We have developed a biodegradable plastic which can be used for making plastic films for retail packaging and general industrial packaging at 30% less cost. We manufacture plastic granules which can be melted and converted to films by bag manufacturers according to required size and shape. This product is validated by industry personals. Our material can be processed on normal 'blown film machines' available at many industries. We kept our focus on filling the gap between the high cost and market demand for Biodegradable plastic.
We are a team of three members. Since the last one and a half year, we are researching this field, during which we had conducted too many lab tests at various places. We had done many iterations before coming to final product composition. On 15th September, we developed our industrially scalable product. After that, we received two orders from Indian buyers for collective demand of 2040 Tonnes/year. After fulfilment of the same, one of the distributors is demanding 50,000 Tonnes per year for Madhya Pradesh and Gujarat. We assume that this is a good demand to start with.
Also, we filled a patent for this technology which is in pending stage.
The government wants Biodegradable.
People want Affordable.
The biodegradable plastic sector has gotten a lot of attention due to the policies of many nations including India. As the awareness for plastic pollution is growing, these policies will get stricter and wider across the globe. However, most of the common consumers are demanding low-cost plastic irrespective of its biodegradability.
Plastic packaging accounts for major percentage in total plastic consumption in all over the world. As per PLASTINDIA 2018 report, total polyethene consumption for film and lamination production i.e. for packaging purpose in 2016-17 is 2060 KTA. Lack of other viable alternatives to plastic and its continuously growing demand makes it a fascinating market to step in. Polyethene demand is growing annually at ~ 9% CAGR. A major part of packaging can be replaced by biodegradable plastic.
Though the carry bags or packagings are used by customers, actually shop owners pay for these bags and not common people. Hence, shopkeepers want to spend as little as possible on these packagings as they can.
Market research shows, currently India consumes more than 89,000 Tonnes of general-purpose carry bags per year. Almost all of them are non-biodegradable. Now in India, plastic is being banned and it will take at least a year to fully impart this ban on the ground.
The European market is well aware of biodegradability and environment. The purchasing power of these nations is also higher than that of developing countries. Biodegradable carry bags are already used there. In 2015, the EU consumed approx. 69,000 tonnes. It is estimated that in 2020, more than 182,000 Tonnes of biodegradable carry bags will be used in the EU.
We wish to acquire 5% of the national market and 2% of the Europian market.
Problem or Opportunity
Plastic is used for general packaging in many places including industrial packaging to retail packaging. Governments are banning these plastics as they cause pollution on a vast scale. India alone consumes more than 390 K Tonne's retail plastic packaging per annum. Biodegradable packaging films in the market are 2 times costly. The government wants 'Biodegradable plastic' and People want 'Low-cost Plastic.' Corporates and organisations are switching on biodegradable options.
Many Indian carry bag manufacturers are operating at their low production capacity due to existing plastic ban. They can restart their production with our plastic. Their experience and existing distribution network will create rapid expansion opportunity for us. ‘Affordable Biodegradable’ will open new markets such as malls, retail chains and other similar buyers because existing options such as cloth bags, jute bags, paper bags are costly. Though the carry bags or packaging are used by customers, actually shop owners pay for these bags and not common people. Hence, shopkeepers want to spend as little as possible on these packaging as they can.
Our product is Fully Biodegradable. It can be purchased at a lower price than other alternatives. It has high mechanical strength which is equally comparable with normal plastic. It can be used for packaging in retail as well as industrial single-use plastic packagings. Non-toxic and No heavy materials used.
Solution (product or service)
We have developed a biodegradable plastic which can be used for making plastic films for retail packaging and general industrial packaging at 30% less cost. We manufacture plastic granules which can be melted and converted to films by bag manufacturers according to required size and shape. Our material can be processed on normal 'blown film machines' available at many industries.
Basically, the material is made from starch and glycerin. Both are biodegradable. But this does not give enough strength. So we use a nanomaterial which gives strength even if added as less as 1%. This nanomaterial is also biodegradable. We have applied for a patent for the same. Our invention is the cheapest method for making industrially viable packaging for many applications if not all. We are a B2B company. The granules we supply are a raw material for the film manufacturing industries. With adequate raw material supply and suppliers, we also have buyers ready to purchase our material.
Competitors can be categorized as a direct and indirect competition. Direct competition includes Non-Biodegradable plastic bag and biodegradable plastic bag manufactures and Indirect competition includes manufacturers of alternative to plastic bags.
In biodegradable plastic envigreen, regeno, Trugreen are few manufacturers who are primary competitor to us. They have production plants and existing supply chain too. We are computing with them on the basis of price. Cost of normal plastic bag is very low and strength is good but the problem with that is that the government has banned manufacturing of such kind of plastic bags so competition will be with Biodegradable plastic bag manufacture and alternative option for plastic. Alternative solution may include jute bag, cloth bag etc. but due to high price compare to plastic bags its market share is less.
Other conventional biodegradable plastics such as PLA, PBAT and PCL etc. are imported in India from well-established manufacturers such as NovaMont, Natureworks, BASF and Jinhui Zao. Production of these types of plastic is a little complex. The conditions and steps involved in the manufacturing of these types of plastics making them 25% to 40% times more costly than our plastic.
Advantages or differentiators
We are offering a 30 % less cost than the existing cost of biodegradable plastic granules. The patent has been filed for technology so we have the government-approved monopoly for the selling of product. The process of finding the solution is lengthy and too many iterations are done before finalizing the final combination so it will not be easy to reach the level in less span as we are the developer of the technology so we know its pitfalls and where we should look for next.
Our grade is cheaper, non-water soluble and can be processed in the conventional machinery. There is huge scope to increase the profitability of a company by process optimization, exports, introducing profitable product range and most importantly reducing raw materials cost with conventional techniques of inventory management. We are now offering material at a cheaper cost without compromising the mechanical properties so it may be a competitive advantage.
The first-year production capacity of biodegradable granules is considered as 4452MT annually, already having collective order of 2040 MT.
The selling price of granules will be Rs. 174/Kg.
This will create revenue of 77.86 Cr in the first year of operation.
Projected profits for the first year of operations are Rs. 6.23 Cr with Net profit margins of 8.05%.
Ø Prices of raw material in the spreadsheets are as per quotations of suppliers for 20 MT production capacity. (here seasonal price fluctuations are also considered)
Actual planned monthly production capacity is 371MT/month this will cut down on raw material cost and will improve profitability significantly.
Effective supply chain management can surely bring more profits than expected.
Break-even sales (In value):- Rs. 127,070,461 (Rs 1.27 Cr)
Break-even (In units):- 730MT
These calculations are done as per standard methods in ZEN CMA project report preparing software.
We are B2B.
Company will sell biodegradable plastic granules which will be used to produce biodegradable plastic bags and packaging films.
Our material can be processed in the existing manufacturing facility available at plastic carry bag manufacturers. This feature will increase market acceptability of this material especially after recent government ban over single-use plastics.
We are planning to outsource product manufacturing to focus more on research and development.
Step 1:- Material preparation as per specified composition in Starch company.
Step 2:- Prepared material will be transported to toll manufacturer.
Step 3:- Toll manufacturer will prepare biodegradable plastic granules from the supplied material.
Step 4:- Product will be dispatched to global and state distributors as per their demands.
We are in contact with different starch companies and granules manufacturers from Gujrat and Maharashtra for this task. This operation will be executed under trained operational and supplier chain managers.
Money will be spent on
Required funds: - 3.3 Cr
To maintain a low risk of failure, we are planning our expansion in two steps.
Usages in two stages
Stage1:- 70 Lakh
Indian and EU certifications.
Salaries of founders, operational managers and two researchers.
Product diversification and further research.
To purchase lab-scale twin screw extruder.
Stage2:- 2.6 Cr
Month 7th to 8th
These funds will be used to fulfil current orders. All the funds will be utilised in the manufacturing of product as per current demand.
Raw materials, the processing cost of machinery.
Offer for investor
We will say in the meeting or negotiate the in-between process.
Few places where we have an upper hand such as advantage of research-oriented product but on the other hand places where we need more cautious like, as we are adopting the toll manufacturing method, in that case, few points will not be in our hands such as delay in production due to failure in machinery, Road causality, dishonesty of supply chain personals may hamper the expected growth and results. There is always room for expansion and growth. In our case looking at the Indian market and eagerly waiting overseas market shows a positive graph of demand and expansion. Above plans will be there for initial days. We should check and change plan accord with the situation and time. Few assumptions we had considered here which are, the supply chain system will perform well. Demand from the market will not be greater than the expected amount. Contributing industries will show cooperation throughout the process.
Incubation/Acceleration programs accomplishment
We are currently incubated in our own college incubation facility since last one and half year. We had participated in different competitions and workshops regarding startup-like Pitching, etc. Also, Our team has experience of management as our founding members are founders of different clubs from our college like satellite club, rocket club, media cell etc.
Won the competition and other awards
Won 'Sustainability Leadership Award' by ICTI (International centre for technical innovations)
2nd Rank in ASSOCHAM India Startup Conclave, Goa Edition.
Selected in Top 5 shortlisted startup at 'P&G Sustainable packaging competition'
Selected for IIT-B Abhyuday program
We have filed for Indian Patent in the expedited track. This enables us to get invention patented in maximum 4 months.