ESTABLISHING BOLTS AND NUTS BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

A bolt is a cylindrical piece of metal that fastens objects together while nut is a hexagonal or square piece with a threaded hole at the centre. Nuts and bolts have a high market demand in the industrial sector.The business idea aims at production of 2,600 kilograms of bolts and nuts per month. The revenue potential is estimated at US$ 241,800 per year with a sales margin of 10%. The total capital investment for the project is US$ 19,113.

Production Capacity

The envisaged plant will have a capacity of 100 kilograms of bolts and nuts per day when operating a single shift of eight hours a day for 300 days within a year.

Production process

The head of the bolt is formed after feeding steel rod into a double stroke cold header machine. Later, using a bolt head trimmer, the bolt is machined to square or hexagonal shape and the threads are cut on a thread-rolling machine. For nuts, steel rods are fed into an automatic nut forking machine and the nuts in a semi-finished form are then fed into a tapping machine for internal threading.

Scale of investment

Capital requirements

Capital Investment Item Units Qty @ Amount
Grinder No 1 750 750
Sealing machine No 5 31 155
Weighing machine No 2 80 160
Filling machine No 2 2000 2000
Delivery Van No 1 7,000 7,000
Trays No 25 3 75
Fermenting materials No 10 3 30
Dark shade No 1 1,500 1,500
Furniture & Fixture set 5 400 2,000
Other tools No 840
  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 work days.
Cost Item Units @/ day Qty/ day Pdn Cost/ day Pdn Cost/ month Pdn Cost/ Year1
Direct costs3:            
MS Rounds Kgs 8 100 400 10,400 124,800
Pickling Chemicals Kgs 7 20 140 3,640 43,680
Packaging Materials Pieces 0.2 50 10 260 3,120
Subtotal         14,300 171,600

General costs (Overheads)

Labour 400 4,800
Utilities 200 2,400
Selling and Distribution 100 1,200
Administrative expenses 150 1,800
Shelter 400 4,800
Depreciation (Asset write off) Expenses 398 4,778
Sub-total 1,648 19,778
Total Operating Costs 15,948 191,378

Project product Costs and Price Structure $

Item Qty /day Qty/yr @ Pdn/yr UPx T/ revenue
Bolts 50 15,600 6 95,689 8 117,000
Nuts 50 15,600 6 95,689 8 124,800
Total 100 31,200   191,378   241,800

Profitability Analysis Table

Profitability Item Per day Per Month Per Year
Revenue 775 20,150 241,800
Less: Production and Operating Costs 613 15,948 191,378
Profit 162 4,202 50,422

Government Facilities and Incentives

The Government has liberalized the economy and encouraged people to invest in industrial set up through incentives like low tax rates and deferred tax payments.

Sources of Supply of Equipment

All equipment can be got from the local market at lower costs.

Related post

Leave A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.