MAKING SHOE POLISH
Introduction
It usually a waxy paste or cream used to polish, shine, water proof or improve and restore the appearance of leather footwear and products and it is used in both liquid and semi-solid form. Shoe polish is not only used on footwear but can also be applied to all leather materials including bags, etc. The most prominent type of shoe polish, Kiwi, is imported and this gives local producers a chance to start producing shoe polish. Project capacity is 60,000 kgs annually with revenue estimated at US$ 996 per year.
Production Process
Shoe polish can be manufactured using vats reasonably powerful heaters and air conditioners. There is no set method of manufacture although most methods use pressure. The process consists of homogenizing molten waxes and other additives followed by thinning with solvent. This involves heating the wax in high temperatures of up to 85 degrees Celsius. The semi-solid polish is packed in round tins, while the liquid polish is packed in plastic bottles having sponge pasted caps. Dyes are added and mixed in turpentine oil if it is not a neutral polish. The mixed mass is reduced slowly to 50 °C, and as its viscosity increases, it is poured through a closed funnel into a cooling chamber. The poured mass is allowed to settle slowly, providing uniform distribution. The process is considered straightforward and the required equipment is relatively easy to acquire. The cost of establishing a fully-fledged shoe polish manufacturing facility has been estimated at around $600,000 (as of 2005). In this case the venture is small scale and the entrepreneur can invest US$83,367.
Market Analysis
Leather footwear is a common product in rural and urban area and shoe-polish is
essential to improving the life and appearance of the footwear. If good quality
shoe polish is locally produced, buyers cannot be an issue; what matters will
be quality. This Industry is not yet developed in Uganda.
Capital Investment Requirement in US $
item |
Units |
Qty |
Price |
Total |
Reaction vessel with mixer |
No |
1 |
3,750 |
3,750 |
Storage vessel |
No |
1 |
1,500 |
1,500 |
Packing machine |
No |
1 |
1,250 |
1,250 |
Rota stamping Machine |
No |
1 |
275 |
275 |
Weighing balance |
No |
1 |
125 |
125 |
Total cost of tools |
6,900 |
1. Production costs assume 312 days per year with daily capacity of 192 Kgs.
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 Operation costs in US$
Direct Materials, Supplies and costs.
Cost Item |
Units |
Unit |
Qty |
Prod |
Prod |
Prod |
Direct Costs |
||||||
Carnauba wax |
Kgs |
2.5 |
9.62 |
24. |
625 |
7,500 |
Synthetic |
kgs |
1.5 |
0.32 |
0.5 |
13 |
150 |
Paraffin |
ltrs |
1.25 |
3.21 |
4.0 |
104 |
1,250 |
Turpentine |
ltrs |
3.50 |
0.3 |
1 |
29 |
350 |
Dye |
kgs |
2.00 |
3.2 |
6 |
167 |
2,000 |
Polish |
pckts |
1 |
16 |
16. |
416 |
4,992 |
Sub-total |
52 |
1,354 |
16,242 |
|||
General Costs (Overheads) |
||||||
Labour |
4,000 |
48,000 |
||||
Selling & distribution |
500 |
6,000 |
||||
Utilities (Water, power) |
550 |
6,600 |
||||
Rent |
300 |
3,600 |
||||
Miscellaneous expenses |
100 |
1,200 |
||||
Depreciation |
144 |
1,725 |
||||
Sub-total |
5,594 |
67,125 |
||||
Total Operating Costs |
6,947 |
83,367 |
Project product costs and Price Structure in US$
Item |
Qty |
Qty |
Unit |
Prod |
Unit |
Total |
Shoe Polish |
192 |
59,998 |
1.4 |
83,367 |
1.6 |
95,996 |
Project product cost and Price Structure in US$
Item |
Per |
Per |
Per |
Revenue |
308 |
8,000 |
95,996 |
Less: Production and operating costs |
267 |
6,947 |
83,367 |
Profit |
40 |
1,052 |
12,629 |
.