What is a butyl rubber project report?
A butyl rubber project report is a detailed project report (DPR) for a butyl rubber unit. For most MSMEs that means a butyl reclaim plant, which devulcanises scrap butyl inner tubes into rubber that can be compounded again. It covers process, machinery, raw materials, market, project cost, finance, five-year projections, DSCR and break-even.
Rubber processors and first-time entrepreneurs use it to size the plant and apply for a term loan; banks use it to judge whether the unit can repay.
Also known as: project report on butyl rubber, butyl reclaim rubber project report, butyl rubber business plan, butyl rubber plant DPR.
Butyl rubber plant or butyl reclaim unit: which one are you planning?
Two very different projects go by the name butyl rubber. Virgin butyl rubber is made from petrochemicals in one of the largest plants a rubber project can need. Butyl reclaim rubber is made from scrap inner tubes in a small factory, and it is the project most entrepreneurs and rubber processors ask NPCS about.
Our sample report models the reclaim unit. If you are evaluating a virgin butyl plant, NPCS prepares that as a separate techno-economic feasibility study.
| Point | Virgin butyl rubber (IIR) | Butyl reclaim rubber |
|---|---|---|
| Feedstock | Isobutylene with about 2% isoprene, from a refinery or cracker | Scrap butyl inner tubes, reclaiming oil and a devulcanising agent |
| Process | Cationic polymerisation in methyl chloride at around minus 100°C, then stripping, drying and baling | Cracking, devulcanising with steam heat, refining on mills and straining |
| Scale in India | One plant: Reliance Sibur Elastomers at Jamnagar, 120,000 MT a year, about $450 million | Units of a few MT per day; our sample is 5.2 MT per day at ₹439.88 lakh |
| Who invests | Petrochemical companies with their own isobutylene | Rubber processors, reclaimers and new MSME promoters |
| Main buyers | Tyre, tube, pharmaceutical closure and adhesive makers | Tube and tyre makers blending it with virgin butyl, sheeting and compound makers |
What a bank checks in a butyl reclaim rubber project
A credit officer looks first at whether scrap prices and selling prices leave enough margin to repay. These are the values in our sample report and why each one is tested.
Banks compare it with current reclaim quotes, not virgin butyl prices. Reclaim sells well below virgin rubber, and pricing it too close inflates every later figure.
Scrap butyl tubes drive cost. Their price moves with collection supply, so the report should test a rise in scrap price against profit and DSCR.
Scrap, oil, chemicals and talc together. A much lower share usually means sorting losses or oil cost were left out.
Debt service coverage ratio is the cash available for repayment divided by the instalments due. Lenders check the weakest year, not only the average.
Values are the assumptions in our illustrative sample. Your report uses figures for your capacity, scrap sources and buyers.
Butyl rubber manufacturing plant cost in India: our sample economics
The sample report models a butyl reclaim unit of 5.2 metric tonnes per day, or 1,716 MT per year over 330 working days. It starts at 60% of capacity, reaches 70% in Year 3 and 80% in Year 5, and sells at ₹80,100 per MT.
| Land and site development | 41.76 |
|---|---|
| Building and civil works | 92.16 |
| Plant and machinery | 226.22 |
| Other fixed assets | 21.47 |
| Contingencies | 15.92 |
| Preliminary and pre-operative | 9.94 |
| Working capital margin | 32.41 |
| Total | 439.88 |
| Promoter's contribution (25%) | 109.97 |
|---|---|
| Term loan from bank (75%) | 329.91 |
| Cash credit limit (separate) | 97.24 |
| Total project cost | 439.88 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. All figures are illustrative.
Butyl rubber manufacturing process: the reclaim route
Reclaiming does not turn scrap back into virgin butyl. It breaks enough of the cured network for the rubber to soften, so it can be mixed into new compounds. The air-holding property of butyl survives the process, which is why tube and liner makers buy it.
- Sorting and cutting
Butyl tubes are separated from natural rubber tubes, valves and patches are removed, and the tubes are cut into pieces.
- Cracking
A cracker mill with grooved rolls tears the pieces into crumb, and a screen returns oversize particles for another pass.
- Mixing with oil
The crumb is blended with reclaiming oil and a devulcanising agent or peptiser in a fixed ratio for each batch.
- Devulcanising
The blend is held under steam pressure in an autoclave until the crosslinks break and the rubber turns soft and plastic.
- Refining
Tight-nip refiner mills work the soft mass into a very thin, smooth sheet, which sets the final texture and viscosity.
- Straining
A strainer extruder forces the rubber through a fine mesh to remove sand, fibre and metal left from the scrap.
- Testing and baling
Each batch is tested for Mooney viscosity and tensile strength, then slabbed, dusted with talc and baled for dispatch.
Raw materials for butyl reclaim rubber
Used tubes come from tyre shops, scrap dealers and tube factories' own rejects. Truck, tractor and two-wheeler tubes give the heaviest pieces. Buying from two or three regular dealers and inspecting each lot keeps natural rubber tubes out of the mix.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Butyl inner tube scrap | 76% | 400.47 |
| Reclaiming oil | 12% | 63.23 |
| Devulcanising agent and peptiser | 7% | 36.88 |
| Talc and processing aids | 5% | 26.35 |
| Total | 100% | 526.93 |
Year 3 cost at 70% capacity in our illustrative sample. Packing is costed separately.
Machinery for a butyl reclaim rubber plant
The devulcaniser autoclave and the refiner mills take almost half of the machinery budget. The steam boiler that feeds the autoclave also brings its own registration and inspection.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Tube cutting and valve removal machine | Cuts tubes and removes metal valves | 11.31 |
| Cracker mill with vibrating screen | Tears pieces into even crumb | 33.93 |
| Crumb and oil mixer | Blends crumb with oil and agent | 13.57 |
| High pressure devulcaniser autoclave | Softens rubber under steam pressure | 54.29 |
| Steam boiler with feed water system | Supplies steam to the autoclave | 27.15 |
| Refiner mills | Work the rubber into a thin, smooth sheet | 45.25 |
| Strainer extruder | Removes grit and foreign matter | 20.36 |
| Slab cutting, weighing and baling unit | Forms and weighs bales | 9.05 |
| Mooney viscometer and tensile tester | Tests every batch | 11.31 |
| Total plant and machinery | 226.22 | |
Costs are the sample report's estimates for a 5.2 MT per day unit. Get current quotations before you finalise.
Who buys butyl reclaim rubber in India?
Tube and tyre makers blend butyl reclaim with virgin butyl to lower compound cost while keeping low air permeability. Bicycle, two-wheeler and tractor tubes are steady users. Sheeting, matting, hose, cable and sealant compounders take grades where cost matters more than peak strength.
Buyers approve a reclaimer after trial batches and then expect the same Mooney viscosity, tensile strength and ash content every time. A unit that holds its specification wins repeat orders, usually on credit; our sample allows buyers 45 days.
- Bicycle, two-wheeler and tractor tube manufacturers
- Tyre makers using it in inner liner compounds
- Rubber sheeting, matting and roofing compound makers
- Hose and cable compound makers
- Rubber chemical and compound traders
Where a new unit wins: clean, well-sorted scrap. A reclaimer close to tube collection centres and tube factories gets better scrap at lower freight, and that shows directly in batch quality and margin.
Licences and approvals for a butyl reclaim unit
Reclaiming is a recycling activity, so it carries waste rules on top of the usual factory approvals. Check each one with your state before you order machinery.
| Business registration | Udyam (MSME) registration and GST registration |
|---|---|
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board; the category is set by your state board |
| Waste tyre EPR | Recyclers producing reclaimed rubber register on the CPCB centralised EPR portal and hold valid SPCB authorisation |
| Boiler | Registration of the steam boiler before use under the Boilers Act, 2025, in force from 1 May 2025 |
| Testing standard | IS 6306 sets the methods of test for reclaimed rubber; buyers often quote it in their specifications |
| Factory and fire | Factory licence where worker and power thresholds apply, and a fire NOC for scrap and oil storage |
Mistakes that weaken a butyl rubber project report
- Costing a virgin butyl plant as an MSME project
Virgin IIR needs isobutylene feedstock and deep refrigeration. A report that prices it like a reclaim unit cannot be defended before a bank.
- Pricing reclaim close to virgin butyl
Reclaim sells at a large discount to virgin rubber. Using virgin prices for sales inflates profit, DSCR and the loan the unit can carry.
- Assuming every tube is butyl
Scrap lots carry natural rubber tubes, valves and patches. Sorting losses and rejected lots must reduce the usable scrap in the projections.
- Leaving out steam and mill power
The autoclave needs a boiler and the refiner mills draw heavy load. Power and fuel are 5% of sales in our sample, and many draft reports show far less.
- No budget for batch testing
Buyers reject batches that drift in Mooney viscosity. Without a viscometer, a tensile tester and trial costs, the approval stage takes longer than planned.
How NPCS helps you set up a butyl reclaim rubber unit
- Route and capacityConfirm whether reclaim or a virgin butyl study fits your budget, and size the daily output to your scrap supply.
- Machinery and suppliersCompare autoclaves, cracker and refiner mills and boilers, and collect quotations.
- Bank-ready project reportProjections, DSCR, working capital and scrap price sensitivity in the format your lender wants.
- Approvals and layoutPlant layout, boiler and power load, and the EPR and pollution approvals for your state.
NPCS's client list includes 2 project report assignments on butyl rubber and 40 in rubber products. The NPCS project team, led by founder Ajay Kumar Gupta, has prepared project reports since 1994.
What's inside the butyl rubber sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
19 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
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Butyl Rubber project report: frequently asked questions
What is the butyl rubber manufacturing plant cost in India?
It depends on which plant you mean. A butyl reclaim unit is an MSME project: our sample report models a 5.2 MT per day unit at ₹439.88 lakh, including ₹226.22 lakh of machinery. Virgin butyl rubber needs a petrochemical complex; the one plant in India, at Jamnagar, cost about $450 million. Your report works out the cost for your own capacity and site.
Can an MSME make butyl rubber in India?
An MSME can make butyl reclaim rubber, not virgin butyl. Virgin butyl rubber is polymerised from isobutylene at very low temperature in a large petrochemical plant. A reclaim unit buys scrap butyl inner tubes and devulcanises them with steam, oil and mills. It needs a shed, a boiler and a few crores of investment, so it suits rubber processors and new entrepreneurs.
What raw material is used for butyl reclaim rubber?
The main raw material is scrap butyl inner tubes from bicycles, two-wheelers, tractors, trucks and buses. In our sample report it is 76% of raw material cost. Reclaiming oil, a devulcanising agent or peptiser, and talc make up the rest. Tubes must be sorted from natural rubber tubes, because mixing them spoils the air-holding quality of the reclaim.
Is butyl reclaim rubber manufacturing profitable?
In our illustrative sample, a 5.2 MT per day unit earns ₹83.10 lakh net profit on ₹962.16 lakh of sales in Year 3. Return on investment is 18.9%, break-even 45.8% of capacity and payback 3.9 years. Real profit depends on the price of tube scrap, steam and power cost, and how consistently each batch meets buyer specifications.
Which machines are needed for a butyl reclaim plant?
You need a tube cutting machine, a cracker mill with a screen and a crumb and oil mixer. Then come a high pressure devulcaniser autoclave with a steam boiler, refiner mills, a strainer extruder and a baling unit. A Mooney viscometer and a tensile tester are needed for batch testing. In our sample report the autoclave is the costliest item at ₹54.29 lakh.
Can I get a PMEGP or CGTMSE loan for a butyl reclaim unit?
PMEGP covers manufacturing projects only up to ₹50 lakh, which is too small for most reclaim plants. A typical unit takes an MSME term loan and cash credit from a bank. CGTMSE guarantee cover, available up to ₹10 crore as of October 2026, can reduce the collateral the bank asks for. Confirm current terms with your bank before applying.
Is the butyl rubber project report PDF free, and can I use it for a loan?
Yes, the sample PDF is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report. Its figures are representative and not based on a real project, so do not submit it to a bank. For a loan, NPCS prepares a report for your own capacity, location and lender.
Sources and references
- Sibur and Reliance to set up South Asia's first butyl rubber plantInvest India, Government of India, checked Oct 2026
- FAQ on Extended Producer Responsibility for waste tyresCentral Pollution Control Board, checked Oct 2026
- The Boilers Act, 2025 (Act 12 of 2025)India Code, Ministry of Law and Justice, checked Oct 2026
- Notification S.O. 1943(E): commencement of the Boilers Act, 2025DPIIT, Ministry of Commerce and Industry (via Inspectorate of Factories and Boilers, Goa), checked Oct 2026
- IS 6306: Methods of test for reclaimed rubberBureau of Indian Standards, checked Oct 2026
- Prime Minister's Employment Generation Programme (PMEGP)State Bank of India, checked Oct 2026
- Credit Guarantee Fund Trust for Micro and Small EnterprisesCGTMSE, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.