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SHOCK ABSORBER RECONDITIONING BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

Shock absorbers are essential items for smooth riding of any automobile. Their basic function is to absorb any shocks to ensure a comfortable ride and better control of the vehicle/automobile. With the high number of automobiles in Uganda and noting the state of most of Uganda’s roads, the rate at which shock absorbers are replaced is high. The project cost is US$12,740, capacity of 4,000 per year giving US$13,978 as revenue in a year.

Production Process, Capacity and Technology

Shock absorbers are opened and checked for oil passage and required pressure. The dirt is removed and fresh oil is filled after replacing rubber bushes and seals.

The profiled plant has a minimum capacity of reconditioning 4,000 shock absorbers per annum but this can be increased as a bigger customer base is captured.

Capital investment Requirement in US$.

Capital Investment Item Units Qty @
Oil fired tilting furnace No 1 1,000
Weighing balance No 2 30
ladle & tongs No 2 15
Hand moulding equipment No 1 1,200
Bench grinder No 1 80
Mixing Machine No 1 500
TC of Machinery & Tools      

Production and Operation costs in US$

Cost Item Units @ Qty Pdn cost
Direct Costs        
Used shock absorbers Pcs 0.25 12.82 83.3
lubricating oil and fluids ltrs 6 0.32 50
Rubber bushes/seals pkts 13 0.06 22
Packaging material ltrs 1 1.6 42
Sub-total       197

General Costs (Overheads) Project product costs and Price Structure

Labour 300
Selling & distribution 200
Utilities (Water, power) 70
Administration 20
Rent 150
Miscellaneous expenses 100
Depreciation 25
Sub-total 865
Total Operating Costs 1,062
Item Qty /day @ UPx TR
Shock absorbers 12.8 3.19 3.5 13,978

Profitability Analysis Table in US$

Profitability Item Per day Per month
Less: Production and operating costs 41 1,062
Profit 4 103

Market

The market is mainly from existing vehicles for reconditioning the shock absorbers. The used shock absorbers can be reconditioned and used, which costs less than a quarter of the Price of a new set. It would also be recommended to liaise with automobile dealers.

Source of machinery and raw materials

Some have to be imported and others could be locally made by Tonet Ltd, Kanyanya Gayaza Rd or John Lugendo and Co Ltd, Ndeeba Masaka Rd email lugendojohn07@yahoo.com. Used shock absorbers can be locally sourced cheaply from all garages in the country.

Government incentive:

Repairs and minor capital equipment 100% granted on actual cost incurred in a year. Private sector foundation Uganda has grants for SMEs to develop capacity.

 

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