MAKING RUBBER WASHERS
Introduction
The rubber washers are rings made of rubber used in mechanical devices and are used to plug any sort of leak in the pipeline system, seal parts in contact with liquids. They are used to prevent vibrations from spreading from one part to another so reducing noise. These are mainly common with chemical and food industries as major consumers of rubber washers and gaskets, etc. With the continuing and increase in the rate of construction works, the demand for rubber washers, many of which are imported, will increase. The project cost is US $129,466 producing 360,000 units annually translating into revenue estimated at US $ 993 per year. Thus is viable and can be put up in areas where access to prime properties is guaranteed.
Production Process
In manufacturing these products, rubber compounds are cut into moulds and pressed with the help of hand press, which are heated with steam, cut to required sizes and finally packed for the market. The profiled plant has a minimum plant capacity of 360,000 units of washers per annum.
Market Analysis
Industrial houses are the major consumers of rubber washers. Therefore, the entrepreneur has to establish a network before entering the market. However, due to the booming premises’ construction in the country the market is promising. This product is not produced in the country yet.
Capital Investment Requirement in US$
|
Item |
Units |
Qty |
Price |
Total |
|
Fly press Machine |
No |
1 |
1,125 |
1,125 |
|
Moulds |
No |
4 |
1,500 |
6,000 |
|
Furniture |
No |
5 |
75 |
375 |
|
Other hand tools |
No |
1 |
500 |
500 |
|
Total cost of tools |
8,000 |
1. Production costs assume 312 days per year with daily capacity of 1,154 washers.
2. Depreciation (fixed asset write off) assumes 4 year life of assets written off at 25% per year for all assets.
3. Direct costs include: materials, supplies and all other costs incurred to produce the product.
4. A production month is 26 work days
5. Currency
used is US Dollars.
Production and Operating costs in US $
Direct Materials, Supplies and costs
|
Cost Item |
Units |
Unit |
Qty |
Prod |
Prod |
Prod |
||
|
Direct Costs |
||||||||
|
Rubber |
Kgs/ |
34 |
9.62 |
326.9 |
8500 |
102,000. |
||
|
other |
ltrs |
75 |
0.32 |
24.0 |
625 |
7,500. |
||
|
Packaging |
Kgs/ |
1.5 |
3.21 |
4.8 |
125 |
1,500. |
||
|
Lubricant |
kgs/ltrs |
12.5 |
0.3 |
4 |
104 |
1,250. |
||
|
Polyethene |
Kgs/ |
1 |
1 |
0.50 |
13 |
156. |
||
|
Sub-total |
360 |
9,367 |
112,406 |
|||||
|
General Costs (Overheads) |
||||||||
|
Labour |
455 |
5,460 |
||||||
|
Selling & distribution |
250 |
3,000 |
||||||
|
Utilities (Water, power) |
250 |
3,000 |
||||||
|
Rent |
200 |
2,400 |
||||||
|
Miscellaneous expenses |
100 |
1,200 |
||||||
|
Depreciation |
167 |
2,000 |
||||||
|
Sub-total |
1,422 |
17,060 |
||||||
|
Total Operating Costs |
10,78 |
129,466. |
||||||
Project product costs and Price Structure in US $
|
Item |
Qty/ |
Qty/yr |
Unit |
Prod |
Unit |
Total |
|
Rubber |
1,154 |
359,986 |
0.4 |
129,466 |
0.5 |
179,993 |
Profitability Analysis in US $
|
Item |
Per |
Per |
Per |
|
Revenue |
577 |
14,999 |
179,993 |
|
Less: Production and operating costs |
415 |
10,789 |
129,466 |
|
Profit |
162 |
4,211 |
50,527 |