MANUFACTURING KEROSENE WICK STOVE
Introduction
This business idea is for manufacturing and marketing of kerosene wick stoves. Kerosene Wick stove is a structure made of metal and is used for cooking purposes. Their market structure is relatively high since they are a viable alternative to other cooking means and are used in households and hotels mainly in urban areas. The business idea is premised on production of 3,328 medium kerosene wick stoves per month which translates into 40,000 wick stoves per year based on three hundred and twelve working days single shift of 8 hours per day. The revenue potential is estimated at US$ 464 per month translating into US$ 269,568 per year with a sales margin of 20% and total investment requirement is US $265,458.
Production Process and Technology
The manufacturing of wick stoves involves mainly the pressing of various sheet metal parts and assembling them.
Market Analysis
Kerosene Wick Stoves have a wide market and high demand in urban areas because they are a viable alternative to the other cooking means. Most of these items are imported from Kenya and China.
Capital Investment Requirements in US$
|
Item |
Units |
Qty |
Unit |
Amount |
|
Sheet cutting |
No |
1 |
6,000 |
6,000 |
|
Power Operated Guillotine |
No |
1 |
2,500 |
2,500 |
|
Circle Cutting Machine |
No |
1 |
5,000 |
5,000 |
|
Deep
drawing Double Action |
No |
1 |
7,500 |
7,500 |
|
Electronic welding set |
No |
1 |
2,500 |
2,500 |
|
Oven for baking the paint |
No |
1 |
1,000 |
1,000 |
|
Trolleys and trays |
dozen |
2 |
180 |
360 |
|
Steel table |
No |
1 |
250 |
250 |
|
Delivery Van |
No |
1 |
5,000 |
5,000 |
|
Total Operating Costs |
30,110 |
Production
and Operating Costs in US$
Direct Materials, Supplies and Costs in US$
|
Cost Item |
Units |
Unit |
Qty/ |
prod |
Prod |
Prod |
|
Direct Costs |
||||||
|
Galvanized |
No |
12.5 |
32 |
400 |
10,400 |
124,800 |
|
Wicks |
Roll |
2.5 |
3 |
7.5 |
195 |
2,340 |
|
Oil Paint |
liter |
1 |
40 |
40 |
1,040 |
12,480 |
|
Sub-total |
75 |
447.5 |
11,635 |
139,620 |
||
|
General Costs (Overheads) |
||||||
|
Rent |
250 |
3,000 |
||||
|
Labour (37) |
6,500 |
78,000 |
||||
|
Utilities (power & water) |
250 |
3,000 |
||||
|
Preliminary costs |
250 |
3,000 |
||||
|
Miscellaneous costs |
100 |
1,200 |
||||
|
Depreciation (Asset write off)Exp |
627 |
7,528 |
||||
|
Sub-total |
7,977 |
95,728 |
||||
|
Total Operating Costs |
19,612 |
235,348 |
||||
Production costs assumed 312 days per year with a daily capacity of 128 medium Kerosene Wick Stoves. But other sizes can also be manufactured using the appropriate materials. Depreciation (fixed asset write off) assumes _4_ years life of assets written off at _25% per year for all assets. Direct Costs include: materials, supplies and other costs that directly go into production of the product. A production month is assumed to have 26 days.
Project Product Costs and Price
Structure in US$
|
Item |
Qty/ |
Qty/ |
Unit |
Prod |
Unit |
T/rev |
|
Kerosene |
128 |
39,936 |
5.9 |
235,348 |
8 |
319,488 |
Profitability Analysis in US$
|
Item |
Per day |
Per Month |
Per Yr |
|
Revenue |
1,024 |
26,624 |
319,488 |
|
Less:
Production and Operating |
754 |
19,612 |
235,348 |
|
Profit |
270 |
7,012 |
84,140 |