HDPE PIPES PLANT PROJECT

1. INTRODUCTION

High Density Polyethylene (HDPE) Pipes are manufactured all over the world by extrusion
technique. Sizing methods still vary but the trend is the pressure sizing i.e. introducing air at
the pressure of about 0.8 kg/cm2 to 1 kg/cm2 through one of the spider legs of the dies.
HDPE Pipes are generally manufactured on single screw extruder.
HDPE Pipes find application in a variety of fields in India and abroad. The most important
applications are as follows:
- Drinking water supply line
- Water lines in hilly areas. Here the property of flexibility of HDPE is exploited to
the fullest extent
- Irrigation lines
- Industrial effluent disposal lines
- Sewage and gas lines
- Fuel gas line
- Mining Industry

2. MARKET POTENTIAL

There is a large market and very good scope envisaged for HDPE Pipes in the near future.
Though some units are already in the line, there is good demand with the increase in
housing/building activities spreading in rural and urban areas. Number of Chemical and
Petrochemical plants are also being set up. Therefore, the demand for HDPE Pipes is also
likely to rise.

3. BASIS & PRESUMPTIONS

(i) The output capacity is taken as 950 Kgs/hr. The unit will work at 24 hrs. per day
for 25 working days in a month and 300 days in year. The output capacity may
vary from machinery to machinery and the cost of machinery may also vary from
supplier to supplier.
(ii) The time period for achieving the full envisaged capacity utilization
is six months

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 (iii) The labor wages are as per the prevailing rates in the market
(iv) The rate of interest for fixed and working capital is taken as 12%
(v) The margin money requirement for this project is 15 per cent
(vi) The payback period of this project is 3 years
(vii) The rate of land is taken @ Rs. 500/-per sq. mtr. and construction charges are taken @
Rs. 3500 per sq. mtr. This may also vary from place to place.
(viii) The present profile has to be updated taking into prevailing cost of land, building,
machinery etc. at the time of implementation of the project

4. IMPLEMENTATION SCHEDULE

The Time requirement for preparation of Project report DAYS : 7 Days

Time requirement for selection of Site : 1 MONTH
Required for registration as Small Scale Unit : One Week
Time required for acquiring the loan Machinery procurement erection and
: Three months
commissioning
Recruitment of laborer etc. : One month
Trial runs : One month
Maximum period of plant startup Six Months

5. TECHNICAL ASPECT
MANUFACTURING PROCESS
HDPE granules are fed into the hopper of the extruder which goes into the heated
cylinder of the extruder, where the granules melt and are conveyed (pumped) to the die
exist. Now the melt passes through the die and takes the shape of the die i.e. circular shape
and emerges from the exit of the die. It then passes through the calibrator and is forced to tale
the shape of the inside of the calibrator which is round in diameter by the inside air
pressure. This melt solidifies and taken round shape in the calibrator, which is cooled by
passing chilled water through it continuously.
Now the solid pipe is taken out from the water and is drawn continuously from the die. The
speed is adjusted according to the thickness of the pipe required and extruder output. The
pipes are either cut into 6 meters’ length or wound on the winder unit.

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 MANUFACTURING PROCESS FLOW CHART:
Process of Manufacturing - HDPE PIPES

Raw materials received at RM Store    

Raw material Check Quality parameter  
Approved Materials will be sent to Mixing section  
Rejected material will be sent back to Supplier  

Composition Approved Materials will be received for mixing  

Weigh all material as per Fixed standard composition Ratio
Compound will be sent for extrusion process  
Machine parameter will be set as per Standard Process Control parameter
Start Machine and connect pipe line.  
Extrusion Process
Pipe sizing , Printing(Logo, Batch No. Etc.) and cutting
In-Process Inspection ( Visual Appurtenance , Dimension )
Check Quality parameter as per IS 4984    
Testing
Approved material will be sent for packing  
Rejected material will be sent to Scrap    
Pipe and Coiling Pipe and Coiling as per requirement  
FG Pipe and Coil shift to FG .      
6. QUALITY & STANDARD

HDPE Pipes for Potable Water Supply are manufactured as per IS: 4984-2016

7. PRODUCTION CAPACITY (Per Annum)

(a) Quantity (M.T.) : 6000 MT./YEAR

(b) Value (Rs.) : 81 CRORE

8. TOTAL POWER REQUIREMENT

Total connected load (KW) : POWER DEMAND 500 KVA

9. POLLUTION CONTROL MEASURES

The unit does not create any pollution. However, a proper ventilation should be made in the
processing area for the better circulation of the fresh air.

10. ENERGY CONSERVATION

Entrepreneurs may select energy efficient machinery and proper planning has also to be made
for saving energy in the unit.

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 11. FINANCIAL ASPECT

A. FIXED CAPITAL
MACHINERY & EQUIPMENT
Sr.
Description of machines Capacity QTY. (Nos.) Cost (Rs)
No.
1 Mixer Unit 1000 kg/Hr. 1 5,000,000
2 HDPE Extruder Machine Line-1 (Single Line) 550Kg/Hr. 1 10,000,000
3 HDPE Extruder Machine Line-2 (Twin Line) 650kg/Hr. 1 12,000,000
4 HDPE Grinding 250 Kg/Hr. 1 800,000
5 HDPE Shedder 250 Kg/Hr. 1 1,200,000
6 RP Machine 150 Kg/Hr. 1 1,000,000
7 Weighing Scale 60 MT 1 2,000,000
8 Chiller Plant 100 TR 1 3,000,000
9 Air Compressor 150 CFM 1 2,000,000
(63mm to
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Die & Mandrel Tool 250mm) Each 1 Set 10,000,000
11 Crane 03 Ton 1 1,000,000
12 Hot Embossing Printing Machine - 3 9,000,000
13 Power Demand 500 KV 1 2,000,000
14 Transformer 750 KV 1 2,000,000
15 LT Panel 1250 Amp. ACB 1250 Amp 1 1,500,000
16 HD Panel VCB 630 Amp. 1 2,000,000
17 LT Distribution Panel - 1 3,000,000
18 Building Cost (Air Line, Water Line) - 1 1,000,000
19 Lab Equipment - 1 Set 2,000,000
20 Cost of Office Equipment’s   1 Set 500,000
Grand Total :- 71,000,000

LAND & BUILDING Area sq. mtrs Rate Rs./Sq. mtr Total Amount
Land 2000 1000 20000000
Building( Working Shed, Lab, Admin 3000(100X30) 4000 12000000
Office & Godown
    Grand Total (Rs.) 3.2 CRORE

A. Total Fixed Capital

Land Building 3.2 CRORE
MACHINERY & EQUIPMENT 7.1 CRORE
Operating Expenses 0.1 Crore
Total 10.4 Crore

i) WORKING CAPITAL:

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 Description No. of Employee Salary (Avg.) Per Month
Admin Staff 5 30,000 150000
Technical Staff 14 50000 700000
Skill Worker 10 20000 200000
Unskilled Worker 16 12000 192000
Grand Total:- 1242000

Raw Material Cost/Per Month: -

Description Qty/ Month (Kg) RATE/TON COST

Raw Material      
HDPE Material (PE100 , PE80 ,
500000 111
PE63) 55500000
Black Master Batch 25000 135 3375000
Blue Master Batch 500 155 77500
Packing Material 100 220 22000
Grand Total:- 58974500

Utilities Cost (Per month):

Description Unit Rate/Unit Cost

Electricity 1750000 7 12250000
Water 2000 10 20000
Grand Total 12270000

Other Contingent Expenses (Per month)

Description Cost
Repairs and Maintenance 5000
Transportation Charges 5000
Postage and stationery 2000
Telephone/Fax/Computer 2000
Consumable Stores 5000
Grand Total 19000

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 12. TOTAL WORKING CAPITAL (Per Month)

Description Cost
Staff and Labor 1242000
Raw Material 55525000
Utilities 12270000
Other Contingent Exp 19000
Grand Total 69056000

TOTAL WORKING CAPITAL for 2 Months: - 138112000 Crore

13. TOTAL CAPITAL INVESTMENT

Description Cost
Fixed Capital 69056000
Working Capital for 2 months 138112000
Grand Total 207168000

14. FIANCIAL ANALYSIS:

A. Cost of Production (per year) (300 days)

Description Cost
Total Recurring Cost 828672000
Depreciation on building @ 5% 160000
Depreciation on machinery & equipment @ 5% 3550000
Depreciation on Dies & Molds @ 2% 200000
Depreciation on office equipment @ 2% 10000
Interest on total Capital Investment @ 10% 20716800
Grand Total 853308800
Annual Sales Turn Over:

Item Qty.( MT) Rate (MT) Value (Rs.)

HDPE Pipes 6000 135000 810000000

B. Net Profit (Per year)

Sales(Rs) Cost of Production (Rs.) Profit
810000000 707694000 102306000

C. Net Profit Ratio = Net Profit x 100

Sales

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 = 102306000 x 100
81000000 =12.63 %

D. Rate of Return = Net Profit x 100

Total Capital Investment

= 102306000 x 100
207168000 = 49.38 %

E. Break-even Point

Description Cost
Total Recurring Cost 828672000
Depreciation on building @ 5% 160000
Depreciation on machinery & equipment @ 5% 3550000
Depreciation on Dies & Molds @ 2% 200000
Depreciation on office equipment @ 2% 10000
Interest on total Capital Investment @ 10% 20716800
Grand Total 853308800

Net Profit (Per Year)

B.E.P. % = Fixed Cost x 100

Fixed Cost + Net Profit

= 104000000 x 100 = 50.41%

104000000 +102306000