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Plastic and Flexible PDF

This study analyzes the feasibility of establishing a plastic and flexible packaging plant in Ethiopia. The plant would produce various plastic products to substitute imports and meet growing local demand, which is projected to increase substantially by 2030. Adama is identified as the best location for the plant. The plant would require 4.62 hectares of land and cost over 2.6 billion Birr to establish. It would create 222 jobs and have a positive economic and social impact by generating tax revenue, employment, and substituting imports. The projected internal rate of return is 21.85%, indicating viability, and the payback period is estimated at 6 years. Environmental impacts would be mitigated through proper waste collection and treatment.

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samuel seifu
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346 views5 pages

Plastic and Flexible PDF

This study analyzes the feasibility of establishing a plastic and flexible packaging plant in Ethiopia. The plant would produce various plastic products to substitute imports and meet growing local demand, which is projected to increase substantially by 2030. Adama is identified as the best location for the plant. The plant would require 4.62 hectares of land and cost over 2.6 billion Birr to establish. It would create 222 jobs and have a positive economic and social impact by generating tax revenue, employment, and substituting imports. The projected internal rate of return is 21.85%, indicating viability, and the payback period is estimated at 6 years. Environmental impacts would be mitigated through proper waste collection and treatment.

Uploaded by

samuel seifu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Summary of Feasibility Study for the Establishment of

Plastic and Flexible Packaging

The study involves techno-economic feasibility study on the establishment of Plastic and
Flexible Packaging consisting of the following components:

1. Market Study and Plant Capacity Determination;

The purpose of the envisaged plant is to produce different types of plastics which are mainly to
substitute import products by local production and for local consumption. The market share of
the envisaged project for flexible plastic packing materials is projected to increase from 11,125
tons in 2015 to 27,760 tons and 64,319 tons by the years 2020 and 2025 respectively. Moreover,
by year 2030 the market share is projected to reach 139,772 tons. The market share of the
envisaged project for rigid plastic packing materials is projected to increase from 5,889 tons in
2015 to 20,101 tons, 52,264 tons and 119,169 tons by the years 2020, 2025 and 2030
respectively.

Likewise, the market share of the envisaged project for laminated plastic packing materials is
projected to increase from 445 tons in 2015 to 987 tons, 2,076 tons and 4,268 tons by the years
2020, 2025 and 2030, respectively.

2. Raw materials and Inputs;

Raw material

 PET, HDPE, LDPE, PP granules and coloring Pigments. Similarly for that of flexible
Packaging BOPP Resin, BOPET Resin, CPP Resin, LDPE Resin, PVC Resin, additives, slip
agent, anti block and anti-static agent are used in different proportions according to the type
of flexible packaging film required which in turn depends on the type of product to be
packed.

Inputs,

 cardboard (Cartoon) and polyethylene sheet, oil, grease and consumables are required and
can be supplied from the local finished product market however envisaged plant will
produce the polyethylene sheet for its own packing of the for the delivery.
 The annual utilities consumption for plant at full capacity operation is estimated to be Birr
80, 975, 380 in local currency.
3. Location and Site Selection

Based on proximity to the source of raw materials and near to consumer of the product (food and
beverage producing plants) around Addis Ababa namely Sululta ,Bisheftu ,Dukam,
Adama,Sebeta ,Waleta ,Gelan ,Mojo. The cities identified by the regional government Clustering
Program are Lagatafo, Sebata, Sululta, Dukam,Galane,Bishoftu, Adama, Asella, Shashimane,
Jimma and Nekemte. Adama town is found to be the best location for the envisaged flexible and
plastic packaging plant followed by Sulelta and Sebeta equally to the second alternative location
in equivalent rank.

Land

The total area of the envisaged plastic factory is 46,200 m2 (4.62 hectare) with a length of 300 m
and of 154 m width. The factory building area including BOPP stretching block, conversion
block, PVC, LDPE, CPP blowing block, BOPET stretching block and injection block all covers
about 7,825 m2 or 16.9%. Office block covers about 417.6 m2 or 0.9 %.
4. Product Mix

a) Flexible Plastic Packing Materials (Plastic Film and Sheet)

b) Rigid Plastic Packaging Materials

c) Laminated Plastic Packing Materials

5. Production Capacity

Economic scale of corrugated paper board technology ranges from the 3500-4000 ton /year for
small scale, 8000-8500 ton/year for medium scale and 15000-16000 tone / year and above for
large scale of production.

6. Technology and Engineering;

Integrated Plastic Packaging Materials Process & Machinery Comprise:-


− Linear Motor Simultaneous Stretching Technology: BOPET and BOPP films
production,
− Casting technology : for CPP film production,
− Multi layer blowing technology : LDPE film production,
− Film blown process : for the PVC film production
Moreover for the semi converting process such as printing and lamination the technology
selected includes
− Gravure printing
− Wet lamination
Similarly for the rigid plastic containers manufacturing technology for producing the complete
rigid plastic bottle and cap packaging product involves technology of producing:

− Bottle pre-form through injection


− Bottle cap by compression molding
The investment costs of plant machinery and equipments is estimated to be Birr
1,790,670,370.00 out of which 87% is required in foreign currency , and the investment costs of
plant utility equipments , tools and devices is estimated to be Birr 119,809,960.00 out of which
87% is required in foreign currency.
7. Organization a Human Resource Requirement

The project will create a job opportunity for 222 employees. The project will have employees
with an initial total annual salary of Birr 9,490,000 when it commences operation.
General Manager……………………………………….1
Executive Secretary ……………………………………1
Commercial and property administration …………….13
Market and Sales ……………………………………...11
Administration and Finance …………………………. 34
Production Department …………………………….. 138
Quality Control and Assurance ……………………. 13
Planning Department …………………………………. 4
8. Financial and Economic Analyses.

8.1 Financial analysis


Investment cost

 The total investment cost of the project is estimated at Birr 2.633 billion.

Source of finance

 Financial requirements during phase one the share of bank loan (70%) and equity
(30%)
Production cost

 The total annual cost of production and revenue at 100% capacity utilization (year 5) is
estimated at Birr 2.615 billion and Birr 3.006 billion respectively.

Profitability

 Annual net profit after tax will increase from Birr 138.96 million during first year of
operation to Birr 493.71 million during the last year of the project life.

Cash Flow

 The projected cash flow of the envisaged project shows that the project would
generate positive net cash flows throughout the project life

Discounted Cash Flow

 the IRR of the project is computed to be 21.85% indicating the viability of


the project
 the net present value of the project at 10% discount rate is found to be Birr 1.639
billion which is acceptable
 Based on the projected cash flow the payback period will be six years, which is a
reasonably short period of time.

8.2. The economic impact of the project

 The project creates employment opportunities for 222 persons.


 During the life of the project it will generate Birr 1.844 billion in terms of corporate
tax and also contributes in the form of payroll tax.
 It substitute import product.

8.3 The project could have the following social impacts

The project will also create forward linkages with the manufacturing sector by supplying the
inputs required by the industries.

The project will create a conducive environment for the rapid growth of service and trade
sectors around the project site which in turn create employment opportunity for a substantial
number of persons.
9. Environmental Impact Assessment

All wastewater will be collected and for the water for the cooling will be recycled continuously
for longer time and that from the cleaning and sanitation will be collected in sewage tanks once
filled and disposed according to the acting municipality regulations and handling wastewater will
prevent any seepage of bad water to the ground aquifer and use efficient ventilation system;
workers wear suitable masks when needed, sustainable maintenance for all machinery and
continuous surveillance. The solid waste to be generated shall be properly collected, properly
damaged to avoid any possible retrieval and finally either recycled or incinerated a specially
prepared incinerator while the liquid waste shall be collected and treated properly before
discharge. The noise protection for the manufacturing unit shall implement an effective hearing
conservation program

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