Compedium of Diaspora opportunities

30/05/2018

MAKING SERVIETTES BUSINESS IN UGANDA

Introduction

A serviette is a small piece of table linen that is used to wipe the mouth and to cover the lap in order to protect clothing when eating. Made out of light absorbent material, napkins are soft to absorb sweat and clean the mouth. The market is constituted by individual consumers, hospitals, restaurants, homes and hotels among others. The business idea aims at production of 2,600 packets of serviettes per month which translates into 31,200 packets annually. The revenue potential is estimated at 11,180 dollars per month, translating into 134,160 dollars per year The total capital investment for the project is 3,635 dollars. The net profit margin is estimated at 29% with a payback period of 3 months.

Plant Capacity

The profiled plant is expected to produce 40,560 units (each unit with 10 packs of 50 pieces each) per annum.

Technology and Production Process

To make serviettes, a hand driven knitting machine and a yarn twister are used. The raw materials include Cotton staple yarn, absorbent thread, cotton thread, cardboard boxes and craft papers.

Cotton staple yarn is knitted into loose fabric tube, cut to required pieces of absorbent cottons with the ends of the napkins tied by thread and packed in printed polythene bags.

 

Scale of Investment

Capital Investment Requirements

Capital Investment Item Units Qty @ Amount
Hand driven Knitting Machine No 1 3,462 3,462
Yarn Twister No 1 173 173
Total       3,635

Production and Operation costs

Cost Item Units @/ day Qty/ day Prod. Cost/ day Prod. Cost/ month Prod Cost/ Year1
Direct costs3:            
Cotton staple yarn Yarns 3 40 120 3,120 37,440
Absorbent thread No 3 30 90 2,340 28,080
Cotton thread Yarns 3 10 30 780 9,360
Cardboard boxes No 0.76 5 3.8 99 1,186
Craft papers No 1.7 15 25.5 663 7,956
Sub-total         7,002 84,022

General costs (Overheads)

Labour 250 3,000
Utilities 300 3,600
Selling and Distribution 100 1,200
Administrative expenses 100 1,200
Shelter 150 1,800
Depreciation machinery 76 909
Sub-total 976 11,709
Total Operating Costs 7,978 94,673
  1. Production is assumed for 312 days per year.
  2. Depreciation assumes 4 year life of assets written off at 25% per year for all assets.
  3. A production Month is assumed to have 26 days.

Project Product costs and Price Structure $

Item Qty / day Qty/yr @ Pdn/ yr UPx T/rev
Plain Serviettes 70 21,840 3 66,271 4 87,360
Decorated Serviettes 30 9,360 3 28,402 5 46,800
Total 100 31,200 6 94,673 9 134,160

Profitability Analysis Table

Profitability Item Per day Per Month Per Year
Revenue 430 11,180 134,160
Less: Production and Operating Costs 303 7,889 94,673
Profit 127 3,291 39,487
  1. Sources of Supply of Raw Materials and Equipments
  2. All equipments and raw materials can be sourced locally.
  3. Government Facilities and Incentives

There are a number of government programme to facilitate industrialists. Among them is Private Sector Foundation Uganda which builds capacity and develops business plans and feasibility studies for investors.

Market Analysis

The Market cuts across Individual consumers, hospitals, restaurants, homes and hotels among others. However, there are many competitors thus the need for exploiting the export market.

 






 
 

 

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