Introduction
This business idea is for manufacturing and marketing of plastic containers. Plastic containers are light-weight, flexible and chemically resistant containers. They can be made in attractive colors which are most popular and are used for household purposes. In most parts of Uganda especially the rural areas, people use plastic containers because they are very durable. A project to manufacture plastic containers would be very viable since there is good market for the containers in both rural and urban areas. Supply to super markets, retail and whole sellers would help to capture part of the market.
The business idea is premised on manufacturing 9,308 containers in different sizes per month, which translates into 111,696 containers per annum. But output can be increased as demand for the products gets established on the market. The revenue potential is estimated at US$14,893 per month translating into US$178,714 per annum with a sales margin of 20% and total investment requirement is US$15,785 for the first year of project operation. The net profit margin of this idea is 11% with a payback period of at least 8 months.
Production Process
The injection molding technique is simple. This is where the molten plastic is conveyed through a cool mould die of desired size and shape. The plastic takes the shape of the mould cavity and is finally removed and polished mechanically.
Capital Investment Requirements in US$
| Capital Investment Item | Units | Qty | @ | Amount |
| Index molding machine | No | 1 | 4400 | 4400 |
| Oven | No | 1 | 550 | 550 |
| Scrap grinder | No | 1 | 2200 | 2200 |
| Multi Cavity mould | No | 1 | 1375 | 1375 |
| Hand tools | Set | 1 | 550 | 550 |
| Weighing machine | No | 1 | 110 | 110 |
| Delivery Van | No | 1 | 6,600 | 6600 |
| Total | 15,785 |
Production and Operating Costs
Direct Materials, Supplies and Costs in US$
| Cost Item | Units | @ | Qty/ day | cost/ day | cost/ month | cost/ year |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Polypropylene granules | Kg | 1.6 | 200 | 320 | 8,320 | 99,840 |
| Colors/ dyes | Kg | 0.8 | 100 | 80 | 2,080 | 24,960 |
| Packing Materials | Kg | 0.7 | 8 | 5.6 | 146 | 1,747 |
| Sub-total | 308 | 406 | 10,546 | 126,547 |
General Costs(Overheads)
| Rent | 250 | 3,000 |
|---|---|---|
| Labour | 1,750 | 21,000 |
| Utilities (Water & power) | 150 | 1,800 |
| Preliminary costs | 100 | 1,200 |
| Miscellaneous Costs | 100 | 1,200 |
| Depreciation (Asset write off) | 329 | 3,946 |
| Sub-total | 2,679 | 32,146 |
| Total Operating Costs | 13,224 | 158,693 |
- Production costs assumed are for 312 days per year with a daily capacity of 385 plastic containers.
- 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
| Item | Qty/ day | Qty/yr | @ | Pdn cost/ yr | UPx | T/rev |
|---|---|---|---|---|---|---|
| Plastic Containers | 358 | 111,696 | 1.4 | 158,693 | 1.6 | 178,714 |
Profitability Analysis in US$
| Profitability Item | Per day | Per Month | Per Yr |
|---|---|---|---|
| Revenue | 572.8 | 14,893 | 178,714 |
| Less: Production &Operating Costs | 509 | 13,224 | 158,693 |
| Profit | 64 | 1,668 | 20,020 |
Market Analysis
Plastic Containers are extensively used in day-to-day activities with a solid potential market in both rural and urban areas.
Supply of Raw Materials and Equipments
Raw materials can be imported from India and South Africa while Equipments can be imported from China and Japan.
Government Incentives Available
Government has put up Organizations like Private Sector Foundation Uganda which serve as a channel through which subsidies and free advisory services are given to serious investors.
Risk certainty
The in the risks involved in this project are related to stiff competition from other firms which may bring about business failure before celebrating its first birth day, thus, there is need to employ better marketing mix tools like Price, product, quality control among others.
