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STARTING KNITTING OF WOOLEN KNITWEAR BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

Woolen knitted products are highly demanded. The business idea is aimed at establishing a woolen kitting project with a capital investment cost of US$ 18,834 , producing an average of 60 woolen knitwear products per day totaling to US$ 18,720 pieces fetching a revenue of US$ 121,680 when sold in the first year of operation. The operating costs are US$ 104,342.

Production Capacity, Technology & Process

The production process involves winding yarn and then knitted in different fashions as the operator desires. The product is combined together by a sewing machine and then packed.

The production capacity largely depends on the nature of the machines used, the efficiency and experience of the workers, and the desired objectives of the project.

Capital Requirements and Equipment

Capital Investment Requirements in US $

Capital investment item units Qty @ Total
Knitting machine No 2 7,000 14,000
Sewing machine No 2 500 1,000
Furniture No 2,500
Scissors No 10 15 150
Measuring tapes No 12 7 84
Steam Iron No 2 50 100
Other Equipment No 1,000
Total       18,834

Production and Operating Costs in US$ Direct Materials, Supplies and Costs

Cost Item Units @ Qty/ day Pdn cost/ day Pdn cost/ mth Pdn cost/ yr
Direct Costs            
Rolls of yarn Rolls 0.75 254 190.5 4,953 59,436
Rolls of threads Rolls 0.5 35 17.5 455 5,460
Packaging materials Pcs 0.08 64 5.12 133 1,597
Sub-total     353 213.1 5,541 66,493

General Costs(Overheads)

Labor 954 11,450
Utilities 346 4,150
Selling and distribution 187 2,240
Miscellaneous expenses 88 1,050
Administration expenses 188 2,250
Rent 1,000 12,000
Depreciation 2763 4,709
Sub-total 3,143 37,849
Total Operating Costs 8,684 104,342
  1. Production costs assumed are for 312 days per year with daily capacity of knitting 60 pieces of woolen knitwear.
  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. Total monthly days assumed are 26-work days.
  5. The valuation currency used is United States Dollars

Project Product Costs and Price Structure

Item Qty/ day Qty/yr @ Pdn cost/ yr UPx T/rev
Woolen Knitwear 60 18,720 5.6 104,342 6.5 121,680

Profitability Analysis Table

Profitability Item Per Day Per Month Per Year
Revenue 390 10,140 121,680
Less: Pdn &Operating Costs 334 8,695 104,342
Profit 56 1,445 17,338

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