Introduction

Coffee is a household drink in most African Household and a major foreign exchange earner. It is widely produced and many Ugandans take it as a beverage, and world over it is a cherished drink. The demand for coffee as a beverage is on the rise locally and any venture in its

production and distribution is viable as it involves adding value to the coffee beans.

This project involves milling coffee beans into desired powder and sold over the counter to a waiting customer. The project requires an

estimated fixed capital of NGN 5,332,000 and generating revenue of  NGN 31,600,000 in the first year of operation.

 

Learn How to Get Funding for Your Business

 

Capital Investment Requirements (CBN exchange rate -$1 to 415.84 NGN) as of  11 march 2022.

Capital investment item Units Qty Cost in

NGN

Cost in USD
Coffee Grinder(20kgs-2HP&starter)  No. 1 4000 9.619
Coffee Roaster(1.5HP&starter)  No. 1 37,000 88.977
Sealing machine     11,000 26.253
Sieves  No. 5 300 0.721
Total cost of machinery 52,300 125.769

 

 

Production and operating costs

Cost Item  Units @

 

NGN

 Qty/

day

Pdn cost/ month  in NGN Pdn cost/  year

In NGN

Pdn cost/  year

In USD

Fresh Coffee Nuts kg 500 10 130,000 1,560,000 3,751.443
Chicory Nuts kgs 200 7 36,000 432,000 1,038.861
Packaging materials pieces 50 200 260,000 3,120,000 7,502.886
Sub-total 426,000 5,112,000 12,293.189

 

 

General costs (overheads) 

   Cost Per Month

NGN

Cost Per Year

NGN

Cost Per Year

USD

Utilities(water and power)  2000 24,000 57.714
Labour 5000 60,000 144.286
Rent 2000 24,000 57.714
Distribution costs 5000 60,000 144.286
Sub –total 14000 168,000  404.001
Total Operating Costs 440,000 5,280,000 12,697.191

 

 

Production Process

The process is simple .Coffee beans are roasted first using a coffee roaster and then blended

 

1) Production costs assumed 312 days per year with daily capacity of producing 25kgs of instant coffee powder.

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 the production of the product.

4) Total monthly days assumed are 26-days.

5) The valuation currency used is the Nigerian Naira and United States Dollars.

Project Product Costs and Price Structure

 

Learn How to Write Business Plan

 

 

Project product costs and Price structure  

Item  Qty /day Qty/yr @ Pdn cost /yr

 

NGN

Pdn cost /yr

USD

TR

In NGN

TR

In USD

Instant Coffee 200 62,400 500 5,280,000 12,697.191 31,600,000 75,990.766

 

Profitability Analysis

Profitability Item  Per day Per month Per Year

NGN

Per Year

USD

Revenue 100,000 2,600,000 31,600,000 75,990.766
Less production and  operating Costs 16,400 440,000 5,280,000 12,697.191
Profit 83,400 2,160,000 26,320,000 63,293.575

 

Market Analysis

The demand for instant coffee is on the rise especially among affluent people in society who are . urban based and from the middle class. Its potential is promising. The revival of coffee shops of the seventies would go a long way to tap the market and popularize the product.

 

Join our telegram grow to get hot business funding opportunities, business tips & business ideas