MAKING WAX CANDLES
Introduction
This business idea is for production and marketing of wax candles. Candles are cylindrical structures made of wax and are used for illumination purposes. Their market structure is relatively high since they are used in hotels, households, churches and for decorative purposes. They are available in ordinary, fancy shapes and various sizes. The business idea aims at production of 14,612 wax candles per month which translates into 175,344 wax candles per year. The revenue potential is estimated at US$ 2,192 per month, translating into US$ 26,302 per year with a sales margin of 20%. The total investment capital for this project is US$20,814.
Production Capacity
The production capacity for the
project depends on the size of a mould used. For example, a medium mould can
produce 70 wax candles per hour and a single 8-hour working shift per working
day produces 562 candles. But in a period of one month the machine can produce
14,612 wax candles and each candle costs at a minimum US$0.075-0.15)
Market Analysis
The market for candles is available
throughout the year both in rural
and as urban areas.
Technology and Process Description
The Equipments used are simple and can
be fabricated locally. It Includes: Aluminum mould, charcoal stove, knife, saucepan
and firewood. The process involves wax and satiric acid which are
melted in a mild steel mould. The wick is inserted in the candle –moulding
machine and the molten mass is poured in the cylindrical mould and it is cooled
by water and poured on the floor. When completely dry, the wick threads are
trimmed and then packed.
Scale of Investment, Capital Investment
requirements and equipment
The scale of investment depends on the market available, but most especially the manufacturer produces on orders.
Capital Investment Requirements in US$
|
Item |
Units |
Qty |
Unit |
Amount |
|
Candle moulds |
No |
2 |
75 |
150 |
|
Charcoal Stove |
No |
2 |
50 |
100 |
|
Weighing machine |
No |
1 |
150 |
150 |
|
Packing Machine |
No |
1 |
150 |
150 |
|
Total |
550 |
Production and Operating Costs
Direct Materials, Supplies and Costs
|
Cost Item |
Units |
Unit |
Qty/ |
Pdn |
Pdn |
Pdn |
|
Direct Costs |
||||||
|
Wax |
Kgs |
2.5 |
7 |
17.5 |
455 |
5,460 |
|
Satiric acid |
Liters |
4 |
2 |
8 |
208 |
2,496 |
|
Wick length |
Rolls |
2.5 |
1 |
2.5 |
65 |
780 |
|
Sub-total |
10 |
28 |
728 |
8,736 |
||
|
General Costs (Overheads) |
||||||
|
Rent |
50 |
600 |
||||
|
Labour |
575 |
6,900 |
||||
|
Utilities (Charcoal) |
25 |
300 |
||||
|
Other costs (Transport costs, & others) |
300 |
3,600 |
||||
|
Deprecation (Asset write off) Exp |
11.46 |
137.5 |
||||
|
Sub-total |
961 |
11,538 |
||||
|
Total Operating Costs |
1,689 |
20,274 |
1. Production costs are assumed for 312 days per
year with a daily
capacity of 562 wax candles.
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 Structure
|
Item |
Qty/day |
Qty/Yr |
Unit |
Pdn/Yr |
Unit |
T/rev |
|
Wax candles |
562 |
175,344 |
0.1 |
17,550 |
0.15 |
26,302 |
Profitability Analysis in US$
|
Item |
Per |
Per |
Per Yr |
|
Revenue |
84 |
2,192 |
26,302 |
|
Less: Production and Operating Costs |
56 |
1,462 |
17,550 |
|
Profit |
28 |
729 |
8,752 |