PUTTING UP AN ANIMAL FEED PLANT BUSINESS IN UGANDA

 PUTTING UP AN ANIMAL FEED PLANT BUSINESS IN UGANDA

Introduction

Animal feed plant is a place where their feeds are made. The need for balanced animal feeds forms an essential part of the intensive diary development programme. What is proposed here, is the setting up of an animal feed manufacturing plant using local products like maize, millet and wheat. The business idea aims at the production of 93,600 kgs of animal feeds per year. The revenue potential is estimated at US$ 121,680 annually, while the initial capital investment required is US$7,150. The payback pay period for this project is approximately 6 months with a net profit margin of 50%.

Plant Capacity

The plant in this profile has a minimum capacity of 300 kgs of animal feed per day thus 93,600 kgs per annum.

Production Process

The process involves blending of various ingredients by using a disintegrator to reduce to the size of the required mesh size, which is uniformly mixed with vitamins, minerals by a ribbon blender. Molasses are added and then the mix is extruded to get pallets of the finished product, which are packed in gunny bags for marketing.

Scale of Investment
Capital Requirements in US$

Capital Item Units Qty @ Amount
Ribbon blender No 1 3,150 3,150
Gyratory shifter No 1 1,800 1,800
weighing machine No 1 500 500
Gunny bag sealing machine No 1 1,300 1,300
Disintegrator No 1 400 400
Total 7,150

Production and Operation Costs in US$

Cost Item Units @ Qty/ day Pdn Cost/day Pdn cost/ month Pdn Cost/ Year1
Direct costs3:
Maize Kgs 0.15 100 15 390 4,680
Wheat brand Kgs 0.15 100 15 390 4,680
Oiled rice brand Kgs 0.16 50 8 208 2,496
Molasses Kgs 0.75 50 37.5 975 11,700
Groundnut cake kgs 0.2 50 10 260 3,120
Mineral mixture Kgs 2 20 40 1,040 12,480
Gunny bags No 0.1 200 20 520 6,240
Subtotal 3,783 45,396

General Costs (Overheads)

Labour 300 3,600
Utilities 300 3,600
Selling and Distribution 100 1,200
Administrative expenses 150 1,800
Shelter 300 3,600
Depreciation (Asset write off) Expenses 149 1,788
Sub-total 1,299 15,588
Total Operating Costs 5,082 60,984
  1. Production is assumed for 312 days per year.
  2. Depreciation assumes 4 year life of assets written off at 25% per year for all assets.
  3. A production Month is assumed to have 26 days.

Project Product Costs and Price Structure

Item Qty /day Qty/yr Unit /Cost Pdn/yr UPx T/rev
Animal feed 300 93,600 0.65 60,984 1.3 121,680
TOTAL 93,600 60,984 121,680

Profitability Analysis Table

Profitability Item Per day Per /Month Per Year
Revenue 390 10,140 121,680
Less: Production &Operating Costs 195.5 5,082 60,984
Profit 194.5 5,058 60,696

Market Analysis

With agricultural modernization and diversification, there is a good future and solid potential for growth. Thus, market for animal feeds is guaranteed except the need for sensitization of the local population on the benefits of using animal feed visa vie natural grass and plants. The market cuts across farmers with different sizes of herds of animals.

 

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