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BAKING BISCUITS BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction
This business idea is for the production and marketing of biscuits. Biscuits are confectionary products and they refer to small thin products of varying shapes, tastes that are of soft brittle texture.
They are referred to by different names in different countries. The revenue is estimated at US$1,404,000 per year. The payback period is really short i.e. 2 months and net profit for this investment is 92%.
Production process
The process consists of combining wheat flour, sugar, margarine, milk and water in a dough mixer. The dough is then mixed with baking powder and kept for around three hours. The prepared dough is then passed through biscuit molding, stamping, and cutting machines and finally baked in an oven. The biscuits are then cooled, sorted and packed neatly.
Capital Investment Requirements in US$
Capital investment item
Units Qty @ Amount Brick oven No. 1 2,500 2,500 Dough mixer No. 1 1,750 1,750 Weighing scale No. 2 75 150 Tray (pieces) No. 5 10 50 a No. 1 50 50 Baking trays No. 50 15 750 Packing materials (kg) No. 200 1.5 300 Van No. 1 26,000 26,000 TCs on Machinery 31,550

Production and Operating costs in US$

Cost Item Units @/ day Qty/ day Pdn cost/ day Pdn cost / month Pdn cost year
Wheat flour kg 2 20 40 1,040 12,480
Sugar kg 1.2 50 60 1,560 18,720
Cooking oil Ltrs 2 40 80 2,080 24,960
Firewood tone 13.5 3 41 1,053 12,636
Margarine kg 4.8 12 57.6 1,498 17,971
Non fat milk powder kg 2.5 30 75 1,950 23,400
Salt kg 0.2 5 1 26 312
Sub-total 354 9,207 110,479

General costs(overheads)

Utilities(water and power) 50 600
Labour 50 600
Rent 125 1,500
Miscellaneous costs 50 600
Depreciation(Asset (write off)Expenses) 657 7,888
Sub –total 932 11,188
  1. Production costs assumed 312 days per year with a daily capacity of 9000 biscuits
  2. 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 product.

Project product Costs and Price Structure in US$

Item Qty /day Qty/yr @ Pdtn cost /yr UPx TR
Biscuits 9,000 2,808,000 0.04 121,667 0.5 1,404,000

Profitability Analysis

Profitability Item Per day Per month Per Year
Revenue 4,500 117,000 1,404,000
Less production and operating Costs 390 10,139 121,667
Profits 4,110 106,861 1,282,333

Market Analysis

Biscuits are delicious to children and therefore have a ready market. Schools, shops, street vending and market places, supermarkets are potential buyers.

Sources of raw materials:

Raw materials are locally available.

Government Facilities and Incentives

The government maintains favorable tax policies for industrialists. They are represented in the formulation of policies on trade and forward their input to the budget through their representatives.

 

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