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Compedium of Diaspora opportunities

MAKING RUBBER ERASERS BUSINESS IN UGANDA

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Introduction

An eraser or rubber is an article of stationery that is used for removing pencil and sometimes pen writings. Erasers have a rubbery consistency and are often white or pink, although modern materials allow them to be made in any color. Many pencils are equipped with an eraser on one end. Typical erasers are made from synthetic rubber, but more expensive or specialized erasers can also contain vinyl, plastic, or gum-like materials. Other cheaper erasers can be made out of synthetic soy-based gum.

Used by school and college going students, erasers are used in addition to the common pencil erasers and some special type of erasers such as typewriter print erasers, ink erasers, etc., which are used in offices and other establishments. The project cost is US$ 3,060 producing 624,000 units annually giving estimated revenue of US $ 174,720 per year generating an annual profit of US$ 9,941.

Production process

The process essentially consists of the following steps:

i) Mixing of various ingredients of the rubber compound namely pale crepe, sulphur, white factice, whiting, zinc oxide and other chemicals and colours.

ii) Moulding the same, in the form of desired shapes and sizes. The profiled plant has a minimum capacity of 2,000 rubber erasers per day.

Capital Investment Requirement in US $

Item Units Qty Price Total
Mixing mill No 1 560 560
Hydraulic No 1 160 160
Grinder machine No 1 840 840
other tools & equipment No 1 1,500 1500
TCs for equipment       3,060
  1. Production costs assumed are for 312 days per year with daily capacity of 2,000 rubbers.
  2. Depreciation (fixed asset write off) assumes 4 year life of assets written off at 25% per year for all assets.
  3. Direct costs include: e materials, supplies and all other costs incurred to produce the product.
  4. A production month is 26 days
  5. Currency used is US Dollars.

Production and Operating costs in US$

(a) Direct material, supplies and costs

Cost Item Units @ Qty/ day Pdn cost/day Pdn cost/ mth Pdn cost/yr
Direct Costs          
Rubber sheets kgs 30 16 481 12503.4 150,041
Sulphur kgs 16 0.32 5.12 133.12 1,597
other chemicals ltrs 7.5 0.16 1.2 31.2 374.4
Packing material pkts 0.6 9.62 5.8 150.072 1,801
Sub-total       492 12,817 153,814

General Costs (Overheads) Project product costs and Price structure

Labour 250 3,000
Selling & distribution 100 1,200
Utilities (Water, power) 300 3,600
Administration 50 600
Rent 100 1,200
Miscellaneous expenses 50 600
Depreciation 63.75 765
Sub-total 913.8 10,965
Total Operating Costs 13,732 164,779
Item Qty/ day Qty/yr Unit cost Pdn cost/ yr UPx TR
Dehydrated fruits 2,000 624,000 0.3 164,779 0.3 174,720

Profitability Analysis in US$

Profitability Item Per day Per month Per year
Revenue 560 14,560 174,720
Less: Production and operating costs 528 13,732 164,779
Profit 32 828 9,941

Market

The demand for rubber erasers is closely linked with the growth of education and industrial establishments. With the increasing number of schools, colleges, educational institutions and offices, the market for erasers is poised for growth. Hence, there exists scope for new units to tap the market.

Source of Equipment and Raw Materials

Can be locally fabricated in Uganda by Tonet Ltd kanyanya Gayaza Rd or imported.

Government Incentive

Startup costs 25% granted on actual cost over the first four years in four equal installments. Sources of Supply of Raw

Materials

All raw materials and equipments are imported.

Market Analysis

The demand for surgical gloves is big in hospitals, pharmaceuticals and research centers.

 

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