MAKING LEATHER LUGGAGE BAGS
Introduction
Leather luggage bags are popular items because of their durability. An important item to luggage, leather bags are made from a combination of materials, varied fashion designs and colours, etc. The leather luggage bags are made from a variety of finished leather. Most industries use printed leather, soft leather, etc., as these are indigenous and locally available. This is a skilled labour oriented industry which can be started in any place and it can as well be a domestic industry. The project cost is US$ 20,315 with a capacity of 18,720 bags annually and revenue estimates of US$ 696 per year.
Production Process & Capacity
After creating a pattern, leather is cut and then skived, adhesive is applied and lining done with the edges beaded and the zip fixed. With the help of a sewing machine, the components are stitched. Later, the excess lining is trimmed and the stitched bag is reversed inside out. Handles are fitted; colour is applied, followed by polishing and finishing. The product is ready to be released to the market. The profiled plant has a capacity of 1,560 bags per month on the basis of 26 working days.
Market Analysis
There has been a steady growth in
terms of demand for leather goods giving this industry potential to export.
Synthetic bags have a short life span and are very unreliable. The domestic
market is open
where quality products are produced. This Industry is not yet developed in
Uganda.
Capital Investment Requirements in US $
|
Item |
Units |
Qty |
Price |
Total |
|
flatbed sowing machine |
Numbers |
1 |
1,750 |
1,750 |
|
Industrial stitching machine |
Numbers |
1 |
2,500 |
2,500 |
|
Leather skiving machine |
Numbers |
1 |
1,750 |
1,750 |
|
Name endorsing machine |
Numbers |
1 |
500 |
500 |
|
Other tools |
|
4 |
125 |
500 |
|
Total cost of Machinery & Tools |
7,000 |
1. Production costs assume 312 days per year with daily capacity of 60 Bags.
2. Depreciation (fixed asset write off) assumes 4 year life of assets written off at 25% per year for all assets.
3. Direct costs include: materials, supplies and all other costs incurred to produce the product.
4. A production month is 26 work days
5.
Currency used is US Dollars.
Production and Operating Costs
Direct Materials, Supplies and Repairs
|
Cost Item |
Units |
Unit |
Qty |
Prod |
Prod |
Prod |
|
Direct |
||||||
|
Lather |
mtrs |
2 |
4 |
8.00 |
208.00 |
2,496.00 |
|
Fabric |
mtrs |
2 |
1 |
2.00 |
52.00 |
624.00 |
|
Synthetic |
mtrs |
4 |
2 |
8.00 |
208.00 |
2,496 |
|
Nails |
kgs |
1 |
0.01 |
0.01 |
0.26 |
3.12 |
|
Glue |
Ltrs |
5 |
0.13 |
0.65 |
16.90 |
202.80 |
|
Zips/buttons |
packets |
8 |
0.12 |
0.96 |
24.96 |
299.52 |
|
Threads |
Rolls |
1 |
2 |
2.00 |
52.00 |
624.00 |
|
Other |
- |
- |
- |
- |
20.00 |
240.00 |
|
Sub-total |
22 |
582.12 |
6,985 |
|||
|
General Costs (Overheads) |
||||||
|
Labour |
420 |
5,040 |
||||
|
Selling & distribution |
150 |
1,800 |
||||
|
Utilities |
80 |
960 |
||||
|
Rent |
100 |
1,200 |
||||
|
Administration expense |
65 |
780 |
||||
|
Miscellaneous expenses |
150 |
1,800 |
||||
|
Depreciation |
146 |
1,750 |
||||
|
Sub-total |
1,111 |
13,330 |
||||
|
Total Operating Costs |
1,692.92 |
20,315 |
Project product cost and Price Structure in US $
|
Item |
Qty |
Qty |
Unit |
Prod |
Unit |
Total |
|
Luggage |
60 |
18,720 |
1.1 |
20,315 |
1.8 |
33,696 |
Profitability Analysis in US $
|
Item |
Per |
Per |
Per year |
|
Revenue |
108 |
2,808 |
33,696 |
|
Less: Production and operating |
65 |
1,693 |
20,315 |
|
Profit |
43 |
1,115 |
13,381 |