Paper Cup Making – A Growing Business Idea

Narendra Kumar

19 Oct, 2019

There are plenty of reasons why the paper cup manufacturing industry is growing. One of the main reasons, of course, its compatibility with nature vis-à-vis the plastic cups. They are the disposal types and end up in the landfill. The paper, however, decomposes in a shorter duration of time whereas plastic takes hundreds of years to degrade completely. The other reason for its growing preference is that it is more hygienic thereby reducing the chances of foodborne diseases. A paper cup making is made from food grade paper with the inners lined with either wax or plastic and is good for handling both hot and cold liquid.

Paper cups are products required for mass consumption and hence once established there are good chances of turning the paper cup business into a profitable one. Most of the international food chains and the Quick-service restaurants are using the paper cup and glasses to serve drinks which have made this industry more lucrative as a business option.

The business can be started on a small scale with a small time investment that is mainly required to buy the machine. One needs to have a space of about 500 sqft to set up the machine and start work. Paper cups can be made via a semi-automatic or a fully automatic machine. Also, on studying the market one can understand that two types of paper cups are in demand – one the normal paper cups that are available in different sizes and the other with the company name printed on the cups.

What are the Industry Trends for Paper Cup Product?

At present in the beverage market in India, 80% of the cups being used are plastic and the remaining 20% are the paper cups. Since demand is increasing because of rising awareness of using eco-friendly cups and glasses, it would not be long before paper cups would take up 100% of the market position. 80% of the paper cups that are manufactured are used by the service restaurant segment in the country.

According to a survey conducted in 2015, about one crore paper cups were being used in India on a daily basis with a steep increase in consumption during the marriage and festive seasons.

The demand for paper cups is estimated to rise every year by 8% by 2019.

What are the Legalities Involved in Opening a Paper Cup Making Unit in India?

The following licenses and registrations are mandatory for starting and operating this business:-

1. The first step is to register the new startup business. it can be done with Company Registration with the Registrar of Companies
2. Obtaining the Health trade license under the Municipal Corporation Act 1957 from the local civil authorities like the State Municipal Corporation or the Health Department. This is required because of public health concern attached to the food-contact
3. GST registration for taxation purposes. It can be easily done online at gst.gov.in.
4. No-objection certification from the Pollution Control Board as the unit is legally bound to ensure that its operation will not harm nature.
5. Factory license under the Factories Act 1948 from the local Factory Inspectorate office.
6. Employee Provident Fund scheme And Employee’s State Insurance Registration is a must if the factory is employing more than 20 employees.
7. Udyog Aadhaar MSME or SSI registration for being eligible to receive government scheme benefits
8. Special permission from local authorities to use a diesel generator set as an alternate source of power.

Also, the paper cup making unit is required to follow GMP regulations (Good Manufacturing Practices) as approved by FSSAI and BIS.

1. FSSAI certification is a mandatory compliance certification required under the Food Safety and Standards of India. Since paper cups are a food-contact material it is essential to maintain the required standards as prescribed under the Act for the safety of materials that are in contact with food intended for human consumption. There is a special inclusion for such materials under the Packaging and Labeling heading which mentions that the containers should confirm to 10 approved Indian Standards Specifications when used receptacles for packing or storing food articles, partially or wholly.
2. BIS compliance certification from the Bureau of Indian Standards which covers 7 items under the paper and fiberboard packaging to be compliant with laid down regulations.