ESTABLISHING A BAKERY
Introduction
Bread and Confectionery products are a lucrative business. These, especially bread, are quite nutritive and easily preserved and shelve life can be prolonged. These are products commonly stocked almost by all provision stores. Bread is one common product on people’s dining tables to a sizeable proportion of the urban and semi-urban communities and therefore enjoys a ready market. This is a project to produce bread, cakes, buns, mandazi, doughnuts etc. This proposal will confine itself to the production of bread, but the same equipment is used to produce all the other products except mandazi which may require some additional machines and cooking oil.
Market Analysis
Bread is a household item therefore has a ready market throughout the year. The market traverses the country. This sector has registered a big number of Investors which includes; Hot Loaf, Ntake, Kiddawalime, Denovo, United, among others.
Production Capacity, Technology and
Process
For bread :- Wheat flour mixed with salt, sugar, yeast, cooking fat, water and other ingredients that may be necessary and kept for fermentation. The fermented dough is divided into desired weights and sizes and molded appropriately, and left to rest for panning. This is later put into greased metal pans and kept in a proover at 38 degrees and with 88% relative humidity. The pans are finally placed in an oven and baked at varying temperatures between 205 –230 degrees Celsius.
Investment Scale, Capital Requirements
and equipment
The investment scale depends on the project set objectives.
Capital Investment Requirements in US$
Item |
Units |
Qty |
Unit cost |
total |
Land & Buildings |
No |
- |
- |
25,000 |
Firewood Oven |
No |
1 |
3,500 |
3,500 |
Mixer |
No |
1 |
2,500 |
2,500 |
Proover System |
No |
1 |
750 |
750 |
Doughnut Stove |
No |
1 |
50 |
50 |
Trays |
No |
100 |
10 |
1,000 |
Tins (1kg-size) |
No |
40 |
11 |
440 |
Tins (1/2kg-size) |
No |
40 |
10 |
400 |
Furniture &Fittings |
No |
- |
2,000 |
2,000 |
Delivery Van |
No |
2 |
8,500 |
17,000 |
Slicing Machine |
No |
1 |
1,250 |
1,250 |
Other tools |
No |
- |
450 |
450 |
Total |
54,340 |
Production
and Operating Costs
Direct Materials, Supplies and Costs in US$
Cost Item |
Units |
Unit |
Qty/ |
Prod |
Prod |
Prod |
Direct Costs |
||||||
Wheat flour |
kgs |
0.7 |
1,000 |
700 |
18,200 |
218,400 |
Salt |
kgs |
0.63 |
20 |
13 |
328 |
3,931 |
Sugar |
kgs |
1 |
250 |
250 |
6,500 |
78,000 |
Yeast |
kgs |
5.8 |
20 |
116 |
3,016 |
36,192 |
Improver |
kgs |
3.9 |
20 |
78 |
2,028 |
24,336 |
Water |
Ltrs |
0.005 |
1,200 |
6 |
156 |
1,872 |
Vanilla |
Btls |
0.5 |
5 |
3 |
65 |
780 |
Cooking fat |
bxs |
15 |
20 |
300 |
7,800 |
93,600 |
Packaging |
Pcs |
0.03 |
2,500 |
75 |
1,950 |
23,400 |
Other materials |
- |
- |
4 |
100 |
1,200 |
|
Sub-total |
5,035 |
1,544 |
40,143 |
481,711 |
||
General Costs (Overheads) |
||||||
Labour |
1,188 |
14,250 |
||||
Utilities |
679 |
8,150 |
||||
Selling & distribution |
2,388 |
28,650 |
||||
Administration expenses |
267 |
3,200 |
||||
Cleaning & toiletries |
192 |
2,300 |
||||
Miscellaneous |
175 |
2,100 |
||||
Depreciation |
611 |
7,335 |
||||
Sub-total |
5,499 |
65,985 |
||||
Total Operating Costs |
45,641 |
547,696 |
1) Production costs assumed 312 days per year with
daily capacity of producing 2,500 loaves of bread.
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.
Project Product Costs and Price
Structure
Item |
Qty/ |
Qty/yr |
Unit |
Prod |
Unit |
Total |
Bread-1kg |
1,250 |
390,000 |
0.95 |
370,772 |
1.10 |
429,000 |
Bread-1/2kg |
1,250 |
390,000 |
0.45 |
176,924 |
0.55 |
214,500 |
Total |
780,000 |
547,696 |
643,500 |
Profitability Analysis Table
Item |
Per day |
Per month |
Per year |
Revenue |
2,063 |
53,625 |
643,500 |
Less: Production and Operating Costs |
1,755 |
45,641 |
547,696 |
Profit |
307 |
7,984 |
95,804 |