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MAKING SISAL FIBRE HANDICRAFTS BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

This business idea is for production of sisal fibre handicrafts. Sisal fibre extracted from sisal leaves is used for making many types of decorative items, bags, wall hangings and toys. The products from sisal are normally appealing in tourist places, hotels and restaurants with a business risk is competition from other manufacturer thus need for proper management and control of the business. The business idea aims at production of 1,300 pieces of fibre handicrafts. The revenue potential is estimated at US$ 524,160 per year with a net profit margin 7%. The total capital investment for the project is US$ 1,260.

Plant Capacity

The profiled plant has a minimum capacity of 50 units per day.

Technology and Production Process

Sisal leaves are cut and fibre extracted through a Raspador machine. After washing in water and subsequent drying, the leaves are ‘beaten’ to remove undesired particles. The dry fibre is used for making braids, which are dyed and made into attractive handicrafts

Scale of investment

Capital Investment Requirements

Capital Investment Item Units Qty @ Amount
Raspador Machine No 1 750 750
Hand tools No 510 510
Total 1,260

Production and Operation costs

Cost Item Units @/ day Qty/ day Pdn Cost/ day Pdn Cost/ month Pdn Cost/ Year
Direct costs3:
Crude Petroleum Jelly Kgs 8 129 1032 26,832 321,984
Oils Litres 3.5 7 24.5 637 7,644
Scented ingredients Kgs 8 1 8 208 2,496
Wax Kgs 2.5 2 5 130 1,560
Packaging materials Pieces 0.05 721 36.05 937 11,248
Sub-total 28,744 344,932

General costs (Overheads)

Labour 700 8,400
Other materials 1000 12,000
Utilities 1500 18,000
Administrative expenses 1500 18,000
Selling and Distribution 3250 39,000
Fuel 3000 36,000
Miscellaneous expenses 700 8,400
Depreciation (Asset write off) Expenses 26.25 315
Sub-total 11676.25 140,115
Total Operating Costs 40,421 485,047
  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 in US $

Item Qty /day Qty/ yr @ Pdn/ yr UPx T/rev
Bags 70 21,840 22 485,047 24 524,160

Profitability Analysis in US $

Profitability Item Per day Per Month Per Year
Revenue 1680 43,680 524,160
Less: Production and Operating Costs 1555 40,421 485,047
Profit 125 3,259 39,113

Sources of supply of raw materials and equipments

All equipments and raw materials can be got in Uganda.

Market Analysis

As the handicrafts made of sisal fibre are elegant and cost effective, the market for sisal fibre is promising and attractive especially in urban and semi-urban areas. The sisal handicrafts also enjoy export potential.

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