MAKING BOLTS AND NUTS
Introduction about the product
This business idea is for production
of bolts and nuts. A bolt is a cylindrical piece of metal that fastens objects
together. A nut is a hexagonal or square piece with a threaded hole at the
centre. Nuts and bolts have a high market demand in the industrial sector.The
business idea aims at production of 2,600 kilograms of bolts and nuts per
month. The revenue potential is estimated at US$ 800 per year with a sales
margin of 10%. The total capital investment for the project is US$ 19,113.
Production Capacity
The envisaged plant will have a capacity of 100 kilograms of bolts and nuts
per day when operating a single shift of eight hours a day for 300 days within
a year.
Production process
The head of the bolt is formed after feeding steel rod into a double stroke
cold header machine. Later, using a bolt head trimmer, the bolt is machined to
square or hexagonal shape and the threads are cut on a thread-rolling machine.
For nuts, steel rods are fed into an automatic nut forking machine and the nuts
in a semi-finished form are then fed into a tapping machine for internal
threading. To relieve cold bolts and nuts forming stress, the nuts and bolts
are normalized in a heat treatment furnace.
Market analysis
The demand for Bolts and Nuts is very high especially in Construction,
Mechanical and Industrial sectors. The major key player in this sector include;
Steel Rolling Mills – Jinja.
Sources of Supply of Equipment
All equipment can be got from the local market at lower costs.
Scale of Investment
1. Capital Requirements
|
Capital Item |
Unit |
Qty |
Unit |
Amount |
|
Double edge grinder |
No |
1 |
6,935 |
6,935 |
|
Hack saw |
No |
1 |
22 |
22 |
|
Drilling machine |
No |
1 |
800 |
800 |
|
Sharper |
No |
2 |
40 |
80 |
|
Lathe |
No |
1 |
525 |
525 |
|
No |
1 |
3,067 |
3,067 |
|
|
nut forming machine |
No |
1 |
255 |
255 |
|
head slotting machine |
No |
1 |
2,000 |
2,000 |
|
thread rolling machine |
No |
1 |
4,950 |
4,950 |
|
No |
1 |
479 |
479 |
|
|
Total |
19,113 |
Automatic nut tapping machine Double stroke heading machine
2. Production and Operating Costs
|
Cost Item |
Units |
Unit |
Qty |
Prod Cost/ |
Prod Cost/ |
|
Direct costs3: |
|||||
|
MS Rounds |
Kgs |
8 |
100 |
400 |
10,400 |
|
Pickling Chemicals |
Kgs |
7 |
20 |
140 |
3,640 |
|
Packaging Materials |
Pieces |
0.2 |
50 |
10 |
260 |
|
Subtotal |
14,300 |
||||
|
General costs (Overheads) |
|||||
|
Labour |
400 |
||||
|
Utilities |
200 |
||||
|
Selling and Distribution |
100 |
||||
|
Administrative expenses |
150 |
||||
|
Shelter |
400 |
||||
|
Depreciation (Asset write off) Expenses |
398 |
||||
|
Sub-total |
1,648 |
||||
|
Total Operating Costs |
15,948 |
Production is assumed for 312 days
per year. Depreciation assumes 4 year life of assets written off at 25% per
year for all assets. A production Month is assumed to have 26 work days.
3. Project product Costs and price Structure in US $
|
Item |
Qty |
Qty/yr |
Unit |
Pdn/yr |
Unit |
T/ |
|
Bolts |
50 |
15,600 |
6 |
95,689 |
8 |
117,000 |
|
Nuts |
50 |
15,600 |
6 |
95,689 |
8 |
124,800 |
|
Total |
100 |
31,200 |
191,378 |
241,800 |
4. Profitability Analysis Table
|
Profitability Item |
Per day |
Per Month |
Per Year |
|
Revenue |
775 |
20,150 |
241,800 |
|
Less: Production and Operating Costs |
613 |
15,948 |
191,378 |
|
Profit |
162 |
4,202 |
50,422 |