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MAKING COTTON T-SHIRTS BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

This business idea is for production and marketing of cotton t-shirts. Cotton t-shirts are particularly for sports and casual wear. A good sweat absorbent wear, these garments are soft, tough and wrinkle free. The revenue is estimated at US$ 702,000 per year, and the project cost is estimated at US$ 107,819 inclusive of operating cost in the first year and the revenue potential is USD 702,000. The pay period is 3 months at net profit of 87%.The production capacity per day is 450 t-shirts per day. The risk associated is marketing mix which can be managed by better management and control of the business.

Production Process

As per the desired sizes and designs, the knitted fabric is cut into pieces and labeled as per measurement of the latest designs for the market. Then, the required button stitching is added to the semi finished fabrics. These products undergo strict quality control measures as knitted shirts and finished garments that are ready for packing and marketing.

Capital Investment Requirements in US$

Capital investment item Units Qty @ Amount
Over lock machine no 1 988 988
Cutting machine no 1 2,680 2680
Sewing machine no 5 500 2500
Industrial flat iron no 1 258.4 258.4
Packing materials no 100 0.05 5
Cutting set no 6 11.7 70.2
Measuring tape no 2 3 6
Zig zag machine no 1 610 610
Van no 1 11,200 11200
Total cost on machinery       18,318

Production and Operating Costs

Cost Item Unit @/ day Qty/ day Pdn cost/ day Pdn cost/ month Pdn cost/ yr
Cotton knitted fabric mtrs 1.5 450 675 17,550 210,600
Sub-total     450 675 17,550 210,600

General costs(overheads)

Utilities(water and power) 150 1,800
Labour 750 9,000
Rent 100 1,200
Miscellaneous costs 50 600
Distribution costs 260 3,120
Depreciation(Asset write off)Expenses) 4579 54,953
Sub –total 1,569 18,828
Total Operating Costs 7,458 89,501
  1. Production costs assumed are for 312 days per year; with a daily capacity of 450 pieces of T-shirts.
  2. Depreciation (fixed assets 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 items that directly go into production of the product.

Project Product Costs and Price in US$

Item Qty/day Qty/yr @ Pdn cost /yr UPx TR
T-shirts 450 140,400 0.6 89,501 5 702,000

Profitability Analysis in US$

Profitability Item Per day Per month Per Year
Revenue 2,250 58,500 702,000
Less production and operating Costs 287 7,458 89,501
Profit 1,963 51,042 612,499

Market Analysis

The demand for T-shirts has been increasing as a casual wear especially for sportswear. Apart from domestic demand, the shirts enjoy a lot of demand from the export market. With the current market prospects in the Western countries, this could yet turn out to be a very profitable project

Source of raw materials and equipment

Raw materials can be sourced locally from knitting industries like phoenix or could be imported from Italy and German.

Government Facilities and Incentives

The government is willing to support industrialist as an initiative for development. There are tax exemptions and land protectionism at relatively low interest rates.

 

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