STARTING A CATERING BUSINESS IN THE OIL AND GAS SECTOR IN UGANDA
Introduction
The Oil and gas sector is a new and growing sector In Uganda with a high demand for quality catering services.
Caterers supply food to oil workers located on oil fields which tend to be isolated away from normal towns. It will require mobility and portable services. Establishing a modern Catering service can prove to be a profitable business. The establishment of this project requires a total fixed cost of US$25,000 with a working capital of about US$40,000 – sufficient for two months operating costs. Generating revenue of 563,160 in the first year of operation.
The project has a payback period of 1year and 3months with a 36% profit margin.
Production Capacity, Technology &Process
The production process involves preparation of both Local and international Foods such as sandwich, Beef burgers, Fried chicken, chips, spaghetti, Pizza, Matooke, Rice, Yams, Cassava, Boiled Irish Potatoes, Posho with all Stews and Snacks such as Chips, Chicken, Fish among others and Beverages.
The production will serve 400 clients daily for breakfast, Lunch and supper. Investment Scale, Capital Requirements & Equipment A typical oil well team will consist of anywhere up to 200 – 400 people.
This plan is based on serving two sites with a total of 400 people to feed. Capital requirements are estimated at US$25,000
Capital Investment Requirements in US$
| Capital investment item | Units | Qty | @ | Total |
|---|---|---|---|---|
| Blenders | No | 6 | 50 | 300 |
| Fridges | No | 3 | 400 | 1200 |
| Cutlery | Sets | 60 | 20 | 1200 |
| Furniture | No | – | 1000 | 1,000 |
| Cooking Equipments | No | – | 3000 | 3000 |
| Music System, TV & Computer | No | 3 | 400 | 1,200 |
| Food warmers, | No | 6 | 110 | 660 |
| mixers &flasks | 10 | 30 | 300 | |
| Delivery Van | No | 1 | 7,000 | 7000 |
| Bouquet set | Sets | 5 | 350 | 1750 |
| Gas and water tanks | No | 2 | 2000 | 2000 |
| Decoration materials, empty crates | No | – | 550 | 550 |
| Standby generator | No | 1 | 800 | 800 |
| Plates and other kitchen equip | – | 4000 | 4,000 | |
| Total | 24,960 |
Production and Operating Costs
| Cost Item | Units | Unit | Qty/ | Pdn cost/day | Pdn cost/Mnth | Pdn cost/Yr |
|---|---|---|---|---|---|---|
| Food Items | Bchs | – | – | 300 | 7,800 | 93,600 |
| Sauce Items | Kgs | – | – | 140 | 3,640 | 43,680 |
| Beverages (water,soder etc) | Cts | – | – | 200 | 5,200 | 62,400 |
| Spices, Cooking oil, Sugar etc(seasonings) | Kgs | – | – | 30 | 780 | 9,360 |
| Other materials | – | 20 | 520 | 6,240 | ||
| Sub–total | – | 690 | 17,940 | 215,280 | ||
| General Costs (Overheads) | ||||||
| Labour | 500 | 6,000 | ||||
| Utilities | 400 | 4,800 | ||||
| Gas & Charcoal | 300 | 3,600 | ||||
| Uniforms | 40 | 480 | ||||
| Cleaning & Toiletries | 200 | 2,400 | ||||
| Miscellaneous expenses | 100 | 1,200 | ||||
| Depreciation | 520 | 6,240 | ||||
| Sub–total | 2,060 | 24,720 | ||||
| Total Operating Costs | 20,000 | 240,000 |
1) Production costs assumed 312 days per year with daily capacity of selling 130plates of food, 150 bottles of beverages &80 cups of tea. 2) Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets. 3) Direct costs include: materials, supplies and other costs that directly go into production of the product. 4) Total monthly days assumed are 26-days. All costing is in US Dollars
Project Product Costs and Price Structure
| Item | Qty/ day | Qty/yr | @ | Pdn cost/ yr | UPx | T/rev |
| Foods | 400 | 124,800 | 1.03 | 128880 | 3.5 | 436,800 |
| Beverages | 330 | 102,960 | 0.44 | 45680 | 0.5 | 51,480 |
| Tea | 300 | 93,600 | 0.46 | 42608 | 0.8 | 74,880 |
| Total | 1030 | 98,676 | 563,160 |
Profitability Analysis Table
| Profitability Item | Per Day | Per Month | Per Year |
| Revenue | 1805 | 46,930 | 563,160 |
| Less: Pdn & Operating Costs | 769 | 20,000 | 240,000 |
| Profit | 1036 | 26,930 | 323,160 |
Market Analysis
The market readily exists as the Oil sector has taken an expanding trend in Uganda with outside catering services being the most suitable arrangement for the supply of food to the workers, the business is a viable venture. Government facilities and incentives The government actively encourages Ugandans to participate in the oil sector by providing support services such as catering. .