Coffee is a household crop in Uganda and a major foreign exchange earner. It is widely produced and many Ugandans take it as a beverage, and world over it is a cherished drink. The demand for coffee as a beverage is on the rise locally and any venture in its production and distribution is viable as it involves adding value to the coffee beans.

This project involves milling coffee beans into desired powder and sold over the counter to a waiting customer. The project requires an estimated fixed capital of US$ 5,300, operating costs of US$ 64,841 generating revenue of US$ 116,064 in the first year of operation. The payback period is 5 months.

Production Process

The process is simple .Coffee beans are roasted first using a coffee roaster and then blended

Capital Investment Requirements

Capital Investment Item Units Qty @ Total
Coffee Grinder(20kgs-2HP&starter) No 1 2,500 2,500
Coffee Roaster(1.5HP&starter) No 1 1,400 1,400
Sealing machine No 1 200 200
Sieves No 5 20 100
Utensils No 400
Furniture & Fittings No 700
Total 5,300

Production and Operating Costs

Cost Item Units @ Qty/ day Pdn Cost/ Day Pdn Cost/ month Pdn Cost/ year
Direct Costs
Fresh Coffee Nuts Kgs 1.1 15 16.5 429 5,148
Chicory Nuts Kgs 2 7 14 364 4,368
Packaging materials Pcs 0.25 350 87.5 2,275 27,300
Sub-total 372 118 3,068 36,816

General costs(Overheads)

Rent 325 3,900
Labour 1,050 12,600
Selling and Distribution 150 1,800
Cleaning and Toiletries 104 1,248
Utilities 475 5,700
Miscellaneous 121 1,452
Depreciation 110 1,325
Sub-total 2,335 28,025
Total Operating Costs 5,403 64,841

1) Production costs assumed 312 days per year with daily capacity of producing
25kgs of instant coffee powder.
2) Depreciation (fixed asset 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.
4) Total monthly days assumed are 26-days.
5) The valuation currency used is United States Dollars.

Project Product Costs and Price Structure

Item Qty/ day Qty/yr @ Pdn Cost/yr UPx Total Rve
Instant Coffee 400 124,800 0.5 64,841 0.93 116,064

Profitability Analysis Table

Profitability Item Per day Per Mnth Per year
Revenue 372 9,672 116,064
Less: Production and Operating Costs 212 5,514 64841
Profit 160 4,158 51,223

Market Analysis

The demand for instant coffee is on the rise especially among affluent people in society who are . urban based and from the middle class. Its potential is promising. The revival of coffee shops of the seventies would go a long way to tap the market and popularize the product.

Government Incentive

A kilo of this instant coffee powder would fetch a lot more than the raw coffee beans. There are no taxes imposed on exports and any Value Added Tax (VAT) input is claimed and reimbursed by the tax body as a way of encouraging and facilitating exporters.


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