Introduction
Candles are cylindrical structures made of wax and are used for illumination purposes. Their market structure is relatively high since they are used in hotels, households, churches and for decorative purposes. They are available in ordinary, fancy shapes and various sizes. The business idea aims at production of 14,612 wax candles per month which translates into 175,344 wax candles per year. The revenue potential is estimated at US$ 1,753 per month, translating into US$ 21,041 per year with a sales margin of 20%. The total investment capital for this project is US$17,586.The demand for this product.
Production Capacity
The production capacity for the project depends on the size of a mould used. For example, a medium mould can produce 70 wax candles per hour and a single 8-hour working shift per working day produces 562 candles. But in a period of one month the machine can produce 14,612 wax candles and each candle costs at a minimum US$0.075-0.15)
Technology and Process Description:
The Equipments used are simple and can be fabricated locally. It Includes: Aluminum mould, charcoal stove, knife, saucepan and firewood. The process involves wax and satiric acid which are melted in a mild steel mould. The wick is inserted in the candle – moulding machine and the molten mass is poured in the cylindrical mould and it is cooled by water and poured on the floor. When completely dry, the wick threads are trimmed and then packed.
Scale of Investment, Capital Investment requirements and equipment:
The scale of investment depends on the market available, but most especially the manufacturer produces on orders.
Capital Investment Requirements in US$
| Capital Investment Item | Units | Qty | @ | Amount |
|---|---|---|---|---|
| Candle moulds | No | 2 | 80 | 160 |
| Charcoal Stove | No | 2 | 55 | 110 |
| Weighing machine | No | 1 | 160 | 160 |
| Packing Machine | No | 1 | 150 | 150 |
| Total | 580 |
Production and Operating Costs Direct Materials, Supplies and Costs
| Cost Item | Units | @ | Qty/ day | Pdn cost/ day | Pdn cost/ mth | Pdn cost/ year |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Wax | Kgs | 3 | 7 | 21 | 546 | 6,552 |
| Satiric acid | Liters | 4 | 2 | 8 | 208 | 2,496 |
| Wick length | Rolls | 3 | 1 | 3 | 65 | 780 |
| Sub-total | 32 | 819 | 9,828 |
General Costs (Overheads)
| Rent | 60 | 720 |
|---|---|---|
| Labour350 | 4,200 | |
| Utilities (Charcoal) | 25 | 300 |
| Other costs (Transport costs, & others) | 200 | 2,400 |
| Deprecation (Asset write off) Exp | 11.46 | 137.52 |
| Sub-total | 646.46 | 7,758 |
| Total Operating Cost | 1,465 | 17,586 |
- Production costs are assumed for 312 days per year with a daily capacity of 562 wax candles.
- 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 into production of the product.
- A production month is assumed to have 26 days.
Project Product Costs and Price Structure
| Item | Qty/ day | Qty/Yr | Unit cost | Pdn/Yr | Unit Price | T/rev |
|---|---|---|---|---|---|---|
| Wax candles | 562 | 175,344 | 0.08 | 17,550 | 0.12 | 21,041 |
Profitability Analysis in US$
| Profitability Item | Per day | Per Month | Per Yr |
|---|---|---|---|
| Revenue | 67.4 | 1,753 | 21,041 |
| Less: Production and Operating Costs | 56.4 | 1,466 | 17,586 |
| Profit | 11 | 288 | 3,455 |
Market Analysis
The market for candles is available throughout the year both in rural and as urban areas.
Government Facilities and Incentives Available:
The government has put up youths training projects to improve on their skills in candle making and there are Non Government Organizations based in Kampala and Pader districts which support people with capital for making wax candles.
1 Comments
Can anyone directly tell me what I need to start in summary because I desperately want to start this business