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Sample Project Report  

For  

 
Paper Cup Machine  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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INDEX 
 
 
 
 

SL.NO  DESCRIPTION  P.NO 

1  Introduction  3 
2  Market potential  4 
3  Manufacturing process  6 
4  Flow sheet diagram  7 
5  About the promoter  8 
6  Basis and Presumption  9 
7  Inspection and quality control  9 
8  Production Capacity  10 
9  Pollution control  10 
10  Financial aspects - Fixed capital  11 
11  Recurring expenditure  12 
13  Working capital assessments  14 
14  Other financial aspects  15 
19  Break-even analysis  17 
20  Profitability Statement  18 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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MANUFACTURE OF PAPER PRODUCTS  

(PAPER CUPS) 

1. INTRODUCTION: 

Disposable food service products were initially developed to enhance  

public health by improving practices in the food service industry. This  
requirement when combined with the environmental threat faced by us at  
the turn of the 20th Century and need of strong efforts in order to  
conserve the environment gave birth to the concept of PAPER CUPS. There  
are several inherent advantages in using Paper Cups as compared to cups  
of other materials. These Paper Cups are gaining popularity all across the  
globe as a beautiful and stylish way of minimizing exposure to food borne  
infections. 

Paper Cups have numerous advantages like; they are manufactured in a  

very simple process using Food Grade Raw Materials with least waste and  
are easiest to recycle. They are ideal for individual servings at all kinds of  
parties, functions, picnic occasions, marriages, chat, tea & food joints, etc.  
Non‐toxic in nature, the shapes and surface designs on these paper cups  
are attractive and present an inviting look. These paper cups can also be  
custom printed with an outlet's logo, brand punch line or advertising  
message. 

Available in a wide variety of designs, textures, colors and sizes,

disposable paper cups are gorgeous, stylish and eloquent. Adding
premium aura wherever used, these cups are made with utmost care to
detail and are a unique addition to any table setting. 

Hence, the future of the proposed unit for manufacturing paper cups is very
vibrant and will be a gesture towards supporting the usage of Eco‐friendly
products. 
 
 
 
 
 
 
 
 
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2. MARKET POTENTIAL 

It is necessary to recognize that in a globalize economic environment the

business outlook for any paper product will depend on the global demand
supply balance for that product. For Paper Cups there is production less
capacity at a global level which was built up over the last decade or so in
response to a boom in global growth and increased levels of awareness of eco‐ 
friendly products. The growth of the manufacturing sector will be largely
influenced by the growth consumption. 

A wide range of paper cups are now produced and marketed in India. The
paper cups are reckoned to be a high potential business for India. 

Manufacturing Paper Cups is the purpose of satisfying needs and wants of

Consumers is the market place. Developing a strategy for delivering an effective
combination of food grade quality and cost‐effective features for consumers
within the target market is done. 

The prospects of paper cups depend on the value of customers who  

utilize it. But in our country paper cups are used by all the people as it is easy  
to use, hygienic and eco‐friendly. Hence, the per capita consumption has  
increased and the demand for it is recognized. While the demand for paper  
cups has shown a good growth, the company will be successful in strategizing  
its market operations. 

As paper cups are a product of daily consumption and necessity, their marketing
will not be a problem as the consumers are aware of the advantages of
using paper cups. The raw materials are indigeneously available and the
manufacturing process is also simple. 
 
 
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“SONA IMPEX” has decided to market their PAPER CUPS to IT

companies, Educational Institutions Canteens, Industrial Canteens,
Restaurants, Fast Foods, Catering People, Tea Shops, Paper Product Dealers and
Super Markets. 

“SONA IMPEX” has made marketing survey and potential for our
product and had a very good response. We have the regular market for our
manufacturing capacity. In future “SONA IMPEX” will increase the capacity to
meet the demand of our product. So it will not be a difficult to find market for
paper cups in this growing paper product industry. 

The increasing demand is being vast, thrust for the development of this  
industry is very big. “SONA IMPEX” will assimilate novel and innovative  
methods to improve its competitiveness for its growth and contribute to the  
country. 

In conclusion, I would like to stress that present status of the industry is in very
good scope and this industry will provide ample employment
opportunities to the underprivileged of our society. 

Therefore to sum up the setting up of “SONA IMPEX” manufacturing unit is

predictable and feasible for its marketing aspects. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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3. MANUFACTURING PROCESS OF PAPER CUPS: 

We have proposed to use the Automatic Paper Cup Forming Machine for our
manufacturing process of Paper Cups. 

The general structure of paper cup forming machine is composed of three

stages. They are: 

1. The first stage: mainly finishes transmission of the paper cup's side‐wall  
paper, shaping side‐wall and transferring them to the second stage after  
shaped. 

2. The second stage: transmission of the cup‐bottom paper, shaping cup‐ 

bottom, joining the shaped side‐wall and cup‐bottom, automatic  
transmission and discharging of the shaped cup, and curling the shaped  
cup's edge. 

3. The third stage: mainly includes 45 degree angle separating, preheating,  

curling bottom, rouletting, curling rim and so on mechanisms, which are  
the important parts in finishing paper cup. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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4. FLOW SHEET DIAGRAM 
 

BLANK  BOTTOM 
 
 
CONE FORMING  
+ 
BOTTOM FIXING 
 
LOADED TO MOULD 
 
 
BOTTOM KNURLING  
+ 
TOP KURLING 
 
 
FINISHED CUP DELIVERY 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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5. About the Promoter 

 
 
Name : 
 
Father’s Name : 
 
DOB : 
 
Sex : 
 
Permanent Address : 
 
Marital Status : 
 
Nationality : 
 
Languages Known : 
 
Educational Qualification : 
 
Work Experience : 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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6. BASIS AND PRESUMPTION OF THE PROJECT: 

 
i. The process of manufacture is on the basis of double shift 
of eight + eight hours per day with three hundred working
days in a year. 
ii. Labor and wages mentioned in profile are as per prevailing 
local rates. 
iii. Interest rate at 12.5% considered in the project 
 
iv. The Promoter contribution will be 10% of the total project 
cost. However it may be vary for women entrepreneurs. 
v. Subsidy and other concessions may be applicable as per the 
MSME Act of Tamilnadu 2006. 
vi. The capacity of the plant 40,000 nos. of paper cups per day 
on the double shift basis. 
 
 
7. INSPECTION AND QUALITY CONTROL: 

“SONA IMPEX” will strictly adhere to the International FDA standards  

and Indian BIS standards in the process of manufacturing Paper Cups from  
procuring high quality food grade raw materials to hygienic methods of  
packaging, as we know that the satisfaction of the customers is the foundation  
of any business. 
 
 
 
 
 
 
 
 
 
 
 
 
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8. PRODUCTION CAPACITY PER ANNUM : 

Quantity: 40,000 nos. of paper cups per day 

1,20,00,000 nos. of paper cups per annum (300 days) 

 
 

9. POLLUTION CONTROL 

The technology adopted for making paper cups is eco‐friendly. Cup

forming process is totally automatically done by the machine, only feeding and
packaging involves manual work. The scrap papers created out of this
manufacturing process also can be sold for recycled paper converters. Hence
there is no chance of any pollution out of this industry. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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10. FINANCIAL ASPECTS 

 

10.1. FIXED CAPITAL : 

 
 

Machinery and Equipment : 

 
 
S.NO  DESCRIPTION  Rate (RS) 
     
1  Automatic Paper Cup Forming  1 nos.  6,00,000
Machine 

     
2  Office equipment ( Computer, Table  50,000
Chair etc.,) 
       
TOTAL 6,50,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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11. RECURRING EXPENDITURE (PER MONTH ): 

 
 

(A) Raw Material Per Month: Rs. 

 
 
 
 
S.N  DESCRIPTION  QTY  RATE  AMOUNT 

1  Printed Blank ‐ Side Wall  2,500 kgs. 75.00  1,87,500

2  Bottom Reel Paper  800 kgs. 72.00  57,600
3  PP cover & Carton Boxes  As required ‐  10,000
  Total (A)      2,55,100
 
 

(b) Salaries & Wages Per Month : Rs. 

 
 
S.No  DESIGNATION  NO  SALARY  Amount 
1  Production cum Marketing  1 
7,500  7,500
Manager (Proprietor) 
2  Machine Operators  2  5,000  10,000
3  Checking & Packaging Women  2  3,000  6,000
4  Office Assistant  1  3,000  3,000
  Total      26,500
  Perquisites 15 %      3,975
  Total (B)      30,475
 
 
 
 
 
 
 
 
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 C) Utilities Per Month : Rs. 
 
S.N  DESCRIPTION  AMOUNT
1  Power 5 HP 750 Units @ Rs. 5 per Unit  3,750
2  Machine Oil, grease & other consumables  1,000
  Total (C)  4,750
 

(D) Other Expenses Per Month : Rs. 

 
S.N  DESCRIPTION  AMOUNT 
1  Rent  5,000
2  Marketing expenses & Advertisement  3,000
3  Postage and stationery  250
4  Repairs and maintenance  500
5  Traveling and transportation  1,000
6  Insurance  250
7  Telephone & Mobile  2,000
8  Packing Materials  500
  Total (D)  12,500

12. RECURRING EXPENDITURE PER MONTH:  

a + b + c + d = Rs. 3,02,825/- 

Recurring Expenditure for three months = Rs. 9,08,475/- 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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13. WORKING CAPITAL ASSESSMENT 

 
 
 
S.N  DESCRIPTION  AMOUNT (Rs) 

1  Raw Material   
  2,55,100
(Required for one month) 

2  Work in progress   
  43,750
(Required for one month) 

3  Finished Good   
  1,50,000
(Required for 15 days) 

4  Bill receivable   
  2,00,000
(Required for 15 days ) 

  TOTAL 6,48,850
   

Say 6,50,000

 
 
 
 
 
 
 
 
 
 
 
 
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14. FINANCIAL ASPECTS 

 
 
14. a. Total Project Cost 
 
 
a. Plant & Machinery 16,50,000 
b. Working capital 16,50,000 
Total 13,00,000 
 
 
14.b Means of Finance Rs 
Total Project cost 13,00,000 
Promoter contribution 10% 01,30,000 
Total 11,70,000 
 
 
Finance required from the Bank 11,70,000/- 
 
 
14.c. Cost of Production Per Annum : Rs. 
 
S.N  DESCRIPTION  AMOUNT 
1  Total recurring cost  36,33,900
2  Interest on Bank Loan @12.5%  1,46,250
Total Depreciation on Machinery & Stabilizer 
3  90,000
@15% 
Total Depreciation on furnitures and other 
4  5,000
equipments @ 20% 
  TOTAL  38,75,150
 
 
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15. Turnover Per Annum : 
By sale of 1,20,00,000 nos. of Paper Cups  

of sizes ranging 150 ml & 210 ml : (average) 

@ Rs. 0.39 Rs. 46,80,000/- 
 

16. Profit Per Annum : 

 
Turnover - Cost of Production 
46,80,000 - 38,75,150 
= 8,04,850/- 
17. % of profit on sales = Profit/annum X 100 
Turnover 
 

= 8,04,850 X 100 
46,80,000 
 

= 17.2% 
 
 
18. Rate of Return = Profit/annum * 100 
Total Capital investment 
= 8,04,850 X 100 
13,00,000 
 
 
= 61.91% 
 
 
 
 
 
 
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19. Break Even Analysis: 

 
 

(1) Fixed expenditure per annum:  Rs 

Interest on Loan   1,46,250 

Total Depreciation  95,000 

40% of salary and wages   1,46,280 

40% of other expenses & Utilities  1,82,800 

========= 

4,70,330  

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(2) Profit per annum = Rs. = 8,04,850/- 

 
 

Break Even Point = Fixed Cost/annum * 100 

 

fixed cost/annum + Profit/annum 

 

= 4,70,330 X 100 

1275180 
 
= 36.88% 
 
 
 
 
 
 
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20. Profitability Statement 

 
(Rs. In Lakhs) 
 
  Year  1  2 3 4 5  6
S.No  Capacity 
65%  70%  75%  80%  85%  90% 
Utilization 
Turnover 
1.  46.80  49.14  51.59  54.17  56.88  59.72 
Raw materials 
2.  30.61  32.14  33.74  35.43  37.20  39.06 
Manpower  3.65 
3.  3.83  4.02  4.22  4.43  4.65 
Utilities 
4.  0.57  0.59  0.62  0.65  0.69  0.72 
Other expenses 
5.  1.50  1.57  1.65  1.73  1.82  1.91 
Depreciation 
6.  0.94  0.83  0.73  0.64  0.57  0.51 
Total Interest 
7.  1.70  1.48  1.16  0.86  0.54  0.51 
Repayment of 
8.  1.24  2.48  2.48  2.48  2.48  2.56 
loan 
Total (2 to 8) 
9.  40.21  42.92  44.40  46.01  47.73  49.92 
Profit before tax 
10.  6.59  6.22  7.19  8.16  9.15  9.80 
Provision for tax 
11.  1.50  2.00  2.50  3.00  3.50  4.00 

12.  Profit after tax  5.09  4.22  4.69  5.16  5.65  5.80 
Less 
13  0.94  0.83  0.73  0.64  0.57  0.51 
depreciation 
14  Cash accrual  4.15  3.39  3.96  4.52  5.08  5.29 

 
 
 
 
 
 
 
 
 
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