PROJECT AT GLANCE

1 Name of Proprietor/Director XXXXXXXX

2 Firm Name XXXXXXXX
3 Registered Address XXXXXXXX
4 Nature of Activity XXXXXXXX
5 Category of Applicant XXXXXXXX
6 Location of Unit XXXXXXXX
7 Cost of Project 20.56 Rs. In Lakhs
8 Means of Finance
i) Own Contribution 2.06 Rs. In Lakhs
ii) Term Loan 13.50 Rs. In Lakhs
iii) Working Capital 5.00 Rs. In Lakhs
9 Debt Service Coverage Ratio 3.34
10 Break Even Point 0.23
11 Power Requiremnet 20 KW
12 Employment 10 Persons

Polyethylene or cloth like

13 Major Raw Materials film, tissue, hot melts,
Hydrophobic & Hydrophilic
non- woven, Elastics
14 Details of Cost of Project & Means of Finance

Cost of Project
Particulars Amount in Lacs
Land Owned/Leased
Building & Civil Work Owned/Leased
Plant & Machinery 13.50
Furniture & Fixture 0.50
Other Misc Assets 1.00
Working Capital Requirement 5.56
Total 20.56
Means of Finance
Particulars Amount in Lacs
Own Contribution 2.06
Term Loan 13.50
Working capital Loan 5.00
Total 20.56
1. INTRODUCTION

Baby diapers are safely used every day by parents all over the world. Since these baby
diapers were invented in the 1930s, they have constantly improved. Long gone is the
days of plastic outer pants, ill-fitting terry cloth inners and constantly wet skin for
babies and infants. Today’s disposable diapers are light, compact, very absorbent,
prevents leaks and easy to use.
• Baby diapers are comfortable to wear due to the softness, lightness and
‘breathability’ of the materials used.
• Keep the skin drier and, as a result, healthier. These benefits have been confirmed by
independent medical experts in skin and infant health.
• Are better at reducing the transmission of infectious diseases as faecal containment is
reduced so that there is less risk of the spread of bacteria.
The story of the diapers begins more than a century ago, but it became commercially
viable in Europe and North America seven decades ago, in the late 1940s. Its evolution
was hardly smooth, however, and the huge success it has become was hardly foreseen
at the outset.
In nine decades of diapers the author Davis Dyer takes a long view of the product, and
explains its development in four distinct periods:
1. Product Invention (before the 1930s), when numerous independent inventors sought
better solutions to traditional diapering
2. Early Commercialization (1930s-1950s), when private corporations introduced
diapers and slowly cultivated the market
3. Rapid Adoption (1960s-1980s), when demand exploded as diapers became affordable
and widely available
4. Continuous Improvement (1990s-present), when the leading manufacturers are
competing on a global basis to offer consumers a product undergoing constant innovation and
improvement.

The main duty requirements of diapers are:

• The device should be comfortable for the baby
• It should be easy to place and remove on the baby
• It should have the capacity to absorb urine and semisolid stool
• It should be capable of being wrapped without spilling contents on removal
• It should be disposable and affordable
• It should be of such inert materials as will not affect baby’s delicate skin

Types of Baby Diapers

▪ Teen baby diaper,
▪ Boy baby diaper,
▪ Baby napkin,
▪ Big baby diaper,
▪ New-born diaper,
▪ Paper diaper,
▪ Disposable baby diapers,
▪ Girl baby diaper and cotton baby diaper etc...

2. PRODUCT DISCRIPTION

2.1 PRODUCT USES

Diapers are personal hygiene products engineered to absorb and contain urine and faeces
of a baby. They are placed and fastened around baby’s legs and bottom to form a leak
proof seal, preventing contamination of baby’s clothes.
 Size measurements:
▪ Standard: 360 mm(L.)×105mm (W.)× 16mm (Thickness) Max. 160 pieces/min
▪ Newborn baby: 320 mm(L.) ×105mm (W.)× 15mm (Thickness) Max. 150 pieces/min

2.2 RAW MATERIAL REQUIREMENT

Most baby diapers are made with the following basic components:

1) Polyethylene or cloth-like film: This is used as the back sheet that prevents the liquids
from leaking out of the diaper. The back-sheet can also be given a cloth-like look, by
adding a thin polypropylene non-woven sheet to the film, using either the hot melt
process or the heat and pressure method.

2) Tissue: A special tissue paper that is different from the regular bathroom tissue and
has a higher elasticity and wet strength is another important component of a diaper. The
tissue essentially serves as a carrier for the pad (the pad is the absorbent core of the
diaper) and helps reduce the pin holes created during the compression process carried out
by continuous drum forming systems.

3) Hot Melts: They are used to glue the different components of the diaper, such as the
pad and the elastics. They are made of a mixture of resins and oils. The hot melt adhesive
is applied in molten form and when it cools down it provides the required bonding force
to glue the materials.

4) Hydrophobic Non-woven: It is used as a top sheet for the leg cuffs; it prevents water
from passing through. It is made of polypropylene resin without any added surface
surfactants. The hydrophobic nonwoven prevents leakage out of diaper. By applying a
surfactant to a restricted area, it is possible to make a roll of hydrophobic nonwoven only
partially philic.

5) Hydrophilic Non-woven: It is the main top sheet, the top surface that is in contact
with the baby's skin. It allows the liquids to flow into the diaper core. The difference
between the two non-wovens (philic and phobic) is the surfactant treatment used in the
process.

6) Elastics: Used to improve the fit of the diaper, usually made of polyurethane or
polyester foam, synthetic rubber or Lycra (also known with the generic name Spandex).
They are used in cuffs, for the waist and the legs; they can also be used as lateral side
panels and in tape construction.

7) Lateral Tapes: In premium diapers, Velcro type materials have been used to provide
mechanical grip, it is also known as the "hook tape". In lower priced diapers, adhesive
tapes made of polypropylene are used. Then there are new versions of elasticized
Nonwoven Velcro Tapes.

8) Frontal Tapes: This is used to facilitate multiple repositioning of the lateral tape
without tearing the back-sheet; it is made of polypropylene film and attached to the front
of the diaper with adhesive. Its use has helped to reduce the thickness of the poly film
without the risk of potential tears associated with the opening of the lateral tapes from the
back-sheet.

9) Cellulose: Used in the construction of the pad, it gives integrity and absorbing
capacity to the diaper. The capacity of normal cellulose pulp is around 10 cc of water
per gram of pulp when the diaper is in "free swell".

10) Acquisition and Distribution Layer: Also known with its abbreviation ADL, it is a sub
layer used between the top sheet and the absorbent core. Sometimes used in full length
but mostly preferred as a patch near the target zone where urine is most likely to be
deposited.

11) Sodium Poly-acrylate: Also known as super-absorbent or "SAP" (super absorbent

polymer), Kimberly Clark used to call it SAM (super absorbent material). It is typically
used in fine granular form (like table salt). It helps improve capacity for better retention in
a disposable diaper, allowing the product to be thinner with improved performance and
less usage of pine fluff pulp.

12) Top Sheet surface add-on lotions: In order to create novelties for product
differentiation, several topical lotions are added to the nonwoven top sheet, among others:
Aloe Vera, Vitamin E, Petrolatum, Almond Oil, Vitamin D, Oat Extract, Jojoba, etc.
There is another trend to use antibacterial lotions (such as tertiary ammonia or silver salt
compounds). However, many paediatricians are against its use for obvious reasons.
 13) Decorated Films and wetness indicators: For even greater product differentiation,
some diapers use decorated films underneath the cloth-like back-sheet. Some use as many
as nine inks with all kinds of well-known characters such as Disney, Sesame Street,
Soccer teams, etc. Another gimmick they use is a wetness indicator. This is typically used
for adult products but some baby diapers also use it.

2.3 MANUFACTURING PROCESS

The manufacturing process of the Diapers is simple and amenable to line production. It
consists of continues operation in which the filler paper is ground by a hammer mill to
produce a fluffed pulp which is then supported by a tissue paper. Next a non-woven fabric is
placed and adhesive is applied to bond the materials. The diaper is cut to the proper
dimension, and the fastener and release tapes are attached at designated points. Thus, the
process is:

Sheets of rolled wood pulp are continuously and automatically fed to the pulp crusher, which
crushes the supplied pulp into cotton-like fluff.

 The fluffed pulp is then molded into strips.

 Two absorbent layers of cotton are placed on two sides of the molded strip.
 The entire strip is then cut into required lengths.
 The Waterproof polyethylene film is laid on the sides of the absorbent layers.
 The entire strip is then wrapped by a non-woven fabric, which holds the individual
strip together.
 The strip is then processed by hot sealing and embossed with favorite figures.
 The diapers, which are still joined together by the train diaper are forwarded by a
conveyer and thereafter cut into separate pieces.
 Each diaper is then placed into individual bags and arrayed in good order for packing.
 Baby Diaper Manufacturing Process:

Raw Pulp Crushing Forming of Fibre- Tissues on two

Tissue Layers (Cotton- sides
Like Fluff)

Forwarding by Hot sealing and Wrapping with PE Cutting into

conveyor embossing Films and Non- Sections
Woven Fabric

Conveyor The finished Cutting Cutting Sections of

products Sections ofDiapers Diapers

Market and Packing and

Up to Baby storage

3. PROJECT COMPONENTS

3.1 Land /Civil Work

An area of almost 3,000-4,000 square feet would be required to set up the Baby Diaper
Manufacturing Unit. This space would be required for raw materials storage, production,
packaging, storage of finished goods, waste treatment, and administrative work.
 We have not considered the cost of Land purchase & Building Civil work in the project.
It is assumed that land & building will be on rent & approx. rental of the same will be Rs.
30,000 – 40,000 per month.

3.2 Plant & Machinery

The manufacturing process of baby diaper is a line production. The unit comprises a paper
pulp crushing machine, forming/ wrapping machine, glue spreading machine and the
conveyer systems, plus counter, control box, and alignment machine.

A fluff pulp mill positioned at the right hand end of the machine and normally
counter/stacker at the left hand end to count the diapers and align them before they are
pushed into the manually held bag or into the automatic packaging machine.

Pulp feeding frame: The electrically controlled lifter, the feeding is easily operated

Pulp grinder: Grinding system with the reject fiber collecting device, which can reduce the
production cost.

Pad wrapping system: Pliable but strong wrapping and forming device made from the
stainless steel with special specification and designs.

Hot melt adhesive rolling system: The special applying adhesive device.

Pad conveyor: Convey the pads in 2.5M row, which is convenient for packing inspection

Drive system: Solid spiral and helical gears of different specification to match with vari-
speed gear shift allowing for reduction of the pulp mat to the proper thickness at the desired
weight.

Packing facilities: If wish to pack the product into a plastic bag, use a pedal-controlled
manual packing machine, or the continuous heat-sealing machine. If one wishes to pack the
product into a paper bag, use a box packing machine and carton packing machine for higher
efficiency.
The technology and plant machineries are easily available worldwide. The machines are
purchased on the turnkey basis from one company with technology tie up, with all other
facilities like training of operators, maintenance provision and also on sharing basis.

Baby Diaper Machine

All high speed disposables machines are custom built to suit exact requirements. They
vary greatly in price based on the following main parameters:

Machine speed

Product features

Product quality

Machine reliability/efficiency

The following tables give costs of typical baby diaper and sanitary napkin machines.
These should be treated only as guidelines since there are many different manufacturers
in Americas, Asia and Europe that offer different levels of machinery and after sales
support.

6.3 Miscellaneous Assets

The miscellaneous assets include Testing devices, Spare parts, Generator, safety
equipment, instrument chart and accessories, cleaning materials of the plants, computer,
printer, furniture, and other electrical equipments.
4. LICENSE AND APPROVALS

To start the baby Diaper manufacturing process the different licenses and registrations from
the different authorities regarding the area and machineries must be obtained initially. These
laws vary from one state to the other. Besides them, the other certificates that must be
obtained are:

1. MSME Udyam Online registration

2. The GST (Goods and Service Tax) certification.
3. A “No-objection Certificate” from the State Pollution Control Board.
4. A “No-objection Certificate” from the Fire Board.
5. Trademark (Choice of brand name-optional)
PROJECTED BALANCE SHEET (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Liabilities
Capital
Opening Balance 3.67 6.27 10.14 13.83
Add:- Own Capital 2.06
Add:- Retained Profit 4.11 6.10 8.88 12.19 14.05
Less:- Drawings 2.50 3.50 5.00 8.50 10.00

Closing Balance 3.67 6.27 10.14 13.83 17.88

Term Loan 12.00 9.00 6.00 3.00 -
Working Capital Limit 5.00 5.00 5.00 5.00 5.00
Sundry Creditors 1.94 2.38 2.86 3.38 3.95
Provisions & Other Liabilities 1.50 2.00 2.40 2.64 2.90
TOTAL : 24.11 24.65 26.41 27.85 29.73
Assets
Fixed Assets ( Gross) 15.00 15.00 15.00 15.00 15.00
Gross Depriciation 2.23 4.12 5.73 7.10 8.27
Net Fixed Assets 12.78 10.88 9.27 7.90 6.73

Current Assets
Sundry Debtors 3.13 3.95 4.75 5.61 6.55
Stock in Hand 4.65 5.65 6.76 7.91 9.20
Cash and Bank 1.55 1.67 2.64 2.43 3.75
Loans & Advances 2.00 2.50 3.00 4.00 3.50
TOTAL : 24.11 24.65 26.41 27.85 29.73
PROJECTED PROFITABILITY STATEMENT (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Capacity Utilisation % 30% 35% 40% 45% 50%
SALES
Gross Sale
BABY DIAPER 93.96 118.50 142.40 168.26 196.44
Total 93.96 118.50 142.40 168.26 196.44
COST OF SALES
Raw Material Consumed 58.32 71.52 85.88 101.48 118.37
Electricity Expenses 1.01 1.35 1.55 1.74 1.93
Depreciation 2.23 1.89 1.61 1.37 1.17
Wages & labour 8.40 10.08 12.10 14.52 17.42
Repair & maintenance 1.88 2.37 2.85 3.37 3.93
Consumables 5.64 7.11 8.54 10.10 9.82
Packaging cost 3.76 3.56 4.27 3.37 4.91
Cost of Production 81.23 97.88 116.80 135.93 157.55
Add: Opening Stock - 2.71 3.26 3.89 4.53
Less: Closing Stock 2.71 3.26 3.89 4.53 5.25
Cost of Sales 78.52 97.32 116.17 135.29 156.83
GROSS PROFIT 15.44 21.18 26.23 32.97 39.62
GROSS PROFIT RATIO 16.43% 17.87% 18.42% 19.59% 20.17%
Salary to Staff 3.24 3.89 4.67 5.83 7.58
Interest on Term Loan 1.33 1.17 0.84 0.51 0.18
Interest on working Capital 0.55 0.55 0.55 0.55 0.55
Rent 4.80 5.04 5.29 5.56 6.11
Selling & Administration Expenses 1.41 4.15 4.98 5.89 7.86
TOTAL 11.33 14.79 16.33 18.34 22.28
NET PROFIT 4.11 6.38 9.90 14.63 17.33
Taxation - 0.29 1.02 2.45 3.29
PROFIT (After Tax) 4.11 6.10 8.88 12.19 14.05
NET PROFIT RATIO 4.38% 5.14% 6.24% 7.24% 7.15%
PROJECTED CASH FLOW STATEMENT (in Lacs)

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
SOURCES OF FUND
Own Margin 2.06
Net Profit 4.11 6.38 9.90 14.63 17.33
Depriciation & Exp. W/off 2.23 1.89 1.61 1.37 1.17
Increase in Cash Credit 5.00 - - - -
Increase In Term Loan 13.50 - - - -
Increase in Creditors 1.94 0.44 0.48 0.52 0.56
Increase in Provisions & Other liabilities 1.50 0.50 0.40 0.24 0.26

TOTAL : 30.34 9.22 12.39 16.76 19.33

APPLICATION OF FUND
Increase in Fixed Assets 15.00
Increase in Stock 4.65 0.99 1.11 1.16 1.28
Increase in Debtors 3.13 0.82 0.80 0.86 0.94
Repayment of Term Loan 1.50 3.00 3.00 3.00 3.00
Increase in Loans & Advances 2.00 0.50 0.50 1.00 - 0.50
Drawings 2.50 3.50 5.00 8.50 10.00
Taxation - 0.29 1.02 2.45 3.29
TOTAL : 28.78 9.10 11.42 16.96 18.01

Opening Cash & Bank Balance - 1.55 1.67 2.64 2.43

Add : Surplus 1.55 0.12 0.96 -0.20 1.32
Closing Cash & Bank Balance 1.55 1.67 2.64 2.43 3.75
CALCULATION OF D.S.C.R

PARTICULARS 1st year 2nd year 3rd year 4th year 5th year

CASH ACCRUALS 6.34 7.99 10.49 13.56 15.21

Interest on Term Loan 1.33 1.17 0.84 0.51 0.18
Total 7.67 9.16 11.33 14.07 15.39

REPAYMENT
Instalment of Term Loan 1.50 3.00 3.00 3.00 3.00
Interest on Term Loan 1.33 1.17 0.84 0.51 0.18

Total 2.83 4.17 3.84 3.51 3.18

DEBT SERVICE COVERAGE RATIO 2.71 2.20 2.95 4.01 4.84

AVERAGE D.S.C.R. 3.34
 REPAYMENT SCHEDULE OF TERM LOAN
Interest 11.00%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
1st Opening Balance -
1st month 13.50 13.50 - - 13.50
2nd month 13.50 - 13.50 0.12 - 13.50
3rd month 13.50 - 13.50 0.12 - 13.50
4th month 13.50 13.50 0.12 - 13.50
5th month 13.50 - 13.50 0.12 - 13.50
6th month 13.50 - 13.50 0.12 - 13.50
7th month 13.50 - 13.50 0.12 0.25 13.25
8th month 13.25 - 13.25 0.12 0.25 13.00
9th month 13.00 - 13.00 0.12 0.25 12.75
10th month 12.75 - 12.75 0.12 0.25 12.50
11th month 12.50 - 12.50 0.11 0.25 12.25
12th month 12.25 - 12.25 0.11 0.25 12.00
1.33 1.50
2nd Opening Balance
1st month 12.00 - 12.00 0.11 0.25 11.75
2nd month 11.75 - 11.75 0.11 0.25 11.50
3rd month 11.50 - 11.50 0.11 0.25 11.25
4th month 11.25 - 11.25 0.10 0.25 11.00
5th month 11.00 - 11.00 0.10 0.25 10.75
6th month 10.75 - 10.75 0.10 0.25 10.50
7th month 10.50 - 10.50 0.10 0.25 10.25
8th month 10.25 - 10.25 0.09 0.25 10.00
9th month 10.00 - 10.00 0.09 0.25 9.75
10th month 9.75 - 9.75 0.09 0.25 9.50
11th month 9.50 - 9.50 0.09 0.25 9.25
12th month 9.25 - 9.25 0.08 0.25 9.00
1.17 3.00
3rd Opening Balance
1st month 9.00 - 9.00 0.08 0.25 8.75
2nd month 8.75 - 8.75 0.08 0.25 8.50
3rd month 8.50 - 8.50 0.08 0.25 8.25
4th month 8.25 - 8.25 0.08 0.25 8.00
5th month 8.00 - 8.00 0.07 0.25 7.75
6th month 7.75 - 7.75 0.07 0.25 7.50
7th month 7.50 - 7.50 0.07 0.25 7.25
8th month 7.25 - 7.25 0.07 0.25 7.00
9th month 7.00 - 7.00 0.06 0.25 6.75
10th month 6.75 - 6.75 0.06 0.25 6.50
11th month 6.50 - 6.50 0.06 0.25 6.25
12th month 6.25 - 6.25 0.06 0.25 6.00
0.84 3.00
4th 1st month 6.00 - 6.00 0.06 0.25 5.75
2nd month 5.75 - 5.75 0.05 0.25 5.50
3rd month 5.50 - 5.50 0.05 0.25 5.25
4th month 5.25 - 5.25 0.05 0.25 5.00
5th month 5.00 - 5.00 0.05 0.25 4.75
6th month 4.75 - 4.75 0.04 0.25 4.50
7th month 4.50 - 4.50 0.04 0.25 4.25
8th month 4.25 - 4.25 0.04 0.25 4.00
9th month 4.00 - 4.00 0.04 0.25 3.75
10th month 3.75 - 3.75 0.03 0.25 3.50
11th month 3.50 - 3.50 0.03 0.25 3.25
12th month 3.25 - 3.25 0.03 0.25 3.00
0.51 3.00
5th Opening Balance
1st month 3.00 - 3.00 0.03 0.25 2.75
2nd month 2.75 - 2.75 0.03 0.25 2.50
3rd month 2.50 - 2.50 0.02 0.25 2.25
4th month 2.25 - 2.25 0.02 0.25 2.00
5th month 2.00 - 2.00 0.02 0.25 1.75
6th month 1.75 - 1.75 0.02 0.25 1.50
7th month 1.50 - 1.50 0.01 0.25 1.25
8th month 1.25 - 1.25 0.01 0.25 1.00
9th month 1.00 - 1.00 0.01 0.25 0.75
10th month 0.75 - 0.75 0.01 0.25 0.50
11th month 0.50 - 0.50 0.00 0.25 0.25
12th month 0.25 - 0.25 0.00 0.25 -
0.18 3.00
DOOR TO DOOR 60 MONTHS
MORATORIUM PERIOD 6 MONTHS
REPAYMENT PERIOD 54 MONTHS
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
punitive, special, incidental or other consequential damages arising directly or
indirectly from any use of the Project Report Content, which is provided as is, and
without warranties.