ECONOMIC VIABILITY OF BASALT-BASED BRAKE PAD IN NIGERIA

  • Gai, Peter Friday UAC Foods Nigeria Limited, Km 16 Ojota Ikorodu Express way Lagos
  • Adisa, Ademola Bello Department of Mechanical/Production Engineering, Faculty of Engineering and Engineering Technology, Abubakar Tafawa Balewa University Bauchi, Nigeria.
  • Tokan Aje Department of Mechanical/Production Engineering, Faculty of Engineering and Engineering Technology, Abubakar Tafawa Balewa University Bauchi, Nigeria.
  • Bawa, Mohammed A. Department of Mechanical/Production Engineering, Faculty of Engineering and Engineering Technology, Abubakar Tafawa Balewa University Bauchi, Nigeria.
Keywords: Economic, Viability, Basalt, Brake, Pad, Nigeria

Abstract

The economic analysis reveals the basic information on the expenditure and profit to an investor who is willing to invest on the production of basalt-based brake pad in Nigeria, Nigeria has huge demand of brake as revealed by data obtained from National Bureau of Statistics Abuja (NBS). The analysis was based on deductive economic analysis which assumptions were made and arrived at particular result and the costing was based on Activity-Based Costing (ABC) where overhead and indirect cost were assigned to the related product. The economic analysis will give an insight to an investor (s) who has been skeptic about investing in the manufacturing of brake pad in Nigeria. The analysis revealed that the total capital require for this investment is #54,520,184.00 to set up a manufacturing plant with a capacity of 12,960 pieces of brake pad per day with a depreciation period of ten years. It also showed that if the line will run at 75% efficiency, the annual production is 2,566,080 pieces of brake pads. The unit cost of production is #520.85, unit selling price is #572.935, interest before tax of #6,797,983.869, break-even quantity of 861,019pieces, payback period of eight months. The annual total cost of production is #1,373,924,104.00, annual total sales revenue of #1,470,309,952.00.Twenty-seven people are require for manning the plant.It is clear from above information the investment is worthwhile because of the good payback period and considering the huge demand in Nigeria.

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Published
2022-01-01
How to Cite
Gai, P. F., Adisa, A. B., Aje, T., & Bawa, M. A. (2022). ECONOMIC VIABILITY OF BASALT-BASED BRAKE PAD IN NIGERIA. International Journal of Engineering Technologies and Management Research, 8(12), 26-41. https://doi.org/10.29121/ijetmr.v8.i12.2021.1052