Introduction
This profile envisages the establishment of a plant that will manufacture office glue based on the capacity of 500 liters per day. The simplest glue is that made from a paste of flour and water.
Production Process
- Put plain white flour and water into a bowl depending on how much glue you need.
- Mix the flour and water together until a smooth paste is achieved. It should not be too thick or too drippy
- Use it soon after creating it. It can be used to stick papertogether.
- Scale of Investment, Capital Investment Requirements
The total capital investment cost to start this project is estimated at USD 12,945 generating annual revenue of USD 234,000 at a net profit of 28% with a payback period of 5 months.
Market Analysis
The demand for office glue is very high in the paper products industry, schools, offices, and craft projects.
Capital Investment Requirements in US$
| Capital Investment Item | units | Qty | @ $ | amount $ |
|---|---|---|---|---|
| Delivery van | No. | 1 | 11200 | 11200 |
| Mixer | No. | 1 | 580 | 580 |
| Gas cooker | No. | 1 | 840 | 840 |
| Boiler | No. | 1 | 110 | 110 |
| Bowls | No. | 2 | 107.6 | 215.2 |
| Total Amount | 12945.2 |
Operating Costs in US$
| Item | Units | @ | Qty/ day | Prod Cost/ day | Prod. Cost/ month | Prod. Cost/ Year |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Manioc Powder | Kgs | 0.5 | 250 | 125 | 3250 | 39000 |
| Vinegar | Litres | 2.5 | 100 | 250 | 6500 | 78000 |
| Water | Litres | 0.05 | 200 | 10 | 260 | 3120 |
| Sub total | 385 | 10,010 | 120,120 | |||
General Costs (Over heads)Project Product Costs & Price Structure in US$
| Rent | 400 | 4,800 |
|---|---|---|
| Packaging Material | 500 | 6,000 |
| Labour | 800 | 9600 |
| Utilities (Power & Gas) | 1,000 | 12,000 |
| Repair & Servicing | 500 | 6,000 |
| Fuel | 500 | 6,000 |
| Depreciation (Asset write off) Expenses | 269.69 | 3,236 |
| Sub – total | 3,970 | 47,636 |
| Total Operating Costs | 13,980 | 167,756 |
| Item | Qty/day | Qty/yr | @$ | Pdn Cost/ yr$ | UPx | T/rev |
|---|---|---|---|---|---|---|
| Glue | 500 | 156,000 | 1.1 | 167,756 | 1.5 | 234,000 |
Profitability Analysis Table
| Profitability Item | Per day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 750 | 19,500 | 234,000 |
| Less: Production & Operating Costs | 538 | 13,980 | 167,756 |
| Profit | 212 | 5,520 | 66,244 |
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 liberalized market.
Risk certainty
The business risk involved may include operational risks; marketing risks among others thus need to manage properly the marketing mix tools of Price, product among others.
