This business idea focuses on the manufacturing and marketing of wire nails, which are essential for various applications such as roofing, carpentry, woodwork, and fencing. With the increasing construction activities in both commercial and private sectors, the demand for wire nails is expected to rise. Establishing a wire nail manufacturing plant can cater to this growing demand. The project aims to produce 769 kilograms of three-inch wire nails per day, totaling 239,928 kilograms per year. With an estimated revenue potential of $55,583 per month ($667,000 per year) and a sales margin of 33%, the initial investment requirement for the first year is $71,300.
Production Capacity
The plant initially has a minimum capacity of producing 20 tons of nails per month. As the market segment expands, the production output can be increased accordingly.
Manufacturing Process Description and Technology
The manufacturing process involves feeding steel wire in coil form into a wire nail-forming machine. The process includes cold heading to form the nail head, followed by shaping the point. The nails are then tumbled in a barrel with sawdust or similar materials to remove burrs. Finally, the finished nails are weighed, packed, and prepared for marketing.
Investment Scale, Capital Requirements & Equipment
The investment scale depends on the project’s objectives and the market demand for wire nails. The required equipment and machinery are typically imported from countries like China and Japan, while raw materials are sourced from Iran or South Africa.
General Costs (Overheads)
To evaluate the financial aspects of the business, it is important to consider general costs and overheads. Production costs are estimated for 312 days per year, with a daily capacity of producing 769 kilograms of three-inch wire nails. However, the same production process can be used to manufacture other nail sizes, such as one-inch or two-inch nails. Depreciation is assumed based on a 4-year write-off period at a rate of 25% per year for all assets. Direct costs include materials, supplies, and other expenses directly related to the production process. A production month is assumed to have 26 days.
Market Analysis
The market for wire nails is consistently high throughout the year, both in rural and urban areas. With the growing construction industry and increasing demand for nails, this business idea presents a lucrative opportunity to supply high-quality wire nails to meet the market needs.
Conclusion
Investing in wire nail manufacturing in Kenya can cater to the rising demand for nails in various industries. By adopting efficient manufacturing processes and ensuring product quality, entrepreneurs can tap into the market and provide a reliable supply of wire nails. This not only contributes to the growth of the construction sector but also creates employment opportunities and reduces the country’s reliance on imported nails.
