This project is for manufacturing and marketing of Expanded Pet pre-foams. Foam nets are preferred over conventional packaging materials due to their merits. They are mainly used for packaging glass bottles, medicine and electronic instruments.
The business idea is premised on production of 2002 rolls per month which translates into 24,024 rolls per year, with a capital investment of US$35,100 The revenue potential is estimated at US$96,096 per year with a net profit margin of 24% and a payback period of 3 years 6 months.
LDP along with additives like blowing agent, talcum powder, etc. are mixed in the blender. This mixture is fed into the hopper of the extruder where the molten substance is mixed with Freon gas to provide smooth & glassy surface and strength. The extruded LDPE passes through a multi hole double rotation and expands.
LDPE foam nets are pulled out by drawing machine and trimmed by pneumatic device. The nets are dropped into stainless steel container smoothly and continuously, from where they are removed, packed and sent to the market.
Capital Investment Requirements in US$
|Capital Investment Item||Units||Qty||@||Amount|
|Extruder Screw diameter||No||1||2,800||2,800|
|Multi hole double rotating die||No||1||2,700||2,700|
|Drawing and cutting unit||No||1||24,000||24,000|
|Freon gas supply System||No||1||2,000||2,000|
Production and Operating Costs Direct Materials, Supplies and Costs
|Cost Item||Units||@||Qty/ day||Pdn cost/ day||Pdn cost/ month||Pdn cost/ year|
|Low Density Polythene||rolls||0.8||50||40||1040||12,480|
|Depreciation (Asset write off) Exp||731||8,775|
|Total Operating Costs||6,077||72,927|
Project Product Costs and Price
|Expanded Pet Pre-Foam||77||24,024||3||72,927||4||96,096|
Profitability Analysis in US$
|Profitability Item||Per day||Per Month||Per Yr|
|Less: Production and Operating Costs||234||6,077||72,927|
Supply of Raw materials and Equipments
Raw materials can be procured locally or imported from Kenya while Equipments may also be imported from China and Japan.
Government Incentives Available
Government has put up Organizations like Private Sector Foundation Uganda which serve as a channel through which subsidies and free advisory services are provided to investors.