MANUFACTURING LEATHER BELTS
Introduction
This business idea is for production and marketing of leather belts. Real
leather belts are one accessory of apparel made of cowhides or other animal
skin. It is a flexible band worn around the waist. A belt supports trousers or
other articles of apparel and it serves for style and decoration. Their market
structure is high since they are of good quality and they are used by almost all
people with trousers and rs. The business idea is premised on three hundred
working single shift of 8 hours per day the unit is designed to have which
translates into 312,000 er belts per year. The revenue potential is estimated
at 400 per month translation into US$2,808,000 per year investment requirement is production of 1,000
belts per day with a sales margin of 25% and US$2,079,725 for the first year of
project Operation.
Market Analysis
It is projected that leather belts have a wider market both internally and
externally because of their good quality.
Production Capacity
The production capacity depends on the materials and equipment used in the
production process.
Technology and process description
This project involves use of strap cutting machine, stitching machine,
Riveting, punching machine and working tools. The production process involves
strap cutting, stitching, riveting, coloring/dying, pressing designs, fixing
fasteners/buckles and punching.
Scale of Investment, Capital Investment
Requirement and
Equipment
The project is on a small scale investment and capital investment depends on
the intended number of outputs a manufacturer is
targeting.
|
Cost Item |
Units |
Unit |
Qty/ |
Prod |
Prod cost/ |
Prod |
|
Direct Costs |
||||||
|
Leather |
roll |
10 |
200 |
2,000 |
52,000 |
624,000 |
|
Rivets |
No |
2 |
1,000 |
2,000 |
52,000 |
624,000 |
|
Buckles |
No |
2 |
1,000 |
2,000 |
52,000 |
624,000 |
|
Dye |
kg |
2 |
50 |
100 |
2,600 |
31,200 |
|
Packaging |
roll |
10 |
20 |
200 |
5,200 |
62,400 |
|
Sub-total |
2,270 |
6,300 |
163,800 |
1,965,600 |
||
|
General Costs(Overheads) |
||||||
|
Construction Costs (Building) |
10,000 |
10,000 |
||||
|
Preliminary costs |
500 |
500 |
||||
|
Utilities (Power & water) |
250 |
3,000 |
||||
|
Labour |
2,000 |
24,000 |
||||
|
Miscellaneous Costs |
500 |
6,000 |
||||
|
Depreciation(Asset write off) Expenses |
1,177 |
14,125 |
||||
|
Sub-total |
14,427 |
57,625 |
||||
|
Total Operating Costs |
178,227 |
2,023,225 |
Capital Investment Requirements in US$
|
Item |
Units |
Qty |
Unit Cost |
Amount |
|
Strap cutting machine |
No |
2 |
6,500 |
13,000 |
|
Stitching machine |
No |
2 |
7,500 |
15,000 |
|
Riveting machine |
No |
2 |
7,500 |
15,000 |
|
Punching machine |
No |
2 |
250 |
500 |
|
Working tools |
Set |
4 |
250 |
1,000 |
|
Delivery van |
No |
1 |
9,000 |
9,000 |
|
Land |
Piece |
1 |
3,000 |
3,000 |
|
Total |
56,500 |
Production and Operation Costs
Direct Materials, Supplies and Costs in US$
1. Production costs assumed are for 312 days per year with a daily capacity of
1,000 Leather belts.
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. A production month is assumed to have 26 work days.
Project Product Cost and Price Structure
in US$
|
Item |
Qty/ |
Qty/Yr |
Unit |
Prod |
Unit |
Total rev |
|
Leather |
1,000 |
312,000 |
6.5 |
2,023,225 |
9 |
2,808,000 |
Profitability Analysis in US$
|
Item |
Per |
Per |
Per Yr |
|
Revenue |
9,000 |
234,000 |
2,808,000 |
|
Less: Production and Operating Costs |
6,485 |
178,227 |
2,023,225 |
|
Profit |
2,515 |
55,773 |
784,775 |