Introduction
This business idea is for the production and marketing of powder milk. The business idea is premised on the production of 52,000 kg of powder milk per month, which translates into 624,000 kg per year. The revenue potential is estimated at US$ 208,000 per month, which translates into US$ 2,496,000 per year. The project cost is US$ 82,373 and the payback period of this project is 2 months.
Production Process
Milk bubbles are sprayed in hot air for 3-30 seconds. The water particles from the milk get evaporated and remain as powder. As this happens in fractions of time, the healthy particles of milk are protected.
| Item | Unit | Qty | @ | Total |
| Auto mixer | No. | 1 | 10,000 | 10,000 |
| lactoscan | No. | 1 | 223 | 223 |
| Packing machine | No. | 1 | 9,500 | 9,500 |
| storage containers | No. | 2 | 300 | 600 |
| Milk sampler | No. | 1 | 50 | 50 |
| Milk reception unit | No. | 1 | 10,000 | 10,000 |
| Delivery van | No. | 2 | 26,000 | 52,000 |
| Total Cost of Machinery | 82,373 |
Production and Operating Costs in US $ Direct Materials, Supplies and Costs
| Cost Item | Units | @/ day | Qty/ day | Prod. cost/ day | Prod. Cost/ month | Prod. Cost/ year |
| Milk | Ltrs | 0.48 | 20,000 | 9,600 | 249,600 | 2,995,200 |
| Packaging materials | ctn | 0.3 | 10 | 3 | 78 | 936 |
| Sub-total | 249,678 | 2,996,136 |
General costs (Overheads)
| Utilities (power) | 300 | 3,600 |
|---|---|---|
| Utilities (water) | 200 | 2,400 |
| Fuel | 1,500 | 18,000 |
| Salaries | 2,500 | 30,000 |
| Rent | 1,000 | 12,000 |
| Depreciation (Assets write off) Expenses | 1716 | 20,593 |
| Sub-total | 7,216 | 86,593 |
| Total Operating costs | 256,894 | 3,082,729 |
Production assumed 312 days per year with a daily capacity of 20,000 Liters of
powder milk.
Depreciation (fixed assets write off) assumes 4 years life of assets write off at
25% per year for the delivery vans.
Direct costs include materials, supplies and other costs that directly go into
production of the product.
| Item | Qty/ day | Qty/ year | @ | Prod. Cost / year | UPx | Total Revenue |
|---|---|---|---|---|---|---|
| Powder milk | 2,000 | 624,000 | 4.9 | 3,082,729 | 5 | 3,120,000 |
| 3,082,729 | 2,496,000 |
Profitability Analysis in US$
| Profitability item | per day | per month | per year |
| Revenue | |||
| Powder milk | 10,000 | 260,000 | 3,120,000 |
| Less Production & Operating Costs | 9,881 | 256,894 | 3,082,729 |
| Profit | 119 | 3,106 | 37,271 |
Government Incentive
Government is supporting dairy farmers through funding the sector and has scrapped taxes on dairy products.
Market
Milk products are consumed countrywide. There is a ready market for dairy products in Uganda.
Suppliers of Plant and Machinery
Snowman’s Centre Plot 89, 7th street, Industrial Area. KampalaUganda. Tel: +256-414-251800, +256-414237104, 0312264786. E-mail: admin@snowmansgroup.com
