MAKING INSTANT COFFEE POWDER

• Agriculture
• Fruits and Beverages

 Introduction

Coffee is a household crop in Uganda being one of the major foreign exchange earners. 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 increase locally and any venture in its production and distribution is a viable venture as it involves adding value to the coffee beans. This project is a new
venture as coffee powder is milled and sold over the counter to the waiting customer or mixed there and then for them to consume immediately. This coffee is fresh and richer in taste and flavor than the packaged and stored stuff. The project requires an estimated fixed capital of US$ 5, 675, operating costs of US$ 64,935 generating revenue of US$ 840, in the first year of operation
Production Process
The process envisaged is simple .Coffee beans are roasted first using a coffee roaster and then blended
Market Analysis
There is a developing trend in life style where the demand for coffee and this type in particular is on the increase especially with the affluent people in society. This is therefore urban based and urban trend involves mainly the middle class. The potential is promising. The demand extends offices private and government, supermarkets and foreign markets especially the Arab world where this kind of coffee is very popular. The revival of coffee shops of the seventies would go a long way to tap the market and popularize the product. The major key players in this sector are; Kyagalanyi Coffee Industry, Uganda Coffee Co-operative, SESACO among others
Capital Investment Requirements

Capital Investment Item	Units	Qty	Unit cost	total
Coffee Grinder(20kgs- 2HP&starter)	No	1	2,500	2,500
Coffee Roaster(1.5HP&starter)	No	1	1,500	1,500
Sealing machine	No	1	150	150
Sieves	No	5	25	125
Utensils	No	-	-	400
Furniture & Fittings	No	-	-	1,000
Total	5,675

Production and Operating Costs
(a)Direct materials, Supplies and Costs

Cost Item	Unit s		Unit Cost	Qty/ day	Pdn Cost/ day	Pdn Cost/ mth		Pdn Cost/yr
Direct Costs
Fresh Coffee Nuts	Kgs		1.1	15	17	429		5,148
Chicory Nuts	Kgs		2	7	14	364		4,368
Packaging materials	Pcs		0.25	350	88	2,275		27,300
Sub-total	372		118	3,068	36,816
General osts(Overheads)
Rent	325		3,900
Labour	1,050		12,600
Selling and Distribution	150		1,800
Cleaning and Toiletries							104		1,250
Utilities	475						5,700
Miscellaneous		121					1,450
Depreciation		118					1,419
Sub-total		2,343					28,119
Total Operating Costs		5,411					64,935

 

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 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/ day	Qty/yr	Unit Cost	Pdn Cost/yr	Unit Price	Total Rve
Instant Coffee	400	124,800	0.52	64,935	0.8	99,840

Profitability Analysis Table

Profitability Item	Per day	Per Mnth	Per year
Revenue	320	8,320	99,840
Less: Production and Operating Costs	208	5,411	64,935
Profit	112	2,909	34,905

Sources of Supply of Raw Materials:
Coffee can be supplied from Eastern (Bugisu region) and Central (Buganda region) parts of Uganda.
Incentive
The Government has revived the Agric sector through provision of improved seeds/variaties such as the introduction of Arabic Coffee which matures in a very short time and of better quality. Also, taxes on Agro-processing industries were waved off by the Government.