New Business Idea ICE CREAM MAKING Production and Marketing with Costs in USD

 Introduction:

Ice cream is a frozen dessert usually made from dairy products such as milk and cream, which are often combined with other ingredients and flavors. Most varieties contain sugar although some are made with other sweeteners. Alternatively, it can be made from milk from soy, rice, and goat for those who are lactose intolerant or allergic to dairy products and would like to avoid them. The production capacity is 38,376kg per year yielding revenue of US $107,453per annum from an investment with an initial cost of US $26,600. The project net profit margin is 45% with a payback period of 2 years and 5 months.

Production, Capacity, and Technology of Ice Cream Making
The basic steps involved in the manufacturing of ice cream are:
Blending of the mixed ingredients, pasteurization, homogenization, ageing the mixture, freezing, packaging, and hardening. The ice cream represents a congealed dairy product produced by freezing a pasteurized mixture of milk, cream, and milk solids other than fat, sugars, emulsifier, and stabilizers.

Capital Investment Requirement in US $

Item	Units	Qty	Cost	Total
Mixing / blending machine	No	1	3,300	3,300
Homogenization machine	No	1	2,800	2,800
Aging % storage vat	No	1	2,500	2,500
Batch Freezers	No	2	1,500	3,000
Pasteurisization machine	No	1	3,000	3,000
Hardening machine	No	1	2,500	2,500
Storage (Refrigerated)	No	1	2,500	2,500
Distribution Van	No	1	7,000	7,000
Total Cost of Machinery & Tools	26,600

Production and Operating cost in US$

Cost Item	Units	@	Qty/ day	Pdn cost/day	Pdn cost/ month	Pdn cost/ year
Direct Costs of materials and supplies
Milk (solid/ fat)	Kgs	2.25	38	85.5	2,223	26,676
Sugar,	Kgs	1	10	10	260	3,120
Flavorings, Candies & fruits	Kgs	3	2	6	156	1,872
Stabilizers / emulsifiers	Kgs	2	0.16	0.32	8	100
Eggs	Trays	2	2	4	104	1,248
Sub-total	106	2,751	33,016

General Costs (Overheads)

Labour	800	9,600
Selling & distribution	100	1,200
Utilities (Water, power)	400	4,800
Rent	200	2,400
Miscellaneous expenses	100	1,200
Depreciation	554	6,650
Sub-total	2,154	25,850
Total Operating Costs	4,905	58,866

 

1. Production costs assume 312 days per year with daily the capacity of 123Kgs.
2. Depreciation of fixed asset assumes 4-year life of assets written off at 25% per
year for all assets.
3. Direct costs include materials and supplies used in product production.
4. A production month is 26 workdays
5. Currency used is US Dollars.

Project product cost and Price Structure in US$

Item	Qty/day	Qty/ year	@	Pdn cost/yr	UPx	TR
Ice Cream	123	38,376	1.53	58,866	2.8	107,453

Profitability analysis in US$

Profitability Item	Per day	Per month	Per year
Revenue	344.4	8,954	107,453
Less: Production and operating costs	189	4,905	58,866
Profit	156	4,049	48,587

 

Market
There are two types of ice cream, soft and hard available on the
market. Ice cream is readily marketable as It is consumed widely. What is important is the strategic location of the business.

Source of Equipment and Materials
The equipment can be sourced from India or China and raw materials are available from local diaries

Government facilities
Startup cost at 25% granted on actual costs over the first four years in equal installments.

Risk
The business risk involved here is that the product is highly perishable if the product is not well stored and the drastic market dynamic due to weather changes.