Bicycle helmets: bill of materials

Digging into the details of the low cost Indian bicycle helmet I discovered that the cost for the basic helmet is as follows

Webbed nylon mesh (for the straps): $0.178/ meter
Resin to create EPS for the helmet - $1.30 per pound (which can go down based on the amount being bought. Also because I am not on site it is a little difficult to gauge the local prices, which will be lower)
Recycled plastic shell for the colorful external part of the helmet- $0.05 - 0.88 per piece.
I don't have the exact number of how much the cost can be brought down depending on how much I am manufacturing.
The most expensive as of now is buying EPS machinery which is about $40,000- $100,000/ set. The next step is to find out how much it will be to rent factories that currently have EPS machinery and if they can handle creating foamed EPS. There is very little detail about the Indian plastic industry on the internet. Most of the search query results are companies in China that produce EPS related products from packing peanuts to bicycle helmets. My understanding is that there are factories but I have to be in India to discover them.


Opportunities and risks

CycleRaja offers helmets in both men’s and women’s and young adult sizes. The age range for the helmets is from 12- 45 years. There is opportunity to invest and expand beyond this target market (younger children). Opportunity exists to expand CycleRaja to other cities, within and outside of India. Metropolitan cities in India like Delhi, Mumbai, Kolkatta and small cities like Pune, Chandighar have a large cycling population. Outside of these cities we are also looking at counties like China  where the infrastructure for bicycles doesn’t exist but there is a cycling culture that supports the livelihood of the poor.

Product Risk – There is a possibility that the product cannot be produced for a cost that is less that $3 in the early part of the venture to afford a profit. By using local manufacturing unit and involving the local community, CycleRaja hopes to reduce the distribution cost of the helmets.

Market Risk- It is possible that the consumer adoption is lower than expected and grows at a lower rate than predicted. To minimize the impact of this large scale marketing will be done in all the cities before the product launch to educate the target market on the importance of bicycle safety.

Financial Risk- There is a risk that the consumer demand will be slower than expected, requiring more investment.

Competitive Risk- It is also possible that existing bicycle companies realize the opportunity and create helmets for lower cost since they can handle a few losses in the early stage of the product launch

http://www.bizrice.com/products/Eps-Epp-Shape-Molding-Machine.html
http://sell.bizrice.com/selling-leads/1900882/patterned-nylon-webbing-nylon-webbing.html
http://ebpack.en.alibaba.com/productgrouplist-215549310/plastic_packaging_box.html