MAKING SERVIETTES
Introduction
A serviette is a small piece of table linen that is used to wipe the mouth and
to cover the lap in order to protect clothing when eating. Made out of light
absorbent material, napkins are soft to absorb sweat and clean the mouth. The
market is constituted by individual consumers, hospitals, restaurants, homes
and hotels among others. The business idea aims at production of 2,600 packets
of serviettes per month which translates into 31,200 packets annually. The
revenue potential is estimated at 180 dollars per month, translating into
134,160 dollars per year with a sales margin of 10%. The total capital
investment for the project is 3,150 dollars.
Plant Capacity
The profiled plant is expected to produce 40,560 units (each unit with 10 packs
of 50 pieces each per annum.
Technology and Production
To make serviettes, a hand driven knitting machine and a yarn twister are used. The raw materials include Cotton staple yarn, absorbent thread, cotton thread, cardboard boxes and craft papers. Cotton staple yarn is knitted into loose fabric tube, cut to required pieces of absorbent cottons with the ends of the napkins tied by thread and packed in printed polythene bags.
Market Analysis
The demand for Serviettes is very high in Urban Centres especially in modern
Hotel, Homesteads, and Institutions, etc. However, this industry is still
undeveloped in Uganda.
Scale of Investment
1. Capital Investment Requirements
|
Capital Investment Item |
Units |
Qty |
Unit |
Amount |
|
No |
1 |
3,000 |
3,000 |
|
|
Yarn Twister |
No |
1 |
150 |
150 |
|
Total |
3,150 |
Hand driven
Knitting
Machine 2. Production and Operation
costs
|
Cost Item |
Units |
Unit |
Qty/day |
Prod. |
Prod. Cost/ |
Prod Cost/ |
|
Direct costs3: |
||||||
|
Cotton staple yarn |
Yarns |
3 |
40 |
120 |
3,120 |
37,440 |
|
Absorbent thread |
No |
3 |
30 |
90 |
2,340 |
28,080 |
|
Cotton thread |
Yarns |
3 |
10 |
30 |
780 |
9,360 |
|
Cardboard boxes |
No |
0.76 |
5 |
3.8 |
99 |
1,186 |
|
Craft papers |
No |
1.5 |
15 |
22.5 |
585 |
7,020 |
|
Sub-total |
6,924 |
83,086 |
||||
|
General costs (Overheads) |
||||||
|
Labour |
250 |
3,000 |
|
Utilities |
300 |
|
Selling and Distribution |
100 |
|
Administrative expenses |
100 |
|
Shelter |
150 |
|
Depreciation machinery |
66 |
|
Sub-total |
966 |
|
Total Operating Costs |
7,889 |
Production is assumed for 312 days per year. Depreciation
assumes 4 year life of assets written off at 25%
per year for all assets. A production Month is assumed to have 26 days.
3. Project Product costs and Price Structure in US$
|
Item |
Qty/day |
Qty/yr |
Unit |
Prod/ yr |
Unit |
Total/revenue |
|
Plain |
70 |
21,840 |
3 |
66,271 |
4 |
87,360 |
|
Decorated |
30 |
9,360 |
3 |
28,402 |
5 |
46,800 |
|
Total |
100 |
31,200 |
6 |
94,673 |
9 |
134,160 |
4.Profitability Analysis Table
|
Profitability |
Per |
Per |
Per Year |
|
Revenue |
430 |
11,180 |
134,160 |
|
Less: Production and Operating Costs |
303 |
7,889 |
94,673 |
|
Profit |
127 |
3,291 |
39,487 |