ESTABLISHING A METAL WORKSHOP

• Services
• Metal and metal products

Introduction

This is a business idea premised on setting up a metal workshop to fabricate different items for stocking for any buyer to pick at will and also to fabricate on order. The establishment of a modern
workshop would require an estimated fixed capital of US$ 7,430 and operating costs of US$ 130,396 generating revenue of US$ 223 in the first year of operation. The workshop would be able to fabricate a variety of items as demand dictates and among others doors, windows, beds, chairs, and gates would be produced and stocked.
Production Capacity, Technology and Process
The process involves the cutting of the plates, tube pipes, angle lines, hollow sections and bars for a particular item, assemble them into an article, weld and grind them. Then, filler paste is applied where necessary and thereafter the article is sprayed.
Market Analysis
The market potential is great because the construction industry is among the fastest growing sectors of our economy. There is a lot of demand for doors, gates, windows and burglar proofing etc. This sector is still informal as there are very many small scale firms spread in major towns and trading centres in the country.
Capital Investment Requirements in US$

Capital Investment Item	Units	Qty	Unit cost	total
Welding Machine	No	1	500	500
Vice	No	2	100	200
Welding Machine	No	1	750	750
Grinding Machine	No	2	450	900
Hack Saw blade	No	2	10	20
Drilling Machine	No	2	225	450
Compressor/Spraying	No	1	500	500
Welding Torch	No	2	25	50
Welding Guards	No	2	15	30
Cutters	No	2	1,000	2,000
Bending Kit	No	1	1,000	1,000
Rivet Gun	No	1	30	30
Tool Kit	No	1	1,000	1,000
Total	7,430

Production and Operating Costs in US$
(a)Direct Materials, Supplies and Costs

Cost Item	Units	Unit Cost		Qty/ day	Pdn Cost/ day	Pdn Cost/ mth		Pdn Cost/yr
Direct Costs
Angle Lines	Pcs	22.5		0.3	7	169		2,028
Hollow Sections	Pcs	20		7.0	139	3,625		43,500
Tube Pipes	Pcs	7		3.6	25	653		7,836
Mild Steel Plates	Pcs	52.5		0.2	10	263		3,156
Welding Rods	Pkts	2.5		2.8	7	180		2,160
Grilling Discs	Pcs	3		5.6	17	440		5,280
Locks	Pcs	40		0.4	15	400		4,800
Filler Paste	Pkts	5		0.4	2	50		600
Hinges	Pairs	1		16.3	16	425		5,100
U-Channel	Pcs	42.5		0.1	6	157		1,884
Other materials	-	-		104	2,701	32,412
Sub-total	37	349		9,063	108,756
General Costs (Overheads)
Rent	250	3,000
Labour	1,013	12,156
			Protective ware				73		876
Power			200				2,400
Miscellaneous			113				1,350
Depreciation			155				1,858
Sub-total			1,803				21,640
Total Operating Costs			10,866				130,396

 

1) Production costs assumed 312 days per year with daily capacity of producing 5pieces of metal products.
2) Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
3) Direct costs include materials, supplies and other costs that directly go into production of the product.
4) Total monthly days assumed are 26-days.
5) The valuation currency used is United States Dollars.
Project Product Costs and Price Structure

Item	Qty/d ay	Qty/y r	Unit Cost	Pdn Cost/yr	Unit Price	Total Rve
Gates	0.19	59	600.00	35,568	1,000	59,280
Front doors	0.38	119	205.00	24,305	300	35,568
Rear Doors	0.38	119	51.33	6,086	100	11,856
Windows	1.92	599	74.00	44,329	125	74,880
Chairs	1.92	599	21.00	12,580	18	10,783
Beds	0.19	59	127.00	7,529	200	11,856
Total	1,554	130,396	204,223

Profitability Analysis Table

Profitability Item	Per day	Per Mnth	Per year
Revenue	655	17,019	204,223
Less: Production and Operating Costs	418	10,866	130,396
Profit	237	6,152	73,827

Source of Supply of Equipment and Rawmaterials
Equipments and Rawmaterials can be bought from Uganda especially Roofings Uganda Ltd, Tembo steel and Uganda Baati.
Incentives
There is a lot of encouragement by the government to whoever is setting up any production unit more so if it is to create some form of
employment. The Trade and Commerce policies are all attuned to
support any form of investment.