BUSINESS IDEA FOR BUTTER MAKING
Introduction
This profile envisages the establishment of a plant that produces Butter. Butter is a spread made from solidified cream. Cream is taken from milk and then churned. Eventually Butter globules form, and start to clump together. Two products result at the end: Butter, and the liquid left over, which is called Butter milk.
Production Capacity
This plant will be capable of producing 200 kgs of Butter every day which will tantamount to 6,000 kgs per month.
Production Process & Technology
Butter
is made through the process of churning milk cream. The churning process breaks
down a membrane around the Butterfat
molecules, allowing them to adhere to each other, thus coagulating to form
Butter. Butter forms in the final two minutes of the churning process. Salt
used to be added to Butter as a preservative, slowing down the growth of
bacteria in the Butter; today, it is added mostly as flavoring for those who
are used to prefer the taste of salted Butter.
Raw Materials
The major raw materials used to make Butter includes: Milk cream, and salt.
Equipment
The
major Equipment needed in the making of yoghurt includes:
• Cream separators
• Churning / Butter machine
• Butter cutter
• Refrigerators
• Milk Tanks
Market Analysis
The
demand for Butter is very high in urban centres where there are super markets,
five star hotels and a high income class of
people as well as on the world market. The main key players in this sector
include; Sameer Agric & Livestock Industry, Fresh
Dairy, among others.
Scale of Investment, Capital Investment
Requirements
The total fixed capital investment cost of the project is estimated at USD 18,340.
Project Costs
The
Initial Capital Investment requirements are estimated at US$ 58,290.
1. Capital Investment Requirements in
US$
|
Item |
Units |
Qty |
Unit |
Amount |
|
Delivery Van |
No. |
1 |
8,000 |
8,000 |
|
Milk Truck |
No. |
1 |
15,000 |
15,000 |
|
Cream Separator |
No. |
1 |
1,500 |
1,500 |
|
Butter Cutter |
No. |
1 |
2,000 |
2,000 |
|
Churning Machine |
No. |
1 |
3,000 |
3,000 |
|
Refrigerators |
No. |
2 |
500 |
1,000 |
|
Milk Tanks |
No. |
2 |
250 |
500 |
|
Total Amount |
31,000 |
2. Operating Costs in US $
|
Item |
Unit |
Unit |
Qty/ |
Prod. |
Prod. |
Prod. |
|
Direct Costs |
||||||
|
Milk |
Ltrs |
0.3 |
5,000 |
1,500 |
39,000 |
468,000 |
|
Salt |
Kgs |
0.8 |
20 |
20 |
520 |
6,240 |
|
Sub total |
1,520 |
39,520 |
474,240 |
|||
|
General Costs (Over heads) |
||||||
|
Rent |
600 |
7,200 |
||||
|
Packaging |
200 |
2,400 |
||||
|
Labour |
1,000 |
12,000 |
||||
|
Utilities (Power &Water) |
1,000 |
12,000 |
||||
|
Repair & Maintenance |
500 |
6,000 |
||||
|
Fuel |
1,500 |
18,000 |
||||
|
Depreciation (Asset write off) Expenses |
645.3 |
7,750 |
||||
|
Sub - total |
5,445.3 |
65,350 |
||||
|
Total Operating Costs |
44,965.3 |
539,590 |
3. Project Product Costs & Price Structure in US$
|
Item |
Qty/ |
Qty/yr |
Unit |
Prod |
Unit |
T/rev |
|
Butter |
500 |
156,000 |
3.45 |
539,590 |
5 |
780,000 |
4. Profitability Analysis
|
Item |
Per |
Per |
Per |
|
Revenue |
2,500 |
65,000 |
780,000 |
|
Less: Production & Operating Costs |
1,520 |
44,966 |
539,590 |
|
Profit |
980 |
20,034 |
240,410 |