How to Make? An Improved Soap .. Not just for more Foam (GTZ, 1993, 71 p.) E. Economic aspects of the improved soap production (introduction...) E.I. Packaging and trading E.II. Profitability E.III. Financial analysis of the soap making (survey forms)

How to Make? An Improved Soap .. Not just for more Foam (GTZ, 1993, 71 p.)

E. Economic aspects of the improved soap production

The small-scale soap making in pert-urban areas is mainly practiced as an income generating activity.

In this case it should solve usual problems of post-production such as storage and trashing. Moreover the determination of cost for investment and production as well as a reasonable profit margin constitute the basis for an economic viability of this activity.

The above mentioned considerations as well as the socio-economic implications (at community level) of aid to the valorisation of locally oleaginous resources define the main macro-economic aspects of this technology.

E.I. Packaging and trading

The stability at storing of produced soap is one of the key elements of the success of soap-making activity.

In fact the product should stand conservation without any damaging of its external aspect or in usage qualities, as well as at producer level as retailer level (whole sale, retail).

Quality damages that an improved soap can undergo during storage include the followings: rancidity, appearance of stains (oxidations) and of leaks (dehydration) or softness (rehydration), loss of scent etc.

Any principles to be observed for improving the stability at storage of produced soaps are:

- Choose good quality of raw materials (the fat should not presents a tendency to become rancid, for example);
- Do an efficient pre-treatment of the fats;
- Saponify according to the semi-hot method;
- Use alcali stable additives ;
- Incorporate stabilizers like thiosulfate (to be incorporated at a rate of 0,25% of the mass of the soap for example).

For conditioning before packaging, the soap bars should be piled the one on the others in a manner that the air could circulate between them. In so doing, they dry up efficiently and a balance could be established between their water content and the hygrometry of the local environment. According to the climate, this process may extend over one to four weeks (refer to chapter II.3.).

The packaging for transportation and trading can be made with cartons or soft woodboxes. According to consumers' convenience, the soap can be delivered under the form of bars or pieces.

For trading itself home level soap manufacturer should refer to the local (usually traditional) structures of trading for domestic products. He should set up a delivery on advance system for "important customers" retailers.

E.II. Profitability

To determine the profitability of the saponification activity, the following elements should be considered:

1. Expenses

- Expenses incurred by raw materials (fats, alkaline, additives);
- Costs of energy and water;
- Salaries (i.e eventually social costs);
- Trading costs (packaging, transportation);
- Property costs;
- Paying off of material and equipment;
- Taxes and impositions (eventually).

- Sum of total Expenses = (A)

2. Receipts (accounting)

- Sale of soaps;
- Sale of eventual empty packages (barrils);

- Sum of total receipts = ( B )

3. Profit/Loss = ( B ) - ( A )

The form Financial Analysis of the operation gives a guideline for the determination of the main elements for calculation of the profitability.

E.III. Financial analysis of the soap making (survey forms)

1. Expenses

1.1 Raw materials

1.1.1. Fats

Nature	Raw quantity purchased	Weight	Purchase Cost
Purification of fats
Nature	Gross Weight	Weight after Purification	Net cost of one Purified Kg
Quantities of used fats
Costs

1.1.2. Alkali

Nature	purchased quantity	Weight (Kg)	Price of One Kg
Production of mother alkaline solution
Weight of	Quantity	Weight of	Cost of one Kg
Alkaline (kg)	Water (1)	mother solution	mother solution
Quantity of the mother solution:
Cost of the mother solution :

1.1.3. Secundary products (Auxiliaries)

Nature	Quantity	Unit Price	Total Cost

1.2 Energy and water costs "purification of fats, saponification)

Nature/ Source	Quantity used	Unit price	Total cost
of energy
Wood	.............	..............
Wood charcoal	.............	..............
Turf	.............	..............
Water	.............	..............

1.3 Salary costs

Nber Hd	Price Hd	Cost

1.4. Trading costs

Nber packaging	Unit price	Unit cost
Costs of transportation
Total cost of trading:

1.5. Property costs (rental costs or paying off of housing)
= annual costs : number of production sessions/year

1.6. Paying off of material and equipment

Nature	Life of occupancy	Costs of acquisition	Annual Procurement
Total annual procurement:

1.7. Taxes and impositions According to regulations

2. Receipts

Nature of product		Quantity (Nber)	Unit price		Receipts
Soap...........	............Bars	.............		.............
			Or
...................	.........Pieces	.............		.............
Empty barrils	..................	.............		.............
Total

Financial summary of the operation = total receipts - total expenses