Financing For Entreprenure Venture – Case Study Example

Compare the value added of exporting raw materials and the value added from processing these raw material Exports are a way for a business and/or country to make money through the materials they produce whether it is processed as a final product or a mere materials. Exporting raw materials maybe uncomplicated as it does not require much effort to sell the produce. It however does not add much value to the material when it is not processed to become a final product. Processed raw materials may require a lot of effort to produce but they add significant value to the original material when they are exported.
The value added of exporting processed raw materials compared to unprocessed raw materials is significant. Processing a raw materials into a product adds significant value many times over compared to its raw material. We can take for example the case of a watch. Watches are made of steel and its raw material is iron ore. If we are going to export the raw material of iron ore, our income will not be much because minerals are cheap. If we are going to process it and make it into a watch, it would take a lot of effort but the added value in terms of use and monetary gain is very significant. So if we are going to export the ore only, it would be around $1 dollar per kilogram but if we are going to process it to a watch, that same kilo of iron ore would amount to more than $100. The example show that it is way much better and more profitable to export processed raw material that is already transformed into a final product than exporting a mere raw material.