Establishing Printing Ink-producing Plant for Export
By Uba Godwin
Printing ink is a dispersion distributed as a thin film on such media like paper, glass, boards, films, plastics, foils, textiles, metal cans etc, to make images. Each kind of medium requires a different type of ink with different formulation.
The applications of printing ink are various and the demand for inks has been boosted tremendously by the explosion experienced in such user-industries as publishing, textile, packaging (metal cans and cardboards, advertising, pharmaccuticals etc) and computer world.
The demand continues to demonstrate an upward trend as years pass by. Even the very newspaper you are reading has printing ink as an essential input in the course of its production.
The existing producers of printing inks can scarcely satisfy over 60% of the local demand and there has continued to be severe pressure on the price to go up.
Massive importation consequently continues in spite of the fact that there are profitabte opportunities for more factories to be established to use locally manufactured raw materials input.
Machinery and Equipment
To produce good quality printing inks, one needs such equipment and accessories as triple roll mill, planetary mixer, mixer blades, weighing balances, grinding gauge, proofing kit, mulders gauge, storage tanks, various electrical fittings etc. Some of the equipment will be imported while the rest will be fabricated locally to reduce investment cost.
Space required is only 30 square metres, a bungalow is ideal. Plant production capacities vary and the level compatible with the promoters' desire and financial ability will be chosen.
The plant highlighted here is ideal for a small-scale venturer. There are opportunities to increase the production capacity to medium and large scale.
Raw Materials
The type, quality, nature and quantity of raw materials required are dictated by the type of printing inks the promoter wishes to manufacture.
Different types of ink need different formulations and qualities but generally the main inputs are resins, waxes, dehydrated limestone, solvents, coloured and mineral pigments, gums, water, preservatives etc.
To package the finished products, one needs pre-printed plastic or metal cans cello tapes, labels and cardboards boxes.
The raw and packaging materials are 80% local in content which makes the project attractive. The remaining 20%, though imported can be sourced from the numerous chemicals marketing companies around.
Solvents and carbon black could be obtained from the NNPC. PProduction Process
The production process of many kinds of ink is the same and involves briefly the mixing of various ingredients in the proportion, grinding the mixture to form a paste with the required chemical and physical properties, thinning the paste already ground into finer dispersions with a solvent thinner in order to produce a 'ready - mixed' finished product which is then packed in metal or plastic containers.
The project being technologically intensive, there is need to employ highly experienced and skilled relevant line staff in order to ensure good quality formulations and high standard of finished goods because any error can lead to rejection.
Location
The project can be established anywhere in the country.
A current survey showed a near absence of such plants in the Northern and Eastern parts of the country. This explains why the printers there have to contend with high cost of printing inks. There is therefore need for promoters there to establish this project to cater for the needs of the printing, packaging, Computer users and publishing companies around there.
Financial Projections and Investimant Analysis
From investment projection carried out, the project can be set up with the sum of N10.8 million. The breakdown is shown below.
Investment analysis carried out also indicated that projected revenue of N65.2million will be made in the first year of operation. This will increase to N85.7 million in the third year. This figure will also rise to N100.4million in the fifth year of operation. Details will be given to prospective investors on contacting the writer.
Net profit is seen to be in the order of 60% and above given good management, availability of raw materials etc.
The payback period of the proposed project is estimated at two years. The return on investment is also very impressive at 62% within the five years under consideration all things being equal.
Estimate of the Project Cost
(N)
Leased property (varies) 500,000
Machinery and equipment 3,550,600
Standby generator 1,500,000
Motor vehicles 1,550,000
Pre-investment expenses
(including feasibility
studies) 250,000
Working capital 2,480,000
Office furniture and
equipment 145,000
Contingency (to cover
cost overruns) 800,000
TOTAL 10,775,600
Implementation
To give effect to the above, comprehensive feasibility studies need to be done, factory premises constructed or acquired, plant and machinery purchased, installed and commissioned for commercial operation. For details contact the writer.
Market potentiality
The market for printing ink is wide, varied and has continued to demonstrate an upward trend. Those who patronize them include private and government presses, publishers of newspapers, magazines and books, wholesale and retail distributors of printing materials and equipment, manufacturers of textiles, plastics and metal containers, advertising agencies, makers of cardboards, cement and feed bags, computer warehouses etc. Distribution could be through appointed agents and own depots.
Funding
The funds for the proposed project will come from the relevant industrial development banks, SMEIs, funding institutions and foreign direct investment funds. Details will be given to prospective investors.
For details on the project, such as conducting a comprehensive feasibility studies and producing a bankable report, sourcing of funds, setting up and training your manpower, please contact the writer.
Uba is of Global Trust Consulting Group 56, Ishaga Road (lst floor) Surulere, Lagos Tel: 01- 4721550, 08023664368 Email: ubagodwin@yahoo. com
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