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MAKING FERTILIZERS FROM DRY BONES BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

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($)
Axes No 10 5 50
Pangas No 20 4 80
wood splitting machine No 1 1,000 1,000
Mortar No 2 400 800
Hoes No 10 4 40
Spades No 10 4 40
Containers No 4 250 1,000
Pick Up Van (3tones) No 1 12,500 12,500
Packaging machine No 1 200 200
Furniture & Fixture No 1,500
Weighing machine No 1 200 200
Other tools No 300
Total 16,010

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
Direct Costs
Dry bones Kgs 0.3 450 135 3,510 42,120
Fire wood Kgs 0.25 600 150 3900 46,800
Fuel Ltrs 0.8 14 11.2 291.2 3,494
Match boxes Pcs 0.05 1 0.05 1.3 15.6
Packaging materials Pcs 0.7 8 5.6 145.6 1,747
Sub-total 1,073 301.85 3,608 94,177
General Costs (Overheads)
Labor 500 6,000
Utilities 80 960
Rent 500 6,000
Cleaning & toiletries 121 1,450
Selling & distribution 104 1,250
Fuel 208 2,500
Miscellaneous expenses 71 850
Depreciation 360 4,315
Sub-total 1,944 23,325
Total Operating Costs 5,552 117,502
  1. 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

Market

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
Revenue 396 10,296 123,552
Less: Pdn &Operating Costs 376.6 9,792 117,502
Profit 19.4 504 6,050

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.

 

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