Post: MAKING NATURAL FIBRE YARN(ROPES) BUSINESS IN UGANDA

MAKING NATURAL FIBRE YARN(ROPES) BUSINESS IN UGANDA

Introduction

This business idea is for the production and marketing of ropes, Ropes prepared by fiber yarn are used for different purposes. The ropes are used in all the sectors of the economy but are most prominent in the agricultural sector. Right from livestock keeping to simple cultivation and then to commercial farming, ropes play a substantial role in the farming processes. Setting up a small plant to make ropes out of fiber yarn using local materials like jute is thus a good entrepreneurial idea. The business idea is premised on the production of 800 ropes per day, 20800 per month and 249600 per year. The revenue potential is estimated at 1,457,664 US $ per year.

 

Production Process

By using sewing machine parts, the yarn is spun, which is operated by sitting on a stool and by simply pedaling the table model sewing machine. The total Operating costs for this project is 227,370 US $ per year

Capital investment requirement in US$

Capital investment item Units Qty @ Amount
Stool No. 10 2 20
Sewing machine No. 1 1,200 1,200
Yarn twister No. 4 50 200
4-hole rope maker machine No. 4 15 60
Extruder(900-1000 per min) No. 1 8,000 8,000
TC on machinery 9,480

Production and operating costs

Cost Item Units @/ day Qty / day Pdn cost / day Pdn cost month Pdn cost/ year
yarn or, jute kg 25 25 700 18,200 218,400
Sub-total 25 700 18,200 218,400

General costs(overheads)

Utilities(water and power) 40 480
Labour 100 1200
Rent 100 1200
Miscellaneous costs 50 600
Distribution costs 260 3,120
Deprectiation(Asset write off)Expenses) 197.5 2,000
Sub -total 747.5 8600
Total Operating Costs 19,016 227,370
  1. Production costs assumed 312 days per year with adaily capacity of 800 ropes
  2. Depreciation (fixed asset write off ) assumes a 4 year life of assests written off at 25% per year for all assets
  3. Direct cost include materials ,supplies and other costs that directly go into production

Project product cost and Price structure

Item Qty/ day Qty/yr @ Pdn cost /yr UPx TR
Ropes 800 249,600 0.73 182,208 0.8 145766

Profitability analysis

Profitability Item Per day Per month Per Year
Revenue 467.2 12,147 145,766
Less production and operating Costs 728.75 18,948 227,370
Profit 19 484 5,808

 

Market analysis

Ropes are highly demanded in various sectors of the economy especially agricultural sector both urban and rural areas.

 

Government Facilities and Incentives Available

The government has set up incentives to those who are involved in manufacturing sector as a bid to encourage setting up small and medium enterprise to create employment.

 

Source of information on machines

Machines can be purchased from Saachi Uganda Ltd Luwum Street.

General costs (Overheads)

Salaries and Wages 280 3,360
Electricity 120 1,440
Water 250 3,000
Transportation Expenses 200 2,400
Consumable stores 85 1020
Selling and Distribution 90 1080
Administrative expenses 150 1,800
Repairs 55 660
Shelter 210 2,520
Depreciation (Asset write off) Expenses 22 261.6
Sub-total 1,462 17,542
Total Operating Costs 3,334 40,006
John Doe
John Doe

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Hi, jenny Loral
Hi, jenny Loral

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