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Emerald & indicator rocks LAPIDARY  INVESTMENT
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Introduction Basic Factory Main Factory Sub-Factory Summary

INTRODUCTION

The cutting of gemstones is often quite specialised. In the west, South Africa, Europe and the USA it can cost you anything between US$5 and US$20 per carat to have a gem faceted and around US$8 to have cabochons made. In some eastern countries the same work and acceptable quality will cost you less than $3 per carat. There are two main reasons for this - mass production and low cost labour.

In my proposed factories we will be able to compete with the eastern countries. My machines are absolutely suitable for mass production, i.e. same form and size on a number of machines, no adjustments, except when changing cut or size and various people doing dedicated sections of the work.

Our estimated cost per gemstone is: less than $0-50 per carat (consumables), $0-50 per carat (labour, overheads, packaging and marketing). Thus our production cost is under $1-00 per carat. The smaller stones cost more per carat, but the larger the stone, the lower the production cost per carat.

Intended share of profit offered as follows:

25% to the investor
25% to the developer and management
30% for further investment in other projects in the country, shared 50% each by investor and developer.
20% shared by factory workers on bonus basis

Below are estimated figures, I used resale values for gemstones far less than the real prices achieved and purchase prices at what is currently paid for average to good quality rough material. This is just to be considered as an indication, for the composition may be totally different, but you may consider the profit margins as very realistic.


BASIC FACTORY

Initial investment of $30,000, employment for 15 people, producing 5,000 to 8,000 gemstones per month and an yearly profit, before taxes, in excess of $200,000. To manufacture the machinery and train personnel would take about two months. We should be in full production in less than four months.

ILLUSTRATIVE ONLY Size Qty Price Total
ROUGH PURCHASE        
Low priced gems 4 Kg 20,000 ct $250 per kg $1,000
More expensive gems 40 gram 200 ct $30 per ct $6,000
GEM PRODUCTION        
Low priced gems 0.5 - 1 carat 1,760 ct $2-00 per ct $3,520
  1 - 2 carat 1,760 ct $3.50 per ct $6,160
  2 - 5 carat 880 ct $5-00 per ct $4,400
Expensive priced gems 0.5 - 1 carat 22 ct $80-00 per ct $1,760
  1 - 2 carat 17 ct $100-00 per ct $1,700
  2 - 5 carat 7 ct $1,000-00 per ct $7,000

 

Initial investment $30,000
Initial gem purchase - Carats 20,200
                               - Value $7,000
Running cost per month $8,000 max
Production capability 6,000 - 8,000 gems p.m.
Personnel 16
Production - Carats 4,446
                 - Est. Quantity 3,800
                 - Value $24,540
                 - Cost $5,000
Profit on initial purchase $12,540
Annual profit @ 70% capacity $200,000 +

MAIN FACTORY:

Initial investment of $80,000, employment for 50 people, producing 18,000 to 25,000 gemstones per month and an yearly profit, before taxes, in excess of $200,000. To manufacture the machinery and train personnel would take about two months. We should be in full production in less than four months.

ILLUSTRATIVE ONLY Size Qty Price Total
ROUGH PURCHASE        
Low priced gems - better quality 15 Kg 75,000 ct $500 per kg $7,500
More expensive gems 82 gram 420 ct $30 per ct $12,600
GEM PRODUCTION        
Low priced gems 0.5 - 1 carat 4,500 ct $2-00 per ct $9,000
  1 - 2 carat 5,500 ct $3.50 per ct $16,500
  2 - 5 carat 6,500 ct $5-00 per ct $32,500
Expensive priced gems 0.5 - 1 carat 45 ct $80-00 per ct $3,600
  1 - 2 carat 37 ct $100-00 per ct $3,700
  2 - 5 carat 15 ct $1,000-00 per ct $15,000

 

Initial investment $80,000
Initial gem purchase - Carats 75,420
                               - Value $20,100
Running cost per month $25,000 max
Production capability 18,000 - 25,000 gems p.m.
Personnel 50
Production - Carats 16,600
                 - Est. Quantity 11,000
                 - Value $80,300
                 - Cost $15,000
Profit on initial purchase $40,000
Annual profit @ 70% capacity $520,000 +

SUB-FACTORY:
Very similar to BASIC FACTORY in all aspects.

MINI FACTORY:
Investment of $4,500, run on franchise basis, producing 400 to 800 stones per month. We will purchase the gems from them at a fair price and supply the consumables.


SUMMARY

  BASIC MAIN SATELLITE MINI
Investment US$30,000 US$80,000 US$15,000 US$4,500
Initial stock $7,000 $20,000 $4,000 not financed
Personnel 16 50 15 4
Running cost per month (Maximum) $8,000 $25,000 $6,000 $500
Capability (Gemstones per month) 7,000 20,000 6,000 500
Annual profit at 70% production $200,000+ $520,000+ $200,000+ $14,000+
         
Re-invest 30% $60,000 $156,000 $60,000 n/a

.Index.

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(C) Copyright C Lamprecht . . . . . . . . . . . . . . . . . . . . . Tel: +27 11 486-1365
E-MAIL: emeraldmine@hotmail.com . . . . . . . .Last Updated: 12 June 1998