Introduction
Cornflakes are one of the most consumed breakfast cereals on account of their taste and nutritional value. They have a high market potential as they are consumed by adults, youth and children. This business idea aims at the production of 700 kilograms of cornflakes a day. The revenue potential is estimated at $ 436,800, annually, at a sales margin of 75% with an initial capital investment cost of $ 30,543. The payback period is about 7 months.
Cornflakes are one of the most consumed breakfast cereals on account of their taste and nutritional value. They have a high market potential as they are consumed by adults, youth and children. This business idea aims at the production of 700 kilograms of cornflakes a day. The revenue potential is estimated at $ 436,800, annually, at a sales margin of 75% with an initial capital investment cost of $ 30,543. The payback period is about 7 months.
Manufacturing Process
Maize grains are cleaned using air classifiers and after separated (large and small grains) using a mesh screen separator. The grains are then polished and milled to remove germs and bran. The milled grains are cooked in a rotary steam cooker where flavor syrups of sugar, malt, salt, and water are added. The grain pieces are then washed and small grains are separated.
Maize grains are cleaned using air classifiers and after separated (large and small grains) using a mesh screen separator. The grains are then polished and milled to remove germs and bran. The milled grains are cooked in a rotary steam cooker where flavor syrups of sugar, malt, salt, and water are added. The grain pieces are then washed and small grains are separated.
The grains are then carried to an agitator pump or lump breaker then sent to a steamer where pre-heated air is blown into the grains so as to reduce the moisture content to the desired level of about 20%. The dried material is then kept in a de-moisturizing tank for a few hours for moisture to equally be distributed. The grits (cooked material) are then washed again and passed through a heavy flaking machine where they are turned into flakes by pressing. The flakes are immediately transferred to a rotary oven for roasting. After roasting, the flakes are inspected, screened and graded to remove standard flakes. The flakes are then packed in water resistant polythene containers of waxed paper.
Scale of Investment
Capital Investments Requirements
Capital Investments Requirements
| Capital Investment Item | Units | Qty | @ | Amount |
|---|---|---|---|---|
| Brick stores for corn grain | No | 1 | 600 | 600 |
| Air classifiers | No | 2 | 650 | 1,300 |
| Separators | No | 3 | 610 | 1,830 |
| Storage bins | No | 6 | 550 | 3,300 |
| Weight balance | No | 1 | 300 | 300 |
| Rotary steam cooker | No | 1 | 1,820 | 1,820 |
| Agitator or lump breaker | No | 1 | 1,200 | 1,200 |
| Pan cooler or steamer | No | 1 | 600 | 600 |
| Germ separator | No | 1 | 480 | 480 |
| Heavy flaking machine | No | 1 | 3,191 | 3,191 |
| Rotary oven | No | 1 | 2,000 | 2,000 |
| Conveyer | No | 1 | 600 | 600 |
| Inspection conveyer | No | 1 | 550 | 550 |
| Packing machine | No | 1 | 700 | 700 |
| Screening and cooling equipment | No | 1 | 540 | 540 |
| Mixer | No | 1 | 300 | 300 |
| Mini boiler | No | 1 | 1,100 | 1,100 |
| Shifter | No | 1 | 600 | 600 |
| Office equipment | No | 532 | ||
| Installation, transportation. | No | 3,000 | ||
| Delivery van | No | 6,000 | ||
| TOTAL | 30,543 |
Production and Operating Costs General costs (Overheads)
| Item | Units | @/ day | Qty/ day | Pdn Cost/ day | Pdn Cost/ month | Production Cost/Year1 |
| Direct costs3: | ||||||
| Maize | Kgs | 0.189 | 1,000 | 189 | 4,914 | 58,968 |
| Salt | Kgs | 0.45 | 50 | 22.5 | 585 | 7,020 |
| Sub total | 5,499 | 65,988 | ||||
| Labour | 1,000 | 12,000 |
|---|---|---|
| Utilities | 1,000 | 12,000 |
| Selling and Distribution | 300 | 3,600 |
| Administrative expenses | 200 | 2,400 |
| Shelter | 500 | 6,000 |
| Depreciation Expenses | 487.63 | 5,852 |
| Sub-total | 3,488 | 41,852 |
| Total Operating Costs | 8,987 | 107,840 |
- Production is assumed for 312 days per year.
- Depreciation assumes 5 year life of assets written off at 20% per year for all assets. A production Month is assumed to have 26 work days.
Project product Costs and Price Structure in US$
| Item | Qty /day | Qty/yr | @ | Pdn/yr | UPx | Total Revenue |
| Corn flakes | 700 | 218,400 | 0.5 | 107,840 | 2 | 436,800 |
| Total | 218,400 | 107,840 | 436,800 |
Profitability Analysis
| Profitability Item | Per day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 1,400 | 36,400 | 436,800 |
| Production and operating costs | 346 | 8,987 | 107,840 |
| Profit | 1,054 | 27,413 | 328,960 |
Sources of Equipment
Equipments can be got from Uganda at a cheaper price although their quality may not be comparable to those imported from India.
Government facilities and incentives
This is an industry in line with government policy of adding value to local produce.
Risk:
The quality of the product may be compromised if proper production processes are not followed, hence, there is need for strict process and quality control measures providing checks at each production stage.
