SHOCK ABSORBER RECONDITIONING BUSINESS IN UGANDA
Introduction
Shock absorbers are essential items for smooth riding of any automobile. Their basic function is to absorb any shocks to ensure a comfortable ride and better control of the vehicle/automobile. With the high number of automobiles in Uganda and noting the state of most of Uganda’s roads, the rate at which shock absorbers are replaced is high. The project cost is US$12,740, capacity of 4,000 per year giving US$13,978 as revenue in a year.
Production Process, Capacity and Technology
Shock absorbers are opened and checked for oil passage and required pressure. The dirt is removed and fresh oil is filled after replacing rubber bushes and seals.
The profiled plant has a minimum capacity of reconditioning 4,000 shock absorbers per annum but this can be increased as a bigger customer base is captured.
Capital investment Requirement in US$.
| Capital Investment Item | Units | Qty | @ |
|---|---|---|---|
| Oil fired tilting furnace | No | 1 | 1,000 |
| Weighing balance | No | 2 | 30 |
| ladle & tongs | No | 2 | 15 |
| Hand moulding equipment | No | 1 | 1,200 |
| Bench grinder | No | 1 | 80 |
| Mixing Machine | No | 1 | 500 |
| TC of Machinery & Tools |
Production and Operation costs in US$
| Cost Item | Units | @ | Qty | Pdn cost |
|---|---|---|---|---|
| Direct Costs | ||||
| Used shock absorbers | Pcs | 0.25 | 12.82 | 83.3 |
| lubricating oil and fluids | ltrs | 6 | 0.32 | 50 |
| Rubber bushes/seals | pkts | 13 | 0.06 | 22 |
| Packaging material | ltrs | 1 | 1.6 | 42 |
| Sub-total | 197 |
General Costs (Overheads) Project product costs and Price Structure
| Labour | 300 |
| Selling & distribution | 200 |
| Utilities (Water, power) | 70 |
| Administration | 20 |
| Rent | 150 |
| Miscellaneous expenses | 100 |
| Depreciation | 25 |
| Sub-total | 865 |
| Total Operating Costs | 1,062 |
| Item | Qty /day | @ | UPx | TR |
|---|---|---|---|---|
| Shock absorbers | 12.8 | 3.19 | 3.5 | 13,978 |
Profitability Analysis Table in US$
| Profitability Item | Per day | Per month |
|---|---|---|
| Less: Production and operating costs | 41 | 1,062 |
| Profit | 4 | 103 |
Market
The market is mainly from existing vehicles for reconditioning the shock absorbers. The used shock absorbers can be reconditioned and used, which costs less than a quarter of the Price of a new set. It would also be recommended to liaise with automobile dealers.
Source of machinery and raw materials
Some have to be imported and others could be locally made by Tonet Ltd, Kanyanya Gayaza Rd or John Lugendo and Co Ltd, Ndeeba Masaka Rd email lugendojohn07@yahoo.com. Used shock absorbers can be locally sourced cheaply from all garages in the country.
Government incentive:
Repairs and minor capital equipment 100% granted on actual cost incurred in a year. Private sector foundation Uganda has grants for SMEs to develop capacity.