Leather purses
Introduction
This profile is for production and marketing of leather purses and wallets. Real leather purses are made out of animal hides, fish skins. It is a garget for keeping money and other documents. It is commonly known as money purse wallet simply because people use it to keep in their money in the pockets of the handbags. The market for such products in East Africa is readily available since it is a quality product and it is used by about 80% of the population in East Africa.
Production Capacity and Process
The production capacity depends on the materials and equipment used in the production process. The production capacity per day is 600 pieces of leather purses and monthly production is about 15,600 purses, which translates into an annual production of 187,200 pieces of Leather purses/wallets. The price per money leather wallet is US$ 5 and this means US$ 1,025 gross revenue per day hence annual gross revenue of US$ 385.
Technology and Process of Production
This business idea involves the use of strap cutting machine, stitching machine and working tools. The process involves the strap cutting, stitching, dying and designing the product as well as fixing fasteners and punching zips.
Scale of Investment, Capital Investment
Requirement and
Equipment
The project is on small scale investment and capital investment depends on output targeted by the manufacturer.
Market Analysis
It is projected that leather purses have a ready market in Uganda and East African countries because of their high quality. This sector is not yet developed in Uganda.
Capital Investments Requirements in US$
|
Item |
Units |
Qty |
Unit |
Amount |
|
Sewing machine |
Number |
2 |
520 |
1,040 |
|
Leather tanning Machine |
Number |
1 |
880 |
880 |
|
Strap cutting |
Number |
1 |
944 |
944 |
|
Punching Zips |
Number |
1 |
630 |
630 |
|
Other equipment |
1 |
520 |
520 |
|
|
Total |
4,014 |
Raw
Materials Requirement For The Year
The raw materials involved are Leather, dye, water and threads which cost about
US$ 18,462.
Production and operating costs in US$
Direct materials, supplies and costs
|
Cost |
Units |
Unit |
Qty/ |
Cost/ |
Cost/ |
Cost/ year |
|
|
Direct |
|||||||
|
Turned |
meters |
12.0 |
100 |
1200 |
31,200 |
374,400 |
|
|
Dye |
kg |
3.0 |
30 |
90 |
2,340 |
28,080 |
|
|
Threads |
meters |
0.8 |
120 |
96 |
2,496 |
29,952 |
|
|
Subtotal |
15.8 |
250 |
1,386 |
36,036 |
432,432 |
||
|
General Costs(Overheads) |
|||||||
|
Administration expenses |
542 |
6,500 |
|||||
|
Labour |
2,083 |
25,000 |
|||||
|
Utilities |
650 |
7,800 |
|||||
|
Rent |
650 |
7,800 |
|||||
|
Selling & Distribution Expenses (Advertising) |
233 |
2,800 |
|||||
|
Depreciation |
84 |
1,004 |
|||||
|
Miscellaneous |
208 |
2,500 |
|||||
|
Subtotals |
4,450 |
53,404 |
|||||
|
Total operating Costs |
40,486 |
485,836 |
|||||
Project product costs and price structure in US$
|
Item |
Qty/d |
Qty/ |
Unit |
Prod/y |
Unit |
Revenue |
|
Leather |
600 |
187,200 |
2.60 |
485,836 |
3.2 |
599,040 |
Profitability Analysis in US $
|
item |
Per |
Per |
Per year |
|
Revenue |
1,920 |
49,920 |
599,040 |
|
Less: Production operating costs |
1,557 |
40,486 |
485,836 |
|
Profit |
363 |
9,434 |
113,205 |