MAKING NATURAL FIBRE YARN (ROPES)

Introduction
This business idea is for the production and marketing of ropes, Ropes prepared by fiber yarn are used
for different purposes. The ropes are used in all the sectors of the economy but are most prominent in the agricultural sector. Right from livestock keeping to simple cultivation and then to commercial farming, ropes play a substantial role in the farming processes. Setting up a small plant to make ropes out of fiber yarn using local materials like jute is thus a good entrepreneurial idea. The business idea is premised on the production of 900 ropes per day, 23,400 per month and 280,800 per year. The revenue potential is estimated at US Dollars 600 per year.

Production Process
By using sewing machine parts, the yarn is spun, which is operated by sitting on a stool and by simply pedaling the table model sewing machine. The total cost for this project for this project is US Dollar
202,917 per year

Market analysis
Ropes are highly demanded in various sectors of the economy especially Agricultural sector. This sector is still informal in Uganda.

Capital Investment Requirements in US $

Capital investment item

Units

Qty

Unit cost

Amount

Stool

No.

10

2

20

Sewing machine

No.

1

5,000

5,000

Yarn twister

No.

4

43

172

No.

4

20

80

1,600

No.

1

1

7,500

7,500

Total cost on machinery



12,625


4-hole rope maker machine Extruder (900-1000 per min)

 Production and Operating costs ($)

Cost Item

Units

Unit
cost/
day

Qty
/day

Prod
cost
/day

Prod
cost
month

Prod
cost/
year

yarn or, jute

kg

25

25

625

16,250

195,000

Sub-total

25

625

16,250

195,000



General costs(overheads)







Utilities(water and power)

40

480





Labour

100

1200





Rent

100

1200





Miscellaneous costs

50

600





Distribution costs

260

3,120





Depreciation(Asset write off)Expenses)

266

3,192





Sub -total

816

9792





Total Operating Costs

17,066

204,792





Production costs assumed 312 days per year with a daily capacity of 900 ropes.
Depreciation (fixed assets write off) assumes 4 years life of assets written off at 25% per year for all assets
Direct costs include materials, supplies and other costs that directly go into production of the product.

Project product Costs and Price Structure ($)

Item

Qty /day

Qty/yr

Unit Cost

Prod cost /yr

Unit Price

Total
revenue

Ropes

900

280,800

0.73

204,792

0.8

210600

 

Profitability Analysis ($)

Profitability Item

Per day

Per month

Per Year

Revenue

675

17,550

210,600

Less production and operating
Costs

656

17,066

204,792

Profit

19

484

5,808