Introduction
Grains are agricultural products that have a very high demand in the country. They usually include: Simsim, ground nuts, soy beans, maize, popcorns, and cow peas.
The project idea is based on adding value by packaging good quality grains and selling them at relatively low prices. The project expects to package 72,000 kgs of assorted grains per annum. Initial investment costs are estimated at US$20,370 generating revenue of US$92,695 at a net profit margin of 43% and payback period of approximately 2 years.
Capital Investment Requirements in US$
| Capital investment item | units | Qty | @ | Total |
| Motor truck(4 tones) | No | 1 | 14,000 | 14,000 |
| Furniture & Fittings | No | 1 | 2,000 | 2,000 |
| Packing machine | No | 1 | 1,000 | 1000 |
| Grading machine | No | 1 | 1,000 | 1000 |
| Grain cleaning machine | No | 1 | 1,200 | 1200 |
| Dust woofers | No | 2 | 400 | 800 |
| Weighing scale | No | 1 | 370 | 370 |
| Total | 20,370 |
Production and Operating Costs in US$
| Cost Item | Units | @ | Qty per day | Pdn cost per day | Pdn cost/ month | Pdn cost/ year |
|---|---|---|---|---|---|---|
| Direct Overheads: | ||||||
| G. nuts | Kgs | 0.8 | 71 | 56.8 | 1,476.8 | 17,722 |
| Soy beans | Kgs | 0.3 | 32 | 9.6 | 249.6 | 2,995 |
| Pop corn | Kgs | 0.3 | 64 | 19.2 | 499.2 | 5,990 |
| Cow peas | Kgs | 0.3 | 64 | 19.2 | 499.2 | 5,990 |
| Packaging material | Pcs | 0.05 | 300 | 15 | 390 | 4,680 |
| Sub-total | 531 | 120 | 3,115 | 37,377 | ||
General Costs (Overheads):
| Field collection fuel | 125 | 1,500 |
|---|---|---|
| Rent | 300 | 3,600 |
| Utilities | 120 | 1,440 |
| Selling & distribution | 50 | 600 |
| Salaries & wages | 200 | 2,400 |
| Miscellaneous expenses | 30 | 360 |
| Depreciation | 424 | 5,093 |
| Sub-total | 1,249 | 14,993 |
| Total Operating Costs | 4,364 | 52,370 |
- Production costs assumed 312 days per year with daily capacity of packing 231kgs of grains.
- 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 packaging of the grain.
- Total monthly days assumed are 26-days.
- The valuation currency used is United States Dollars.
Market Analysis
The market for grains readily exists and their demand continues to grow mainly across borders to such places as Southern Sudan.
Project Product Costs and Price Structure
| Item | Qty/ day | Qty/ year | @ | Pdn cost/ year | UPx | Total revenue |
|---|---|---|---|---|---|---|
| G. Nuts | 71 | 22,130 | 0.73 | 16,096 | 1.3 | 28,769 |
| Soy Beans | 32 | 9,974 | 0.73 | 7,254 | 1.2 | 11,969 |
| Pop Corn | 64 | 19,948 | 0.73 | 15,510 | 1.3 | 25,932 |
| Cow Peas | 64 | 19,948 | 0.73 | 15,510 | 1.3 | 25,932 |
| Total | 231 | 72,000 | 52,370 | 92,602 |
Profitability Analysis Table
| Profitability Item | Per Day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 297 | 7,717 | 92,602 |
| Less: Production & Operating Costs | 168 | 4,364 | 52,370 |
| Profit | 129 | 3,353 | 40,232 |
Government Facilities and Incentives
Generally, food products are VAT exempt and hence taxes are minimized.
Risk
The business risk involved is price fluctuation, which may affect the targeted profits. However, this can be minimized by setting up buffer stocks in times of low prices and resell later when they are high.
1 Comments
Hello Mr/Mrs
I want to start this as my business and a source income.
I want to Know more about this opportunity. Thank you