Post: STARTING A VERMI-COMPOST BUSINESS IN UGANDA

STARTING A VERMI-COMPOST BUSINESS IN UGANDA

Introduction

The importance of Vermi-compost, which is eco-friendly, has increased in recent years, as it is chemical free manure. The increase in the demand for fertilizers has also inadvertently led to the increase in demand for vermi-compost. The business risk is that some worms can easily die and some organic waste can be harmful to the soil texture, however, this can mitigated by applying Vermicomposting technology. It costs US$ 3,680 with estimated revenue of US$ 11,482, with net profit margin of 8%. The payback period is 3 years.

Production, Capacity and Technology

The organic waste is pasteurized and kept in the composing tanks with earthworms dumped into it. The earthworms multiply in due course and the soil converts into compost, referred to as Vermi compost. Soil is to be excavated in the four catcher sheds up to a depth of about one foot for preparing the beds, which contain organic waste, Vermi castings and cow dung. The length and width of the beds is 100 ft. and 5 ft. respectively.

Some paddy straw should be spread evenly at the bottom of the excavations. Charging of waste and cow dung slurry should be continued till the heap of material is one foot above the ground level. The profile project has a minimum capacity of producing 300kg per month of Vermi-compost.

Capital Investment Requirement in US $

Item Units Qty Price Total
Power driven chaffer cutter No 1 530 530
Weighing machine platform type No 1 150 150
Water pump& pipes for sprinkling No 1 1,300 1300
Tools & implements No 1 1,700 1700
Total Cost of Machinery & Tools 3,680

Production and Operation costs Direct materials, supplies and costs

Cost Item Units @ Qty/ day Pdn cost/ day Pdn cost/ month Pdn cost/yr
Direct Costs
Cow dung manure kg 0.25 12.8 3.205 83.33 999.96
Vermi castings kgs 8.2 0.16 1.312 34.112 409.3
Biodegradable manure kgs 0.06 5 0.3 7.8 93.6
Sub-total 4.8 125.2 1502.9

General Costs (Overheads)

Labour 300 3,600
Selling & distribution 50 600
Utilities (Water, power) 200 2,400
Rent 25 300
Miscellaneous expenses 100 1,200
Depreciation 77 920
Sub-total 752 9,020
Total Operating Costs 877 10,523
  1. Production costs assumed are for 312 days per year with daily capacity of 11.5 kgs
  2. Depreciation (fixed asset write off) assumes 4 year life of assets written off at 25% per year for all assets.
  3. Currency used is US Dollars.
  4. A production month is assumed to have 26 days

Project product costs and Price Structure in US $

Item Qty/day Qty/year Unit cost Pdn cost/yr UPx TR
Compost manure 11.5 3,588 2.9 10,523 3.2 11,482

Profitability Analysis in US $

Profitability Item Per day Per month Per year
Revenue 37 956.8 11,482
Less: Production and operating costs 34 877 10,523
Profit 3 80 959

Market

The Vermi compost, an eco-friendly technology has gained popularity in urban as well as rural areas to preserve the environment. The other potential market is from the flower growers who are growing tremendously.

Suppliers of Plant and machinery

All that is required is available in Uganda and is in most cases not hard to come by.

Government incentive

The government so far does not tax farmers save for the large scale ones who fall in the income tax bracket.

 

John Doe
John Doe

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Hi, jenny Loral
Hi, jenny Loral

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