Introduction
The demand for Adhesives is very high in the Paper products industry, Schools, Offices and Craft projects. This profile envisages the establishment of a plant that will manufacture Adhesives from Natural Rubber based on the capacity of 500 liters per day. An adhesive, or glue, is a mixture in a liquid or semi-liquid state that adheres or bonds items together.
The venture is estimated o yield an annual revenue of US$780,000, with net profit margin 19% and payback period of 2 months.
Production Process:
Adhesives cure (harden) by evaporating a solvent (Most adhesives cure at room temperature) or by exposing them to an elevated temperature. The rubber compositions are packed together by molding them into thin coatings between a release film and a porous substrate to allow curing. The resultant product has highly desirable bonding and release.
Project Costs
Capital Investment Requirements in US$
| Capital Investment Item | Units | Qty | @$ | Amount $ |
|---|---|---|---|---|
| Delivery Van | No. | 1 | 9,000 | 9,000 |
| Mixer | No. | 1 | 540 | 540 |
| Boiler | No. | 1 | 520 | 520 |
| Rollers | No. | 2 | 238 | 476 |
| Total Amount | 10,536 |
Operating Costs in US$
| Item | Units | @ $ | Qty/ day | Prod Cost/ day | Prod. Cost/ month | Prod. Cost/ Year[1]$ |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Rubber | Kgs | 3.8 | 500 | 1900 | 49400 | 592800 |
| Sub total | 1,900 | 49,400 | 592,800 | |||
General Costs (Over heads) Project Product Costs & Price Structure
| Rent | 500 | 6,000 |
|---|---|---|
| Packaging Material | 300 | 3,600 |
| Labour | 800 | 9,600 |
| Utilities (Power & Water) | 600 | 7,200 |
| Repair & Servicing | 500 | 6,000 |
| Fuel | 500 | 6,000 |
| Depreciation(Asset write off) Expenses | 220 | 2,634 |
| Sub – total | 3,420 | 41,034 |
| Total Operating Costs | 52,820 | 633,834 |
| Item | Qty/ day | Qty/yr | @$ | Pdn Cost/yr | UPx | T/rev |
|---|---|---|---|---|---|---|
| Adhesive | 500 | 156,000 | 4.1 | 633,834 | 5 | 780,000 |
Profitability Analysis in US$
| Profitability Item | Per day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 2500 | 65,000 | 780,000 |
| Less: Production & Operating Costs | 2,032 | 52,820 | 633,834 |
| Profit | 468 | 12,181 | 146,166 |
- Sources of Supply of Raw Materials
- Raw materials are readily available in Uganda.
- Government Facilities and Incentives Available:
- The Government is willing to support industrialization through; Tax exemptions, Basic infrastructure, Grants, long term Loans and a liberalized market.
