PROJECT REPORT NO - 1

PVC PIPES

PURPOSE OF THE DOCUMENT

T his particular pre-feasibility is regarding PVC Pipes

The objective of the pre-feasibility is primarily to facilitate potential entrepreneurs’ in

project identification for investment and in order to serve this objective; the
document covers various aspects of the project concept development, startup, marketing,
and finance and business management

[We can modify the project capacity and project cost as per your requirement. We can also prepare project
report on any subject as per your requirement.]

Prepared By:

Institute for Industrial development

A unit of M/S Samadhan Samiti
Email: [email protected]
Phone: +91 7408733333,
+91 7607655555
 PVC PIPES
Introduction
PVC stands for polyvinyl chloride, and it’s become a common
replacement for metal piping. PVC’s strength, durability, easy
installation, and low cost have made it one of the most widely used
plastics in the world. PVC is a thermoplastic material that is molded into
different shapes to create pipes, fittings, valves and other liquid handling
supplies.

It's the white plastic pipe commonly used for plumbing and drainage.

PVC pipes are manufactured by extrusion of raw material PVC, and

generally follow the same steps of typical pipe extrusion operations:
Feeding of raw material pellets / powder into the PVC twin screw
extruder. Melting and heating in multiple extruder zones.

Types of PVC Pipes

Two main types of PVC pipe exist: schedule 40 and schedule 80. The
difference lies in the thickness of the pipe wall. Schedule 40 PVC pipes
have thinner walls than their schedule 80 counterparts. If you come
across a different schedule number than the typical 40 or 80, know that
the higher the number, the thicker the pipe wall.

Thicker walls come in handy for different pressure and temperature

applications. To help you make the correct purchase, PVC pipes have
their schedule and pounds per square inch (PSI) rating printed on the
side.

Application of PVC Pipes

PVC is currently used in a wide spectrum of piping applications, all
helping to meet modern infrastructure need.
 Water applications: VC piping systems are used in several areas for
the transport of water - from delivery of drinking water over the
removal of sewage or waste products to drainage of water from the
ground or roof.
 Drinking water: Pipes and fittings for the distribution of water under
pressure. The main application is the distribution of drinking water.
The diameters are of medium size (generally between 75 mm and
250 mm).
 Soil and waste: Pipes and fittings for the evacuation of waste water
without pressure inside the buildings (generally vertical). These are
usually of medium diameters (< 160 mm). They can be made of
compact PVC or have structured walls (foam core).
 Sewage and underground drainage: Pipes and fittings for the
collection and evacuation of waste water without pressure and
intended to be buried in the ground (horizontally). These are usually
of large diameter (160 mm and up to 630 mm). They can be made of
compact PVC or have structured walls (foam core or twin wall with a
corrugated layer).

Description of PVC Pipes Manufacturing Machine

Following machines are used for Single Screw PVC Pipes
Manufacturing unit:

a) High Speed Mixture machine

b) Rigid Extruder machine
c) Granule-ds Extruder Machine
d) Grinder
e) Different Dies

PVC Pipes market analysis & Potential

The global PVC pipes market reached a volume of 22.8 Million Tons in
2018, growing at a CAGR of 5.4% during 2011-2018. The market is
further projected to reach a volume of 30.5 Million Tons by 2024,
expanding at a CAGR of 4.9% during 2019-2024. PVC pipes are
composed by the extrusion of a blend of polyvinyl chloride (PVC) and
several additives. The production of PVC pipes consumes around four
times lesser energy and incurs lower losses of the raw material in
comparison to concrete pipes. Moreover, complete recyclability of PVC
makes the environmental footprint of these pipes far smaller than the
alternative piping materials. Owing to these factors, PVC pipes find
applications in water systems, underground wiring and sewer lines.

PVC Pipes Manufacturing Process

 PVC stands for Polyvinyl Chloride it’s a polymer which is used in
several application from wire to pipe, due to its insulation and strength
properties.
 The PVC Granules are feed to mixer via Hooper and feeder
arrangement along with the various additives; it ensures that various
additives are uniformly distributed within the PVC Granules followed
by which the granules additive mixture is feed to Extruder.
 Extruder melts these granules into semi-solid state and forces them
through the die attached to it utilizing a plunger or screw arrangement.
The die has cavity of shape of pipe, hence a continuous pipe is
obtained from extruder die.
 An appropriate cooling system is used to cool the pipe formed by
extruder usually an air cooler, then this continuous pipe goes through
a printing machine where the required labels are printed onto pipe
followed by which these pipes are cut into required length by a simple
cutter and sent for sale.

Machinery &Equipment’s required:

Single Screw PVC Pipe Machine (50 Kg per Hour Capacity): Cost Rs.
20-25 Lacs.

This machine includes: Extruder, Water tank, Cutter, Mixture & Grinder

Name Cost

Mixture Rs. 2-2.5 Lacs

Grinder Rs. 25,000

Extruder Rs. 5 Lakhs

 Cost of the machine is exclusive of GST & value of the machine

varies with the change in production capacity.

Note: This project report is based on Single Screw PVC Pipe

Manufacturing Machine.

Land &Building required:

Land required 1500-1800 Square Feet (approx.)

Approximate Rent for the same is Rs. 30000-35000 Per Month.

Labour & staff Requirement:

8-10 Manpower is required for the PVC Pipes Manufacturing Unit.

Includes:

3 Skilled Labour

5 Unskilled Labour

2 Helper

Raw material requirement

The raw materials required for PVC Pipes is as follow:

S.N. Name Measurement Amount

1 PVC Resin KG Rs. 76

2 Calcium KG Rs. 10-15

3 DOP (Dioctyl Phthalate) KG Rs. 120

4 P Wax (Polyethylene/ Paraffin Wax) KG Rs.100

5 One Pack KG Rs. 135

6 CPE (Chlorinated Polyethylene) KG Rs. 105

7 Optical Brightener KG Rs. 2300

 On an average raw material cost per KG is approx. Rs. 70-80. Value

of raw material changes as per the quality.

PVC Pipes Manufacturing unit License &registration

For Company:
 Obtain the GST registration.
 Additionally, obtain Udyog Aadhar registeration.
 NOC from Fire/ Pollution Board.
 Choice of a Brand Name of the product and secure the name with
Trademark if required.

Implementation Schedule

S.N. Activity Time Required

(in Months)

1 Acquisition Of premises 1

2 Construction (if Applicable) 1- 2 Months

3 Procurement & installation of Plant & Machinery 1

4 Arrangement of Finance 1

5 Requirement of required Manpower 1

Total time Required (some activities shall run 2-3 Months

concurrently)
 FINANCIAL ASSISTANCE REQUIRED

Term Loan of Rs. 25.49 lakh and Working Capital limit of Rs. 22.50 Lacs
(in Lacs)
COST OF Own Bank
PROJECT PARTICULARS Amount Contribution Finance
10.00% 90.00%
Building Civil Work

Plant & Machinery 23.60 2.36 21.24

Furniture & Fixtures and Other
Assets 4.72 0.47 4.25

Working capital 25.00 2.50 22.50

Total 53.32 5.33 47.98

MEANS OF
FINANCE PARTICULARS AMOUNT

Own Contribution 5.33

Bank Loan 25.49

Working capital Limit 22.50

Total 53.32
COMPUTATION OF PRODUCTION OF PVC PIPES

Items to be Manufactured

PVC Pipes

Machine capacity per Hour 50 KG

Total Shift of 8 Hours 2

machine capacity per Day(8 Hour shift) 800 KG

machine capacity per annum 240,000 KG

Raw Material

wastage 5% of Input

Raw material Requirement Per day 842 KG

Raw Material Required Per Annum 252,632 KG

Production of PVC Pipes

Production Capacity KG

1st year 60% 144,000

2nd year 65% 156,000

3rd year 70% 168,000

4th year 75% 180,000

5th year 80% 192,000

6th year 85% 204,000

Raw Material Requirement

Particulars Requirement

At 100% Capacity 252,632 KG

Raw Material Cost

Year Capacity Rate Amount

Utilisation (per KG) (Rs. in lacs)

1st year 60% 70.00 106.11

2nd year 65% 72.00 118.23

3rd year 70% 74.00 130.86

4th year 75% 76.00 144.00

5th year 80% 78.00 157.64

6th year 85% 79.00 169.64

COMPUTATION OF SALE (In Lacs)

Particulars 1st year 2nd year 3rd year 4th year 5th year 6th year

Op Stock - 14,400 15,600 16,800 18,000 19,200

Production 144,000 156,000 168,000 180,000 192,000 204,000

Less : Closing Stock 14,400 15,600 16,800 18,000 19,200 20,400
Net Sale 129,600 154,800 166,800 178,800 190,800 202,800
sale price per kg 105.00 107.00 109.00 111.00 113.00 115.00

Sales (in Lacs) 136.08 165.64 181.81 198.47 215.60 233.22

BREAK UP OF LABOUR CHARGES

Particulars Wages No of Total

Rs. per Month Employees Salary

Skilled (in thousand rupees) 10,000 3 30,000

Unskilled (in thousand rupees) 8,000 5 40,000

Total salary per month 70,000

Total annual labour charges (in lacs) 8.40

BREAK UP OF STAFF CHARGES

Particulars Wages No of Total

Rs. per Month Employees Salary

Supervisor 11,000 1 11,000

Helper 7,000 2 14,000

Total salary per month 25,000

Total annual labour charges (in lacs) 3.00

Utility Charges at 100% capacity (per month)

Particulars value Description
Power connection required 40 KWH
consumption per day 640 units

Consumption per month 16,000 units

Rate per Unit 7 Rs.
power Bill per month 112,000 Rs.
PROJECTED PROFITABILITY STATEMENT (In Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year 6th Year

Capacity Utilisation % 60% 65% 70% 75% 80% 85%

SALES

Gross Sale

PVC Pipes 136.08 165.64 181.81 198.47 215.60 233.22

Total 136.08 165.64 181.81 198.47 215.60 233.22

COST OF SALES

Raw Material Consumed 106.11 118.23 130.86 144.00 157.64 169.64

Electricity Expenses 8.06 8.74 9.41 10.08 10.75 11.42

Depreciation 4.01 3.43 2.94 2.52 2.16 1.85

Labour 8.40 8.82 9.26 9.72 10.21 10.72

Repair & maintennace 2.72 3.31 3.64 3.97 4.31 4.66

Consumables 1.50 1.82 2.00 2.18 2.37 2.57

Packaging Charges 1.22 1.49 1.64 1.79 1.94 2.10

Cost of Production 132.02 145.85 159.74 174.26 189.39 202.97

Add: Opening Stock /WIP - 13.20 14.58 15.97 17.43 18.94

Less: Closing Stock /WIP 13.20 14.58 15.97 17.43 18.94 20.30

Cost of Sales 118.82 144.46 158.35 172.81 187.87 201.61

GROSS PROFIT 17.26 21.17 23.46 25.66 27.73 31.61

Interest on Term Loan 2.29 2.10 1.64 1.18 0.71 0.25

Interest on working Capital 2.25 2.25 2.25 2.25 2.25 2.25

Selling & distribution Expenses 1.02 1.24 1.36 1.49 1.62 1.75

Staff Expenses 3.00 3.15 3.31 3.47 3.65 3.83

Rent 3.60 3.78 3.97 4.17 4.38 4.59

TOTAL 12.16 12.53 12.53 12.56 12.60 12.67

NET PROFIT 5.10 8.64 10.93 13.10 15.13 18.94

Taxation 0.80 1.35 1.70 2.04 2.36 2.95

PROFIT (After Tax) 4.30 7.30 9.22 11.06 12.77 15.98

PROJECTED BALANCE SHEET (In Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year 6th year

Liabilities

Capital

opening balance 6.14 9.43 13.65 18.51 23.28

Add:- Own Capital 5.33

Add:- Retained Profit 4.30 7.30 9.22 11.06 12.77 15.98

Less:- Drawings 3.50 4.00 5.00 6.20 8.00 10.00

Closing Blance 6.14 9.43 13.65 18.51 23.28 29.26

Term Loan 23.17 18.54 13.90 9.27 4.63 -

Working Capital Limit 22.50 22.50 22.50 22.50 22.50 22.50

Sundry Creditors 8.84 9.85 10.91 12.00 13.14 14.14

Provisions & Other Liab 0.50 0.75 1.13 1.35 1.69 2.11

TOTAL : 61.15 61.07 62.09 63.63 65.24 68.01

Assets

Fixed Assets ( Gross) 28.32 28.32 28.32 28.32 28.32 28.32

Gross Dep. 4.01 7.45 10.39 12.90 15.06 16.91

Net Fixed Assets 24.31 20.87 17.93 15.42 13.26 11.41

Current Assets

Sundry Debtors 11.79 14.36 15.76 17.20 18.69 20.21

Stock in Hand 22.04 24.44 26.88 29.43 32.08 34.43

Cash and Bank 3.00 1.40 1.51 1.59 1.22 1.95

TOTAL : 61.15 61.07 62.09 63.63 65.24 68.01

PROJECTED CASH FLOW STATEMENT (In Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year 6th year

SOURCES OF FUND

Own Margin 5.33

Net Profit 5.10 8.64 10.93 13.10 15.13 18.94

Depreciation & Exp. W/off 4.01 3.43 2.94 2.52 2.16 1.85

Increase in Cash Credit 22.50 - - - - -

Increase In Term Loan 25.49 - - - - -

Increase in Creditors 8.84 1.01 1.05 1.09 1.14 1.00

Increase in Provisions & Oth lib 0.50 0.25 0.38 0.23 0.34 0.42

TOTAL : 71.77 13.34 15.29 16.94 18.76 22.21

APPLICATION OF FUND

Increase in Fixed Assets 28.32

Increase in Stock 22.04 2.39 2.44 2.55 2.65 2.36

Increase in Debtors 11.79 2.56 1.40 1.44 1.49 1.53

Repayment of Term Loan 2.32 4.63 4.63 4.63 4.63 4.63

Drawings 3.50 4.00 5.00 6.20 8.00 10.00

Taxation 0.80 1.35 1.70 2.04 2.36 2.95

TOTAL : 68.77 14.94 15.18 16.87 19.13 21.47

Opening Cash & Bank Balance - 3.00 1.40 1.51 1.59 1.22

Add : Surplus 3.00 - 1.60 0.11 0.07 - 0.37 0.74

Closing Cash & Bank Balance 3.00 1.40 1.51 1.59 1.22 1.95
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL (In Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year 6th Year

Finished Goods

13.20 14.58 15.97 17.43 18.94 20.30

Raw Material

8.84 9.85 10.91 12.00 13.14 14.14

Closing Stock 22.04 24.44 26.88 29.43 32.08 34.43

COMPUTATION OF WORKING CAPITAL REQUIREMENT (In Lacs)

TRADITIONAL METHOD

Particulars Amount Own contribution Bank Finance

Finished Goods & Raw Material 22.04 10% 2.20 90% 19.84

Less : Creditors 8.84 10% 0.88 90% 7.96

Paid stock 13.20 10% 1.32 90% 11.88

Sundry Debtors 11.79 10% 1.18 90% 10.61

25.00 10% 2.50 90% 22.50

Working Capital Required Requirement From Bank 22.50

COMPUTATION OF DEPRECIATION

Description Plant & Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance - - -

Addition 23.60 4.72 28.32

Total 23.60 4.72 28.32

Less : Depreciation 3.54 0.47 4.01

WDV at end of Year 20.06 4.25 24.31

Additions During The Year - - -

Total 20.06 4.25 24.31

Less : Depreciation 3.01 0.42 3.43

WDV at end of Year 17.05 3.82 20.87

Additions During The Year - - -

Total 17.05 3.82 20.87

Less : Depreciation 2.56 0.38 2.94

WDV at end of Year 14.49 3.44 17.93

Additions During The Year - - -

Total 14.49 3.44 17.93

Less : Depreciation 2.17 0.34 2.52

WDV at end of Year 12.32 3.10 15.42

Additions During The Year - - -

Total 12.32 3.10 15.42

Less : Depreciation 1.85 0.31 2.16

WDV at end of Year 10.47 2.79 13.26

Additions During The Year - - -

Total 10.47 2.79 13.26

Less : Depreciation 1.57 0.28 1.85

WDV at end of Year 8.90 2.51 11.41

Less : Depreciation 1.34 0.25 1.59

WDV at end of Year 7.57 2.26 9.82

Less : Depreciation 1.13 0.23 1.36

WDV at end of Year 6.43 2.03 8.46

CALCULATION OF D.S.C.R

1st 2nd 3rd 4th 5th 6th

PARTICULARS year year year year year Year

CASH ACCRUALS 8.32 10.73 12.16 13.58 14.92 17.83

Interest on Term Loan 2.29 2.10 1.64 1.18 0.71 0.25

Total 10.60 12.83 13.80 14.75 15.64 18.09

REPAYMENT

Instalment of Term Loan 2.32 4.63 4.63 4.63 4.63 4.63

Interest on Term Loan 2.29 2.10 1.64 1.18 0.71 0.25

Total 4.61 6.74 6.28 5.81 5.35 4.89

DEBT SERVICE COVERAGE

RATIO 2.30 1.90 2.20 2.54 2.92 3.70
AVERAGE D.S.C.R. 2.60
 REPAYMENT SCHEDULE OF TERM LOAN
Interest 10%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
ist Opening Balance

1st month - 25.49 25.49 - - 25.49

2nd month 25.49 - 25.49 0.21 - 25.49
3rd month 25.49 - 25.49 0.21 - 25.49
4th month 25.49 - 25.49 0.21 25.49
5th month 25.49 - 25.49 0.21 25.49
6th month 25.49 - 25.49 0.21 25.49
7th month 25.49 - 25.49 0.21 0.39 25.10
8th month 25.10 - 25.10 0.21 0.39 24.72
9th month 24.72 - 24.72 0.21 0.39 24.33
10th month 24.33 - 24.33 0.20 0.39 23.94
11th month 23.94 - 23.94 0.20 0.39 23.56
12th month 23.56 - 23.56 0.20 0.39 23.17

2.29 2.32
2nd Opening Balance

1st month 23.17 - 23.17 0.19 0.39 22.78

2nd month 22.78 - 22.78 0.19 0.39 22.40
3rd month 22.40 - 22.40 0.19 0.39 22.01
4th month 22.01 - 22.01 0.18 0.39 21.63
5th month 21.63 - 21.63 0.18 0.39 21.24
6th month 21.24 - 21.24 0.18 0.39 20.85
7th month 20.85 - 20.85 0.17 0.39 20.47
8th month 20.47 - 20.47 0.17 0.39 20.08
9th month 20.08 - 20.08 0.17 0.39 19.70
10th month 19.70 - 19.70 0.16 0.39 19.31
11th month 19.31 - 19.31 0.16 0.39 18.92
12th month 18.92 - 18.92 0.16 0.39 18.54
2.10 4.63
3rd Opening Balance

1st month 18.54 - 18.54 0.15 0.39 18.15

2nd month 18.15 - 18.15 0.15 0.39 17.76
3rd month 17.76 - 17.76 0.15 0.39 17.38
4th month 17.38 - 17.38 0.14 0.39 16.99
5th month 16.99 - 16.99 0.14 0.39 16.61
6th month 16.61 - 16.61 0.14 0.39 16.22
 7th month 16.22 - 16.22 0.14 0.39 15.83
8th month 15.83 - 15.83 0.13 0.39 15.45
9th month 15.45 - 15.45 0.13 0.39 15.06
10th month 15.06 - 15.06 0.13 0.39 14.67
11th month 14.67 - 14.67 0.12 0.39 14.29
12th month 14.29 - 14.29 0.12 0.39 13.90
1.64 4.63
4th Opening Balance

1st month 13.90 - 13.90 0.12 0.39 13.52

2nd month 13.52 - 13.52 0.11 0.39 13.13
3rd month 13.13 - 13.13 0.11 0.39 12.74
4th month 12.74 - 12.74 0.11 0.39 12.36
5th month 12.36 - 12.36 0.10 0.39 11.97
6th month 11.97 - 11.97 0.10 0.39 11.59
7th month 11.59 - 11.59 0.10 0.39 11.20
8th month 11.20 - 11.20 0.09 0.39 10.81
9th month 10.81 - 10.81 0.09 0.39 10.43
10th month 10.43 - 10.43 0.09 0.39 10.04
11th month 10.04 - 10.04 0.08 0.39 9.65
12th month 9.65 - 9.65 0.08 0.39 9.27
1.18 4.63
5th Opening Balance
1st month 9.27 - 9.27 0.08 0.39 8.88
2nd month 8.88 - 8.88 0.07 0.39 8.50
3rd month 8.50 - 8.50 0.07 0.39 8.11
4th month 8.11 - 8.11 0.07 0.39 7.72
5th month 7.72 - 7.72 0.06 0.39 7.34
6th month 7.34 - 7.34 0.06 0.39 6.95
7th month 6.95 - 6.95 0.06 0.39 6.57
8th month 6.57 - 6.57 0.05 0.39 6.18
9th month 6.18 - 6.18 0.05 0.39 5.79
10th month 5.79 - 5.79 0.05 0.39 5.41
11th month 5.41 - 5.41 0.05 0.39 5.02
12th month 5.02 - 5.02 0.04 0.39 4.63

0.71 4.63
6th Opening Balance
1st month 4.63 - 4.63 0.04 0.39 4.25
2nd month 4.25 - 4.25 0.04 0.39 3.86
3rd month 3.86 - 3.86 0.03 0.39 3.48
4th month 3.48 - 3.48 0.03 0.39 3.09
5th month 3.09 - 3.09 0.03 0.39 2.70
 6th month 2.70 - 2.70 0.02 0.39 2.32
7th month 2.32 - 2.32 0.02 0.39 1.93
8th month 1.93 - 1.93 0.02 0.39 1.54
9th month 1.54 - 1.54 0.01 0.39 1.16
10th month 1.16 - 1.16 0.01 0.39 0.77
11th month 0.77 - 0.77 0.01 0.39 0.39
12th month 0.39 - 0.39 0.00 0.39 -

0.25 4.63
DOOR TO DOOR 72 MONTHS
MORATORIUM PERIOD 6 MONTHS
REPAYMENT PERIOD 66 MONTHS