RIGID PVC PIPES

INTRODUCTION
Rigid PVC pipes are un-plasticised material which are inert in nature and light in
weight. The characteristics of these pipes are low cost, ease of handling, ease of
installation, non-corrosiveness, good tensile strength, ability to withstand high
fluid pressure, long life etc., They have become excellent substitute for the
conventional G.I. pipes for water distribution and conventional cement pipes for
drainage application. They are in great demand for various drainage application
as well because these pipes are not brittle like cement pipes and are easily and
quickly installable. These pipes are also used in electrical jobs due to the
excellent electrical and heat insulation properties.

All the electricity boards have accepted PVC conduits. There are larger diameter
pipes which have wide acceptance for potable water supply as they can
withstand high fluid pressures and are highly durable. Their use in tube wells is a
recent innovation. They also offer very good resistance to most of the chemicals.
In this report, the manufacture of rigid PVC pipes with a maximum dia. upto 110
mm (outer dia), mainly used as domestic water supply lines and rain water drain
lines, has been considered.

MARKET
The Indian Plastic Industry has taken great strides in its quest for success. The
last few decades have seen it rise to the position of a leading force in the country
with a sizable base. The industry itself is growing at a fast pace and the per
capita consumption of plastics in the country has increased manifold as
compared to the earlier decade.

Plastic has undoubtedly gained notable importance in every sphere of activities.

It has helped substitute and save scarce natural resources. It is an inseparable
part of our daily life.
Constant development in polymer technology, processing machinery, know how
and cost effective production is fast replacing plastics in every segment from its
conventional materials

• Polymer demand in India to touch 7.3 million tons by 2006 - 2007 and 12.4
million tons by 2010 - 2011.
• India is expected to be the 3rd largest consumer of plastics after US and
china by 2010.

Growth rate between 12% - 15%. Consistently outperforming GDP.

Major Raw Material Producers 15

Processing Units 22,000 Nos
Turnover Rs. 25,000 crores
Capital Asset Rs. 47,000 crores
Raw Material produced approx. 4.2 million tones
Raw Material consumed approx. 3.7 million tones
Employment Direct / Indirect 2.5 million
Export value approx. USD 1104 million
Revenue to Government approx. Rs. 6000 crores

Demand estimates for major Polymers - INDIA (1000 Tones)

2003 2004
LDPE 281
3000
Linear PE / LLDPE / HDPE 1666
PP 1737 2569
PVC 986 1614
PS 246 402
PET Bottles 45 100
PET Film 55 100
Demand estimates for Engineering Thermoplastics (1000 Tones)
ABS 40 65
Polyamide ( 6 & 66) 20 32
PET / PBT Moulding
2 3
Material
Polycarbonate 20 32
Other Thermoplastics 26 40
Thermosets 116 155

Demand estimates for Machinery

Injection Moulding 32350 Nos
Blow Moulding 5050 Nos
Extrusion 16700 Nos
* Source : Task Force on Petrochemical / Industry
Estimate

The per capita plastics consumption, which is currently at 3 kg, is projected to go

up to 7.7 kg by the year 2007. While it is true that our consumption is below the
world average of 17 kg, per capita figures should be viewed in the context of our
large population; sometimes per capita figures are useful only for trend analysis
and not in absolute terms.
INSTALLED CAPACITY
Product Installed No of working Capacity Capacity per
capacity per hours per day per day annum
hour 300 days per
annum
Rigid pvc 37.5 kgs 16 600 180 MT
pipes (Maximum
dia-110 mm
outer dia)

PLANT AND MACHINERY

Sl.No Description Qty Rs. in lakh

1. High speed mixer, honschel type capacity 50 kg. per 1 1.25
batch, fitted with complete controls with cooling arrangements
2. 85 MM PVC rigid pipe extrusion plant consisting of twin screw
1 8.00
extruder, vacuum sizing unit, cooling tank, haul off unit and cutting
device complete with controls and motor etc, with Dies for 50mm,
63mm, 75mm, 90mm Dia Pipes
3. Scrap Grinder, heavy duty, fitted with electric motor 5 HP 1 0.60
4. Overhead water tank and re cycling pump unit 1 0.30
5. Weighing balance (Avery) type industrial model
100 gms. to 5 kgs. 0.15
1 Kg. to 100 Kgs 0.25
6. Pipe storage tracks, small hand tools and greasing & oiling 0.25
equipments etc.
7. Testing & Inspection Equipments, Laboratory 1.20
Total 12.00
MANUFACTURING PROCESS

TYPICAL PVCCOMPOUNDING FORMULATION FOR RIGID PVC PIPE :

(Parts by weight)
PVC Resin 100
Stabilizer (non-toxic) 5
Primary Plasticizer 1.5
Secondary Plasticizer 5
Internal Lubricant 3
External Lubricant 4
Epoxy plasticizer 1.5
Pigment base 3
Pigment As required

Rigid or unplasticized PVC pipes are made from polyvinyl chloride (PVC) which
in resin form is hard and rigid material. This rigidity can be controlled by
controlling the percentage of plasticizer at the time of compounding. The
production of rigid PVC pipes consists of plasticizing and homogenising PVC
compound and mattering through an extruder. This hot molten PVC compound
is extruded by the extruder through a circular slit. This circular slit governs the
size of the pipe to be extruded. Different dies are used for manufacturing
different sizes of pipes.

The pipes thus extruded through the die is then passed through a vacuum sizing
tank wherein the dimensions of the pipe can be accurately set. This also helps in
the surface finish of the pipe. Vacuum sizing which is much more sophisticated
than other types of forming operations reduce the percentage of wastage
considerably.
 As the pipe being extruded is rigid in form they cannot be wound into coils so an
in-line motorised cutting device should be provided for cutting the pipes into
required sizes. Since the performance requirement for the rigid pipes are quite
critical the unit should preferably be equipped with process control laboratory for
the preliminary testing of raw materials for ascertaining the consistency in their
quality. The unit may also have arrangement for quality testing of pipes.

RAW MATERIALS
The raw materials required for the annual production of 180MTs of PVC pipes
are the following.
For MTS 180
Qty-MTs Rate/MT Value Rs. Lakhs
PVC-Resin 162.00 48000 77.76
Plasticisers 9.00 65000 5.85
Stabilisers 3.60 64000 2.30
ESBO 3.84 50000 1.92
Lead stearate 3.24 80000 2.59
Calcium stearate 1.62 50000 0.81
Calcium carbonate 10.80 12000 1.30
Colourants 0.84 110000 0.92
TOTAL 93.46
Packing materials For 180 MTs 1000/MT 1.80

LOCATION LAND AND BUILDING

Built up area-Sq.ft 3000
Rent p.m.-Rs per .5 per sq.ft 15000
Advance-10 months .Rs 150000

UTILITIES
Three phase- KW 60.00
Power charges Rs. lakhs p.a 13.68
Water-For process-Litres per day 2000
For human consumption-litres/day 200

MANPOWER
Nos Monthly wages Total
Manager 1 8000 8000
Supervisor 1 6000 6000
Skilled 8 5000 40000
Unskilled 8 3000 24000
Accounts Assistant 1 4000 4000
Sales Executive 1 5000 5000
Security 2 2000 4000
sub total 91000
Add benefits 20% 18200
Total per month 109200
TOTAL PER ANNUM-Rs. lakhs 13.10

SCHEDULE OF IMPLEMENTATION
After the financial arrangements are made the project can be implemented in 3
months times.

COST OF PRODUCTION AND PROFITABILTY

Assumptions
Installed capacity 180 MT of Rigid PVC Pipes of various sizes per
annum
Capacity utilisation Year-1 -60%
Year -2 -70%
Year-3 onwards- 80%
Selling price Rs.80.00 per kg
Raw materials As per the details given above
Packing materials As per details given above
Power
Wages and salaries
Repairs and Maintenance
Depreciation
Selling general and
administrative expenses
Interest on Term loan
Interest on working capital
Income tax
Rs.13.68 lakhs per annum at 100%
Rs. 13.10 lakhs with increase 5% every year.
Rs.0.60 lakh per annum with 10% annual
increase.
Written down value method -15 % on machinery
Rs.30000 per month with 5% annual increase.
11% per annum
11 % per annum
33.66 % on profits

ASSESSMENT OF WORKING CAPITAL

Months Values % Margin Bank
Consumptions Amount Finance
Raw Materials 0.50 2.34 25% 0.59 1.75
Consumables 2.00 0.18 25% 0.05 0.13
Finished goods 0.50 3.27 25% 0.82 2.45
Debtors 0.50 3.60 10% 0.36 3.24
Expenses 1.00 0.30 100% 0.30 0.00
9.69 2.12 7.57

MACHINERY SUPPLIERS
A. EXTRUDERS, SCRAP GRINDERS & MIXERS
1. M/s. BOOLANI ENGINEERING CORPORATION, Shabir Mansion
137, Linghi Chetty Street, Chennai - 600 001
2. M/s. BRIMCO PLASTIC MACHINERY PVT.LTD, 14, Sunkurama Chetty Street
(II Floor), Chennai - 600 001.
3. M/s. DGP WINDSOR LTD, 21, Century Plaza, 580, Anna Salai, Chennai - 600 018
4. M/s. KOLSITE MACHINE FABRIK LTD, C-1, Gems Court,14, Khader Nawaz Khan
Road
Chennai - 600 006
5. M/s. JOLITE ENGINEERING WORKS, 343, Walltax Road, Chennai - 600 079
6. M/s. SIVA ENGINEERING WORKS, 12-A, Shanmugarajan Street, Vepery
Chennai - 600 007
7. M/s. POLYMER MACHINERY WORKS, 40, Avaniapuram Main Road, Madurai- 625
012

8. M/s. SANT ENGINEERING INDUSTRIES, 580, Main Faiz Road, Karol Bagh
New Delhi- 110 005
9. M/s. REMICA PLASTIC MACHINERY MFRS, Opp. Rustom Mills, Dhudeshwar Road
Ahmedabad- 380 001
10. M/s. NEOPLASTIC MACHINERY, New Mithakali Under Bridge, Ahmedabad- 380 009
11. M/s. NEPTUNE PLASTIC & METAL INDUSTRIES, Jain Chambers, 18,
R.N. Mukherjee Road, Calcutta- 700 001
12. D. G.P. Windsor India Ltd, 2 J, Century Plaza, Teynampet, Chennai – 600
018.
13. Europack Machines India Pvt Ltd, 52 Bindal Industrial Estate, Sakinaka,
Andhari East, Mumbai – 500 072.
14. Ambica Engineering & Wire Products, L 45, GIDC Estate, Odher, Ahmedabad–
382415,
15. Hind Hydraulics & Engineers, Faridabad, Plot No. 13, Sector 74, Faridabad–
121005.
16. Prasad Groups & Companies, Plot No. 14 – 16 GIDC Industrial Estate, Phase 1
Valva,
Ahmedabad – 382445
17. HMT International Ltd, 59 HMT Bhavan, Bellary Raod, Bangalore – 560 032.

ADDRESSES OF RAW MATERIALS & OTHER CONSUMABLES SUPPLIERS

PVC RESIN
1. M/s. Chemicals and Plastics India Ltd, PVC Division, 8, Cathedral Road,
Chennai - 600 086.
2. M/s. Indian Petrochemicals Corporation, Chennai Regional Office, 33, D'Silva Road
Mylapore, Chennai - 600 004.
3. M/s. Reliance Industries Ltd., Petrochemicals Division, JVL Plaza, 501, Anna Salai
Chennai - 600 018.
4. M/s. National Organic Chemical Industries Ltd., 8, Haddows Road, Chennai -600 006.
5. M/s. Ram-Nath & Co., 38, Cathedral Road, Chennai - 600 086.
6. M/s. Jai Enterprises, 22, Rutland Gate IV Street, Chennai - 600 008.
7. M/s. Sree Polymers, 218, Nehru Nagar, Chennai -600 096.

LUBRICANTS, PROCESSING AIDS, STABILIZERS, PIGMENTS ETC.

1. M/s. Ram-Nath & Co., 38, Cathedral Road, Chennai - 600 086.
2. M/s. Asco Plastics, 17-B, Muthusa Maistry Street, Seven wells, Chennai - 600 001.
3. M/s. Rajshree Petrochemicals, 156, Mint Street, Kanchanplaza, First Floor
 Chennai - 600 079.
4. M/s. Sri Sakthi Industries, 144, Nehru Nagar, Chennai - 600 041.
FINANCIAL ASPECTS

1. COST OF PROJECT
[Rs.lakhs]

Land & Building (Advance) 1.50

Plant & Machinery 12.00
Other Misc. assets 0.50
Pre-Operative expenses 1.50
Margin for WC 2.14
17.64

2. MEANS OF FINANCE

Capital 8.64
Term Loan 9.00
17.64

3. COST OF PRODUCTION & PROFITABILITY STATEMENT

[Rs.lakhs]

Years 1 2 3 4 5

Installed Capacity-MTs 180 180 180 180 180

Utilisation 60% 70% 80% 80% 80%
Production/Sales-MTs 108 126 144 144 144

Selling Price per MT-Rs. 0.80 lakhs

Sales Value (Rs.lakhs) 86.40 100.80 115.20 115.20 115.20

Raw Materials 56.07 65.42 74.76 74.76 74.76

Packing Materials 1.08 1.26 1.44 1.44 1.44
Power 8.21 9.58 10.94 10.94 10.94
Wages & Salaries 13.10 13.76 14.45 15.17 15.93
Repairs & Maintenance 0.60 0.66 0.73 0.80 0.88
Depreciation 1.80 1.53 1.30 1.11 0.94
Cost of Production 80.86 92.21 103.62 104.22 104.89
Selling, Admin, & General exp 3.60 3.78 3.97 4.17 4.38
Interest on Term Loan 0.99 0.87 0.62 0.37 0.12
Interest on Working Capital 0.84 0.84 0.84 0.84 0.84
Total 86.29 97.70 109.05 109.60 110.23

Profit Before Tax 0.11 3.10 6.15 5.60 4.97

Provision for tax 0.04 1.04 2.07 1.89 1.67
Profit After Tax 0.07 2.06 4.08 3.71 3.30
Add: Depreciation 1.80 1.53 1.30 1.11 0.94
Cash Accruals 1.87 3.59 5.38 4.82 4.24

Repayment of Term loan 0.00 2.25 2.25 2.25 2.25

4. WORKING CAPITAL:

Months Values % Margin Bank

Consumptions Amount Finance

Raw Materials 0.50 2.34 25% 0.59 1.75

Consumables 2.00 0.18 25% 0.05 0.13
Finished goods 0.50 3.37 25% 0.84 2.53
Debtors 0.50 3.60 10% 0.36 3.24
Expenses 1.00 0.30 100% 0.30 0.00
9.79 2.14 7.65

6. PROFITABILITY RATIOS BASED ON 80% UTILISATION

Profit after Tax = 4.08 4%

Sales 115.20

Profit before Interest and Tax = 7.61 30%

Total Investment 25.29

Profit after Tax = 4.08 47%

Promoters Capital 8.64
7. BREAK EVEN LEVEL

Fixed Cost (FC):

[Rs.lakhs]
Wages & Salaries 14.45
Repairs & Maintenance 0.73
Depreciation 1.30
Admin. & General expenses 3.97
Interest on TL 0.62
21.07

Profit Before Tax (P) 6.15

BEL = FC x 100 = 21.07 x 80 x 100

FC +P 27.22 100

62% of installed capacity

 4. PROFITABILITY RATIOS BASED ON 80% UTILISATION

Profit after Tax = 5.88 5%

Sales 115.20
Profit before Interest and Tax = 10.31 41%
Total Investment 25.19
Profit after Tax = 5.88 68%
Promoters Capital 8.62

5. BREAK EVEN LEVEL

Fixed Cost (FC):

[Rs.lakhs]
Wages & Salaries 11.75
Repairs & Maintenance 0.73
Depreciation 1.30
Admin. & General expenses 3.97
Interest on TL 0.62
18.37
Profit Before Tax (P) 8.86

BEL = FC x 100 = 18.37 x 80 x 100

FC +P 27.23 100
54% of installed capacity