MAKING EXERCISE BOOKS BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

This business idea is for manufacturing and marketing of exercise books. Exercise books are stationary items required for schools, offices and other purposes. Their market structure and demand is high since they are used by all school pupils from primary to senior four. They are sold in stationary shops, markets, whole sale shops, retail shops and even on the streets.

Production Capacity

Production capacity depends on the quantity of raw materials used in production process. The business idea is based on three hundred working days, single shift of 8hr.per day. The smallest viable unit can produce 2,000 Exercise books of 96 pages per day, translating into 624,000 Exercise books of 96 pages per annum at a sales Price of US$0.25 each. The revenue potential is estimated at US$ 156,000 per month, translating into US$ 1,872,000 per annum and total investment requirement is US$ 71,390 for the first year of project operation.

Technology and process Description

Manufacturing of exercise books involves use of Double Side Disc Ruling Machine size 915 mm Hand Feed with motor and starter, Paper and Board Cutting Machine hand operated, and power driven Cutting width 990 mm with mortar and starter, Wire Stitching Machine power operated with motor and starter capacity 25mm, Press 460*610mm, Offset Printing Machine complete with accessories & electrical. The production process involves ruling of lines on the paper in red & blue ink, folding of paper, cutting of paper, cutting of outer cover, printing of outer cover, folding of the outer cover & stitching of cover and pages, Inspection and packing.

Scale of Investment, Capital Investment Requirements

The scale of Investment is relatively big as it involves buying many different machines and equipment.

 

Capital Investment Requirements in US$

Capital Investment Item Units Qty @ Amount
Double side disc ruling machine No 1 12,500 12,500
Paper and board cutting machine No 1 9,800 9,800
Wire stitching machine No 1 3,490 3,490
Offset printing Machine with all Electronic accessories No 1 31,000 31,000
Working tools Set 2 1,700 3,400
Delivery Van No 1 11,200 11,200
Total       71,390

Production and Operating Costs
Direct Materials, Supplies and Costs in US$

Cost Item Units @ Qty/ day cost/ day cost/ mth cost/ year
Direct Costs            
Reams of Paper (size A3) No 5 16 80 2080 24960
Craft Paper in different colours (for covers) No 0.85 400 340 8840 106080
Printing Ink Liter 28 1 28 728 8736
Stitching Wires Packet 0.5 2 1 26 312
Gum Liter 0.81 5 4.05 105.3 1263.6
Sub-total     424 453.05 11,779 141,352

General Costs(Overheads)

Rent 1,000 12,000
Labour 625 7,500
Utilities(power) 120 1,440
Preliminary Costs 250 3,000
Miscellaneous Costs 150 1,800
Depreciation(Asset write off)Exp 595 7,139
Sub-total 2,740 32,879
Total Operating Costs 14,519 174,231
  1. Production costs assumed 312 days per year with a daily capacity of 2,000 exercise books of 96 pages.
  2. Depreciation (fixed asset write off) assumes 4 years life of assets written off at _10% per year for all assets.
  3. Direct Costs include materials, supplies and other costs that directly go into production of the product.
  4. A production month is assumed to have 26 days.

 

Project Product and Price Structure in US$

Item Qty/ day Qty/Yr @ Pdn cost/Yr UPx T/rev
Exercise books of 96 pages 2,000 624,000 0.3 174,231 3 1,872,000

Project Analysis in US$

Profitability Item Per day Per Month Per Yr
Revenue 6000 156,000 1,872,000
Less: Production and Operating Costs 558 14,519 174,231
Profit 5442 141,481 1,697,769

Market Analysis

There is ready market throughout the country as more and more children go to school. The UPE programme has boosted the numbers.

Source of Supply of Machinery, Equipments and Raw Materials

The supply of raw materials, Machinery and Equipments is procured locally although it could also be imported from countries like Japan, South Africa and Chain.

Government Facilities and Incentives Available

There are low tax rates and sometimes no taxes at all on most of the industrial equipments and raw materials.

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