Introduction
This business idea is for manufacturing and marketing of Scented phenyl. Scented phenyl is used as a disinfectant to clean wash basins, toilets, and kitchen sinks etc. It is used in residential houses and commercial establishments such as: hospitals, offices and shops etc., as a disinfectant and also for some pleasant smell. It is used in most households and other institution like hotels and thus has a good market potential. The business idea is premised on production of 2,600 liters of scented phenyl per month which translates into 31,200 liters per annum. The revenue potential is estimated at US$5,096 per month translating into US$61,152 per annum with a sales margin of 58% and total investment requirement is US$3,190 for the first year of project operation
Production Capacity
The production capacity depends on the quantity of raw materials and technology used in the production process. But for this case, the plant has a minimum capacity of 31,200 liters of scented phenyl per annum and this is on the basis of 312 working days in a year and 8-hour single work shifts in the working days.
Production Process
The raw materials are weighed and put separately. After preparing the caustic soda solution, required quantities of resin, castor oil, light creosote oil and caustic soda solution, are mixed together in a reactor. After obtaining the final product from the storage tanks, the final product can be packed into bottles and ready for market.
Capital Investment Requirements in US$
| Capital Investment Item | Qty | @ | Amount |
|---|---|---|---|
| Reaction vessel | 1 | 870 | 870 |
| Medium sealing machine | 1 | 320 | 320 |
| Bottle filling machine | 1 | 750 | 750 |
| Storage vessels | 3 | 350 | 1050 |
| Weighing scale. | 1 | 200 | 200 |
| Total | 3,190 |
Production and Operating Costs in US$
| Cost Item | Units | @ | Qty/ day | Pdn cost/ day | Pdn cost/ mth | Pdn cost/ yr |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Rosin | liter | 0.81 | 30 | 24.3 | 631.8 | 7,582 |
| Caster oil | liter | 0.85 | 15 | 12.75 | 331.5 | 3,978 |
| Caustic soda | liter | 0.8 | 15 | 12 | 312 | 3,744 |
| Light creosote oil | liter | 0.6 | 50 | 30 | 780 | 9,360 |
| Sub-total | 110 | 79.05 | 2,055 | 24,664 |
General Costs (Overheads)
| Rent | 250 | 3,000 |
|---|---|---|
| Labour | 500 | 6,000 |
| Utilities | 100 | 1,200 |
| Transport | 100 | 1,200 |
|---|---|---|
| Preliminary Costs | 100 | 1,200 |
| Miscellaneous Costs | 50 | 600 |
| Depreciation | 66 | 798 |
| Sub-total | 1,166 | 13,998 |
| Total Operating Costs | 3,222 | 38,662 |
- Production costs assumed 312 days per year with a daily capacity of 100 liters of Scented Phenyl
- 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 Structures
| Item | Qty/ day | Qty/ Yr | @ | Pdn cost/Yr | UPx | T/rev |
|---|---|---|---|---|---|---|
| Scented Phenyl | 100 | 31,200 | 1.24 | 38,662 | 1.96 | 61,152 |
Profitability Analysis in US$
| Profitability Item | Per day | Per Month | Per Yr |
|---|---|---|---|
| Revenue | 196 | 5,096 | 61,152 |
| Less: Production and Operating Costs | 124 | 3,222 | 38,662 |
| Profit | 72 | 1,874 | 22,490 |
Market Analysis
Market for scented phenyl is growing due to good fragrance and also because of almost the same cost as that of ordinary phenyl. The wide application in commercial establishments, hospitals, hotels, nursing homes and restaurants, etc., has carved a good market niche for this product.
Supply of Raw Materials and Equipments
Raw materials and machines can be imported from India.
