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


  1. Production costs assumed are for 312 days per year with daily capacity of producing 260 pieces of fishing hooks.
  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. 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