MANUFACTURING OF FISHING HOOKS
Introduction
Modern fishing hooks are used in fishing of large fish such as Nile perch, fishing in ponds and wells etc. The investment in this project requires a certain big amount of capital, but the payback period is short. An estimated fixed capital of $52,900 and operating costs of $114,425, when invested can generate an estimated revenue of $178,464, in the first year of operation.
Production Capacity, Technology and Process
The production technology involves heating a hook material to exact temperature that is perfect for that particular style and then molded depending on the size, and design. The hot hook is then cooled in oil. After cooling, then sharpening of the finished hook is done using sharpening fabricating machines.
Investment Scale, Capital Requirements and Equipment
The investment scale depends on the set goals and objectives of the project.
The capital requirements and equipment needed is as indicated in the table below.
Capital Investment Requirements in US$
|
Capital Investment Item |
Units |
Qty |
Unit cost |
Total |
|
Supermax TCM-V56T |
No |
1 |
37,800 |
37,800 |
|
Fabrication tools |
No |
- |
- |
3,000 |
|
Furniture and Fittings |
No |
- |
- |
3,600 |
|
Delivery Van |
No |
1 |
6,000 |
6,000 |
|
Other Tools |
No |
- |
- |
2,500 |
|
Total |
|
|
|
52,900 |
Production and Operating Costs
- Production costs assumed are for 312 days per year with daily capacity of producing 260 pieces of fishing hooks.
- 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.
- Total monthly days assumed are 26-days. 5) The valuation currency used is United States Dollars
(a)Direct Materials, Supplies and Costs in US$
|
Cost Item |
Units |
Unit Cost |
Qty/ day |
Pdn cost/ day |
Pdn cost/ mth |
Pdn cost/yr |
|
Direct Costs |
|
|
|
|
|
|
|
Carbon Steel |
Kgs |
14 |
7 |
96 |
2,500 |
30,000 |
|
Bronze |
Kgs |
5 |
9 |
45 |
1,167 |
14,000 |
|
Aluminum |
Kgs |
4 |
5 |
22 |
583 |
7,000 |
|
Other materials |
Kgs |
2 |
4 |
10 |
250 |
3,000 |
|
Packaging materials |
Pcs |
0.05 |
260 |
13 |
350 |
4,200 |
|
Sub-total |
285 |
187 |
4,850 |
58,200 |
||
|
General Costs(Overheads) |
|
|
|
|
||
|
Labor costs |
|
|
1,021 |
12,250 |
||
|
Utilities |
|
|
1,113 |
13,350 |
||
|
Administration expenses |
|
|
300 |
3,600 |
||
|
Selling & distribution |
|
|
125 |
1,500 |
||
|
Rent |
|
|
750 |
9,000 |
||
|
Fuel |
|
|
150 |
1,800 |
||
|
Miscellaneous expenses |
|
|
125 |
1,500 |
||
|
Depreciation |
|
|
1,102 |
13,225 |
||
|
Sub-total |
|
|
4,685 |
56,225 |
||
|
Total Operating Costs |
|
|
9,535 |
114,425 |
||
Market Analysis
The market for fishing hooks widely exists since the fishing industry in Uganda is a vibrant one contributing to about 10% of the GDP.
Project Product Costs and Price Structure in US$
|
Item |
Qty/ day |
Qty/yr |
Unit Cost |
Pdn cost/ yr |
Unit price |
T/rev |
|
Modern Fishing Hooks |
260 |
81,120 |
1.41 |
114,425 |
2.2 |
178,464 |
Profitability Analysis Table
|
Profitability Item |
Per Day |
Per Month |
Per Year |
|
Revenue |
572 |
14,872 |
178,464 |
|
Less: Production & Operating Costs |
367 |
9,535 |
114,425 |
|
Profit |
205 |
5,337 |
64,039 |