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.
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.
Capital Investments Requirements
|Capital Investment Item||Units||Qty||@||Amount|
|Brick stores for corn grain||No||1||600||600|
|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|
|Heavy flaking machine||No||1||3,191||3,191|
|Screening and cooling equipment||No||1||540||540|
Production and Operating Costs General costs (Overheads)
|Item||Units||@/ day||Qty/ day||Pdn Cost/ day||Pdn Cost/ month||Production Cost/Year1|
|Selling and Distribution||300||3,600|
|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|
|Profitability Item||Per day||Per Month||Per Year|
|Production and operating costs||346||8,987||107,840|
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.
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.