MAKING EXERCISE BOOKS
Introduction
This business idea is for manufacturing and marketing of exercise books. Exercise books are stationary items required for schools, offices and other purposes. Their market structure and demand is high since they are used by all school pupils from primary to senior four. They are sold in stationary shops, markets, whole sale shops, retail shops and even on the streets.
Market Analysis
There is ready market throughout the country as more and more children go to school. The UPE program has boosted the numbers. Picfare and Musana industries are among the key players in this sector.
Production Capacity
Production capacity depends on the quantity of raw materials used in production process. The business idea is based on three hundred working days, single shift of 8hr.per day. The smallest viable unit can produce 2,000 Exercise books of 96 pages per day, translating into 624,000 Exercise books of 96 pages per annum at a sales price of US$0.25 each. The revenue potential is estimated at US$500 per month, translating into US$156,000 per annum with a sales margin of 10% and total investment requirement is US$93,745
Technology and process Description
Manufacturing of exercise books involves use of Double Side Disc Ruling Machine
size 915 mm Hand Feed with motor and starter, Paper and Board Cutting Machine
hand operated, and power driven Cutting width 990 mm with mortar and starter,
Wire Stitching Machine power operated with motor and starter capacity 25mm, Press
460*610mm, Offset Printing Machine complete with accessories & electrical.
The production process involves ruling of lines on the paper in red & blue
ink, folding of paper, cutting of paper, cutting of outer cover, printing of
outer cover, folding of the outer cover & stitching of cover and pages,
Inspection and packing.
Scale of Investment, Capital Investment
Requirements
The scale of Investment is relatively big as it involves
buying many different machines and equipment.
Capital Investment Requirements in US$
|
Capital Investment Item |
Units |
Qty |
Unit Cost |
Amount |
|
Double side disc ruling machine |
No |
1 |
10,000 |
10,000 |
|
Paper and board cutting machine |
No |
1 |
9,000 |
9,000 |
|
Wire stitching machine |
No |
1 |
3,000 |
3,000 |
|
Offset printing Machine with |
No |
1 |
27,500 |
27,500 |
|
Working tools |
Set |
2 |
1,500 |
3,000 |
|
Delivery Van |
No |
1 |
9,000 |
9,000 |
|
Total |
61,500 |
Production
and Operating Costs
Direct Materials, Supplies and Costs in US$
|
Cost Item |
Units |
Unit |
Qty/ |
cost/ |
cost/ |
cost/year |
|
Direct Costs |
||||||
|
Reams of
Paper |
No |
4 |
16 |
64 |
1664 |
19968 |
|
Craft
Paper in |
No |
0.75 |
400 |
300 |
7,800 |
93,600 |
|
Printing Ink |
Liter |
25 |
1 |
25 |
650 |
7,800 |
|
Stitching Wires |
Packet |
0.4 |
2 |
0.8 |
21 |
250 |
|
Gum |
Liter |
0.75 |
5 |
3.75 |
98 |
1,170 |
|
Sub-total |
424 |
393.6 |
10,232 |
122,788 |
||
|
General Costs(Overheads) |
||||||
|
Rent |
1,000 |
12,000 |
||||
|
Labour |
625 |
7,500 |
||||
|
Utilities(power) |
120 |
1,440 |
||||
|
Preliminary Costs |
250 |
250 |
||||
|
Miscellaneous Costs |
150 |
1,800 |
||||
|
Depreciation(Asset write off)Exp |
513 |
6,150 |
||||
|
Sub-total |
2,658 |
29,140 |
||||
|
Total Operating Costs |
12,890 |
151,928 |
1. Production costs assumed 312 days per year with a daily
capacity of 2,000 exercise books of 96 pages.
2. Depreciation (fixed asset write off) assumes 4 years life of assets written
off at _10% per year for all assets.
3. Direct Costs include materials, supplies and other costs that directly go
into production of the product.
4. A production month is assumed to have 26 days.
Project Product and Price Structure in US$
|
Item |
Qty/ |
Qty/Yr. |
Unit |
Prod |
Unit |
T/rev |
|
Exercise |
2,000 |
624,000 |
0.24 |
151,928 |
0.25 |
156,000 |
Project Analysis in US$
|
Profitability Item |
Per |
Per |
Per Yr. |
|
Revenue |
500 |
13,000 |
156,000 |
|
Less: Production and Operating Costs |
487 |
12,661 |
151,928 |
|
Profit |
13 |
339 |
4,072 |