MAKING POWDER MILK BUSINESS IN UGANDA

 MAKING POWDER MILK BUSINESS IN UGANDA

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

 

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