MAKING ICE CANDY BUSINESS IN UGANDA

Introduction

The business idea is for the production and marketing of ice candies. Ice Candy is made out of frozen juice or fruits in little ice bags where one would have to nibble at the end of the plastic to sip or bite the ice candy. The business risk involved is healthy and safety related risks surrounding the manufacturing and processing. However, this is can be solved by employing food scientists.

The total investment is estimated at US$ 3,230 with production capacity of 15,000 ice candies per day. The total revenue is estimated at US$ 936,000 per year. The net profit margin is 26% for this business idea.

Production process

To make an ice candy, one needs to have ice candy bags, funnel and fresh fruits or juices, depending on the Ice Candy flavor you wish to make. The required quantity of water is taken into the container. Colours, fresh fruits and juices are mixed thoroughly and filled in candy blocks. Bamboo sticks are inserted into candy holes and placed in a freezer for solidification. After cooling, they are removed and placed in a cold chamber.

Capital investment in US$

Capital investment item Units Qty @ Amount
Ice candy machine No. 1 1,700 1,700
Defreezer No. 1 1,100 1,100
Electrical motor No. 1 400 400
Packaging materials (kg) No. 10 3 30
Total cost of machinery 3,230

Production and operating costs in US $

Cost Item Units @ Qty/ day Pdn cost/ day Pdn cost/ month Pdn cost/ year
Colours, fruits, Sugar kg 62 35 2,170 56,420 677,040
Sub-total 35 2,170 56,420 677,040

General costs(overheads)

Utilities(water and power) 50 600
Labour 75 900
Rent 75 900
Miscellaneous costs 50 600
Distribution costs 260 3120
Depreciation(Asset write off)Expenses) 67 808
Sub –total 577 6928
Total Operating Costs 56,997 683,968
  1. Production costs assumed 312 days per year with a daily capacity of 15000 packets of ice candies
  2. Depreciation (fixed assets write off) assumes 4 years life of assets written off at 25% per year for all assets
  3. Direct costs include materials, supplies and other costs that directly go into production of the product.

Project product costs and Price structure

Item Qty /day Qty/yr @ Pdn cost /yr UPx TR
Ice candies 15,000 4,680,000 0.14 683,968 0.2 936,000

Profitability Analysis in US $

Profitability Item Per day Per month Per Year
Revenue 3,000 78,000 936,000
Less production and operating Costs 2,192 56,997 683,968
Profit 808 21,003 252,033

Market Analysis

Ice candy is consumed by all sections of society particularly children. The market for ice candy is good especially in primary schools.

Sources of Raw Materials and Equipment;

Raw materials and equipments can be purchased from the local market.

Government Facilities and Incentives

The government has come out to encourage industrialists through being very liberal in her policies. Facilitation is extended to them through organizations like Private Sector Foundation Uganda; an initiative that encourages investors.

 

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