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MAKING RUBBER ADHESIVE BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

This profile envisages the establishment of a plant that will make Rubber Cement. Rubber cement is an adhesive made from elastic polymers mixed in a solvent such as acetone and hexane to keep them fluid enough to be used. This makes it part of the class of drying adhesives: as the solvents quickly evaporate, the “rubber” portion remains behind, forming a strong yet flexible bond. Often a small percentage of alcohol is added to the mix.

The total Capital Investment cost to start this project is estimated at USD13,610. The predicted annual revenue is USD 673,920, with a net profit of 23% and a payback of 2 months.

Production Process

The process to make rubber cement is relatively simple. After the rubber is broken down into smaller pieces, it is mixed with the hexane-or heptane-based solvent and then various sizes of containers are filled with the liquid. Most equipment is automated.

Raw Materials

Rubber cement is an opaque liquid that contains pulverized natural or synthetic rubber and a solvent based on hexane or heptanes. Grades of rubber cement may contain 70-90% heptanes or hexane and 1-15% isopropyl alcohol (isopropanol) or ethyl alcohol (ethanol). The rubber is received in the form of large blocks or slabs, typically 100 lb (45 kg) in size.

 

Capital Investment Requirements in US$

Capital Investment Item Units Qty @$ Amount $
Truck No. 1 8,000 8,000
Grinder No. 1 3,100 3,100
Mixer No. 1 750 750
Tanks No. 5 100 500
Furniture No. 2 50 100
Weighing Scale No. 1 160 160
Packaging Machine No. 1 1,000 1,000
Total Amount 13,610

Operating Costs in US$ General Costs (Over heads)

Item Units @ $ Qty/ day Prod. Cost/ day$ Prod. Cost/ month$ Prod. Cost/ Year[1]$
Direct Costs
Rubber Kgs 0.77 500 385 10,010 120,120
Heptanes Ltrs 45 25 1125 29,250 351,000
Ethanol Ltrs 0.48 75 36 936 11,232
Sub total 1,546 40,196 482,352
Rent 500 6,000
Labour 500 6,000
Utilities (Power & Water) 800 9,600
Repair & Maintenance 300 3,600
Packaging Materials 200 2,400
Fuel 500 6,000
Depreciation(Asset write off) Expenses 284 3,403
Sub – total 3,084 37,003
Total Operating Costs 43,280 519,355

Project Product Costs & Price Structure

Item Qty/ dayLtrs Qty/yr @$ Pdn Cost/ yr$ UPx T/rev
Rubber Cement 600 187,200 2.77 519,355 3.6 673,920

Profitability Analysis

Profitability Item Per day Per Month Per Year
Revenue 2,160 56,160 673,920
Less: Production & Operating Costs 1,665 43,280 519,355
Profit 495 12,880 154,565

Sources of Supply of Raw Materials

Raw materials may be imported from Liberia/West African Countries.

Government Facilities and Incentives Available:

The Government is willing to support industrialization through; Tax exemptions, Basic infrastructure, Grants, long term Loans and liberalized market.

 

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