MAKING SCOURING POWDER
Introduction
Scouring powder is a
widely used household product. It is used in cleaning of metallic and ceramic
products such as: tiles, toilet bawls, bathtubs & rinsing sinks etc.
Production Capacity Technology &
Process
The production process involves the mixing of baking soda, salt, and borax
powder in the right quantities and then the mixture is stored in an air tight
container. Production capacity of 99,840kgms of scouring powder in the first
year of operation and a total revenue of, 914US$ can be realized when a total
operating cost of 32,319US$ is injected into the project.
Market Analysis
The market exists widely in urban areas and the product can easily be supplied
to supermarkets, wholesale and retail shops. Big producers such as: Mukwano
Industries Ltd and Unilever Uganda Ltd may affect production costs and price of
new entrants as they produce at relatively low costs since they enjoy the
economies of large scale production.
Investment Scale, Capital Requirements
and Equipment
The investment scale largely depends on the production capacity and the ease
with which raw materials are acquired. The major equipment required includes
the following items as tabled bellow.
Capital Investment Requirements
|
Capital investment item |
units |
Qty |
unit cost |
Total($) |
|
Mixer |
No |
1 |
400 |
400 |
|
Air tight Container |
No |
1 |
500 |
500 |
|
Delivery Van(0.5 -tone) |
No |
1 |
4,000 |
4,000 |
|
Furniture & Fixture |
No |
- |
- |
1,200 |
|
Weighing Scale |
No |
1 |
200 |
200 |
|
Other Tools |
No |
- |
- |
1,200 |
|
Total |
7,500 |
Production and Operating Costs
Direct materials, Supplies and Costs
|
Cost Item |
Units |
Unit |
Qty/ |
Prod |
Prod |
Prod |
|
Direct Costs |
||||||
|
Salt |
Kgs |
0.4 |
16 |
6 |
167 |
2,000 |
|
Borax Powder |
Kgs |
0.35 |
32 |
11 |
292 |
3,500 |
|
Baking Soda |
Kgs |
0.4 |
32 |
13 |
333 |
3,994 |
|
Packaging |
Pcs |
0.08 |
160 |
13 |
333 |
4,000 |
|
Other materials |
- |
- |
- |
83 |
1,000 |
|
|
Sub-total |
240 |
43 |
1208 |
14,494 |
||
|
General Costs(Overheads) |
||||||
|
Labour |
292 |
3,500 |
||||
|
Rent |
267 |
3,200 |
||||
|
Utilities |
267 |
3,200 |
||||
|
Selling & distribution |
225 |
2,700 |
||||
|
Cleaning & Toiletries |
154 |
1,850 |
||||
|
Miscellaneous expenses |
125 |
1,500 |
||||
|
Depreciation |
156 |
1,875 |
||||
|
Sub-total |
1,485 |
17,825 |
||||
|
Total operating Costs |
2,693 |
32,319 |
1) Production costs assumed are for 312
days per year with daily capacity of producing 320kgs of scouring powder.
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
2) Project Product Costs and Price Structure
|
Item |
Qty/ |
Qty/yr |
Unit |
Prod |
Unit |
T/rev |
|
Scouring |
320 |
99,840 |
0.32 |
32,319 |
0.54 |
53,914 |
Profitability Analysis Table
|
Profitability Item |
Per Day |
Per Month |
Per Year |
|
Revenue |
173 |
4,493 |
53,914 |
|
Less: Production& Operating Costs |
104 |
2,693 |
32,319 |
|
Profit |
69 |
1,800 |
21,595 |