MANUFACTURING SCENTED PHENYL IN UGANDA

By: wmutenza0 comments

Introduction

This business idea is for manufacturing and marketing of Scented phenyl. Scented phenyl is used as a disinfectant to clean wash basins, toilets, and kitchen sinks etc. It is used in residential houses and commercial establishments such as: hospitals, offices and shops etc., as a disinfectant and also for some pleasant smell. It is used in most households and other institution like hotels and thus has a good market potential. The business idea is premised on production of 2,600 liters of scented phenyl per month which translates into 31,200 liters per annum. The revenue potential is estimated at US$5,096 per month translating into US$61,152 per annum with a sales margin of 58% and total investment requirement is US$3,190 for the first year of project operation

Production Capacity

The production capacity depends on the quantity of raw materials and technology used in the production process. But for this case, the plant has a minimum capacity of 31,200 liters of scented phenyl per annum and this is on the basis of 312 working days in a year and 8-hour single work shifts in the working days.

Production Process

The raw materials are weighed and put separately. After preparing the caustic soda solution, required quantities of resin, castor oil, light creosote oil and caustic soda solution, are mixed together in a reactor. After obtaining the final product from the storage tanks, the final product can be packed into bottles and ready for market.

Capital Investment Requirements in US$

Capital Investment Item Qty @ Amount
Reaction vessel 1 870 870
Medium sealing machine 1 320 320
Bottle filling machine 1 750 750
Storage vessels 3 350 1050
Weighing scale. 1 200 200
Total 3,190

Production and Operating Costs in US$

Cost Item Units @ Qty/ day Pdn cost/ day Pdn cost/ mth Pdn cost/ yr
Direct Costs
Rosin liter 0.81 30 24.3 631.8 7,582
Caster oil liter 0.85 15 12.75 331.5 3,978
Caustic soda liter 0.8 15 12 312 3,744
Light creosote oil liter 0.6 50 30 780 9,360
Sub-total 110 79.05 2,055 24,664

General Costs (Overheads)

Rent 250 3,000
Labour 500 6,000
Utilities 100 1,200
Transport 100 1,200
Preliminary Costs 100 1,200
Miscellaneous Costs 50 600
Depreciation 66 798
Sub-total 1,166 13,998
Total Operating Costs 3,222 38,662
  1. Production costs assumed 312 days per year with a daily capacity of 100 liters of Scented Phenyl
  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 days.

Project Product Costs and Price Structures

Item Qty/ day Qty/ Yr @ Pdn cost/Yr UPx T/rev
Scented Phenyl 100 31,200 1.24 38,662 1.96 61,152

Profitability Analysis in US$

Profitability Item Per day Per Month Per Yr
Revenue 196 5,096 61,152
Less: Production and Operating Costs 124 3,222 38,662
Profit 72 1,874 22,490

Market Analysis

Market for scented phenyl is growing due to good fragrance and also because of almost the same cost as that of ordinary phenyl. The wide application in commercial establishments, hospitals, hotels, nursing homes and restaurants, etc., has carved a good market niche for this product.

Supply of Raw Materials and Equipments

Raw materials and machines can be imported from India.

 

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