Make millions by producing serviettes

The rise middle class, corporate and growing population in urban centres have propelled the rise in eateries in Uganda.
One of the items that come with the maintaining hygiene in restaurants and hotels are serviettes which are now one of the fast moving consumer goods.
Serviettes are small pieces of table linen that are used to wipe the mouth and to cover the lap in order to protect clothing when eating.
Made out of light absorbent material, napkins are soft to absorb sweat and clean the mouth.
That is why experts think that investing in making serviettes is a viable business for Ugandans looking for startups.
This is equally a large and small scale project anybody can invest in; those that are still working and want to make additional income, retired workers, pensioners, local and state governments that want to empower unemployed youths housewives who want to establish business while taking care of their homes.

Capital investment
Experts say that for you to start such an investment, you need total capital investment of about $3,635 (Shs13 million). This involves purchasing a serviette-making machine, raw materials and operating capital.
The machines also differ in prices depending where you procure them. Looking at Alibaba.com, the prices for the machines range from $500 (Shs1.8 million) to $10,000 (Shs36 million) depending on the capacity.
If you are aiming at producing about 2,600 packets of serviettes per month, this translates into 31,200 packets annually.
The revenue potential is estimated at $11,180 (Shs40.2 million) monthly, translating into $134,160 (Shs482 million) annually.
The net profit margin is estimated at 29 per cent with a payback period of three months.

Production process
According to Uganda Investment Authority, this business is premised on producing 40,560 units (each unit with 10 packs of 50 pieces each) per annum.

Technology
To make serviettes, you need a hand-driven knitting machine and a yarn twister to do the job.
The raw materials include cotton staple yarn, absorbent thread, cotton thread, cardboard boxes and craft papers.
Luckily, the raw materials and all the equipment to produce serviettes can be sourced locally.
Cotton staple yarn is knitted into loose fabric tube, cut to required pieces of absorbent cotton with the ends of the napkins tied by thread and packed in printed polythene bags.

Market
The market for serviettes is wide from individuals to established eateries. They are generally used for cleaning and sanitary purposes in households, restaurants, hotels, canteens, social gatherings, parties, maternity homes, clinics, hospitals, educational institutions, churches, night clubs, shops, fast food centres and offices.
However, business experts say this is one investment with competition from imports either from neighbouring Kenya and China.
This creates an opportunity because the market is big and is still growing locally.

Advice
Because there are already supplies of serviettes on the market both from imports and some locally produced-business, experts say before you inject your money into this business, move around to ascertain what quality of serviettes being used.
Mr Newton Buteraba, the chief executive officer, House of Wealth –a local firm that offers business advisory services and motivational speaking in an interview Prosper magazine, said: “With this kind of business, it would be wise for one to do background research by engaging different customers –hotels and restaurants to find out what type of serviettes they use, where they get them from and who supplies them. This will give you a clear idea on which market to target.”
Furthermore, Mr Buteraba advises that with any startup, it is not good to start with a loan but with savings such that the profits are ploughed back into the business.

Incentives
According to Uganda Investment Authority, there are a number of government programme that facilitate industrialists.
Among them is Private Sector Foundation Uganda (PSFU) which builds capacity and develops business plans and feasibility studies for investors.
PSFU has a new project enhancing skills development named Skills Development Facility. Here, those interested in getting training to grow can access funds.