Introduction
This business idea is for hulling and selling of rice. It is premised on processing 7,200 Kg per day, which translates into 187,200 Kg per month. The revenue potential is estimated at US$ 198,800 per month translating into US$ 2,277,600 per year. The total investment is estimated cost at USD 10,865. The project is also estimated to yield a net profit margin of 50%.
Production Process
Dried and cleaned paddy is de-husked by aspiration, and the de-husked brown rice is got. The brown rice is placed in a polisher where the polished rice and bran are separated. After sieving the polished rice, the broken rice is separated and the sieved rice is then packed in bags for dispatch.
Capital investment requirements in US$
| Item | Unit | Qty | @ | Total |
| Combined Rice huller | No. | 1 | 3000 | 300 |
| Electric Motor | No. | 1 | 400 | 400 |
| Truck | No. | 1 | 10,000 | 10,000 |
| Weighing scale | No. | 1 | 165 | 165 |
| Total | 10,865 |
Production & Operating Cost in US Dollars Direct Materials, Supplies and Costs
| Cost Item | Units | @/ day | Qty/ day | Prod. cost/ day | Prod. Cost/ month | Prod. Cost/ year |
| Rice (super) | Kgs | 0.5 | 3,000 | 1,500 | 39,000 | 468,000 |
| Rice (Kaiso) | Kgs | 0.5 | 2,200 | 1,100 | 28,600 | 343,200 |
| Up land rice | Kgs | 0.5 | 2,000 | 1,000 | 26,000 | 312,000 |
| Sub-total | 93,600 | 1,123,200 |
General costs (Overheads)
| Utilities (power) | 200 | 2,400 |
|---|---|---|
| (Utilities (water) | 20 | 240 |
| Salaries | 400 | 4,800 |
| renting | 200 | 2,400 |
| Depreciation (Assets write off) Expenses | 74 | 888 |
| Sub-total | 894 | 10,728 |
| Total Operating costs | 94,494 | 1,133,928 |
- Production costs assumed are for 312 days per year with a daily capacity of 7,200
kgms per day.
- Depreciation (fixed assets 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 products.
Project Product Cost and Price Structure
| Item | Qty/ day | Qty/ yr | @ | Prod. Cost /year ($) | UPx | TR |
|---|---|---|---|---|---|---|
| Rice (super) | 3,000 | 936,000 | 0.5 | 468,000 | 2 | 936,000 |
| Rice (Kaiso) | 2,200 | 686,400 | 0.5 | 343,200 | 3 | 1,029,600 |
| Up land rice | 2,000 | 624,000 | 0.5 | 312,000 | 1 | 312,000 |
| = | 2,277,600 |
Profitability analysis in US$
| Profitability item | per day | per month | per year |
|---|---|---|---|
| Revenue | 7300 | 189800 | 2,277,600 |
| Rice (Kaiso) | 1,100 | 28,600 | 343,200 |
| Up land rice | 1,000 | 26,000 | 312,000 |
| Less Prod & Operating Costs | 3,634 | 94,484 | 1,133,808 |
| Profit | 3666 | 95,316 | 1,143,792 |
Market
Locally produced rice has potential to be supplied to both the domestic and foreign markets. Although it is said to compete with imported varieties the demand still outstrips the supply especially with the opening up of the Southern Sudan market. There is also a market to supply to supermarket chains, retailers, wholesalers and the Armed Forces.
Equipment Suppliers
Agro Sokoni Limited, Plot 15/17 Nassar Road P.O .Box 22793 Kampala. Tel: 0414-257445
Auto Sokoni Limited, Nkurumah Road, Kampala opposite Charm towers.
