MAKING PAPER ENVELOPES
Introduction
Paper envelopes are stationery products that are
easily marketed as the users and consumers are many for example government
organizations, schools, courier companies and individuals.
The project idea targets a wide market that exists in the paper products
industry. An estimated fixed capital of 10,340US$ and operating costs of
119,884US$ can generate a revenue of 202,800US$ in the first year of active
operation.
Production Capacity, Technology
&Process
A paper cutting machine is used to cut different paper pieces to sizes as wanted by the operator for the type and size of envelopes to be produced. Binding glue is then applied to the cut sides of the paper and later they are joined together. Labeling can be done thereafter. The envelopes are then packed ready for distribution.
Market
Analysis
Stationery products have a high demand by many institutions such as: schools,
Government bodies, Stationery shops, NGOS and individual buyers.
Investment Scale, Capital Requirement
& Equipment
The investment scale largely depends on the entrepreneur’s intended objectives.
The table below shows some of the key equipment requirements.
Capital Investment Requirements in US$
|
Capital investment item |
units |
Qty |
unit cost |
Total |
|
Paper Cutting machine |
No |
1 |
5,400 |
5,400 |
|
Rulers |
No |
100 |
2.5 |
250 |
|
Pencils |
No |
300 |
0.5 |
150 |
|
Glue Sticks |
No |
125 |
2.0 |
250 |
|
Scissors |
No |
34 |
10 |
340 |
|
Furniture |
No |
- |
- |
3,500 |
|
Other tools |
No |
- |
- |
450 |
|
Total |
10,340 |
Production
and Operating Costs in US$
1) Production costs assumed are for 312 days per year with daily capacity of producing
5,000pieces of paper envelopes.
2) Depreciation (fixed asset write off) assumes 4-years life of assets written
off at 25% per year for all assets.
3) Direct costs include materials, supplies and other costs that directly go
into production of the product.
4) Total monthly days assumed are 26-days.
5) The valuation currency used is United States Dollars.
Direct Materials, Supplies and Costs
|
Cost Item |
Units |
Unit |
Qty/ |
Prod |
Prod |
Prod cost/ |
|
Direct Costs |
||||||
|
Wall
Paper |
mtrs |
1.1 |
40 |
44 |
1,144 |
13,728 |
|
Bonded Paper |
mtrs |
1 |
34 |
34 |
884 |
10,608 |
|
Decorative |
mtrs |
1.3 |
22 |
29 |
744 |
8,923 |
|
Printer Paper |
mtrs |
1.2 |
15 |
18 |
468 |
5,616 |
|
Glue |
mtrs |
4 |
25 |
100 |
2,600 |
31,200 |
|
Old
Calendars |
mtrs |
1 |
7 |
7 |
182 |
2,184 |
|
Other |
- |
- |
- |
121 |
1,450 |
|
|
Sub-total |
143 |
232 |
6,142 |
73,709 |
||
|
General Costs (Overheads) |
||||||
|
Labour |
1,400 |
16,800 |
||||
|
Utilities |
700 |
8,400 |
||||
|
Rent |
1,000 |
12,000 |
||||
|
Selling & distribution |
383 |
4,600 |
||||
|
Cleaning & toiletries |
45 |
540 |
||||
|
Miscellaneous expenses |
104 |
1,250 |
||||
|
Depreciation |
215 |
2,585 |
||||
|
Sub-total |
3,848 |
46,175 |
||||
|
Total Operating Costs |
9,990 |
119,884 |
Project Product Costs and Price Structure
|
Item |
Qty/ |
Qty/ |
Unit |
Prod |
Unit |
Total revenue |
|
Paper |
5,000 |
1,560,000 |
0.08 |
119,884 |
0.13 |
202,800 |
Profitability Analysis Table
|
Item |
Per Day |
Per Month |
Per Year |
|
Revenue |
650 |
16,900 |
202,800 |
|
Less :Production& Operating Costs |
384 |
9,990 |
119,884 |