Introduction
Paint manufacture involves the mixing of different chemicals at different sequences and at specified durations for them to set and form a thick and, or sticky solution that is used to coat structure surfaces when applied to give them a decorated look of the desired colours. The mixing is done by a trained person with acumen in that field. This industry product is on high demand since the Construction sector is growing very fast and booming. The capital outlay is a bit stretched but the return on investment justifies it.
The project requires an estimated fixed capital of US$ 14,544 and operating costs of US$ 491,765 generating revenue of US$ 698,880 in the first year of operation.
Production Capacity, Technology and Process
Paint manufacture machinery and equipment can be located in a moderate space of about 15ft *20ft, and a store of about 15ft* 10ft plus an office space of about 120 square feet. The factory production capacity depends on the size of the machinery the shifts operated and the capital invested. If materials are available, the factory can operate up to three shifts. Costing is based on a capacity of 2,000 jerry cans of emulsion paint a month.
Capital Investment Requirements in US$
| Capital Investment Item | Units | Qty | @ | total |
|---|---|---|---|---|
| Mixer | No | 1 | 2,400 | 2,400 |
| Electrical Installation | No | – | – | 750 |
| Weighing Scale (Digital) | No | 1 | 300 | 300 |
| Laboratory Equipment | No | 1 | 400 | 400 |
| 600 Liter drums | No | 3 | 100 | 300 |
| Jerry cans | No | 1,600 | 2 | 3,200 |
| Pickup | No | 1 | 7,000 | 7,000 |
| Viscometer | No | 1 | 100 | 100 |
| Carrier Trolley | No | 1 | 50 | 50 |
| Time Watch | No | 1 | 4 | 4 |
| Tool Kit | No | 1 | 40 | 40 |
| Total | 14,544 |
Production and Operating Costs (a)Direct Materials, Supplies and Costs
| Cost Item | Units | @ | Qty/ day | Pdn Cost/ day | Pdn Cost/ mth | Pdn Cost/ yr |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| TT | Kgs | 3 | 96 | 288 | 7,488 | 89,856 |
| PVA | Kgs | 2 | 80 | 160 | 4,160 | 49,920 |
| Whiting | Kgs | 0.15 | 1,600 | 240 | 6,240 | 74,880 |
| Foam line | Mlgm | 1.5 | 11.2 | 16.8 | 437 | 5,242 |
| Ammonia | Mlgm | 0.02 | 400 | 8 | 208 | 2,496 |
| Nitrosal | Kgs | 11 | 24 | 264 | 6,864 | 82,368 |
| Water | Ltrs | 0.03 | 1,920 | 57.6 | 1,498 | 17,971 |
| Packaging Materials | Pcs | 2 | 160 | 320 | 8,320 | 99,840 |
| Sub-total | 35,214 | 422,573 | ||||
General costs (Overheads)
| Rent | 750 | 9,000 |
|---|---|---|
| Labour | 1,454 | 17,448 |
| Protective ware | 83 | 996 |
| Power | 1,950 | 23,400 |
| Selling and Distribution | 688 | 8,256 |
| Cleaning and Toiletries | 271 | 3,252 |
| Miscellaneous | 267 | 3,204 |
| Depreciation | 303 | 3,636 |
| Sub-total | 5,766 | 69,192 |
| Total Operating Costs | 40,980 | 491,765 |
- Production costs assumed 312 days per year with daily capacity of producing 160-20ltr jerry cans of emulsion paint.
- Depreciation (fixed asset write off) assumes 4-years life of assets written off at25% 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.
- The valuation currency used is United States Dollars.
Market Analysis
Construction Sector is one of the fastest growing sectors in the country. There is therefore, a ready market for the paint and paint products once quality is taken into account during production. Construction Companies, Estate Developers, Hardware shops, Institutions as well as individuals are the potential customers.
Project product costs and Price Structure
| Item | Qty/ day | Qty/yr | @ | Pdn Cost/yr | UPx | Total Rve |
|---|---|---|---|---|---|---|
| Emulsion Paint | 160 | 49,920 | 9.8510577 | 491,765 | 14 | 698,880 |
Profitability Analysis Table
| Profitability Item | Per day | Per Mnth | Per year |
|---|---|---|---|
| Revenue | 2,240 | 58,240 | 698,880 |
| Less: Production and Operating Costs | 1576 | 40,980 | 491,765 |
| Profit | 664 | 17,260 | 207,115 |
Capital Investment Requirements in US$
