MAKING CORNFLAKES


Introduction
Cornflakes are one of the most consumed breakfast cereals on account of their taste and nutritional value. When milk is added to them, they turn into a wholesome food with the baked corn flakes swelling up to
provide a thick delicious food cereal. They have a high market potential as they are consumed by adults, youth and children. This business idea aims at production of 700 kilograms of cornflakes a day. The revenue potential is estimated at $, 200 annually at a sales margin of 10%. The initial capital investment cost for the project is $ 28,613.


Manufacturing Process
Maize grains are cleaned using air classifiers and after separated (large grains and small grains) using a mesh screen separator. The grains are then polished and milled to remove germs and bran. The milled grains are cooked in a rotary steam cooker where flavor syrups of sugar, malt, salt, and water are added. The grain pieces are then washed and small grains are separated. The grains are then carried to an agitator pump or lump breaker then sent to a steamer where pre-heated air is blown into the grains so as to reduce the moisture content to the desired level of about 20%. The dried material is then kept in a de-moisturizing tank for a few hours for moisture to equally be distributed. The grits (cooked material) are then washed again and passed through a heavy flaking machine where they are turned into flakes by pressing. The flakes are immediately transferred to a rotary oven for roasting. After roasting, the flakes are inspected, screened and graded to remove standard flakes. The flakes are then packed in water resistant polythene containers of waxed paper.


Market Analysis
Cornflakes are a popular Cereal which is stocked by a big portion of the middle and affluent classes of people. Cornflakes are mostly sold in supermarkets, Wholesale and Retail shops in Uganda. However, there are no producers yet in the Country.


Scale of Investment
Capital Investments Requirements

Capital Investment Item

Units

Qty

Unit Cost

Amount

Brick stores for corn grain

No

1

532

532

Air classifiers

No

2

532

1,064

Separators

No

3

532

1,596

Storage bins

No

6

426

2,553

Weight balance

No

1

426

426

Rotary steam cooker

No

1

1,596

1,596

Agitator or lump breaker

No

1

1,064

1,064

Pan cooler or steamer

No

1

851

851

Germ separator

No

1

532

532

Heavy flaking machine

No

1

3,191

3,191

Rotary oven

No

1

2,128

2,128

Conveyer

No

1

640

640

Inspection conveyer

No

1

532

532

Packing machine

No

1

745

745

Screening and cooling
equipment

No

1

532

532

 

Mixer

No

1

213

213

Mini boiler

No

1

1,064

1,064

Shifter

No

1

532

532

Office equipment

No

532

Installation, transportation.

No

2,970

Delivery van

No

5,320

TOTAL

28,613


 

 

 

Production and Operating Costs

Cost
Item

Units

Unit
cost/
day

Qty/
day

Prod
Cost/
day

Prod
Cost/
month

Production
Cost/Year1

Direct costs:





Maize

Kgs

0.175

1,000

175

4,550

54,600

Salt

Kgs

0.5

50

25

650

7,800

Sub-total






62,400

General costs (Overheads)





Labour

1,000

12,000



Utilities

1,000

12,000



Selling and Distribution

300

3,600



Administrative expenses

200

2,400



Shelter

500

6,000



Depreciation Expenses

477

5,723



Sub-total

3,477

41,723



Total Operating Costs

3,477

41,723



Production is assumed for 312 days per year. Depreciation assumes 5 year life of assets written off at 20% per year for all assets. A production Month is assumed to have 26 work days.


Project product Costs and price Structure in US$

Item

Qty
/day

Qty/yr

Unit
Cost

Prod/yr

Unit
price

Total
revenue

Corn
flakes

700

218,400

0.19

41,723

3.0

655,200

Total

218,400

41,723

655,200


 

Profitability Analysis

Profitability Item

Per day

Per Month

Per Year

Revenue

2,100

54,600

655,200

Production and Operating Costs

134

3,477

41,723

Profit

1,966

51,123

613,477