Introduction
The proposed plant is for manufacture of refills for the ball pens. The ball pen has almost replaced the conventional fountain pens, with the use-and-throw refills, creating a niche of its own. Thanks to the ease and convenience of the ball pens, they have turned into the most preferred medium of writing, which is not only cost –effective, but also serves the variegated needs of the people who write. These come in different sizes and in various colours made from a very small diameter HDPE tubes filled with a special type of ink. The business idea aims at production of 500 units per day thus 156,000 units per annum. The revenue potential is estimated at US $ 31,200 annually and the startup capital is US $2,660 thus total capital investment of the project is US$ 23,887. The payback period is approximately 1 year with a net profit margin of 32%.
Production Process
The HDPE granules are fed into the extruder through hopper to produce extruded plastic tubes, which are cut to fit into various sizes of the ball pens by a cutter unit and the metal tips are fitted, ink filled to make the refills ready for use. They are then packed in a plastic film by a machine and dispatched to the market for bulk sell.
Scale of Investment in US$
Capital Investment Requirements
| Capital Item | Units | Qty | @ | Amount |
|---|---|---|---|---|
| Ink filling system | No | 1 | 600 | 600 |
| Air compressor | No | 1 | 550 | 550 |
| Water pump | No | 1 | 350 | 350 |
| Cutter unit | No | 2 | 80 | 160 |
| Extrusion system | No | 1 | 1,000 | 1,000 |
| Total | 2,660 |
2. Production and Operating Costs in US$
| Cost Item | Units | @ | Qty/ day | Pdn Cost/day | Pdn Cost/ month | Pdn Cost/ Year |
|---|---|---|---|---|---|---|
| Direct costs3: | ||||||
| HDPE granules | Kgs | 0.5 | 10 | 5 | 130 | 1,560 |
| Tips | No | 0.005 | 550 | 2.75 | 71.5 | 858 |
| Packing materials | No | 0.1 | 10 | 1 | 12 | 144 |
| Subtotal | 213.5 | 2,562 | ||||
General costs (Overheads)
| Labour | 500 | 6,000 |
|---|---|---|
| Utilities | 300 | 3,600 |
| Selling and Distribution | 200 | 2,400 |
| Administrative expenses | 200 | 2,400 |
| Shelter | 300 | 3,600 |
| Depreciation | 55 | 665 |
|---|---|---|
| Sub-total | 1,555 | 18,665 |
| Total Operating Costs | 1,769 | 21,227 |
- Production is assumed for 312 days per year.
- Depreciation assumes 4 year life of assets written off at 25% per year for all assets.
- A production Month is assumed to have 26 days.
Project Product Costs and Price Structure in US$
| Item | Qty /day | Qty/yr | Unit Cost | Pdn/yr | Upx | T/rev |
|---|---|---|---|---|---|---|
| Refills | 500 | 156,000 | 0.14 | 21,227 | 0.2 | 31,200 |
| TOTAL | 156,000 | 21,227 | 31,200 |
Profitability Analysis Table in US$
| Profitability Item | Per day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 100 | 2,600 | 31,200 |
| Less: Production and Operating Costs | 68 | 1,769 | 21,227 |
| Profit | 32 | 831 | 9,973 |
Plant Capacity
The plant would have a minimum capacity of 500 refills per day.
Market Analysis
Plastic ball pens are now gradually becoming a part of common possession, which turns popular by the year. Refills, an integral part of ball pens, also have good demand both in domestic as well as export market. Supply to educational institutions, public and private offices would help capture the market.
