Agro-Tech Book - Agriculture Support Programme

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are used to operating machinery. Electric motors are cheaper and more ef�cient than diesel engines for providing power. Cake Cake is the remainder of the seed after it has been crushed and the oil extracted. It still contains small amounts of oil and is a valuable feed for animals. It can be broken into small particles and fed to chickens or mixed with meal and fed to pigs and cattle. Meal is valuable and can be sold to other farmers. SUNFLOWER PROCESSING BUDGETS Cost of running the press. The cost of buying the machine is the biggest hurdle in running an oil pressing business. The cost of the press must be covered by sales of oil before the press stops working from being too old. A Yenga should be able to process 15 tons (300 bags) of sun�ower in its life. If the owner has borrowed money to buy the press, and is paying interest, it should be paid off as soon as possible. Here we assume that no money was borrowed. If the press costs K540,000, and processes 15 tons before it is useless, it means that K1,800 (15TX20bags=300bags --– K540,000/300=K1,800) is needed from each bag to pay for the press. It also costs money to keep it maintained and repaired. This may be K75 per bag. The running cost of the press is then K1,875 per bag without counting interest. Interest may be 60% per year and if we assume the life of the machine is 2 years, then the interest payable will be approximately 60% if repayments are spread over the 2 years. This would amount to (0.6X540,000)=K324,000 Thus, the cost of interest, per bag processed = K1,080 --- (324,000/300= 1,080) In addition the owner may be paying a worker to operate the press. This may be K3,000 per day during which one bag can be processed. Therefore the cost of operating the press to process one 50 kg bag will be K5,955 (1,800+75+1080+3000=5,955) Cost of the seed E.E.O.A. A press owner may process his own seed or buy it from someone else; either way it has a cost. It will be cheaper at harvest than later in the year and may range from K15,000 to more than K25,000. Assuming that it cost K20,000 per bag the total cost of processing the oil and cake will be it will now be K25,955 --- (20,000+5,955) How much oil will be produced? The Yenga press is not as ef�cient as a mechanical screw press at extracting oil and the oil content of the seed is also variable. You can expect about 10 to 13 litres (13 to 17 bottles of 750 mls) from a bag of seed. The sale of this oil must cover the cost of processing the bag. 12 • If 13 bottles are produced for sale, then the selling price per bottle must be at least (zero pro�t) K1,996.54 (K25,955/13 bottles) AGRO-TECHNOLOGY: Farming and Processing Equipment
• If 15 bottles are produced for sale, then the selling price per bottle must be at least (zero pro�t) K1,730.33 (K25,955/15 bottles) • If 17 bottles are produced for sale, then the selling price per bottle must be at least (zero pro�t) K1,526.76 (K25,955/17 bottles) Oil sales The price of oil will change through the year depending on the cost of seed, the amount of oil that others are trying to sell and the amount of money that customers have. At a selling price of K2,700 per bottle, a bag producing 15 bottles, will produce K40,500 worth of oil and therefore give a margin of K14,545 (40,500-25,955) per bag. The margin is K969.67 per bottle (K14,545/15 bottles) Value of Cake The cake is very valuable provided there is a market! Cake can be valued at K400/kg and as approximately 30Kg are produced per 50kg of Sun�ower processed, the value of cake from one bag of seed can be K12,000 (30kgXK400). If the processor can sell his cake for K12,000 per bag processed, the total gross pro�t jumps to K26,545 (14,545+12,000). It is therefore most important to secure a regular market for the cake!!! Riskiness The business has its risks as explained above. The level of pro�t will depend on: • The selling price of the oil (who pays for the bottle? -- customers exchange bottles!) • The price paid for the seed delivered to the press • The extraction rate i.e. the number of bottles of saleable oil produced per bag • The amount paid for operating labour • The selling price of the cake – there may be no local market so the owner may have to transport the cake at a cost, or feed it to livestock! E.E.O.A. If we assume zero selling price for the cake, the 15 bottles of oil must sell for over K1,730 per bottle in order to make a pro�t if seed is bought at K20,000 per bag. If oil is sold at K2,000 per bottle and only 13 bottles are produced, no more than K20,045 (13 bottlesX K2,000 – K5,955) must be paid for each 50kg of seed Keeping Records Make sure that press owners keep records so that they know if they are making or losing money. Make a cost and sales sheet like the form attached to keep records on. Examples of costs and returns are shown in the tables below. Oil Press Costs and Returns Press Owner’s name: Bwalya Mulenga Press type:Yenga Price paid:K540,000 Date purchased: 31 st February 2006 from Mafuta AGRO-TECHNOLOGY: Farming and Processing Equipment 13
Page 1 and 2: Economic Expansion in Outlying Area
Page 3 and 4: Farming and Processing Equipment AG
Page 5 and 6: A “DEEP WELL PUMP” is a means o
Page 7 and 8: than one “pass´may be required t
Page 9 and 10: Shellers There are many devices use
Page 11: * Dirt, dust and all waste matter m
Page 15 and 16: E - Monthly Oil Movement for month
Page 17 and 18: HAMMER MILL PROCESSING and COSTS In
Page 19 and 20: OPERATING BUDGET This will be consi
Page 21 and 22: Hrs �nish_______ Hrs start_______
Page 23 and 24: Agro-Tech Equipment Suppliers Categ
Page 25 and 26: Agro-Tech Equipment Suppliers - Bra
Page 27: NOTES E.E.O.A. AGRO-TECHNOLOGY: Far

Agro-Tech Book - Agriculture Support Programme

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