Scouring powder is a widely used household product. It is used in cleaning of metallic and ceramic products such as: tiles, toilet bawls, bathtubs & rinsing sinks etc.
Production Capacity Technology & Process
The production process involves the mixing of baking soda, salt, and borax powder in the right quantities and then the mixture is stored in an air tight container. Production capacity of 99,840kgms of scouring powder in the first year of operation and a total annual revenue of US$53,914can be realized when a total operating cost of US$32,319 is injected into the project. The net profit margin is 40% and the pay back is 1 year and 3 month.
- Investment Scale, Capital Requirements and Equipment
- The investment scale largely depends on the production capacity and the ease with which raw materials are acquired.
- The major equipment required includes the following items as tabled bellow.
Capital Investment Requirements
|Capital investment item||units||Qty||@||Total($)|
|Air tight Container||No||1||500||500|
|Delivery Van(0.5 -tone)||No||1||4,000||4,000|
|Furniture & Fixture||No||–||–||1,200|
Production and Operating Costs (a)Direct materials, Supplies and Costs
|Cost Item||Units||@||Qty/ day||Pdn cost/ day||Pdn cost/ mth||Pdn cost/yr|
|Selling & distribution||225||2,700|
|Cleaning & Toiletries||154||1,850|
|Total operating Costs||2,693||32,319|
- Production costs assumed are for 312 days per year with daily capacity of producing 320kgs of scouring powder.
- Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
- Direct costs include materials, supplies and other costs that directly go intoproduction of the product.
- Total monthly days assumed are 26-days.
- The valuation currency used is United States Dollars
The market exists widely in urban areas and the product can easily be supplied to supermarkets, wholesale and retail shops. Big producers such as: Mukwano Industries Ltd and Unilever Uganda Ltd may affect production costs and Price of new entrants as they produce at relatively low costs since they enjoy the economies of large scale production.
Project Product Costs and Price Structure
|Item||Qty/day||Qty/yr||@||Pdn cost/ yr||UPx||T/rev|
Profitability Analysis Table
|Profitability Item||Per Day||Per Month||Per Year|
|Less: Production& Operating Costs||104||2,693||32,319|
Government Facilities & Incentives
Poverty eradication programs such as “Bonna Bagagawale”are aimed at financing such projects. There is also the European investment fund.
Capital Investment Requirements in US$ General Costs (Overheads)