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Compedium of Diaspora opportunities

MANUFACTURING OF NAIL POLISH BUSINESS IN UGANDA

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Introduction

Nail polish is a cosmetic product used by the majority of women in Uganda. It has got market both in rural and urban areas of the country.

This project idea was developed on the basis of using the simplest technology in the manufacturing of nail polish with an estimated fixed capital of 4,850 US$, and operating costs of 175,817US$ used to produce 11,856 liters of nail polish to realize 330,439US$ of revenue in the first year of operation.

Production Capacity, Technology and Process

The production technology is very complex and may involve the use of robots, but recently a home made nail polish can be manufactured using a much simpler technology. Here the primary film former called nitrocellulose is mixed with a shimmer or metallic pearl and this may create a good shade if applied but care has to be taken by first applying it on the nails to test its quality.

Investment Scale, Capital Requirements and Equipment

The investment scale is dependant on the set project objectives.

Capital Investment Requirements

Capital investment item units Qty @ Total
Laboratory testing kit No 1 500 500
Utensils No 440
Portable stirrer with mortar No 1 2,400 2,400
Bottle filling machine No 1 650 650
Containers(Drums) No 2 230 460
Other tools No 400
Total       4,850

Production and Operating Costs

Cost Item Units @ day Qty/ day Pdn cost/ day Pdn cost/ mth Pdn cost/yr
Direct Costs            
Nitrocellulose Kgs 12.5 25 312.5 8,125 97,500
A shimmer Kgs 9 7 63 1,638 19,656
Metallic pearl Kgs 6.9 3 20.7 538 6,458
Ethyl alcohol Ltrs 6.4 3 19.2 499 5,990
Bottes-25ml (packaging) Pcs 0.05 1,513 75.65 1,967 23,603
Other materials   167 2,004
Sub-total       491 12,934 155,212

General Costs (Overheads)

Labour 767 9,200
Utilities 538 6,450
Rent 500 6,000
Administrative expenses 204 2,450
Cleaning & toiletries 100 1,200
Selling & distribution 200 2,400
Miscellaneous expenses 146 1,750
Depreciation 101.04 1212.5
Sub-total 2,556 30,663
Total Operating Costs 15,490 185,874
  1. Production costs assumed are for 312 days per year with daily production capacity of 38 litres of nail polish.
  2. Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
  3. Direct costs include: materials, supplies and other costs that directly go into production of the product.
  4. Total monthly days assumed are 26-work days.
  5. The valuation currency used is United States Dollars.

 

Market Analysis

The market for cosmetics is readily available country wide and for successful implementation, it is recommended that products are distributed to supermarkets, salons and cosmetic shops that can easily increase sales.

Project Product Costs and Price Structure

Item Qty/ day Qty/yr @ Pdn cost/yr UPx T/rev
Nail Polish 1,513 472,056 0.39 185874 0.65 306,836

Profitability Analysis Table

Profitability Item Per Day Per Month Per Year
Revenue 983 25,570 306,836
Less: Production & Operating Costs 596 15,490 185,874
Profit 388 10,080 120,962

Government Facilities and Incentives

The initial allowance on plant and machinery offered can be an incentive as it reduces on income tax components on the investment.

Cutting table No 4 20 80
Electronic flat Iron No 2 20 40
Steam Pressing table No 1 250 250
Weighing balance No 1 150 150
Stools.etc No 4 10 40
Delivery van No 1 8,000 8000
Total       12,310

 

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