ESTABLISHING A DAIRY FARM BUSINESS IN UGANDA

 ESTABLISHING A DAIRY FARM BUSINESS IN UGANDA

Introduction

Dairy farming is a class of agricultural, or animal husbandry enterprise, for long-term production of milk, usually from dairy cows but also from goats and sheep, which may be either processed on-site or transported to a dairy factory for processing and eventual retail sale. It is a lucrative business, which can fetch big profits due to the increasing and ready market for dairy products.

Production Capacity

The production capacity is based on the quality and number of animals raised on the farm. However, for 5 Friesian Cows, 100ltrs of milk will be produced as each Dairy Animal is capable of producing 20 Litres of milk per day.

Capital Investment Requirements and Equipment

This project will be operated locally on small scale, i.e. 5 Friesian Cows operated on 5 acres of land. The Fixed Capital Investment required to start this project is approximately US$ 73,521, generating a revenue potential of USD 374,400 per annum. The net profit margin is 6% with a payback period of 2 years.

Market Analysis

There is a high demand for dairy products in Urban Centers of Uganda especially in schools, hospitals, households, and Dairy processing industry. However, they may also be exported.

Capital Investment Item Units Qty @$ Amount $
Land Acres 5 12,000 60,000
Cows No. 5 680 3,400
Field Van No. 1 8,000 8,000
Milk Cans No. 5 57 285
Milk Filters No. 2 12 24
Clamps No. 2 22 44
Barns & Shelters No. 2 545 1,090
Spraying Pump No. 1 30 30
Injectors No. 2 10 20
Spades & Pangas No. 4 3 12
Weighing Scale No. 1 120 120
Water Basins No. 5 12 60
Harmer No. 1 5 5
Wheel Barrows No. 2 35 70
Hand Hoe & Rake No. 2 3 6
Thermometer No. 1 12 12
Milk Cups No. 5 6 30
Water Tanks No. 2 125 250
Feeding Troughs No. 5 12.5 62.5
Total Amount 73,521
Labour 300 3,600
Repair & Maintenance 200 2,400
Ropes 10 120
Fuel 400 4,800
Depreciation(Asset write off) Expenses 36 437
Sub – total 946 11,357
Total Operating Costs 12,692 152,303

Project product costs and Price structure in US$

Item Qty/day Qty/yr @$ Pdn Cost/yr$ UPx Total /rev
Milk 3000 936,000 0.16 152,303 0.4 374,400

Profitability Analysis table

Profitability Item Per day Per Month Per Year
Revenue 1,200 31,200 374,400
Less: Production & Operating Costs 488 12,692 152,303
Profit 712 18,508 222,097
Sources of Supply of Raw Materials
All raw materials and equipments are imported.
However, the business risk associated with it is a high potential of health and safety related risks surrounding the manufacturing and processing, perish ability of the products. But , this can be solved by employing food scientists and adhering to a strict safety regime.

Production and operation costs in US $

Item Units @ Qty/ day Prod. Cost/ day Prod. Cost/ month Prod. Cost/Year
Direct Costs
Feeds Kgs 0.78 500 390 10,140 121,680
Drugs M/gs 21.5 5 107.5 2,795 33,540
Calcium/ Salt Kgs 0.6 10 6 156 1,872
Water Litres 0.0028 600 1.68 43.7 524
Sub total 505.18 11,746 140,946

 

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