1️⃣ Executive Summary
This project aims to set up an MSME unit focused on manufacturing biodegradable and compostable packaging materials, including paper bags, compostable plastics, and other eco-friendly packaging solutions. With increasing environmental awareness and regulatory pressures against single-use plastics, this business is both sustainable and lucrative.
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Business Name: GreenWrap Packaging Solutions
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Location: Industrial Area / Small Industrial Estate (flexible based on local zoning)
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Products: Paper bags, compostable plastic bags, food packaging wrappers, and boxes.
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Project Cost: ₹45 Lakhs (approx.)
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Capacity: 3 million units/year
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Employment: 12 direct, ~8 indirect
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Break-even Point: ~65% capacity utilization.
2️⃣ Objectives
✅ To reduce environmental pollution by replacing conventional plastic with eco-friendly packaging.
✅ To meet the growing demand from retailers, restaurants, e-commerce, and FMCG sectors.
✅ To create employment opportunities and support MSME growth.
3️⃣ Industry Overview
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Market Trends: Increasing global focus on sustainability and bans on single-use plastics.
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Growth Drivers: Government regulations (Plastic Waste Management Rules, 2016 and amendments), consumer demand, corporate ESG commitments.
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Target Customers: Retailers, supermarkets, restaurants, bakeries, online delivery services, FMCG companies.
4️⃣ Technical Feasibility
4.1 Product Portfolio
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Paper Bags — Kraft paper bags, carry bags, shopping bags.
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Compostable Plastic Bags — Bags made from cornstarch or polylactic acid (PLA).
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Food Wrappers and Boxes — Paper-based food packaging.
4.2 Production Process
A. Paper Bags:
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Raw Material: Kraft paper rolls.
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Machines: Sheet cutting machine → Printing machine (optional) → Bag-making machine → Finishing (handle fixing, etc.).
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Output: 20,000 bags/day (varied sizes).
B. Compostable Plastics:
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Raw Material: Cornstarch, PLA resin, natural additives.
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Machines: Extruder → Blown film plant → Cutting and sealing machines → Bag finishing.
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Output: 10,000 bags/day (varied sizes).
4.3 Plant & Machinery (Indicative Costs)
| Item | Cost (₹ in Lakhs) |
|---|---|
| Paper bag making machine | 8.00 |
| Printing machine | 3.00 |
| Compostable plastic extruder + Blown film plant | 15.00 |
| Cutting & sealing machines | 4.00 |
| Other tools & equipment | 2.00 |
| Testing equipment (quality control) | 1.50 |
| Miscellaneous (trolleys, tables, etc.) | 1.50 |
| Total Machinery Cost | 35.00 |
4.4 Utilities
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Power requirement: 25 kW
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Water requirement: 500 liters/day
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Labor: 12 skilled/unskilled workers
5️⃣ Project Cost & Means of Finance
| Particulars | Amount (₹ in Lakhs) |
|---|---|
| Land & Building (lease/rent) | 3.00 |
| Plant & Machinery | 35.00 |
| Pre-operative expenses | 1.00 |
| Working Capital Margin | 6.00 |
| Total Project Cost | 45.00 |
Means of Finance:
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Promoter’s Contribution: ₹15.00 Lakhs
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Term Loan (Bank/NBFC): ₹30.00 Lakhs (Under CGTMSE scheme if collateral is insufficient)
6️⃣ Financial Projections (First 5 Years)
6.1 Production & Sales
| Year | Capacity Utilization | Production (Units) | Revenue (₹ Lakhs) |
|---|---|---|---|
| 1 | 50% | 1.5 million units | 60.00 |
| 2 | 60% | 1.8 million units | 72.00 |
| 3 | 70% | 2.1 million units | 85.00 |
| 4 | 80% | 2.4 million units | 100.00 |
| 5 | 90% | 2.7 million units | 115.00 |
6.2 Profitability (Year 1 example)
| Particulars | Amount (₹ Lakhs) |
|---|---|
| Gross Revenue | 60.00 |
| Raw Materials (35%) | 21.00 |
| Power & Fuel | 2.50 |
| Wages | 6.00 |
| Other Manufacturing Expenses | 3.00 |
| Selling & Administrative | 4.00 |
| EBITDA | 23.50 |
| Interest (Term Loan) | 3.00 |
| Depreciation | 4.00 |
| Profit Before Tax | 16.50 |
| Tax (25%) | 4.13 |
| Net Profit | 12.37 |
6.3 Break-even Analysis
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Break-even Capacity: ~65% utilization
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Break-even Sales: ₹45 Lakhs
7️⃣ Marketing & Sales Strategy
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B2B approach: Direct sales to retailers, supermarkets, restaurants, and FMCG companies.
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Tie-ups with e-commerce packaging suppliers.
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Participation in trade fairs and green product exhibitions.
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Digital presence: Website, social media, online advertising.
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Certifications: Compostability certifications, ISO 9001, FSSAI (if applicable).
8️⃣ Statutory & Regulatory Compliance
✅ MSME Registration (Udyam).
✅ GST Registration.
✅ Pollution Control Board Consent (for manufacturing unit).
✅ Trade License from local municipal body.
✅ BIS/FSSAI (if dealing with food-contact packaging).
✅ ISO certification (recommended for quality assurance).
✅ Compliance with Plastic Waste Management Rules, 2016 (compostable plastic segment).
9️⃣ Risk Analysis
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Raw material price volatility (paper, PLA resin).
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Technological obsolescence (continuous R&D needed).
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Competition from established brands.
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Regulatory changes.
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Consumer awareness and adoption rate.
🔟 Conclusion
This project is a sustainable, socially responsible, and financially viable MSME idea that aligns with the government’s mission to reduce plastic pollution and promote green businesses. With proper marketing and quality control, this unit can generate steady profits while contributing to environmental protection.
