MANUFACTURING OF BALL-PEN REFILLS
Introduction
The proposed plant is for manufacture of refills for the ball pens. The ball pen has almost replaced the conventional fountain pens, with the use-and-throw refills, creating a niche of its own. Thanks to the ease and convenience of the ball pens, they have turned into the most preferred medium of writing, which is not only cost –effective, but also serves the variegated needs of the people who write. These come in different sizes and in various colours made from a very small diameter HDPE tubes filled with a special type of ink. The business idea aims at production of 500 units per day thus 156,000 units per annum. The revenue potential is estimated at US $ 200 annually with a total capital investment of US$ 2,295.
Production Process
The HDPE granules are fed into the extruder through hopper to produce extruded plastic tubes, which are cut to fit into various sizes of the ball pens by a cutter unit and the metal tips are fitted, ink filled to make the refills ready for use. These refills, for bulk sales, are packed in a plastic film by a machine and dispatched to the market.
Market Analysis
Plastic ball pens are now gradually becoming a part of
common possession, which turns popular by the year. Refills, an integral part
of ball pens, also have good demand both in domestic as well as export
market. Supply to educational institutions, public and private offices would
help capture the market. The main Key player in this sector is Nice plastics –
Uganda limited.
Scale of Investment in US$
1. Capital Investment Requirements
|
Item |
Units |
Qty |
Unit Cost |
Amount |
|
Ink filling system |
No |
1 |
495 |
495 |
|
Air compressor |
No |
1 |
500 |
500 |
|
Water pump |
No |
1 |
200 |
200 |
|
Cutter unit |
No |
2 |
50 |
100 |
|
Extrusion system |
No |
1 |
1,000 |
1,000 |
|
Total |
2,295 |
2. Production and Operating Costs in US$
|
Cost Item |
Units |
Unit |
Qty |
Prod |
Prod |
Prod |
|
Direct costs |
||||||
|
HDPE granules |
Kgs |
0.5 |
10 |
5 |
130 |
1,560 |
|
Tips |
No |
0.005 |
550 |
2.75 |
71.5 |
858 |
|
Packing materials |
No |
0.1 |
10 |
1 |
26 |
312 |
|
Subtotal |
228 |
2,730 |
||||
|
General costs (Overheads) |
||||||
|
Labour |
500 |
6,000 |
||||
|
Utilities |
300 |
3,600 |
||||
|
Selling and Distribution |
200 |
2,400 |
||||
|
Administrative expenses |
200 |
2,400 |
||||
|
Shelter |
300 |
3,600 |
||||
|
Depreciation (Asset write off) Expenses |
53 |
636 |
||||
|
Sub-total |
1,553 |
18,636 |
||||
|
Total Operating Costs |
1,781 |
21,366 |
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 |
Qty |
Unit |
Prod |
Unit |
T/rev |
|
Refills |
500 |
156,000 |
0.1 |
21,366 |
0.2 |
31,200 |
|
Total |
156,000 |
21,366 |
31,200 |
4. Profitability Analysis Table in US$
|
Item |
Per day |
Per |
Per Year |
|
Revenue |
100 |
2,600 |
31,200 |
|
Less: Production and Operating Costs |
68 |
1,781 |
21,366 |
|
Profit |
32 |
819 |
9,834 |