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MAKING SPECTACLE FRAMES BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

This Business Ideais for manufacture and marketing of spectacle frames from plastic cellulose acetate sheets. They are mass consumption items and are used by those with eye sight problems and for protection from the sun. The project envisages producing 1,300 sets of spectacle frames per month on the basis of 8 hours per working day. This translates into 15,600 sets per annum. The revenue potential is estimated at US$ 546,000 per year with a net profit margin 14% and a payback period of 3 months. The total investment requirement for the venture US$ 17,510

Production Process

Spectacle frames are made in two parts that is; one is the front which holds the two glasses and the other is the two sides which are fitted on each of the front. Generally spectacle frames are specified by Eye size and Bridge size. Eye size is the one which decides the size of the glass which it holds while the bridge size is the distance between the two glasses.

 

Capital Investment Requirement in US$

Capital Investment Item Units Qty @ Amount
Sheet cutting machine No 1 4,300 4,300
Pneumatic wire shooting machine No 1 4,000 4,000
Front design machine No 1 250 250
Pneumatic hing fitting machine No 1 3,250 3,250
Nose bumping fixture No 1 2,000 2,000
S.P hand press and bending fixture No 1 500 500
Side grooving machine No 1 500 500
Drill Machine No 1 560 560
Fixture and hammer No 2 200 400
Special purpose fixture with heating box No 1 250 250
Barrel polishing machine No 1 1,500 1,500
Total       17,510

 

Production and Operating costs

Cost Item Units @ Qty/ day Pdn cost/ day Pdn cost/ month Pdn cost/ year
Direct costs No 50 10 500 13,000 156,000
Cellulose Nitrates No 37 5 185 4,810 57,720
Cellulose Acetate Sheets of 4mm to 8mm thickness   85 15 700 18,200 218,400
Sub-total         36,010 432,120

 

General Costs(Overheads)

Rent 2,200 26,400
Labour 20 240
Utilities(power) 250 3,000
Other costs 366 4,388
Depreciation (Asset write off) Exp 365 4,378
Sub-total 3,251 39,006
Total Operating costs 39,261 471,126
  • Production costs assumed are for 312 days per year with a daily capacity of 231 Spectacle frames.
  • Depreciation (fixed asset write off) assumes a 4 year life of assets written off at 25% per year for all assets.
  • Direct costs include: materials, Supplies and other costs that directly go into production of the product.
  • 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
Spectacle frames 50 15,600 30.2 471,126 35 546,000

Profitability Analysis in US$

Profitability Item Per day Per Month Per Year
Revenue 1,750 45,500 546,000
Less: Production and Operating Costs 1510.0176 39,260 471,126
Profit 240 6,240 74,874

Government Incentives Available

Government is encouraging small and Medium Enterprises and income generating activities to eradicate poverty through provision of soft loans in the financial institutions.

Market Analysis

There are more people today wearing spectacles as a creative treasure and many more use sun glasses. Thus plastic frames which are trendy and fashionable have a ready market and their Prices are relatively low.

Availability of Raw Materials and Equipments

Raw materials and equipments are imported from Japan, China and German.

 

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