Starting Plastic Injection Molding Manufacturing Plant

Monday, September 8, 2014

Starting Plastic Injection Molding Manufacturing Plant

Starting a plastic manufacturing plant, like any other business, requires research and planning. More than just a business, it requires the technical and scientific knowledge of manufacturing plastic as well as the legal requirements of licenses and environmental permits.

An injection molding plant is a type of material-processing plant. Injection molding plants may serve as secondary processors that take raw plastic and form it to create parts for other end applications. An example of a secondary process injection molding plant is a company that provides molded plastic parts to a factory that produces a more complex product. Plastic processors may also be a tertiary level manufacturer, producing items ready for the consumer. The company that produces plastic kitchenware would be a prime example of a tertiary injection molding plant. Regardless of what product the company produces, it will need a factory floor space, adequate power to run the machinery and injection molding machine and the raw plastic required to make the product.

Here are a few things to consider in starting a plastic manufacturing plant.

Like any other business, planning to start a plastic manufacturing plant involves a lot of planning and research. In fact, one may consider starting a manufacturing plant even more tedious than any other business as one does not only try and consider the business aspect of the plastic manufacturing plant but even the environmental and legal aspects of the business venture. It requires not only the skills of a businessman but even the knowledge and skill of a scientist and engineer. Services of attorneys may also be needed to help maneuver the environmental and license requirement of the government.

But before even going into the specific needs of a plastic manufacturing plant, it is first essential to determine what kind of plastic one is looking to produce. There are a lot of plastic products in the market today and there are even more competitors for the said product. One has to carefully plan and research the market and find out which area has a shortage or need for plastic products. In determining the kind of product to produce, one must also consider the skill level needed to produce such product. Do you have the necessary background in plastic making for such product? Do you have the necessary experience in manufacturing such product?

After determining the product, it is then necessary to decide the size of the plastic manufacturing plant. Do you plan to work merely at home or start a plant some other place? How much plastic do you want to produce in a given period of time? There are generally three ways in starting a plastic manufacturing plant. One can either buy an existing manufacturing plant. There are a lot of plastic manufacturing plants that are fully furnished and offered for sale in various parts of the world. They cater to a wide variety of plastic products. Another way is to start the manufacturing plant yourself. This means producing the necessary capital or finding investors to do so and building-up the plant yourself. Another way is to start small and try homemade plastic first. If one is just new in the plastic manufacturing business, one can choose to apprentice and work for a plastic plant before starting one’s own business.

Once you are knowledgeable of your desired product, the scientific and technical way to manufacture it and the type of business venture you are planning, as well as the location of your plant, you can start looking into the license and permit requirements of the government. Oftentimes, environmental per-conditions are also necessary before a permit or license is granted.

Instruction:

Step 1

Commit to a finalized plan for the type of injection molded plastic product your business will sell. The dimensions and type of plastic used to create the product will have a direct impact upon the injection molding machine purchasing decision.

Step 2

Determine how much investment capital is available for starting up the injection molding plant, since this will directly affect the size of the facility available as well as how large of an injection molding machine your business can afford.

Step 3

Contact injection molding machine industrial suppliers with the specifications for the types of end products you'll need the machine to produce, as well as the approximate budget available for production equipment. The company will then suggest which models most closely match your business's particular needs. Contact multiple companies to compare suitable models. Decide which model your company intends to order.

Step 4

Contact a real estate agent with experience in industrial procurement, and secure a production facility suitable for the size and energy requirements of the model of injection molding machine your company has chosen. After choosing a production facility and finalizing the lease or purchasing agreement, place the order for the injection molding machine.

Step 5

Contact bulk plastic suppliers and secure a contract from the best company competing for the contract. Investigate the track record of each supplier company; a low bid won't do any good if the company is unable to keep up with the raw material volume requirements of your business.

Step 6

Produce samples of your finished products. Making these early samples will help staff become accustomed to the machinery in a low stress situation and work out any problems before beginning main production runs. The samples will also serve prototypes for marketing presentations to potential distributors. With the plant started and operational, it's time to move on to marketing and production.

If you have reached this page then somehow you are associated with Injection Molding of Plastics, if not then you can still find some useful information about starting a business.

Starting any business need planning. Planning includes the following points to be studied and discussed with experienced professionals, friends before actually starting a company.

Purpose of Starting

Experience in Injection Molding
Financial background
Technical knowledge about Plastics Processing
Location of Plant – very important
End Customers and Location
Products to be manufactured / Job Work
Type of Products to be made Commercial / Industrial / Automotive / Aerospace
Legal Status of the Company Proprietor / Partnership / LLP / Pvt. Ltd. / Ltd.
Number of Partners / Directors

It all starts with your knowledge and experience in the Plastics Processing Industry, especially Injection Molding. I restrict my discussion to starting a small Proprietorship / Partnership company doing Job work or molding commercial plastics components.

Now a days many people who are not associated with plastics are also starting Injection molding plant, by way of necessity / opportunity available.

Most people think about their budget first and decide about the size of the plant accordingly. For a new comer starting Injection Molding plant with little experience in the field, seems to be easier with smaller machines initially. But you have to look at the over all project cost before deciding what capacity machine to be purchased.

Let us assume that one has decided to start with 100Tons Injection Molding Machine to manufacture Commercial items like 20 liter Water Jar Cap or house hold items.

PROJECT REQUIREMENT AND COST

Sl.No.	Plant Requirements	Details
1	Plant Size in Square Feet	400 – 600 Sq.ft
2	Amount of Rent per Month @ 20 per sq.ft	8000 – 12000 minimum
3	If rental Premises Cost of Advance	10 Months of rent is norm
4	Cost of Machine – assuming Used Machine	depends on age and condition of the machine,.
5	A Frame with 2tons Chain Pulley Block	To be determined
6	Power Required for Machine	Approx 35hp
7	Cooling Water Pump Power	1hp
8	Cooling Tower and Piping	To be determined
9	Mould clamps and Tools	To be determined
10	Hydraulic Oil for Machine about 200liters	To be determined
11	Machine loading and unloading erection	To be determined
12	Machine Transportation if not in the same city	To be determined
13	Electrical fittings, wiring in the Building	To be determined
14	Accessories like Scrap Grinder, Oven	If required
15	If own products then cost of Mould	To be determined
16	Working Capital considering 6 months rent, wages, and other expenses	To be determined
17	Number of employees assuming accounts work to be taken care by owner./ consultant	6 for 24 hours operation
18	Registration with Sales Tax	To be determined
19	Stationery Printing	To be determined
20	Office Furniture	To be determined

Monthly Expenses

Description	Details
Electricity Bill	To be determined
Wages and staff welfare	To be determined
Miscellaneous Expenses	To be determined
Telephone / Mobile Expenses	To be determined
Transportation Expenses	To be determined
Interest on Investment @ 18% per annum
Insurance for Equipment	To be determined

Assuming accounts related work is carried by owner. Otherwise you may have to pay another (To be determined) Per month for filing sales tax returns.

Annual Expenses

Audit fees.
Filing of Income tax returns
Annual Sales tax assessment
Bonus for Employees
Festival Expenses if any
Insurance for Equipment and plant

Tips

Rent a factory production facility large enough to house a stockpile of raw plastic. This prevents supply-chain disruptions from limiting production.
Opening an injection molding plant will take a lot of management oversight. Rather than dividing your attention between marketing and startup, consider hiring a consulting marketer to court perspective distributors while you focus on getting the factory up and running.

Warning

Ensure that the injection molding machine your company purchases can operate on the level of electrical infrastructure available in the factory facility.

References

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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Monday, September 8, 2014