Business Plan of Paper Recycling Plant

Our Business plan is to convert used paper to the new, re-useable paper & other paper products. The process is known as Paper Recycling. Our business will help the paper industry to fulfill the rapidly increasing demand of paper products. Due to the inability for paper industry to meet the demand of paper, country needs to import paper from abroad. Due to this demand-supply gap, prices of paper products are increasing day by day. Our business plan will not only decrease the import bill of the country but also will decrease the price of paper products which will increase the purchasing power of the individuals and hence it will increase their welfare.

There are two possible reasons for which people would love to buy recycled paper products.

1. In an era of high rate of inflation, this low priced range of products will attract people to purchase.

2. Recycled paper products are friendly to environment. Most of the people don’t know about the concept of recycling. If awareness is created amongst the individuals, this will lead to increase in recycled product’s demand.

Since this production process requires used paper, less energy, less water and other raw materials, it is a cost effective process. In this way it has advantage over other products in the market. Another aspect of advantage is that of environment friendliness. This product will not only compete with the existing paper maker firms but also it will compete with the other closely related industries, such as polythene bag manufacturers. We all know that polythene bags are in one way or the other hazardous to the environment. This weakness of polythene bags becomes our strength and hence gives us competitive advantage over them.

In initial stage we’ll establish a paper processing plant & will try to capture the market by different means of marketing (Electronic, Print, and TV etc). When our product captures target proportion of market, we’ll then plan for the extension of the firm, either by expanding the plant size in the same area or installation of new plant on new piece of land.

Despite minor fluctuations in the consumption of paper over the years, it is showing an increasing trend. From the data of 50 Years (given in later paragraphs), we can predict that in future this demand will be increasing, as a result production capacities will be needed to be increased to meet the world demand.

Bangladeshi Paper market is large and growing but the pace of growth is declining because of increase in cost of production due to rapid increase in Fuel and Energy prices. Despite of the constraints, the market will grow because of the increase in demand of paper products forthcoming years. Per capita paper consumption is showing increasing trend over the years. In the period 2001-02, the consumption took huge jump showing the increase in need of paper in daily life. Bangladesh’s share in World consumption, although very minute, is increasing over time. From almost 0 percent in 1961, this share increased to 0.02% in 2010. The information stated above shows that there is huge potential in Paper Market as the per capita consumption is increasing over the years.

Paper Recycling has five main categories and 67 sub-categories. The details of the processing stages will vary according to whether pulp substitute grades, newsprint or packaging grades are treated. After an initial soaking, the recovered paper is pulped to separate the fibers, screened to remove the non-paper components and paper and board detrimental to production, de-inked (but not in packaging production), thickened and washed. During these refining processes both unusable materials and some fibers are removed from the system; such losses have been estimated at 15% for newsprint reprocessing. Therefore, the input of one tone of recovered paper will result on average in the production of approximately 850 kg of recycled paper. The yield does depend on the paper and board being produced – in packaging grades yields are high, in newspaper production 15-20%, and in graphic papers some 35%. Losses tend to increase with increased recovered paper content in paper destined for recycling. Unlike metals and glass, paper cannot be perpetually recycled, as the fibers break in the pulping process. It is estimated that paper can be reprocessed four times so virgin fiber will always be needed.

Initial capital requirement for manual processing will be around Tk. 1 Billion and  for automatic processing will be around Rs. 1.6 Billion.

Details of revenue and expenditures are given in main sections.

Some Environmental Benefits

1) Recycling can reduce water use in paper production by nearly 60% and energy consumption by 40%

2) Air pollution can be decreased by 74% and water pollution by 35% (these figures depend on factors such as transport distances and de-inking methods used)

3) Disposal problems are reduced by using waste paper to produce new paper. For every ton of paper used for recycling, the savings are:

• At least 30000 liters of water

• 3000-4000 KWh electricity (enough for an average 3-bedroom house for a year.

• 95% of air pollution

4) Recycling half the world’s paper would free 20 million acres of forest land.

5) Recycling one stack of newspapers about six feet tall saves the life of one tree 35 feet tall. Recycling approximately one ton saves 17 trees.

Some Social and Economic Benefits

1) Recycling will help local industries grow and will also bring in more employment.

2) There is 28 – 70 percent less energy consumption in producing recycled paper compared to virgin paper. Every ton of recycled paper saves approximately four barrels of oil, 4200 kilowatt hours of energy and enough energy to heat and air condition the average North American home for almost six months. (South Carolina

Electric & Gas Company. 1991. Recycle — Save Energy.)

3) There is also less water usage. This is because most of the energy used in papermaking is required for the pulping needed to turn wood into paper.

4) Using recycled paper reduces the need for primary raw materials.

Future outlook & trends:

Bangladeshi paper market is large and growing but the pace of growth is declining because of increase in cost of production due to rapid increase in Fuel and Energy prices. Despite of the constraints, the market will grow because of the increase in demand of paper products forthcoming years. Per capita paper consumption is showing increasing trend over the years. In the period 2001-02, the consumption took huge jump showing the increase in need of paper in daily life. Bangladesh’s share in World consumption, although very minute, is increasing over time. From almost 0 percent in 1961, this share increased to 0.02% in 2010.

The information stated above shows that there is huge potential in Paper Market as the per capita consumption is increasing over the years.

Analysis of competitors:

Our competitors will be the paper manufacturers, bag producers (paper, polythene etc), paper raw material related industries etc. Our business is not restricted to paper making or raw material generation; we want to be more diversified in order to be in sustainable position. In this way, majority of the industries that directly related with paper manufacturing will be our competitors.

Market Segmentation:

Considering the use of paper products, our target customers could be an individual, a corporation or government. In addition, existing paper manufacturing companies can also use our recycled pulp for their paper manufacturing, in this way we can also be the raw material provider for the industry.

Industry & Market Forecast:

Despite minor fluctuations in the consumption of paper over the years, it is showing an increasing trend. From the data of 50 Years (given in later paragraphs), we can predict that in future this demand will be increasing, as a result production capacities will be needed to be increased to meet the world demand.

Products:

We will be selling recycled pulp to the paper manufacturers. And we will also be engaged in production of paper products like paper bags, tissue papers, gift papers, note books etc.

Size of Business:

Initially it will be a medium scale paper processing plant. But with the increase of market share the size of plant will also be expanded.

Background of entrepreneurs:

Bio-data of entrepreneurs are given in the appendix (a) & (b).

Manufacturing process & management of residues:

Recovered paper reprocessing varies according to the type of recycled paper product, which will in turn determine the type of recovered paper that is used as the process feedstock. The higher quality, which need little cleaning, are used to make printing and writing papers, tissues and wrapping papers, and are known as pulp substitute grades since the quality is equal to virgin pulps. Newsprint and other papers needing de-inking are reprocessed for further use in the production of newspaper and hygiene papers. The lower qualities are mainly used for the production of packaging papers and board. Recovered paper is graded into numerous categories.

Paper Recycling processes include the following main steps:

a. Pulping: Adding water and applying mechanical action to separate fibers from each other.

b. Screening: Using screens, with either slots or holes, to remove contaminants that are larger than pulp fibers.

c. Centrifugal cleaning: Spinning the pulp slurry in a cleaner causes materials that are more dense than pulp fibers to move outward and be rejected.

d. Flotation: Passing air bubbles through the pulp slurry, with a surfactant present, causes ink particles to collect with the foam on the surface. By removing contaminated foam, pulp is made brighter. This step is sometimes called deinking.

e. Kneading or dispersion: Mechanical action is applied to fragment contaminant particles.

f. Washing: Small particles are removed by passing water through the pulp.

g. Bleaching: If white paper is desired, bleaching uses peroxides or hydrosulfites to remove color from the pulp.

h. Papermaking: The clean (and/or bleached) fiber is made into a “new” paper product in the same way that virgin paper is made.

i. Dissolved air flotation: Process water is cleaned for reuse.

j. Waste disposal: The unusable material left over, mainly ink, plastics, filler and short fibers, is called sludge. The sludge is buried in a landfill, burned to create energy at the paper mill or used as a fertilizer by local farmers.

Explanation of the Recycling Process:

The first step at the paper recycling process is to sort and separate the paper by grades, or type of paper. Then the paper moves by conveyor to the pulper, which contains water and chemicals to separate fibers from each other so that the pulper can chop the paper into tiny pieces. As the heated mixture breaks down the paper fibers, the old paper turns into a mushy texture called pulp. The pulp is sent through a screening process to filter any contaminants that are larger than pulp fibers, such as bits of plastic, staples, glue and twine. Then the pulp is cleaned again by spinning it in a large cone-shaped cylinder.

Next, the pulp is compressed to make the recycled fibers swell, which then makes them ideal for papermaking. After being compressed, color stripping chemicals remove the dyes from the paper. If white paper is desired then the next process is bleaching by using peroxides and hydrosulfites to remove color from the pulp making it whiter and brighter.

At last, the pulp is ready for papermaking which starts by fusing the pulp with water and chemicals together so that it is 99.5 percent water. This blend of watery pulp enters at the beginning of the paper machine and is sprayed by a wide jet continuously. The soaking pulp then heads towards a large flat wire screen where water starts to drain from the pulp, and the recycled fibers quickly begin to attach together to create a watery sheet. Lastly, felt-covered press rollers squeeze out more water. Now the sheet resembles paper, and heated metal rollers dry the paper.

After being wound up, the finished recycled paper is removed from the machine and is cut and shipped to the converting plant where it will be printed or made into new paper products such as paper bags, envelopes, or boxes.

Management of Residues:

The rejects, effluents and sledges generated by the recycling process include inks adhesive particles, small plastic particles and wax, paper filler and coating particles and large solid materials such as grit, wire (paper clips and staples) and ceramics. Treatment and disposal of these wastes tend to be more complicated and costly than treatment and disposal of effluents and sledges from virgin pulp mills, due to the increased variability and contamination of the raw recovered paper feedstock. This has started to hamper an otherwise positive trend in paper recycling, due to the fact that the more you recycle, the more residues you produce. This is because of the increased recovered fiber content in paper and board destined for recycling. In areas where recycling has already been common practice for some time (Central and Southern Europe for example), mills need more recovered paper to produce the same amount of paper than a mill in Scandinavia. This is because of a higher recovered fiber content in papers.

Physical plant, Machinery & equipment:

The plants will be constructed by GK construction in tk. 50 cr. & contractor will supply the necessary equipment & machineries of paper plant.

Names of suppliers of raw materials:

1. Collection of waste paper from household waste stream by own employees.

2. Collection of waste paper from scrape paper dealer of Nimtoli,Dhaka.And from around the country.

Description of company’s operation:

Company first collect scrap paper from suppliers & than do necessary processing to make it paper pulp. After making paper pulp it sale some of its paper pulp to other paper industries as final product and send the remaining paper pulp to another paper producing plant of the company in order to produce plain paper & other paper items. These items reach in the hand of customer through wholesale dealer & retailer.

Flow of orders for goods:

Flow of orders for goods would be done by the following way:

1. At first raw material supplied by the supplier will enter into raw material warehouse of the paper processing plant. Here following months required inventory will be hoarded.
2. After that raw material will be send to processing plant & paper pulp will be produced.
3. After producing paper pulp it will be sold to other paper producing industries as final product & the remaining pulp will be send pulp warehouse of company’s paper producing plant.
4. From this warehouse the paper pulp will be send to paper producing plant to make the plain paper and other paper items.
5. The finished products will then be sending to finished product inventory & will be reached to the hand of customer through wholesale dealer & retailer.

Technology utilization:

Our paper processing plant would be fully automatic & necessary technologies would be installed to make our production & administration most cost efficient.

Pricing:

Normal market price will be charged for paper pulps to paper making industry with some credit facilities.

Normal market price will be charged for paper products to wholesale dealers with some extra credit facilities & discount according to purchase quantity.

Distribution:

Considering the use of paper products, our target customers could be an individual, a corporation or government. In addition, existing paper manufacturing companies can also use our recycled pulp for their paper manufacturing, in this way we can also be the raw material provider for the industry. So we will distribute our pulps by ourselves & paper products by wholesale & retail seller.

Promotion:

Customers are not waiting for our product to be launched instead we are providing them a substitute to a more expensive product. In order to be successful, we need to introduce ourselves to the market. For this purpose, we will market our product(s) through different mediums (Websites, Emails, Print Media, TV etc). Different types of awareness programs will be used to make people buy recycled paper products. We are aware that this sort of awareness programs costs a lot but this way is the most effective way in case of our product.

Product forecast:

In order to analyze market demand for paper products, we first need to analyze the World demand for Paper products by using per capita paper consumption and then analyze Bangladesh with the same variable.

Per capita Paper Consumption of the World.

Figure 1 shows the per capita consumption of paper in the world since 1960.

We can clearly see from the figure that despite minor fluctuations in the consumption of paper over the years, it is showing an increasing trend. From this data of 50 Years, we can predict that in future this demand will be increasing; as a result production capacities will be needed to be increased to meet the world demand.

Per-Capita Paper Consumption in Bangladesh

Bangladeshi Paper market is large and growing but the pace of growth is declining because of increase in cost of production due to rapid increase in Fuel and Energy prices. Despite of the constraints, the market will grow because of the increase in demand of paper products forthcoming years.

It is quite evident from the figure that per capita paper consumption is showing increasing trend over the years. In the period 2001-02, the consumption took huge jump showing the increase in need of paper in daily life.

Comparison with World Per-Capita Paper Consumption

 (Note : All information are collected from internet)

Table 1 shows that trend of per capita consumption in both Bangladesh and World are increasing over time. Bangladesh’s share in World consumption, although very minute, is increasing over time. From almost 0 percent in 1961, this share increased to 0.02% in 2010.

The information stated above shows that there is huge potential in Paper Market as the per capita consumption is increasing over the years.

Expected Market Share:

In initial stages we are not expecting to capture huge market share because of the limitation of the resources employed. However, we can say that in 5 years time, we can cover up to 10% of the market share and the paper recycling industry can cover 40-45% of market share on aggregate.

Market share can be increased by means of marketing and creating awareness amongst individuals. Low priced and moderate quality recycled goods will be popular in small industries and households.

Form of ownership:

The business will operate as a private limited company under the business name of K & N Paper Recycling Plant for All. The business will include Kazi Ismail Kader and Nasrin Sultana as partners each owning 50% shares of the business.

Identification of partners or principal shareholder:

1) BILLAL HOSSAIN  (JNU. AIS).

Authority of principals:

BILLAL HOSSAIN SHALL be Managing director &.

BILLAL HOSSAIN shall hold the position of & Human resource manager.

Management team members’ roles & responsibilities with background:

ASSESSMENT OF RISK

Evaluate strength and weakness of business:

SWOT Analysis

FINANCIAL PLAN

Pro-forma Income Statement:

Our product will be in two different broad categories.

1. Raw Material (Pulp) Generation.

2. Final Paper product manufacturing.

We will be selling recycled pulp to the paper manufacturers; this will be the first source of revenue for us. If we can successfully convince them to purchase our pulp, then this source of revenue can get big.

Secondly, we will also be engaged in production of paper products like paper bags, tissue papers, gift papers, note books etc, this will also be the source of revenue for us.

Pro-forma Income Statement of first three years

(Note: All those costs and revenues are rough estimates. Actual may vary)

Cash flow projection:

Pro-forma Cash Flow Statement of first three years

 (Note: All those collection and payments are rough estimates. Actual may vary)

 Pro-forma Balance Sheet:

Pro-forma Balance Sheet of first year

(Note: All those costs and revenues are rough estimates. Actual may vary)

Sources & Application of Fund:

Pro-forma Sources & Applications of Funds, End of first year

Industrialized paper making has an effect on the environment both upstream (where raw materials are acquired and processed) and downstream (waste-disposal impacts). Recycling paper reduces this impact.

Today, 90% of paper pulp is made of wood. Paper production accounts for about 35% of felled trees, and represents 1.2% of the world’s total economic output. Recycling of newsprint saves about 1 ton of wood while recycling 1 tone (1.1 ton) of printing or copier paper saves slightly more than 2 tons of wood. This is because Kraft pulping requires twice as much wood since it removes lignin to produce higher quality fibers than mechanical pulping processes. Relating tons of paper recycled to the number of trees not cut is meaningless, since tree size varies tremendously and is the major factor in how much paper can be made from how many trees. Trees raised specifically for pulp production account for 16% of world pulp production, old growth forests 9% and second- and third- and more generation forests account for the balance. Most pulp mill operators practice reforestation to ensure a continuing supply of trees. The Forest Stewardship Council (FSC) certifies paper made from trees harvested according to guidelines meant to ensure good forestry practices. It has been estimated that recycling half the world’s paper would avoid the harvesting of 20 million acres (80,000 km²) of forestland.

Energy

Energy consumption is reduced by recycling, although there is some debate concerning the actual energy savings realized. The EIA claims a 40% reduction in energy when paper is recycled versus paper made with un-recycled pulp. Some calculations show that recycling one ton of newspaper saves about 4,000 KWh of electricity. This is enough electricity to power a 3- bedroom European house for an entire year. Recycling paper to make pulp may actually consume more fossil fuels than making new pulp via the Kraft process, however, since these mills generate all of their energy from burning waste wood (bark, roots) and byproduct lignin. Pulp mills producing new mechanical pulp use large amounts of energy; a very rough estimate of the electrical energy needed is 10,000 mega joules (MJ) per ton of pulp (2500 KWH per short ton), usually from hydroelectric generating plants.

Landfill use

About 35% of municipal solid waste (before recycling) by weight is paper and paper products. Recycling 1 ton of newspaper eliminates 3 cubic meters of landfill. Incineration of waste paper is usually preferable to land filling since useful energy is generated. Organic materials, including paper, decompose in landfills, albeit sometimes slowly, releasing methane, a potent greenhouse gas. Many larger landfills now collect this methane for use as a biogas fuel.

Water and air pollution

The US EPA has found that recycling causes 35% less water pollution and 74% less air pollution. Pulp mills can be sources of both air and water pollution, especially if they are producing bleached pulp. Modern mills produce considerably less pollution than those of a few decades ago. Recycling paper decreases the demand for virgin pulp and thus reduces the overall amount of air and water pollution associated with paper manufacture. Recycled pulp can be bleached with the same chemicals used to bleach virgin pulp, but hydrogen peroxide and sodium hydrosulfite are the most common bleaching agents. Recycled pulp, or paper made from it, is known as PCF (process chlorine free) if no chlorine-containing compounds were used in the recycling process.

Additional Environmental Benefits

1) Disposal problems are reduced by using waste paper to produce new paper. For

every ton of paper used for recycling, the savings are:

• At least 30000 liters of water

• 3000-4000 KWh electricity (enough for an average 3-bedroom house for a year.

• 95% of air pollution

2) Recycling one stack of newspapers about six feet tall saves the life of one tree 35 feet tall. Recycling approximately one ton saves 17 trees.

Other Social and Economic Benefits

1) Recycling will help local industries grow and will also bring in more employment.

2) There is also less water usage. This is because most of the energy used in paper making is required for the pulping needed to turn wood into paper.

3) Using recycled paper reduces the need for primary raw materials.

 In the initial stages, cost of recycled paper is well below paper from virgin pulp. These costs are rising as the utilization of recycled paper is increasing. The cost rises to the extent that it matches the cost of producing paper from virgin paper. This point is shown with red circle in the diagram. It shows that after this limit, recycled paper utilization in economically not feasible because the similar cost is being used for producing paper from virgin pulp.