PRE-FEASIBILITY REPORT OF PVC PIPE

MANUFACTURING PROJECT

INTRODUCTION:

Polyvinyl Chloride (PVC) piping is the most widely used plastic piping material. PVC pipe is
manufactured by extrusion in a variety of sizes and dimensions and generally sold in 10' and
20' lengths. PVC pipe is available in both solid wall and cellular core construction. Cellular
core construction involves the simultaneous extrusion of at least three layers of material in to
the pipe wall: a solid outer layer, a cellular core intermediate layer, and a solid inner layer.

Polyvinyl chloride (PVC) pipe is made from a plastic and vinyl combination material. The
pipes are durable, hard to damage, and long lasting. They do not rust, rot, or wear over time.

PVC is a polar polymer with strong intermolecular forces; therefore it is rigid at room
temperature. On the other hand, when a plasticizer is added upon fabrication, flexible PVC
products are obtained. This versatility is a major advantage of PVC.

PVC pipes are used for a variety of purposes e.g. water supply schemes, spray irrigation,
deep tube well schemes and land drainage schemes. PVC slotted and corrugated pipes are
ideal systems for drainages of water from land where water logging is inevitable. It is widely
used by various utility services now-a days too. The usage of PVC pipes also depends upon
the size of these pipes too. It is manufactured in different sizes having in numerable usage
value.

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THE CHIEF ADVANTAGE OF PVC :

 Resistance to corrosion
 Light weight
 Toughness
 Rigidity
 Economical in laying, jointing and maintenance
 Ease of fabrication

The PVC pipes are much lighter than cast iron or A.C. pipes. Because of their light weight
PVC pipes are easy to handle, transport, and install. Solvent cementing techniques for
jointing PVC pipe lengths is cheaper, more efficient and far simpler. PVC pipes progressively
replacing conventional pipes like G.I., Cast Iron, Asbestos Cement or Stone-ware. PVC pipes
are light in weight, rates for use under pressure, easy to install, low frictional loss, low on
maintenance cost, and have low frictional loss. PVC pipes do not become pitted or
tuberculate and are unaffected by fungi and bacteria and are resistant to a wide range of
chemicals.

MARKET OUTLOOK:

India PVC pipes and fittings Market is expected to reach INR 391 billion by FY’2020. Future
growth of India PVC pipes and fittings Market is expected to be led by rapidly increasing
population leading to increased demand for agricultural production, expanding housing sector
and significant role played by the government in the development of irrigation infrastructure
and real estate sector in the country.

PVC pipes and fittings market in India has witnessed constant incline in terms of volume of
PVC pipes and fittings produced, year on year.

The exports of PVC pipes and fittings in India have witnessed healthy traction in terms of
growth as observed over the past few years. India continues to maintain its leading position
as the net exporter of PVC pipes and fittings across the world. The availability of cheap labor
and low processing costs has made India a manufacturing hub for PVC pipes and fittings with
several multinationals setting up their manufacturing facilities in the country.

The export market for PVC pipes in India has grown considerably over the years due to the
country’s competence in low cost manufacturing and technically trained manpower.
Global PVC Pipe Market size was valued at $54,246 million in 2015, and is anticipated to grow
at a CAGR of 6.7% to reach $85,565 million by 2022. Polyvinylchloride (PVC) is the third
largest selling plastic commodity after polyethylene & polypropylene. It is beneficial over other
materials owing to its chemical resistance, durability, low cost, recyclability, and others; thus, it
can replace wood, metal, concrete, and clay in different applications.

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Piping and piping systems are a major application of PVC resin. PVC pipes are manufactured
by extrusion method in a variety of dimensions such as solid wall or cellular core construction.
These are corrosion resistant, cost effective, flame resistant, and easy to install & handle, and
environmentally sound, with long service life.
PVC pipe has applications in drain-waste-vent (DWV), sewers, water mains, water service
lines, irrigation, conduit, and various industrial installations.

Future growth of India PVC pipes and fittings Market is expected to be led by the rising
construction of much required residential units and inclining demand of PVC pipes and fittings
in agricultural sector to bring in more area under cultivation. This will also be bolstered by the
government projects for clean environment and housing for all which includes a large focus
on the sanitation facilities for the people.

The Indian PVC pipes and fittings industry, which comprises of segments such as RPVC, PVC
pipes and fittings has grown significantly over the last few years due to the increase in the
demand from irrigation sector on account of the burgeoning population and uncertain weather
conditions in the country. The PVC pipes and fittings industry in India is highly fragmented.

INDIA PVC PIPE MARKET, 2014‐2022

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OBJECT

The object of this report is to explore the feasibility of setting up the unit and to assess the
financial requirements of the project.

LOCATION

The location of the unit will be at Bihta, Patna, Bihar. Raw materials, Electricity, Water, Skilled
and Semi-Skilled labour are easily available in the around the site.

PERQUISITE
LAND & BUILDING

A RCC covered area of approximately 5000 sq. ft. will be required to house the Plant and
Machinery for processing, packaging and storing the finished product.

RAW MATERIAL (PVC PIPE)

1. PVC RESIN
2. CALCIUM CARBONATE
3. ONE PACK
4. STABILIZER
5. STEARIC ACID
6. EPOXY
7. DOP OIL

POWER SUPPLY

103 KW - 415 V, 3 Phase, 50 Hz

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 MANPOWER

a) Accountant - 1 No.
b) Office Peon - 1 No.
c) Security - 2 Nos. for ward and watch
d) Experience Operator - 1No. Diploma in Engineering, to operate the Plant
e) Assistant Operator - 2 No
f) Unskilled Labor - 8 No.
g) Drivers - 2 Nos. for delivery of the product
h) Sales Executives - 2 persons

LOGESTICS

Delivery Van - 2 No. four wheeler

PROJECT ESTIMATION
A. NON-RECURRING EXPENSES

1. Land An area measuring 8000 sq. ft. is sufficient for setting up the plant for setting the
plant & machineries, godown, quarter, toilet and freely loading & unloading of raw
material and finished products.

Estimated cost of the land Rs.07,00,000.00

2. Building & other Unit construction

(a) A covered space measuring 5000 sq. ft. is proposed to be constructed as working
shed for processing of PVC Pipe

(b) Godown for storage of raw material & finished products measuring 2000 sq. ft.
with Asbestos shed

Estimated cost of construction will be approximately

( A. + B.) Rs.30,00,000.00

3. PLANT & MACHINERY

Sl. P a r t i c u i a r s Qty. Amount

No.
01 20 mm - 110 mm OD, 90-110 Kg Per Hour Capacity Twin One Rs.46,85,000.00
Screw PVC, UPVC, RPVC, SWR & Conduit Pipe Plant Complete Unit
TOTAL Rs.46,85000.00
PACKING CHARGES:@1% Rs.00,46,850.00
Rs.47,31,850.00
ADD : GST @ 18% Rs.08,51,733.00

GRAND TOTAL Rs.55,83,583.00

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4. Logistics

Four Wheeler Delivery Van - 2 No. Rs. 7,00,000.00 Rs. 14,00,000.00

5. Electrical Fittings
3 Phase line Transformer, cap. 150 KvA 1 No. Rs. 2,50,000.00
Complete Wiring for installation of
Machineries including all electrical MCB,
Isolator, Switches and Control Panel 1 Lot Rs.5,00,000.00
(without considering any extra pole)
Security deposit with Electric Supply authority Rs. 1,50,000.00
Fire Extinguisher 1 No. Rs. 5,000.00
Electric Fan 4 Nos. Rs. 6,000.00
Distribution Control Panel 1 No . Rs. 2,50,000.00 Rs.11,61,000.00
100 KvA capacity (for stable power
supply) 1 No. Rs.5,75,000.00
Input Range 300-460V
(110 Kg. Per hour capacity PVC Pipe Plant) 100 KvA
7. Pre & Post Operational Expenses Rs.02,00,000.00

TOTAL NON-RECURRING EXPENSES Rs.1,20,44,583.00

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B, RECURRING EXPENDITURE

Raw Materials (PVC)

1. PVC Resin, Vergin (per day basis) 448 kgs. Rs.0,53,760.00
2. Calcium Carbonate (per day basis) 360 kgs. Rs.0,04,320.00
3. Stabilizer (per day basis) 5.800 kgs. Rs.0,00,754.00
4. Steric Acid (per day basis) 5 kgs. Rs.0,00,400.00
5. Parafin Wax (per day basis) 5kgs. Rs.0,00,450.00
6. Dop Oil (per day basis) 900 gms.. Rs.0,00,135.00
Total : 824.7kgs. Rs.0,59,819.00

RECURRING EXPENDITURE

Raw Materials PVC (Per Month)

1. PVC Resin 11200 Kg.. Rs. 13,44,000.00

2. Calcium Carbonate 9000 Kg.. Rs. 1,08,000.00
3. Stabilizer 145 Kg. Rs. 0,18,850.00
4. Steric Acid 125 Ks. Rs. 10,000.00
5. Parafin Wax 125 Kg. Rs. 11,250.00
6. Dop Oil 22.5 Kg. Rs. 3,375.00
Total : 20,617.5 Kgs. Rs. 14,95,475.00

(A) NON-RECURRING EXPENDITURE Rs.1,20,44,583.00

(B) RECURRING EXPENDITURE Rs 14,95,475.00
Rs.1,32,62,368.00
TOTAL PROJECT COST Rs.1,35,40,058.00
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 FEASIBILITY REPORT

The feasibility of the project worked out with all practical means for a profitability of the business
is here as under :

The present lowest market sales price for the above ranges and the realization there on is as under and as
per seriatim

Sl. Total
No. Description Production cost/Kg* Quantity Sale Price/Kg Amount
01 PVC PIPE Rs.72,60 “ 824Kg @ 110 Rs.90,640.00
TOTAL Rs.90,640.00

The Sales on a daily basis will yield a realization of Rs.90,640.00

The Sales realization on month basis with 25 working days Rs.22,66,000.00

Manufacturing Expenses of per day basis Rs.59,822.00

Manufacturing Expenses per month basis Rs.59,822.00 x 25 days = Rs. 14,95,550.00 p.m.

Total receipts from sales per day basis Rs. 90,640.00

Total receipts from sales per month basis Rs. 90,640.00 x 25 days = Rs. 22,66,000.00 p.m.

Gross profit per Month on total installed capacity Rs.07,70,450.00 p.m.

The average gross profit per annum …. …… …. …. ….Rs..92,45,400.00

OVERHEAD EXPENSES
(PER MONTH BASIS)

1. TELEPHONE : Rs. 2,000.00

2. ELECTRICITY : Rs.1,00,000.00
3. WAGES & SALARIES : Rs.1,50,000.00
4. SPARES & CONSUMABLES : Rs. 10,000.00
5. FUEL FOR VEHICLE : Rs. 50,000.00
6. TOUR & TRAVELS : Rs. 10,000.00
Rs.3,72,000.00 per month

The overheads per annum will be Rs.3,22,000.00 x 12 months Rs.36,64,000.00

The total gross profit per annum Rs.92,45,400.00

Less : Total overhead per annum Rs.36,64,000.00

PROFIT BEFORE DEPRECIATION AND INTERESTS Rs.55,81,400.00

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NOTE : THE ABOVE CALCULATION MADE ON SINGLE SHIFT BASIS BUT
IN CASE OF MARKET DEMAND THE MACHINERY CAN RUN IN
DOUBLE SHIFT BASIS ALSO

APPROX. PRODUCTION COST

PRODUCTION COST PER KG. (PVC PIPE) AS PER PRESENT MARKET RATE OF RAW MATERIAL

Sl. Unit price

No. Material Quantity per kg. Total Price
01 PVC RESIN (VERGIN MATERIAL) 25 KGS. 120.00 Rs.3,000.00
02 STABILIZER 300 GMS. 130.00 Rs. 39.00
03 CALCIUM CARBONATE 20 KGS. 12.00 Rs. 240.00
04 STERIC ACID 250 GMS. 80.00 Rs. 20.00
05 PARAFIN WAX 250 GMS. 90.00 Rs. 22.50
06 DOP OIL 50 GMS. 150.00 Rs. 07.50
TOTAL 45.850 KGS. RS.3,329.00
COST PRICE PER KG. RS.72.60
ADD : ELECTRICITY COST PER KG. RS.05.00
LABOUR CHARGES PER KG. RS.03.00
TOTAL PRODUCTION COST RS.80.60/KG.
Before Tax