Polyethylene terephthalate (also written as poly ethylene terephthalate), commonly abbreviated as PET, is the most common thermoplastic polymer resin of the polyester family and is used in fibers for clothing, containers for liquids and foods, thermoforming for manufacturing, and in combination with glass fiber for engineering resins. PET Bottles have become highly popular packaging for many kind of liquid products such as soft drinks, drinking water, cooking oils and etc., mainly due to its strength, light weight, excellent dye-ability and satisfactory resistance to almost all organic solvents.
The demand of PET bottles is on a rise as most of the food manufacturers from different businesses are converting to PET bottles for the packaging of their products mainly because of lower cost and better preservation. The PET bottles / containers are commonly used for the packaging of the following:
- Soft Drinks / Carbonated Beverages
- Drinking Water
- Edible Oil
- Household Food Containers
- Lubricating Oils
- Feeding Bottles for Babies
Due to high demand of PET bottles, there is a huge potential for establishing small manufacturing units of PET bottles in the main cities of Pakistan. Accordingly, this particular project is related to setting-up a modernly equipped ‘PET Bottles Manufacturing Unit’ at a small and medium scale level. Proposed unit is based on 02 sets of semi automated ‘Pet Blow Machines’, and have an installed capacity of producing around 18,171 bottles of three different sizes, i.e. 0.5, 1.5 and 6 ltr, per day on 8 hours single shift basis. For this proposed production ‘Preforms’ will be outsourced, while molds of stated sizes are procured as a part of machinery. The unit will operate on contract manufacturing basis, particularly for mineral water, beverages and edible oil industries.
How PET Bottle is Produced in Pakistan
PET bottles manufacturing process involves two basic stages of ‘Preforms Manufacturing’ and ‘Bottle Blow Molding’. The production operations of proposed unit mainly entails the second stage of manufacturing process, whereas ‘PET Preforms’ will be outsourced from the market. The practice of outsourcing ‘PET Preforms’ from the market is widely being practiced in the industry, particularly by small and medium scale units mainly to avoid high capital cost of required machinery and equipment for making PET Preforms.
PET bottles usage, as liquid packaging material is a growing industrial segment in Pakistan relying heavily on the changing lifestyle patterns and population growth in the country. Major target market for proposed unit includes mineral water, food / beverages and edible oil industry stakeholders based in Karachi and Lahore. However, there is also a growing demand for the product in Hyderabad, Sukkur, Shikarpur, Gujranwala, Multan, Rawalpindi, Quetta and Peshawar etc. The production of 0.5 and 1.5 liter bottles is the highest, as they are used in the beverage and mineral water industries which are the two largest consumers of PET bottles. The production of 6 liter is lower than the other two because they are mostly used in edible oil packaging.
Investment Required for PET Bottle Business in Pakistan
Total cost estimates are Rs. 17.43 million with a capital investment of Rs. 15.87 million and an initial working capital requirement of Rs. 1.56 million. Projected IRR, Net Present Value (NPV) and Payback of this project are 32%, Rs. 16,669,952 and 3.88 Year years respectively. Details of these financials can be studied in the PET bottles business plan by SMEDA.