Introduction
A bolt is a cylindrical piece of metal that fastens objects together while nut is a hexagonal or square piece with a threaded hole at the centre. Nuts and bolts have a high market demand in the industrial sector.The business idea aims at production of 2,600 kilograms of bolts and nuts per month. The revenue potential is estimated at US$ 241,800 per year with a sales margin of 10%. The total capital investment for the project is US$ 19,113.
Production Capacity
The envisaged plant will have a capacity of 100 kilograms of bolts and nuts per day when operating a single shift of eight hours a day for 300 days within a year.
Production process
The head of the bolt is formed after feeding steel rod into a double stroke cold header machine. Later, using a bolt head trimmer, the bolt is machined to square or hexagonal shape and the threads are cut on a thread-rolling machine. For nuts, steel rods are fed into an automatic nut forking machine and the nuts in a semi-finished form are then fed into a tapping machine for internal threading.
Scale of investment
Capital requirements
| Capital Investment Item | Units | Qty | @ | Amount |
|---|---|---|---|---|
| Grinder | No | 1 | 750 | 750 |
| Sealing machine | No | 5 | 31 | 155 |
| Weighing machine | No | 2 | 80 | 160 |
| Filling machine | No | 2 | 2000 | 2000 |
| Delivery Van | No | 1 | 7,000 | 7,000 |
| Trays | No | 25 | 3 | 75 |
| Fermenting materials | No | 10 | 3 | 30 |
| Dark shade | No | 1 | 1,500 | 1,500 |
| Furniture & Fixture | set | 5 | 400 | 2,000 |
| Other tools | No | – | – | 840 |
- Production is assumed for 312 days per year.
- Depreciation assumes 4 year life of assets written off at 25% per year for all
assets.
- A production Month is assumed to have 26 work days.
| Cost Item | Units | @/ day | Qty/ day | Pdn Cost/ day | Pdn Cost/ month | Pdn Cost/ Year1 |
|---|---|---|---|---|---|---|
| Direct costs3: | ||||||
| MS Rounds | Kgs | 8 | 100 | 400 | 10,400 | 124,800 |
| Pickling Chemicals | Kgs | 7 | 20 | 140 | 3,640 | 43,680 |
| Packaging Materials | Pieces | 0.2 | 50 | 10 | 260 | 3,120 |
| Subtotal | 14,300 | 171,600 |
General costs (Overheads)
| Labour | 400 | 4,800 |
|---|---|---|
| Utilities | 200 | 2,400 |
| Selling and Distribution | 100 | 1,200 |
| Administrative expenses | 150 | 1,800 |
| Shelter | 400 | 4,800 |
| Depreciation (Asset write off) Expenses | 398 | 4,778 |
| Sub-total | 1,648 | 19,778 |
| Total Operating Costs | 15,948 | 191,378 |
Project product Costs and Price Structure $
| Item | Qty /day | Qty/yr | @ | Pdn/yr | UPx | T/ revenue |
|---|---|---|---|---|---|---|
| Bolts | 50 | 15,600 | 6 | 95,689 | 8 | 117,000 |
| Nuts | 50 | 15,600 | 6 | 95,689 | 8 | 124,800 |
| Total | 100 | 31,200 | 191,378 | 241,800 |
Profitability Analysis Table
| Profitability Item | Per day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 775 | 20,150 | 241,800 |
| Less: Production and Operating Costs | 613 | 15,948 | 191,378 |
| Profit | 162 | 4,202 | 50,422 |
Government Facilities and Incentives
The Government has liberalized the economy and encouraged people to invest in industrial set up through incentives like low tax rates and deferred tax payments.
Sources of Supply of Equipment
All equipment can be got from the local market at lower costs.
