MAKING CORNFLAKES IN UGANDA

 MAKING CORNFLAKES IN UGANDA
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.
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.
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 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
  1. Production is assumed for 312 days per year.
  2. 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.

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