DEHYDRATED FRUITS AND VEGETABLES BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

Fruits like grapes, oranges, papaya, mangoes, etc. are largely grown in Uganda. However, they are harvested seasonally resulting in some seasons of relative scarcity. In order to maintain the availability of fruits and vegetables throughout the year, the activity of dehydration is undertaken.

The process of dehydration also helps constitute fruits and vegetables in a hygienic condition. The estimated capital investment US$5,150, with revenue estimates of US$40,560 per year, with net profit of 38% and a payback period of 1 year and 3months.

Production Process, Capacity and Technology

The process starts with major selection of the fruits and vegetables, and washing them. They are peeled, shelled, sliced, blanched and dehydrated under controlled conditions.

The dehydrated fruits and vegetables are finally packed in suitable containers to avoid moisture absorption. Dehydration of fruits & vegetables is done by various processes like Traditional Sun Drying, Solar Dryers, Mechanical Dryers, vacuum freeze drying, vacuum drying, Osmotic dehydration, dehydration through explosion puffing and microwave based technique.

The envisaged project has minimum daily capacity of 100kg per day.

Capital Investment Requirement in US $:

Item Unit Qty Price Total
Syrup tank No 1 500 500
Heating vessels No 1 1000 1000
Nylon net No 1 1000 1000
Plastic vats No 1 1000 1000
Cross flow drier No 1 1,000 1,000
Impulse sealer No 1 150 150
Other tools & equipment No 1 500 500
TC of Machinery & Tools 5,150

Production and Operation costs in US$

(a) Direct materials, supplies and costs

Cost Item Units @ Qty Pdn cost Pdn cost
Direct Costs
Fruits Kgs 0.3 16 4.81 125
Sugar syrup ltrs/kgs 1.1 0.8 0.88 22.9
Citric acid Ltrs 36 0.32 11.54 300
Packing material Kgs 0.5 48 24.04 625
Sub-total 41 1,072.92

General Costs (Overheads)

Labour 400
Selling & distribution 120
Utilities (Water, power) 150
Administration 50
Rent 100
Miscellaneous expenses 100
Depreciation 69
Sub-total 989
Total Operating Costs 2,061.62
  1. Production costs assumed are for 312 days per year with daily capacity of 100 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 days
  5. Currency used is US Dollars

Project product costs and Price structure in US$

Item Qty/day Qty/yr Unit cost Pdn cost/yr UPx
Dehydrated fruits 100 31,200 0.8 24,740 1.3

Profitability Analysis in US$

Profitability Item Per day Per month Per year
Revenue 130 3,380 40,560
Less: Production and operating costs 80 2,084 24740
Profit 50 1,296 15,553

Market

The market for fruits and vegetables exists and all year round. Supply is bound to increase the returns to investment. Supply is recommended to supermarket chains, grocery shops, main markets, as they can help a lot in capturing a portion of the market. With an increased shelf life for the fruits and vegetables, the profit sales ratio is bound to increase.

Source of Equipment and Materials

It can be locally made by Tonet Ltd, Kanyanya, Gayaza Rd or imported. Fruits and vegetables are readily available in the local market throughout the country depending on the season.

Government incentive

Startup costs 25% granted on actual cost over the first four years in four equal installments.

 

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