STARTING LEATHER PURSES BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

Real leather purses are made out of animal hides, fish skins. It is a garget for keeping money and other documents. It is commonly known as money purse wallet simply because people use it to keep in their money in the pockets of the handbags.

Production Capacity and Process

The production capacity per day is 500 pieces of leather purses and monthly production is about 13,000 purses, which translates into an annual production of 156,000 pieces of Leather purses/wallets. The Price per leather wallet is US$ 3.5 and this means US$ 1,750 gross revenue per day hence monthly gross revenue US$ 45,500 which translates into annual gross revenue of US$ 54600.

 

Technology and Process of Production

This business idea involves the use of strap cutting machine, stitching machine and working tools. The process involves the strap cutting, stitching, dying and designing the product as well as fixing fasteners and punching zips.

 

Capital Investments Requirements in US$

Capital Investment item Units Qty @ Amount
Sewing machine Number 2 520 1,040
Leather tarning Machine Number 1 880 880
Strap cutting Number 1 944 944
Punching Zips No. 1 630 630
Other equipment   1 520 520
Sub-total       4,014
Land   2 5,000 10,000
Total Investment       14,014

Production and operating costs in US$

Cost item @/dy Qty/dy Cost/ dy Cost/ mnth Cost/yr
Direct Costs          
Turned leather 12 100 1200 31,200 374,400
Dye 3 30 90 2,340 28,080
Threads 0.8 120 96 2,496 29,952
Subtotal 15.8 250 1,386 36,036 432,432

General Costs (Overheads)

Administration expenses 542 6,500
Labour 2,250 27,000
Utilities 650 7,800
Rent 700 8,400
Selling & Distribution 300 3,600
Depreciation 84 1,004
Miscelleneous 208 2,500
Subtotals 4,734 56,804
Total operating Costs 40,770 489,236

Market Analysis

It is projected that leather purses have a ready market in Uganda and East African countries because of their high quality despite the competition with bark cloth purses which are not durable.

 

Project product costs and Price structure in US$

Item Qty/day Qty/year @ Prodn/ year UPx Rev
Lether purse 500 156,000 3.14 489,236 3.5 546,000

Profitability Analysis in US $

Profitability item Per day Per month Per year
Revenue 1,750 45,500 546,000
Less: Production operating costs 1,568 40,770 489,236
Profit 182 4,730 56,765

Sources of Supply of Machinery, Equipment and Raw Materials

Machinery is available on the local market along Entebbe road or can be imported from China and India while raw materials can be bought locally from the industrial area in Kampala and from Uganda Leather tanning Industry Limited in Jinja.

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