This profile envisages the establishment of a plant for the production of candy with a capacity of 500 tons per annum.
The present demand for the proposed product is estimated at 2,112 tons per annum. The demand is expected to reach at 3,516 tones by the year 2020. The plant will conceive employment possibilities for 14 persons. The total investment requirement is estimated at £50,000 million, out of which £ 19, 000 is required for plant and machinery. The project is financially viable with an internal rate of return (IRR) of 28 % and a net present value (NPV) of £ 8.36 million discounted at 8.5%.
II.PRODUCT DESCRIPTION AND APPLICATION
Candy is shaped pieces of cooked and flavored sugar, syrup, etc usually with coffee, mint, fruit juices, milk, nuts, etc added. It is recognized throughout the world as an important ingredient of a balanced diet. Candy is well known in replacing the energy which the human body continuously spends through physical exertion.
III.MARKET STUDY AND PLANT CAPACITY
MARKET STUDY
Past provide and Present Demand
The demand for candy or sugar confectionaries is met both through local production and imports. Nearly all the producers are located in Addis Ababa, and according to “Region 14 Administration Industry and Handicrafts Bureau-Report” on the survey of Private Small and Medium Scale Industries, 1993, they used to number 24 at the time of the survey and their reported and combined annual production was 1118 tons, according to the same source.
Table 3.1
APPARENT CONSUMPTION OF CANDY (SUGAR CONFECTIONERY)
The consumption of sugar confectionaries in the country is bound to increase with an increase income of the population and development of taste to the products. In projecting the demand for the product an average annual growth rate of 4% is employed which is equivalent to the population growth rate (see Table 3.2).
Table 3.2
PROJECTED DEMAND FOR CANDY
Year
Projected Demand (tones)
Local Capacity (tones)
Demand Gap
(tones)
2008
2196
1300
896
2009
2284
1300
984
2010
2375
1300
1075
2011
2470
1300
1170
2012
2569
1300
1269
2013
2672
1300
1372
2014
2779
1300
1479
2015
2890
1300
1590
2016
3006
1300
1706
2017
3126
1300
1826
2018
3251
1300
1951
2019
3381
1300
2081
2020
3516
1300
2216
3. Pricing and Distribution
The retail price of candy varies between £ 20 and £ 25 per kg depending on the country of origin and types of additives and flavor ants. Allowing a 30% margin for wholesalers and distributors the product could be sold at a price ranging from £ 16 to £ 18 per kg.
B.PLANT CAPACITY AND PRODUCTION PROGRAMME
1.Plant Capacity
Based on the market study, capital requirement and minimum economy of scale, the annual production capacity of the envisaged plant is 500 tones of candy. This capacity will be attained by working single shift a day having eight working hours and 300 working days per annum.
IV.MATERIALS AND INPUTS
RAW AND AUXILIARY MATERIALS
Various types of candies do exist depending on the ingredients used and manufacturing process employed. The envisaged plant will produce hard candy which can be identified by their hard ...