Introduction
This business idea is for sericulture. Sericulture is the rearing of silkworms for silk. It is a major income generating activity based on cocoons cultivation in rural areas. However, there is high risk of death of some silkworms, which can be managed by employing high disease resistant and high yielding strain of mulberry silk worms. The business idea aims at production of 31,200 yarns of silk annually. The revenue potential is estimated at US $ 93,600 annually. The total capital investment cost for the project is US $14,718. The net profit is at 36% in a payback period of 1 year and 6 months.
Production Capacity
The envisaged project is production of 31,200 yarns of silk annually.
Technology and Processes Description
The technology needed is as in the table for fixed capital investment requirements below. The raw materials include silk worms and mulberry leaves. Silk worms are reared in trays in rooms with controlled and humid temperatures and regularly fed on mulberry leaves. At a certain stage the silkworms convert themselves into cocoons. These cocoons are made from a single filament of material secreted by the pupa and wrapped around itself for protection. These filaments upon hardening constitute silk. Reeling is then done by first cooking them in water to remove the gum, which holds it together, and then unwinding the filaments. Prior to weaving, the raw silk is boiled in water to remove the remaining gum, dyed and bleached, and then woven into the garment usually on a handloom.
Capital Investment Requirements
| Capital Investment Item | Units | Qty | @ | Amount |
| Trays | 10 | 70 | 700 | |
| Stands | 100 | 45 | 4500 | |
| Feeding Stands | 50 | 16 | 800 | |
| Leaf chambers | 50 | 31.5 | 1575 | |
| Leaf chopping boards | 5 | 70 | 350 | |
| Thermometers | 10 | 60 | 600 | |
| Hygrometers | 10 | 35 | 350 | |
| Foot operated sprayers | 1 | 3245 | 3245 | |
| Mats | No | 332 | ||
| Reeling machine | No | 1 | 250 | 250 |
| Hand looms | No | 266 | ||
| Twisting machine | 1 | 1100 | 1,100 | |
| Warping machine | No | 1 | 650 | 650 |
| Total | 14,718 |
Production and Operating Expenses General costs (Overheads)
| Cost Item | Units | @/day | Qty/ day | Pdn Cost/day | Pdn Cost/ month | Pdn Cost/ Year1 |
| Direct costs | ||||||
| Mulberry Leaves | Kgs | 1.5 | 50 | 75 | 1,950 | 23,400 |
| Medicine | Ltrs | 9 | 1 | 9 | 234 | 2,808 |
| Packaging Materials | Pieces | 0.26 | 3 | 0.78 | 20 | 243 |
| Sub-total | 2,204 | 26,451 |
| Labour | 700 | 8,400 |
|---|---|---|
| Utilities | 700 | 8,400 |
| Selling and Distribution | 200 | 2,400 |
| Administrative expenses | 200 | 2,400 |
| Shelter | 700 | 8,400 |
| Depreciation (Asset write off) Expenses | 307 | 3,680 |
| Sub-total | 2,807 | 33,680 |
| Total Operating Costs | 5,011 | 60,131 |
- Production is assumed for 312 days per year.
- Depreciation assumes 4 year life of assets written off at 25% per year for all assets.
- A production Month is assumed to have 26 days.
Project Product Costs and Price Structure
| Item | Qty /day | Qty/yr | @ | Pdn/ yr | UPx | T/rev |
| Silk | 100 | 31,200 | 2 | 60,131 | 3 | 93,600 |
Profitability Analysis Table
| Profitability Item | Per day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 300 | 7,800 | 93,600 |
| Less: Production & Operating Costs | 193 | 5,011 | 60,131 |
| Profit | 107 | 2,789 | 33,469 |
Sources of supply of Equipments
All equipments and raw materials needed can be got in Uganda from Bushenyi.
Market analysis
The market for sericulture is assured both in rural and urban areas. There is tremendous market in Uganda especially with the growth of the textile sector. Government facilities
Farming costs 20% farm work, labour quarters, immovable buildings, other necessities for the farm. A silk processing factory is available in Mbarara. The NAADS and the prosperity for all programmes can consume products from this project.
Tools and Equipment in US$ Product Cost and Price Structure in US$
