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Compedium of Diaspora opportunities

MANUFACTURING OF BALL-PEN REFILLS IN UGANDA

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Introduction

The proposed plant is for manufacture of refills for the ball pens. The ball pen has almost replaced the conventional fountain pens, with the use-and-throw refills, creating a niche of its own. Thanks to the ease and convenience of the ball pens, they have turned into the most preferred medium of writing, which is not only cost –effective, but also serves the variegated needs of the people who write. These come in different sizes and in various colours made from a very small diameter HDPE tubes filled with a special type of ink. The business idea aims at production of 500 units per day thus 156,000 units per annum. The revenue potential is estimated at US $ 31,200 annually and the startup capital is US $2,660 thus total capital investment of the project is US$ 23,887. The payback period is approximately 1 year with a net profit margin of 32%.

Production Process

The HDPE granules are fed into the extruder through hopper to produce extruded plastic tubes, which are cut to fit into various sizes of the ball pens by a cutter unit and the metal tips are fitted, ink filled to make the refills ready for use. They are then packed in a plastic film by a machine and dispatched to the market for bulk sell.

Scale of Investment in US$

Capital Investment Requirements

Capital Item Units Qty @ Amount
Ink filling system No 1 600 600
Air compressor No 1 550 550
Water pump No 1 350 350
Cutter unit No 2 80 160
Extrusion system No 1 1,000 1,000
Total       2,660

2. Production and Operating Costs in US$

Cost Item Units @ Qty/ day Pdn Cost/day Pdn Cost/ month Pdn Cost/ Year
Direct costs3:          
HDPE granules Kgs 0.5 10 5 130 1,560
Tips No 0.005 550 2.75 71.5 858
Packing materials No 0.1 10 1 12 144
Subtotal         213.5 2,562

General costs (Overheads)

Labour 500 6,000
Utilities 300 3,600
Selling and Distribution 200 2,400
Administrative expenses 200 2,400
Shelter 300 3,600
Depreciation 55 665
Sub-total 1,555 18,665
Total Operating Costs 1,769 21,227
  1. Production is assumed for 312 days per year.
  2. Depreciation assumes 4 year life of assets written off at 25% per year for all assets.
  3. A production Month is assumed to have 26 days.

Project Product Costs and Price Structure in US$

Item Qty /day Qty/yr Unit Cost Pdn/yr Upx T/rev
Refills 500 156,000 0.14 21,227 0.2 31,200
TOTAL   156,000   21,227   31,200

Profitability Analysis Table in US$

Profitability Item Per day Per Month Per Year
Revenue 100 2,600 31,200
Less: Production and Operating Costs 68 1,769 21,227
Profit 32 831 9,973

Plant Capacity

The plant would have a minimum capacity of 500 refills per day.

Market Analysis

Plastic ball pens are now gradually becoming a part of common possession, which turns popular by the year. Refills, an integral part of ball pens, also have good demand both in domestic as well as export market. Supply to educational institutions, public and private offices would help capture the market.

 

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