MANUFACTURING OF FISHING HOOKS IN UGANDA
Modern fishing hooks are used in fishing of large fish such as Nile perch, fishing in ponds and wells etc. The investment in this project requires a certain big amount of capital, but the payback period is short. An estimated fixed capital of US$53,023 and operating costs of US$ 123,094, when invested can generate estimated revenue of US$ 283,920, in the first year of operation. The net profit margin for this project is 57%. And the pay pack period is estimated at 1 year 8 month.
The production technology involves heating a hook material to exact temperature that is perfect for that particular style and then molded depending on the size, and design. The hot hook is then cooled in oil. After cooling, then sharpening of the finished hook is done using sharpening fabricating machines. Investment Scale, Capital Requirements and Equipment The investment scale depends on the set goals and objectives of the project.
| Capital Investment Item | Units | Qty | @ | Total |
| Supermax TCM-V56T | No | 1 | 37,904 | 37,904 |
| Fabrication tools | No | – | – | 3,000 |
| Furniture and Fittings | No | – | – | 3,600 |
| Delivery Van | No | 1 | 6,019 | 6,019 |
| Other Tools | No | – | – | 2,500 |
| Total | 53,023 |
Production and Operating Costs (a)Direct Materials, Supplies and Costs in
| Cost Item | Units | @ | Qty/ day | Pdn cost/ day | Pdn cost/ mth | Pdn cost/ yr |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Carbon Steel | Kgs | 15.5 | 7 | 108.5 | 2,821 | 33,852 |
| Bronze | Kgs | 6 | 9 | 54 | 1,404 | 16,848 |
| Aluminum | Kgs | 4.7 | 5 | 23.5 | 611 | 7,332 |
| Other materials | Kgs | 2 | 4 | 8 | 208 | 2.496 |
| Packaging materials | Pcs | 0.07 | 260 | 18.2 | 473 | 5,678 |
| Sub-total | 212.2 | 5,517 | 66,830 |
General Costs(Overheads)
| Labour costs | 1,021 | 12,252 |
|---|---|---|
| Utilities | 1,113 | 13,356 |
| Administration expenses | 300 | 3,600 |
| Selling & distribution | 125 | 1,500 |
| Rent | 750 | 9,000 |
| Fuel | 150 | 1,800 |
| Miscellaneous expenses | 125 | 1,500 |
| Depreciation | 1,105 | 13,256 |
| Sub-total | 4,689 | 56,264 |
| Total Operating Costs | 10,206 | 123,094 |
- Production costs assumed are for 312 days per year with daily capacity of producing 260 pieces of fishing hooks.
- 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.
- Total monthly days assumed are 26-days.
- The valuation currency used is United States Dollars
Market Analysis
The market for fishing hooks widely exists since the fishing industry in Uganda is a vibrant one contributing to about 10% of the GDP.
Project Product Costs and Price Structure
| Item | Qty/ day | Qty/yr | @ | Pdn cost/ yr | UPx | T/rev |
|---|---|---|---|---|---|---|
| Modern Fishing Hooks | 260 | 81,120 | 1.5 | 123,094 | 3.5 | 283,920 |
Profitability Analysis Table
| Profitability Item | Per Day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 910 | 23,660 | 283,920 |
| Less: Production & Operating Costs | 394 | 10,258 | 123,094 |
| Profit | 515 | 13,402 | 160,826 |
Government Facilities and Incentives
The government is trying to modernize the fishing industry and any investment targeted towards that direction can be funded using the “Bonna Bagagawale” program and the European Investment Fund