POWER LOOMS TO PRODUCE YARN
Introduction
A power loom is a machine that weaves yarn into
textiles. Power looms manufacture cloth from yarn. This cloth is thereafter
used to make suits, dresses, bed sheets depending on the intentions of the
user.
The business idea aims at production of 40,950 meters of yarn per month which
translates into 491,400 meters annually. The revenue potential is estimated at
US$ 840 per year with a sales profit of 28,225which is 11.3%. The total capital
investment for the project is $ 2,700.
Plant Capacity
The profiled plant, works for 312 working days and has a minimum capacity of 491,400 Meters per annum.
Technology and Production Process
Power loom and office furniture are needed in order to make yarn. The raw material used is synthetic yarn. A loom works by holding lengthy wise threads (warps) under tension. The vertically oriented threads are attached to two or more harnesses which move up and down separating warp threads from each other and creating the shed. A weft thread is wound onto spools called bobbins which are placed in a shuttle and passed through the shed which creates the weave.
Market Analysis
Market for yarn is dominant in the textile industry. The key players in this sector include Nytil, and Phoenix (U) Ltd.
Scale of Investment
The business can be operated with a fixed capital of US$2,200.
Capital Investment requirements in US$
|
Item |
Units |
Qty |
Unit cost |
Amount |
|
Power loom |
No. |
1 |
1,500 |
1,500 |
|
Furniture |
No. |
1 |
700 |
700 |
|
Other accessories |
No. |
1 |
500 |
500 |
|
Total |
2,700 |
Production
and operating costs in US $
Direct Materials, supplies and costs
|
Cost item |
Units |
Unit |
Qty/day |
Cost/day |
Cost/month |
Cost/ |
|
|
Direct |
|||||||
|
Cotton |
kg |
1.50 |
450 |
675 |
17,550 |
210,600 |
|
|
Subtotal |
2 |
450 |
675 |
17,550 |
210,600 |
||
|
General Costs(Overheads) |
|||||||
|
Administration expenses |
708 |
8,500 |
|||||
|
Labour |
1,250 |
15,000 |
|||||
|
Utilities |
650 |
7,800 |
|||||
|
Rent |
1,000 |
12,000 |
|||||
|
Selling & Distribution |
542 |
6,500 |
|||||
|
Depreciation |
143 |
1,715 |
|||||
|
Miscellaneous |
375 |
4,500 |
|||||
|
Subtotals |
4,668 |
56,015 |
|||||
|
Total operating Costs |
22,218 |
266,615 |
|||||
Project Product costs and price structure in US $
|
Item |
Qty/ |
Qty/ |
Unit |
Prod/ |
Unit |
Revenue |
|
Yarn |
1575 |
491,400 |
0.54 |
266,615 |
0.6 |
294,840 |
Profitability Analysis in US $
|
item |
Per day |
Per month |
Per year |
|
Revenue |
945 |
24,570 |
294,840 |
|
Less: Production operating costs |
855 |
22,218 |
266,615 |
|
Profit |
90 |
2,352 |
28,225 |