MAKING PRINTED SHOPPING BAGS BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

Shopping bags or carrying bags are made from LD/LLDPE plastic, which are used by traders and business houses with their firm names printed in multi –colours using off set printers. This project involves capital of US$153,638 which in return brings in gross profits of US$112,320 with a profit margin of US$ 23,030 per annum. The bags are not only convenient, but are also a means of advertising and sales promotion. What is proposed here is to set up plant to make printed shopping bags, which are environmentally friendly since they can be recycled.

Production Capacity The proposed plant would have a minimum capacity of 150 tonnes per annum. The shopping bag production capacity is about 89,290 units of bags per annum.

Production Capacity, Technology and Process

LD/LLDPE mixture after feeding to the blown film extruder, are melted and pumped out in the form of a tube, which is blown into a bubble and collapses to form a lay flat. The lay flat is given corona treatment and printed in flex printing machine. The film is converted into a bag by attaching a handle and sealing the bottom.

 

Capital Investments requirements in US$

Capital Investment item Units Qty @ Amount
Film Blowing machine No 1 1,100 1,100
Printing Machine No 1 580 580
Rocker Hydraulic pressure cutting No 1 944 944
Paper bag making machine No 1 830 830
Other equipment 1 520 520
Total 3,974

Production and operating costs in US $

Cost item Units @/ day Qty/ day Cost/ day Cost/ month Cost/ year
Direct Costs
Turned leather Kg 0.8 50 40 1,040 12,480
Dye ltrs 0.5 20 10 260 3,120
Water ltrs 0.6 10 6 1,708 20,496
Subtotal 1.9 80 56 3,008 36,096

General overheads Project product costs and Price structure in US$

Administration expenses 542 6,500
Labour 2,083 25,000
Utilities 650 7,800
Rent 650 7,800
Selling & Distribution Expenses 217 2,600
Depreciation 83 994
Miscellaneous 208 2,500
Subtotals 4,433 53,194
Total operating Costs 7,441 89,290
Item Qty/ day Qty/yr @ Prodn/ yr UPx TR
Shoping bags 600 187,200 0.5 89,290 0.6 112,320

Profitability Analysis in US$

Profitability item Per day Per month Per yr
Revenue 360 9,360 112,320
Less: Production operating costs 286 7,441 89,290
Profit 74 1,919 23,031

Sources of Supply of Machinery and Equipment and Raw Materials

Blown film extruder, air compressor, pumps, printing machine flexography/rotogravure, bag making machine, and the raw materials used are Printing ink, LD/LLDPE granules and handles. These machines can be imported from China although they can also be got from our local market on Entebbe road.

Government Facilities and Incentives Available

The manufacturers are allowed to recover their start-up cost to the tune of 25% of their expenditure in the year of income for four years and initial allowance of 50% of cost base for eligible property in areas of Kampala, Namanve, Entebbe, Njeru and Jinja while 75% of cost base of those outside specified areas. Such initial cost is allowed for tax purposes.

Equipment: Project product costs and Price structure

Sewing machine

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