MAKING AIR FRESHENER BUSINESS IN UGANDA

Introduction

Air fresheners are consumer products that mitigate unpleasant odors within indoor spaces. They can be in form of candles, sprays and gel and can also be used as a deodorant. They are an item that both household and public offices can’t seem to do without. The freshener is also commonly used in both public and home toilets. The production capacity is estimated at 200 pieces per day, monthly production of 5,200 pieces and annual production of 62,400 which yields the TR US$162,240 per year, leading to net profit margin of 27% and payback period of 8 months.

Production Process

Air freshener cake is made out of Para dichlorobenzene, colour and perfume. These ingredients are properly mixed and molded by using fly press. The resulting gel of freshener is packed to avoid the absorption of moisture, which weakens the freshener.

Capital Investment Requirements ($)

Capital investment item Unit Qty @ Amount
Fly press wheel type single body No. 1 6,000 6,000
Drum mixer No. 1 630 630
Plastic bucket with lid weighing balance No. 3 50 150
Van No. 1 6,000 6,000
Packing materials No. 1,500 0.4 600
TC of machinery 13,380

Market Analysis

With increasing population and the need for improved living conditions, the demand for air freshener is also gradually increasing. The growing hygiene consciousness has attracted attention to this product. Hence, there is ready market in urban areas. Areas of target are: supermarket chains, retail shops, restaurants, hotels and tourist centers.

Sources of Raw Materials and Equipments Raw materials are readily available in Uganda markets in the chemicals industry and equipments are available in the market.

Government Facilities and Incentives

The government is willing to support industrialists in Uganda through capital, tax exemptions, grants and liberalized markets and trade policies. There is a lot of free data and free consultation in government ministries and parastatals like Private Sector Foundation Uganda.

Production and Operating costs (US$)

Cost Item Units @/ day Qty/ day Pdn cost/ day Pdn cost/ month Pdn cost/ year
Para dichlorobenzene Kg 0.8 100 80 2,080 24,960
Perfume colour kg 25 10 250 6,500 78,000
Sub-total 3 30 8,580 102,960

General costs (overheads)

Utilities(water and power) 125 1500
Labour 75 900
Rent 125 1500
Miscellaneous costs 50 600
Distribution costs 260 3120
Depreciation (Asset write off)Expenses) 278.75 3,345
Sub -total 913.75 10965
Total Operating Costs 9,494 113,925
  1. Production costs assumed are for 312 days per year with a daily capacity of 200 tins of air refreshner.
  2. Depreciation (fixed assets 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.

Project product Costs and Price Structure ($)

Item Qty/ day Qty/ yr @ Pdn cost /yr UPx TR
Air freshener 200 62,400 1.83 113,925 2.6 162,240

Profitability Analysis ($)

Profitability Item Per day Per month Per Year
Revenue 520 13,520 162,240
Less production and operating Costs 365.14423 9,494 113,925
Profit 154.85577 4,026 48,315

 

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