Uganda_720x68_a

Compedium of Diaspora opportunities

MAKING LEATHER SANDALS BUSINESS IN UGANDA

By  | 

Introduction

The business idea is for making and marketing of leather sandals. It is premised on production of 18,200 Leather Sandals per month which translates into 218,400 Sandals per year. The revenue potential is estimated at US $ 50,960 per month which translates into US $ 611,520 per year. This project cost is US $ 10,150.

Production Process

After the tannery process, different layers of skins and hides are put together to make shoe soles, another piece is cut that will make the strings of the shoe. The two pieces are then inter-joined by use of either glue or sewing machine. The two are finally taken for smoothening more especially at the edges.

Capital Investment Requirements in US $

Item Unit Qty @ Total
Heavy Duty sewing machine No. 1 5,000 5,000
Smoother machine No. 1 1200 1200
Cutting tools No. 5 190 950
Delivery van No. 1 3,000 3,000
TC of Machinery 10,150

Production and operating costs in US$ Direct Materials, Supplies and costs

Cost Item Units Unit Cost/ day Qty/ day Prod. cost/ day Prod. Cost/ month Prod. Cost/ year
skins and hides Kgs 1 150 150 3,900 46,800
Glue grams 1.5 10 15 390 4,680
Sub-total 165 4,290 51,480

General costs (Overheads)

Utilities (power) 100 1200
Utilities (water) 100 1200
Salaries 250 3000
Rent 100 1200
Depreciation (Assets write off) Expenses 211.46 2,538
Sub-total 761.46 9,138
Total Operating Cost 5,051.5 60,618
  1. Production costs assumed 312 days per year with a daily capacity of 800 Leather Sandals.
  2. Depreciation (fixed assets write off) assumes 4 years life of assets write off of 25% per year for all assets.
  3. Direct costs include materials, supplies and other costs that directly go into production of the product.

Project Product Cost and Price Structure In US $

Item Qty/ day Qty /yr @ Prod. Cost /yr UPx TR
Leather sandals 700 218,400 0.28 60,618 2.8 611,520

Profitability Analysis in US $

Profitability item per day per month per year
Revenue 1,960 50,960 611,520
Less: Prodn& Operating Costs 194.28686 5,051 60,618
Profit 1,766 45,909 550,903

Government Incentives Available

Government is encouraging small scale businesses and income generating activities to eradicate poverty through “Bonna Bagagawale Programme”.

Market Analysis

There is an ever-increasing demand for leather products processed from skins and hides.

Availability of Raw Materials and Equipment

Raw Materials (skins and hides) can be got from Ankole and Karamoja regions in Uganda, and equipment can be obtained from the local market.

Risk Certainty

This business associated with risks of stiff competion from other manufacturers thus need for employing better mixing strategies like Price, place among others.

 

You must be logged in to post a comment Login

Leave a Reply