ESSENTIAL OIL
Introduction
This project is for extraction of oil from various oil bearing plants and grasses such as: Eucalyptus, cinnamon ginger, lemons etc. Essential oil is highly volatile and is essentially carried away by steam without undergoing decomposition. Essential oils are produced for use in medicine and perfume manufacture, and for other industrial purposes. The project requires an estimated fixed capital of US$ 26,500 and operating costs of US$ 284,507 generating total revenue of US$ 400 in the first year of operation.
Market Analysis
Essential oil is a vital item in pharmaceutical and
perfume manufacture; as well as other industrial use. The industrial development
in the country is a healthy atmosphere for this project as it guarantees the
market. There is great potential for export to the highly industrialized world.
The major investors in this sector
include; Mukwano Group of industries, RAFIK, and BIDCO Uganda limited.
Production capacity and process
The leaves are stacked in the extractor and the boiler
pressure is maintained at 40 and distilling may vary from 3hrs to 18 hours
depending on the species being distilled. The leaves are subjected to the steam
and oil is extracted as it goes up in the steam. Water is separated through
fractional distillation. If eucalyptus leaves are used, 80kgs of oil would be
expected to be generated from one hectare. Oil yield may vary from plant to
plant or from stuff used such as lemons.
Project Product costs and Price Structure
Capital Investment Requirements in US$
|
Item |
Units |
Qty |
Unit cost |
total |
|
Fractional
Distillation with |
No |
1 |
5,000 |
5,000 |
|
Steam generating tank |
No |
1 |
10,000 |
10,000 |
|
Truck (3-tone) |
No |
1 |
8,000 |
8,000 |
|
Laboratory equipment |
No |
1 |
2,000 |
2,000 |
|
Other tools |
No |
- |
- |
500 |
|
Furniture & Fittings |
No |
- |
- |
1,000 |
|
Total |
26,500 |
Production
and Operating Costs in US$
Direct materials, Supplies and Costs
|
Cost Item |
Units |
Unit |
Qty/ |
Prod |
Prod |
Prod |
|
Direct Costs |
||||||
|
Fresh
Leaves |
Tones |
625 |
1 |
625 |
16,250 |
195,000 |
|
Water |
Ltrs |
0.003 |
3,000 |
9 |
234 |
2,808 |
|
Packaging |
Pcs |
1.75 |
64 |
112 |
2,912 |
34,944 |
|
Sub-total |
3,065 |
746 |
19,396 |
232,752 |
||
|
General Costs (Overheads) |
||||||
|
Rent |
500 |
6,000 |
||||
|
Labour |
2,050 |
24,600 |
||||
|
Selling and Distribution |
369 |
4,430 |
||||
|
Cleaning and Toiletries |
63 |
750 |
||||
|
Utilities |
529 |
6,350 |
||||
|
Miscellaneous |
250 |
3,000 |
||||
|
Depreciation |
552 |
6,625 |
||||
|
Sub-total |
4,313 |
51,755 |
||||
|
Total Operating Costs |
23,709 |
284,507 |
1) Production costs assumed 312 days per year with
daily capacity of producing 600 litres of essential oil.
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.
|
Item |
Qty/ |
Qty/yr |
Unit |
Prod |
Unit |
Total Revenue |
|
Essential |
600 |
187,200 |
1.52 |
284,507 |
20 |
3,744,000 |
Profitability analysis table
|
Item |
Per |
Per |
Per year |
|
Revenue |
12,000 |
312,000 |
3,744,000 |
|
Less: Production and Operating Costs |
912 |
23,709 |
284,507 |
|
Profit |
11,088 |
288,291 |
3,459,493 |