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VERMI-CULTURE BUSINESS IN UGANDA

By: wmutenza0 comments

Introduction

Vermiculture: “The raising and production of earthworms and worm castings” In recent years, thanks to the growing awareness, the benefits of organic compost have been understood, and today, more and more farmers want organic compost as it enhances the soil fertility and regenerates micro organisms in the soil.

This idea is associated with risks of harmful organic waste to the soil, however, this can be mitigated by applying Vermi-culturing technology. Project cost is US$ 7,640, revenue is estimated at US$29,063 from production of 360 kgs of worms, which are used as baits in the fishing sector, cocoons and residues annually. The net profit margin is estimated at 3% with a payback period of 3 years.

Production Process, Capacity and Technology

Much similar to the process of making vermi-compost, this involves breeding of earthworms in a mixture of cow dung and agricultural wastes to make organic compost manure. The profiled project has a minimum capacity of 30kg per month and this, among others is on the basis of 26 working days in a month and single 8-hour work shifts in each working day.

Capital Investment Requirement in US $

Item Units Qty Price Total
Compost turning equipment No 1 1,200 1,200
Screening equipment No 1 1,700 1,700
Green waste picking station No 2 870 1,740
Sieves of 3mm No 2 1,500 3,000
TC of tools 7,640

Production and Operation costs in US$ Direct materials, supplies and costs

Cost Item Units @ Qty/ day Pdn cost/day Pdn cost/ month Pdn cost/ year
Direct Costs
Cow dung kgs 0.2 12.8 2.56 66.664 799.96
Earth worms kgs 8.2 0.16 1.312 34.112 409.34
Agricultural residue. kgs 0.07 5 0.35 9.1 109.2
Sub-total 4.23 110 1319

General Costs (Overheads)

Labour 1,650 19,800
Selling & distribution 100 1,200
Utilities (Water, power) 200 2,400
Rent 25 300
Miscellaneous expenses 100 1,200
Depreciation 159 1,910
Sub-total 2,234 26,810
Total Operating Costs 2,344 28,129
  1. Production costs assumed are for 312 days per year with daily capacity of 1.15 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 work days
  5. Currency used is US Dollars.

Project product costs and Price Structure

Item Qty/day Qty/ year Unit Cost Pdn cost/ yr UPx TR
Worms 1.15 359 78 28,129 81 29,063

Profitability Analysis in US$ Market

Profitability Item Per day Per month Per year
Revenue 94 2,422 29,063
Less: Production and operating costs 90 2,344 28,129
Profit 3 78 934

Thanks to the awareness in rural areas, the demand for Vermicompost is growing supported by an increase in the number of commercial establishments especially in market gardening and flower farmers.

Suppliers of Equipment and Materials

All the equipment needed for this project is available in Uganda and at a cheap price. Tonet Ltd, Kanyanya, Gayaza. Worms can be got from Kawanda or Namulonge research centers.

 

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