Post: BUTTER MAKING BUSINESS IN UGANDA

BUTTER MAKING BUSINESS IN UGANDA

Introduction

This profile envisages the establishment of a plant that produces Butter. Butter is a spread made from solidified cream. Cream is taken from milk and then churned. Eventually Butter globules form, and start to clump together. Two products result at the end: Butter, and the liquid left over, which is called Butter milk.

Production Capacity

This plant will be capable of producing 400 kgs of Butter every day which will tantamount to 10400 kgs per month.

Production Process & Technology

Butter is made through the process of churning milk cream. The churning process breaks down a membrane around the Butterfat molecules, allowing them to adhere to each other, thus coagulating to form Butter. Butter forms in the final two minutes of the churning process. Salt used to be added to Butter as a preservative, slowing down the growth of bacteria in the Butter; today, it is added mostly as flavouring for those who are used to or prefer the taste of salted Butter.

Scale of Investment, Capital Investment Requirements

The total fixed capital investment cost of the project is estimated at USD 42,246.

Capital Investment Requirements in US$

Item Units Qty @$ Amount $
Delivery Van No. 1 6,000 6,000
Milk Truck No. 1 12,000 12,000
Cream Separator No. 1 2,000 2,000
Butter Cutter No. 1 1,600 1,600
Churning Machine No. 1 4,500 4,500
Refrigerators No. 2 700 1,400
Milk Tanks No. 2 400 800
Total Amount 31,000

Operating cost in us $ General Costs (Over heads)

Item Units @ Qty/ day Prod. Cost/ day Prod. Cost/ month Prod. Cost/ Year
Direct Costs
Milk Ltrs 0.24 5,000 1,200 31,200 374,400
Salt Kgs 0.4 20 8 208 2,496
Sub total 1,208 31,408 376,896
Rent 600 7,200
Packaging 200 2,400
Labour 1,000 12,000
Utilities (Power &Water) 1,000 12,000
Repair & Maintenance 500 6,000
Fuel 1,500 18,000
Depreciation (Asset write off) Expenses 645.3 7,750
Sub – total 5,445 65,350
Total Operating Costs 36,853 42,246

Project product cost and Price structure

Item Qty/day Qty/yr @ Pdn Cost/yr UPx T/rev
Butter 400 124,800 3.4 430,560 5 2,152,800

Profitability analysis

Profitability Item Per day Per Month Per Year
Revenue 6,900 17,900 2,152,800
Less: Production & Operating Costs 135 3,521 42,246
Profit 6,765 14,380 2,110,554

Sources of Supply of Raw Materials

Milk which is the prime Raw material for Butter making will be supplied locally from milk collecting centres especially in western and central parts of Uganda.

Government Facilities and Incentives Available

The Government has tried to improve on the Transport and Communication Network, removed tax levy on agricultural products in a bid to promote Agro-processing industry in Uganda.

 

John Doe
John Doe

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Hi, jenny Loral
Hi, jenny Loral

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