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 |
Qty/ |
Prod |
Prod |
Prod
cost |
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- |
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 |
Prod |
Unit |
Total Revenue |
Nail |
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 |