pyrolysis
Converting Waste Plastic into Diesel
Done By,
Group 11
Contents
Introduction…………………………………………………………………………………………………………4
Renewable energy and its importance.......................................................4-5
Waste generation and plastic waste..............................................................5
Importance of this project.............................................................................5
Project life......................................................................................................5
Process................................................................................................................6-12
Legal procedures....................................................................................................13
Reservation of name and application for regulation...................................13
Notorization of memorandum of assossiation............................................13
Acquisition of trade liscense........................................................................13
Application for establishment card..............................................................13
Registration of native workers.....................................................................13
Civil……………………………………………………………………………………………………………………14
Economics...............................................................................................15-17
Production cost.......................................................................................18-21
Total fixed production cost..........................................................................22
Total variable cost........................................................................................23
Cash flow chart…………………………………………………………………………………………….23-25
Calculations.................................................................................................26
Cumulative cash return graph.................................................................... 27
Human resources…………………………………………………………………………………………27-28
Ethics…………………………………………………………………………………………………………..29-30
Marketing plan………………………………………………………………………………………………….31
The company...............................................................................................32
The school................................................................................................... 32
The household.............................................................................................33
Electronic media..........................................................................................33
Marketing budget........................................................................................33
References ……………………………………………………………………………………………………….35
INTRODUCTION
Renewable energy & its importance
Renewable energy is the form energy whose sources can be replenished in a very short period of time. On the other hand, non-renewable sources of energy such as crude oil, coal & natural gas takes over millions of years to get replenished. Non-renewable sources are the main source of energy for mankind. Roughly 90% of the energy generated on earth comes from fossil fuels. We all must be aware that reserves of fossil fuels are limited. We have to switch to alternative forms of energy as fossil fuel reserves are depleting fast. Apart from the sustainability point of view, there are other disadvantages of fossil fuels. The fumes caused by burning fossil fuels are harmful to mankind. Fossil fuels contain impurities such as sulphur which is the root cause of acid rain. Burning of fossil fuels is not very efficient and sometimes, it is an incomplete process which in turn produces carbon monoxide which is fatal to mankind. We can obtain renewable energy in the form of wind energy, solar energy, geothermal energy, tidal energy, bio-fuels such as biomass, bio-diesel & bio-ethanol, synthetic fuels such synthetic diesel etc. These alternative forms of energy produce much less pollution to no pollution at all depending of the types.
Waste generation & Plastic waste
In the ever-growing population of mankind, the rate of environmental degradation is at a worse state. The amount of waste generated worldwide is at an alarming rate. The reason why this is important is because it has direct relation to the better living of mankind. Waste products can classified into two types based on the degradability factor – biodegradable & non-biodegradable. Biodegradable waste products break down in the environment at a very short period of time. All organic wastes are biodegradable in nature. On the other hand, non-biodegradable waste are a major environmental concern. The break down process of the these wastes is very slow. These type of waste products take millions of years to degrade in nature. It keeps polluting the environment throughout its life. On example of such type of waste is plastic.
Plastic is a material derived synthetically from petroleum. It is very strong & durable and very moldable in nature. Due to these properties, It has found its way into every industry. Almost everything we see around today is made of plastic or have some component made of plastic. Due to its durable nature, it is non-biodegradable and hence, polluting in nature. After using plastic products, people usually do not dispose it properly and it ends up blocking drainage systems or in the river polluting the marine environment. In UAE, It happens very often that shopping bags end up in the desert, thrown away carelessly by campers or picnic goers. Camels mistakenly consume plastic as food. Since, it cannot be digested, it remains inside their stomach forming a bulk. The weight of this bulk can be as high as 60kgs. Due to this, camels suffer an unnatural and very painful death.
Even in the most advanced cities, there isn’t a proper large-scale waste management method which completely takes care of the hazards imposed by plastic. Plastic usually ends up in landfills. It degrades the soil of that region. It may also seek to the underground contaminating any nearby underground water bodies. In some countries, the wastes are incinerated or burned in the landfills. Incineration produces fumes which are toxic in nature. Incineration only shifts a soil pollution to air pollution. It is our duty to build a sustainable place where we all live in harmony. We have to discard the traditional ways of waste management and look for alternatives. One such alternative is plastic to fuel production.
Importance of our project Plastic to fuel production is a project which involves conversion of waste plastic to clean burning hydrocarbon fuels with the help of a process called pyrolysis. The pyrolysis process consists of the thermal degradation of the wastes (in this case, plastic) in the absence of oxygen/air. The end product mainly is ultra clean low sulphur diesel. This project has got a two-fold advantage. Firstly, it helps in reducing plastic wastes which would otherwise pollute the environment and secondly, it has the potential to atleast partially contribute in solving the energy crisis.
Project Life
This project is totally planned for 10 years starting from the scratch with constructing the factory and buying the machines till it is dismantled.
Process
Pyrolysis is an endothermic irreversible process of thermo-chemical decomposition of organic material at elevated temperatures to produce hydrogen and carbon monoxide in the absence of oxygen.
It is mostly used in oil and gas industry to convert waste materials such as tires, plastics or rubbers into bio-fuel or bio-oil as an end product where we can further purify and add chemicals to it and get the desired fuel we need such as diesel, petrol or kerosene oil which can be suitable for use by light or heavy vehicle’s on daily or regular basis.
A typical Pyrolysis machine has a schematic as shown below
Processes which are followed by the pyrolysis process include separation of char from gas/liquid particles, condensation of oil and fuel processing which are explained more below.
1. Feeder;
In order to feed the raw materials to the pyrolysis machine tank, raw materials should be fed into the plant in an approximate size of 2mm or slightly more depending on the size of the pyrolysis machine tank, typically raw materials are recommended to be in 2mm size to get better results.
2. Pyrolysis;
After the raw materials are fed into the pyrolysis machine tank through the feeder, it then converts the material into vapour/gas state through heating which then flows through the pipe into the stabilization chamber.
3. Dust or Char removal;
When the material is flowing in liquid or gas state through the pipe to the stabilization chamber, a filter is used which removes the char content or dust from the liquid or gas material by forcing it to move from a filter where char or dust with bigger molecules gets trapped inside the filter mesh and allows liquid/gas to flow through it.
4. Stabilization Chamber;
After the liquid/gas material passes through the filter it then flows into the stabilization chamber where the condensation takes place by cooling the material from liquid/gas phase to liquid single phase which is then collected in the chamber.
Hydrotreatment – It is the chemical process that takes place inside the stabilization chamber where the hydrogen atoms are used to remove the contaminant content such as sulphur, oxygen and nitrogen atoms are removed from ethanol molecules by providing high hydrogen pressures by using catalysts. Oxygen atoms are mostly removed in the form of water and carbon dioxide as it is increases acidity in oil and makes it more reactive.
5. Fuel processing or Purification;
When the bio-oil is collected after the condensation in stabilization chamber, it then flows into the further purification plant where fuel processing enhances and stabilizes the oil to be used in commercial vehicles or industries or regular basis.
Hydrocracking – It is a chemical process that takes place in the purification of bio-oil by tailoring the size of molecules in the desired range as gasoline, diesel or kerosene which can then be used as an everyday fuel by light and heavy vehicle industries.
Pyrolysis machine proposed for our project,
Machine Specifications
Dimension (length, Width, Height)
9.2m, 34m, 14m
Type of Raw Material waste rubbers and plastics
Warranty
1 year
Brand Name
HuaYin
Cooling system
2 horizontal condensers
Power in Watts
20KW
Labours required
4/machine
Certification
CE, SGS, ISO, BV
Place of Origin
Chine, Henan
Land Required
400sqm
Voltage
380 volts
Maintenance/Service Provided
Engineers provided by the company for service
Weight
42 tons
Rotating Speed
0.4 rate/minute
Machine details:
Cost of machine – 55000$
Engineers provided by the huayin company
Labors required - 3-4 to operate the machine
Voltage – 380V
Electricity - 20kW
Area Required - 400m2
Efficiency – 89%
Average Oil yield conversion is – 48%
Oil density – 0.89
Machine can work 19 hours and should be stopped for 5 hours for service or cleaning
Input mass of waste plastic – 10 ton’s
Output in Liters – 8900L Diesel (approx)
Points to be considered while discussing,
The pyrolysis process and stages of plastic to diesel
The various machines we found and why did we select this as the best one
The company that will give us the machine and the warranty from them
https://www.youtube.com/watch?v=IvZFfx7XhQE http://www.alibaba.com/product-gs/1241665103/10_Ton_Plastic_Tire_Oil_Machine.html http://www.wasterecyclingnews.com/article/20121016/BLOGS08/121019951/pyrolysis-a-simple-process-with-surprising-results
Legal Procedures
There are several procedures to adhere to when establishing an industry in the UAE. The details regarding the legal limitations to be considered by an entrepreneur planning to register a new industry in the United Arab Emirates are explained below.
Reservation of Name and Application for Registration To establish an industry, the first step an entrepreneur should take is to acquire initial approvals on industry name, partners’ identities and business activities from the licensing department. The licensing department is a branch of the Department of Economic and Development known as the (DED) in short. If the name of the company is available and approved, subsequent payments are made on DED website.
Notarization of Memorandum of Association This is also don at the Department of Economic Development. This involves an the lawyer of an entrepreneur obtaining an initial approval from the notary subsequent to the client’s arrival to have all documents notarized with immediate effect. The maximum fee paid for notary is AED 10,000.
Acquisition of Trade License and Membership registration To acquire a trade license and commercial registration certificate, original documentations are submitted to commercial registry still in the department of economic development. Documents can also be submitted online at the DED website. If the officials in the registry department approve such documents, the company name will be registered and other documents will be forwarded to the Federal Ministry of Economy for the arrangement of publication. This subsequently leads to the acquisition of trade license.
Application for Establishment Card The next step after obtaining the trade license is for the representative of the company or the entrepreneur to physically apply for the “Establishment card” at the ministry of labor.
Registration of Native Workers All native workers must be registered with the ministry of labor. This is done at ministry of labor and it requires all workers to present their personal information such as employment contract, employer’s passport copy, company’s trade license and proof of worker’s UAE citizenship.
Civil (choosing the place for the factory)
We made a plan of renting an industrial open land of 35,000 feet in AL Qouz Dubai. The land will already have offices, bathrooms and parking lots which take a space of 5,000 square feet. Now the construction of a 30,000 sqft factory will cost around 5,000,000 AED. The factory will consist of 5 pyrolysis machines and 3 underground storage tanks.
The staff will consist of 59 people which are:
1. General manager
2. Secretary
3. Admin manager
4. Accountant
5. Production manager
6. 2 supervisors
7. Coordinator
8. 4 drivers (2 for transportation and 2 for shipping the diesel)
9. 2 human resources
10. 2 watch men
11. Office boy
12. 2 safety officers
13. 20 skilled labourers
14. 20 regular labourers
Considerations for all yearly expenses are shown in the capital section and they include:
1. Raw materials
2. Machinery and equipment
3. Power consumption
4. Rent and construction
5. Staff salaries
6. Office expenses
7. Government charges for registrations and licensing
8. Government yearly charges
9. Maintenance and repairs
10. Depreciation of equipment of 10 years
11. Air-conditioning
12. Fire fighting
13. Flooring
Economics
Initial set up cost
Company name – AED 110
Company Registration – AED 210
Trade License – AED 15,000
Dubai Chamber of commerce and industry (DCCI) – AED 10,000
Waste – AED 2,000
Card of ministry of labor – AED 2,000
Total =
Factory costs
Machinery & Equipment Cost
5x Pyrolysis machine cost
AED 200,750
AED
1,003,750
2x buses cost
AED 109,500
AED
219,000
2x diesel Tankers
AED 164,250
AED
328,500
3x underground tankers
AED
60,000
AED
180,000
Total
AED
1,731,250
Rent
Required Factory Area =
35,000 ft2
Rent per Month =
AED 67,000
Rent land per Year =
AED 67,000 x 12
=
AED
804,000
Rent cost for the first 2 years is included in the capital
=
AED
1,608,000
Air conditioning
Area is 25000 sqr ft
Requires 30 tons of cooling
Approximate cost per ton is AED 6000
Total AC
AED
180,000
Total Ventilation
AED
100,000
Total HVAC
AED
280,000
Fire Fighting
Area is 25000 sqr ft
Requires 40 nos Sprinklers based on 1 sprinkler per 350 sqr ft
AED
45,000
One fire pump set consist of Diesel Pump , Standby pump
Jockey
AED
145,000
Diesel Tank
AED
18,000
Water Tank
AED
60,000
Pipes and Valves
AED
35,000
Fire Extinguishers Blankets
AED
7,000
Fire Fighting
AED
310,000
Electrical
Area is 5000 sqr ft
Requires 15,000 watt of light
AED
30,000
Panel Boards
AED
45,000
Isolators for Machines
AED
18,000
Cable Tray and Trunking
AED
7,000
Main Cables
AED
80,000
Total Electrical
AED
180,000
Flooring & Apoxy
Flooring
AED
80,000
Apoxy
AED
50000
Total Flooring
AED
130,000
Total construction cost of the factory
TOTAL CAPITAL
Product Cost
Fixed Product Cost + Variable Product Cost
Fixed Product Cost
A.
STAFF
Per
Salaries
Air
Leave
RP Renewal
Insurance
Total
Nos
Month
Ticket
Pay
Med.
180
1
General Manger
1
25,000
25,000
270
2,083
100
350
27,803
2
Secretary
1
3,500
3,500
270
292
100
350
4,512
3
Admin Manager
1
16,000
16,000
270
1,333
100
350
18,053
4
Accountant
1
8,000
8,000
270
667
100
350
9,387
5
Production Manager
1
16,000
16,000
270
1,333
100
350
18,053
6
Supervisors
2
12,500
25,000
240
2,083
200
700
28,223
6
Sales Manger
1
12,500
12,500
120
1,042
100
350
14,112
7
Coordinator
1
4,000
4,000
120
333
100
350
4,903
8
Drivers 4
2,000
8,000
480
667
400
1,400
10,947
9
HR Personnal
2
8,000
16,000
540
1,333
200
700
18,773
10
Watchmen
2
2,500
5,000
240
417
200
700
6,557
11
Office Boy
1
2,500
2,500
120
208
100
350
3,278
12
Safety Officers
2
4000
8,000
240
667
200
700
9,807 Total per Month 149,500
3,450
12,458
2,000
7,000
174,408
Gross Total per Month
AED 174,408
Gross Total per Year
AED 2,092,900
B.
LABORS
Per
Salaries
Air
Leave
RP Renewal
Insurance
Total
Nos
Month
Ticket
Pay
Med.
1
Skilled Labors
20
5,000
100,000
2,400
8,333
2,000
7,000
119,733
2
Labors
20
3,000
60,000
2,400
5,000
2,000
7,000
76,400 Total per Month 160,000
4,800
13,333
4,000
14,000
196,133
Gross Total per Month
AED 196,133
Gross Total per Year
AED 2,353,600
Total Staff
AED
2,092,900
Total Labor
AED
2,353,600
Grand Total Staff & Labor
AED
4,446,500
C.
RENT & Power
RENT
Power
Factory
Labor
Rent
1 Factory Premises
67,000
2 Labor Accommodation 30,000 3
Power Consupmtion
26,353 Total per Month 67,000
30,000
26,353 Gross Total per Month
AED 123,353
Gross Total per Year
AED 1,480,236
D.
Office Expenses
Communica-
Printing
tion
Stationary
Postage
Computer
Server Communication
1 Internet 150
FAX 1 Line
350
TEL 4 Lines
1,400
2
Printings & Stationary 600
3
Periodicals & Postage
250
3
Computers
10
3,500 3
Server
2,000 Total per Month 1,900
600
250
3,500
2,000 Gross Total per Month
AED 8,250
Gross Total per Year
AED 99,000
E.
Charges & Fees
SN Bank
Recruit
Govt
1
Bank Charges & Fees 2,000
2
Recruitment Charges & Fees 5,000 3
Govt. Charges & Fees
1,000
Total per Month 2,000
5,000
1,000 Gross Total per Month
AED 8,000
Gross Total per Year
AED 96,000
F.
Maintenance and Repairs
Repairs & Maintenance
Equip
Tools
Computer
Server
Air Con
Vehicles
1
Equipment
3,000
2
Tools
1,000
3
Computers
300
4
Server
300
5
Air conditioner
500 6
Vehicles plus Maintenance
4
400 Total per Month 3,000
1,000
300
300
500
400
Gross Total per Month
AED 5,500
Gross Total per Year
AED 66,000
G.
Depreciation Over 10 Years
SN Depreciation
Computers
Equip
Air Con
Vehicles
1
Computers & Printers
300
2
Tools & Equipment
15,000
3
Air conditioner
3,000 4
Vehicles
4,000 Total per Month 300
15,000
3,000
4,000
Gross Total per Month AED 22,300
Gross Total per Year
AED 267,600
H.
Insurance Premium per Year
AED 90,000
TOTAL FIXED PRODUCT COST:
Variable Product Cost
Marketing (Considered to be 9% of sales income)
Marketing Phasing
Year
Cost
2015
1,534,920
2016
2,302,370
2017-2022
2,558,190
2023
2,430,280
Raw Materials (The maximum production requires
18250
tones of plastic)
Year
Cost
2015
(60% production requires
10950
tones of plastic)
6,033,450
2016
(90% production requires
16425
tones of plastic)
9,050,180
2017-2022
(Maximum production)
18250
10,055,750
2023
(95% production requires
17338
tones of plastic)
9,552,960
Cost of plastic per ton
AED
551
Total Variable Cost per year:
Year
Total Cost
2015
7,568,370
2016
11,352,550
2017-2022
12,613,940
2023
11,983,250
Cash Flow chart (In thousands)
Fixed Capital Investment
AED
9268.6
Fixed Capital Phasing
Year
Capital Investment
2013
35%
2014
65%
Working Capital %
(estimated to be 25% of capital)
25%
Maximum Production of diesel 8121.25 Litres/year
Production Phasing
Year
Production
Litres/year
2015
60%
4872.75
2016
90%
7309.125
2017-2022
100%
8121.25
2013
95%
7715.19
Selling Cost
3.5
AED per litre
Decommissioning Cost(Estimated to be 30% of the capital)
2780.58
Scrap (Estimated to be 10% of the capital)
926.86
Project Year
0
1
2
3
4
5
6
7
8
9
10
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Production (liters/year)
0
0
4872.75
7309.125
8121.25
8121.25
8121.25
8121.25
8121.25
8121.25
7715.19
Fixed Capital
3244.01
6024.59
1853.72
Working Capital
0
0
4263.66
2131.83
710.61
0
0
0
0
0
-355.30
Sales Income
0
0
17054.63
25581.94
28424.38
28424.38
28424.38
28424.38
28424.38
28424.38
27003.16
Product Cost
0
0
14113.71
17897.89
19159.28
19159.28
19159.28
19159.28
19159.28
19159.28
18528.59
Cash Return
-3244.01
-6024.59
-1322.74
5552.22
8554.48
9265.09
9265.09
9265.09
9265.09
9265.09
6976.15
Cumulative Cash return
-3244.01
-9268.60
-10591.34
-5039.12
3515.36
12780.46
22045.55
31310.64
40575.73
49840.82
56816.98
ROI
67.05595
PBT
Year
CCR
3
-5039.12
4
3515.36
Interpolating gives
3.6
NPV – there were two approaches tried to invest the capital in the business.
Approach 1 – The entire construction of the factory is done by the first year while the machinery and equipment will be installed in the second year. This approach requires 63% of the capital. The interest rate is taken to be at a compound interest of 10%
Approach 2 – In this case, around 50% of the construction is completed in the first year. The remaining 50% left plus the machinery and equipment will be completed in the following year. Hence, the capital required is approximately 35%. The interest rate is a compound interest of 10%.
Approach 1
Approach 2
NPV
74015
120449
Comparing the net positive values for both, the approach 2 is a better way to invest the money in the business as its NPV is much higher than the approach 1.
Discount factor
1
0.952380952
0.907029
0.86384
0.822702
0.783526
0.746215
0.710681
0.676839
0.644609
0.613913
PV
-3244.01
-8827.2381
-9606.66
-4352.98
2892.099
10013.82
16450.73
22251.89
27463.25
32127.84
34880.69
NPV
120049
IRR
5%
120049
40%
-789.057
39.77%
Human Resources
HR department is one of the most important departments; all other departments are controlled by the HR management. It consists of two main parts;
Strategic
Operational
Strategic
The different posts and jobs that have to be done are decided and accordingly people are employed. In the case of a factory to get the trade mark L.L.C. we need a minimum of 60 employees.
Managing the individual and organizational operations of the company
Operational
Watching over the performances and giving rewards for the extra effort done by the employees
Making sure of the safety of the employee while working in the factory.
The HR consists of 2 main people they both work together in strategic and operational work for the company. The different posts that are available are listed below, with the brief about each employee’s task
Post
Brief
Qty
General Manger
The highest ranking manager taking care of the whole company’s operations
1
Secretary
Assistant to the General manager
1
Admin Manager
Over sees the operations in each department and makes sure they run smoothly
1
Accountant
Handles the finance of the company
1
Production Mgr.
A production manager is involved with the planning, coordination and control of manufacturing processes
1
Supervisors
Every department has a supervisor who handles the department operations
2
Sales Manger
Approaches new firms for sale and convinces them as well as manages the different sale outcomes
1
Coordinator
Interacts between the Factory workers and the supervisors
1
Drivers Transports the diesel to various sale points on a truck
4
Security Guard
Watches over the factory and takes care of who goes in and out
2
Office Boy
Handles the paper work
1
Labors
Load the machine with plastics
20
Skilled labors
Operate the machine and control the variables
20
The Health safety and risks are discussed in the ‘Safety and health management’ topic.
HR department also contributes lot into ethical management of the business. They set up a number of policies that are to be followed by all the employees in order to keep with work ethical. These policies are as follows:
Any act or event that conflicts with the company’s business shall not be carried out
Keeping professionalism in the work
Should interact with other employees while working
Honesty in work
Shall not engage in any business activity that is in competition with the business of this company
Shall not expose any kind of confidential information of the company
Should not misuse or damage any property of the company
Should not accept or give away gifts that are on the name of the company.
Time and Attention at work should be maximum
Harassment in any terms of age, gender, race and any other means is unacceptable
Working under the influence of alcohol is strictly prohibited
Frauds such as cheating tricking or stealing others works will be dealt with concern to the country Law
Shall follow all the safety regulations at all times
Any other problems that are encountered by the employees are directed to the HR department who further take the decision and follow it by the action required to be taken.
Ethics in a company
Ethics of a business is known as the behavior of the company in the society. An ethical strong company gets a better reputation in the society because it doesn’t only focus on profits; it focuses on fitting into the society by taking care of the environment behavior of their employees as well as contributes to the society in a positive way e.g. being sustainable i.e. causing as less environment harm as possible.
Some of the main parts of Ethics are;
Sustainability
Health safety
Morals of the company
Each one of these have been discussed separately but when converging them with Ethics; Sustainability is an important concern for a consumer, our company is using up the waste plastics that can no longer be recycled or reused as plastics again, this gives a positive view to the society about the company and thus the consumer would be proud of what they buy therefore they will feel they are doing the right thing, This will also promote campaigns to separate plastic waste from the other waste with and Ethics is all about deciding what is right and wrong.
Health and safety is a high priority issue, injuries or any severe harm to the working labor can affect the whole company’s reputation, however this can be dealt with good safety systems and other alternatives that have been discussed earlier. Looking to it in the Ethical manner, it is highly inacceptable for the consumer to realize that the Diesel company their purchasing from has no safety for their workers, which will force them to conclude as the company being unethical.
Morals inside the company are the actual core points that form the Ethics of the company, every human being has morals of his own, and he brings these morals with him at work. When these morals are suppressed by the companies due to various invalid reasons, this will cause conflicts within the work he is assigned and this will be the case for many other workers, which will affect the Ethics of the whole company. Example when the Supervisors a lot the work to the labors, he gives extra work to one of the labors whereas others do less than him, this would be an unethical act which will ultimately lead bad performance in work.
Therefore to solve these ethical issues, the HR department sets a number of policies that are to be followed by the staff and labors. This is known as the Code of Conduct
It can be broken down into three parts i.e. prevention, detection and reaction.
In the company, Prevention would be the Policies made by the HR that have been listed earlier.
Detection is to know about the employee whether they’re following the policies or not.
Reaction is responding to any kind of unacceptable or unethical activity either by simple warning or by taking a serious action, all depending on the effect of the action on the ethical level.
Marketing Plan
Marketing is a process by which a company goes through making stakeholders aware about what our company is doing.
There was a time when marketing was given secondary importance in the workings of a company, which in turn caused very little, or even no budget being allotted to this immensely important department. The reason for this was relatively less competition in the market and, as a result, if a quality product was made, it would sell well.
However, things are vastly different now. With multiple companies providing the same service, and a wide range of options for the consumer to choose from, competition in every sector has increased dramatically. This is where marketing takes centre stage in a company. The importance of marketing increased so quickly and so astonishingly that today, almost no product is out of its sphere of influence.
In this age, a company can simply not survive without some form of marketing.
Marketing has significant importance in our company as well. The core operation of our company is converting plastic into diesel. For this process, we require the raw material for it which is Plastic.
In order to obtain this plastic this plastic relatively cheaply and maintain a steady supply, we need to create awareness among the local population. We need to use different marketing strategies to convince them not to just dump their tones of plastic waste just about anywhere, and instead, take some extra effort, and give it to us.
This phenomenon is what caused our company to consider marketing, a very important pillar of the organization and hence, we dedicated ample resources for it.
To tackle this central requirement of raw material, which is the backbone of our company, we have developed a 4-thronged strategy. This 4-thronged strategy is our way of dividing and classifying the sources of plastic in the market.
1. The Company :
The reason that we thought that this method was the easiest was because a company is a professional environment, where there is only one boss or manager. The employees follow whatever the management tells them to do. We therefore have to convince the management only, and be assured that most of the plastic is being supplied to us and is not being wasted.
However, in most cases, convincing the management of a company is not as easy as it sounds. We have to use different marketing strategies to convey our point to them and create enthusiasm within them for our cause.
To start with, we can interactive put banners in the workplace of the factory, indicating where to dump the plastic and why this was important. Moreover, we can set a threshold level for the plastic collected and we can offer discounted diesel to companies which collects plastic above that threshold level. This strategy holds special importance as we are dealing with businessmen, whose ultimate aim is to maximize their profits.
This first method that we talked about is our most significant supply of raw materials and hence is most central to our business.
2. The School :
This is a tricky part of our strategy. The reason that this method is not as simple as the previous method is that the school is not as disciplined an environment as the workplace is. Hence our marketing strategy in the school should be as attractive as possible, which, in turn would motivate the students. Keeping this in mind, a plan was chalked out.
A competition will be organized in schools wherein we will run a campaign in various schools. The slogan of the campaign will be, “Save Earth, Save Plastic”. As part of this campaign, we will organize a waste plastic collection competition between different grades in the school. To better motivate the students, a ‘bumper prize’ will be announced for the winning class beforehand. Moreover, certificates of Participation can be awarded to all the grades in the school
3. The household:
This is the last of part of our 3-way strategy. Our approach to this part should be very different from the first and second parts. As we are dealing with independent households here it will be relatively difficult to create awareness for our cause.
Firstly, we need to distribute containers in the neighborhood so that residents can dump their waste plastic in the container. For the first time, it is imperative that we distribute ‘informational leaflets’ together with the containers. These leaflets will give awareness about the importance of recycling plastic waste. This will also encourage more people to contribute towards increasing the volumes of plastic that we collect from these houses. We can then expand this campaign to different neighborhoods and hence we can obtain a considerable amount of our raw material by this method.
The objectives of this campaign is to create a habit of recycling plastic waste among the community, so that in successive years we have to allot considerably lesser budget for marketing in the community.
4. Electronic Media :
This aspect of our plan is more general and does not cater to one specific segment of the society, but rather to wider audience. This includes running advertising campaigns on television. What this also includes is running a campaign on social media websites like Facebook and Twitter.
In order for this part of our marketing plan to be executed professionally, we have outsourced it to an advertising company. The job of the advertising company will be to design and run advertisements for our company. Moreover, they will also run a campaign for us on various social media websites.
Marketing budget:
Since marketing is a very important aspect is today’s world, we dedicate 9% of our total sales income very year to marketing.
http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/starting-a-business
References
Civil
1. Salaries, construction, office expenses, fire fighting/flooring/air-conditioning: From viatech engineering company.
2. Power consumption: http://www.dewa.gov.ae/tariff/tariffdetails.aspx
3. Buses costs: http://www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=buses
4. Truck costs: www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=diesel+trucks
5. Tankers : www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=diesel+storage
6. Pyrolysis machine: www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=pyrolysis
Legal
1. Government charges: http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/starting-a-business
References: Civil 1. Salaries, construction, office expenses, fire fighting/flooring/air-conditioning: From viatech engineering company. 2. Power consumption: http://www.dewa.gov.ae/tariff/tariffdetails.aspx 3. Buses costs: http://www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=buses 4. Truck costs: www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=diesel+trucks 5. Tankers : www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=diesel+storage 6. Pyrolysis machine: www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=pyrolysis Legal 1. Government charges: http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/starting-a-business
Done By,
Group 11
Contents
Introduction…………………………………………………………………………………………………………4
Renewable energy and its importance.......................................................4-5
Waste generation and plastic waste..............................................................5
Importance of this project.............................................................................5
Project life......................................................................................................5
Process................................................................................................................6-12
Legal procedures....................................................................................................13
Reservation of name and application for regulation...................................13
Notorization of memorandum of assossiation............................................13
Acquisition of trade liscense........................................................................13
Application for establishment card..............................................................13
Registration of native workers.....................................................................13
Civil……………………………………………………………………………………………………………………14
Economics...............................................................................................15-17
Production cost.......................................................................................18-21
Total fixed production cost..........................................................................22
Total variable cost........................................................................................23
Cash flow chart…………………………………………………………………………………………….23-25
Calculations.................................................................................................26
Cumulative cash return graph.................................................................... 27
Human resources…………………………………………………………………………………………27-28
Ethics…………………………………………………………………………………………………………..29-30
Marketing plan………………………………………………………………………………………………….31
The company...............................................................................................32
The school................................................................................................... 32
The household.............................................................................................33
Electronic media..........................................................................................33
Marketing budget........................................................................................33
References ……………………………………………………………………………………………………….35
INTRODUCTION
Renewable energy & its importance
Renewable energy is the form energy whose sources can be replenished in a very short period of time. On the other hand, non-renewable sources of energy such as crude oil, coal & natural gas takes over millions of years to get replenished. Non-renewable sources are the main source of energy for mankind. Roughly 90% of the energy generated on earth comes from fossil fuels. We all must be aware that reserves of fossil fuels are limited. We have to switch to alternative forms of energy as fossil fuel reserves are depleting fast. Apart from the sustainability point of view, there are other disadvantages of fossil fuels. The fumes caused by burning fossil fuels are harmful to mankind. Fossil fuels contain impurities such as sulphur which is the root cause of acid rain. Burning of fossil fuels is not very efficient and sometimes, it is an incomplete process which in turn produces carbon monoxide which is fatal to mankind. We can obtain renewable energy in the form of wind energy, solar energy, geothermal energy, tidal energy, bio-fuels such as biomass, bio-diesel & bio-ethanol, synthetic fuels such synthetic diesel etc. These alternative forms of energy produce much less pollution to no pollution at all depending of the types.
Waste generation & Plastic waste
In the ever-growing population of mankind, the rate of environmental degradation is at a worse state. The amount of waste generated worldwide is at an alarming rate. The reason why this is important is because it has direct relation to the better living of mankind. Waste products can classified into two types based on the degradability factor – biodegradable & non-biodegradable. Biodegradable waste products break down in the environment at a very short period of time. All organic wastes are biodegradable in nature. On the other hand, non-biodegradable waste are a major environmental concern. The break down process of the these wastes is very slow. These type of waste products take millions of years to degrade in nature. It keeps polluting the environment throughout its life. On example of such type of waste is plastic.
Plastic is a material derived synthetically from petroleum. It is very strong & durable and very moldable in nature. Due to these properties, It has found its way into every industry. Almost everything we see around today is made of plastic or have some component made of plastic. Due to its durable nature, it is non-biodegradable and hence, polluting in nature. After using plastic products, people usually do not dispose it properly and it ends up blocking drainage systems or in the river polluting the marine environment. In UAE, It happens very often that shopping bags end up in the desert, thrown away carelessly by campers or picnic goers. Camels mistakenly consume plastic as food. Since, it cannot be digested, it remains inside their stomach forming a bulk. The weight of this bulk can be as high as 60kgs. Due to this, camels suffer an unnatural and very painful death.
Even in the most advanced cities, there isn’t a proper large-scale waste management method which completely takes care of the hazards imposed by plastic. Plastic usually ends up in landfills. It degrades the soil of that region. It may also seek to the underground contaminating any nearby underground water bodies. In some countries, the wastes are incinerated or burned in the landfills. Incineration produces fumes which are toxic in nature. Incineration only shifts a soil pollution to air pollution. It is our duty to build a sustainable place where we all live in harmony. We have to discard the traditional ways of waste management and look for alternatives. One such alternative is plastic to fuel production.
Importance of our project Plastic to fuel production is a project which involves conversion of waste plastic to clean burning hydrocarbon fuels with the help of a process called pyrolysis. The pyrolysis process consists of the thermal degradation of the wastes (in this case, plastic) in the absence of oxygen/air. The end product mainly is ultra clean low sulphur diesel. This project has got a two-fold advantage. Firstly, it helps in reducing plastic wastes which would otherwise pollute the environment and secondly, it has the potential to atleast partially contribute in solving the energy crisis.
Project Life
This project is totally planned for 10 years starting from the scratch with constructing the factory and buying the machines till it is dismantled.
Process
Pyrolysis is an endothermic irreversible process of thermo-chemical decomposition of organic material at elevated temperatures to produce hydrogen and carbon monoxide in the absence of oxygen.
It is mostly used in oil and gas industry to convert waste materials such as tires, plastics or rubbers into bio-fuel or bio-oil as an end product where we can further purify and add chemicals to it and get the desired fuel we need such as diesel, petrol or kerosene oil which can be suitable for use by light or heavy vehicle’s on daily or regular basis.
A typical Pyrolysis machine has a schematic as shown below
Processes which are followed by the pyrolysis process include separation of char from gas/liquid particles, condensation of oil and fuel processing which are explained more below.
1. Feeder;
In order to feed the raw materials to the pyrolysis machine tank, raw materials should be fed into the plant in an approximate size of 2mm or slightly more depending on the size of the pyrolysis machine tank, typically raw materials are recommended to be in 2mm size to get better results.
2. Pyrolysis;
After the raw materials are fed into the pyrolysis machine tank through the feeder, it then converts the material into vapour/gas state through heating which then flows through the pipe into the stabilization chamber.
3. Dust or Char removal;
When the material is flowing in liquid or gas state through the pipe to the stabilization chamber, a filter is used which removes the char content or dust from the liquid or gas material by forcing it to move from a filter where char or dust with bigger molecules gets trapped inside the filter mesh and allows liquid/gas to flow through it.
4. Stabilization Chamber;
After the liquid/gas material passes through the filter it then flows into the stabilization chamber where the condensation takes place by cooling the material from liquid/gas phase to liquid single phase which is then collected in the chamber.
Hydrotreatment – It is the chemical process that takes place inside the stabilization chamber where the hydrogen atoms are used to remove the contaminant content such as sulphur, oxygen and nitrogen atoms are removed from ethanol molecules by providing high hydrogen pressures by using catalysts. Oxygen atoms are mostly removed in the form of water and carbon dioxide as it is increases acidity in oil and makes it more reactive.
5. Fuel processing or Purification;
When the bio-oil is collected after the condensation in stabilization chamber, it then flows into the further purification plant where fuel processing enhances and stabilizes the oil to be used in commercial vehicles or industries or regular basis.
Hydrocracking – It is a chemical process that takes place in the purification of bio-oil by tailoring the size of molecules in the desired range as gasoline, diesel or kerosene which can then be used as an everyday fuel by light and heavy vehicle industries.
Pyrolysis machine proposed for our project,
Machine Specifications
Dimension (length, Width, Height)
9.2m, 34m, 14m
Type of Raw Material waste rubbers and plastics
Warranty
1 year
Brand Name
HuaYin
Cooling system
2 horizontal condensers
Power in Watts
20KW
Labours required
4/machine
Certification
CE, SGS, ISO, BV
Place of Origin
Chine, Henan
Land Required
400sqm
Voltage
380 volts
Maintenance/Service Provided
Engineers provided by the company for service
Weight
42 tons
Rotating Speed
0.4 rate/minute
Machine details:
Cost of machine – 55000$
Engineers provided by the huayin company
Labors required - 3-4 to operate the machine
Voltage – 380V
Electricity - 20kW
Area Required - 400m2
Efficiency – 89%
Average Oil yield conversion is – 48%
Oil density – 0.89
Machine can work 19 hours and should be stopped for 5 hours for service or cleaning
Input mass of waste plastic – 10 ton’s
Output in Liters – 8900L Diesel (approx)
Points to be considered while discussing,
The pyrolysis process and stages of plastic to diesel
The various machines we found and why did we select this as the best one
The company that will give us the machine and the warranty from them
https://www.youtube.com/watch?v=IvZFfx7XhQE http://www.alibaba.com/product-gs/1241665103/10_Ton_Plastic_Tire_Oil_Machine.html http://www.wasterecyclingnews.com/article/20121016/BLOGS08/121019951/pyrolysis-a-simple-process-with-surprising-results
Legal Procedures
There are several procedures to adhere to when establishing an industry in the UAE. The details regarding the legal limitations to be considered by an entrepreneur planning to register a new industry in the United Arab Emirates are explained below.
Reservation of Name and Application for Registration To establish an industry, the first step an entrepreneur should take is to acquire initial approvals on industry name, partners’ identities and business activities from the licensing department. The licensing department is a branch of the Department of Economic and Development known as the (DED) in short. If the name of the company is available and approved, subsequent payments are made on DED website.
Notarization of Memorandum of Association This is also don at the Department of Economic Development. This involves an the lawyer of an entrepreneur obtaining an initial approval from the notary subsequent to the client’s arrival to have all documents notarized with immediate effect. The maximum fee paid for notary is AED 10,000.
Acquisition of Trade License and Membership registration To acquire a trade license and commercial registration certificate, original documentations are submitted to commercial registry still in the department of economic development. Documents can also be submitted online at the DED website. If the officials in the registry department approve such documents, the company name will be registered and other documents will be forwarded to the Federal Ministry of Economy for the arrangement of publication. This subsequently leads to the acquisition of trade license.
Application for Establishment Card The next step after obtaining the trade license is for the representative of the company or the entrepreneur to physically apply for the “Establishment card” at the ministry of labor.
Registration of Native Workers All native workers must be registered with the ministry of labor. This is done at ministry of labor and it requires all workers to present their personal information such as employment contract, employer’s passport copy, company’s trade license and proof of worker’s UAE citizenship.
Civil (choosing the place for the factory)
We made a plan of renting an industrial open land of 35,000 feet in AL Qouz Dubai. The land will already have offices, bathrooms and parking lots which take a space of 5,000 square feet. Now the construction of a 30,000 sqft factory will cost around 5,000,000 AED. The factory will consist of 5 pyrolysis machines and 3 underground storage tanks.
The staff will consist of 59 people which are:
1. General manager
2. Secretary
3. Admin manager
4. Accountant
5. Production manager
6. 2 supervisors
7. Coordinator
8. 4 drivers (2 for transportation and 2 for shipping the diesel)
9. 2 human resources
10. 2 watch men
11. Office boy
12. 2 safety officers
13. 20 skilled labourers
14. 20 regular labourers
Considerations for all yearly expenses are shown in the capital section and they include:
1. Raw materials
2. Machinery and equipment
3. Power consumption
4. Rent and construction
5. Staff salaries
6. Office expenses
7. Government charges for registrations and licensing
8. Government yearly charges
9. Maintenance and repairs
10. Depreciation of equipment of 10 years
11. Air-conditioning
12. Fire fighting
13. Flooring
Economics
Initial set up cost
Company name – AED 110
Company Registration – AED 210
Trade License – AED 15,000
Dubai Chamber of commerce and industry (DCCI) – AED 10,000
Waste – AED 2,000
Card of ministry of labor – AED 2,000
Total =
Factory costs
Machinery & Equipment Cost
5x Pyrolysis machine cost
AED 200,750
AED
1,003,750
2x buses cost
AED 109,500
AED
219,000
2x diesel Tankers
AED 164,250
AED
328,500
3x underground tankers
AED
60,000
AED
180,000
Total
AED
1,731,250
Rent
Required Factory Area =
35,000 ft2
Rent per Month =
AED 67,000
Rent land per Year =
AED 67,000 x 12
=
AED
804,000
Rent cost for the first 2 years is included in the capital
=
AED
1,608,000
Air conditioning
Area is 25000 sqr ft
Requires 30 tons of cooling
Approximate cost per ton is AED 6000
Total AC
AED
180,000
Total Ventilation
AED
100,000
Total HVAC
AED
280,000
Fire Fighting
Area is 25000 sqr ft
Requires 40 nos Sprinklers based on 1 sprinkler per 350 sqr ft
AED
45,000
One fire pump set consist of Diesel Pump , Standby pump
Jockey
AED
145,000
Diesel Tank
AED
18,000
Water Tank
AED
60,000
Pipes and Valves
AED
35,000
Fire Extinguishers Blankets
AED
7,000
Fire Fighting
AED
310,000
Electrical
Area is 5000 sqr ft
Requires 15,000 watt of light
AED
30,000
Panel Boards
AED
45,000
Isolators for Machines
AED
18,000
Cable Tray and Trunking
AED
7,000
Main Cables
AED
80,000
Total Electrical
AED
180,000
Flooring & Apoxy
Flooring
AED
80,000
Apoxy
AED
50000
Total Flooring
AED
130,000
Total construction cost of the factory
TOTAL CAPITAL
Product Cost
Fixed Product Cost + Variable Product Cost
Fixed Product Cost
A.
STAFF
Per
Salaries
Air
Leave
RP Renewal
Insurance
Total
Nos
Month
Ticket
Pay
Med.
180
1
General Manger
1
25,000
25,000
270
2,083
100
350
27,803
2
Secretary
1
3,500
3,500
270
292
100
350
4,512
3
Admin Manager
1
16,000
16,000
270
1,333
100
350
18,053
4
Accountant
1
8,000
8,000
270
667
100
350
9,387
5
Production Manager
1
16,000
16,000
270
1,333
100
350
18,053
6
Supervisors
2
12,500
25,000
240
2,083
200
700
28,223
6
Sales Manger
1
12,500
12,500
120
1,042
100
350
14,112
7
Coordinator
1
4,000
4,000
120
333
100
350
4,903
8
Drivers 4
2,000
8,000
480
667
400
1,400
10,947
9
HR Personnal
2
8,000
16,000
540
1,333
200
700
18,773
10
Watchmen
2
2,500
5,000
240
417
200
700
6,557
11
Office Boy
1
2,500
2,500
120
208
100
350
3,278
12
Safety Officers
2
4000
8,000
240
667
200
700
9,807 Total per Month 149,500
3,450
12,458
2,000
7,000
174,408
Gross Total per Month
AED 174,408
Gross Total per Year
AED 2,092,900
B.
LABORS
Per
Salaries
Air
Leave
RP Renewal
Insurance
Total
Nos
Month
Ticket
Pay
Med.
1
Skilled Labors
20
5,000
100,000
2,400
8,333
2,000
7,000
119,733
2
Labors
20
3,000
60,000
2,400
5,000
2,000
7,000
76,400 Total per Month 160,000
4,800
13,333
4,000
14,000
196,133
Gross Total per Month
AED 196,133
Gross Total per Year
AED 2,353,600
Total Staff
AED
2,092,900
Total Labor
AED
2,353,600
Grand Total Staff & Labor
AED
4,446,500
C.
RENT & Power
RENT
Power
Factory
Labor
Rent
1 Factory Premises
67,000
2 Labor Accommodation 30,000 3
Power Consupmtion
26,353 Total per Month 67,000
30,000
26,353 Gross Total per Month
AED 123,353
Gross Total per Year
AED 1,480,236
D.
Office Expenses
Communica-
Printing
tion
Stationary
Postage
Computer
Server Communication
1 Internet 150
FAX 1 Line
350
TEL 4 Lines
1,400
2
Printings & Stationary 600
3
Periodicals & Postage
250
3
Computers
10
3,500 3
Server
2,000 Total per Month 1,900
600
250
3,500
2,000 Gross Total per Month
AED 8,250
Gross Total per Year
AED 99,000
E.
Charges & Fees
SN Bank
Recruit
Govt
1
Bank Charges & Fees 2,000
2
Recruitment Charges & Fees 5,000 3
Govt. Charges & Fees
1,000
Total per Month 2,000
5,000
1,000 Gross Total per Month
AED 8,000
Gross Total per Year
AED 96,000
F.
Maintenance and Repairs
Repairs & Maintenance
Equip
Tools
Computer
Server
Air Con
Vehicles
1
Equipment
3,000
2
Tools
1,000
3
Computers
300
4
Server
300
5
Air conditioner
500 6
Vehicles plus Maintenance
4
400 Total per Month 3,000
1,000
300
300
500
400
Gross Total per Month
AED 5,500
Gross Total per Year
AED 66,000
G.
Depreciation Over 10 Years
SN Depreciation
Computers
Equip
Air Con
Vehicles
1
Computers & Printers
300
2
Tools & Equipment
15,000
3
Air conditioner
3,000 4
Vehicles
4,000 Total per Month 300
15,000
3,000
4,000
Gross Total per Month AED 22,300
Gross Total per Year
AED 267,600
H.
Insurance Premium per Year
AED 90,000
TOTAL FIXED PRODUCT COST:
Variable Product Cost
Marketing (Considered to be 9% of sales income)
Marketing Phasing
Year
Cost
2015
1,534,920
2016
2,302,370
2017-2022
2,558,190
2023
2,430,280
Raw Materials (The maximum production requires
18250
tones of plastic)
Year
Cost
2015
(60% production requires
10950
tones of plastic)
6,033,450
2016
(90% production requires
16425
tones of plastic)
9,050,180
2017-2022
(Maximum production)
18250
10,055,750
2023
(95% production requires
17338
tones of plastic)
9,552,960
Cost of plastic per ton
AED
551
Total Variable Cost per year:
Year
Total Cost
2015
7,568,370
2016
11,352,550
2017-2022
12,613,940
2023
11,983,250
Cash Flow chart (In thousands)
Fixed Capital Investment
AED
9268.6
Fixed Capital Phasing
Year
Capital Investment
2013
35%
2014
65%
Working Capital %
(estimated to be 25% of capital)
25%
Maximum Production of diesel 8121.25 Litres/year
Production Phasing
Year
Production
Litres/year
2015
60%
4872.75
2016
90%
7309.125
2017-2022
100%
8121.25
2013
95%
7715.19
Selling Cost
3.5
AED per litre
Decommissioning Cost(Estimated to be 30% of the capital)
2780.58
Scrap (Estimated to be 10% of the capital)
926.86
Project Year
0
1
2
3
4
5
6
7
8
9
10
Year
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Production (liters/year)
0
0
4872.75
7309.125
8121.25
8121.25
8121.25
8121.25
8121.25
8121.25
7715.19
Fixed Capital
3244.01
6024.59
1853.72
Working Capital
0
0
4263.66
2131.83
710.61
0
0
0
0
0
-355.30
Sales Income
0
0
17054.63
25581.94
28424.38
28424.38
28424.38
28424.38
28424.38
28424.38
27003.16
Product Cost
0
0
14113.71
17897.89
19159.28
19159.28
19159.28
19159.28
19159.28
19159.28
18528.59
Cash Return
-3244.01
-6024.59
-1322.74
5552.22
8554.48
9265.09
9265.09
9265.09
9265.09
9265.09
6976.15
Cumulative Cash return
-3244.01
-9268.60
-10591.34
-5039.12
3515.36
12780.46
22045.55
31310.64
40575.73
49840.82
56816.98
ROI
67.05595
PBT
Year
CCR
3
-5039.12
4
3515.36
Interpolating gives
3.6
NPV – there were two approaches tried to invest the capital in the business.
Approach 1 – The entire construction of the factory is done by the first year while the machinery and equipment will be installed in the second year. This approach requires 63% of the capital. The interest rate is taken to be at a compound interest of 10%
Approach 2 – In this case, around 50% of the construction is completed in the first year. The remaining 50% left plus the machinery and equipment will be completed in the following year. Hence, the capital required is approximately 35%. The interest rate is a compound interest of 10%.
Approach 1
Approach 2
NPV
74015
120449
Comparing the net positive values for both, the approach 2 is a better way to invest the money in the business as its NPV is much higher than the approach 1.
Discount factor
1
0.952380952
0.907029
0.86384
0.822702
0.783526
0.746215
0.710681
0.676839
0.644609
0.613913
PV
-3244.01
-8827.2381
-9606.66
-4352.98
2892.099
10013.82
16450.73
22251.89
27463.25
32127.84
34880.69
NPV
120049
IRR
5%
120049
40%
-789.057
39.77%
Human Resources
HR department is one of the most important departments; all other departments are controlled by the HR management. It consists of two main parts;
Strategic
Operational
Strategic
The different posts and jobs that have to be done are decided and accordingly people are employed. In the case of a factory to get the trade mark L.L.C. we need a minimum of 60 employees.
Managing the individual and organizational operations of the company
Operational
Watching over the performances and giving rewards for the extra effort done by the employees
Making sure of the safety of the employee while working in the factory.
The HR consists of 2 main people they both work together in strategic and operational work for the company. The different posts that are available are listed below, with the brief about each employee’s task
Post
Brief
Qty
General Manger
The highest ranking manager taking care of the whole company’s operations
1
Secretary
Assistant to the General manager
1
Admin Manager
Over sees the operations in each department and makes sure they run smoothly
1
Accountant
Handles the finance of the company
1
Production Mgr.
A production manager is involved with the planning, coordination and control of manufacturing processes
1
Supervisors
Every department has a supervisor who handles the department operations
2
Sales Manger
Approaches new firms for sale and convinces them as well as manages the different sale outcomes
1
Coordinator
Interacts between the Factory workers and the supervisors
1
Drivers Transports the diesel to various sale points on a truck
4
Security Guard
Watches over the factory and takes care of who goes in and out
2
Office Boy
Handles the paper work
1
Labors
Load the machine with plastics
20
Skilled labors
Operate the machine and control the variables
20
The Health safety and risks are discussed in the ‘Safety and health management’ topic.
HR department also contributes lot into ethical management of the business. They set up a number of policies that are to be followed by all the employees in order to keep with work ethical. These policies are as follows:
Any act or event that conflicts with the company’s business shall not be carried out
Keeping professionalism in the work
Should interact with other employees while working
Honesty in work
Shall not engage in any business activity that is in competition with the business of this company
Shall not expose any kind of confidential information of the company
Should not misuse or damage any property of the company
Should not accept or give away gifts that are on the name of the company.
Time and Attention at work should be maximum
Harassment in any terms of age, gender, race and any other means is unacceptable
Working under the influence of alcohol is strictly prohibited
Frauds such as cheating tricking or stealing others works will be dealt with concern to the country Law
Shall follow all the safety regulations at all times
Any other problems that are encountered by the employees are directed to the HR department who further take the decision and follow it by the action required to be taken.
Ethics in a company
Ethics of a business is known as the behavior of the company in the society. An ethical strong company gets a better reputation in the society because it doesn’t only focus on profits; it focuses on fitting into the society by taking care of the environment behavior of their employees as well as contributes to the society in a positive way e.g. being sustainable i.e. causing as less environment harm as possible.
Some of the main parts of Ethics are;
Sustainability
Health safety
Morals of the company
Each one of these have been discussed separately but when converging them with Ethics; Sustainability is an important concern for a consumer, our company is using up the waste plastics that can no longer be recycled or reused as plastics again, this gives a positive view to the society about the company and thus the consumer would be proud of what they buy therefore they will feel they are doing the right thing, This will also promote campaigns to separate plastic waste from the other waste with and Ethics is all about deciding what is right and wrong.
Health and safety is a high priority issue, injuries or any severe harm to the working labor can affect the whole company’s reputation, however this can be dealt with good safety systems and other alternatives that have been discussed earlier. Looking to it in the Ethical manner, it is highly inacceptable for the consumer to realize that the Diesel company their purchasing from has no safety for their workers, which will force them to conclude as the company being unethical.
Morals inside the company are the actual core points that form the Ethics of the company, every human being has morals of his own, and he brings these morals with him at work. When these morals are suppressed by the companies due to various invalid reasons, this will cause conflicts within the work he is assigned and this will be the case for many other workers, which will affect the Ethics of the whole company. Example when the Supervisors a lot the work to the labors, he gives extra work to one of the labors whereas others do less than him, this would be an unethical act which will ultimately lead bad performance in work.
Therefore to solve these ethical issues, the HR department sets a number of policies that are to be followed by the staff and labors. This is known as the Code of Conduct
It can be broken down into three parts i.e. prevention, detection and reaction.
In the company, Prevention would be the Policies made by the HR that have been listed earlier.
Detection is to know about the employee whether they’re following the policies or not.
Reaction is responding to any kind of unacceptable or unethical activity either by simple warning or by taking a serious action, all depending on the effect of the action on the ethical level.
Marketing Plan
Marketing is a process by which a company goes through making stakeholders aware about what our company is doing.
There was a time when marketing was given secondary importance in the workings of a company, which in turn caused very little, or even no budget being allotted to this immensely important department. The reason for this was relatively less competition in the market and, as a result, if a quality product was made, it would sell well.
However, things are vastly different now. With multiple companies providing the same service, and a wide range of options for the consumer to choose from, competition in every sector has increased dramatically. This is where marketing takes centre stage in a company. The importance of marketing increased so quickly and so astonishingly that today, almost no product is out of its sphere of influence.
In this age, a company can simply not survive without some form of marketing.
Marketing has significant importance in our company as well. The core operation of our company is converting plastic into diesel. For this process, we require the raw material for it which is Plastic.
In order to obtain this plastic this plastic relatively cheaply and maintain a steady supply, we need to create awareness among the local population. We need to use different marketing strategies to convince them not to just dump their tones of plastic waste just about anywhere, and instead, take some extra effort, and give it to us.
This phenomenon is what caused our company to consider marketing, a very important pillar of the organization and hence, we dedicated ample resources for it.
To tackle this central requirement of raw material, which is the backbone of our company, we have developed a 4-thronged strategy. This 4-thronged strategy is our way of dividing and classifying the sources of plastic in the market.
1. The Company :
The reason that we thought that this method was the easiest was because a company is a professional environment, where there is only one boss or manager. The employees follow whatever the management tells them to do. We therefore have to convince the management only, and be assured that most of the plastic is being supplied to us and is not being wasted.
However, in most cases, convincing the management of a company is not as easy as it sounds. We have to use different marketing strategies to convey our point to them and create enthusiasm within them for our cause.
To start with, we can interactive put banners in the workplace of the factory, indicating where to dump the plastic and why this was important. Moreover, we can set a threshold level for the plastic collected and we can offer discounted diesel to companies which collects plastic above that threshold level. This strategy holds special importance as we are dealing with businessmen, whose ultimate aim is to maximize their profits.
This first method that we talked about is our most significant supply of raw materials and hence is most central to our business.
2. The School :
This is a tricky part of our strategy. The reason that this method is not as simple as the previous method is that the school is not as disciplined an environment as the workplace is. Hence our marketing strategy in the school should be as attractive as possible, which, in turn would motivate the students. Keeping this in mind, a plan was chalked out.
A competition will be organized in schools wherein we will run a campaign in various schools. The slogan of the campaign will be, “Save Earth, Save Plastic”. As part of this campaign, we will organize a waste plastic collection competition between different grades in the school. To better motivate the students, a ‘bumper prize’ will be announced for the winning class beforehand. Moreover, certificates of Participation can be awarded to all the grades in the school
3. The household:
This is the last of part of our 3-way strategy. Our approach to this part should be very different from the first and second parts. As we are dealing with independent households here it will be relatively difficult to create awareness for our cause.
Firstly, we need to distribute containers in the neighborhood so that residents can dump their waste plastic in the container. For the first time, it is imperative that we distribute ‘informational leaflets’ together with the containers. These leaflets will give awareness about the importance of recycling plastic waste. This will also encourage more people to contribute towards increasing the volumes of plastic that we collect from these houses. We can then expand this campaign to different neighborhoods and hence we can obtain a considerable amount of our raw material by this method.
The objectives of this campaign is to create a habit of recycling plastic waste among the community, so that in successive years we have to allot considerably lesser budget for marketing in the community.
4. Electronic Media :
This aspect of our plan is more general and does not cater to one specific segment of the society, but rather to wider audience. This includes running advertising campaigns on television. What this also includes is running a campaign on social media websites like Facebook and Twitter.
In order for this part of our marketing plan to be executed professionally, we have outsourced it to an advertising company. The job of the advertising company will be to design and run advertisements for our company. Moreover, they will also run a campaign for us on various social media websites.
Marketing budget:
Since marketing is a very important aspect is today’s world, we dedicate 9% of our total sales income very year to marketing.
http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/starting-a-business
References
Civil
1. Salaries, construction, office expenses, fire fighting/flooring/air-conditioning: From viatech engineering company.
2. Power consumption: http://www.dewa.gov.ae/tariff/tariffdetails.aspx
3. Buses costs: http://www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=buses
4. Truck costs: www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=diesel+trucks
5. Tankers : www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=diesel+storage
6. Pyrolysis machine: www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=pyrolysis
Legal
1. Government charges: http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/starting-a-business
References: Civil 1. Salaries, construction, office expenses, fire fighting/flooring/air-conditioning: From viatech engineering company. 2. Power consumption: http://www.dewa.gov.ae/tariff/tariffdetails.aspx 3. Buses costs: http://www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=buses 4. Truck costs: www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=diesel+trucks 5. Tankers : www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=diesel+storage 6. Pyrolysis machine: www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=pyrolysis Legal 1. Government charges: http://www.doingbusiness.org/data/exploreeconomies/united-arab-emirates/starting-a-business