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27/05/2018

BANANA FIBER PRODUCTS BUSINESS IN UGANDA

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Written by: wmutenza

Introduction

The banana fiber is a widely used product in making coarse woven fabrics e.g. sacks, ropes, twigs, sand bags, tents, webbings, canvas and screens, kit bags, tool bags, luggage, gunny bags and covers. The fiber is extracted from the pseudo-stem of banana. Banana fiber can also be blended with wool and cotton for making blankets, carpets etc. The proposed project is for setting up a banana fiber making plant to utilize the products of the variety of banana plantations in Uganda. The project cost is US$ 4,325 with capacity of 46,800kgs per year, revenue estimates stand at US$ 93,600 annually and a net profit margin of 72%.Production Process

The production process starts with the extraction of the fiber from banana pseudo-stem. The process involves splitting of the banana pseudo-stem into strips, injection in open vats followed by washing and drying. By using traditional techniques, the fiber can be converted into various utility items. Production capacity is projected at 150kgs per day.

Capital Investment Requirement in US $:

Capital Investment Item Units Qty @ Amount
Two roll crusher No 1 1,000 1,000
Drying chambers No 1 800 800
Weighing balance No 1 25 25
Cutting and splitting equipment No 2 1,000 2,000
Open vat No 1 500 500
Total 4,325

Production and Operating costs in US $

(a)Direct material, supplies and costs

Cost Item Units @ Qty Pdn cost/ Pdn
Direct Cost
Banana pseudo stem Kgms 0.03 321 8.01 208.3
Chemical Litres 5 0.64 3.2 83.2
Paper / Plastic roll stems Rolls 2 3 4.5 117
Polythene bags/ sacks packets 0.4 3.2 1.33 34.65
Other materials 10
Sub-total 17 453.2

General Costs (Overheads)

Labour 625
Selling & distribution 150
Utilities 250
Rent 350
Administration expenses 65
Miscellaneous expenses 150
Depreciation 163
Sub-total 1,753
Total Operating Costs 2,206
  1. Production costs assume 312 days per year with daily capacity of 150 Kgs.
  2. Depreciation (fixed asset write off) assumes 4 year life of assets written off at 25% per year for all assets.
  3. Direct costs include: materials, supplies and all other costs incurred to produce the product.
  4. A production month is 26 work days
  5. Currency used is US Dollars.

Project product costs and Price structure inUS $

Item Qty/day Qty/yr @ Pdn cost/yr UPx
Banana Fiber 150 46,800 0.6 26,477 2

Profitability Analysis in US$

Profitability Item Per day Per month Per year
Revenue 300 7,800 93,600
Less: Production and operating costs 39 1,018 26,477
Profit 261 6,782 67,123

Market

A wide range of products can be produced which enjoy good market in both rural and urban areas. It’s a potential boost to the tourism sector and economy as a whole since many tourists like these products.

Sources of machinery and Equipment

While the equipment can be sourced from China and India, they can be fabricated in Uganda by Tree Shade Ltd, Mwanga II Rd-Kisenyi Kampala, and John Lugendo &Co Ltd, Ndeeba Masaka Rd, email lugendojohn07@yahoo.com.

Government incentive

Uganda Investment Authority provides guidelines on investment and government incentives, tax holidays and security matters. Industrialists’ Associations are allowed in the formulation of government policies on taxes and industries, through Uganda Manufacturers Association (UMA) representation in budget making.

 






 
 

 

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