Fortification of Vegetable oil and Sugar with Vitamin A in Uganda

Table 4.3: The Private Sector Plant Costs of Fortifying Vegetable Oil with Vitamin A in Uganda
Fortificant: Retinol Palmitate 1.7 million IU / gram
(Based on a weighted average of the costs of the two largest vegetable oil producers in Uganda, and an annual output level of 50,250 tons per plant and 6 products/brands)
ONE-TIME CAPITAL COSTS
To mix, introduce and improve dispersion of vitamin A: UGX US$
stainless steel tank for making premix: 24,975,000 15,000
pump to pump premix solution into process tank: 832,500 500
accessories 1,415,250 850
piping 333,000 200
27,555,750 16,550
Training in in-plant QA-sensitization for QA heads of all food vehicles (25 staff, does not include value of staff time) 333,000 200
Training in in-plant QA of supervisors, lab etc. personnel (25 staff, does not include value of staff time) 333,000 200
Re-designing of label and printing plates ( 8 brands) 3,496,500 2,100
Total Capital Costs: 31,718,250 19,050
ANNUAL RECURRENT COSTS
1. Premix Costs UGX US$
Using Retinol Palmitate 1.7 million IU/g to add 35 mg of vitamin A / kg of vegetable oil 862 kg/quarter 95,777,986 57,524
Freight 3,013,983 1,810
Clearance 250,000 150
Import license/NDA Certification of Premix Supplier (prorated to quarterly payment) 25,000 15
2% NDA charge 1,915,560 1,150
Total Premix Cost/Quarter 100,982,528 60,650
Total Premix Cost/Year 403,930,113 242,601
2. QA /QC Testing Costs-In Plant
Method #1: (As described in ECSA Vegetable Oil Fortification Manual, 2007)
Semi-quantitative test using a chromogenic reagent (US$4/test x 6 test/day x 250 days) = 9,990,000 6,000
Total Additional In-Plant Lab Costs: 9,990,000 6,000
3. External Lab Costs
UIRI Lab Quantitative Test Fee = 80,000 per test
1,920,000 monthly for two tests per month External Lab Costs: 23,040,000 13,838
4. Incremental production costs
Additional staff to handle production/premix-related activities: 1/shift
300,000 Monthly salary
105,000 Benefits @ 35% of salary, includes:
a) NSSF (National Social Security Fund, 10%)
b) Transport and food allowances
c) Health Insurance
405,000 Total remuneration of one production worker/month
1,215,000 Total cost 3 additional workers/month 14,580,000 8,757
Power for pump and two mixing tanks: 4 kw/hr*9 hrs/day*355 days/yr*190 UGX/hr 2,428,200 1,458
Incremental Annual Production Costs: 17,008,200 10,215
Total Annual Incremental Costs of Fortification UGX US$
1. Premix 403,930,113 242,601
2. Quality assurance / In-Plant lab testing: 9,990,000 6000
3. Quality control / External lab testing: 23,040,000 13,838
4. Additional production costs 17,008,200 10,215
TOTAL: 453,968,313 272,654
Note: The proportion of the capital costs in the overall yearly cost of the program is very low; it is
approximately 3,200,000 UGX (US$2,000), which represents 0.7% of the total cost of the annual
fortification process.
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