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
& heater

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
Cost

Qty
/day

Prod
cost
/day

Prod
cost
/month

Prod
cost
/yr

Direct Costs







Carnauba wax

Kgs

2.5

9.62

24.

625

7,500

Synthetic
waxes

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
containers

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
/day

Qty
/yr

Unit
Cost

Prod
cost/yr

Unit
price

Total
rev

Shoe Polish

192

59,998

1.4

83,367

1.6

95,996

 

Project product cost and Price Structure in US$

Item

Per
day

Per
month

Per
year

Revenue

308

8,000

95,996

Less: Production and operating costs

267

6,947

83,367

Profit

40

1,052

12,629

.