Make money from cereal

A bowl of cornflakes. Cornflakes are one of the most consumed breakfast cereals on account of their taste and nutritional value.

What you need to know:

Cornflakes are one of the most consumed breakfast cereals on account of their taste and nutritional value. Dorothy Nakaweesi shows how one can earn some money from making them.

Cereals made from processed grains are often eaten as the first meal of the day. They are eaten hot or cold, usually mixed with milk, yogurt, or fruit.
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 is one of those businesses that Ugandans have not ventured into but instead import the products from Kenya, South Africa, UK and other countries.
Investment experts think if Ugandans invest in this business, it can save the country from a big import bill and will also create jobs along the value chain.

Investment Capital
According to Uganda Investment Authority senior investment officer, Mr John Musajjakawa, the initial capital which involves the procurement of machinery and raw materials is about $30,000 (Shs108 million).
If one aims at producing or processing about 700 kilogrammes of cereals per day, this will bring in an annual revenue estimate of $436,000 (Shs1.5 billion) this means a monthly earning of about Shs131 million.
With this investment it means the payback period for the money invested into the business is about seven months.

Market pointers

Mr Charles Ocici, the executive director Enterprise Uganda, shares that if one is to invest in breakfast cereals, they have to look out for the source of raw materials. In this case, cereals which are made out of local raw materials such maize and wheat.
He, however, added: “This does not stop you from gradually diversifying into other local raw materials such as millet and sorghum which do resonate with Ugandans.”
He adds that because this kind of investment caters for a rather fairly narrow market, one needs to produce unique cereals which will be better than the already imported products.
Mr Ocici advises that for a local producer to be unique from the imports, introducing or mixing local dried fruits such as mangoes, apple bananas, mangoes or pineapples will not only relate with the customers but it will also increase your earnings.
In terms of technology, Mr Ocici said whoever intends to invest in such an enterprise should consider technological transfer especially from South Africa and Kenya where they have invested in this business.
“You don’t have to spend or worry so much on which type of technology to do the job. Bring in technologies with an African angle,” he advised.
Mr Ocici reflects that packaging in this kind of investment is very key because it appeals to the potential customers.
He said packaging should be of high quality to kill two birds with one stone — that is catching the eye of a customer and preserving the products for months.
“Using paper packaging together with polythene inside to protect the cereals to keep them fresh is key,” he says.
In this kind of investment, Mr Ocici says one has to create network of clients such as the high-end supermarkets and hotels plus day care centres.

Incentives
Mr Musajjakawa says that investing in production of breakfast cereals is an intuitive that supports the governments’ value addition policy. This is geared towards creating jobs and promoting local industries.

Equipment
Equipment can be got from Uganda cheaply although its quality may not be comparable to those imported from India. Others include: Storage (Silo), mixer, extruder cooker, coating machine, storage bin, packaging machine and laboratory equipment.