Introduction
This business idea is for manufacturing and marketing of exercise books. Exercise books are stationary items required for schools, offices and other purposes. Their market structure and demand is high since they are used by all school pupils from primary to senior four. They are sold in stationary shops, markets, whole sale shops, retail shops and even on the streets.
Production Capacity
Production capacity depends on the quantity of raw materials used in production process. The business idea is based on three hundred working days, single shift of 8hr.per day. The smallest viable unit can produce 2,000 Exercise books of 96 pages per day, translating into 624,000 Exercise books of 96 pages per annum at a sales Price of US$0.25 each. The revenue potential is estimated at US$ 156,000 per month, translating into US$ 1,872,000 per annum and total investment requirement is US$ 71,390 for the first year of project operation.
Technology and process Description
Manufacturing of exercise books involves use of Double Side Disc Ruling Machine size 915 mm Hand Feed with motor and starter, Paper and Board Cutting Machine hand operated, and power driven Cutting width 990 mm with mortar and starter, Wire Stitching Machine power operated with motor and starter capacity 25mm, Press 460*610mm, Offset Printing Machine complete with accessories & electrical. The production process involves ruling of lines on the paper in red & blue ink, folding of paper, cutting of paper, cutting of outer cover, printing of outer cover, folding of the outer cover & stitching of cover and pages, Inspection and packing.
Scale of Investment, Capital Investment Requirements
The scale of Investment is relatively big as it involves buying many different machines and equipment.
Capital Investment Requirements in US$
| Capital Investment Item | Units | Qty | @ | Amount |
|---|---|---|---|---|
| Double side disc ruling machine | No | 1 | 12,500 | 12,500 |
| Paper and board cutting machine | No | 1 | 9,800 | 9,800 |
| Wire stitching machine | No | 1 | 3,490 | 3,490 |
| Offset printing Machine with all Electronic accessories | No | 1 | 31,000 | 31,000 |
| Working tools | Set | 2 | 1,700 | 3,400 |
| Delivery Van | No | 1 | 11,200 | 11,200 |
| Total | Â | Â | Â | 71,390 |
Production and Operating Costs
Direct Materials, Supplies and Costs in US$
| Cost Item | Units | @ | Qty/ day | cost/ day | cost/ mth | cost/ year |
|---|---|---|---|---|---|---|
| Direct Costs | Â | Â | Â | Â | Â | Â |
| Reams of Paper (size A3) | No | 5 | 16 | 80 | 2080 | 24960 |
| Craft Paper in different colours (for covers) | No | 0.85 | 400 | 340 | 8840 | 106080 |
| Printing Ink | Liter | 28 | 1 | 28 | 728 | 8736 |
| Stitching Wires | Packet | 0.5 | 2 | 1 | 26 | 312 |
| Gum | Liter | 0.81 | 5 | 4.05 | 105.3 | 1263.6 |
| Sub-total | Â | Â | 424 | 453.05 | 11,779 | 141,352 |
General Costs(Overheads)
| Rent | 1,000 | 12,000 |
|---|---|---|
| Labour | 625 | 7,500 |
| Utilities(power) | 120 | 1,440 |
|---|---|---|
| Preliminary Costs | 250 | 3,000 |
| Miscellaneous Costs | 150 | 1,800 |
| Depreciation(Asset write off)Exp | 595 | 7,139 |
| Sub-total | 2,740 | 32,879 |
| Total Operating Costs | 14,519 | 174,231 |
- Production costs assumed 312 days per year with a daily capacity of 2,000 exercise books of 96 pages.
- Depreciation (fixed asset write off) assumes 4 years life of assets written off at _10% per year for all assets.
- Direct Costs include materials, supplies and other costs that directly go into production of the product.
- A production month is assumed to have 26 days.
Project Product and Price Structure in US$
| Item | Qty/ day | Qty/Yr | @ | Pdn cost/Yr | UPx | T/rev |
|---|---|---|---|---|---|---|
| Exercise books of 96 pages | 2,000 | 624,000 | 0.3 | 174,231 | 3 | 1,872,000 |
Project Analysis in US$
| Profitability Item | Per day | Per Month | Per Yr |
|---|---|---|---|
| Revenue | 6000 | 156,000 | 1,872,000 |
| Less: Production and Operating Costs | 558 | 14,519 | 174,231 |
| Profit | 5442 | 141,481 | 1,697,769 |
Market Analysis
There is ready market throughout the country as more and more children go to school. The UPE programme has boosted the numbers.
Source of Supply of Machinery, Equipments and Raw Materials
The supply of raw materials, Machinery and Equipments is procured locally although it could also be imported from countries like Japan, South Africa and Chain.
Government Facilities and Incentives Available
There are low tax rates and sometimes no taxes at all on most of the industrial equipments and raw materials.
