Profitable investment in napkins and diapers

By Uba Godwin |   16 February 2020   |   2:58 am  


Introduction
Napkins and diapers are some items that could be produced at small and medium scales. For their daily use and demand, these products can ensure daily cash. Aside these two products, other items like serviettes, toilet rolls, facial tissues, face towels, among others could be produced side by side with them, using similar raw materials.

This information will enlighten anyone interested in how to set and run the business.
Marketing Potentials and Strategies

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Napkins and diapers are consumed daily, irrespective of age, status or religious leaning. Napkins and diapers are for sanitary and cleansing purposes. Their demand is high in homes, schools, hospitals, among others.

The arsenals of any mother/lady are not complete without napkins and diapers. So, consider the number of new born babies and children under the age of six in the country. This number is also rising every day.

Napkins and diapers are in high demand, especially with the increasing awareness of good personal hygiene and quality standard of living. The market for these products is huge.

Recent findings show that most producers cannot meet their market demand, thus creating a large gap yearning for the products.
This enormous demand/supply gap can translate to a viable venture for any investor.

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Raw Materials
Essential raw materials for these products are the jumbo reels and cotton lint. Also included is the packaging machine that would wrap the product and print producers’ name, logo, address and brand name on the wrapper.The raw materials and machine are obtained locally from suppliers and producers.

Plants And Machinery
The machines for production are usually imported. There are reputable producers and suppliers of quality machines from South Africa, China, Taiwan and Germany.

Packaging Machines
The production line can be located in any part of the country, particularly nearness to the source of raw materials.

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Accommodation
The production line does not need much space. A rented three-bedroom flat is enough to kick-start the business. This will take care of the production, storage and raw material rooms as well as the administration/accounting rooms

Financial Implications
The production line can procured with about N23million. This amount many change depending on other products the investor may include as by-products.
The breakdown of this amount on a small-scale level is as follows
Financial Estimates (take off)
Accommodation (rented) N1, 500, 000
Plants & machinery N15, 500,000
Utilities N 2, 500,000
Working capital N3, 000,000
Preliminary Expenses (including feasibility studies/biz plan) N500, 000
Total N23, 000,000
The size of production — medium or large scale — will change the total cost listed above.

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Investment Analysis
The payback period based on preliminary projections will be about two years.The return on investment is about 52% and there is positive NPV. Details will be discussed with the prospective investors.

The project is very profitable with about Gross Profit of N16million in the first year, N24million in the second year, N38million in the 3rd and N62million in the 4th year of operation. The turnover is very impressive.

Conclusion
This project is very profitable. There is a need for Nigerians to set up small, medium and large-scale industries to reduce unemployment in the country.For details on comprehensive and bankable feasibility studies, investment advisory services, sourcing of project funds, training, among others contact E-mail: ubagodwin@yahoo.com
•Tel:08034494437, 0823664368.

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