MAKING RUBBER BANDS BUSINESS IN UGANDA

Introduction

This business idea is production and marketing of rubber bands. A rubber band is a short length of rubber and latex formed in the shape of a loop. They come in multiple colors. Such bands are typically used to hold multiple objects together. Rubber bands are elastic in nature and are extensively used for a variety of purposes in offices, shops and banks. Its establishment capital operational annual cost is modest at about US$ 45,501 per year, Potential revenue is estimated at US$70,200 per year and the production capacity is 80 bundles per day.

Production Process

Latex is prepared by using stabilizers and pigments through the normal dipping method. With the help of moulds, through dipping and vulcanizing, rubber tubes are prepared. These are used to prepare rubber bands in different sizes, colours and widths.

Capital Investment Requirements in US$

Capital investment item Units Qty @ Amount
Rubber band cutting machine No. 2 400 800
Wooden moulds No. 3 100 300
Ball mill No. 1 210 210
Packing materials(kg) No. 10 30 300
TC on machinery       1,610

Production and Operating Costs in US$

Cost Item Units @/ day Qty/ day Pdn cost/ day Pdn cost/ month Pdn cost/ year
Rubber pigments Sheets 38 3 114 2,964 35,568
Sub-total     3 114 2,964 35,568

General costs(overheads)

Utilities(water and power) 100 1,200
Labour 100 1,200
Rent 150 1,800
Miscellaneous costs 50 600
Distribution costs 260 3,120
Depreciation(Asset write off)Expenses) 33.5 402.5
Sub -total 693.5 8,323
Total Operating Costs 3,658 43,891
  1. Production costs assumed 312 days per year with a daily capacity of 250 bundles of rubber bands.
  2. Depreciation (fixed assets write off) assumes 4 years life of assets written off at 25% per year for all assets
  3. Direct costs include materials, supplies and other costs that directly go into production of the product.

Project Product Costs and Price Structure in US $

Item Qty/ day Qty/ yr @ Pdn cost /yr UPx TR
Rubber Bands 250 78,000 0.56 43,891 0.9 70,200

Profitability Analysis in US$

Profitability Item Per day Per month Per Year
Revenue 225 5,850 70,200
Less production and operating Costs 140.67 3,658 43,891
Profits 84.33 2,192 26,310

Market Analysis

Rubber bands have steady demand in the market. Financial institutions are the major users but trading community and others such as school, shop keeper etc use substantial amounts too.

Source of raw materials and equipments

Raw materials like rubber can be imported from Congo Free State, Ghana and Liberia while equipments can be sourced from China.

Government facilities and Incentives

The government is encouraging the establishments of industries at all levels to create employment. These are soft loans with various financial institutions coupled with advisory service and subsidies.

 

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