Introduction
This business idea is for making card board cartons from recycled cardboard. Cardboard boxes (cartons) are industrially prefabricated boxes, primarily used for packaging goods and materials. This box uses regular cardboard that usually gets thrown away. It makes a sturdy box for storing small things; you can basically make it any size you like. They have the inherent advantages of being light in weight, easy to fabricate and store. Cardboard boxes are used for packing TVs, Fridges, and bulky things like soap, toothpastes and garments. The market potential covers the entire packaging industry. The business idea aims at production of 62,400 boxes annually. The revenue potential is estimated at $ 90,355 per year with a sales margin of 28%. The total capital investment for the project is $ 9,614.
Plant Capacity
The envisaged project has a minimum plant capacity of 200 boxes per day on the basis of 8-hour single working daily shifts. Output can then be increased with time depending on demand as operations gain experience.
Capital Investments Requirements
| Capital Item | Units | Qty | @ | Amount |
|---|---|---|---|---|
| Box Cutter | No | 1 | 21 | 21 |
| Carton Stapler | No | 1 | 243 | 243 |
| Stitching machine | No | 1 | 350 | 350 |
| Delivery Van | No | 1 | 9,000 | 9000 |
| TOTAL | 9,614 |
Production Process
The process description involves, deciding the size and dimensions of your box,(drawing and cutting), gluing the pieces together, sanding the pieces to see if they are even, let the pieces dry, join them all and the product is ready for use. Generally, boxes are prepared to customer specifications and the boxes/cartons can be prepared indifferent sizes, designs and colors
Production and Operating Cost
| Cost Item | Units | @ day | Qty/ day | Pdn Cost/ day | Pdn Cost/ mth | Pdn Cost/ Year1 |
|---|---|---|---|---|---|---|
| Direct costs3 | ||||||
| Card Boards | No | 0.58 | 200 | 116 | 3,016 | 36,192 |
| Staples | Boxes | 0.42 | 5 | 2.1 | 55 | 655 |
| Fixing Materials | Boxes | 0.23 | 10 | 2.3 | 60 | 718 |
| Ruler and Pens | No | 0.2 | 10 | 2 | 52 | 624 |
| Sub-total | 3,182 | 38,189 | ||||
General costs (Overheads)
| Labour | 400 | 4,800 |
|---|---|---|
| Utilities (Electricity) | 200 | 2,400 |
| Selling and Distribution | 100 | 1,200 |
| Administrative expenses | 100 | 1,200 |
| Repairs | 75 | 900 |
| Shelter | 150 | 1,800 |
| Depreciation (Asset write off) Expenses | 200 | 2404 |
| Plant and Machinery | 197 | 2,364 |
| Sub-total | 1,422 | 17,068 |
| Total Operating Costs | 4,605 | 55,257 |
- 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 days.
Project product Costs and Price Structure
| Item | Qty /day | Qty/yr | Unit cost | Pdn cost/ yr | UPx | T/rev |
|---|---|---|---|---|---|---|
| Small boxes | 60 | 18,720 | 0.25 | 4,680 | 0.49 | 9,173 |
| Medium Boxes | 60 | 18,720 | 0.75 | 14,040 | 1.27 | 23,774 |
| Large Boxes | 80 | 24,960 | 1.5 | 37,440 | 2.3 | 57,408 |
| Total | 200 | 62,400 | 56,160 | 90,355 |
Profitability Analysis Table
| Profitability Item | Per day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 289.6 | 7,530 | 90,355 |
| Less: Production and Operating Costs | 177.10 | 4,605 | 55,257 |
| Profit | 112.50 | 2,925 | 35,098 |
Sources of supply of equipments
Equipments can be got from India, or fabricated locally at Katwe (Uganda) at modest Prices.
