CANDYLAND

Candyland

Table OF CONTENTS

PAGE

I.

SUMMARY

8-3

II.

PRODUCT DESCRIPTION & APPLICATION

8-3

III.

MARKET STUDY AND PLANT CAPACITY

8-4

A. MARKET STUDY

8-4

B. PLANT capability & output PROGRAMME

8-7

IV.

MATERIALS AND INPUTS

8-7

A. RAW & AUXILIARY MATERIALS

8-7

B. UTILITIES

8-8

V.

TECHNOLOGY & ENGINEERING

8-9

A. TECHNOLOGY

8-9

B. ENGINEERING

8-10

VI.

MANPOWER & TRAINING REQUIREMENT

8-12

A. MANPOWER REQUIREMENT

8-12

B. TRAINING REQUIREMENT

8-13

VII.

FINANCIAL ANALYSIS

8-13

A. TOTAL INITIAL INVESTMENT COST

8-13

B. PRODUCTION COST

8-14

C. FINANCIAL EVALUATION

8-15

D. ECONOMIC BENEFITS

8-16

I. SUMMARY

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)

Year

Domestic production

Import

2000

1433

350.23

2001

1440

468.52

2002

1405

553.57

2003

992

764.6

2004

1460

763.24

2005

1103

694.59

Average

1306

599

Source: culture administration, External Trade Statistics, Annual Issues.

2.Projected Demand

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 ...