FMC

Bamboo Straw

Overview

Product Idea and description

  • A natural, eco-friendly, biodegradable, hygiene, chemical free substitute of plastic straw. One can reuse the straw rinsing it clean under tap water and dry immediately. 
  • Can be set up as household manufacturing unit.

 

Target group

  • Straw traders and exporters
  • Beverage joints (standard restaurants, hotels, institutional canteens, corporate house staff canteens, juice bar, coastal area eateries, caterers)

 

 

Raw material required

  • Mature bamboo culm(1-3  years) of Melocanabaccifera, Bambusa pallid,  6-8mm or less diameter

Production capacity, facility and labour required

  • Small unit – Production capacity 10000-12000 pcs per month and involving 4 workers (1 drying & cutting, 1 sanding & sorting, 1 boiling & cleaning, 1 supporting staff) require approx 200 sq. ft space.

 

  • Industrial Unit – Monthly production of 1L (around 10k pieces per worker) pieces bamboo straw involving 10-12 workers at  500 sq ft (160sq ft space) for working, storage of raw material 150 sq feet, finished product 50-60 sq feet, this will require more tools,  ( Labour income – 10,000, Unit owner income- 30,000, per unit Rs 3, job segregation is essential)

 

Production Process

  • Harvesting, cutting, sanding, boiling, cleaning and packaging.
  • Collection of thin wall bamboo raw material with 6-8mm diameter, proper drying before cutting and after boiling are important stages in production process.

 

Tools &Equipments required for production and prices

  • Big knife or Dao – To harvest bamboo.
  • Hand grinding with 4inch grinding blade (Rs. 3000-3500)- To cut bamboo into piece.
  • Sanding machine or sandpaper- For polishing.
  • Oven and utensils (Rs. 2800-3000)– For boiling bamboo pieces.
  • Straw cleaning brush (Rs 50-60)– For clean inside.
  • Steel wire fixed with hygiene cotton (Alternative of brush)
  • Measuring tape (Rs 30-50)- To measure the bamboo and cut into pieces
  • Cardboard box and cellotape (Rs. 10 -15 for box and Rs. 50-60 for wide tape)- To keep bamboo straw and pack with cellotape

 

Financial linkages/ Government schemes

National Bamboo Mission to support enterprise
State specific schemes eg.Swalamban in Tripura upto 1 crore project proposal (35% subsidy upto 1 lakh)
PMEGP, SIDBI

Pricing Strategy

Rs. 3.25 (0.7 margin) artisan has to keep a margin

Package, storage and transportation requirements

  • Final product is packaged in cardboard packet for delivery in a dry place
  • Finished bamboo straws can be stored in cardboard packets on racks

 

Marketing strategy

Estimate of Market size in India and globally
India –   India consumes 13 million tonnes of plastic straws every year. Therefore, there lies a huge potential to tap this industry.
Globally- The worldwide market for Bamboo Straw is expected to grow at a CAGR of roughly 5.6% over the next five years, will reach 160 million US$ in 2023, from 120 million US$ in 2017
Major B2B & B2C Portals – exportsindia.com, alibaba.com, indiamart.com, amazon.com, brownliving, vvegano, qtrove
Major suppliers–Shiva Food Packaging, ORENDA India, Tugs, AS trading, Bamboo India, Shunya, Bijaya enterprise, Bumbugo, Bambrew
Global suppliers- Straw Free, Buluh Straws, Anji Wuyuan Bamboo Products Factory, Bamboo Straws Worldwide, Zone Bamboo Straws, Simply Straws
B2C & B2B markets -Strategy for consumers (small packs), hotels/resorts, cafes/joints, tie up with event management companies.
Marketing strategy:

  • Tie up with event management companies for cold beverages such as weddings, business events, corporate gatherings parties etc.
  • Small packs for consumers eg, 4 pieces in a pouch with cleaner for retail through ecommerce platforms, shops in cloth packaging

 

Priced at Rs. 199 at Brownliving,in

  • Collaboration with cafes/joints, bars serving cold beverages

  • Tie up with hotels/resorts for keeping bamboo straws as a part of their room kit and in eating area

 

Distribution Channel

  • E-commerce, local buyers, traders

Production stage

The bamboo selected for making the straw should be 1-3 years maturity. Bamboos with diameter 6-8mm require for straw. Bamboo of very less diameter is selected from the forest or homestead plantation.

The harvested bamboos are kept for drying at least 4-5days. This process is done to reduce water content in the bamboo. After drying it is cut into pieces. Bamboo pieces are 6 inch, 8inch and 10inch. Hand cutting tool is used for cutting bamboo into pieces.

Sanding of the pieces are done with sand paper. it gives smoothness of the straw. Both end of the straw also sanded to give surface finish of the end. Sanding machine can also be used for this activity.

The bamboo pieces are keep in water and boiled for an hour with salt. After boiling bamboo pieces are rinsed and cleaned from innerside through a brush. It is done to make dirt and bacteria free. Boiling works as treatment of bamboo pieces.

The bamboo pieces are kept for drying at room temperature for 8-10 hours during summer season. During winter and rainy season time for drying at room temperature needs more time. Sometimes it is kept under sunrays. After drying it is packed for dispatch.

Product SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

  • Easy to obtain bamboo in any quantity
  • Eco-friendly, natural & organic and reusable.
  • Perfectly sustainable alternative to plastic
  • Durable and robust, also it has no sharp edges which makes bamboo straws a safe for children to use
  • Require less skilled general workforce to operate hand tools and small equipment.
  • Low cost of set-up
  • Heat, Stain and Odour Resistant
  • Lack of knowledge for production process and detailing
  • Prone to fungi and insect attacks
  • High demand from caterers, standard restaurants, hotels, institutional canteens, corporate house staff canteens, juice bar, coastal area eateries, caterers post plastic ban
  • High export potential
  • E-commerce platforms viz. Amazon, Flipkart are already placing bamboo straws as part of their assortment.

 

  • Alternatives available such as metals, paper, silicon, biodegradable plastic etc

Financial Plan

One can easily start this business from home as a household unit with working capital requirement (equipment, raw material, labour at 0.8-1L payment and per unit cost at around Rs. 4-5. However, to increase production and keep per unit cost competitive, an industry set up is required. Unit with monthly production of 1L pieces bamboo straw at a cost of Rs. 2.20 per straw requires capital investment of 2.7 -2.8L, 20-25% raw material cost, try to cut the cost of raw material as low as possible, resell wastage/part left of straw /secondary product– ensuring that there is no moisture. Working capital requirement would be 2L assuming working capital cycle 30days and total 8 work hours in a day.

Turnover Calculation

INR 

Production per month (pcs)

1,00,000

Selling Price

3

Total Turnover per month

3,00,000 

Total annual turnover

36,00,000 

 

Margin Calculation over

INR 

Cost of 1L straws

2,20,000

Selling Price (1 L straws)

3,00,000

Margin (%)

27%

 

Capital Investment

INR

Construction for 400 sq ft bamboo work shed @ Rs.500 per sq ft

2,00,000 

Hand tools & other supporting equipment

20,000 

Sanding machine

22,500 

Boiling equipment

10,000 

 Electrical fittings & rack for work shed

20,000

Total

2,72,500

 

Recurring Monthly Cost

INR

Salary for 6 workers average @ Rs. 8000

48,000

Travelling expenses

5,000

Raw Material (Bamboo Poles- 20,000)

1,20,000

Electricity

3,000

Logistics & Packaging

5,000

Other Misc cost (rent, auxillary raw material etc)

20,000

Total

2,01,000

 

Profit Calculation (Yearly) INR

 Gross Profit 

11,88,000

 Tax @ 30% 

3,56,400

 Net Profit 

8,31,600

Pay Back period (Months)

 

 

Sensitivity Analysis based on monthly operating profit

Price

Straws sold

₹ 9,000.00

50,000

75,000

1,00,000

1,25,000

1,50,000

₹ 3.40

-1,21,000

-36,000

49,000

1,34,000

2,19,000

₹ 3.20

-1,31,000

-51,000

29,000

1,09,000

1,89,000

₹ 3.00

-1,41,000

-66,000

9,000

84,000

1,59,000

₹ 2.80

-1,51,000

-81,000

-11,000

59,000

1,29,000

₹ 2.60

-1,61,000

-96,000

-31,000

34,000

99,000

₹ 2.40

-1,71,000

-1,11,000

-51,000

9,000

69,000

 

Monthly Operating Profit (Rs) = Total Straws sales revenue- Total cost of straws – Salaries for artisans- Rent- Electricity
= 3,00,00-2,20,000-48,000-20,000-3,000
= 9,000