MAKING FERTILIZERS FROM DRY BONES
Introduction
Uganda’s economy is dominated by the agricultural sector and any investment
such as production of agricultural fertilizers can be a very viable investment
both in the short run and long run period of
the investment. This project if implemented can yield a total estimated revenue
of 960US$ with operating costs of 67,411US$ employed in the first year of
active production of an estimated 137,280kgms of fertilizers.
Production Capacity, Technology
&Process
The production process involves digging of a5-ft deep pit with a radius of 1-mtr .Charcoal or wood is put in the pit and on top of it dry bones are piled. The fire wood is ignited and the bones are burnt until they are spongy and brittle. The burnt bones are then removed and pounded by a simple mortar to a fine material which contains calcium and phosphate. It does not matter even if burnt wood ash is mixed with the burnt bones. The fertilizer is then weighed and packed.
Market Analysis
The fertilizer industry in Uganda is still very small as key players in the
market are Tororo cement industry and Hima cement industry. Therefore,
investing in fertilizer manufacturing is a very lucrative
project. There are no key players in this industry.
Investment Scale, Capital Requirements
& Equipment
The equipment needed is very simple as it may require the following tools
tabled below;
Capital Investment Requirements
|
Item |
Units |
Qty |
Unit Cost |
Total($) |
|
Axes |
No |
10 |
5 |
50 |
|
Pangas |
No |
20 |
4 |
80 |
|
wood splitting machine |
No |
1 |
1,000 |
1,000 |
|
Mortar |
No |
2 |
350 |
700 |
|
Hoes |
No |
10 |
4 |
40 |
|
Spades |
No |
10 |
4 |
40 |
|
Containers |
No |
4 |
250 |
1,000 |
|
Pick Up Van (3tones) |
No |
1 |
12,500 |
12,500 |
|
Packaging machine |
No |
1 |
200 |
200 |
|
Furniture & Fixture |
No |
- |
- |
1,200 |
|
Weighing machine |
No |
1 |
200 |
200 |
|
Other tools |
No |
- |
- |
250 |
|
Total |
17,260 |
The machines are available on the local
market.
Production and Operating Costs in US$
Direct Materials, Supplies and Costs
|
Cost Item |
Units |
Unit |
Qty/ |
Prod |
Prod |
Prod
cost |
||
|
Direct Costs |
||||||||
|
Dry bones |
Kgs |
0.25 |
450 |
113 |
2,925 |
35,100 |
||
|
Fire wood |
Kgs |
0.02 |
600 |
12 |
312 |
3,744 |
||
|
Fuel |
Ltrs |
0.73 |
14 |
10 |
266 |
3,189 |
||
|
Match boxes |
Pcs |
0.05 |
1 |
0.05 |
1 |
16 |
||
|
Packaging |
Pcs |
0.5 |
8 |
4 |
104 |
1,248 |
||
|
Sub-total |
1,073 |
139 |
3,608 |
43,296 |
||||
|
General Costs (Overheads) |
||||||||
|
Labor |
567 |
6,800 |
||||||
|
Utilities |
79 |
950 |
||||||
|
Rent |
500 |
6,000 |
||||||
|
Cleaning & toiletries |
121 |
1,450 |
||||||
|
Selling & distribution |
104 |
1,250 |
||||||
|
Fuel |
208 |
2,500 |
||||||
|
Miscellaneous expenses |
71 |
850 |
||||||
|
Depreciation |
360 |
4,315 |
||||||
|
Sub-total |
2,010 |
24,115 |
||||||
|
Total Operating Costs |
5,618 |
67,411 |
||||||
1) Production costs
assumed are for 312 days per year with daily production capacity of 440 kgs of
fertilizers.
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 |
T/rev |
|
Dry bone |
440 |
137,280 |
0.49 |
67,411 |
0.75 |
102,960 |
Profitability Analysis Table
|
Item |
Per Day |
Per Month |
Per Year |
|
Revenue |
330 |
8,580 |
102,960 |
|
Less: prod &Operating Costs |
216 |
5,618 |
67,411 |
|
Profit |
114 |
2,962 |
35,549 |