Bread and Confectionary products are a lucrative business. These, especially bread, are quite nutritive and easily preserved and the shelf life can be prolonged. These are products commonly stocked almost by all provision stores. Bread is one common product on people’s dining tables to a sizeable proportion of the urban and semi-urban communities and therefore, enjoys a ready market.
This is a project to produce bread, cakes, buns, mandazi, doughnuts etc. It requires capital investment of US $55,580, yield revenue of 920,400 and net profit margin of 60%.
Capital Requirements and equipment
The investment scale depends on the project set objectives.
Capital Investment Requirements in US$
|Capital Investment Item||Units||Qty||@||total|
|Land & Buildings||No||25,000|
Production and Operating Costs
|(a)Direct Materials, Supplies and Costs in $|
|Cost Item||Units||@||Qty/ day||Pdn Cost/day||Pdn Cost/ month||Pdn Cost/ year|
|General Costs (Overheads)|
|Selling & distribution||1,800||150|
|Cleaning & toiletries||192||2,300|
|Total Operating Costs||72,358||839,688|
- Production costs assumed 312 days per year with daily capacity of producing 2,750 loaves of bread.
- Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
- Direct costs include materials, supplies and other costs that directly go into production of the product.
- Total monthly days assumed are 26-days.
- The valuation currency used is United States Dollars.
Project Product Costs and Price Structure
|Item||Qty/ day||Qty/yr||@||Pdn Cost/yr||UPx||Total Rve|
Profitability Analysis Table
|Profitability Item||Per day||Per Mnth||Per year|
|Less: Production & Operating Costs||2,691||69,974||839,688|
Bread is a household item, therefore it has a ready market throughout the year and the country.
Government Facilities and Incentives
There exists a liberalized trade policy. Bakery owners are allowed to import wheat tax free and process it into wheat flour.