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STARTING A MANUFACTURING LEATHER BELTS BUSINESS IN UGANDA

By: wmutenza01 comments

Introduction

This business idea is for production and marketing of leather belts. Real leather belts are one accessory of apparel made of cowhides or other animal skin. It is a flexible band worn around the waist. A belt supports trousers or other articles of apparel and it serves for style and decoration. Their market structure is high since they are of good quality and they are used by almost all people with trousers and others.

The business idea is premised on three hundred working days single shift of 8 hours per day the unit is designed to have production of 1,000 belts per day which translates into 312,000 leather belts per year. The revenue potential is estimated at US$197,600 per month translation into US$2,371,200 per year with a sales margin of 27%with total capital investment requirement of US$67,660 and operational cost of 1,868,893 for the first year of project Operation.

Production Capacity

The production capacity depends on the materials and equipments used in the production process.

Technology and process description

This project involves use of strap cutting machine, stitching machine, Riveting, punching machine and working tools. The production process involves strap cutting, stitching, riveting, coloring/dying, pressing designs, fixing fasteners/buckles and punching.

Scale of Investment, Capital Investment Requirement and Equipment

The project is on a small scale investment and capital investment depends on the intended number of outputs a manufacturer is targeting.

Capital Investment Requirements in US$

Capital Investment Item Units Qty @ Amount
Strap cutting machine No 2 6,000 12,000
Stitching machine No 2 8,100 16,200
Riveting machine No 2 7,500 15,000
Punching machine No 2 300 600
Working tools Set 4 390 1,560
Delivery van No 1 9,000 9,000
Preliminary costs No 1 300 300
Construction cost (Building) No 1 10,000 10,000
Land Piece 1 3,000 3,000
Total       67,660

Production and Operation Costs

Direct Materials, Supplies and Costs in US$ General Costs(Overheads)

Cost Item Units @ Qty/ day Pdn cost/ day Pdn cost/ month Pdn cost/ year
Direct Costs          
Leather roll 10 200 2,000 52,000 624,000
Rivets No 1.5 1,000 1,500 39,000 468,000
Buckles No 2 1,000 2,000 52,000 624,000
Dye kg 2.3 50 115 2,990 35,880
Packaging materials roll 11.2 20 224 5,824 69,888
Sub-total     2,270 5,839 151,814 1,821,768
Utilities (Power & water) 250 3,000
Labour 2,000 24,000
Miscellaneous Costs 500 6,000
Depreciation(Asset write off) Exp 1,177 14,125
Sub-total 3,927 47,125
Total Operating Costs 155,741 1,868,893
  1. Production costs assumed are for 312 days per year with a daily capacity of 1,000 Leather belts.
  2. Depreciation (fixed asset write off) assumes _4_ years life of assets written off at _25% per year for all assets.
  3. Direct Costs include materials, supplies and other costs that directly go into production of the product.
  4. A production month is assumed to have 26 work days.

Project Product Cost and Price Structure in

Item Qty/ day Qty/Yr @ Pdn cost/Yr UPx T/rev
Leather Belts 1,000 312,000 6.0 1,868,893 7.6 2,371,200

Profitability Analysis in US$

Profitability Item Per day Per Month Per Yr
Revenue 7,600 197,600 2,371,200
Less: Production and Operating Costs 5,990 155,741 1,868,893
Profit 1,610 41,859 502,307

Market Analysis

  • It is projected that leather belts have a wider market both internally and externally because of their good quality.
  • Source of supply of Machinery, Equipment and Raw Materials
  • Supply of raw materials is done locally and equipments can be got from hardware shops.

 

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Comments

  • Jeff Schwartz

    10/11/2020

    I have over 30 years of experience in leather belt manufacturing.
    I can help you with the purchase of the machinery that you will need.
    I’ve been going over your costs and can see that you really need assistance.
    If interested please contact me and let me know what your time frame is.
    Best Regards,
    Jeff

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