MAKING SCHOOL BAGS
Introduction
The idea is premised on production and marketing of 20,800 bags per month which
translates into 249,600 bags per year. The revenue potential is estimated at
USD 700 per year. The business has a good market demand throughout the year
especially at the beginning of term. This kind of investment can cost about US
5, 027.
Production Process
The manufacturing process calls for skill in cutting the raw material, followed
by stitching and fixing accessories before it is packed for dispatch. An
internal lining is fixed to prevent easy tearing from the inside.
Market Analysis
With the growing numbers of school-and-college-going children, the demand for
these bags is on the rise. Hence, there is a ready
market for neatly stitched bags. The plant may also incorporate in other bags
like transport bags. These are all easily marketable in Uganda. This industry
is not developed in Uganda.
Capital Investment required in US$
|
Item |
Unit |
Qty |
Unit |
Total |
|
Industrial Sewing machine |
No. |
2 |
2,500 |
5,000 |
|
Pair of scissors |
No. |
5 |
5 |
25 |
|
Measuring tape |
No. |
1 |
2 |
2 |
|
Delivery van |
No. |
1 |
4,500 |
4,500 |
|
Total cost of Machinery |
5,027 |
Production and Operating Costs in US$
a) Direct Materials, Supplies and Costs
|
Cost Item |
Units |
Unit |
Qty/ |
Prod. |
Prod. |
Prod. |
|
Tarpaulin |
Mtrs |
1.3 |
100 |
125 |
3,250 |
39,000 |
|
Zips |
No. |
0.3 |
800 |
200 |
5,200 |
62,400 |
|
Threads |
Bundles |
1.5 |
3 |
5 |
117 |
1,404 |
|
Sub-total |
8,567 |
102,804 |
||||
|
General costs (Overheads) |
||||||
|
Utilities (power) |
150 |
1,800 |
||||
|
(Utilities (water) |
10 |
120 |
||||
|
Packaging |
50 |
600 |
||||
|
Salaries |
150 |
1,800 |
||||
|
Renting |
150 |
1,800 |
||||
|
Depreciation (Assets write off) Expenses |
105 |
1,257 |
||||
|
Sub-total |
615 |
7,377 |
||||
|
Total Operating costs |
9,182 |
110,181 |
Production
costs assumed are for 312 days per year with a daily capacity of 800 School
bags.
Depreciation (fixed assets write off) assumes 4 years life of assets write off
at 25% per year for all assets.
Direct costs include: materials, supplies and other costs that directly go into
production of the product.
Product Costs and price structure in US$
|
Item |
Qty/ |
Qty /yr |
Unit |
Prod. |
Unit |
Total |
|
School |
800 |
249,600 |
0.4 |
110,181 |
2 |
374,400 |
Profitability Analysis in US$
|
Profitability item |
per day |
per |
per year |
|
Revenue |
|||
|
School bags |
1,200 |
31,200 |
374,400 |
|
Less Prod & Operating Costs |
353 |
9,182 |
110,181 |
|
Profit |
847 |
22,018 |
264,219 |