MAKING BUCKETS BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

Buckets are a household item in many homes mainly used to draw and store water and to wash clothes. They are however, used to carry other items as well. They are popular because of their durability and multipurpose use. They are quite common in rural areas, although urban dwellers use them too. The project idea has been developed to tap into the existing market for metallic buckets. The project estimates fixed capital of US$ 3,049, operating costs of US$ 226,410, generating revenue of 247,104 US$ in the first year of operation. The project’s profit margin is estimated at 8%.

Production Process

Buckets are manufactured out of galvanized iron sheets. It is cut into required sizes within conical shapes. These are then assembled and swaging as a main production process is done. A handle is made out of cut to size steel rod and fitted on to the body. Utmost precision is focused on the fixing of the bottom to the body to ensure it does not leak.

Capital Investment Requirements in US$

Capital Investment Item Units Qty @ total
Shearing machine No 1 820 820
Bending Machine No 1 522 522
Hand operated circle cutting machine No 1 600 600
Press Hand operated No 1 457 457
Office furniture Fittings No 150
Tool Kit & other tools No 500
Total       3,049

Production and Operating Costs Direct Materials, Supplies and Costs

Cost Item Units @ Qty/ day Pdn Cost/ day Pdn Cost/ month Pdn Cost/ year
Direct Costs          
Galvanized Iron sheet Pcs 55 12 660 17,160 205,920
Steel Rods Pcs 52 0.5 26 676 8,112
Rivets Pcs 0.3 22 5.5 143 1,716
Sub-total       692 17979 215748

General Costs (Overheads)

Rent 200 2,400
Labour 300 3,600
Utilities 175 2,100
Cleaning and Toiletries 50 600
Miscellaneous 100 1,200
Depreciation 64 762
Sub-total 889 10,662
Total Operating Costs 18,868 226,410
  1. Production costs assumed 312 days per year with daily capacity of producing 36 buckets.
  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.

Market Analysis

Buckets and drums are common in schools and training institutions and places of communal gatherings like community centers.

Project Product Costs and Price Structure

Item Qty/day Qty/yr @ Pdn Cost/ yr UPx Total Revenu
Buckets 36 11,232 20 226,410 22 247,104

Profitability Analysis Table

Profitability Item Per day Per Month Per year
Revenue 792 20,592 247,104
Less: Production and Operating Costs 726 18,868 226,410
Profit 66 1,724 20,694

Government Facilities and Incentives

The government has come out clean on the liberalization of the economy. There are a lot of incentives for those entrepreneurs who venture into manufacturing. They enjoy VAT deferment facilities and other tax benefits. Through organizations like Private Sector Foundation Uganda there are plenty of opportunities that accrue to the users of these available facilities including financial Subsidies.

Business Risk

This is associated with some risks like incurring losses thus need for employing better marketing strategies like Price, product, and people among others.

 

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