>* He weighed it in his hand and wondered why 10g (less than 0.5oz) of cotton, which at the time cost 10 paise (£0.001), should sell for 4 rupees (£0.04) - 40 times the price.*
This is the first estimation of the material cost. Then he learned that they use cellulose. And I don't know if it considers the cost of the surrounding cloth or the plastic wrap. Just assume this is accurate and pick a material cost of 0.10 rupees/pad.
> [...] and provides employment for 10 women. They can produce 200-250 pads a day [...]
Assuming a 20 days/month work, we get 500 pads/month/worker. The minimum salary is slightly bigger than ~100 rupees, let's say 0.02 rupees/pad
I don't know the details in India, but tax and retirement founds and security health may add a 50%, that is 0.01 rupees/pad.
> A manual machine costs around 75,000 Indian rupees (£723) - a semi-automated machine costs more.
To recover machine the cost in 5 years, with 60000 pads/year, the result is 0.25 rupees/pad.
> First, a machine similar to a kitchen grinder breaks down the hard cellulose into fluffy material, which is packed into rectangular cakes with another machine.
Well, I don't know the cost of cellulose. Just assume that it's a good approximation to consider the cost of an equivalent amount of cotton instead, as in the first paragraph. [ * ]
Another cost source is the gas to cook the cellulose and the electricity for the light in the building and the building maintenance cost and ... I don't know how to do a good estimation of them, so just forget them.
And don't forget to add taxes.
Then my optimistic cost is 0.38 ruppes/pad and they sell them for 2.5 rupees, so it's a x6.6 margin, instead of a x25 margin.
[ * ] If I'm free to invent numbers, I'd like to double the material cost from 0.1 to 0.2 rupees/pad to consider the changes in the material. Then the total estimation is 0.48 ruppes/pad and the margin reduced to x5.2.
