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Business tip: PRODUCING SIMSIM AND GROUND NUT PASTE IN UGANDA

By: wmutenza0 comments

Introduction

Groundnuts paste is made from grounding fried groundnuts into a paste. The paste is used as a sauce stew to accompany food. It is many times mixed with other sauce or mixed directly into food. It makes soup heavy, and tastes nice. It may also be used or pasted on bread and be used instead of butter. This proposal will produce a safe product using stainless steel machinery unlike the present products produced using cast-iron equipment, which end up laced with materials likely to cause cancer to those eating it. About 250 to 350 kgs of groundnuts can be processed daily. An investment capital of US$2,768 would sufficiently start up this project. The project is estimated to generate annual revenue of US$327,600 with a net profit of 28%

Production Capacity, Technology and Process

The process begins with the cleaning and sorting of the sun- dried shelled groundnuts. Thereafter, the nuts are fried briefly so that they can make a paste and to give a good taste. It is then put into the grinding machine for processing into a paste and packed in plastic containers .

The process is quite simple and fast and a substantial amount can be processed in a day with modest equipment within a small space.

Capital Investment Requirements in US$

Capital Investment Item Units Qty @ Total
Stainless Grinding Machine No 1 1000 1000
Sealing Machine No 1 720 720
Furniture No 1 200 200
Weighing Scale No 1 720 720
Bicycle No 1 72 72
Plastic drum No 2 20 40
Ladels No 4 4 16
Total 2,768

Production and Operating Costs
(a)Direct materials, Supplies and Costs in US$

Cost Item Units @ Qty/ day Pdn Cost/ day Pdn Cost/ mth Pdn Cost/ yr
Direct Costs
Groundnuts Kgs 1.65 250 413 10,725 128,700
Simsim Kgs 1.7 100 170 4,420 53,040
Packaging materials Pcs 0.43 350 151 3,913 46,956
Sub-total 700 733 19,058 228,696

General Costs (Overheads)

Rent 98 1176
Labour 210 2,520
Selling and Distribution 100 1,200
Cleaning and Toiletries 65 780
Miscellaneous 50 600
Depreciation 26 312
Sub-total 549 6,588
Total Operating Costs 19,607 235,284
  1. Production costs assumed 312 days per year with daily capacity of producing 300kgs of paste.
  2. Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
  3. Direct costs include materials, supplies and other costs that directly go into production of the product.
  4. Total monthly days assumed are 26-days.
  5. The valuation currency used is United States Dollars.

Market Analysis

There is a ready market for the paste and outlets are spread all over because this is a house hold item used by all families throughout the year. It is stocked in markets, provisional shops and supermarkets etc.

Project Product Costs and Price Structure

Item Qty/ day Qty/yr @ Pdn Cost/yr UPx Total Rve
G/nut and Simsim Paste 350 109,200 2.2 235,284 3 327,600

Profitability Analysis Table

Profitability Item Per day Per Month Per year
Revenue 1050 27,300 327,600
Less: Production and Operating Costs 754 19,607 235,284
Profit 296 7,693 92,316

Government Facilities and Incentives

The government trades a liberalized policy on trade and commerce. It is in the interest of government for anybody to take up any venture that would add value to agricultural produce where this project falls. There are low interest financial facilities in different institutions that can be accessed by those that suit the prescribed investment lines or parameters.

 

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