MAKING PAPER BAGS
Introduction
Paper bags can be made in any size from craft paper, which is mainly used as packaging material for various items like food, pharmaceuticals, flour, cereals and grains among others.
Production Capacity
This plant will be able to produce 2,250 paper bags of half a kilo per day amounting to 67,500 paper bags per month.
Process Description
Paper bag making process is very simple and the following steps are taken: (i) cutting of paper by a paper cutting machine, (ii) Drawing label lines for folding by a Die – cutter, (iii) folding using a piece of wood, and finally (iv) gluing.
The Scale of Investment
This plant will be operated on a small scale due to high capital requirements to purchase heavy duty machinery. It is estimated that this plant will need an initial capital investment of US$ 1,398 inclusive of the working capital for the first month of operation.
Market Analysis
The demand for paper bags is widely spread in all sectors in the Ugandan economy due to government’s policy of abolishing use of polythene bags. This has stimulated the growth of paper bag making industries in the country. Paper bags are mainly used in factories, hospitals, clinics, hotels, retail shops, super markets, schools & markets. The production of paper bags is done on small scale especially from paper works centre spread along Nkrumah and Nasser Roads, Kampala – Uganda.
Project Costs
1. Capital Investment Requirements in US$
|
Item |
Units |
Qty |
Unit |
Amount |
|
Delivery Motor Cycle |
No. |
1 |
2,000 |
2,000 |
|
Glue Board |
No. |
1 |
50 |
50 |
|
Folding Wood |
No. |
1 |
5 |
5 |
|
Paper Cutter |
No. |
1 |
4,000 |
4,000 |
|
Die Cutter |
No. |
1 |
2,000 |
2,000 |
|
Furniture |
No. |
2 |
30 |
60 |
|
Total Amount |
8,115 |
2. Operating Costs in US$
|
Item |
Units |
Unit |
Qty/ |
Prod. |
Prod. |
Prod. |
|
Direct Costs |
||||||
|
Craft paper |
Rms |
23 |
4 |
92 |
2,392 |
28,704 |
|
Glue |
Ltrs |
2.5 |
10 |
25.0 |
650 |
7,800 |
|
Sub total |
117 |
3,042 |
36,504 |
|||
|
General Costs (Over heads) |
||||||
|
Rent |
200 |
2,400 |
||||
|
Labour |
300 |
3,600 |
||||
|
Glue Brush |
5 |
60 |
||||
|
Utilities (Power) |
300 |
3,600 |
||||
|
Repair & Maintenance |
300 |
3,600 |
||||
|
Fuel |
200 |
2,400 |
||||
|
Depreciation (Asset write off) Expenses |
169.4 |
2,029 |
||||
|
Sub - total |
1,474.4 |
17,689 |
|
|
|
|
|
Total Operating Costs |
4,516.4 |
54,193 |
|
|
|
|
3. Project Product Costs & Price Structure
|
Item |
Qty/day |
Qty/yr |
Unit |
Pdn |
Unit |
T/rev$ |
|
Paper |
2000 |
624,000 |
0.12 |
76,509 |
0.15 |
93,600 |
4. Profitability Analysis
|
Item |
Per |
Per |
Per |
|
Revenue |
300 |
7,800 |
93,600 |
|
Less: Production & Operating Costs |
117 |
4,516.4 |
54,193 |
|
Profit |
183 |
3,283.6 |
39,407 |