MANUFACTURING OF NAIL POLISH

Introduction
Nail polish is a cosmetic product used by the majority of women in Uganda. It has got market both in rural and urban areas of the country. This project idea was developed on the basis of using the simplest technology in the manufacturing of nail polish with an estimated fixed capital of3,450US$, and operating costs of 175,817US$ used to produce 11,856 liters of nail polish to realize 439US$ of revenue in the first year of operation.


Production Capacity, Technology and Process

The production technology is very complex and may involve the use of robots, but recently a homemade nail polish can be manufactured using a much simpler technology. Here the primary film former called nitrocellulose is mixed with a shimmer or metallic pearl and this may create a good shade if applied but care has to be taken by first applying it on the nails to test its quality.

Market Analysis
The market for cosmetics is readily available country wide and for successful implementation, it is recommended that products are distributed to supermarkets, salons and cosmetic shops that can easily increase sales.

 

 


Investment Scale, Capital Requirements and Equipment
The investment scale is dependent on the set project objectives.
Capital Investment Requirements

 Item

Units

Qty

Unit Cost

Total($)

Laboratory testing kit

No

1

500

500

Utensils

No

-

-

400

Portable stirrer with mortar

No

1

1,200

1,200

Bottle filling machine

No

1

450

450

Containers(Drums)

No

2

250

500

Other tools

No

-

-

400

Total

3,450




 

Production and Operating Costs
Direct materials, Supplies and Costs

Cost Item

Units

Unit
cost

Qty/
day

Prod
cost/
day

Prod
cost/
month

Prod cost
/yr

Direct Costs







Nitrocellulose

Kgs

11.4

25

285

7,410

88,920

A shimmer

Kgs

9

7

63

1,638

19,656

Metallic pearl

Kgs

5.7

3

17

445

5,335

Ethyl alcohol

Ltrs

6.4

3

19

499

5,990

Bottles-
25ml(packaging)

Pcs

0.05

1,513

76

1,967

23,603

Other materials

-

-

-

167

2,000


Sub-total


 

 1,551

460

12,125

145,504

General Costs (Overheads)







Labour

767

9,200





Utilities

538

6,450





Rent

500

6,000





Administrative expenses

204

2,450





Cleaning & toiletries

100

1,200





Selling & distribution

200

2,400





Miscellaneous expenses

146

1,750





Depreciation

72

863





Sub-total

2,526

30,313





Total Operating Costs

14,651

175,817





1) Production costs assumed are for 312 days per year with daily production capacity of 38 litres of nail polish.
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-work days.
5) The valuation currency used is United States Dollars.

Project Product Costs and Price Structure

Item

Qty/day

Qty/yr

Unit
Cost

Prod
cost/yr

Unit
price

Total Revenue

Nail
Polish

1,513

472,056

0.37

175,817

0.7

330,439

 

 

 

 

Profitability Analysis Table

Profitability Item

Per Day

Per Month

Per Year

Revenue

1,059

27,537

330,439

Less: Production & Operating Costs

564

14,651

175,817

Profit

496

12,885

154,622