THE PROJECT

Location

The project consists of two factories located in the same premises. Diary Plant is a UHT plant for processing milk obtained in milk surplus areas for marketing in urban centers. The plant also produces and packs butter and ghee. It is complete with all services provided. Plastic factory is new technology import and is explained in more detail further on.

History

The project was conceived in 1984/85 and was brought on commercial production in 1986. The market price of the milk was so low that we sustained heavy losses. Reasons for low price were the dumping into Pakistan of highly subsidized low quality milk powder. It was hoped that with such heavy investment (20 Milk Plants), our Government will do something to stop the import of this non-nutritious low quality milk powder. Unfortunately this did not happen and we were forced to close down the plant for regular commercial production.

The plant has been however kept in good shape by short operations and maintenance. The situation has now changed and the imported milk powder has become expensive due mainly the depreciation of the rupees Market price of UHT milk has gone up to Rs. 30.00/lit From Rs. 6.00 of 1986). As such the UHT Dairy Plants are now viable.

Assets & Liabilities

Liabilities of the plant have mounted due to finance charges and depreciation.

However, the value of the assets on the ground has increased at a faster rate. This is due to the depreciation of the rupee. We had paid for the imported machinery at Rs. 4,80 to a German Mark. It is now over Rs. 28.00 per mark. C&F value of the plant was 10 million German Marks. It has been hardly used for one year.

All the machinery in our plant is of latest design. We had negotiated the purchase of our plant when Europe was in recession. The prices obtained were very favorable. Present prices of our machinery have registered a great increase in foreign currency. Added to that is the affect of devaluation placing us in a good position.

Setting up of an identical plant now will require Rs. 600 million and a period of three years after placing orders.

The present value of our assets, due to reasons explained above, after depreciation, is well in excess of Rs. 300 million.

We have retained the original valuation to take benefit of tax loss. However we have prepared balance sheets on revalued assets for the purpose of this study. This does not affect the cash flow and the ability to repay the loans.

Introduction

Plastic has come to play an important role in packing. It is fast replacing paper and paperboard. It is stronger and more presentable. But the real reason for its success is the fact that plastic packing is economical.

Multi-layer Sheet

Single layer plastic sheet has been in use for long time. It is suitable for non-food merchandise. Foodstuffs, where shelf life and quality are paramount, protection from bacteria and gasses in an important consideration. This necessitates a great increase in the thickness of packing sheet. This becomes cumbersome. But worst, it no longer remains competitive.

This can be overcome by providing multi-layer structures where one layer may provide protection against permeability of gases, while other requirement may be fulfilled by a different layer.

Such structures have been in use whereby plastic sheets of different materials were laminated to each other.

However the modern method developed in late seventies consists of extruding different materials through a multi-layer die. This means one extrusion instead of many, and no lamination process. The reduction in manufacturing cost makes this product very attractive

In Pakistan multi-layer sheet has found wide applications.

Our project has the following components installed.

This unit has three extruders to handle three different materials. These then come out of a die to produce 3/6 layer sheet. This machine is fully automatic and has a thickness control of plus minus 3 micros which is very important for modern high speed packing machines.

A corona treatment unit is installed to treat the sheet before printing. This is an automatic on line operation.

c) Take up Unit

This provides the winding mechanism with automatic tension control.

d) Flexo-graphic Press

A two color Flexo-graphic press in installed.

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