STARTING A FRUIT JUICE CANNING BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

Fruit Juice Canning is a method of preserving fruit juice sealed in an airtight container, which prevents microorganisms from entering and proliferating inside. The products may include: Canned fruit cocktail consisting of a mixture of fruits, such as; mangoes, tangerine, lemons, apples, and passion fruits. There is an increasing demand for canned fruits as they can be sold in both local and foreign markets.

Production Capacity

It is projected that at least 100 Dozens of 300m litres (1,400 ltrs) of canned juice can be produced a day.

Production Technology & Process

The canning process involves placing fruit juice in jars or similar containers and heating them to a temperature that destroys microorganisms that cause food to spoil. During this heating process air is eliminated from the jar and as it cools a vacuum seal is formed. This seal prevents air from getting back into the product bringing with it contaminating micro-organisms.

Capital Investment Requirements and Equipment: This project may be operated on both small and large scale depending on the size and nature of the market. The fixed capital investment required to start it is approximately 27,170 USD as shown in the table below:

Raw Material Requirements for 12 Months: It is projected that in a month, at least 42,000 kgs of fruits, 36,000 jar cans & labels are required to meet the projected production capacity. The revenue per annum is USD 748,800, with an operating cost of USD 656,473 at a net profit of 12%. The payback period is 4 months.

Market Analysis

The demand for canned juice is very high in super markets, hotels and for export.; Foreign markets will constitute about 80% of the total market size.

Project Costs:

Capital Investment Requirements in US$

Capital Investment Item Units Qty @ Amount
Delivery Van No. 1 11,200 11,200
Juicer No. 1 3,200 3,200
Gas Cooker No. 1 5,350 5,350
Jar Lifter No. 1 1,350 1,350
Cutting Board No. 1 58 58
Timer No. 1 27 27
Juice Tanks No. 3 55 165
Boiler No. 1 535 535
Furniture No. 5 37 185
Packaging Machine No. 1 5,100 5,100
Total Amount 27,170

Operating Costs in US$ General Costs (Over heads)

Item Units @ Qty/ day Prod. Cost/day Prod. Cost/mth Prod. Cost/ Year
Direct Costs
Fruits Kgs 0.6 1000 600 15600 187200
Flavours Kgs 1.5 100 150 3900 46800
Food Colour Kgs 0.55 100 55 1430 17160
Preservatives Kgs 6 100 600 15600 187200
Sugar Kgs 2.5 200 500 13000 156000
Water Litre 0.07 500 35 910 10920
Sub total 1,940 50,440 605,280
Rent 400 4,800
Packaging Material 500 6,000
Labour 800 9,600
Utilities (Power & Gas) 1,000 12,000
Repair & Servicing 500 6,000
Fuel 500 6,000
Depreciation(Asset write off) Expenses 566 6,793
Sub – total 4,266 51,193
Total Operating Costs 54,706 656,473

Project Product Costs & Price Structure in US

Item Qty/day Qty/yr @$ Pdn Cost/yr$ UPx T/rev
Canned Juice 1200 374,400 1.75 656,473 2 748,800

Profitability Analysis in US$

Profitability Item Per day Per Month Per Year
Revenue 2,400 62,400 748,800
Less: Production & Operating Costs 2,104 54,706 656,473
Profit 296 7,694 92,328

Sources of Supply of Raw Materials:

Raw materials will be locally supplied from Eastern, Western – Kasese, North Eastern, and Central parts of Uganda, which are the leading and major fruit producing regions.

Government Facilities and Incentives Available:

These incentives are available from the Government in her bid to promote Industrialization and Agro-Processing: tax exemptions, land, transport and communication facilities.

 

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