New Business Idea MAKING CORNFLAKES Production and Marketing with Costs in USD

 MAKING CORNFLAKES

Introduction
Cornflakes are one of the most consumed breakfast cereals on account of their taste and nutritional value. They have a high market potential as they are consumed by adults, youth and children. This business idea aims at the production of 700 kilograms of cornflakes a day. The revenue potential is estimated at $ 436,800, annually, at a sales margin of 75% with an initial capital investment cost of $ 30,543. The Return on Investment(ROI) period is about 7 months.

Manufacturing Process of Industrial Cornflakes factory

1. Maize grains are cleaned using air classifiers and are separated (large and small grains) using a mesh screen separator. The grains are then polished and milled to remove germs and bran. 
2. The milled grains are cooked in a rotary steam cooker where flavor syrups of sugar, malt, salt, and water are added. 
3. The grain pieces are then washed and small grains are separated. 
4. 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%. 
5. The dried material is then kept in a de-moisturizing tank for a few hours for moisture to equally be distributed. 
6. The grits (cooked material) are then washed again and passed through a heavy flaking machine where they are turned into flakes by pressing. 
7. The flakes are immediately transferred to a rotary oven for roasting.
8. After roasting, the flakes are inspected, screened, and graded to remove sub-standard flakes. The flakes are then packed in water-resistant polythene containers of waxed paper.

Scale of Investment
Capital Investments Requirements

Capital Investment Item	Units	Qty	@	Amount
Brick stores for corn grain	No	1	600	600
Air classifiers	No	2	650	1,300
Separators	No	3	610	1,830
Storage bins	No	6	550	3,300
Weight balance	No	1	300	300
Rotary steam cooker	No	1	1,820	1,820
Agitator or lump breaker	No	1	1,200	1,200
Pan cooler or steamer	No	1	600	600
Germ separator	No	1	480	480
Heavy flaking machine	No	1	3,191	3,191
Rotary oven	No	1	2,000	2,000
Conveyer	No	1	600	600
Inspection conveyer	No	1	550	550
Packing machine	No	1	700	700
Screening and cooling equipment	No	1	540	540
Mixer	No	1	300	300
Mini boiler	No	1	1,100	1,100
Shifter	No	1	600	600
Office equipment	No	532
Installation, transportation.	No	3,000
Delivery van	No	6,000
TOTAL	30,543

Production and Operating Costs

Item	Units	@/ day	Qty/ day	Pdn Cost/ day	Pdn Cost/ month	Production Cost/Year1
Direct costs3:
Maize	Kgs	0.189	1,000	189	4,914	58,968
Salt	Kgs	0.45	50	22.5	585	7,020
Sub total	5,499	65,988

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	487.63	5,852
Sub-total	3,488	41,852
Total Operating Costs	8,987	107,840

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	@	Pdn/yr	UPx	Total Revenue
Corn flakes	700	218,400	0.5	107,840	2	436,800
Total	218,400	107,840	436,800

Profitability Analysis

Profitability Item	Per day	Per Month	Per Year
Revenue	1,400	36,400	436,800
Production and operating costs	346	8,987	107,840
Profit	1,054	27,413	328,960

 

Sources of Equipment
Equipments can be got from Locally at a cheaper price although
their quality may not be comparable to those imported from India/China.

Risk:
The quality of the product may be compromised if proper production
processes are not followed, hence, there is need for strict process
and quality control measures providing checks at each production
stage