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
cost

Qty/
day

Prod
cost/
day

Prod
cost/
month

Prod cost/
yr

Direct Costs







Wall Paper
Samples

mtrs

1.1

40

44

1,144

13,728

Bonded Paper

mtrs

1

34

34

884

10,608

Decorative
Paper

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
Pictures

mtrs

1

7

7

182

2,184

Other
materials

-

-

-

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/
day

Qty/
yr

Unit
Cost

Prod
cost/yr

Unit
price

Total revenue

Paper
Envelopes

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