STARTING A MANUFACTURING LEATHER BELTS BUSINESS IN UGANDA
Introduction
This business idea is for production and marketing of leather belts. Real leather belts are one accessory of apparel made of cowhides or other animal skin. It is a flexible band worn around the waist. A belt supports trousers or other articles of apparel and it serves for style and decoration. Their market structure is high since they are of good quality and they are used by almost all people with trousers and others.
The business idea is premised on three hundred working days single shift of 8 hours per day the unit is designed to have production of 1,000 belts per day which translates into 312,000 leather belts per year. The revenue potential is estimated at US$197,600 per month translation into US$2,371,200 per year with a sales margin of 27%with total capital investment requirement of US$67,660 and operational cost of 1,868,893 for the first year of project Operation.
Production Capacity
The production capacity depends on the materials and equipments used in the production process.
Technology and process description
This project involves use of strap cutting machine, stitching machine, Riveting, punching machine and working tools. The production process involves strap cutting, stitching, riveting, coloring/dying, pressing designs, fixing fasteners/buckles and punching.
Scale of Investment, Capital Investment Requirement and Equipment
The project is on a small scale investment and capital investment depends on the intended number of outputs a manufacturer is targeting.
Capital Investment Requirements in US$
| Capital Investment Item | Units | Qty | @ | Amount |
|---|---|---|---|---|
| Strap cutting machine | No | 2 | 6,000 | 12,000 |
| Stitching machine | No | 2 | 8,100 | 16,200 |
| Riveting machine | No | 2 | 7,500 | 15,000 |
| Punching machine | No | 2 | 300 | 600 |
| Working tools | Set | 4 | 390 | 1,560 |
| Delivery van | No | 1 | 9,000 | 9,000 |
| Preliminary costs | No | 1 | 300 | 300 |
| Construction cost (Building) | No | 1 | 10,000 | 10,000 |
| Land | Piece | 1 | 3,000 | 3,000 |
| Total | 67,660 |
Production and Operation Costs
Direct Materials, Supplies and Costs in US$ General Costs(Overheads)
| Cost Item | Units | @ | Qty/ day | Pdn cost/ day | Pdn cost/ month | Pdn cost/ year |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Leather | roll | 10 | 200 | 2,000 | 52,000 | 624,000 |
| Rivets | No | 1.5 | 1,000 | 1,500 | 39,000 | 468,000 |
| Buckles | No | 2 | 1,000 | 2,000 | 52,000 | 624,000 |
| Dye | kg | 2.3 | 50 | 115 | 2,990 | 35,880 |
| Packaging materials | roll | 11.2 | 20 | 224 | 5,824 | 69,888 |
|---|---|---|---|---|---|---|
| Sub-total | 2,270 | 5,839 | 151,814 | 1,821,768 |
| Utilities (Power & water) | 250 | 3,000 |
|---|---|---|
| Labour | 2,000 | 24,000 |
| Miscellaneous Costs | 500 | 6,000 |
| Depreciation(Asset write off) Exp | 1,177 | 14,125 |
| Sub-total | 3,927 | 47,125 |
| Total Operating Costs | 155,741 | 1,868,893 |
- Production costs assumed are for 312 days per year with a daily capacity of 1,000 Leather belts.
- 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 work days.
Project Product Cost and Price Structure in
| Item | Qty/ day | Qty/Yr | @ | Pdn cost/Yr | UPx | T/rev |
| Leather Belts | 1,000 | 312,000 | 6.0 | 1,868,893 | 7.6 | 2,371,200 |
Profitability Analysis in US$
| Profitability Item | Per day | Per Month | Per Yr |
|---|---|---|---|
| Revenue | 7,600 | 197,600 | 2,371,200 |
| Less: Production and Operating Costs | 5,990 | 155,741 | 1,868,893 |
| Profit | 1,610 | 41,859 | 502,307 |
Market Analysis
- It is projected that leather belts have a wider market both internally and externally because of their good quality.
- Source of supply of Machinery, Equipment and Raw Materials
- Supply of raw materials is done locally and equipments can be got from hardware shops.
1 Comments
I have over 30 years of experience in leather belt manufacturing.
I can help you with the purchase of the machinery that you will need.
I’ve been going over your costs and can see that you really need assistance.
If interested please contact me and let me know what your time frame is.
Best Regards,
Jeff