How to open a toilet paper production: business plan, equipment, recommendations

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The Russian market of hygiene products is steadily showing annual growth by an average of 7-9%. According to experts, this trend will continue in the future. In financial terms, the market is growing faster (20-30%) than in real terms, because single-layer toilet paper is selling worse and worse. Today, many consumers prefer to buy two- or three-ply toilet paper for hygiene purposes.

Market Brief

In the domestic market of hygiene products, a stable change in consumer demand has recently been observed. Consumers prefer high-quality, but budget products. Demand is stable and not subject to seasonal fluctuations, and the low cost of finished products ensures quick implementation. But when planning a sales strategy, you need to take into account competition and market saturation.products.

The level of competition is estimated as medium-high. At the moment, you will have to compete with at least a dozen large companies. The number of small firms and medium-sized enterprises that are engaged in the toilet paper business is almost impossible to count. It can be expected that the larger players in the market will absorb the smaller ones, and those that produce a low-quality product will disappear.

The largest producers are: Syassky Pulp and Paper Mill, which is located in the Leningrad Region, the Syktyvkar Tissue Group holding (Komi), Naberezhnye Chelny Paper Mill (located in the Republic of Tatarstan), SCA Hyjin Products Russia (factory in the Leningrad region). It will definitely require a significant initial investment in a toilet paper business. It is completely unprofitable to organize a workshop at home.

Business registration

How to open a toilet paper production? The step-by-step instructions are simplified as follows: registering a business, renting production workshops and purchasing equipment, searching for suppliers of raw materials and developing distribution channels. All these issues need to be addressed consistently and comprehensively. One of the longest stages is the official registration of a legal entity, the choice of a taxation system and other bureaucratic procedures.

An entrepreneur needs to register with the Federal Tax Service at the legal address. A legal address can be obtained for non-residential premises. Without an officeit is not possible to register as a legal entity. Before applying to the tax office, you need to choose the form of the enterprise (for the normal operation of the plant, you will need to register a legal entity, but if you plan a small company, you can stop at individual entrepreneurship) and an acceptable taxation option. If there are several owners, usually the choice falls on the creation of an LLC or a production cooperative.

During registration, you will need to indicate the OKVED number. For such activities, code 21.22 is suitable - the production of paper products for sanitary and hygienic and household purposes. For the implementation of production and wholesale trade, it is necessary to apply for taxation under a general or simplified scheme. With a simplified one, an entrepreneur is exempt from property tax, profit, VAT, but is limited by income limits (up to one hundred and fifty million rubles a year).

Before carrying out activities, you also need to obtain permission from the SES and the fire inspectorate. Production facilities must comply with sanitary and fire safety standards.

Production technology

A business plan for the production of toilet paper must necessarily include a description of the production process. Depending on the raw materials, the production cycle may be complete or incomplete. In the first case, waste paper is used, in the second, the raw material for the production of toilet paper is the finished paper base. Waste paper as a raw material is more profitable, because in this case there is no needpurchase special expensive equipment and hire trained employees who can cope with complex and time-consuming work.

The technology for the production of hygienic products for the full cycle is as follows:

1. Sorting waste paper, crushing raw materials in a crusher, adding water and straining through a sieve.
2. Washing the mixture (the whiteness of the raw material will depend on the number of washing cycles with water in a special tank).
3. Crushing the raw materials that are the basis for the production of toilet paper.
4. Checking the proportions of paper base and water.
5. Squeezing out excess liquid with a nylon mesh, placing raw materials in a dryer. At 110 degrees Celsius, the paper base dries, the tapes are wound on bobbins.
6. Placing the bobbin on the unwinder, embossing and rewinding.
7. Cutting technological rolls into consumer rolls of the desired size.
8. Packing the goods and sending them to a warehouse or retail outlets.

Use ready-made base

The production technology of toilet paper and paper napkins from the finished base is simpler, so it does not require highly skilled personnel. The cost of purchasing special equipment will also not be significant. The production process is divided into the following steps:

1. Installing the base roll on the special drum.
2. Punching in special punching blocks.
3. Cutting technological rolls into consumer blanks in accordance with the specified dimensions.
4. Packaging of finished products and warehousing for subsequent sale to the final consumer.

Production hall rent

Almost all technology for the production of toilet paper (according to reviews, this business requires considerable investments at the initial stage to purchase equipment) is based on the use of mainly semi-automatic machines, so the room must be selected large enough. The workshop should be located on the ground floor or in the basement, well heated, well ventilated, running water and electricity. Free access to the premises should be provided for the shipment of finished products and the supply of raw materials. The profitability of the business depends, among other things, on reducing the cost of supplying raw materials and the delivery of finished products, so it is better to look for a place for a plant near paper waste processing shops or secondary raw materials depots.

After choosing the premises, it is necessary to establish contacts with the owner and conclude a preliminary contract. At this stage, the entrepreneur does not yet have the right to conduct business, because he does not have state registration. It is advisable to draw up final agreements only after the completion of all bureaucratic procedures, however, for registration, you need to provide a lease agreement for the production workshop. Some entrepreneurs decide to register a company at their home address, but in the future this may cause serious conflicts with the tax authorities.

Procurement of equipment

In the business plan for the production of toilet paper, you needreflect the cost of purchasing equipment. The machines used vary in complexity and cost. To organize a mini-production you will need:

• unwinder-winder (rewinds the feedstock into technological rolls with layer sizing;
• machine for cutting technological rolls (technological rolls on such a machine are cut into ready-to-sell).

The most affordable unwinder costs almost seven thousand dollars, a band saw for cutting technical rolls costs about two thousand. For the equipment of the production workshop, it is advisable to purchase separately a bushing, rewinding, cutting, packaging machine, pasting table. For a semi-automatic line, you will have to pay about 800 thousand rubles or more. A full machine costs from 1.2 million rubles and more.

Paper recycling machine

Japanese company has come up with an effective paper waste recycling solution - White Goast's machine converts office cardboard and paper waste into toilet paper. The productivity of the machine is relatively low: from 900 sheets of standard A4 format, 30 minutes after the start of the cycle, one roll of paper is obtained. The cost of the processing machine is about $100,000.

The cost of one roll of toilet paper made on this machine is approximately $0.17, the retail price is $0.58. Payback periods are very long. If the machine isfunction constantly, then in a year it will pay off only eight thousand dollars. At the same time, in ten years the same car can cost twice as much. It turns out that it is much more profitable to hand over paper waste to a regular recycling point. Most likely, this is only a prototype, which will be further developed.

Hiring production staff

The success of a toilet paper business largely depends on the skills of its employees. If an entrepreneur does not have experience in this field of activity, then a good technologist is definitely needed. You also need to hire a storekeeper, an accountant (at first, you can outsource accounting rather than invite an employee to the staff), a driver, several workers to ensure the smooth operation of the production line. A business plan for a toilet paper business should include staffing requirements and salary levels.

Providing production with raw materials

Where to find raw materials and what to do with toilet paper waste? Most often, suppliers are waste paper processing plants, which exist in many regions and are open to cooperation. To establish business contacts, it is usually enough to send a commercial offer to the management of the relevant department or just call.

Production waste per shift is about 100 kg. Raw material collection points usually do not accept such waste, because they cannot sell it. Trimmings can be tried to be passed through the machines again (this is only possible if there are machinesfull cycle), make egg trays or seedling pots from the wet mass., sell to the public to add to the compost for fertilizer.

Development of distribution channels

The business idea of toilet paper production is an opportunity to make good money, but any manufacturer depends on the stability of demand and the availability of distribution channels for finished products. You can offer your goods to wholesalers simply by phone. Advertisements in catalogs or traditional print ads in wholesale markets work well. Large buyers do not need to be enticed by creative advertisements, as in the case of a retail consumer, which greatly facilitates the process of finding distribution channels.

Production payback calculation

The final (but by no means the last) part of the toilet paper production business plan is the calculation of the project's payback. Approximately 110 thousand rolls of toilet paper are obtained from one ton of base, the optimal batch size is 330 thousand rolls (30 tons of raw materials). The cost of a roll will be 7.6 rubles. With a markup of 22%, the sale of the entire batch will allow the entrepreneur to earn 732.6 thousand rubles a month. The investment in the business will pay off in three to four months of operation of the production shop.

In different regions, the cost of renting production facilities and the margin for finished products are different, so the calculations are approximate. It may be possible to purchase cheaper (quality used) equipment, which will reduce costs. The salary of employees also depends not only onthe region where the production is based, but also on the type of settlement (city, village or urban settlement). In any case, the production of toilet paper, if properly organized, is a profitable business with prospects for expansion and development.