Sugar is a very vital commodity in every household and its demand has increased both domestically and internationally with the local demand already exceeding supply.
The project idea is based on production of sugar using the cheapest technology with an estimated production output of 312,000kgms annually with fixed capital of US$38,100 and operating costs of US$138,552 employed to generate a total revenue of US$234,000 with a net profit margin of 41% and a payback period of 1 year 6 months.
Production Capacity, Technology &Process
The harvested cane material is collected and crushed, the juice is collected and filtered and the liquid treated with lime to remove impurities. This is then neutralized with sulfur dioxide and then boiled .The sediment settles to the bottom and can be dredged out while scum rises to the surface and this is skimmed off. The heat is removed and the liquid crystallizes usually while being stirred to produce sugar crystals.
The production capacity greatly depends on the desired objectives of the entrepreneur, but the technology is simple mostly involving crushing, filtering, boiling and cooling.
Investment Scale, Capital Requirements & Equipment Capital Investment Requirements in US$
|Capital investment item||Units||Qty||@||Total|
|Land & Buildings||No||–||–||17,000|
|Delivery Van (3-tones)||No||1||12,700||12,700|
|Sugar cane crusher||No||1||880||750|
|Furniture & Fixture||No||–||–||1,200|
Production and Operating Costs in USS (a)Direct materials, Supplies and Costs
|Cost Item||Units||@||Qty/ day||Pdn cost/ day||Pdn cost/ mth||Pdn cost/ yr|
|Selling & distribution||271||3,252|
|Total Operating Costs||11,546||138,552|
- Production costs assumed are for 312 days per year with daily capacity of processing 1,000kgs of sugar.
- Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
- Direct costs include: materials, supplies and other costs that directly go into production of the product.
- Total monthly days assumed are 26-work days.
- The valuation currency used is United States Dollars.
The market for sugar is already available as most of the sugar consumed is still being imported & there is still a wide market in Southern Sudan.
Project Product Costs and Price Structure
Profitability Analysis Table
|Profitability Item||Per Day||Per Month||Per Year|
|Less: Production & Operating Costs||444||11,546||138,552|
Government Facilities & Incentives
The government has sourced a fund for both small scale and medium size entrepreneurs to facilitate their investment activities at a low interest rate known as the European Investment Fund.