MAKING RUBBER ERASERS BUSINESS IN UGANDA
Introduction
An eraser or rubber is an article of stationery that is used for removing pencil and sometimes pen writings. Erasers have a rubbery consistency and are often white or pink, although modern materials allow them to be made in any color. Many pencils are equipped with an eraser on one end. Typical erasers are made from synthetic rubber, but more expensive or specialized erasers can also contain vinyl, plastic, or gum-like materials. Other cheaper erasers can be made out of synthetic soy-based gum.
Used by school and college going students, erasers are used in addition to the common pencil erasers and some special type of erasers such as typewriter print erasers, ink erasers, etc., which are used in offices and other establishments. The project cost is US$ 3,060 producing 624,000 units annually giving estimated revenue of US $ 174,720 per year generating an annual profit of US$ 9,941.
Production process
The process essentially consists of the following steps:
i) Mixing of various ingredients of the rubber compound namely pale crepe, sulphur, white factice, whiting, zinc oxide and other chemicals and colours.
ii) Moulding the same, in the form of desired shapes and sizes. The profiled plant has a minimum capacity of 2,000 rubber erasers per day.
Capital Investment Requirement in US $
| Item | Units | Qty | Price | Total |
|---|---|---|---|---|
| Mixing mill | No | 1 | 560 | 560 |
| Hydraulic | No | 1 | 160 | 160 |
| Grinder machine | No | 1 | 840 | 840 |
| other tools & equipment | No | 1 | 1,500 | 1500 |
| TCs for equipment | 3,060 |
- Production costs assumed are for 312 days per year with daily capacity of 2,000 rubbers.
- Depreciation (fixed asset write off) assumes 4 year life of assets written off at 25% per year for all assets.
- Direct costs include: e materials, supplies and all other costs incurred to produce the product.
- A production month is 26 days
- Currency used is US Dollars.
Production and Operating costs in US$
(a) Direct material, supplies and costs
| Cost Item | Units | @ | Qty/ day | Pdn cost/day | Pdn cost/ mth | Pdn cost/yr |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Rubber sheets | kgs | 30 | 16 | 481 | 12503.4 | 150,041 |
| Sulphur | kgs | 16 | 0.32 | 5.12 | 133.12 | 1,597 |
| other chemicals | ltrs | 7.5 | 0.16 | 1.2 | 31.2 | 374.4 |
| Packing material | pkts | 0.6 | 9.62 | 5.8 | 150.072 | 1,801 |
| Sub-total | 492 | 12,817 | 153,814 | |||
General Costs (Overheads) Project product costs and Price structure
| Labour | 250 | 3,000 |
|---|---|---|
| Selling & distribution | 100 | 1,200 |
| Utilities (Water, power) | 300 | 3,600 |
| Administration | 50 | 600 |
| Rent | 100 | 1,200 |
| Miscellaneous expenses | 50 | 600 |
| Depreciation | 63.75 | 765 |
|---|---|---|
| Sub-total | 913.8 | 10,965 |
| Total Operating Costs | 13,732 | 164,779 |
| Item | Qty/ day | Qty/yr | Unit cost | Pdn cost/ yr | UPx | TR |
|---|---|---|---|---|---|---|
| Dehydrated fruits | 2,000 | 624,000 | 0.3 | 164,779 | 0.3 | 174,720 |
Profitability Analysis in US$
| Profitability Item | Per day | Per month | Per year |
|---|---|---|---|
| Revenue | 560 | 14,560 | 174,720 |
| Less: Production and operating costs | 528 | 13,732 | 164,779 |
| Profit | 32 | 828 | 9,941 |
Market
The demand for rubber erasers is closely linked with the growth of education and industrial establishments. With the increasing number of schools, colleges, educational institutions and offices, the market for erasers is poised for growth. Hence, there exists scope for new units to tap the market.
Source of Equipment and Raw Materials
Can be locally fabricated in Uganda by Tonet Ltd kanyanya Gayaza Rd or imported.
Government Incentive
Startup costs 25% granted on actual cost over the first four years in four equal installments. Sources of Supply of Raw
Materials
All raw materials and equipments are imported.
Market Analysis
The demand for surgical gloves is big in hospitals, pharmaceuticals and research centers.