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STARTING A BONE CHINA BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

Bone China porcelain products are decorative products that are used by a range of consumers especially hotels, recreation centers, events management enterprises, office and home decoration enterprises etc.

The targeted output for the project is 39,936 pieces of high quality bone china porcelain products produced annually requiring an estimated fixed capital of US$ 43,602, operating costs of US$ 89,548, realizing estimated revenue of US$ 143,770, in the first year of operation. The projected net profit margin is at 38% and having a payback period of 3 years.

Capital Investment Requirements in US$ Production Capacity, Technology and Process

Capital Investment Item Units Qty @ Total
Land and Buildings No 16,000
Hammer & Ball Mills No 2 1,270 2,540
Jaw crushers No 1 1,290 1,290
Electric kiln No 1 5,890 5,890
Wheel throwing machine No 2 1,900 3,800
Mixer No 1 1,220 1,220
Fuel blower No 1 1,362 1,362
Furniture & Fittings No 2,500 2,500
Delivery van No 1 9,000 9,000
Total       43,602

The manufacturing process involves the following stages;

The raw materials such as: clay, feldspar, silica, stone dust, are first crushed using jaw crushers, hammer mills or ball mills.

they are cleaned to remove improperly sized materials, and later passed into a mixer to mix the cleaned materials.

Using the soft plastic method of production, the materials are shaped by manual molding, jiggering or ram pressing, wheel throwing where the mixed material is put on the wheel and shaped while the wheel turns.

After shaping the materials, bisque firing takes place and here heating of the products is done at relatively low temperatures to vaporize volatile contaminants and minimize shrinkage during firing.

  • The products are passed to an electric kiln where fifing takes place using high temperature ranging between 1,000 to 1,5000c.
  • The products are left to cool and later packaged for selling and distribution.
  • Production and Operating Costs in US$

 

(a)Direct Materials, Supplies and Costs

Cost Item Units @ Qty/ day Pdn cost/ day Pdn cost/ mth Pdn cost/yr
Direct Costs            
Clay &Stone dust Kgs 0.028 128 3.6 93.1 1,118
Felspar Silica, vanaculanite Kgs 18 7 126 3276 39,312
Water & Other materials Kgs 0.005 4,000 20 520 6,240
Packaging materials Pcs 0.229 128 29.3 762 9,145
Sub-total     4263 179 4,651 55,816

General costs (Overheads)

Labour costs 1,217 14,600
Utilities 561 6,732
Administration expenses 375 4,500
Miscellaneous expenses 83 1,000
Depreciation 575 6,901
Sub-total 2,811 33,733
Total Operating Costs 7,462 89,548
  1. Production costs assumed are for 312 days per year with daily capacity of producing 128 pieces of bone china porcelain products.
  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-days.
  5. The valuation currency used is United States Dollars

Project Product Costs and Price Structure

Item Qty/day Qty/yr @ Pdn cost/yr UPx T/rev
Bone China Porcelain 128 39,936 2.2 89,548 3.6 143,770

Profitability Analysis Table

Profitability Item Per Day Per Month Per Year
Revenue 460.8 11,981 143,770
Less: Production &Operating Costs 287 7,462 89,548
Profit 174 4,518 54,222

 

Market Analysis

The market for bone China porcelain exists in the country with major consumers such as: supermarkets, restaurants, wholesale shops and retail shops etc.

 

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