MAKING RUBBER BANDS
Introduction
This business idea is production and marketing of rubber bands. A rubber band is
a short length of rubber and latex formed in the shape of a loop. They come in
multiple colors. Such bands are typically used to hold multiple objects
together. Rubber bands are elastic in nature and are extensively used for a
variety of purposes in offices, shops and banks. Its establishment capital cost
is modest at about US$ 12,803 per year, Potential revenues is estimated at US$500
per year and the production capacity is 80 bundles per day.
Production Process
Latex is prepared by using stabilizers and pigments through the normal dipping
method. With the help of moulds, through dipping and vulcanizing, rubber tubes
are prepared. These are used to prepare rubber bands in different sizes,
colours and widths.
Market Analysis
Rubber bands have steady demand in the market. Financial institutions are the
major users but trading community and others such as school, shop keeper etc.
use substantial amounts too.
Capital Investment Requirements in US$
|
Capital investment item |
Units |
Qty |
Unit |
Amount |
|
Rubber band cutting machine |
No. |
2 |
309 |
618 |
|
Wooden moulds |
No. |
3 |
95 |
285 |
|
Ball mill |
No. |
1 |
200 |
200 |
|
Packing materials(kg) |
No. |
10 |
25 |
250 |
|
Total cost on machinery |
1,353 |
Production and Operating Costs in US$
|
Cost Item |
Units |
Unit |
Qty/ |
Prod |
Prod |
Prod |
|
Rubber |
Sheets |
35 |
3 |
105 |
2,730 |
32,760 |
|
Sub-total |
3 |
105 |
2,730 |
32,760 |
||
|
General costs(overheads) |
||||||
|
Utilities(water and power) |
100 |
1,200 |
||||
|
Labour |
100 |
1,200 |
||||
|
Rent |
150 |
1,800 |
||||
|
Miscellaneous costs |
50 |
600 |
||||
|
Distribution costs |
260 |
3,120 |
||||
|
Depreciation(Asset write off)Expenses) |
28 |
338 |
||||
|
Sub -total |
688 |
8,258 |
||||
|
Total Operating Costs |
3,418 |
41,018 |
1 Production costs assumed 312 days per year with a daily
capacity of 250 bundles of rubber bands.
2 Depreciation (fixed assets 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.
Project Product Costs and Price Structure in US $
|
Item |
Qty/da |
Qty/ yr |
Unit |
Prod |
Unit |
Total |
|
Rubber |
250 |
78,000 |
0.53 |
41,018 |
0.7 |
50,700 |
Profitability Analysis in US$
|
Profitability Item |
Per |
Per |
Per |
|
Revenue |
163 |
4,225 |
50,700 |
|
Less production and operating Costs |
131 |
3,418 |
41,018 |
|
Profits |
31 |
807 |
9,682 |