Uganda’s economy is dominated by the agricultural sector and any investment such as production of agricultural fertilizers can be a very viable investment both in the short run and long run period of the investment. This project if implemented can yield total estimated revenue of US$123,552 with a payback period of 1 year 4months.
Production Capacity and Technology
The production process involves digging of a 5-ft deep pit with a radius of 1-metre .Charcoal or wood is put in the pit and on top of it dry bones are piled. The fire wood is ignited and the bones are burnt until they are spongy and brittle. The burnt bones are then removed and pounded by a simple mortar to a fine material, which contains calcium and phosphate. It does not matter even if burnt wood ash is mixed with the burnt bones. The fertilizer is then weighed and packed.
Investment Scale, Capital Requirements & Equipment
The equipment needed is very simple as it may require the following tools tabled below:
Capital Investment Requirements
|Capital investment item||units||Qty||@||Total($)|
|wood splitting machine||No||1||1,000||1,000|
|Pick Up Van (3tones)||No||1||12,500||12,500|
|Furniture & Fixture||No||–||–||1,500|
The machines are available on the local market.
Production and Operating Costs in US$ (a)Direct Materials, Supplies and Costs
|Cost Item||Units||@||Qty/day||Pdn cost/day||Pdn cost/ mth||Pdn cost/ year|
|General Costs (Overheads)|
|Cleaning & toiletries||121||1,450|
|Selling & distribution||104||1,250|
|Total Operating Costs||5,552||117,502|
- Production costs assumed are for 312 days per year with daily production capacity of 440 kgs of fertilizers. 2) Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets. 5) The valuation currency used is USD
Project Product Costs and Price Structure
|Item||Qty/day||Qty/year||@||Pdn cost/ year||UPx||Total/rev|
|Dry bone Fertilizers||440||137,280||1.3||117,502||0.9||123,552|
Profitability Analysis Table
|Profitability Item||Per Day||Per Month||Per Year|
|Less: Pdn &Operating Costs||376.6||9,792||117,502|
The fertilizer industry in Uganda is still very small as key players in the market are Tororo cement industry and Hima cement industry. Therefore, investing in fertilizer manufacturing is a very lucrative project.
Government Facilities & Incentives
Government programs such as: NAADS are aimed at improving agricultural production in the country & therefore such projects are being supported by the government.