A feasibility study of establishing a polypropylene sack plant in Cagayan de Oro City

• Main Author: Chua, Dun Y.
• Format: text
• Language: English
• Published: Animo Repository 1980
• Subjects: Polypropylene, Plastic bags; Polymer Science
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/671
• Institution: De La Salle University

The project will put up a plastic sack plant in Cagayan de Oro City to supply the rice mills and corn mills in Region X. The project will supply roughly 50% of the total sack requirement for rice and corn grit. It will employ around 50 people, with an investment of P5 million to be financed internally through equity and externally through loans. The incorporation up to plant completion of the project will require a total of 12 months. The key officers of the company will be composed of members of the proponent's family. The rest will be recruited from Cagayan de Oro City. The marketing aspect of the study will show that as the present trend continues, the supply will lag behind demand. Prices will continue to go up. The company will supply directly a part of the sack requirement of Region X. The technical aspects of the study involves the manufacturing process that includes film extrusion, slitting and drawing, winding, warping, weaving process, and the printing and bag making. The plant's size is 3,500 square meters with a daily capacity of 8,640 pieces based on 300 working days. The supplier of machinery and equipment is Luckylin Company of Taipei, Taiwan. The plastic resins will be imported either from Japan or Europe. The power will be supplied by National Power Corporation. The maximum power demand is 90 KWH. The company will pay 10% and 30% tax for importation of machinery and raw material, respectively. Business tax is 10% of sales. Income tax rate is 25% for the first P100,000.00 and 35% in excess of P100,000.00. Financing will come from the Development Bank of the Philippines in the amount of P4 million at 12% interest per annum with a grace period of three years on principal. The principal will be amortized for the next seven years. The amount of paid-in capital is P1 million. Subsequent financing of operation will come from cash generated from business operation. The initial year's operation will incur more than P300,000.00 net loss but operation in the succeeding years will average more than P1 million