Triple P Investments High Quality Cassava Flour Processing Business Plan - 11.09.2016

BUSINESS PLAN:
ESTABLISHMENT AND OPERATION
OF
A MEDIUM-SCALE
HIGH QUALITY CASSAVA FLOUR PLANT
AT
SOROTI
IN
NORTH-EASTERN UGANDA
TRIPLE P INVESTMENTS
P.O. BOX --------,
KAMPALA,
UGANDA.
Cell Phone: +256-772-469070
Landline: +256------------------
Fax: +256------------------
E‐Mail: maryelogu@yahoo.com
SEPTEMBER 2016
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TRIPLE P INVESTMENTS Business Plan Corporate Document
A. TABLE OF CONTENTS
S/NO. DESCRIPTION PAGE
1.0 EXECUTIVE SUMMARY 1

1.1 Introduction 1
1.2 Opportunity Rationale 3
1.3 Product Profile 4
1.4 Competitive Advantages 4
1.5 Target Markets & Product Distribution 5
1.6 Marketing Strategy 5
1.7 Project Capacity & Production Plan 5
1.8 Equipment & Materials 6
1.9 Ownership/Team 6
1.10 Personnel Compensation Policy 7
1.11 Investment Cost (Finding Required) 7
1.12 Cash Flow Analysis 7
1.13 Keys to Success 8
1.14 Company Aims/Objectives 9
1.15 Development Objectives 10
1.16 Mission Statement 10
1.17 Tax Advantage 10
1.18 Risk Management 11
2.0 PURPOSE OF DOCUMENT 12
THE ROLE OF GOVERNMENT, TAXATION,

3.0 REGULATION & INCENTIVES 13
4.0 PROJECT PROFILE 15

4.1 Project Brief 15
4.2 Company Profile and History 15
4.3 Aims/Objectives of the Business 16
4.4 Mission Statement 16
4.5 Business Legal Aspects 16
4.6 Project Location/Site Selection 17
4.7 Review of the Cassava Starch Industry 18
4.8 Opportunity Rationale 19
4.9 Proposed Capacity 20
4.10 Total Project Cost 21
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4.11 Objective and Scope of the Business Plan 22
4.12 Methodology 22
5.0 PRODUCTS & SERVICES 23

5.1 Cassava Starch 23
5.2 HQCF 24
5.3 Intended Use of HQCF 24
5.4 Quality Management 27
5.5 Competition 29
UGANDA CASSAVA PRODUCTION AND VALUE-

6.0 CHAIN 30
6.1 Production 30
6.2 Fresh Cassava Markets and Value Chain 32
6.3 Dried Cassava Markets and Value Chain 38
INDUSTRIAL UTILIZATION OF CASSAVA IN

43
7.0 UGANDA
7.1 Industrial Development in Uganda 43
Overview of Potential for Industrial Utilization of Cassava in
44
7.2 Uganda
8.0 CASSAVA MARKET STUDY 52

8.1 Wheat Milling Sector 52
8.2 Urban Consumption 52
8.3 Composite Flour 53
8.4 Urban Bakeries 53
8.5 Rural Bakeries 53
8.6 Biscuit Industry 55
8.7 Paperboard (Boxes) 56
8.8 Plywood 58
DEVELOPING INDUSTRIAL OPPORTUNITIES FOR

60
9.0 CASSAVA IN UGANDA
9.1 Overview 60
Development of Linkages between Primary Producers
9.2 (Farmers) and Industrial Users of Cassava-based Products 61
Key Criteria for Entrepreneurs Wishing to Form Market
9.3 Linkages and Carry Out Secondary Processing 63
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10.0 MARKETING PLAN & STRATEGIES 94
10.1 SWOT Analysis 65
10.2 Marketing Strategy and Growth Potential 66
10.3 Sales Strategy 69
11.0 RAW MATERIALS AND PROCUREMENT 71
12.0 TECHNICAL ASPECTS 72

12.1 Production Process 72
12.2 The Cassava Starch Factory 75
12.3 Quality Specifications and Standards 83
12.4 Packaging 86
12.5 Factory Infrastructure 87
GOOD MANUFACTURING PRACTICE FOR HQCF

13.0 PRODUCTION 89
13.1 Control of Operations 89
13.2 Maintenance and Sanitation 89
13.3 Personal Hygiene 89
13.4 Transportation 90
13.5 Product Information and Consumer Awareness 90
13.6 Training 90
14.0 VEHICLES 92
15.0 LAND & SERVICES INFRASTRUCTURE 93

15.1 Land and Location 93
15.2 Service Infrastructure at Site 93
16.0 GOVERNANCE & MANAGEMENT STRUCTURE 95

16.1 Governance Structure 95
16.2 Management Structure 96
16.3 Plant Operations and Quality Assurance 97
16.4 Personnel Requirements in the Cassava Starch Factory 97
16.5 Personnel Remunerations and Management 99
16.6 Other Management Considerations 100
17.0 ENVIRONMENTAL ASPECTS 102
18.0 SCHEDULE OF IMPLEMENTATION 104

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19.0 FINANCIAL EVALUATION 106
19.1 Capital Cost of Project 106
19.2 Financial Plan 108
19.3 Profit & Loss Account 109
19.4 Rates of Return 110
19.5 Payback Period 110
19.6 Capital: Output Ratio 111
19.7 Projected Cash Flow 111
19.8 Projected Balance Sheet 112
19.9 Break-Even Analysis 113
19.10 Value Added/Contribution to GDP 114
20.0 PROJECT ECONOMICS 116

15.1 Outline of Project Economics 116
15.2 Jobs Creation 116
15.3 Economic Benefits from the HQCF Value-Chain 117
21.0 KEY SUCCESS FACTORS 121
22.0 CONCLUSION & RECOMMENDATIONS 122

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B. LIST OF TABLES
T/NO. DESCRIPTION PAGE
1 The Company Shareholders 17
2 Total Initial Project Investment Cost 21
Recommended inclusion levels of HQCF in different cassava-

3 based products 25
Physical and chemical quality characteristics and requirements

4 of HQCF for food uses 26
Limit for chemical, biological and physical hazards in cassava

5 flour 27
6 Cassava Production in Uganda, 2004 – 2008 30
7 Costs and margins within the fresh cassava value chain 37
8 Costs and margins within dried cassava value chain 40
9 Industrial options for high-grade cassava flour in Uganda 46
10 SWOT Analysis – Wheat milling industry 54
11 SWOT Analysis – Biscuit Industry 56
12 SWOT Analysis – Paperboard Industry 57
13 6-Year Sales Forecast 70
14 Starch Factory Equipment 82
15 Analytical Characteristics of Cassava Starch 85
16 Permissible Levels of Contaminants in Cassava Starch 86
17 Infrastructure Required at the Factory 88

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18 Required Vehicles 92
19 Factory Personnel Requirements 98
Estimated Staff Remuneration per annum Cassava Starch

20 Factory 100
21 Cost of Project 106
22 Financial Plan 109
Summary Profit & Loss Account for First Five Years of the
23 Project 110
24 Rates of Return 110
25 Calculation of Payback Period for Equity and Total Investment 111
26 Capital: Output Ratios 111
27 Projected Cash Flows 112
28 Projected Balance Sheet 113
29 Break-Even Analysis in Project Year 5 114
30 Value Added/Contribution to GDP 115
31 Project Economics 116

31-1: Total Project Cost 116
31-2: Project Returns 116
31-3: Financing Planning 116
32 Production Costs/Acre 117
33 Processing of 6,000 kgs at Processing Site 119
34 Economic and Livelihood Benefits to Communities 120

Economic analysis for HQCF substitution for wholesale end-users of
34-1: wheat at US $ 817 per ton 120
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34-2: For Retail End-Users of Wheat at US$ 1,058 per ton 120
35 Key Financial Modelling Assumptions 106

35-1: HQCF and Wet-milled Cassava Flour Production Assumptions 106
35-2: Operating Assumptions 106
35-3: Economy-Related Assumptions 106
35-4: Revenue Assumptions 107
35-5: Cash Flow Assumptions 107
35-6: Operating Expense Assumptions 108
35-7: Financial Assumptions 109
35-8: Depreciation Rate Assumptions 110
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C. LIST OF FIGURES
F/NO. DESCRIPTION PAGE
1 Performance Highlights (PY2 – PY6) 8
2 Cassava Production Trends (1980 - 2011) 31
3 Fresh Cassava Value Chain 34
4 Dried Cassava Value Chain 41
5 Annual average retail prices of maize and cassava in Soroti 42
Options for improved market linkages between cassava

6 producers and industrial end-users 63
7 HQCF Product Flow Chart 73
Generalized Value Chain for High Quality Cassava Flour

8 (HQCF) 75
9 General View of the Planned Cassava Starch Factory 78
Typical Floor Plan for a High Quality Cassava Flour

10 Production Plant 79
11 Flow Chart of the Cassava Starch Process 80
12 Proposed Governance Structure 96
13 Organogram of the Factory Personnel 99
14 Project Implementation Milestones 105

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D. LIST OF FINANCIAL ANALYTICAL SCHEDULES
S/NO. DESCRIPTION PAGE
01: Key Financial Modeling Assumptions 123
02: Source and Structure of Project Financing 125
03/1: Estimation of Sales Revenue in US$ (HQCF Section) 126
03/2: Estimation of Sales Revenue in US$ (Cassava Flour Section) 127
03/3: Projected Income and Profitability Statement (Composite Project) 128
04: Loan and Interest Service Schedule 129
Calculation of Working Capital: I Minimum Requirements of Current

05/1: Assets and Liabilities 130
Calculation of Working Capital: II Annual Production Cost –

05/2: Estimates 131
05/3: Calculation of Working Capital: III Working Capital Requirements 132
06: Fixed Assets and Depreciation Allowances 133
07: Change in Total Investment Costs 134
08: Change in Total Assets 134
09: Projected Cash Flow Table 135
10: Projected Cash Flow Table and Calculation of Present Value 136
11: Projected Income Statement 137
12: Projected Balance Sheet 138
13: Projected Payback Period 139
14: Business Ratios/Ratio Analysis 140

x
15: Sensitivity Analysis 142

1.0 EXECUTIVE SUMMARY
1.1 Introduction
Cassava [Manihort Esculentus (Euphorbiacea)] is grown throughout Uganda with the

current production level being about 4.76 million metric tons per annum; a figure
expected to double by 2020. In Uganda, cassava is the second most important staple
crop after Bananas and Uganda is the sixth largest producer of the crop in Africa. The
main cassava growing regions based on production volumes of 2008/2009 (season two
of 2008 and season one of 2009) were; the eastern region (37%), followed by the
northern region (34%), western (15%) and lastly central (14%). It is also widely grown in
other parts of the country as a famine reserve crop. Cassava is an annual crop with high
yielding capability, is easy to grow and performs well even in marginal areas. Cassava
matures in 6 – 8 months. Once it matures, the tubers harvested per plant, weigh up to
3kg, and can be stored for up to 2years in the ground.
Cassava has the potential to industrialize Uganda more than any other product if its
potentials are properly harnessed, cassava will not only be a white gold but an
alternative to oil as a non‐oil foreign exchange earner and a key instrument for job
creation and catalyst for development.
The proposed cassava (tapioca) HQCF flour factory that will be located in Soroti town
will have the capacity to process 700 tons per day of fresh cassava roots that will yield
100 tons per day of HQCF flour and an additional 100 tons of wet-milled cassava flour.
The key cassava producing areas in eastern and northern Uganda will be the key raw
material source areas for the crop to supply the HQCF processing plant at Soroti. The
Triple P Investments High Quality Cassava Flour Industrial Enterprise will support
the farmers in this cassava-belt of Uganda with essential agricultural inputs with the
aim of helping them to produce cassava roots at below $45 per ton to be internationally
competitive. The HQCF processing plant development plan spans a period of three to
four years before it is fully developed. The HQCF processing plant will be installed in
the first year.
The Ugandan cassava high quality cassava flour market is estimated to be 45,000 M tons
per annum. HQCF can easily substitute for the expensive wheat flour in bread (20%)
and in biscuits (10-50%) manufacturing. But the present in Uganda is such that it is still
forced to resort to expensive wheat flour imports to satisfy demand owing to poor
perceptions about the applicability of HQCF flour as a convenient substitute in local the
bread and confectionery industries. At 90% capacity, the proposed factory will satisfy
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about 67% percent of the domestic HQCF demand. HQCF flour from the proposed
factory will penetrate the market at US$600 per ton which is below the current domestic
market price. Domestic market prices are lucrative and higher than international market
prices but the international market price is still very profitable.
The growth of the vital cassava starch industry is not only a means to an end to supply
various foods and nutritional necessities but will also produce biofuel. Cassava has a
very high starch‐to‐sugar conversion ratio that makes it an ideal plant for biofuel
production. Just 3‐5 ha of cassava can produce enough biofuel to supply electricity to
5‐10 homes for 6 hours per day for a full year. Cassava biofuel has many other beneficial
uses. The company plans to develop a biofuel plant in the next 5 years.
In Uganda, cassava is one of the most important root crops – especially in eastern
Uganda. Currently, Approximately 3.5 million tonnes have been produced from c. 0.4
million ha of land. The crop is grown in mixtures of legumes and cereals in small plots
of land (ranging in size from 3 Ha – 15 Ha). Apart from being a staple food in both the
rural and urban households of eastern Uganda, cassava alone contributes about 22% of
agricultural GDP in Uganda for food and domestic purposes but its industrial
processing and utilization has been very limited. There is the great potential of High
Quality Cassava Flour (HQCF) replacing imported food items like wheat flour, which is
used in bakery products and as extenders in glue for plywood and paperboard
manufacturing in Uganda.
Past and on-going research carried out by the National Crop Resources and Research
Institute (NaCRI) in Namulonge has proved that it is feasible to produce High Quality
Cassava Flour (HQCF) as a substitute for the above-stated industrial purposes.
The business plan is to examine the financial viability or otherwise in the production of
High Quality Cassava Flour (HQCF) and wet-milled cassava flour by Triple P
Investments High Quality Cassava Flour Industrial Enterprise at Soroti in eastern
Uganda.
Triple P Investments’ objectives would ultimately strengthen the capacities of farming

families and support smallholder Cassava farmers (more especially in the eastern and
northern parts of Uganda) through adequate provision and employment of modern
technology on a sustainable basis. The proposed Triple P Investments will have the
capacity to process up to 100 MT of HQCF flour and 100 MT of wet-milled cassava flour
daily.
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Presently, the Ugandan cassava starch market is being underutilized reaching only 10%
of the local market demand. The global market potential of cassava with respect to
biofuel production is also significant. Locally, a 3‐5% increase in local market supply
will take place immediately as there is limited local competition for cassava (tapioca)
starch.
1.2 Opportunity Rationale
Uganda with the present population of over 35 million has experienced a rapid
population growth rate (c. 3.2% p.a.) that has imposed lots of pressure on the available
economic and natural resources to cope with it. Also, a large majority of Ugandans
active in the agricultural sector engage in low-productivity manual farming, which
contributes to the country’s extremely high level of poverty. The result has been a
decline in the nation’s overall prosperity and a concomitant reduction in job
opportunities. During this period, various sections of the economy have deteriorated to
a very low level, unemployment rates and poverty level have increased drastically with
extreme poverty rates still stagnating in the 20 – 30% range, high inflation rates, Uganda
has not been able to effectively compete in the global arena.
The argument by most Ugandans is that the diversification of the nation’s economy
from an entirely coffee dependent one to areas like manufacturing, tourism, agriculture,
solid minerals is the only way to alleviate the present situation and put smiles on the
faces of the masses.
Agriculture which was the bedrock of the Ugandan economy in the 1960’s up to 1990’s
has been gradually relegated to the background. Thousands of graduates from
Ugandan universities, polytechnics and colleges of education find themselves in the
growing banking industries and less in the agricultural sector. The agricultural sector
among other sectors has the potential for providing numerous employment
opportunities, increase food supply, increase the nation’s foreign exchange and brings a
lot of benefits to Uganda. The present peasant way of farming must be upgraded to
mechanize farming with assistance given to farmers through extension services,
adequate and prompt supply of farm inputs, financial assistance and subsidies. The
increased farm products would increase the food need of the growing population and
excess would be processed by SME (Small and Medium Enterprises) agro-processing
industries for consumption, industrial and export purpose.
With the enormous comparative advantage that Uganda has in root and tuber
production especially cassava production it therefore makes economic sense for the
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country to place more emphasis in this area of agriculture in which it obviously is
among one of the leading nations in the world.
The Govern of Uganda (GoU) through its cassava transformation programme is

committed to growing a new generating of farmers that would take cassava production
as a business embracing modern method of production and emphases on value chain
addition. It is against the backdrop of contributing to development of Uganda through
cassava utilization that the Triple P Investments High Quality Cassava Flour
Industrial Enterprise was formed to promote, assist and encourage the production,
processing and marketing of cassava in East Africa, particularly Uganda leading to
creation of jobs, poverty eradication and industrialization of the region.
Value chain addition in cassava production and indeed in any agricultural commodity
is the key to a sustainable increase in production and the various benefits that follow it.
1.3 Product Profile
The business shall have two major product lines namely; HQCF Flour Line that shall be
involved in the production of High Quality Cassava Flour [HQCF] (30,000 MT per
year); and the Wet-milled Cassava Flour product line that shall be involved in the
production of wet-milled cassava flour (30,000 MT per year).
1.4 Competitive Advantages
The competitive advantage of the proposed plant over competitors is two-fold:
1. Significant amounts of the nation’s cassava outputs are generated in the eastern
and northern parts of Uganda, where Soroti is located. Preliminary studies show
that there is a huge gap between the primary production and industrial
processing of cassava produced in this area, therefore there will be raw material
adequacy and promptness of supply.
2. Soroti is also located in a strategic position that makes it easier for the
transportation as well as efficient distribution of the HQCF flour products that
will be eventually produced. First, Soroti straddles the strategic Malaba – Mbale
– Gulu – Nimule highway that effectively links it to the Republic of South Sudan
and the eastern gateway to Mombasa Port in Kenya. Secondly, Soroti is
connected to the National Electricity Grid that is generated from Jinja – which is
only 213.8 kms away to its south-west. In fact, the city is a host to 132 KV Sub-
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station. So in summary, the proposed enterprise will have access to reliable
electricity. There is also a good network of roads connecting the raw material
producing area and to the proposed HQCF processing plant in Soroti.
1.5 Target Markets & Product Distribution
The target markets are mostly industrial end-users (e.g. bakeries and biscuit
manufacturers, plywood and paperboard manufacturers, textile manufacturers, and
breweries), local urban markets, large contractual consumers, households, hotels,
hospitals, offices, schools, etc. The Company will as a matter of top marketing priority
need to develop its own strong niche markets in Kampala such as bakeries and
confectionery manufacturers that will take to its high quality cassava flour products and
provide it with a secure and reliable captive market of repeat customers (end-market
consumers) which it will capitalize on for future business growth. Triple P Investments
shall ensure that the high quality cassava flour products it produces are of high quality
and that standard specifications are met. The packaging materials shall be attractive
enough with a unique brand name for product identification.
1.6 Marketing Strategy
Our marketing strategy will be based mainly on ensuring that customers know about
our existence and the products we produce. Hence our intention is to make the right
information available to the right target customers. This will be done through
implementing a market penetration strategy that will ensure that we are well known
and respected in the market. We will ensure that our products' prices are favorable
relative to competing imported product (e.g. wheat flour) prices, and that our potential
customers appreciate the quality of our products. However, the prices we charge will
also take into consideration the cost of production and distribution so as to ensure that
we remain viable and operational. In order to be competitive and have that cutting-edge
market penetration there will be need for us to not only aggressively market the high
quality of our high quality cassava flour products, but also to go out of our way in
serving our customers and clients so as to establish a good long-term relationship.
1.7 Project Capacity & Production Plan
The proposed Triple P Investments High Quality Cassava Flour Industrial Enterprise
will have a maximum capacity to process, package and sell up to 100 Metric Tons of
HQCF flour per day or 2,500 Metric Tons of HQCF flour per month and 30,000 Metric
Tons of HQCF flour per year. The Company will also be able to mill, process and
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package similar volumes of wet-milled cassava flour for human consumption over
identical time periods. To produce these product volumes, Triple P Investments HQCF
processing plant will need to source up to 120,000 Metric Tons of fresh cassava to
process 30,000 Metric Tons of HQCF flour in one year of business operations (using a
conversion ratio of 4:1); it will also need to source a further 90,000 Metric Tons of fresh
cassava from the cassava farmers to be able mill and package 30,000 Metric Tons of wet-
milled cassava over the same one (1) year period.
1.8 Equipment & Materials
Since this project is an agricultural-based industry, the main raw material needed in the
manufacture of HQCF flour products is fresh cassava that that the proposed Triple P
Investments High Quality Cassava Flour Industrial Enterprise will be procuring
directly from the hundreds of thousands of small holder peasant farmers throughout
eastern and northern Uganda. Triple P Investments will also be able to easily source
and procure other vital HQCF flour production inputs such as packing materials,
cleaning chemicals & detergents, disinfectants and other cassava-processing industry
consumables from local suppliers in Uganda – who produce, stock, and supply them in
abundance in major towns including Kampala and Soroti.
The HQCF flour processing plant spare parts will be sourced and procured from
reputable suppliers or their Ugandan local agents for easy follow-up after-sales
servicing and support.
1.9 Ownership/Team
For a start, the managerial structure of the Triple P Investments High Quality Cassava
Flour Industrial Enterprise is going to be simple. A total of 60 workers will be required
for initial commencement of operations. The HQCF flour and processing plant will be
run as a Limited liability company, and therefore will have a Board of Directors and a
Chairman, but those will be on non-executive capacity. The plant will be managed by a
General Manager and assisted by a Deputy General Manager, who will have
considerable experience in food processing. There will also be procurement, marketing
and Accounts officers. There will also be machine operators, drivers for logistics,
security men and unskilled labourers.
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1.10 Personnel Compensation Policy
The Triple P Investments High Quality Cassava Flour Industrial Enterprise intends to
compensate its personnel well, so as to retain their invaluable expertise and to ensure
job satisfaction and enrichment through delegation of authority. The company intends
to achieve optimal productivity whilst realizing the full potential of each of its
employees through provision of health care, generous profit sharing, plus a minimum
of three weeks’ vacation. Awards will be given out to outstanding individuals for hard
work and productions so as to not only show our appreciation, but to instill a sense of
fun into the work and promote the maintenance of high standards.
1.11 Investment Cost (Finding Required)
The total capital investment cost including land assets, HQCF flour processing plant,
plant buildings, utilities, other equipment, miscellaneous fixed assets, vehicles, and a
500 kVA diesel electric generator is US$3,252,537 approximately, while the margin
money for working capital and physical contingencies is approximately US$747,463.
The project is to be financed through 89.38% debt and 10.62% equity.
1.12 Cash Flow Analysis
The cash flow analysis calculated with an interest rate of 12.5% pa and a capacity
utilization of 100% (attainable in Yr. 2) shows a positive internal rate of return (IRR) of
91.43% with an NPV (at 17% discount factor) of US$ 23,882,213 for the HQCF flour
processing project wages and salaries, annual maintenance and repairs, use of energy
(fuel, diesel and lubricants) and all other operational costs were estimated with an
annual increment of 5% over 10 years. We also estimated that the market price of
cassava produce (raw material) will increase by average of 5% annually. Significantly,
all the economic signs are pointing to significantly higher costs for food in the next 5‐10
years. A discounted Net Income shows that the total outlay of the project will be fully
recovered by Year 3 that reduces the risks that the project might be exposed to in the
long term.
The project viability is also noteworthy; with an annual average Return on Investment
(ROI) of about 77% over the first six years and 167% over the first ten years; that is
about US$3.09 million annually over the first six years and more than US$6.68 million
annually over the 10 years reflected in our financial statements. We project that the
proposed HQCF flour processing enterprise to break even at 15.92% capacity
utilization.
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Even with an increase in raw material prices of 10%, the HQCF flour processing plant
still shows a positive internal rate of return of 68.22% and it also breaks even at 19.12%
and shows recovery of total investment outlays in slightly less than 3.4 years. This
means that the project will still be viable under very harsh environmental conditions.
(Refer to Schedules 01-15 on pages 122 – 142 for detailed financial models).
Ultimately the attractiveness of our venture lies with the fact that customers will choose
our products above those of competitors because of the competitive prices as well as
their high quality. Hence, the Triple P Investments High Quality Cassava Flour
Industrial Enterprise's stand-out initiatives will be to drive sales, market share and
productivity so as to provide additional impetus towards attainment of the corporate
goals and objectives. Investment in this project is a step in the right direction.
NOTE: All currency figures in this plan are in US Dollars.
Figure 1: Performance Highlights (PY2 – PY6)

Sales Gross Margin Net Profit
45,000,000
40,000,000
35,000,000
30,000,000
UShs '000s
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
PY 2 PY 3 PY 4 PY 5 PY 6
1.13 Keys to Success
 High level quality control.

 Another important aspect is the quality check at different stages of the high
quality cassava flour production and sales chain. This is very important because
there is a need to check and ensure that the Triple P Investments high quality
cassava flour product distributors do not supply poor quality to compromise the
standards and quality of our products.
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 Individualized customer service - providing our customers with what they want,
when and how they want it.
 Fully integrated distribution channels to help customers increased access to
Triple P Investments high quality cassava flour products.
 Smart high quality cassava flour product distribution networks will also play an
important role in the success of this business.
 Integrating the changing market fundamentals into the business.
 Long-term partnership with both the cassava farmers in eastern Uganda and our
customers so as to acquire guaranteed market.
 The commercial viability of this project depends upon the availability of regular
raw material (fresh cassava) supply.
 To establish a brand name, aggressive marketing efforts are recommended.
1.14 Company Aims/Objectives
The main aim of Triple P Investments is to make High Quality Cassava Flour (HQCF)
available to bakers and confectionery industries engaged in plywood and paperboard
manufacturing in Uganda. The production of HQCF will offer rural cassava farmers in
Uganda ready market for their produce, help reduce post-harvest losses, and also
reduce the importation of the increasingly expensive wheat flour for use in industry.
Triple P Investments also intends to create jobs for people in the rural areas.
Other Company objectives include: -
 Build our own high quality brand of high quality cassava flour products for both
the local and international market within the next 2 years to average daily sales
volume of 100 – 200 Metric Tonnes per day.
 To provide high quality and reliable supply of high quality cassava flour
products for both industrial end-users and value-added wet-milled cassava flour
product consumers in Uganda.
 Achieve first year (Project Year 2) EBIT (Earnings before Interest and Tax) of at
least US$450,494.
 To fulfill all the industrial end-user customer orders and quality standards
within the first year of business operation (i.e. Project Year 2).
 To provide innovative support to the cassava farmers in Eastern and Northern
Uganda.
 To reduce the cost of raw material (fresh cassava) inputs.
 Boost productivity.
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1.15 Development Objectives
• Organize graduate youths train them in modern methods of cassava production

and help in linking them up with finance and the various inputs needed for large
scale cassava production.
• Train youth most especially graduates on the various opportunities available in
the cassava value chain addition which includes; production, processing and
marketing, assisting them to be involved thereby making them gainfully
employed.
• Help individuals, communities, local governments and state governments in the
establishment of small scale cassava processing factories.
• Conducting a feasibility report and business plan on the production, processing
and marketing of cassava.
• Supply/ linkage of cassava processing factories to raw materials i.e. cassava
fresh roots.
• Linkage of cassava processing factories to markets for their products.
• Supply / linkage of farmers to inputs such as agrochemicals, cassava step
cutting, fertilizer etc.
• Procurement of cassava processing machinery for Triple P Investments.
• Consultancy on increase in profitability and performance of small scale cassava
processing factories.
• Provision / linkage to land for large scale mechanized modern methods of
cassava production.
• Provision / linkage to tractor hiring services for large scale cassava production.
• Help in securing loans for the establishment of cassava processing factories.
• Analysis of soil, cassava fresh roots and processed cassava products.
1.16 Mission Statement
To assist, promote and encourage the production, processing and marketing of cassava
products in east Africa, particularly in Uganda leading to job creation, poverty
alleviation and industrialization of the region.
1.17 Tax Advantage
This project will be in line to receive excellent tax breaks. It will be rated as having an
agro-industrial investor status since it will be processing intermediate products using
locally-produced agricultural raw materials and will also be located in an economically
disadvantaged area. This status will provide a tax holiday for five to ten years. The
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company will also be entitled to a 30% tax concession for five years because of its
utilization of local raw materials.
1.18 Risk Management
Agricultural ventures are especially prone to climatic risks such as drought and
flooding. The project may be prone to flooding and fire due to bush burning activities of
local farmers. These risks are covered by the activities of some of the larger insurance
companies in Uganda that provide agricultural insurance such as UAP Insurance
(through its UAP Crop Insurance), NIKO Insurance Company, and Lion Assurance
through its Kungula Agro-insurance product that offers a 2.5% premium on the sum
insured. The project will therefore take out an insurance cover against such risks from
these insurance companies. Similarly, the project will take out a risk cover for the
factory from UAP insurance.
11
2.0 PURPOSE OF THE DOCUMENT
The objective of this Business Plan is primarily to facilitate the project promoter
(TRIPLE P INVESTMENTS) and project financiers with the investment information
and provide an overview of a "High Quality Cassava Flour Industrial Enterprise". The
project Business Plan may form the basis of an important investment decision and in
order to serve this objective, the document/study covers various aspects of project
concept development, start-up, and marketing, finance and business management. The
document also provides sectoral information which has some bearing on the project
itself.
The purpose of this document is to facilitate potential investors of Triple P Investments
by providing them a macro and micro view of the business with the hope that the
information provided herein will aid the project promoter in crucial investment
decisions.
The Business Plan report is based on the information obtained by the Project
Consultant (PC) from industry sources as well as the PC’s discussions with
businessmen in the Ugandan agricultural and agro-industrial sub-sectors. For the
financial models, since the forecast/projections relate to the future periods, actual
results are likely to differ because of the events and circumstances that don’t occur as
frequently as expected.
12
3.0 THE ROLE OF GOVERNMENT, TAXATION, REGULATION &
INCENTIVES
The Government of Uganda has no direct role in the company since it is privately
owned. Government however has a lot of encouraging incentives for such investments.
For instance in terms of taxes, the enterprise will be rated as having industrial investor
status. Fiscal measures have been provided for deductions and allowances in the
determination of taxable income of manufacturing enterprises, including: Industrial
investor status, which is a concession to companies involved in various priority
industrial investment sectors including agro-processing, provides a tax holiday period
of five to ten years. The company will however have to apply for this status. The
company activities will therefore be considered by the government, to be beneficial to
the country's economy and in the interest of the public.
Similarly, since the company may be involved in local raw material development; local
value added; labor intensive processing; export-oriented activities; in‐plant training; it
also qualifies for additional concessions.
As an agro-processing company, Triple P Investments could apply to the

Commissioner General of the Uganda Revenue Authority (URA) for a certificate of
income tax exemption on the condition that it will process agricultural products grown
or produced in Uganda. Income Tax exemption is valid for one year but can be renewed
annually.
The government also offers generous capital investment depreciation allowances to any
investor in Uganda who places depreciable assets in service – and these are declared
annually by the investor on the return using the reducing balance method and are as
follows:
 40% for computers and data handling equipment
 35% for automobiles; buses and mini-buses (<30 passengers); goods vehicles(<7
tonnes); construction & earth moving equipment
 30% for buses (>30 passengers); good vehicles (> 7 tonnes); specialized trucks;
tractors; plant & machinery used in farming, manufacturing or mining
operations; trailers & trailer-mounted containers.
 20% for rail cars; locomotives & equipment; vessels, barges, tugs & similar water
transportation equipment; aircraft; specialized public utility plant, equipment &
machinery; office furniture, fixtures & equipment; any depreciable asset not
included elsewhere and farm works.
13
The EAC General Exemption Regime for import duties also applies to all types of
imported manufacturing plant and machinery so long as the end-user is VAT-
registered. In this case, the import duty is zero-rated and the payment of VAT at
importation on specified imports is postponed to a future date in accordance with the
VAT Deferment Regulations 2013. The cost of plant and machinery should be at least $
22,500 and above. The same import duty exemption under the EAC General Exemption
Regime also applies to imported industrial spare parts imported as replacement parts
used exclusively on industrial machinery and are not for resale or any other commercial
purpose other than for replacement of worn out and obsolete parts of industrial
machines subject to such conditions as the Commissioner may impose.
An industrial enterprise that holds a Free Zone Manufacturing License in Uganda can
also qualify for a range of other tax exemptions including:
 Exemption on export processing zone imported raw materials and intermediate
goods, machinery and equipment, spare parts for exclusive use in the Free Zone.
 Tax holiday for the first 10 years on export of finished consumer and capital
goods and 30% is charged for each year thereafter after allowable deductions
(this requires an exemption certificate from the Commissioner General);
 100% exemption from tax on income from agro- processing (requires a certificate
of exemption from the Commissioner General).
Similarly, there are other laws and regulations promulgated by the Ugandan
government to ensure discipline and establish a quality assurance system in the
manufacturing sector. These include the trade malpractices decree and investment
guarantee/effective protection. Several regulatory bodies enforce these laws and
regulations and the company will have to register with them and obtain the necessary
permits, licenses and certificates. These regulatory bodies and laws include the Uganda
National bureau of Standards (role includes certification of factories, products and
laboratories), the Food and Drugs Act 1959, (mandated to regulate and control the
importation, exportation, manufacturing, advertisement, distribution, sale and use of
food, drugs, cosmetics, medical devices, bottled water and chemicals), and the National
Environment Management Authority (NEMA) (charged with overall responsibility for
monitoring, supervising and coordinating Environmental Impact Assessment (EIA)).
14
4.0 PROJECT PROFILE
4.1 Project Brief
The proposed manufacturing company shall assume the name Triple P Investments
and shall be setup at an initial cost of US$ 4 million in the Soroti town industrial area of
north-eastern Uganda. High Quality Cassava Flour (HQCF) and wet-milled cassava
flour will be produced at the Triple P Investments High Quality Cassava Flour
Industrial Enterprise processing factory at its 20-Acre industrial site at the Soroti UIA
Industrial Business Park for both the local market (industrial end-users) and exports.
Unlike the traditional processing methods that results in substandard products;
therefore pose major challenges to utilization and marketing of cassava, especially for
export, this plant will utilize modern technology to produce high quality cassava flour
(HQCF) and chips as substitutes for imported wheat flour, and as raw materials to other
local companies. There is high demand for High quality cassava flour globally, so this
plant will supply to the international market also.
The company is expected to start its operations on July 1st 2017 and due to the large
market for its products, it is expected to break even in the second year of operation. The
company shall employ 60 members of staff at the initial stages and this number is
expected to increase as the company’s operations expand and this and other operational
aspects of the company indicates that the huge economic and social development
benefits presented to the Ugandan cassava farming populations in eastern and northern
Uganda are enormous.
The business shall have two major product lines namely; HQCF Flour Line that shall be
involved in the production of High Quality Cassava Flour [HQCF] (30,000 MT per
year); and the Wet-milled Cassava Flour product line that shall be involved in the
production of wet-milled cassava flour (30,000 MT per year).
4.2 Company Profile and History
Triple P Investments provides community targeted agriculture solutions to alleviate

the poverty of the rural populace by investing and developing a grassroots-based value
chain solution in the agricultural sector. We are also of immense value to businesses
that focus on agriculture and the agricultural industry in terms of financing and
investment advice. Triple P Investments emerged out of the need to bridge the gap
between small holder farmers, financial institutions and Government development
agenda by creating a confluence of goals. This mandate has been pursued, in
15
consonance with our stakeholders, to achieve successful agribusiness solutions within
and outside Uganda.
4.3 Aims/Objectives of the Business
The main aim of Triple P Investments is to make High Quality Cassava Flour (HQCF)
available to bakers and confectionery industries engaged in plywood and paperboard
manufacturing in Uganda. The production of HQCF will offer rural cassava farmers in
Uganda ready market for their produce, help reduce post-harvest losses, and also
reduce the importation of the increasingly expensive wheat flour for use in industry.
Triple P Investments also intends to create jobs for people in the rural areas.
Other Company objectives include: -
 Build our own high quality brand of high quality cassava flour products for both
the local and international market within the next 2 years to average daily sales
volume of 100 – 200 Metric Tonnes per day.
 To provide high quality and reliable supply of high quality cassava flour
products for both industrial end-users and value-added wet-milled cassava flour
product consumers in Uganda.
 Achieve first year (Project Year 2) EBIT (Earnings before Interest and Tax) of at
least US$450,494.
 To fulfill all the industrial end-user customer orders and quality standards
within the first year of business operation (i.e. Project Year 2).
 To provide innovative support to the cassava farmers in Eastern and Northern
Uganda.
 To reduce the cost of raw material (fresh cassava) inputs.
 Boost productivity.
4.4 Mission Statement
To assist, promote and encourage the production, processing and marketing of cassava
products in East Africa, particularly in Uganda leading to job creation, poverty
alleviation and industrialization of the region.
4.5 Business Legal Aspects
Triple P Investments is a limited liability company that was incorporated in the

Republic of Uganda on the ----- (Date) of ----------- (Month), 20-----. The company
16
Registration Number of is ----------. The company’s authorized share capital is UG Shs. --
--------------/= made up of -------- Ordinary Shares of UG Shs. -----------/= each. The
company has ----- shareholders and ----- directors.
Triple P Investments comes into this high quality cassava flour processing project with
an equity capital base of US$424,836. The Company has ---- principal shareholders with
share ownership as follows:
Table 1: The Company Shareholders

Shareholder Shares held (%age)
1. Mr./Ms. ---------------------------- ----- -----%
2. Mr./Ms. ---------------------------- ----- -----%
3. Mr./Ms. ---------------------------- ----- -----%
4. Mr./Ms. ---------------------------- ----- -----%
5. Mr./Ms. ---------------------------- ----- -----%
6. Mr./Ms. ---------------------------- ----- -----%
Total 100 100%
4.6 Project Location/Site Selection
Triple P Investments High Quality Cassava Flour Industrial Enterprise will be located
at the 219-Acre Soroti UIA Industrial Business Park. Soroti town is right in the centre
of one of the most important cassava growing regions of Uganda. The Soroti town
location of the proposed Triple P Investments High Quality Cassava Flour Industrial
Enterprise will serve to ensure timely or regular delivery of sufficient quantity of fresh
cassava to the processing plant and avoid spoilage during transportation since cassava
is very perishable, and to reduce to the minimum possible, the high transportation cost
resulting from its bulkiness.
Specifically, the high quality cassava flour industrial processing site has been selected
with the following considerations in mind:
 all year round availability of required quantities of cassava roots,
 easy and low cost of transportation of fresh roots to the plant,
 easy access to clean water,
 availability of labor, and
 access to electricity, to power the electrically-powered machinery of the
proposed factory.
Triple P Investments High Quality Cassava Flour Industrial Enterprise which is to be

located in Soroti town for the purpose of proximity to the targeted markets shall not
17
engage in processing of fresh cassava roots but will only be involved in drying, milling,
and packaging of already de-watered cassava. The small-scale processing plants to
produce such de-watered cassava shall be given to the cassava farmers as part of its
farmer-support initiative by Triple P Investments to help them out in processing the
fresh cassava.
4.7 Review of the Cassava Starch Industry
The road map to increased local employment, income and economic growth in Uganda
is to diversify the use of cassava into various other products including cassava starch.
Uganda, the 11th largest cassava producing country in the world with a current cassava
production of 4,757,800 Metric Tons valued at US$497,014,000, unfortunately, has only
one starch plant – the Lira Starch Company which was installed in the 1960s and is
currently operating way below its installed manufacturing capacity. The key challenge
for this plant is to ensure a consistent supply of raw material at reduced costs. The
development of nucleus farms, out grower schemes and buffer farms in places where
there are private sector agri-business investments is very important. This is currently
the highest development challenge for the cassava sub‐sector, as it offers the best
opportunity for moving cassava up the value chain in Uganda. The future of cassava
production and economic growth of the cassava sub‐sector is informed by the
competitive position of Ugandan cassava in the global market place.
Globally, cassava is the fourth main source for starch production. On average, four to
five tons of roots are normally required to produce one ton of cassava starch. Starch is
normally further transformed into value‐added products and used for the preparation
of glues, alcohol, and currently its greatest industrial asset: biofuel.
Trade in cassava starch and flour expanded significantly in recent years, compensating
only in part by the contraction in the international market for chips and pellets. The
major cassava starch and flour importers are, by order of importance: Japan, the
Chinese Province of Taiwan, Hong Kong, China, Malaysia, Singapore, the United States
and the Philippines. Thailand, Vietnam and Indonesia are the major suppliers, but other
smaller exporters in Africa, Asia, Latin America and the Caribbean have also gained
some space in that market.
Protectionism is high in the starch market. Cassava starch tariffs in the main importer
countries are mostly zero but can range up to 480% in exporter countries such as Korea.
In the main markets, starch is imported under preferential access conditions. Japan for
18
instance, has established an overall 200,000 tons tariff quota on native starch from
maize, potato and cassava, starting with a 25% duty and reduced in 2000 to 15%.
Presently, Ugandan cassava products are price takers thereby placing the development
of a cassava starch plant at a very big advantage. There are ample indications that
technically Uganda could be a cassava market leader as climate, market, high yielding
planting materials, and improved processing techniques are known and available.
Triple P Investments will transform the cassava sector from a largely low‐input
traditional sub‐sector, geared for subsistence, to one that is market‐driven and aimed at
income generation.
At a policy level, cassava has been included on the Development Strategy and
Investment Plan (DSIP) of the Ministry of Agriculture as a key commodity for food
security and there is also space to fully stretch this crop across the value chain for
national development. In line with these specific agendas, the Government of Uganda
along with the other EAC (East African Community) partner states are also looking to
resuscitate the textile industry by investing more funding into the sector and raising
tariffs against imported second-hand textiles into East Africa. This singular move is of
great advantage as a revamped textile industry in Uganda provides additional markets
for starch manufacturing companies including the proposed starch factory.
4.8 Opportunity Rationale
Loaded with about 90% carbohydrate, cassava roots are a valuable source of raw
materials for industries that manufacture carbohydrate-based and starch-based
products such as food and bakeries, beverages, pulp, paper and card boxes industries;
and starch, pharmaceutical and ethanol industries among others. It can effectively
substitute wheat flour and starch in the manufacture of these products once it is
processed into high quality cassava flour (HQCF), an industrial raw material for which
the technology is available and can be processed by intermediate agro-industrial
processors like Triple P Investments.
Markets: Studies by the Africa Innovations Institute (AfrII) Kampala, have revealed that
the market potential for HQCF is huge and remains largely unexploited. A market of
about 6,600tons per year has been identified by the Africa Innovations Institute and is
currently available with the biscuit and paperboard manufacturers. This represents less
than 20% of the potential market if the food and bakeries, beverages, pulp, paper and
card box industries; starch, pharmaceutical and ethanol industries are developed.
19
Two biscuit manufacturers have developed new biscuits products with HQCF. As a
result, they plan on using more of HQCF as a raw material. They even plan to engage
the farmers in supply contracts which guarantee price and market. Similar results have
been achieved with the paperboard industry where one manufacturer reported that the
HQCF produces better glue that imported starch and they plan 100% substitution to
save on foreign currency.
Standards are available: The Uganda National Bureau of Standards (UNBS) has
already developed quality standards for cassava flour and is working with partners to
develop East African Standards for HQCF and cassava composite flours. It will use
these standards to certify HQCF and other products for the market. This will open
markets for HQCF and other cassava products regionally and globally further
expanding the market of the product.
Industries ready to use HQCF: Based on recent market study by the C:AVA project to
determine the market opportunities for HQCF, the annual tonnages required by
industries are as follows: Biscuits 2,400 tons, paperboard 2,400 tons, bakeries 1,200 tons
and composite flour 600 tons.
Adequate support industries: There are adequate support industries for the
manufacture of HQCF. The production, processing and marketing of HQCF depends on
support industries that supply raw materials and services. These industries are ready to
provide necessary support to value chain actors in the areas of equipment fabrication
and repair, provision of packaging material and transportation There are two
workshops in Kampala and that can fabricate HQCF processing equipments.
Huge enthusiasm among rural farmers and youth: The huge market opportunities in the
HQCF value chain have generated a lot of enthusiasm among the youth farmers
participating in the HQCF value chain.
4.9 Proposed Capacity
The proposed Triple P Investments will have a maximum capacity to process, package
and sell up to 100 Metric Tons of HQCF flour per day or 2,500 Metric Tons of HQCF
flour per month and 30,000 Metric Tons of HQCF flour per year. The Company will also
be able to mill, process and package similar volumes of wet-milled cassava flour for
human consumption over identical time periods. To produce these product volumes,
Triple P Investments HQCF processing plant will need to source up to 120,000 Metric
Tons of fresh cassava to process 30,000 Metric Tons of HQCF flour in one year of
20
business operations (using a conversion ratio of 4:1); it will also need to source a further
90,000 Metric Tons of fresh cassava from the cassava farmers to be able mill and
package 30,000 Metric Tons of wet-milled cassava over the same one (1) year period.
4.10 Total Project Cost
The total capital investment of the proposed Triple P Investments High Quality
Cassava Flour Industrial Enterprise is US$ 4 million and is comprised of the project
promoter’s equity input, land and site development building & civil infrastructure
development, purchase and installation of plant equipment and machinery, connection
of the HQCF plant to power and water utility infrastructure, purchase of a 500 kVA
industrial electric generator, transportation vehicles, office furniture & equipment and
working capital and contingency expenditure budget. A sum of US$747,463 is required
as contingency expenses and working capital, which will be used to finance payment
the salaries & wages, administrative expenses, industrial repairs & maintenance,
utilities, sales & marketing expenses, product packaging materials, transport expenses,
insurance premiums, industrial consumables, and the purchase of raw materials (fresh
cassava) for the first 3 – 6 months of the project. Table 2 below provides the
composition and structure of the initial project investment cost.
Table 2: Total Initial Project Investment Cost (US$)

S. No. Project Investment Component Share Equity Medium Total
Capital Term Loan
1. Existing Land (20 Acres) 5.00% 200,000 0 200,000
2. Buildings & Civil Works (including
QC Lab) 26.04% 0 1,041,666 1,041,666
3. Machinery & Equipment 40.47% 0 1,618,974 1,618,974
4. Utility & Others 4.05% 0 161,897 161,897
5. Industrial Generator 20 kVA 1.25% 0 50,000 50,000
6. Motor Vehicles 2.50% 100,000 0 100,000
7. Miscellaneous Fixed Assets 2.00% 0 80,000 80,000
8. SUB-TOTAL 81.31% 300,000 2,952,537 3,252,537
9. Contingency (5%) 4.07% 0 162,627 162,627
10. Working Capital 14.62% 124,836 460,000 584,836
11. TOTAL 100.00% 424,836 3,575,164 4,000,000
10.62% 89.38% 100.00%
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4.11 Objective and Scope of the Business Plan
The purpose of this Business Plan is to establish the need for setting up of a high quality
cassava flour products industrial enterprise to avail more than 20 percent growth per
annum in both the agro-industrial sector of Uganda. The purpose of the project is to
establish and operate a high quality cassava four products industrial enterprise that will
stimulate the development of a cassava supply-chain for interested industrial users of
cassava in Uganda. The HQCF flour products industrial enterprise being proposed will
be capable of processing 30,000 Metric Tons of HQCF products per annum and a further
30,000 Metric Tons of wet-milled cassava flour per annum for sale on the fast-growing
cassava consumption and industrial market segments in Uganda. All the proposed high
quality cassava flour products will be processed on site (i.e. at the Triple P Investments
20-acre industrial plot at the Soroti UIA Industrial Business Park).
The scope of the study is thus to undertake, inter alia, need assessment, technical
evaluation, assessment of governance and management structure and financial
evaluation of the project, on the basis of which recommendations are to be developed
for setting up the said project.
4.12 Methodology
The methodology employed for this business plan consists of review of published data
as well as exhaustive interviews of the stakeholders including cassava farmers, cassava
agronomy and industrial experts, cassava value-chain traders and actors, plywood,
paperboard and bakery end-users of wheat flour in Uganda, multilateral agencies and
Government of Uganda officials as well as those belonging to the Ministry of
Agriculture Animal Industry and Fisheries (MAAIF) and the Ministry of Industry,
Trade and Cooperatives. Lastly, we would like to bring on record the cooperation
extended by those individuals and companies who though no longer associated with
the industry, were willing to share their opinions and experiences to facilitate new
entrants coming into the industry.
The data collected has been analyzed using quantitative and qualitative techniques,
where required necessary assumptions have been made which have been mentioned in
the report.
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5.0 PRODUCTS & SERVICES
5.1 Cassava Starch
Starch is one of the most abundant substances in nature, a renewable and almost
unlimited resource. Starch is produced from grain or root crops. It is mainly used as
food, but is also readily converted chemically, physically, and biologically into many
useful products to date, starch is used to produce such diverse products as food, paper,
textiles, adhesives, beverages, confectionery, pharmaceuticals, and building materials.
Cassava starch has many remarkable characteristics, including high paste viscosity,
high paste clarity, and high freeze-thaw stability, which are advantageous to many
industries.
Advantages of cassava starch

Cassava has many advantages for starch production.
 High level of purity.

 Excellent thickening characteristics.
 A neutral (bland) taste.
 Desirable textural characteristics.
 A relatively cheap source of raw material containing a high concentration of
starch (dry-matter basis) that can equal or surpass the properties offered by other
starches (maize, wheat, sweetpotato, and rice).
Cassava starch:
 Is easy to extract using a simple process (when compared to other starches) that
can be carried out on a small-scale with limited capital.
 Is often preferred in adhesive production as the adhesives are more viscous,
work more smoothly, and provide stable glues of neutral pH
 Has clear paste.
The development of both the food and non-food uses of cassava starch has made much
progress and continues to have a bright future. Both old and important new products,
such as modified starches, starch sugars, starch-based plastics and fuel alcohol, are
reviewed briefly.
23
5.2 HQCF
High quality cassava flour is simple unfermented cassava flour. High Quality Cassava
Flour (HQCF) can also be used as an alternative for starch and other imported materials
like wheat flour in a number of industrial undertakings. HQCF can be used in the
production of adhesives (in paper board manufacture) as an extender for ply wood
glues, as a source of starch in the textile industry and as raw material for the production
of glucose syrups, industrial alcohol and bakery products.
What is HQCF used for?
High Quality Cassava Flour (HQCF) can be used as an alternative for starch and other
imported materials such as wheat flour in a variety of industries in many countries in
Africa.
Market demand and commercial partners have been identified in various industrial
sectors (plywood, paperboard, bakery, confectionery and industrial and potable
alcohol) which rely on expensive imported raw materials. A locally produced cassava-
based alternative has the potential to substitute for the imported material (import
substitution) and create a market for the farmer's cassava.
Uses of HQCF include raw material for the production of glucose syrups, industrial
alcohol and bakery products, the production of adhesives, as an extender for plywood
glues and as a source of starch in textile sizing. Specifically;
 Bakery products - HQCF was used at levels of 10-35% in bakery products;
popular in rural areas where consumers preferred the heavy cake like texture;
 Glucose syrups – A controlled process was developed for conversion of HQCF
into sugar syrups with a range of dextrose equivalents to meet different end-user
requirements using enzymes from plant seedlings;
 Industrial and potable alcohol – A system was developed for conversion of
sugar syrup into ethyl alcohol for industrial or potable use;
 Adhesives - HQCF blended with soluble borax and caustic soda to produce
Bauer type paperboard adhesive that could completely replace imported starch
based materials. HQCF was used for complete substitution of wheat flour as an
extender in urea and phenol formaldehyde resin plywood adhesives.
5.3 Intended Use of HQCF
The unfermented HQCF is useful in the convenience or fast food industry for making a
variety of pastries at 100% use or as a composite of wheat flour particularly for bread
24
baking (20% composite with wheat). It is very acceptable as raw material in the food
and beverage industry for the manufacture of biscuits, bread, noodles, baby foods,
alcoholic drinks, etc; and as binding or thickening agent in soups and stews.
High quality cassava flour is also an acceptable raw material in various industries:
 manufacture of gum,
 extender for plywood glues,
 manufacture of paperboard adhesives,
 glucose syrup and alcohol production,
 sizing in textile manufacture.
The most important, in terms of potential sustainable growth market is its use for the
manufacture of high-grade foods (baby food, biscuit, noodles, meat sausages, bread,
etc).
Table 3: Recommended inclusion levels of HQCF in different cassava-based products

Group of end-users Product/end-use Inclusion levels
Bread bakers Bread including French Bread (Baguette) 20% (Optimum)

Food factories Biscuits 10 – 50%
Wafers 10%
Noodles 10%
Home Caterers Cakes 100%
Chinchin 25 – 100%
Meat/fish pie 10 – 100%
Buns, Fish rolls 10 – 12.5%
Puff-puff, etc. 10 – 25%
Restaurants Stiff porridge 10 – 18%
Industrial (Non-food) Paper 0 – 96%

Matches 50%
Textile 20 – 50%
Extender in Plywood Manufacture 30 – 100%
Abass et al., 1998; Grafham et al., 2000
HQCF is expected to meet some minimum requirements by the industry before it is

adopted. These include price competitiveness, consistency of quality, and all year round
availability in the required quantities. Specific quality criteria for HQCF have been set
25
by the industry (Tables 4 & 5). The inability of small-scale processors to meet the
minimum quality set by industrial users of HQCF can be resolved by adopting a
suitable quality management system.
Table 4: Physical and chemical quality characteristics and requirements of HQCF for
food uses
Characteristics Quality Levels
a) Moisture content (MC) ≤10%
b) Starch content 65-70%
c) Total ash on dry matter basis, maximum 3%
d) Acid insoluble ash, maximum by mass 0.15%
e) Total titrate-able acidity (as lactic) <0.25%
f) Crude fiber on dry matter basis, maximum 2%
g) Pasting Temperature <740C
h) Cook Paste Viscosity, minimum 740 BU
i) Total cyanogens (CNP) “10 mg/kg HCNeq
j) pH >5.8
k) Particle size 250± - 500µ
Or at least 90% by mass shall
pass through 6mm sieve
Abass et al., 1998; Grafham et al., 2000
26
Table 5: Limit for chemical, biological and physical hazards in cassava flour
Chemical (heavy metals) Maximum levels (mg/kg)
a) Lead 0.1
b) Arsenic 0.1
c) Copper 5.0
d) Mercury 0.01
e) Tin 15
f) Zinc 50
g) Iron 22
Biological (microorganisms) Maximum microbial counts (cfu/g)
h) Total plate count 104
i) Yeast and mould 102
j) Escherichia coli Nil
k) Salmonella spp Nil
l) Coliforms 103
m) Staphylococcus spp Nil
n) Vibrio cholerae Nil
Mycotoxin contents Maximum levels (μg/kg)
o) Total aflatoxins 10
p) Aflatoxin B1 5
Other contaminants (physical)
q) Metal fragments, plant residues sands
or stones Nil
5.4 Quality Management
Quality is the fitness of a product for use by consumers. The nutritional, sensory, safety,
convenience, aesthetic and health values of HQCF must be maintained for all customers
- industrial as well as individual users.
5.4.1 Hazard/Quality Analysis Critical Control Point (HACCP/QACCP)

System
The Hazard analysis critical control point (HACCP) system is concerned and deals
primarily with controlling and ensuring the safety of food products. It is a scientific and
systematic approach to identifying hazards and providing measures for their control to
guarantee food safety. It involves monitoring and controlling of materials, and
processes which could lead to a compromise in the safety of the final food products.
27
However, from the standpoints of food manufacturers and consumers, the quality of
food is as important as the safety. In spite of the fact that food quality systems are often
complicated and expensive to implement, food manufacturers implement them as a
matter of priority to produce products that meet the minimum quality standards and in
compliance with the food and drug regulations of the countries where the products are
to be consumed. Quality Analysis and Critical Control Point (QACCP) system which
employs simple but well planned techniques was developed to address both the quality
as well as the safety of food products during processing. The HACCP/QACCP system
therefore falls under Quality Assurance as well and can be applied during production
of HQCF.
The application of QACCP system to HQCF production thus ensures control of input
materials and processing procedures to produce high quality cassava flour that meets
the predefined quality characteristics. This control may, very well include for example,
control of cassava cultivar to indirectly ensure chemical safety through low cyanide
content of the final product.
To ensure effectiveness of the quality systems, it is often important to implement some

prerequisite quality programs in HQCF production before HACCP/QACCP. Two of
such prerequisite programs are Good Manufacturing Practice (GMP) and eneral
principles of Food Hygiene or Good Hygiene Practice (GHP). Even though
HACCP/QACCP can be simplified to a level where it can be easily implemented by
SMEs using techniques such as measurement of pH with pH paper, timing of
operations, physical observation and inspections, etc, it often still involves extensive
documentation and laboratory analysis of samples for verification.
HACCP-like system
To simplify the system further for ease of implementation by SMEs, the
HACCP/QACCP systems for producing high quality cassava flour may be
implemented without the 6th and 7th principles of HACCP, i.e. with no rigorous
record-keeping nor verification schemes. However, emphasis should be placed on
identifying hazards and their critical control points, establishing critical limits for
preventive measures and a monitoring procedure (Forsythe and Hayes, 1998).
5.4.2 HACCP/QACCP Team
Triple P Enterprises shall have a HACCP/QACCP team in place to carry out the
HACCP/QACCP implementation and monitoring as well as taking corrective actions
28
when necessary. The team shall have the appropriate knowledge of HQCF production
and expertise. It shall consist of:-
1. An external technical and independent advisor on HACCP/QACCP

2. Operations or Production Manager At least one should have Food
3. Quality Assurance Manager Science/ Microbiology or Food
4. An Agronomist Chemistry/ Biochemistry background
5. Engineer, Equipment or Machinery Technician
6. Marketing/Distribution Manager
7. Supporting Junior Staff
This multi-disciplinary team shall be given strong support by top management and
shall have very firm commitment to the application and funding of the
HACCP/QACCP application. The team shall meet regularly (possibly once every
month) to review performance of the quality mandate and maintain the consciousness
of the entire workforce to quality and safety.
5.5 Competition
The alternative to HQCF is imported wheat flour. Studies have shown that the price of
imported wheat flour is ever increasing due to production cost increases in the
countries of wheat origin in North America, Europe and Asia and also due to high
foreign exchange rate and inflation. Also the cost of imported starches or glues for the
paperboard industries is very high. Starch derived from HQCF is a cheaper alternative.
From the above, it can be stated that HQCF can compete with imported wheat flour and
other adhesives from the plywood, paperboard and bakery industries.
29
6.0 UGANDA CASSAVA PRODUCTION AND VALUE-CHAIN
6.1 Production
Cassava, which can grow well on marginal lands, is one of the most important staple
foods in Uganda. It is estimated that 60% of the production is destined for household
consumption and 40% for marketing (Kimathi, et al, no date). According to Mugisa
(2010), cassava, which is known as a “poor man’s crop”, is predominantly grown by
subsistence farmers as a staple crop on plots averaging 1 to 3 acres.
Cassava production statistics are confusing in that there are large discrepancies between
different sources of information, as demonstrated in the following figures and tables.
Table 6 shows the cassava production figures according to the Uganda Bureau of
Statistics (UBOS), quoted in Mugisa (2010). They indicate that there was a decline in
production after 2005 from about 5.5 million tonnes to about 5 million tonnes in 2008,
also reflecting a decline in yields from about 14.4 t/ha to 12.7 t/ha during this time
period.
According to a speech given by H.E. YK Museveni (June 2012) the annual cassava
production in Uganda is 6.7 million tonnes, compared to over 30 million tonnes
produced annually in East and Central Africa.1 In addition, it is recognised that the crop
is important for animal feed and commercial use in industry sectors such as starch,
beverages, and liquid glucose (H.E. YK Museveni, ibid).
Table 6: Cassava Production in Uganda, 2004 – 2008

2004 2005 2006 2007 2008
Area planted (‘000s
Ha) 407 387 379 386 398
Production (‘000s
MT) 5,500 5,576 4,924 4,973 5,072
Source: UBOS, 2009, in Mugisa, 2010.
Compared to the aforementioned data, Figure 2 illustrates a sharp drop of production

at around 2007 from about 5 million tonnes to 3 million tonnes per annum. In particular
the drop in production is due to Cassava Brown Streak Disease (CBSD). This has
implications on yield figures. For example, the Agricultural Crop Census 2008/9
projection highlights cassava yields of 3.3 T/ha on high acreage of 933,333ha in 2012.
1
Speech by H.E. YoweriKagutaMuseveni, President of the Republic of Uganda at the Official Opening of
the Second Scientific Conference on the Global Cassava Partnership of the 21st Century, 18th June 2012;
Speke Resort Munyonyo, Kampala.
30
These major discrepancies in cassava production and yield data make it difficult to
establish forecasts about demand and supply situations in the years to come. Amongst
other things, this affects the availability of cassava that can be used for industrial
processing. The fact that cassava prices have been high since about 2008 confirms data
that demonstrates a sharp drop in production.
Figure 2: Cassava Production Trends (1980 – 2011, tonnes p.a.)
Source of data: UBOS/MAAIF 2008/9 Crop Census
Since cassava does not have a mature stage, the crop can be harvested at a farmer’s
discretion (Mugisa, 2010). A plant can be harvested when its roots are sufficiently
developed to meet consumers’ needs or delayed until the next growing season. This
feature makes cassava an ideal secondary crop for small-scale farmers in Uganda as
they can stagger their harvesting activities for food consumption or marketing activities.
For example, harvesting can be delayed if the market is oversupplied. At the same time,
given the plant’s physical attributes (i.e. perishability within a few days), post-harvest
activities must follow a strict short timeframe, which constrains a farmer’s ability to
devote time to post-harvest activities of fresh cassava.
As indicated above, cassava is one of the staple food crops in Uganda, and is a major
food security crop used for home consumption. Nevertheless, cassava is also traded
either in the form of fresh roots or dried chips/flour. The following sections describe
both the markets and value chains for fresh roots and dried cassava.
31
6.2 Fresh Cassava Markets and Value Chain
With its expanding population, Kampala is Uganda’s largest market for fresh cassava
roots with supplies mainly coming from districts to the West of the capital, such as
Masindi, Hoima, Masaka, and Mubende. This is likely to be due to distance and better
transport links with that part of the country. Fresh cassava supplies from districts to the
East of the capital (e.g. Busoga region) appear to be in the minority.
According to traders, Kalerwe Market is the main wholesale market for fresh cassava.
Others include St Balikuddembe Market (formerly Owino) and Kawempe Market. In
addition to the capital Kampala, fresh cassava is traded in major district towns such as
Jinja, Lira, Mbale, and Mbarara. Although small quantities of roots are also traded in
smaller towns, it can be assumed that a significant proportion of the inhabitants of these
rural towns are also cassava producers.
Fresh cassava roots are usually traded in bags. However, unlike dried cassava (i.e. 100
kg bags), bags with fresh cassava are not measured and it is estimated that they weigh
on average approximately 150 kg, and in some cases up to 200 kg.
Consumers have a preference for sweet, soft varieties, which fetch higher prices. On the
other hand, bitter varieties fetch lower prices. Also, it was indicated that a red-skinned
variety, which is only produced in the Masindi area, is particularly liked by consumers
and fetches a high price (UGX 70,000 per bag at farm level, and over UGX 100,000 in
Kampala). The latter variety is in relatively short supply and the quantities traded are
smaller.
In June 2009 it was reported that 20 – 30 bags of red-skinned type cassava arrived in
Kalerwe market, whilst it was 50 – 60 bags of other varieties. Assuming a total arrival of
80 bags of 150 kg per day, would mean a total quantity of 12 tonnes per day in this
market. Due to time constraints it was not possible to assess the total annual
consumption of fresh roots in Kampala.
6.2.1 Players involved in fresh cassava marketing
Fresh cassava trading is highly stream-lined by comparison with dried cassava trading.
This is due to the perishability of fresh cassava which requires swift movement of the
roots from the farm to the consumer, with a minimal number of transactions. As a
result, fresh cassava tends to arrive within 24 hours after harvest in Kampala.
According to traders, the cassava will be harvested during the day and then transported
32
at night to Kampala, where it arrives in the early morning hours. Retailers will then sell
the bulk of the roots during the following day. Unsold cassava roots are stored for a
maximum of one night, and roots which are still not sold by then will be used for sun-
drying.
Farmers have the following options of selling cassava to traders:
 Travelling trader from Kampala buys entire field (i.e. garden) and arranges for
uprooting of the harvest; sometimes the traders use commission agents.
 Farmers harvest the roots themselves and sell the bags (usually 150 kg and more)
to local agents or the travelling traders from Kampala.
As already described, travelling traders who are based in urban areas such as Kampala,
play an important role in the marketing chain. They hire vehicles such as pick-ups or
trucks of variable sizes (about 4 – 10 tonnes capacity), and have at the same time a
wholesaler function. If they are based in a particular market they can also by-pass the
commission agents who tend to play an intermediary function between suppliers and
urban retailers.
Due to their financial resources, travelling traders / wholesalers deal in larger

quantities (e.g. 5 – 10 bags per day, and more), whilst retailers sell one bag or less per
day. The latter may sell cassava in small heaps in or near the wholesale markets or take
the roots to smaller retail markets in other parts of the town.
Women play an active role in fresh cassava marketing, in particular in retailing.

Wholesale trade is more dominated by men – reasons given include financial
requirements as well as the physical side of the job (i.e. lifting of heavy bags, although
that is usually done by porters), and women preferring not to travel at night which is
part of a cassava wholesaler’s job.
Figure 3 provides an overview of the fresh cassava value chain, linking Kampala with
supply areas such as Masindi, Hoima, Mubende and Masaka Districts (all districts
located in the West of the Capital).
33
Figure 3: Fresh Cassava Value Chain
Farmers
Local
Agents
Travelling Traders;
e.g. based in Kampala
/ Kalerwe Market
Urban Market
Commission Agents
Retailers
Consumers
6.2.2 Prices, costs and margins
In Uganda, fresh cassava is traded in large bags which weigh approximately 150 kg.
There was scarcity of fresh cassava on the Kampala market when the survey was
undertaken (August 2012), which was reflected in the small quantity and poor quality
(e.g. small size) of roots available in Kalerwe Market. For example, it was reported that
on the day of the survey 4 trucks each with 30 bags of fresh cassava had arrived in the
market (i.e. about 18 tonnes in total), which compares with 10 trucks arriving daily
during the main harvest time. At the same time, traders reported that “several” years
ago about 60 trucks arrived in the market every day. This latter figure would need to be
34
validated, however with an apparent shortage of cassava in Uganda it is clear that
cassava prices are much higher in 2012 compared to ten years ago.2
Recent price trends indicate that while prices of cassava (fresh and dried) and maize
(grain and flour) in Kampala have generally fluctuated between 2008 and 2012, it is
notable that there has been little difference between the prices of dried and fresh
cassava, and in some months the price for fresh roots has exceeded the price of dried
chips. Price signals suggest producing and selling more fresh roots, but due to factors
such as the short lifespan of fresh roots post-harvest and traditional practices,
processing remains widespread.
Table 7 provides an overview of costs and margins within the fresh cassava marketing
chain. It is interesting to note that farmers in 2016 obtain over 30% of the final selling
price, which compares favourably with periods when cassava prices were very low. For
example, a study undertaken in 2002 indicated that farmers obtained between 17% to
26% (UGX 4,000 – UGX 6,000 per bag) of the Kampala retail price, depending on
whether they sold their fresh cassava as ‘standing crop’ or already harvested
(NRI/Foodnet, 2002).
In August2016 traders indicated how the Kampala wholesale price of cassava relates to
farmgate prices. The wholesalers’ gross margin is of the order of UGX 30,000 to UGX
35,000 per bag of fresh roots (150kg) which remains relatively constant. Therefore, when
prices of fresh roots are higher farmers are able to obtain a higher share of the retail
price. At the same time, lower quantities of roots available for sale restricts the turnover
of traders. In interviews traders complained about declining supplies citing poor yields,
in part due to cassava brown streak disease. Also, the low quality (i.e. in particular the
small size) of roots arriving in the market was highlighted as a concern. Regarding
varieties, traders indicated that traditional varieties have a longer shelf-life (three days)
compared to new varieties, which reportedly have a shelf-life of one day.
Traders of fresh cassava in Jinja portrayed a similar story to that in Kampala, also
complaining about declining supplies, which they attributed to cassava brown streak
disease and production constraints (e.g. tractor hire for ploughing is more difficult and
farmers rely more on hand hoes). For example, one wholesaler stated that about five
years ago five lorries would have supplied the Jinja market every day, whilst now
(August 2016) it is one lorry per day. This is also reflected in higher prices; a bag of
2In 2002 farmers indicated they received prices of UGX 4-6,000 per bag (NRI/Foodnet, 2002); in August
2016 they indicated prices of UGX 50,000 per bag and higher.
35
fresh cassava (150kg) sells at UGX 56,000 in a village in Kamuli and UGX 80,000 in the
Jinja wholesale market.
According to traders in Jinja, supply of fresh cassava does not fluctuate very much
throughout the year, perhaps with the exception of July when supplies are lower. At the
same time, demand for fresh cassava has been declining due to high prices. As a
consequence, consumers seek alternative foods such as sweet potatoes, the price of
which has increased much less compared to cassava.
Traders stated that unsold roots would be chopped up into chips and sun-dried for
three days. As for varietal preferences, new varieties also have a poor reputation in Jinja
which is relatively close to important cassava production centres. Local varieties such as
Kayobyo allegedly are less affected by brown-streak disease.
36
Table 7: Costs and margins within the fresh cassava value chain
Case study: Trader based in Kampala buying from farmers in Masindi District and
selling to retailers in Kampala, August 2012
UShs Bag of 150 % of final selling
kgs price
Farmer
Selling price 50,000 33%
Travelling trader, based in Kampala

Purchase price 50,000
Selling price, Kalerwe wholesale market 84,000 56%
Gross margin 34,000
Costs
Miscellaneous labour (handling) 3,500
Packaging material 1,000
Transport 16,700
Transport tax (police) 2,000
Market dues 2,000
Capital costs (@ 3% of all costs) 2,256
Total costs 27,456
Net margin 6,544
Urban retailer, Kampala

Purchase price 84,000
Selling price 150,000
Gross margin 66,000
Costs
Transport/handling 3,500
Market dues 2,000
Total costs 8,185
Net margin 57,815

NB. Net margins are before income tax and payment of tradinglicense; Figures are
average figures based on discussions withtraders in Kampala in August 2012
37
6.3 Dried Cassava Markets and Value Chain
In addition to fresh cassava, substantial quantities of cassava are consumed in dried

form. This tends to involve peeling, slicing / chipping, sun-drying, and milling of
cassava. It is assumed that most of the flour in Uganda is sold in traditional markets as
very small amounts are sold through supermarkets and shops. According to NRI/AfrII
(2009), it is estimated that about 200,000 tonnes of cassava flour are consumed per
annum in Uganda, which is the equivalent of between 600,000 to 800,000 tonnes of fresh
cassava. Using Uganda National Household Survey data from 1996/97, Collinson et al
(2003) estimate that the quantities of cassava flour purchased and consumed from own
production totalled about 180,000 tonnes in 1997.
Cassava flour is also often mixed in various proportions with millet flour to produce a
more nutritious and tasty composite flour, which is preferred by certain populations of
the country (e.g. those in Eastern Uganda). In addition to the cassava flour consumed in
Uganda itself, one must add substantial quantities that are exported to neighbouring
countries. During the course of the survey (August 2016), it was reported that large
quantities of cassava flour were exported to Southern Sudan. Also, some exports were
going to the Democratic Republic of Congo (DRC), and occasionally Kenya, Tanzania,
and Rwanda.
6.3.1 Players in the dried cassava value chain
Figure 4 reveals the complexity of dried cassava marketing. The number of links in the
chain reflects the many services that are required to deliver cassava flour to consumers.
From harvest to purchase at the local store, cassava must be processed into dried chips,
bulked (in other words, assembled into tradable quantities), transported, stored, milled
and finally retailed at convenient locations for consumers.
Similar to the fresh cassava value chain, high food prices have led to a situation where
the farmers’ share of the final price is quite favourable (e.g. over 50%). This compares to
a situation of higher production and supply of cassava when the farmers’ share can be
as low as 15% - 20% (NRI/Foodnet, 2002).
The roles of each participant in the value chain, and a description of their relationships
and transactions with other participants are given below.
38
Farmers: Farmers harvest, peel, slice / chip, and dry cassava roots. In most cases they
sell on a cash basis. Farmers have several marketing options. Using their own or hired
transport they can sell to:
 Travelling traders (often via a depot next to a mill in a trading centre),
 Local agents/assemblers who act on behalf of district based wholesalers /
millers, or
 Local retailers and consumers.
Local agents / village assemblers: These individuals use their local knowledge to bulk
cassava chips from the surrounding area. Customers (i.e. usually wholesalers from local
towns or travelling traders) are willing to pay for this service because they would
otherwise have to spend time and money assembling sufficient quantities of cassava
chips to justify the cost of transport to the next stage in the value chain. To some extent,
the assemblers also sort chips into high quality white, well dried grade chips and a
lower quality discoloured grade, sifting for extraneous matter in the process (Collinson
et al, 2003).
District level wholesalers/millers: These traders, who at the same time often own one
or two hammer mills, operate in district level towns such as Soroti, Pallisa or Jinja. They
supply flour to:
 Exporters of flour to neighbouring countries (e.g. Southern Sudan, DRC);
 Wholesalers in Kampala;
 Local retailers.
Their primary roles include the processing of chips into flour, and to store the flour in
volumes that are sufficient to enable their customers to transport it to the next
destination.
Travelling traders: These traders supply large quantities of cassava flour to export
markets and urban consumer markets. They turn over their capital rapidly by
minimizing the length of time between purchase and sale. Such traders buy from
several village assemblers in one trip, and hire vehicles to transport the chips to the
urban centres, where they pay for milling and sell flour to wholesalers or to exporters.
Kampala based wholesalers / millers: In particular, in Kisenyi market of Kampala, a

number of traders combine cassava flour milling with wholesaling. These operations
purchase cassava chips either directly from village assemblers via agents or from
travelling traders.
39
Service millers: Such businesses do not engage in trade but merely provide milling
services. In rural areas and the smaller district towns, millers often use small petrol or
diesel powered mills, mainly for milling of maize and cassava. In larger towns, millers
are often specialized and run electrically powered mills.
Urban Retailers: The majority of food retailing in urban areas is characterized by a large
number of small, non-specialized stores, which sell small quantities of numerous
products including different types of flours and household products. Women play an
important part in retail trading.
Exporters: This category of trader may be based in Uganda or in neighbouring countries

(e.g. Southern Sudan) from where they come to purchase significant amounts of flour.
Exports tend to take place via export trading hubs such as Arua, but also via Kampala.
Table 8: Costs and margins within dried cassava value chain

Case study: Chips bought in Kamuli and flour sold in Jinja
UShs Bag of 100 % of final selling
kgs price
Farmer, based in Kamuli District
Selling price, chips 75,000 68%
Trader, based in Jinja town

Purchase price, chips bought in Kamuli 75,000
Selling price, flour 110,000 100%
Gross margin 35,000
Costs
Miscellaneous labour 2,000
Transport 5,000
Milling, Jinja town (Ush 40/kg) 5,000
Packaging material 1,500
Market dues 2,000
Loss’ (3% during milling) 2,250
Store rent 1,000
Total costs 21,563
Net margin 13,437
40
NB. Net margins are before income tax and payment of trading license; Figures are
average figures based on discussions with traders in Jinja, reflecting the situation
between October and December when supplies are more abundant
Figure 4: Dried cassava value chain
Farmers in districts specialized in the production of dried cassava chips (e.g. Soroti,
Pallisa, Kumi, Kamuli, Lira, Masindi)
Local Agents
Travelling traders District-based District & rural

millers/wholesalers retailers
Service Consumer
Millers
Export to Southern Kampala

Sudan, DRC, millers/wholesaler
Rwanda, Kenya s
Caterers and
Urban retailers
bakeries
Key
Cassava chips Consumers
Cassava flour
41
6.3.2 Dried cassava prices
Given that about 3 kg of fresh cassava are required to obtain 1 kg of dried chips one
would expect a similar price ratio between the two products. However, as Figure 5
shows, this is clearly not the case in Soroti, which is a major centre for cassava
production and processing in Eastern Uganda. It is assumed that this reflects market
anomalies introduced by low supply of fresh roots and high demand for dried cassava
from within Uganda and neighbouring countries, an issue also noted above in the
discussion of fresh roots prices.
Figure 5: Annual average retail prices of maize and cassava in Soroti

1600
1400
1200
1000
Ugsh per KG
800
600
400
200
0
2006 2007 2008 2009 2010 2011
Maize grain Maize flour Cassava chips Cassava fresh
Source: Farmgain Africa, 2012 (www.farmgainafrica.org )
42
7.0 INDUSTRIAL UTILIZATION OF CASSAVA IN UGANDA
7.1 Industrial Development in Uganda
Since 1986, the government - with the support of foreign countries and international
agencies - has acted to rehabilitate and stabilize the economy by undertaking currency
reform, raising producer prices on export crops, increasing prices of petroleum
products, and improving civil service wages. The policy changes are especially aimed at
dampening inflation and boosting production and export earnings. Since 1990 economic
reforms ushered in an era of solid economic growth based on continued investment in
infrastructure, improved incentives for production and exports, lower inflation, better
domestic security, and the return of exiled Indian-Ugandan entrepreneurs. The global
economic downturn hurt Uganda's exports; however, Uganda's GDP growth has
largely recovered due to past reforms and sound management of the downturn. Oil
revenues and taxes will become a larger source of government funding as oil comes on
line in the next few years. Instability in South Sudan is a risk for the Ugandan economy
because Uganda's main export partner is Sudan, and Uganda is a key destination for
Sudanese refugees.
Uganda’s economy is largely based on agriculture, which contributes 23.5% of the

country’s GDP (2013 est.), and 80% of the export revenue. The sector is dominated by
small-holder farming. Coffee is by far the most important earner of foreign exchange
and a major source of income in rural areas. The agricultural sector is considered to
have substantial potential for growth and investment.
Although rapid growth has been experienced by the manufacturing sector during the
1990s and 2000s (e.g. 17%in 1997), due to historic reasons, the latter is still small in size
(contributing 8.8% to total GDP). Nevertheless, industry is an important source of
income and employment, contributing 27.2% of the GDP. Manufacturing activities are
concentrated in agro-processing, such as food, sugar, tobacco, and cotton.
Improvements in the macro-economic and legislative environment provide an incentive
for both local and foreign investors. At the same time, in spite of improved investment
conditions, the relatively small size of the domestic market represents a constraint to
industrial development in Uganda. Although there is some export potential within the
region, domestic manufacturers also face competition from imports produced in Kenya,
South Africa, and outside the continent.
The challenge is to identify industries that have a comparative advantage in supplying

both domestic and regional markets. Economic development and poverty reduction will
43
ultimately depend to a large extent on the creation of employment outside the primary
sector. One of the entry points for increased industrial growth is better utilization of the
country’s abundant natural resources. This study looks at how agro-industries can
benefit from cassava, which is considered to be one of the crops with substantial
production potential in Uganda.
7.2 Overview of Potential for Industrial Utilization of Cassava in Uganda
This sub-section provides an overview of the potential for cassava in a range of

industrial sectors in Uganda, a summary of the findings from the survey is given in
Table 9. On the basis of market size and quality requirements the various sectors can be
divided into those with potential for realization in the near future (<5 years), those with
potential in the medium to long-term (>5 years) and those with no potential for
realization in the foreseeable future (>10 years). An overview of each of these groups is
given below.
Overall, the two sectors with the most potential for utilization of cassava are animal
feed and bakery products (bread & biscuits) which account for 98% of the potential
annual demand for cassava (45,750 tonnes of fresh cassava) by Ugandan industry. The
remaining sectors (plywood, paperboard & textiles) account for just 2% of the potential
annual demand (994 tonnes of fresh cassava) for cassava by industry. Although cassava
is already in use in these sectors and accounts for 49% of the starch-based raw materials
used (162 tonnes of cassava flour per annum), there appears to be little chance for
expansion of these sectors in the near future, and as such demand for cassava-based
products is unlikely to increase significantly.
7.2.1 Sectors with Potential to Utilize Cassava in the Near Future (<5 Years)
Animal feed
Research in many parts of the world has demonstrated that dried cassava can substitute
for part of the cereal-based energy component of livestock feed rations.
The major factors that could influence the realization of this opportunity are:
 The animal feed industry in Uganda requires reasonable quantities of cassava

 (~19,000 tonnes of fresh cassava) per annum.
 Animal feeds have relatively low quality specifications.
 Little investment is required to realise the opportunity.
 The long-term prospects of the Ugandan livestock industry appear favourable.
44
 Potential for export of dried cassava to similar industries in neighbouring
countries.
45
Table 9: Industrial options for high-grade cassava flour in Uganda
Industry Current raw material Potential Existing market (tonnes Market potential
locallyproduced per annum) (tonnesof fresh cassava
cassava-based perannum)
alternative
Animal Feed Maize, wheat, and rice Cassava chips 40,000 tonnes of cereal- 20,000 tonnes of HQCF
bran based carbohydrates
Plywood Locally-made cassava Cassava flour 250 tonnes of locally- 320 tonnes of HQCF
flour made cassava flour
Paperboard Imported maize starch Starch based adhesive 1,440 tonnes of SBA 3,500 tonnes
based adhesive, imported (SBA) made from high- including 150 tonnes of
native maize starch grade cassava flour locally made cassava
(NMS) and cassava flour flour
Textiles Locally made cassava Cassava flour 36 tonnes locally made 108 tonnes
flour cassava flour
Bread Imported wheat High-grade cassava flour 300,000 tonnes imported 90,000 tonnes*
equivalents wheat equivalents
Biscuits Imported wheat High-grade cassava flour 7,000 tonnes imported 2,100 tonnes*
equivalents wheat equivalents
Processed foods Imported NMS Cassava starch and 170 tonnes of NMS Very little potential
(sauces) cassava flour in sausages
Pharmacy Imported NMS Cassava starch 675 tonnes of NMS No potential
Industrial alcohol Locally produced sugar Cassava-derived sugar 3.4 million litres of No potential
molasses syrup rectified spirit per annum
Laundry starch Imported NMS and Cassava starch 4 tonnes (3 tonnes of No potential
soluble starch NMS) and 1tonnes of
soluble starch
Total market requirement (tonnes of fresh cassava)
* Assuming a 10% replacement of imported wheat equivalents with high-grade cassava flour.
46
Plywood, Paperboard and Textile industries
These three sectors have limited market potential in terms of size, but have the
advantage that cassava flour is already accepted by many of the industries involved in
these sectors.
The major factors that could influence the realisation of this opportunity are:
 Cassava flour is already accepted by industry.
 Industries have relatively low quality requirements in Uganda.
 Little investment is required to realise the opportunity.
 Potential for export of cassava flour to similar industries in neighbouring
countries.
7.2.2 Sectors with Potential to Utilize Cassava in the Medium to Long-Term

(>5 Years)
Biscuits
Research in Ghana has demonstrated that high-quality cassava flour can be used to
substitute for up to 35% of wheat flour in sweet dough biscuits without being detectable
by urban consumers (Graffham, et al., 2000). If cassava flour is used at higher levels of
substitution, consumers notice a reduction in golden colour of the biscuit, and lessening
of wheatyflavour. At very high levels (>50% cassava flour) of substitution the biscuits
develop a brittle crumbly texture which is not commercially acceptable.
The major factors that could influence the realisation of this opportunity are:
 Biscuits production is less gluten sensitive.

 Products should readily achieve consumer acceptability, if correct marketing
approach is adopted.
 The downside of this opportunity is the limited size of the potential market
(2,100 tonnes of cassava flour per annum).
Bread
Research in many parts of the world has demonstrated that high-quality cassava flour
can be used to substitute for up to 10% of wheat flour in bread without being detectable
by urban consumers. Higher levels of substitution are not advisable as consumers do
not the product, which typically has a reduced loaf volume and heavy texture.
The major factors that could influence the realization of this opportunity are:
47
 Relatively large market size (90,000 tonnes of cassava flour per annum).
 Ugandan bakery industry has expressed strong interest in cassava flour due to
increasing cost of existing raw materials (wheat flour), and stiff competition with
the industry.
7.2.3 Sectors with Potential to Utilize Cassava in the Foreseeable Future (>10
Years)
Starch
Starch is an important industrial commodity that finds applications in a wide range of
industries. The largest consumers of starch and starch-based products in a
industrialised country are textiles, paper and plywood, adhesives, processed foods and
pharmaceuticals and cosmetics. Smaller amounts of starch are used in a wide range of
other applications including fillers for explosives and biodegradable plastics.
In Uganda imported native maize starch, is used in the pharmaceutical, paperboard,

processed foods and laundry sector. Starch-based adhesives (SBA) are used in
paperboard manufacture. However, the total market for starch and SBA’s (2,769 tonnes
per annum) in Uganda is still small with only limited potential for growth (Table 9). A
small-scale factory for production of 10 tonnes per day of maize or cassava starch will
cost approximately US$2 million (price current in November 2000) to import and install
in Uganda. This factory has the capacity to produce 3,000 tonnes of starch per annum,
and would need to operate at 80% of capacity to ensure recovery of initial investment
and profitability within 2-5 years (Graffham and Westby, 1998).
Thus a Ugandan starch factory would need to produce a minimum of 2,400 tonnes of
starch per annum. At maximum production capacity, the starch plant would be able to
satisfy the total internal requirements for domestic manufacturers that would leave a
surplus of about 231 tonnes (less than 10% of total annual ouput) for export to
customers outside Uganda.
However, potential investors in starch production need to take account of the following
key points before going ahead with proposals for establishing a starch factory
(Graffham and Westby, 1998):
(i). Raw material supply and seasonality of supply. Starch factories require at least 20-
40 tonnes of high quality dry maize or fresh cassava roots a day for a period of at least
100 days a year to be effective. To supply these demands the raw material has to be
treated as a high value cash drop and grown on a large-scale. Reliability of supply
48
could be a serious issue in an area where maize and cassava have always been
perceived as staple and food security crops. To be effective starch factories need a long
processing season with continuous supplies of raw material of constant quality.In many
cases climatic problems reduce the season to between 4-6 months. Factories relying on
sun-drying face the additional difficulty of finding that the peak season for raw material
availability often coincides with periods of wet and cloudy weather which are
unsuitable for sun drying.
(ii). Road infrastructure. A good road infrastructure is required to ensure that cassava
roots can reach the factory for processing within 12 hours of harvest. This factor can be
obviated by using dry maize as the raw material.
(iii). Water supply. Starch factories require large amounts of water of good quality for
processing. Process water should be free of solid particles, low in iron (<0.3mg ferrous
ions/litre) and as soft as possible.
(iv). Power supply. Starch is a mechanized process so a reliable source of power needs
to provided. This may have to be self-contained as starch factories are likely to be
situated in rural areas close to the cassava farms.
(v). Access to land. This is most important for traditional factories that require a large
area for settling tanks and drying yards.
(vi). Availability of skilled labour. Modern and traditional starch factories have a
relatively low labour requirement, but both require efficient management and the
modern factories need highly skilled personnel both to operate and maintain the
facility.
(vii). Choice of drying method. Sun drying will reduce costs but increase processing
time and can only be used if the factory is situated in an area of low rainfall, high air
temperatures and low humidity. Artificial drying may seem the obvious solution, but
flash drying is the major cost burden of any modern factory both in terms of capital
investment and running costs. To be economic, a flash dryer must have a high loading
for most of the year.
In the light of all of these factors, there appears to be little potential for starch
manufacture in Uganda in the foreseeable future.
49
Sugar syrups
Sugar syrups are very important for the food, beverage and pharmaceutical industries.
Some of the most popular products include high fructose syrup for the beverage
industry, and liquid glucose for both food and pharmaceutical industries. Starch is often
used as a raw material for production of sugar syrups through controlled enzymatic
hydrolysis. Simple processes result in a range of malto-dextrins (breakdown products of
starch), maltose and glucose. With greater process control starch can be almost
completely degraded to produce glucose syrup. High fructose syrup is prepared by
enzymatic isomerisation of glucose syrup.
Uganda has a reasonably large food and beverage industry which currently relies on
glucose syrup (1,800 tonnes per annum) and crystalline sugar as raw materials but
which could convert to high fructose syrup in the future. One pharmaceutical
manufacturer is producing cough syrups in Uganda and consumes 160 tonnes of
glucose and liquid glucose per annum. The glucose is imported from the Kenyan maize
starch manufacturer Corn Products Corporation (CPC).
Although a market exists for sugar syrups, an essential prerequisite for production is a
supply of cheap high quality starch, so this industry can only develop if conditions in
Uganda become favourable for development of a Ugandan starch industry.
Industrial alcohol
Industrial alcohol can be prepared from glucose syrups derived from enzymatic
breakdown of cassava starch or flour. Uganda has a reasonable capacity for production
of industrial alcohol, but there is no potential for cassava in this area. The reasons for
this are as follows:
 Ample supplies of existing cheap raw material for alcohol production (molasses);
 Process involving starch hydrolysis is more expensive than molasses-based
process.
Industrial chemicals
The area of industrial chemicals is very large and is normally fed with feedstocks
derived from the petrochemical industry. In the absence of petroleum and suitable
sources of alcohol distilled from sugarcane, industrial alcohol prepared from starch can
be used as the feed stock for production of a wide range of organic chemicals. However,
the industrial chemicals sector in Uganda is very underdeveloped with little potential
for growth in the medium-term and as such there is no potential for utilization of
cassava in this area.
50
Biodegradable plastics from starch
Increasing levels of pollution from durable polyurethane and polyethylene based films
have provided the impetus for development of partially and fully degradable plastic
films and mouldings. Partially degradable films using surface modified cassava starch
have been developed and commercialized in India (Balagopalan, 2000). These films
contain 40% cassava starch and 60% of low-density polyethylene polymer, and thus are
partially degradable. In Thailand plastic films have been made from 100% cassava
starch using a process known as annealing which enables starch polymers to be
converted into a flexible sheet. This product is completely biodegradable, but high cost
of production would appear to be the limiting factor in the process.
To manufacture these products, a country must have existing industrial capacity and
research expertise in conventional petrochemical based plastics. In addition the country
should have access to a low cost supply of native starch produced in country.
Uganda has neither of these attributes, and is unlikely to develop this level of industrial
capacity, and thus there is no potential for cassava-based products in this area.
51
8.0 CASSAVA MARKET STUDY
8.1 Wheat Milling Sector
According to latest data from the Ugandan Ministry of Agriculture (MAAIF) and the
Uganda Bureau of Statistics (UBOS) Uganda imports approximately 400,000 tonnes of
wheat from countries including the USA, Russia, France, and Australia. The milling
conversion rate from wheat to flour is 75% and therefore Uganda produces 300,000
tonnes of milled wheat for domestic consumption. The MAAIF national policy is to
work towards replacing 10-30% of wheat with HQCF for use in bread and biscuit
manufacture.
The milling sector consists of five to six principal millers, most located in Kampala but
there is also some milling capacity in Jinja. From discussions with some millers it
appears there is capacity to double the quantities of wheat currently milled. There are
projections in some sectors of 10% annual growth in demand for wheat flour and
therefore in 10 years Uganda could potentially mill twice the amount of wheat it
currently mills. There is no formal association of millers but representatives of each
company do meet on an ad hoc basis to discuss sector issues.
As with other commodities, wheat prices have sustained increases since 2008. Imported
wheat prices since 2008 have ranged between US$270.00 to US$320.00 F.O.B. Mombasa,
plus US$130.00 – US$150.00 to have delivered to Uganda on C.I.F. basis. Therefore, the
total cost is approximately US$450.00 / tonne for imported wheat delivered to millers in
Uganda. Wheat flour is currently sold at UGX 2000 / kg (approximately US$800 /
tonne) to users of wheat flour, principally in the bakery sector.
8.2 Urban Consumption
Data obtained from interviews indicates a consumption of approximately 100,000

tonnes of wheat flour for use in the urban bakery and composite flour sectors. In the
bakery sector there are around 30 urban bakeries, most located in Kampala but also in
Jinja, mainly producing bread for the urban household sector. Larger urban bakeries
consume up to 60,000 tonnes of wheat flour (across ten companies); medium-scale
bakeries use 15,000 tonnes; and a few smaller bakeries consume up to 5,000 tonnes
between them. The remaining 20,000 tonnes of wheat flour in urban areas is used in the
composite flour sector.
52
8.3 Composite Flour
In the short-term the composite flour sector represents an immediate market potential
for more sales of either HQCF or improved cassava chips as grits are often used in
composite flour blending. Cassava flour is already used in composite flour
manufacture, especially for markets in the east of Uganda where a blend of 60% cassava
flour and 40% millet is a common staple food. As a result, more than 700 tonnes of
cassava flour is currently consumed in composite flour manufacture (80% as chips, 20%
as flour), and potential demand exists for at least a further 2000 tonnes per annum of
HQCF (or high quality chips) with a willingness to look at replacing 10% of the 20,000
tonnes of wheat flour currently used.
8.4 Urban Bakeries
In contrast, there is a strong resistance in the urban bakery sector to consider

substituting up to 10% of wheat flour with HQCF in bread manufacture. Anecdotally it
appears from previous trials that bread produced using cassava does not produce the
same quality loaf, particular issues relate to a lack of brown crust which gives a ‘half-
baked’ appearance to the bread, and also inconsistency in the bread volume. There
remains a significant marketing and technical challenge to overcome the perception of
cassava flour as an inferior raw material that produces an inferior product that
consumers won’t buy. Furthermore, there is significant competition in the bread market
in that bakers did complain of thin margins and are therefore more risk averse when it
comes to tampering with their current products and trialling something new such as
HQCF.
The main concerns of manufacturers in the urban bakery sectorare:

 Scepticism regarding consistency of supply
 Concern that cassava flour will not be clean (cassava flour sold in markets is
often dirty)
 Negative consumer perception of cassava so wouldn’t want to put cassava on
labels
 Too much starch could be an issue (to be verified)
 Cassava may weaken the volume / size of bread.
8.5 Rural Bakeries
Compared to the urban bakery sector a more likely short to medium term market sector
for HQCF can be found in the rural bakery sector. Rural bakeries, which constitute
53
hundreds of small-scale operations, consume approximately two thirds (200,000 tonnes)
of wheat flour in Uganda. Around 70% of this (140,000 tonnes) is used to produce non-
bread products including chapattis, donuts, pancakes, and baghias. The remainder is
mainly used for local bread manufacture. Cassava flour is already used as home-baking
flour for production of non-bread products, and at a sector level there is a realistic
potential demand for 14,000 tonnes per annum of HQCF (10% of 140,000 tonnes wheat
flour currently used).
From a commercial perspective, wheat flour costs on average UGX 4,300 per kg (US$
1.27 per kg) from the handful of large millers in Uganda. In contrast HQCF is currently
offered between UGX 1860-2200 (US$ 0.55-0.65 per kg) per kg and therefore represents a
potential 53% reduction in raw material cost applied to the percentage of HQCF that is
used to replace wheat flour.
Table 10: SWOT Analysis – Wheat milling industry

Strengths Weaknesses
 Large processing capacity.  Absence of supporting legislation for
 Investment capacity in new technologies HQCF inclusion in wheat flour.
including drying equipment.  Millers fear losing their market if they
 A few millers may be prepared to mix include HQCF on their own.
flour provided there is legislation on  Bakeries don’t accept wheat flour if
blending HQCF with wheat flour. cassava flour is included, especially in
 Standards have been drafted for Kampala.
composite flour.  Potential for cost savings is limited if
 Rural bakeries appear more open to mix inclusion rates of HQCF are low.
cassava flour with wheat flour, mainly  Poor consumer perception – cassava has
for non-bread products. reputation of poor person’s food.
Opportunities Threats
 Growing demand for bread and bakery  Limited awareness of HQCF and its uses.
products.  No consistent supply of cassava and
 High wheat flour price may provide HQCF.
incentive for HQCF inclusion.  Cassava brown streak disease (CBSD).
 Local sourcing of cassava in Uganda has  High cassava prices can be disincentive.
competitive advantage and generates  Limited processing capacity.
social capital (i.e. support of local  Inadequate Government support to
communities). boost cassava production.
54
8.6 Biscuit Industry
There are four main biscuit manufacturers in Uganda. The largest of them has about
60% market share and buys approximately 6,000t – 7,200t of wheat flour per year. In
total, it is estimated that approximately 10,000t to 12,000t of flour are used in the
Ugandan biscuit industry. It is generally assumed that it is possible to replace up to 35%
of wheat flour with HQCF in biscuit production, which would mean a potential
opportunity for 3,500t to 4,200t per annum. At the same time, industry sources
indicated that they envisage an inclusion rate of 10% to start with (i.e. market potential
of 1,200t), given that the type of biscuit which would include cassava flour is expected
to be voluminous (i.e. requiring a high gluten content to ensure appropriate raising
properties of the dough). Biscuit factory managers stated that they would prefer to start
with 20 tonnes of HQCF per month, which could be slowly increased to 60 tonnes per
month. They reiterated the importance of continuous supply of HQCF.
There have been some efforts to encourage the Ugandan biscuit industry to use cassava
flour in their manufacturing process. Around 2002, a large company had an unhappy
experience when, after some successful trials using cassava flour, they were badly let
down when the supplier tried to supply commercial quantities and failed to deliver the
correct quality at the correct time. As a result, the company stopped using cassava flour
in biscuit manufacturing.
It is to be determined in future negotiations the price a biscuit manufacturing company

would be willing to pay for HQCF. As of August 2016, biscuit manufacturers paid USD
1.20 to USD 1.25 per kg3 of wheat flour delivered at factory gate. Therefore, working on
the assumption that companies would pay up to 80% of wheat flour prices, a processor
of HQCF would have to supply at around USD 0.56 to USD 0.65 per kg (UGX 1,900 to
2,200) or UGX 95,000 to UGX 110,000 per 50kg bag.
It was stated that the wheat flour price is high because it can only be imported at a high
import duty (i.e. 60%), whilst imported wheat is duty exempt (situation in August
2012). Growth expectations of the biscuit industry were indicated to be of the order of
10% per annum. This includes exports to neighbouring countries such as Rwanda,
Burundi, Democratic Republic of Congo (DRC), and South Sudan. No exports to Kenya
are taking place because a sister company of the Uganda factory is producing biscuits
there. At the same time, some producers stated that competition in the biscuit industry
3This corresponds to UGX 1715 to UGX 1788 per kg or UGX 85,750 to UGX 89,425 per bag of 50 kg (based
on an exchange rate of UGX 2,450 per USD). Figures are based on price information obtained in August
2016.
55
is intense, due to competition amongst domestic producers and imports from countries
such as South Africa, China, India, and Kenya. The URA data also showed that Uganda
imported 1,200t of biscuits in 2008, which was down from 1,800t in 2007. These biscuits
come from a range of sources, cheaper imports come from India, Pakistan and the
Middle East and more expensive ones are imported from South Africa and Europe.
Table 11: SWOT Analysis – Biscuit Industry

 Testing of biscuit production with HQCF  Reduced raising properties of dough
has been done and product line containing HQCF.
developed. Test results have been  Lack of knowledge about biscuit recipes
positive. containing HQCF.
 Satisfactory shelf-life test by largest  Need to use other materials (e.g. raising
player. agents) when using HQCF.
 Biscuit standards for inclusion of HQCF  Processing of HQCF may reduce starch
have been developed. content, as a result of which starch may
 There is potential for reducing input costs have to be added to dough.
without compromising quality.  Limited benefits in terms of cost
reduction if HQCF inclusion levels are
low.
 Immediate, medium size market demand  Competition from cheap biscuit imports.
exists.  Inconsistent supply of HQCF.
 Local sourcing of raw materials (i.e.  Farmers and biscuit manufacturers fail to
HQCF) has advantages (social capital). agree on a price for HQCF.
 Biscuit manufacturers’ trucks can be used  High prices of cassava due to
for transport of HQCF at reduced rates undersupply and CBSD.
(they are often empty when returning
from delivery).
8.7 Paperboard (Boxes)
Paperboard boxes are manufactured in Uganda for both domestic and regional markets.
Principal exports are to neighbouring countries, i.e. Rwanda, South Sudan, Burundi,
and DRC. Evidence from this research suggests some optimism of 10% growth per
annum in the sector, however this should be cautioned as this is a competitive industry
making margins tight, and the general economic slowdown since 2011 has started to
affect some order quantities.
56
In the paperboard industry starch is used to produce starch based adhesives (SBAs)
which consist of a blend of water, starch, borax, and caustic soda. There are six
paperboard manufacturers in Uganda identified in this research,4 between them they
consume 120 tonnes of starch per month, or 1440 tonnes per annum. Two companies
dominate the market accounting for 80% of market share, a third company accounts for
10%, and the remaining 10% of the market is shared between the three smaller
companies. The three largest companies all currently use 100% maize starch as the raw
material for their adhesives, however two of the smaller companies are already using
High Quality Cassava Flour (HQCF) for their adhesives.
The maize starch that accounts for over 90% of starch supply for SBAs is imported from
Corn Products Kenya Limited from their facility in Eldoret in the west of Kenya, close
to the Ugandan border. The price of maize starch from Kenya is approximately US$800
/ tonne delivered, or US$0.8 / kg, delivered in 50kg sacks. The two largest paperboard
companies both confirmed this price based on the following breakdown: US$740 –
US$750 per tonne F.O.B. Kenya, plus transport US$50 – US$60 per tonne. There are no
excise duties as supply is within the East African Community (EAC).
Table 12: SWOT Analysis – Paperboard Industry

 HQCF can be used and is already used by  Some companies have not been exposed
industry as adhesive ingredient (glue to trials (also due to lack of samples), and
extender). lack knowledge.
 HQCF has better bonding properties than  The two companies who tried out HQCF
corn starch (according to two paperboard are only small-scale.
manufacturers).
 Input costs can be reduced without
compromising quality.
 Immediate, medium size market demand  Inconsistent supply of HQCF due to
for HQCF exists. limited processing capacity.
 Companies are open to conducting trials.  Farmers and paperboard manufacturers
 Demand for paper-board products is fail to agree on a price for HQCF.
growing.  High prices of cassava due to
 There is over-reliance on imported maize undersupply of roots and CBSD.
starch from Kenya.
 Local sourcing of raw materials (i.e.
HQCF) has advantages (social capital).
57
Before considering the application of large-scale funding collaborations and joint-
investment projects in using cassava as a viable raw material base for the production of
starch-based adhesives (SBAs) for the paper board industry, there are a number of areas
that require significant attention in order to move forward with cassava as a viable raw
material for industrial purposes. Principal areas for focus include:
 An awareness campaign to promote cassava and affect negative perspectives.

This could be strongly supported with the preparation of factsheets promoting
the positive experiences of using HQCF in adhesives from other countries;
 Drying capacity – a significant challenge with no current mechanical drying
capacity and reliance on dry season only for HQCF production;
 Related to the previous point, providing a more regulated year-round supply of
HQCF;
 Issue of food security versus industrial demand for cassava – current supply
constraints suggest a need for significant increase in production. This situation
has been worsened with recent extensive cases of loss from Cassava Brown
Streak Disease (CBSD).
8.8 Plywood
The country’s sole plywood manufacturer (Nileply) already uses locally available
cassava flour (4.8 tonnes per week or about 250 tonnes per annum) as an adhesive
ingredient (i.e. glue extender). In the past, the company has used wheat flour, which,
according to their experience, has a better bonding capacity than cassava flour.
However, cassava flour is cheaper and locally available.
The company supplies 80% of the domestic market. The remainder is imported. The
company expects the sector to grow, however the availability of forests to be used for
plywood represent the limiting factor in the near future. The company has its own
plantations part of which will mature in 10 years which should ease the supply
situation. The cassava flour is sourced locally and the buying agents undertake visual
observation of the flour (bought at UGX 1,100/kg in August 2012).
They look for a particular quality of flour, which should have the following
specifications:
 High starch content;
 Cassava flour should not be mouldy in that this will affect the production (e.g.
equipment may be clogged up; or spreading of glue will be affected);
 Cassava flour should be fine, and well dried.
58
The Operations Manager agreed to test HQCF as an adhesive ingredient to compare its
quality with that of traditional cassava flour. Four bags of HQCF would be required to
use HQCF on one production line. If the trial results are positive the company may be
prepared to change their formula for glue preparation, as a result of which more HQCF
may be required.
59
9.0 DEVELOPING INDUSTRIAL OPPORTUNITIES FOR CASSAVA IN
UGANDA
9.1 Overview
Industrial markets for agricultural products can appear highly attractive to potential
investors, as they appear to offer the promise of steady demand, stable prices, and
prompt payments, especially when compared to traditional markets for the commodity.
However, experience in Ghana has shown that the relationship between the supplier of
the raw material and the end-user may breakdown if certain factors are not taken into
account. Discussions with representatives of Ghanaian industries have highlighted the
following as the most important points to take into consideration (Graffham, 2000):
 Manufacture of products to meet the required quality specifications – Before

starting production of cassava-based product, it is very important to determine
the customer’s requirements on quality, and for producer and user to agree a
standard for quality of the product.
 Reliability in maintaining quality – When a quality specification has been

agreed, it must be maintained at all times. The use of adulterants and short cuts
to reduce costs and process times must be avoided.
 Reliability of supply (quantity) – Processors must never promise more than

they can produce by the agreed delivery date, as the end user will be planning
his production on the basis of having the necessary quantities of raw materials.
 Timeliness of delivery – Realistic delivery dates are a must for commercial

success.
 Price competitiveness – Industrial users want a local product that is cheaper

than the imported alternative. However, reduction in price must not be achieved
at the expense of quality.
It is vitally important for anyone wishing to market cassava-based products to industry

to keep these criteria in mind at all times. Many industries in Ghana expressed a
willingness to be tolerant of the manufacturers’ difficulties, as long as they were kept
fully informed, but were not happy with past experiences of producers of cassava-based
products who were found to be unreliable on quality quantity and timeliness of
delivery.
60
The lessons learned from Ghana, apply to Uganda as well. During the industrial survey
in Uganda several industries reported having had bad experiences with suppliers of
locally made cassava flour. These problems included adulteration, financial fraud, and
failure to maintain regularity of supply.
9.2 Development of Linkages between Primary Producers (Farmers) and

Industrial Users of Cassava-based Products
During the course of the survey, it became apparent that the link between potential
industrial users and farming communities is missing. As a consequence, building of this
link is key to the success of a future cassava economy not only producing for human
consumption but also for the industrial sector. The improvement of market linkages
needs to be incorporated into the overall set of recommendations, which include:
 Dissemination of information to potential industrial end-users of cassava based

raw materials. This includes distribution of literature, and organization of
workshops.
 Supply of adequate samples of raw material to industries interested in trials (e.g.
poultry feeding industry, bakeries, and biscuit manufacturers).
 Identification of options establishing a link between farming communities and
industrial end-users.
 Sustainable surplus production of good quality raw material, including
processing of roots into dried chips and flour where required.
There are two main options to be considered for the establishment of the link between
farmers and the industrial sector:
a) Out-grower schemes, whereby farmers and end-users are in direct contact, or

b) Private intermediaries (i.e. traders and processors) providing the missing link.
As for (a), two industrial companies indicated that they had attempted out-grower
schemes in the past, which in the end proved unsuccessful (e.g. production of
sunflower for animal feed). The reasons given for the failure of these schemes include
occurrence of difficult production conditions (i.e. drought), low yields, higher prices
offered elsewhere by other buyers, and default by farmers. At the same time, it also
transpired that these initiatives, which were started by feed millers, were most likely
based on unrealistic expectations. The prices offered by the millers were not attractive
enough for farmers to sell their produce to them, in particular when there was a
61
shortage elsewhere. Insufficient extension services are likely to be another constraint
faced by the schemes.
For future out-grower schemes (i.e. contract farming), it seems important that these
will be based on realistic expectations on both sides, i.e. farmers and end-users. This
calls for agreed price formulae reflecting prevailing market prices, farmers’ need of
sufficient margins, and end-users’ demand for relatively inexpensive raw materials. The
precondition of sufficient surplus production requires efficient extension services,
including, if necessary, the provision of adequate planting material. Feed millers
indicated the possibility of part-using their sales agents based at District level as
extension link. Given the size of most farms in cassava producing communities in
Uganda, the formation of farmer groups seems necessary in order to reduce high
transaction costs in input supply and output marketing. At the same time, it is
important that farmer co-operation will be based on realistic assumptions, and that
mistakes made in the past can be avoided. Gordon (2000) and Coulter et al (1999)
examined approaches to out-grower schemes and farmer co-operation in various sub-
Saharan countries.
The second option (b) consists of private intermediaries providing the missing link
between farming communities and industrial end-users. In particular, this option
should be envisaged where out-grower schemes are likely to encounter difficulties.
Local traders currently supply the plywood and cardboard manufacturing industries
with comparatively modest quantities of cassava flour. If industries, such as the
livestock feed sector, should require larger quantities of cassava, and do not wish to
engage in out-grower schemes, then it seems appropriate for private entrepreneurs to
provide the missing link. For example, traders who are already involved in dealing with
dried cassava, could be encouraged to invest in chipping and drying units catering for
the needs of small farmer groups. Traders could then either purchase fresh roots from
producers and sell dried chips to industrial users, or charge farmers for their services.
As indicated rudimentarily in Figure 6, the implementation of both options (i.e. out-

grower schemes, or private intermediaries) is likely to require the facilitation by
research institutions, NGOs, and extension services. For example, research and
extension services have to play a pro-active part in the introduction of appropriate
cassava chipping and drying technologies. At the same time, industrial end-users have
to commit themselves to strengthen market linkages in whatever form, and make
related investments. Last but not least, the Government needs to provide an enabling
economic environment, including a conducive regulatory and legal framework.
62
Figure 6: Options for improved market linkages between cassava producers and
industrial end-users.
Option 1: Option 2:
Out-grower schemes Private Intermediaries
Farmer groups Farmers (i.e. Individuals

or groups)
Facilitation:
 Research Institutions Private entrepreneurs
 Extension Services (i.e. Traders/processors)
 NGOs
Individual End-users Individual End-users
9.3 Key Criteria for Entrepreneurs Wishing to Form Market Linkages and
Carry Out Secondary Processing
Some of the products require specialized secondary processing (e.g. adhesive

formulation) that cannot be done in the village. There is clearly a need for entrepreneurs
who can form the necessary linkages, provide financial support for rural processors and
carry out secondary processing operations. The most important criteria for
entrepreneurs who could fulfill the role of market linkage and secondary processor,
include:
 Access to capital;
 Access to processing facilities and commercial transport;
 Relevant manufacturing experience;
 Proven business record (success over 10 years or more);
 Proven record on quality;
 Understanding of the market system and issues involved;
 Willingness to support farmers and primary processors for mutual gain.
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10.0 MARKETING PLAN & STRATEGIES
The business as a policy will sell all its products on cash down basis. However,
customers who buy in large quantities will be considered for one month’s credit on
their own merit.
Triple P Investments intends to win and maintain customers by providing high quality
cassava flour products that add value in terms of price, quality, safety, availability and
functionability, and are supported by a dedicated, well-trained team. This shall be
important to the successful implementation of our overall strategy and hence the need
to ensure we are focused and working harmoniously towards attainment of the goals
and objectives. We initially intend to be focusing on satisfying the local market.
Our marketing strategy emphasizes focus. We are a new company and hence must
focus our efforts towards informing customers of our existence and the products we are
able to supply. Initially Triple P Investments will focus on the local market before
contemplating entering the regional market. This is mainly due to our limited resources
and the need to inspire confidence in our products as well as business operations. The
target customers will include key decision-makers and order-makers in bakeries,
paperboard and plywood manufacturers and breweries, who often order or recommend
on behalf of the whole organization, the aim being to obtain an initial order and fully
satisfy the customer from then on. Hence:
 We intend to focus on delivering quality products at affordable prices that in

turn will produce good referrals, which can then generate revenue.
 We intend to build image and awareness through consistency and
distinctiveness in our order fulfillment.
Our strategy is to grow the business by nurturing clients and establishing good one to
one relationships with them. All criteria from customer satisfaction, order fulfillment,
price competitiveness to staff attitudes are to be looked at thoroughly in the initial
stages so as to identify areas of improvement. To attain low lead times (the time it takes
to meet orders) we need to ensure that all functions are communicating properly and
formally, using valid and accurate data to derive achievable plans and schedules for all
stages of procurement, manufacturing and delivery.
Triple P Investments will develop new channels of distribution as the company grows.
Its plan to become a nationally known brand may be pushed forward by entering into
contracts with the numerous bakeries, paperboard and plywood manufacturers
64
throughout the country, such that it gives Triple P Investments exclusive access to the
relatively remote areas in the country.
10.1 SWOT Analysis
We shall be in a highly lucrative market in a growing economy. The high quality

cassava flour products market in Uganda is still a growing market segment that is not
yet fully utilised to the extent that imported wheat flour is still the major component
being used in the bread-making and biscuit-manufacturing industries in Uganda.
Triple P Investments however hopes to produce and deliver high quality cassava flour
products to remain competitive in the market and cut a strong market niche in the
process. The Company foresees its strengths as the ability to respond timeously to
customer's orders and provide them with the correct quantity. Our key personnel will
be well trained in the actual production of our products so as to ensure on time
deliveries to the client. This will go a long way towards penetrating the market. Below
are the summarized strengths, weaknesses, opportunities and threats.
10.1.1 Strengths
 Relationship selling: We intend to get to know our customers, one on one. Our
direct sales efforts will seek to maintain a relationship with our customers.
 Diversified customer base: We intend to obtain orders for our products from a
wide customer base. This will ensure lack of dependency on one customer.
 Low production costs: The costs of our products will be approximately a third
less than the famous brand names and end user prices.
10.1.2 Weaknesses
 A limited financial base compared to the already well-established manufacturers

on the local market.
 The introduction of new organizational practices and personnel who have not
previously worked together presents a challenge to the organization.
 Our infancy dictates that wholesalers and other intermediaries might be skeptical
about our products.
10.1.3 Opportunities
 Growing demand of bread and bakery products.

 High wheat flour price may provide incentive for HQCF inclusion.
65
 Immediate, medium size market demand for HQCF exists.
 Companies are open to conducting trials.
 Demand for paper-board products is growing.
 There is over-reliance on imported maize starch from Kenya.
 Local sourcing of cassava in Uganda has competitive advantage and generates
social capital (i.e. support of local communities).
 Service. As our intended target markets are in relatively accessible areas we
intend to be able to meet their requirements in the shortest possible time.
 Current drive by government towards encouraging the participation of
indigenous entrepreneurs and diversification of the economy presents an
opportunity that we may fully utilize.
 Organizational human resources: The skills, competencies and placements of
Triple P Investments executive and senior management personnel will be a
priceless asset to the organization.
10.1.4 Threats
 Limited awareness of HQCF and its uses.

 Competition from cheap biscuit imports.
 High prices of cassava due to undersupply and Cassava Brown Streak Disease
(CBSD).
 Inadequate Government support to boost cassava production.
 Macroeconomic instability.
 Supply chain disruptions.
10.2 Marketing Strategy and Growth Potential
We intend to implement a progressive marketing strategy. In terms of marketing we

intend that our name and products are marketed on an extensive basis to ensure that
customers are aware of our existence. In price, we intend to offer reasonable and
competitive prices in comparison to existing competitors on the local market and we
need to be able to sustain that. Our marketing will strive to ensure that we establish
long relationships with clients.
10.2.1 Pricing Strategy
Triple P Investments' high quality cassava flour products will be competitively priced
in relation to its existing competitor's products. Due to the introductory nature of our
products we intend to implement a penetration pricing strategy which will ensure that
66
potential customers are attracted by our lower prices, up until our products are fully
appreciated on the market, especially in terms of their quality. In our pricing strategy,
we shall ensure that our costs are prudently kept low so as to ensure our financial goals
come to fruition. Bearing all these pricing factors in mind, Triple P Investments
proposes to price its HQCF flour product at US$600 per Metric Ton and sell its wet-
milled cassava flour on the market for US$320 per Metric Ton. Prices will be subject to
an inflation-adjusted annual price increase of 5% p.a.
10.2.2 Promotion Strategy
The promotion strategy shall initially revolve around informing customers of our
existence, the products we produce, and how to order them. The intention will be to
highlight the following key benefits of ordering our products instead of competitors,
including:
 Our lower production costs which will convert to lower order prices.
 Quality products able to compete with the top brands.
 Faster order fulfillment times.
We intend to be well known by all our stakeholders in particular wholesalers including

commercial bakeries, biscuit manufacturing industries, plywood and paperboard
industries, export/import companies and other such enterprises that may utilize our
high quality cassava flour products, as well as informal traders. Hence we shall
leverage our presence using introductory letters, brochures and other sales literature.
We intend to spread the word about our business through the following:
1. Personal Selling. Undoubtedly customer solicitation face-to-face will be our

most powerful form of promotion mainly due to the fact that our products are
mainly ordered by individuals in organizations and companies. Its flexibility will
enable us to give our customers concise details of what we have to offer and the
benefits of using our products. Another important determinant in utilizing
personal selling is the fact that we are relatively new on the market. As such
potential customers/clients will to a certain degree be skeptical towards our
products and their efficacy.
2. Advertising. In view of the fact that we are new on the market we intend to
undertake adequate advertising of our name and products we offer. This is to
instill awareness and knowledge of our existence in the market place, which
hopefully shall convert into market share. A constant look out will be made of
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any special editions in the local newspapers, which may provide an opportunity
for us to advertise our products and business name.
3. Direct Marketing. This will be used to a limited extent in the form of

telemarketing and informing potential customers and obtaining referrals where
possible. In the case of telemarketing it will involve our targeting potential
customers of our products and informing them of our existence. We may then
arrange for an appointment with the respective decision-maker/order-maker,
with the intention being to encourage them to order our products.
4. Events. We intend to attend trade shows and exhibitions to increase awareness

of our products and services. These events will also enable us to interact with
potential clients who may decide to order our products. Trade shows that
instantly come to mind include the Uganda International Trade Fair (UGITF) that
is annually hosted by the Uganda Manufacturers Association (UMA) in October
of each year.
10.2.3 Distribution Strategy
The method of distribution that Triple P Investments will apply will depend on the
type of end-user being targeted. Outlined below are the various categories of end-users
and the proposed modes of distribution.
Domestic end-users, home bakers and other low level users

Linkages shall be established with identifiable wheat flour retail outlets or shops and
supermarkets for supply of HQCF. 1 kg, 2 kg, 5 kg and 10 kg packages may be
displayed alongside other forms of flour such as maize or wheat flour. The arrangement
shall ensure that the retail outlets make reasonable but attractive profits from the HQCF
sales.
Commercial bakeries, industrial and other large scale end-users

Conscious business contacts will be made with large scale end-users. Orders for supply
of HQCF shall be honored by prompt delivery to the end-users with a reasonable
surcharge for transportation. The end-users may also arrange to collect the consignment
from the Triple P Investments HQCF processing plant at Soroti. To create a unique
trade identity for HQCF, a maximum weight of 40kg per bag or preferably 25kg/bag
shall be adopted for delivery to large-scale end-users such as biscuit and bread factories
that use other types of flour (e.g. wheat, maize, etc.) in their products. This will help to
avoid mistaking wheat flour for HQCF in the store or at the processing floor.
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Commercial wheat or maize flour mills
Triple P Investments shall arrange with flour mills to collect grits/granules or dried
chips from its HQCF processing plant at Soroti (in bulk packages of their choice). It is
not important to mill the grits/granules or dried chips at factory before delivery to the
commercial flour mills since the flour mills will blend it with other grains before milling
to a composite flour.
Exporters and importers

Exporters/Importers must arrange the collection of HQCF in unit packages of their
choice from the Triple P Investments HQCF processing plant at Soroti. Where delivery
by the processing plant is more desirable by the exporter or importer, the location of
delivery (door-to-door or door-to-port), a reasonable surcharge for transportation and
other related costs are to be agreed upon.
10.2.4 Positioning Statement
We intend to position ourselves as a desirable alternative source of high quality cassava

flour products in Uganda. This shall be undertaken through use of high quality raw
materials (fresh cassava) and production processes so as to ensure the efficient delivery
of high cassava flour quality products. The product strategy will also be based on
quality, combined with making the product easily available to the customers. An
important competitive edge will be our assembly strategy, which will be based on good
quality, such that production and delivery are not only a pleasure, but also a feature
that enhances the sense of quality and perception by clients. We shall also work on
ensuring fast and cost-effective product delivery that should also serve as an important
competitive advantage on the market.
Through our lower prices, made possible by reduced local delivery charges, we intend
to attract a large portion of the market, both directly and indirectly through referrals.
10.3 Sales Strategy
For the short term at least, the selling process will depend on personal
selling/networking and advertising to inform potential customers about the products
we offer and the benefits of utilizing our high quality cassava flour products. Our
marketing does not intend to affect the perception of need as much as knowledge and
awareness of the product category.
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10.3.1 Sales Forecast
Sales forecast information for the first six years of business operation is presented in the
table below.
Table 13: 6-Year Sales Forecast (In US$)

PRODUCT LINE FINANCIAL YEAR OF OPERATION
YEAR 1 2 3 4 5 6
Sales (US$)
HQCF _ 17,781,120 21,337,344 25,204,738 27,935,251 29,332,013
Wet-milled Cassava Flour 9,483,264 11,379,917 13,442,527 14,898,800 15,643,740
Total Sales (US$) _ 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754
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11.0 RAW MATERIALS AND PROCUREMENT
The proposed Triple P Investments High Quality Cassava Flour Industrial Enterprise
will obtain its raw materials from the high cassava production areas of eastern and
northern Uganda that altogether account for over 70% of Uganda’s annual cassava
output of 4.2 million metric tonnes. However, the success of the factory will depend on
the management efficiency of its fresh cassava procurement operations as well as its
ability to support primary cassava producers in eastern and northern Uganda with
essential cassava production inputs that will greatly help to drop production costs at
the farm level.
Because the factory is located within the major cassava production zone of Uganda, raw
cassava roots that will have been harvested from the farms will be transported and
processed the almost the same day in the factory. Transport costs will be minimal as
Triple P Investments will be using its own transportation trucks to transport the
procured raw cassava to the Soroti-based factory and in‐ground storage will also be
maintained for the raw material. However, a warehouse will be provided at site for the
storing of processed products namely industrial cassava starch.
The cassava farmers in eastern and northern Uganda are expected to provide enough
cassava fresh roots up to a maximum of 310,000 tons at full development and given a
minimum yield of 30 tons per ha. To reduce production costs and attain higher yields,
cassava farmers in eastern and northern Uganda will be supported by Triple P
Investments with agricultural mechanization support including land preparation and
harvesting. Planting will be at 0.8 to 1m to achieve a plant population of 12,500 plants
per ha in their small-holder farms.
The following improved cassava mosaic disease resistant varieties are recommended:
NASE 14, NARO CAS1, and NARO CAS2. These varieties were officially released for
food and industrial applications in November 2015 by the Namulonge-based National
Crops Resources Research Institute (NaCRRI) and are high-yielding, aromatic, have a
sweet in taste, can withstand pests and are rich in food matter. They also have a higher
resistance to Cassava Mosaic Virus (CMV) and greater tolerance to Cassava Brown
Streak Virus (CBSV). Other varieties can be sourced from the International Institute of
Tropical Agriculture.
Over the ten year financial modeling period, the smallholder cassava farmers in eastern
and northern Uganda are expected to support over 100% of the factory needs.
Production cost per ton should aim to be less than $45 (UGX152,400). In other words,
71
farm production cost for cassava fresh roots should not exceed $55 (UGX186,300) per
ton delivered at the processing plant. This is the international benchmark production
cost per ton and should be the primary goal of the cassava smallholder farmers. Yields
should aim to be above 30 tons per. In fact, the International Tropical Agriculture (IITA)
Ibadan has already attained yields of 80 tons per hectare in its various demonstration
farms. Working together with the local cassava research institutions in Uganda such as
the Namulonge-based National Crops Resources Research Institute (NaCRRI), we
believe that yields of 60 tons per ha are easily achievable. However, 30 tons have been
used to keep the figures as conservative as possible. It is important to mention that it is
the starch content per ton and not the fresh root yield that is critical for the factory.
Initially, a selection of the best varieties (in terms of starch content/production in the
farm location) developed by the International Institute of Tropical Agriculture and
released by the FMARD should be planted in a600 ha seed multiplication field. Each
variety should be tested for starch yield within the location and the ones that are most
promising should be planted over time.
72
12.0 TECHNICAL ASPECTS
12.1 Production Process
a) Step 1: Always use good quality cassava roots.

b) Step 2: Peel and wash cassava roots – removing any rots within 12 hours of
harvest.
c) Step 3: Wash peeled roots in clean water.
d) Step 4: Grate the root into a wet mash and slice them thinly.
e) Step 5: Put the mashed cassava into a clean bag and press water out using a
hydraulic press. Then break, press mash into fine particles (granules).
f) Step 6: Place the granules (or sliced roots) thinly on clean trays on raised
platform and allow to dry as quickly as possible (6 hours).
g) Step 7: After drying mill finely to 0.25 mm.
h) Step 8: Sieve the milled product to produce fine free-flowing flour.
i) Step 9: Package in polythene bags or in any other airtight containers and keep in
hygienic dry aerated store.
Figure 7: HQCF Product Flow Chart
Raw material Cassava roots
Intermediate product 1 Cassava grit/Wet cake (mash)
Intermediate product 2 High quality cassava flour
End-products Bakery flour and products
Processed food products
Plywood industry
Paperboard industry
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Characteristics of High Quality Cassava Flour

 White in colour.
 Bland in taste, not sour.
 Low in cyanide (<10mg/kg).
 Has particle size < 0.25 mm).
 Odorless.
 Free of foreign matter.
 Free of mould, with low microbial count.
 Has moisture content of 10-12%.
 Not fermented (pH >5.5)
74
Figure 8: Generalized Value Chain for High Quality Cassava Flour (HQCF)
Farmers/Farmer Processors Intermediaries End User: e.g. bakeries

(often working in groups, replacing 10%-30% of wheat
two options): Roots with HQCF
HQCF
A. Buys roots from farmer
and processes to HQCF End User: e.g. making
A. Farmer sells roots to
“instant” cassava meal or
an intermediary Grits and sells to end-users
other traditional products
Or HQCF End User: e.g. industrial use

in paperboard and plywood
products
Village Processing Units

Provides grating/pressing
service to farmer/processor
12.2 The Cassava Starch Factory
The factory will be located in a 20-Acre (8.1 Hectare) land area within the 219-Acre
Soroti UIA Industrial Business Park. Additional factory infrastructure will be
developed to meet the requirements of good factory practices and work conditions. The
infrastructure required include warehouses, factory building, unloading bay, gate
house and weigh bridge, offices, boiler room, staff quarters, borehole and water tank,
generator house, electricity generators, roads and drive ways, waste water treatment
plant, oxidation tanks, and perimeter fencing for the factory and residential areas. The
estimated cost of these facilities is provided in Sub-Section 12.5.
The building/structure provided for processing shall be spacious enough to allow for
free movement of staff and materials. It shall also be high enough and with adequate
windows or openings provided to ensure maximum ventilation. A height of about 12 ft
(3.53 m) is recommended. Mosquito netting will also be fixed on windows and trap
doors to keep out flies and other flying insects.
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12.2.1 The Cassava Starch Process
1) Transport
Moving cassava fresh roots from the farm to point of processing (the factory) should be
done within a time of 24 hours after harvesting. Otherwise deterioration will begin to
take place in the harvested fresh roots. This is why the proposed farm and factory will
be located within the same area.
2) Reception & Weigh‐in

The manufacturing processing begins with the reception and weigh‐in of the fresh
cassava roots. After the verification of the trucks and weights, the trucks proceed to the
discharge platform (unloading bay) to deposit the fresh cassava tubers. The discharge
platform is usually made of concrete. Here the product is stored to feed the industrial
process. The amount of roots deposited should be enough to service the mill for up to
24 hours.
3) Washing & Peeling

From the deposit, the cassava roots go to the washers through conveyor screws or
conveyor belts. Specially made equipment makes it possible for washing roots and
peeling simultaneously. In this process only the fine peels or brown peel is removed,
avoiding losses of starch content. Also, at this point classification and inspection is
performed through the conveyor belts that feed the crushers.
4) Pre‐milling
The crushers’ function is to standardize the roots size in 2 to 3 cm, allowing uniform
feeding and more efficient milling. The triturated cassava is taken by an elevator on a
helicoidal thread to a dosing feeder that will allow uniform feeding of the grater.
5) Milling
This is done through the contact between the triturated roots and a rotator cylinder that
works with outlying high‐speed, known as grater, with saw blades in the surface that
disintegrates the cassava, causing cellular breaking and consequent liberation of the
starch. The disintegrated material, being constituted for a mixture of cassava and water
(mass) is pumped to the centri-sieves.
6) Extraction
The purpose of this operation is to separate the starch from the fibers of cassava. The
extraction is made in centri-sieves, known as GLs. These extractors are assembled in
batteries, with the purpose of increasing the recovery. The water enters in counter flow
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(sprays) for best extraction of the starch. This liquid that comes from the extraction
proceeds to the purification. The resulting pulp is pumped to the silo from where it is
picked up and distributed to cattle farmers, or can be dried for rations production or
other uses.
77
Figure 9: General View of the Planned Cassava Starch Factory
Entrance/
weigh bridge
Flash
dryer
Factory Warehouse
Unloading
bay
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Figure 10: Typical Floor Plan for a High Quality Cassava Flour Production Plant
Drying platforms (Sun or solar drying)
Drying platforms (Sun or solar drying)
Mechanical
Water D D drying
storage E
E
Office Other types of

Weighing Milling
mechanical drying
platform systems
E F Store (Cassava
D grits, chips,
B C Sifting &
flour and
Peeling area Chipping Dewatering Packaging
packaging
A Grating area area materials)
Washing Area
A – Flow of peeled cassava roots to washing area

•
B – Flow of washed roots to grating machine
•
Solid Liquid C – Flow of cassava mash to dewatering machine (mechanical press)
•
waste waste D – Flow of pressed cake to drying platforms for sun/solar drying or
•
mechanical dryers (such as cabinet, rotary or flash dryers)
• E – Flow of dried granules/grits to milling machine for milling, sifting
and packaging
• F – Bags or cartons of packaged HQCF flour to the store ready for sale
79 or marketing
7) Concentration
The starch slurry acquired after the extraction is concentrated by the centrifugal force to
take of the soluble starches and the fruit water, in centrifuges of plates and nozzles. The
separated fruit water goes to the washer and then to the wastewater treatment by waste
pipe.
Figure 11: Flow Chart of the Cassava Starch Process

Cassava Roots
Reception and
Weigh-in
Washing and
Peeling
Pre-Milling
Milling
Extraction
Concentration
Starch Washing
De-watering
Drying
Packing
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8) Starch Washing
The starch slurry already concentrated, proceeds to washing, in centrifuges of platesand
nozzles or in hydro‐cyclones, purposively used to reach a high concentration of starch.
The concentrated starch proceeds to a mixing tank with an agitator that allows the
constant mixture of the concentrated product, avoiding the starch decantation.
9) Dewatering
The concentrated starch is pumped from the mixing tank to a vacuum filter or a
Centrifugal Decanter. In these equipment’s the concentrated starch is filtered and
dehydrated to a humidity of 45 ‐ 48% (vacuum filter) or 38 – 40% (centrifugal decanter),
and is ready to for drying. For medium sized industries the centrifugal decanter is more
appropriate because it allows economy in drying compared to the vacuum filter.
10) Drying
The dehydrated starch is dried in a Flash Drier. The product is dried by heated air,
originating from the heat exchanger and boiler. The separation of the air and starch is
made by cyclones. The hot air reaches 150°C and the final product in powder form with
moisture between 12 to 13%, and medium temperature of 58°C, proceeds to a silo for
cooling and storage.
11) Packing
The starch is transported from the silo by helical feeders to a packing machine. The
packing is made without manual contact, in paper bags multi‐leafed of 10, 25 and 50 kg
or in Big‐Bags. Quality assurance tests are usually done on a sample of packaged
cassava to ensure that they meet the standards.
12.2.2 Equipment
The major equipment used in HQCF processing plants include mechanical graters,
dewatering machines/press (manual screw/types, mechanical types based on
hydraulic systems) or centrifuges, sun drying platforms or mechanical dryers (cabinet,
rotary, fluidized bed, flash, etc.), grinding or milling machines (plate, attrition, pin, or
hammer), and flour sifters. Others are water supply system (water well/bore hole,
storage tanks) piping, weighing, filling, bagging and storage systems.
The layout, i.e. equipment and facilities arrangements, shall be such that operational
processes from the reception of fresh cassava roots to peeling, washing, grating or
chipping, de-watering, drying of de-watered cake, milling of dry grits into flour,
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packaging and storage can flow smoothly. Interruptions in the sequence of flow of raw
material (roots) and intermediate products during processing shall be very minimal.
The following equipment will be purchased for the factory at an estimated cost of
US$1,618,974 from China. The components of the starch factory are listed in Table 14
below.
Table 14: Starch Factory Equipment

Process Section Equipment Name Qty (Unit) Remarks
Cleaning Conveyor 2 Carbon Steel
Cylinder Rinser 1 Carbon Steel
Paddle Cleaner 1 Carbon Steel
Circulating Pump 1 Carbon Steel
Crushing Magnetic Separator 1
Crushing Machine 2 Carbon Steel
Thick Slurry Pump 1 Stainless Steel
Sieving, washing Centrifugal screen set 4 Stainless Steel
Starch Pump 4 Stainless Steel
Dregs Pump 4 Stainless Steel
De-sanding De-sanding Pump 1 Stainless Steel
De-sanding Machine 1 Stainless Steel
Concentrating, refining Cluster cyclone (with pump) 20 Stainless Steel
Filter 1 Stainless Steel
Pipeline Pump 1 Stainless Steel
Scraper centrifuge 1
Drying Drying system 1 Stainless Steel
Airlock valve 1
Finned Tube Heat exchanger 1 Aluminium
Production classification Classification sieve 1 Stainless Steel
Weighing and Packaging Electronic Balance/Packing machine 1
Liquid Starch Tank 2 Stainless Steel
Process Water Tank 1 Stainless Steel
Reagent Tank 1 Stainless Steel
Pump net, pipeline system 1 set Stainless Steel
Laboratory equipment 1 set
Electric cabinet 7
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12.2.3 Additional Information on the Factory
Energy Consumption - Approximately1600kW

Electrical Converters ‐ 1000 KVA for the equipment
- 45 KVA for illumination.
Water Consumption
- 1 million liters per 24 hour day Steam
- 5.0 ton steam per hour will be required.
Waste
- Pulp: 36 ton/24h, with 85% of moisture.
- Peel: 2.7 ton, 24/hours.
- Fruit water: 20.25 liters per hour.
12.3 Quality Specifications and Standards
The Uganda Bureau of Standards (UNBS) has defined the standards for cassava starch.
The Uganda Bureau of Standards (UNBS) also carries out the registration of both locally
manufactured and imported products. The registration program is primarily designed
to provide data or inventory of products and their‐specified quality parameters. It also
provides information about the manufacturer or importer and therefore affords
trace‐ability of the product especially when considering specific quality requirements
and consumer advocacy/protection.
Product registration involves initial application to UNBS, return of filled form

review/processing through the enforcement section, laboratory, quality assurance,
report and recommendations received by DG, payment of necessary fees to UNBS upon
satisfactory reports, issuance of registration certificate and renewable yearly. The
factory will need to register with the Uganda Bureau of Standards (UNBS) once it is
commissioned. The cost of this activity will amount to about US$3,280 (UGX 11.1
million).
12.3.1 Standards for Cassava
The Uganda Bureau of Standards for Cassava Starch is specified under US 347: 2001 as
follows:
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1) Scope
This standard prescribes the quality requirement, method of processing, sampling and
tests for food and industrial grade cassava starch.
2) Terminologies
For the purpose of this standard the following definitions and terms shall apply.
3) Classification
Cassava Starch can be classified as food grade or industrial grade. Food‐Grade Cassava
Starch is a white granular product that:
a) Is obtained by wet extraction process from mature cassava root

b) Satisfies the quality requirements as outlined in clause 3.0 of this standard.
Industrial Grade Starch: Industrial grade starch other food grade starch, which may or
may not be modified.
Processing: There are two methods of processing cassava starch in Uganda:

• The traditional method
• The industrial method
12.3.2 Essential Quality Factors and Analytical Characteristics
1) Quality Factors
Color: The color of cassava starch shall be white.
Taste and Odor: Cassava starch shall be free from objectionable odor and taste.
Freedom from foreign matters: White granular cassava shall be free from foreign
matters.
Particle size: Not less than 95% of mass of cassava starch shall pass easily through a
sieve of 100 – 140 (0.1‐0.12 mm) mesh screen.
Solubility: The cassava starch shall not be soluble in cold water and in (96%) ethanol.
Iodine test: Cassava starch, when tested with iodine, shall give a blue‐black coloration.
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Analytical characteristics: Starch shall comply with the analytical characteristics shown
in Table 15.
Food Additives: In addition to other additives approved by the Uganda Bureau of

Standards (UNBS), food‐grade cassava starch may contain ascorbic acid 0.2% maximum
as color improver.
Table 15: Analytical Characteristics of Cassava Starch

Analytical Characteristics Requirement
Total Acidity 1.0% measured as lactic acid (max)
pH 5-7
Hydrocyanic acid and its Glucosides 10mg/kg (max)
Starch content 95% (min)
Moisture 12% (max)
Fiber 0.2% (max)
Sulphated Ash 0.6% (max)
Viscosity or pasting properties 33‐34 Stem hall second
Insoluble ash 0.2% (max)
Chloride 0.64% (max)
Note: Every other starch that does not conform to the above table is classified as industrial starch.
Hygiene: It is recommended that the product covered by the provisions of this standard
shall be prepared in accordance with the international code of Hygiene practice entitled
“Recommended International Code of Hygiene Practice General Principles of Food
Hygiene” (CAC/RCP: 1‐1969, Rev.1).
When tested by appropriate methods of sampling and examination, the product:

a) Shall be totally free from pathogenic micro‐organism;
b) Shall not contain more than total aerobic count of 10,000 CFU/g or ml;
c) Shall not contain any other poisonous, extraneous, or deleterious substances in
an amount that can present a hazard to health.
2) Contaminants
Maximum residue limits for pesticides shall be in conformity with the Uganda Bureau
of Standards (UNBS) regulation on pesticides residues. In addition it shall conform to
the prescribed levels of contaminants in Table 16.
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Table 16: Permissible Levels of Contaminants in Cassava Starch
Contaminants Maximum level permissible in mg/kg of dry matter
Sodium (Na) 74
Manganese (Mn) 12
Iron (Fe) 22
Copper (Cu) 4.3
Bromine (Br) 6.6
Zinc (Zn) 19
Molybdenum (Mo) 17
Aluminium (Al) 30
Oxalate 26
Lead (Pb) 1
12.4 Packaging
Labelling: The package shall be hermetically sealed and marked with the following:
Name of the Product: The name of the product to be shown on the label shall be“
Cassava Starch” with special mention on the grade. The name shall indicate the particle
size of the granules in accordance with the descriptions contained in Section 12.1.
Net Weight: Net weight shall be declared in metric system.
Name and Address: The name and address of the manufacturer and/or packer shall be
declared.
Date Marking: The date of manufacture and batch number on packing shall be
declared. The expiry date shall be well written on the label.
Country of Origin: The country of the product shall be declared.

The UNBS Certification marks if the manufacturer is a licensee.
Packaging, Transport and Storage:

Food grade cassava starch shall be packed, transported and stored in containers, which
will safeguard the hygienic and organoleptic qualities of the product.
The packaging material shall be such as to protect the product against bacteriological
and other contamination; it shall protect the product as far as possible against any
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infiltration of moisture, insect infestation and leakage. The packaging material shall not
impact any odour, taste, colour or any other extraneous the product.
Method of Sampling and Analysis: The methods of sampling and analysis indicated
hereafter are international reference methods.
• ISO: 2170‐1972 “Cereals and Pulses Sampling of milled products”.

• Determination of granularity: According to ISO: 2591‐1973 “test Sieving”
• Determination of moisture contents
• Determination of total acidity
• Determination of carbohydrate content
• Determination of fibre content
• Determination of sulphated ash
• Determination of Hydrocyanic acid content
Criteria for Conformity:

A lot shall be declared as conforming to this standard if the following conditions are
met.
Each sample inspected/analyzed for quality requirement conforms to all provisions of

this standard.
12.5 Factory Infrastructure
The factory will be located in a 20-Acre (8.1 Hectare) land area within the 219-Acre
Soroti UIA Industrial Business Park. Additional factory infrastructure will be
developed to meet the requirements of good factory management practices and work
conditions. The following infrastructure (Table 17) will be required at the factory:
Setting up the above named infrastructure and facilities is estimated at a total cost of
about US$1,041,666. Since these are fixed items depreciation will be estimated using the
straight‐line method.
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Table 17: Infrastructure Required at the Factory
S/No. Description/Function Area (SQM) Cost (UGX) Cost (US$)
1 Warehouse 211,198,902 62,117
2 Factory Building 1,251,549,819 368,103
3 Unloading Bay 28,752,800 8,457
4 Gate House and Weigh Bridge 140,799,535 41,412
5 Offices 70,399,768 20,706
6 Boiler 21,119,970 6,212
7 Quality Control Laboratory 68,000,000 20,000
8 Factory Manager's Residence 56,319,654 16,565
9 Borehole and Water Tank (5,000 lt Capacity) 46,933,178 13,804
10 Generator House 56,319,654 16,565
11 2 Nos Generators (500 KVA each) 125,155,142 36,810
12 A 300 KVA Electricity Transformer and low tension 46,933,178 13,804
poles/tension wires
13 Roads and driveway 657,118,000 193,270
14 Wastewater treatment system 78,221,964 23,006
15 Oxidation tanks 354,314,000 104,210
16 Perimeter fencing and land development 328,528,400 96,626
17 TOTAL 3,541,663,965 1,041,666
Exchange rate US$1.00 = UGX 3,400.00
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13.0 GOOD MANUFACTURING PRACTICE FOR HQCF PRODUCTION
13.1 Control of Operations
The Triple P Investments HQCF processing plant at Soroti shall as a matter of top
priority implement an HACCP/QACCP program to guarantee the safety and quality of
its products. Monitoring procedures to check against chemical, microbiological and
physical contamination of product shall be set up. Packaging materials for HQCF shall
provide adequate protection from damage and contamination, accommodate proper
labeling and must not react chemically with the product. It must be impermeable to
water and air.
Records of processing, production, and distribution if kept will enhance the credibility
of the food safety and quality systems. Personnel will have requisite skills and training
in food hygiene principles and practices and be able to judge potential risks, take
appropriate preventive and corrective actions. Products revealed to be hazardous to
health shall be recalled from markets and not sold for human consumption.
13.2 Maintenance and Sanitation
Equipment shall be well maintained to facilitate sanitation procedures, function as

intended and prevent contamination. In particular, metal deposits from attrition mill
(resulting from poor adjustment of the mill plates), jewelry (ear-rings, rings, bands,
etc.), and contaminants such as greases, lubricating oil and cleaning chemical residues
should be avoided in HQCF. Physical and chemical cleaning as well as disinfection
shall be carried out regularly but cleaning chemicals should be handled carefully and
properly kept from the online-products, final product and HQCF store. Gross debris,
loose soil and dust shall be removed and rinsed off before disinfecting. Holes, drains
and other access routes of pests shall be sealed, wastes disposed of promptly and any
pests present in the plant shall be eradicated. Responsible personnel must monitor and
check effectiveness of cleaning and sanitation systems; keep records of cleaning regimes
and conduct regular auditing of premises for sanitation and hygiene.
13.3 Personal Hygiene
All the Triple P Investments HQCF processing plant staff shall be required to maintain
a high degree of personal hygiene and cleanliness always. Personnel who are injured or
sick should not handle online-products or final products and should be made to
undergo medical examination. Health conditions which must be reported to
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management include diarrhoea, vomiting, fever, skin lesions, jaundice and discharge
from ear, eye or nose. Cuts and wounds should be covered with waterproof dressings.
In addition, personnel must wash hands under the following circumstances:

• At the start of processing activities
• At the end of every unit operation and before commencing another unit
operation
• Immediately after using the wash room
• After handling unpeeled cassava or any material which could lead to the
contamination of online-products and HQCF.
Personnel must be prevented from smoking, spitting, chewing gum, sneezing or

coughing near unprotected food materials. Wearing of personal effects such as jewelry,
watches, pins, bracelets, bands etc. should be discouraged. Visitors must wear
protective clothing and adhere to all personal hygiene requirements.
13.4 Transportation
During transportation of HQCF, breakage or puncture of sacks and contamination of

the packaging and products should be avoided. Vehicles must be cleaned and
disinfected where necessary. Ideal temperatures and humidity should be maintained
and dust and water must be avoided from coming into contact with semi-finished dried
products and packaged HQCF.
13.5 Product Information and Consumer Awareness
Practice first-in-first-out (FIFO) principle of stocking. Mark product containers for Lot
identification and trace-ability. All HQCF intended for the consumer market must bear
adequate information for the safe and correct handling, storage, preparation and use of
the product. All must be labelled with date and year of production.
13.6 Training
All the Triple P Investments HQCF processing plant personnel shall be trained to make
them aware of their roles and responsibilities in protecting high quality cassava flour
from contamination or deterioration. Those handling cleaning chemicals and other
potentially hazardous chemicals should also be trained on safe handling procedures.
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Training focus shall include:
• Nature of high quality cassava flour
• Manner of handling and packaging high quality cassava flour
• Condition of storage
• Expected length of storage before it expires
• Further preparation before consumption etc.
• Hygienic conduct and basic food hygiene.
• Maintenance and sanitation of structures and buildings
• Cleaning and sanitation procedures for working tools and equipment.
The training programs shall be reviewed regularly to meet individual personnel’s level
of knowledge and understanding.
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14.0 VEHICLES
Cost estimates are provided for 2 trucks for transporting raw cassava fresh roots from
the farmers throughout the cassava-growing areas of eastern Uganda to the factory and
for local transportation of the finished products to the markets in Kampala and beyond.
Allowances are also made for 1 Toyota Hilux vehicles for the factory executive staff.
The cost of required vehicles for the Triple P Investments High Quality Cassava Flour
Industrial Enterprise is detailed in the following Table 18.
Table 18: Required Vehicles

Vehicle Type Number Cost/Unit (US$) Total Cost (US$)
Office Vehicles
4WD Pick Ups 1 20,000 20,000
Sub-Total 1 20,000
Factory Vehicles
Medium-Sized Trucks 2 40,000 80,000
Sub-Total 2 80,000
TOTAL 3 100,000
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15.0 LAND & SERVICES INFRASTRUCTURE
15.1 Land and Location
i. Ample space is required for buildings, future expansion, parking of transport

vehicles and for empty cans. About 20 acres of land are required for the HQCF
and wet-milled cassava flour processing plant. However the built up area to total
area should be around 1:1 ratio;
ii. The location of the proposed Triple P Investments High Quality Cassava Flour
Industrial Enterprise at the Soroti UIA Industrial Business Park on the
outskirts of Soroti Town gives it a strategic and significant manufacturing
location advantage as the site it will be a fully-serviced business park with the
basic physical infrastructure service amenities including internal roads, power
and water and is also a conveniently-situated industrial hub that makes it ideal
for sourcing of raw materials and the fast distribution and supply of the
processed cassava flour products to both the domestic consumer markets and
identified export markets for these products;
iii. The proposed site location of the proposed Triple P Investments High Quality
Cassava Flour Industrial Enterprise at the Soroti UIA Industrial Business Park
– in Soroti Town also has proximity to the main eastern Mombasa-bound
road/rail facilities export routes out of Uganda, and service utilities such as
water, electricity and effluent mains, social infrastructure, etc.
iv. The subsoil of the site is also firm with proper drainage.
The land proposed for the setup of this project is 20 Acres (approx. 8.1 Ha) in the 219-
Acre Soroti UIA Industrial Business Park. This area will be sufficient for installation of
plant machinery and equipment of the proposed Triple P Investments High Quality
Cassava Flour Industrial Enterprise. The area requirement and construction cost
details are already given in Table 19 in the preceding Section 13 above.
15.2 Service Infrastructure at Site
The Triple P Investments HQCF flour factory will be easily accessible as it will be
located within the 219-AcreSoroti UIA Industrial Business Park. However, there is a
need to make provisions for electricity supply, water and factory and industrial park
site roads. Electricity generators will be purchased to support the Triple P Investments
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processing plant. Similarly, two deep water boreholes will be sunk in the site toservice
the factory. Access roads within the site will be constructed. The surrounding villages
will benefit from the water that will be provided by the factory as they willbe allowed
to collect water from the factory site for their domestic use.
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16.0 GOVERNANCE & MANAGEMENT STRUCTURE
16.1 Governance Structure
It is proposed that a special purpose company be set-up to establish and operate the
proposed dairy unit. This company will be known as Triple P Investments. The
Companies Act (cap. 110 of the Laws of Uganda) regulates the establishment and
governance of a limited company (public of private) in Uganda.
Corporate Governance is a set of institutional and market-based mechanisms that

encourage controllers of a company to maximize the value of a company for its owners.
The conduct of the corporation is a three-way process involving the board of directors,
top management and the employees. At the core of corporate governance is
empowerment at all levels – shareholders, the board, and top management. The law
applicable to a company is the law of the country.
Principles and rules on corporate governance need to be laid down in the Articles &
Memorandum of Association (Incorporation) and the Regulations of Board of Directors.
The proposed governance structure is illustrated on the following page.
The business of the company is to be managed under the directions of the Board of
Directors. The Board is responsible for establishing broad corporate policies and for the
overall performance of the company. The core responsibility of the directors is to
exercise their business judgment and to act in what they reasonably believe to be in the
best interests of the company.
The Board’s Corporate Governance Committee is required to review the principles and
rules regularly in the light of prevailing best practices and it is required to forward
suggestions for improvement to the board for approval.
The Board’s Corporate Governance Committee is also responsible for considering

matters of corporate social responsibility and matters of significance in areas related to
corporate public affairs and the company’s employees and shareholders.
The Board’s job should be to create and maintain a structure that will ensure harmony
and cooperation between management and the employees in pursuing the goals and
objectives of the organization rather than simply rubber-stamping the actions of
management.
The Board’s Audit Committee will have two fundamental responsibilities: internally it
95
will oversee the annual external audit to ensure the accuracy and integrity of the
financial statements as required by legislation. It will also ensure that there are no
breakdowns in corporate governance rules and procedures, including the rules of
ethical conduct and internal control. The Audit Committee would also be the practical
monitor collecting information regarding corporate misconduct and encouraging those
with such information to come forward.
Figure 12: Proposed Governance Structure
Share-Holders The Company
Corporate Board of Directors Corporate

Governance Chairman Audit
Committee Committee
Chief Executive
Officer
Skilled Skilled & Semi-Skilled

& Semi-Skilled Personnel Personnel – Wet Milled
– HQCF Section Cassava Section
16.2 Management Structure
The paramount duty of the Board of Directors is to select a Chief Executive Officer
(CEO) and to oversee the CEO and the other senior management staff in the proper and
ethical operation of the company.
The Board would identify, and periodically update the qualities and characteristics
necessary for an effective CEO of the company. With these principles in mind, the
Board should periodically monitor and review the development and progression of
potential internal candidates against these standards.
96
The CEO will be in-charge of the day-to-day management of operations and is
responsible for ensuring that the company and management functions are organized,
run and developed in accordance with the law, Articles of Association and decisions
taken by the Board, and the Annual General Meeting of the Shareholders.
The management structure, presented in Figure 13 comprises of various departments

including cassava (raw material) procurement, plant operation, quality assurance,
human resource, finance, marketing & sales, internal audit and field staff.
The structure is characterized by clear assignment of responsibilities as well as a

reduced number of interfaces.
The selected CEO will be responsible for delivering policy and performance for
customers, society, staff, suppliers and the business. The core activities are briefly
described as under:
16.3 Plant Operations and Quality Assurance
A Plant Maintenance Engineer with a degree in food processing will be appointed to

run the processing plant. He will be assisted by qualified and experienced quality
assurance staff headed by a food technologist. Very high quality standards need to be
maintained, as one of the reasons for urban consumers switching to processed dairy
products is the hygiene aspect of the process. The plant maintenance staff will be
responsible for daily washing and sterilization of the plant. Plant is normally run for 16
hours followed by a mandatory 8 hour shutdown period to allow for cleaning of the
plant and its peripheral machinery.
16.4 Personnel Requirements in the Cassava Starch Factory
A committed and experienced factory manager will be hired to manage the factory. The
factory manager reports directly to the Managing Director or CEO and the board of
directors.
Three experienced hands will also be hired to see to the day to day operations of the
factory. These three factory controllers will operate on a shift basis of 8 hours each. The
factory will also employ the services of three marketing managers to market its
products locally in the short run and perhaps internationally in the long run.
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With respect to the automated washing bay the factory will hire an unloading operator,
six factory operators two (2) each working per shift for a total of three shifts, three
packing operators, two general services namely laboratory and quality control
personnel, one weigh bridge operator, three steam boiler operators, one maintenance
engineer, two security guards, three administrative secretaries, 1 accountant and about
30 casual labourers, 10 each working in shifts of six hours.
Table 19: Factory Personnel Requirements

Position/Function Persons/Shift No. of Shifts Total
Factory Manager 1 1 1
Factory Controller 1 3 3
Marketing Manager(s) _ _ 3
Unloading Operator 1 1 1
Factory Operator 2 3 6
Packing Operator 3 1 3
Laboratory/Quality Control 2 1 2
Weighbridge Operator 1 1 1
Boiler Operator 1 3 3
Plant Maintenance Engineer 1 1 1
Security 2 1 2
Administration Secretary 3 1 3
Accountant 1 1
Casual Labourers 10 3 30
TOTAL 60
 People in charge of the factory (Factory controller) should have basic technical
knowledge in mechanics and electricity.
 The maintenance mechanic/engineer should have basic knowledge in welding

(stainless steel and carbon steel); mechanics and electrical (i.e. the ability to
accomplish preventive and corrective maintenance of the equipment and electric
motors).
 Other operators do not need special abilities, however they need to have the
capacity to understand the instructions.
Figure 26 shows the organogram of the factory management. The factory manager will
report directly to the MD/CEO. Factory controllers will report directly to the factory
98
manager while the weigh bridge operator, unloading operators, boiler operator, and
maintenance engineers will report to the factory controller. The laboratory control and
packaging operator will report directly to the marketing managers who report to the
factory manager. All persons will be serviced by an accountant, administrative
secretaries, security and stores/warehouse supervisor.
Figure 13: Organogram of the Factory Personnel

MD/CEO
Factory
Accountant
Manager
Admin Sec
Factory Marketing
Controller Manager
Security
 Unloading Operator  Laboratory/Quality
 Factory Operator Control
 Weigh Bridge Operator  Packaging Operator
 Boiler Operator Stores &
 Maintenance Engineer Warehouse
16.5 Personnel Remunerations and Management
The remunerations of each category of staff for the cassava factory are stated below
(Table 21). The remuneration per year is about US$632,160. A 5% increase is included
in calculating the cash flow on remunerations over ten years. Remunerations are
consistent with the national minimum wage. Housing and recreation facilities will be
provided for the general managers and managers on site.
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Table 20: Estimated Staff Remuneration per annum Cassava Starch Factory
S/No. Staff Position Number Monthly Wage Total Annual
(US$) Wage (US$)
1 Factory Manager 1 6,000 72,000
2 Factory Controller 3 10,000 120,000
3 Marketing Managers 3 10,000 120,000
4 Unloading Operator 1 700 8,400
5 Factory Operator 6 4,200 50,400
6 Packing Operator 3 1,200 14,400
7 Laboratory/Quality Control 2 1,600 19,200
8 Weigh Bridge Operator 1 400 4,800
9 Boiler Operator 3 1,200 14,400
10 Plant Maintenance Engineer 1 1,500 18,000
11 Security 2 400 4,800
12 Administrative Secretary 2 2,000 24,000
13 Accountant 1 4,000 48,000
14 Sub-Total 43,200 518,400
15 Social Security Contribution (15%) 6,480 77,760
16 Casual Labour 30 3,000 36,000
17 TOTAL 52,680 632,160
16.6 Other Management Considerations
The factory working conditions and personnel regulations will be guided by the
provisions of the Ugandan labour and related laws. The Ugandan law makes general
and special provisions for the health, safety and welfare of persons employed in places
statutorily defined as “factories” and for which a certificate of registration is required
by law. It makes general provisions as to the standards of cleanliness, crowding,
ventilation, lighting, drainage of floors, and sanitary conveniences: e.g. all factories
must have potable water and washing facilities.
The factory will ensure basic safety and health standard for workers. In respect of
safety, there are general provisions as to the securing, fixing, usage, maintenance and
storage of prime movers, transmission machinery, other machinery, unfenced
machinery, dangerous liquids, automated machines, hoists and lifts, chains, ropes and
lifting tackle, cranes and other lifting machines, steam boilers, steam receivers
containers, and air receivers. There are in addition to these, standards set for the
training and supervision of inexperienced workers, safe access to any work place,
prevention of fire and safety arrangements in case of fire and first aid boxes.
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Also, the law provides that adequate arrangements should be made for the removal of
dust or fumes from factories, provision of goggles to protect the eyes in certain
processes and the prevention of eating and drinking in places where poisonous or
injurious substances give rise to dust or fumes. It is mandatory that all accidents and
industrial diseases be notified to the nearest inspector of factories and be investigated; it
is prohibited for the occupier of a factory to make any deductions from the wages of
any employee in respect of anything to be done or provided in pursuance of the
Factories Act.
The law under the workmen’s compensation act provides for the payment of
compensation to workmen for injuries suffered in the course of their employment. The
workweek is set at 48 hour week with adequate provisions made for medical, annual,
casual and sick leave and other personnel obligations for all staff engaged on a
permanent basis. Some of the factory staff will be required to work on an eight hour
shift basis for six days.
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17.0 ENVIRONMENTAL ASPECTS
It is known that cassava processing produces a big quantity of wastes that can have
negative impact to the environment and human health. Through their strong and
unpleasant smell these cassava processing wastes cause a hostile environment for
farming communities living nearby.
In the addition, if these wastes are not properly treated, they constitute potent toxicant
to the soil, soil organisms, water and plants. During the process of cassava processing
(dried chip, dried starch, and wet starch) it resulted particularly in large volume of
wastes. The quality and quantity of these wastes vary greatly due to plant age, varieties,
time after harvesting, kind of industrial equipment used in processing and its
adjustment (Oliveira et al., 2001). Furthermore, if they are not properly managed, the
aesthetic and beauty of the environment in the processing areas can also substantially
be affected.
Cassava processing produces large amount of wastes including solid and liquid which
are high in organic matter constituents and cyanide. Solid wastes are mainly derived
from cassava chip processing, if properly managed, can be utilized in many ways in
crop and animal productions. Liquid (water) waste on the other hand has the potential
to pollute ground water or lakes, rivers or streams into which it flows. Cassava
processing can also produce unpleasant smell and unattractive pictures. Due to all these
problems, cassava processing has always been regarded with a reputation of a major
environment pollutant.
Cassava processing generates two types of liquid waste, the first one is produced by
washing and peeling of cassava roots that generally contains a large amount of inert
material and, the second one is produced by draining starch sedimentation tank.
Wastewater from cassava processing is odorous with unpleasant smell. Due to its high
microbial content, it is subject to a relatively rapid breakdown. This wastewater is
normally rich in cyanogens content therefore it causes a general concern of their
possible effect on health and the environment. However, even with such possible
harmful effect, this water is discharged directly by the factory onto soils and nearby
rivers and streams. It is therefore presenting a strong risk for the environment through
reducing quality of the stream and makes its water less suitable for other downstream
users. Polluted water can cause unpleasant odours and flies infested environment and
eventually affect the health of the inhabitants adversely.
102
Nevertheless, other than all these negative impacts that the wastewater from cassava
processing can have on the environment and human health, there are also positive
impacts of this wastewater. It is known that wastewater contains both organic material
and a rich source of nitrogen, therefore if appropriately managed; this wastewater can
certainly be utilized as liquid fertilizer for rice production. Reports from farmers who
have their crop field adjacent to the cassava processing plants confirm this efficacy of
cassava wastewater in boosting their crop yield. In addition, due to its high contents of
cellulose, hemi-cellulose and starch, cassava processing wastewater can as well be
effectively utilized for the production of ethanol (Vo et al., unpublished).
The other type of waste that produced by cassava processing plants is solid waste.
Cassava solid waste can be unrecoverable starch, the peel and soil/stem debris. This
type of waste can also have a significant hazard to the environment and human health
of those communities living nearby the processing plants. Nevertheless, as compared to
wastewater, the solid waste is less hazardous to the farming communities other than its
strong and unpleasant smell. During the process of its breaking down, the solid waste is
reported to produce strong and unpleasant smell that can attract houseflies which
causes nuisance and health threaten to people in the area. In some occasions this
unpleasant odour can reach up to 200-300 m and provide good ground for a complaint
and/or attacked by people who live around the processing areas.
Annually, cassava processing can produce big quantities of solid waste and if this is not
managed properly, it can cause a serious pollution to the environment and human life.
Results of this business plan suggested that for the dried chip processing, one metric ton
of fresh cassava root produces about 20 Kg of solid waste (Men Sarom et al., 2014).
Therefore based on this calculation and the projected marketable quantity of 60,000 tons
of HQCF and 60,000 tons of wet-milled cassava flour and, basing on the established
conversion ratios of fresh root to HQCFof 4:1 and fresh root to cassava flour of 3:1,
presumably 210,000 tons of fresh cassava will be processed by the factory each year and
will generate at least 4.2 metric tons of solid waste each year. This is quite a big amount
of solid waste produced by an HQCF and wet-milled cassava processing plant which
without appropriate management can be not only a wasteful resource but also a source
of environmental pollution.
Nonetheless, solid waste of cassava processing can be a good feed for animal and aquaculture
production. Cassava peel can be utilized as a medium for mushroom cultivation or is used to
produce compost, and for the production of ethanol and maltose (Henry and Howeler, 1996).
Currently, most of the cassava solid waste is dried in the sun for 3-7 days, and then sold to the
manufacturing of animal feed at a low price.
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18.0 SCHEDULE OF IMPLEMENTATION
It is expected that it will take approximately 12 months to have this project put into
operation from the day funds for its execution are secured. The preparatory stage which
involves the eventual approval for funding is assumed to take 3 months from the date
of its final submission to project financiers by the project promoters. The follow-on
project implementation activities are expected to take an additional 9 months to
completion – which altogether adds up to 12 months (1 year).
The following Gantt chart presented in Figure 14 highlights the important project
implementation milestones.
104
Figure 14: Project Implementation Milestones
Commence Operations
Commissioning of Industry
Full Staffing
Hiring Key Executives
Arrangements for Industrial
Input Supplies
Procure Project Office
Stationery and or Equipment
Industry Plant & Equipment:
Installation
Shipment & Delivery
Identification of Equipment
Suppliers/Opening of LCs and
Order of Equipment
Industry Plant
Infrastructure/Site
Development
Surveys & Demarcation
Seed Financing
Period (Months) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
105
19.0 FINANCIAL EVALUATION
This section evaluates various financial aspects of the project (cost of project, earnings
forecast, rates of return, payback period, cash flow, balance sheet, etc.). Wherever
calculations, workings, etc. are voluminous, a summarized version is presented in this
chapter and detailed calculations are given in the relevant Schedules of Financial
Analysis 01 – 15 on pages 122 – 142 of this Business Plan.
19.1 Capital Cost of Project
Total project cost is estimated at US$ 4 million as shown below in Table 21 in

summarized form.
Table 21: Cost of Project (In US$)

Description Local Currency Foreign Total (US$)
(US$) Currency (US$)
Existing Land (20 Acres) 200,000 0 200,000
Buildings & Civil Works (including
QC Lab) 1,041,666 0 1,041,666
Machinery & Equipment 161,897 1,457,077 1,618,974
Utility & Others 161,897 0 161,897
Industrial Generator 500 kVA 50,000 0 50,000
Motor Vehicles 100,000 0 100,000
Miscellaneous Fixed Assets 80,000 0 80,000
Total Fixed Costs 1,795,460 1,457,077 3,252,537
Physical Contingency (5%) 162,627 0 162,627
Working Capital 124,836 460,000 584,836
TOTAL PROJECT COST 2,082,923 1,917,077 4,000,000
Funds will be required for the purchase of packaging materials, purchase and
installation of the HQCF flour processing plant machinery and equipment, purchase of
an industrial 500 kVA generator, payments for land preparation and development,
payments for building and civil construction of the HQCF flour processing plant,
purchase of transportation motor vehicles, purchase and installation of miscellaneous
fixed assets, etc. The production process for the HQCF flour processing plant is a
continuous process and capacity has been calculated basing on 8 hours per day, the
HQCF flour processing plant must be compulsorily shut down for cleaning on a daily
basis and the cleaning-in-place and sterilization time is 8 hours. It is expected that the
HQCF flour processing plant will run for 300 days a year (i.e. 25 days/month x 12
106
months) and in the second year capacity utilization will start off 100% in Project Year 2
and continue on a straight-line throughout project life, for the reason that the project
has to utilize economies of scale to break even early and effectively service debt.
Land:
Triple P Investments High Quality Cassava Flour Industrial Enterprise proposes to
locate the HQCF flour-processing factory at the new 219-Acre Soroti UIA Industrial
Business Park. Soroti town is right in the middle of one of the most important cassava
growing areas of Uganda. The plot size for the proposed agro-industrial enterprise is 20
acres (about 8.1 Hectares) valued at US$200,000 (i.e. US$10,000 per Acre).
Site Improvement:
The project promoters of Triple P Investments High Quality Cassava Flour Industrial
Enterprise will have to undertake some extensive land improvement works at the
proposed site including site surveys, land leveling and drainage, and other structural
land design works that are estimated to cost US$96,626 (Refer to Table 17 on page 88).
Building & Construction:

The total constructed area is estimated to cover approximately 12,000 square meters (3
Acres) to house the HQCF flour processing plant building (processing and storage
areas) and raw cassava reception and storage section, generator room, and the main
administration building. The total cost of the building and civil works has been
estimated at US$1,041,666.
Machinery and Equipment:

A top-line HQCF flour processing plant of 100 MT/day per day needs to be purchased
from a supplier of integrated cassava processing plants. There is a number of overseas
(especially Chinese) HQCF flour processing equipment manufacturers/suppliers or
their agents in Uganda from whom such equipment can easily be ordered and
purchased. Listed equipment for a comprehensively-equipped HQCF flour processing
plant include various machinery plant and equipment for the cleaning, crushing,
sieving & washing, de-sanding, concentrating & refining, drying, production
classification, weighing & packaging, liquid starch tank, process water tank, reagent
tank, and laboratory equipment as specified in Table 17 on page 88. It is estimated that
the cost for the top-line HQCF flour processing plant would cost US$1,618,974.
Utilities & Others:

Triple P Investments High Quality Cassava Flour Industrial Enterprise has included a
cost item for water and power connection to the proposed HQCF flour processing plant.
107
Connection of the HQCF flour processing plant to utilities is estimated to cost 10% of
plant machinery and equipment or US$161,897.
Transportation Vehicles:
Triple P Investments High Quality Cassava Flour Industrial Enterprise will have to
acquire a 4WD double-cabin pick-up and two (2) medium-sized trucks for the
movement of raw material into the factory and transportation of finished products to
the market. Vehicles are estimated to cost US$100,000.
Stand-by Electric Generator:

Given the unreliability and erratic nature of mains electricity in Uganda, Triple P
Investments High Quality Cassava Flour Industrial Enterprise has budgeted for a
stand-by industrial diesel electric generator of 500 kVA capacity capable of supplying
power 24/7 to the HQCF flour processing plant in the event of unexpected or abrupt
power outages with and estimated market purchase value of US$20,000.
Working Capital:
HQCF flour is a business in which cash flow is very high and companies in the industry
tend to generate cash surpluses on a regular basis, most of the fresh (raw) cassava is
purchased on a 1-week credit basis and the finished product is sold on cash. Some
advances are paid especially in the dry season when fresh cassava production goes
down. Working capital is mostly required for paying for purchase of vital production
inputs such as fresh cassava raw material, HQCF flour packaging materials, quality
control laboratory chemical reagents, agro-industrial consumables, finished goods in
warehouse that have to be preserved and stabilized before release into the market, for
payments of utility bills, wages, fuel for vehicles and for spares. The Working Capital
requirements have been estimated at US$584,836 for the first three months of operation.
19.2 Financial Plan
The project is proposed to be financed through a combination of development banking

institutional financing and equity in the ratio of 89:11 respectively. The development
banking institutional loan will carry a profit markup rate of 12.5 percent per annum
payable over a period of ten years.
108
Table 22: Financial Plan (In US$)
Source of Finance/Component Share Local Foreign Total (US$)
Currency Currency
(US$) (US$)
1) Financial Assistance
Long-Term Development Loan
Buildings & Civil Works
(including QC Lab) 26.04% 1,041,666 0 1,041,666
Machinery & Equipment 40.47% 161,897 1,457,077 1,618,974
Utility & Others 4.05% 161,897 0 161,897
Industrial Generator 20 kVA 1.25% 50,000 0 50,000
Miscellaneous Fixed Assets 2.00% 80,000 0 80,000
Contingency (5%) 4.07% 162,627 0 162,627
Working Capital 11.50% 460,000 0 460,000
Sub-Total (1) 89.38% 2,118,087 1,457,077 3,575,164
2) Equity
Project Promoter
Existing Land (20 Acres) 5.00% 200,000 0 200,000
Motor Vehicles 2.50% 100,000 0 100,000
Working Capital 3.12% 124,836 0 124,836
Sub-Total (2) 10.62% 424,836 0 424,836
TOTAL (1 + 2) 100.00% 2,542,923 1,457,077 4,000,000
As shown in Table 22 above, the business requires an investment of US$ 4 million

made up of US$424,386 as owner’s (project promoters’) equity and US$3,575,164 as loan
request. The loan will be used to procure the construction of plant buildings and other
site civil works, plant machinery and equipment, utilities and a stand-by electric
generator, miscellaneous fixed assets, physical contingencies, and part of working
capital (including 3 month’s raw material supply).
19.3 Profit & Loss Account
The projected income statement for the proposed Triple P Investments High Quality
Cassava Flour Industrial Enterprise is given in Table 23 below.
109
Table 23: Summary Profit & Loss Account for First Five Years of the Project (In US$)
Description Year 2 Year 3 Year 4 Year 5 Year 6
Sales 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754
Less: Cost of Goods Sold 20,490,626 21,515,157 22,590,915 23,720,461 24,906,484
Gross Profit 6,773,758 11,202,104 16,056,349 19,113,590 20,069,270
Less: Operating Expenses 5,501,205 5,873,052 6,268,604 6,632,941 6,959,133
Operating Profit 1,272,553 5,329,051 9,787,745 12,480,650 13,110,137
Less: Interest service 446,896 400,000 350,000 300,000 250,000
Less: Loan service 375,164 400,000 400,000 400,000 400,000
Provision for Tax 135,148 1,358,715 2,711,324 3,534,195 3,738,041
Net Profit 315,346 3,170,336 6,326,422 8,246,455 8,722,096
Cum. Retained Earnings 315,346 3,485,681 9,812,103 18,058,558 26,780,653
19.4 Rates of Return
On the basis of the projected income statements and related projections, rates of return
for the project are calculated and shown in Table 24:
Table 24: Rates of Return (In Percentages)

Gross Profit to Sales 24.84% 34.24% 41.55% 44.62% 44.62%
Operating Profit to Sales 4.67% 16.29% 25.33% 29.14% 29.15%
Net Profit to Sales 1.16% 9.69% 16.37% 19.25% 19.39%
Net Profit to Investment 8% 79% 158.16% 206% 218.05%
19.5 Payback Period
Payback period for the project, both in terms of owner’s equity and total investment, is
calculated below:
Total Project Investment = US$ 4,000,000

Project Promoter’s Equity = US$ 424,836
“Profits” = Net Profit + Interest + Depreciation
110
Table 25: Calculation of Payback Period for Equity and Total Investment (In US$)
Year Amount paid back from Balance of Total Balance of Total
“Profits” Investment Equity
1 0 -4,000,000 -424,836
2 1,025,411 -2,974,589 600,575
3 3,833,506 858,917 4,434,081
4 6,939,592 7,798,508 11,373,672
5 8,809,625 16,608,133 20,183,297
Payback period for Promoter’s Equity = 0.41 Years

Payback period for Total Project Investment = 2.78 Years
19.6 Capital: Output Ratio
Capital output ratios, representing the production potential of the project in relation to
the investment involved in its establishment, are calculated in Table 26:
Table 26: Capital: Output Ratios (In US$)

Total Investment 4,000,000 _ _ _ _
Sales (Output) 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754
Capital: Output Ratio 1: 6.82 1: 8.18 1: 9.66 1: 10.71 1: 11.24
19.7 Cash Flow
The projected cash flow for the first six years of the project is shown hereunder:
111
Table 27: Projected Cash Flows (In US$)
Project Year 1 2 3 4 5 6
Costs (US$)
A. Cash inflow 4,000,000 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754
1. Financial resources
total 4,000,000 _ _ _ _ _
2. Sales revenue total _ 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754
B. Cash outflow -4,000,000 -34,728,451 -29,949,674 -32,743,936 -35,025,175 -36,805,774

1. Total assets schedule
including replacements -4,000,000 -7,771,413 -394,749 -415,093 -429,578 -544,116
2. Operating Costs _ -25,991,831 -27,388,210 -28,859,519 -30,353,401 -31,865,617
3. Debt Service
a) Interest (12.5%) _ -446,896 -400,000 -350,000 -300,000 -250,000
b) Repayments _ -375,164 -400,000 -400,000 -400,000 -400,000
4. Corporate tax _ -135,148 -1,358,715 -2,711,324 -3,534,195 -3,738,041
5. Dividends 4% on equity _ -8,000 -8,000 -8,000 -8,000 -8,000
C. Surplus / deficit 0 -7,464,067 2,767,587 5,903,328 7,808,877 8,169,979
D. Cumulative cash bal. 0 -7,464,067 -4,696,480 1,206,848 9,015,725 17,185,704
19.8 Balance Sheet
Projected balance sheet for the first six years of operation is shown below:
112
Table 28: Projected Balance Sheet (In US$)
CAPITAL EMPLOYED: YR.1 YR.2 YR.3 YR.4 YR.5 YR.6
Share Capital 200,000 200,000 200,000 200,000 200,000

Retained Earnings 315,346 3,485,681 9,812,103 18,058,558 26,780,653
Shareholder's Equity/Deficit 515,346 3,685,681 10,012,103 18,258,558 26,980,653
Long-Term Liabilities 3,200,000 2,824,836 2,424,836 2,024,836 1,624,836
3,715,346 6,510,517 12,436,939 20,283,394 28,605,489
EMPLOYMENT OF CAPITAL: `
Plant Buildings 1,041,666 989,583 937,499 885,416 833,333 781,250

HQCF Plant Equip. & Machinery 1,618,974 1,457,077 1,295,179 1,133,282 971,384 809,487
Utilities & Others + Genset 211,897 190,707 169,518 148,328 127,138 105,949
Miscellaneous Fixed Assets 80,000 72,000 64,000 56,000 48,000 40,000
Vehicles 100,000 80,000 60,000 40,000 20,000 100,000
LONG-TERM ASSETS: 2,789,367 2,526,196 2,263,026 1,999,855 1,836,685
CURRENT ASSETS: 1,589,473 4,612,556 10,764,409 18,836,483 27,284,351
Accounts Receivable 2,165,986 2,282,351 2,404,960 2,529,450 2,655,468
Stock (Inventory) 5,363,117 5,628,238 5,906,614 6,198,910 6,505,820
Bank Balance and Cash 242,309 255,573 269,680 282,473 293,661
Other Current Assets -6,181,940 -3,553,605 2,183,154 9,825,650 17,829,402
CURRENT LIABILITIES/DEBT: 663,494 628,235 590,496 552,945 515,547

Accounts Payable 216,599 228,235 240,496 252,945 265,547
Current Portion of Long-term
Liabilities 446,896 400,000 350,000 300,000 250,000
NET CURRENT ASSETS: 925,979 3,984,321 10,173,913 18,283,538 26,768,804
TOTAL CAPITAL 3,715,346 6,510,517 12,436,939 20,283,394 28,605,489
19.9 Break-Even Analysis
The project’s commercial break-even level (profitability break-even) in Project Year 5 is

calculated below:
113
Table 29: Break-Even Analysis in Project Year 5 (In US$)
Items Variable Cost Fixed Cost Total Cost
Raw materials 23,720,461 0 23,720,461
Salaries & wages 548,853 182,951 731,804
Administrative Expenses 46,305 23,153 69,458
Repairs & Maintenance 44,344 22,172 66,516
Utilities 115,190 38,397 153,587
Sales, Marketing & Training Exp 803,138 267,713 1,070,851
Packaging Material 390,698 130,233 520,931
Transport 2,805,014 935,005 3,740,019
Insurance (1.6% of Plant & Bldg Costs) 28,380 14,190 42,570
Cost of Consumables 158,136 79,068 237,205
Depreciation 0 263,170 263,170
Financial Expenses 0 300,000 300,000
TOTAL 28,660,521 2,256,051 30,916,571
Sales Value of Production = US$ 42,834,051
Break-even Sales = 2,256,051 = 2,256,051 = 2,256,051

1 –28,660,521 1 –0.669 0.331
42,834,051
Break-even Sales = US$ 6,818,047
Capacity utilization required to Break-even = US$ 6,818,047 x 100 = 15.92%

US$ 42,834,051
Margin of Safety = 100% – 15.92% = 84.08%
19.10 Value Added/Contribution to GDP
Implementation of the project is expected to have a beneficial economic impact on

regional/national economic development. The project’s contribution towards the
country’s Gross Domestic Product (GDP) is estimated below.
114
Table 30: Value Added/Contribution to GDP (In US$)
Value of Production (Sales) 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754
Less Intermediate Inputs:
Raw Material 20,490,626 21,515,157 22,590,915 23,720,461 24,906,484
Utilities 132,674 139,308 146,273 153,587 161,266
Packaging Material 450,000 472,500 496,125 520,931 546,978
Depreciation 263,170 263,170 263,170 263,170 263,170
Total Intermediate Inputs 21,336,470 22,390,135 23,496,483 24,658,149 25,877,898
Value Added 5,927,914 10,327,126 15,150,781 18,175,902 19,097,856
Value Added as a %age of
Output 21.74% 31.56% 39.20% 42.43% 42.46%
Value Added per Worker 32,933 57,373 84,171 100,977 106,099
115
20.0 PROJECT ECONOMICS
20.1 Outline of Project Economics
The total project cost for setting up the proposed Triple P Investments High Quality
Cassava Flour Industrial Enterprise is US$ 4 million. The capital cost incurred is
US$3,252,537 and the working capital and contingency expenses on account are
altogether US$747,463. The total cost, project returns and financial plan are given in
Tables 31-1 to 31-3 below.
Table 31-1: Total Project Cost

Account Head Total Cost (US$)
Capital Cost 3,252,537
Contingency (5%) 162,627
Working Capital Cost 584,836
Total Project Cost 4,000,000
Table 31-2: Project Returns
NPV (UShs) @ 17% 23,882,213
FIRR 91.43%
Payback Period (Years) 2.78
Table 31-3: Financing Planning
Financing Ratio US$
Equity 10.62% 424,826
Debt 89.38% 3,575,164
20.2 Jobs Creation
Triple P Investments High Quality Cassava Flour Industrial Enterprise HQCF flour
processing enterprise will create 60 direct employment opportunities and thousands in
indirect jobs through the interlinked induced activities.
The net employment effect is generally expected to grow in tandem with the
establishment of the dairy farm as a viable agri-business entity and the consolidation of
its business/ marketing position within on the local market.
The throughput of Triple P Investments’ products on the markets will definitely induce
a positive beneficial growth impact on other inter-related areas that will lead to the
creation of more jobs for a broad category of both skilled and semi-skilled labour.
As a measure of national economic benefit, the calculation below gives an indication of

the investment to jobs created ratio (Over the 10-year financial analysis period).
116
Investment to Jobs Created Ratio (IJCR)
US$ 4,000,000 = US$66,667/job

60
20.3 Economic Benefits from the HQCF Value-Chain
The economic benefits derived from the commercialization of cassava through the
HQCF value chain will definitely provide incentives for smallholder farmers to increase
production of cassava through adoption of new high yielding disease resistant varieties
and improved agronomic practices. Not only will this enhance food security but it will
also improve availability of cassava at household level for trading and processing
purposes thus improving incomes of farmers. The cash benefits from HQCF value chain
will be derived either from the sale of HQCF once a farmer processes his/her cassava or
from providing labour for peeling, washing, grating, pressing, drying, bulking, milling
and sieving. Increased incomes will result in improved economic status as improved
incomes will enable them to procure assets like livestock (goats), complete houses, pay
school fees and for health care.
HQCF Competitiveness
Cassava can be a source for household income in the following ways: fresh roots,
traditional cassava chips or as High Quality Cassava flour.
20.3.1 Cassava Sold as Fresh Roots at Farm gate Level
Table 32: Production Costs/Acre

Cost Items/Activities Production Costs (UShs)
Land clearing 100,000
Tillage (1st and 2nd) 180,000
Stem acquisition 150,000
Stem transport to new farm 30,000
Planting 32,000
Inter-cropping 10,000
Weeding (1st, 2nd, 3rd and 4th) 160,000
Harvesting 100,000
Total 762,000
117
Yields: 6,000 kg /acre
Price at farm gate: 200 Shs/kg
Gross income per acre (Uganda shillings): 1,200,000 UgShs/acre
Net income per acre: 438,000
Advantages of selling cassava as fresh roots

• Do not incur processing cost
• There is a thriving fresh roots market
Disadvantages of selling cassava as fresh roots

• Incomes earned from selling fresh roots are low
• Roots are bulky when transporting
• Roots deteriorate quickly leading to high post-harvest losses.
20.3.2 Cassava Sold as Traditional Cassava Chips
Processing costs:
i. Cost for fresh roots/acre: 762,000
ii. Peeling and drying costs: 60,000
iii. Total costs: 822,000
Note: cassava chips: ¼ X weight of fresh roots.

Traditional chips/acre: 1,500kg
Price for traditional chips at farm gate: 800 UShs/kg
Gross income: 1,200,000
Net income: 378,000
Disadvantages of traditional cassava chips

• Poor quality product
• Very limited use in industry
Advantages
• Shelf stable
• Fetches higher price than fresh cassava roots
• Used for food security in households.
118
20.3.3 Cassava Sold as HQCF
HQCF processing costs
Table 33: Processing of 6,000 kgs at Processing Site

Cost Items Units Unit Cost Total Cost
Fresh roots 6,000 kgs 200 1,200,000
Peeling roots 12 pple 4,000 48,000
Grating 4 pple 6,000 24,000
Petrol 3 lts 7,200 21,600
Oil 1 lt 12,000 12,000
Workers for cleaning, water 5 pple 4,000 20,000
Drying 6 pple 4,000 24,000
Milling services 1,500 200 300,000
Cleaning 20 pple 6,000 120,000
Packaging bags 30 bags 1,000 30,000
Sealing bags 30 bags 500 15,000
Association commission 30 bags 1,000 30,000
Transportation 30 bags 5,000 150,000
TOTAL COST 1,994,600
Price received 1,500 kg 2,000 3,000,000
Gross income 3,000,000
Net income/Acre @ 2,000/= per kg 1,005,400
Net income at 1,800/= per kg 705,400
Disadvantages of processing cassava to HQCF

• Require capital investments to process cassava into HQCF.
• Requires skilled labour.
• High operating costs associated with processing it.
• Drying is a limiting factor.
Advantages of processing cassava into HQCF

• Large unexploited market with bakeries and biscuit industries.
• High income generated from HQCF
• High returns on investment.
• Source of employment for family and local communities.
• Shelf stable HQCF and cost effective.
119
20.3.4 Economic and Livelihood Benefits to communities
The current market for HQCF is 3,468 tons. The gross income from this in a year would
be 6.936 billion Uganda shillings giving a net income to rural smallholder farmers of
2.325 billion Uganda shillings. This is a potentially very significant infusion of cash in
the local economy that can trigger a rapid transformation of the livelihoods of the rural
poor in Uganda.
Table 34-1: Economic analysis for HQCF substitution for wholesale end-users of
wheat at US $ 817 per ton
Scenario Flour Qty Unit Cost (UGX) Total Cost (UGX)
Scenario 1 Pure wheat 38,148 tons 2,761,628 105,350,584,944
Scenario 2 Wheat 90% 34,680 tons 2,761,628 95,773,259,040
HQCF 10% 3,468 tons 2,000,000 6,936,000,000
Total cost of HQCF 10% substitution 102,709,259,040
Saving by end-users due to substitution 2,641,325,904
Table 34-2: For Retail End-Users of Wheat at US$ 1,058 per ton
Scenario Flour Qty Unit Cost (UGX) Total Cost (UGX)
Scenario 1 Pure wheat 38,148 tons 3,576,257 136,427,052,036
Scenario 2 Wheat 90% 34,680 tons 3,576,257 124,024,592,760
HQCF 10% 3,468 tons 2,000,000 6,936,000,000
Total cost of HQCF 10% substitution 130,960,592,760
Saving by end-users due to substitution 5,466,459,276
20.3.5 Conclusion
• The HQCF value chain has been tested and found to be plausible and profitable
at household, retail and industry levels.
• There are potentially large economic spin-offs that can be realized if this value
chain is supported to become functional.
• There is great hope that has been aroused at individual household and
community levels of the poor rural farmers that their well-being can be uplifted
by their participation in the HQCF value chain.
• The end-users have concluded their own product development phase and come
up with high-end market highly preferred products from wheat and HQCF.
• The end-users have expressed an immediate demand of over 200 tons per month
and want to sign legal and binding contracts now.
• The end-users will only use UNBS-certified HQCF products.
120
21.0 KEY SUCCESS FACTORS
 High level quality control.

 Another important aspect is the quality check at different stages of the high
quality cassava flour production and sales chain. This is very important because
there is a need to check and ensure that the Triple P Investments high quality
cassava flour product distributors do not supply poor quality to compromise the
standards and quality of our products.
 Individualized customer service - providing our customers with what they want,
when and how they want it.
 Fully integrated distribution channels to help customers increased access to
Triple P Investments high quality cassava flour products.
 Smart high quality cassava flour product distribution networks will also play an
important role in the success of this business.
 Integrating the changing market fundamentals into the business.
 Long-term partnership with both the cassava farmers in eastern Uganda and our
customers so as to acquire guaranteed market.
 The commercial viability of this project depends upon the availability of regular
raw material (fresh cassava) supply.
 To establish a brand name, aggressive marketing efforts are recommended.
121
22.0 CONCLUSION & RECOMMENDATIONS
It can be concluded from the foregoing business analysis and financial modelling that
the proposed full-scale establishment and operation of the proposed Triple P
Investments’ cassava processing and high-value addition enterprise in Soroti District is
extremely viable from a financial and commercial point of view. The business will
significantly reduce post-harvest losses of cassava at the village level. It will also
increase income for cassava farmers in the rural areas. The production of HQCF by the
business will provide a good local substitute for imported wheat flour, which is used by
industrialists in the plywood, paperboard and bakery industries.
It is therefore recommended that:
i. A medium- long-term development loan of US$3,575,164 be granted to Triple P

Investments for the purposes stated in this report.
ii. That the interest charged on this loan shall not exceed 12.5% per annum.
iii. That the loan shall be repaid in ten (10) years with two (2) years moratorium.
iv. That the fixed assets purchased together with personal guarantors or landed
property may be used as primary and collateral security to secure the loan.
It is also further recommended that an early decision to facilitate it with the requisite
line of credit be expedited such that implementation of the project follows the fastest
track possible for the benefit of the project promoters, the agricultural crops sub-sector,
the regional agro-processing industry and market, and the Ugandan economy at large.
122
Schedule 01: KEY FINANCIAL MODELLING ASSUMPTIONS
Table 35-1: HQCF and Wet-milled Cassava Flour Production Assumptions

Maximum capacity utilization 100%
Fixed year capacity utilization (Project Years 2 – 10) 100%
Total Uganda market demand for HQCF flour 45,000 MT p.a.
Total Uganda market demand for wet-milled cassava flour 200,000 MT p.a.
Fresh Cassava Usage/Annum (HQCF) 120,000 MT p.a.
Annual production of HQCF flour by plant 30,000 MT p.a.
Conversion Factor: Fresh Cassava: HQCF Flour 4:1
Fresh Cassava Usage/Annum (Wet-milled Cassava Flour) 90,000 MT p.a.
Annual production of wet-milled cassava flour by plant 30,000 MT p.a.
Conversion Factor: Fresh Cassava: Wet-milled Cassava Flour 3:1
Milling Loss 2%
Table 35-2: Operating Assumptions

Hours operational per day 10
Processing Hours 8
Days operational per month 25
Days operational per year 300
Table 35-3: Economy-Related Assumptions

Electricity price growth rate 10%
Diesel price growth rate 5%
Wage growth rate 5%
Table 35-4: Cash Flow Assumptions

Accounts Receivable cycle (in days) 30
Accounts Payable cycle (in days) 30
Raw material inventory (in days) 30
Equipment spare parts inventory (in days) 30
Table 35-5: Revenue Assumptions

HQCF Flour in US$/Metric Ton 600
Wet-milled Cassava Flour in US$/Metric Ton 320
123
Table 35-6: Operating Expense Assumptions
Operating Expense Item Rate in Annual Rate of
US$/Annum Change %
Fresh Cassava Cost in US$/MT 97.63 5%
Administrative Expenses 60,000 5%
Utilities 132,674 5%
Sales, Marketing & Training Expenses (2.5% of Net
Sales Revenue) Variable
Packaging Material 450,000 5%
Transport 3,230,769 5%
Maintenance (2.5% of Plant Buildings & Machinery) straight line
Insurance (1.6% of Plant Buildings & Machinery) straight line
Cost of Consumables (1.0% of Raw Material Costs) Variable
Table 35-7: Financial Assumptions

Project Life (Years) 10
Debt 89.38%
Equity 10.62%
Interest rate on long-term debt 12.5%
Debt tenure (Years) 10
Debt payments per year 1
Table 35-8: Depreciation Rate Assumptions

Land 0%
Buildings 5%
Machinery and Equipment 10%
Office Equipment 10%
Furniture & Fixtures 10%
Vehicles 20%
124
Schedule 02: SOURCE AND STRUCTURE OF PROJECT FINANCING (US$)
S. No. Project Investment Component Share Equity Medium Total
Capital Term Loan
1. Existing Land (20 Acres) 5.00% 200,000 0 200,000
2. Buildings & Civil Works (including
QC Lab) 26.04% 0 1,041,666 1,041,666
3. Machinery & Equipment 40.47% 0 1,618,974 1,618,974
4. Utility & Others 4.05% 0 161,897 161,897
5. Industrial Generator 20 kVA 1.25% 0 50,000 50,000
6. Motor Vehicles 2.50% 100,000 0 100,000
7. Miscellaneous Fixed Assets 2.00% 0 80,000 80,000
8. SUB-TOTAL 81.31% 300,000 2,952,537 3,252,537
9. Contingency (5%) 4.07% 0 162,627 162,627
10. Working Capital 14.62% 124,836 460,000 584,836
11. TOTAL 100.00% 424,836 3,575,164 4,000,000
10.62% 89.38% 100.00%
125
Schedule 03/1: Estimation of Sales Revenue in US$ (HQCF Section)
ITEM YEAR OF OPERATION
1 2 3 4 5 6 7 8 9 10
Average Production per Minute 160 160 160 160 160 160 160 160 160
75% efficiency 120 120 120 120 120 120 120 120 120
Capacity Utilisation 70% 80% 90% 95% 95% 95% 95% 95% 95%
Actual Production per min (kgs) 84 96 108 114 114 114 114 114 114
Actual Production per hour (kgs) 5,040 5,760 6,480 6,840 6,840 6,840 6,840 6,840 6,840
Production per day (kgs) 100,800 115,200 129,600 136,800 136,800 136,800 136,800 136,800 136,800
Production for 300 working days (kgs) 30,240,000 34,560,000 38,880,000 41,040,000 41,040,000 41,040,000 41,040,000 41,040,000 41,040,000
Selling Price (USD/kg of HQCF) 0.6 0.63 0.66 0.69 0.73 0.77 0.80 0.84 0.89
Sales Revenue (USD) 18,144,000 21,772,800 25,719,120 28,505,358 29,930,626 31,427,157 32,998,515 34,648,441 36,380,863
Value Loss (2%) 362,880 435,456 514,382 570,107 598,613 628,543 659,970 692,969 727,617
Net Sales Revenue (USD) 17,781,120 21,337,344 25,204,738 27,935,251 29,332,013 30,798,614 32,338,545 33,955,472 35,653,246
126
Schedule 03/2: Estimation of Sales Revenue in US$ (Cassava Flour Section)
1 2 3 4 5 6 7 8 9 10
Average Production per Minute 160 160 160 160 160 160 160 160 160
75% efficiency 120 120 120 120 120 120 120 120 120
Capacity Utilisation 70% 80% 90% 95% 95% 95% 95% 95% 95%
Actual Production per min (kgs) 84 96 108 114 114 114 114 114 114
Actual Production per hour (kgs) 5,040 5,760 6,480 6,840 6,840 6,840 6,840 6,840 6,840
Production per day (kgs) 100,800 115,200 129,600 136,800 136,800 136,800 136,800 136,800 136,800
Production for 300 working days (kgs) 30,240,000 34,560,000 38,880,000 41,040,000 41,040,000 41,040,000 41,040,000 41,040,000 41,040,000
Selling Price (USD/kg of HQCF) 0.32 0.34 0.35 0.37 0.39 0.41 0.43 0.45 0.47
Sales Revenue (USD) 9,676,800 11,612,160 13,716,864 15,202,858 15,963,000 16,761,151 17,599,208 18,479,168 19,403,127
Value Loss (2%) 193,536 232,243 274,337 304,057 319,260 335,223 351,984 369,583 388,063
Net Sales Revenue (USD) 9,483,264 11,379,917 13,442,527 14,898,800 15,643,740 16,425,927 17,247,224 18,109,585 19,015,064
127
Schedule 03/3: Projected Income and Profitability Statement (Composite Project) in US$
1 2 3 4 5 6 7 8 9 10
INCOME (USD)
HQCF Sales 17,781,120 21,337,344 25,204,738 27,935,251 29,332,013 30,798,614 32,338,545 33,955,472 35,653,246
Cassava Flour Sales 9,483,264 11,379,917 13,442,527 14,898,800 15,643,740 16,425,927 17,247,224 18,109,585 19,015,064
Total Sales 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754 47,224,542 49,585,769 52,065,057 54,668,310
OPERATING EXPENSES (USD)

Raw materials 20,490,626 21,515,157 22,590,915 23,720,461 24,906,484 26,151,808 27,459,399 28,832,369 30,273,987
Salaries & wages 632,160 663,768 696,956 731,804 768,394 806,814 847,155 889,513 933,988
Administrative Expenses 60,000 63,000 66,150 69,458 72,930 76,577 80,406 84,426 88,647
Repairs & Maintenance (2.5% of Plant &
Building Costs) 66,516 66,516 66,516 66,516 66,516 66,516 66,516 66,516 66,516
Utilities 132,674 139,308 146,273 153,587 161,266 169,329 177,796 186,686 196,020
Sales, Marketing & Training Expenses 681,610 817,932 966,182 1,070,851 1,124,394 1,180,614 1,239,644 1,301,626 1,366,708
Packaging Material 450,000 472,500 496,125 520,931 546,978 574,327 603,043 633,195 664,855
Transport 3,230,769 3,392,307 3,561,923 3,740,019 3,927,020 4,123,371 4,329,539 4,546,016 4,773,317
Insurance (1.6% of Plant & Bldg Costs) 42,570 42,570 42,570 42,570 42,570 42,570 42,570 42,570 42,570
Cost of Consumables 204,906 215,152 225,909 237,205 249,065 261,518 274,594 288,324 302,740
Total Operating Expenses 25,991,831 27,388,210 28,859,519 30,353,401 31,865,617 33,453,444 35,120,662 36,871,240 38,709,348
Interest (12.5%) 446,896 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000
Depreciation 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170
Total Production Costs 26,701,896 28,051,380 29,472,689 30,916,571 32,378,787 33,916,614 35,533,832 37,234,410 39,022,518
Surplus/Deficit (USD) 562,488 4,665,881 9,174,575 11,917,480 12,596,967 13,307,928 14,051,937 14,830,647 15,645,792
Cumulative USD) 562,488 5,228,369 14,402,944 26,320,424 38,917,390 52,225,318 66,277,255 81,107,902 96,753,693
128
Schedule 04: Loan and Interest Service Schedule (In US$)
Item Years
Loan Amount 3,537,164
Year 1 2 3 4 5 6 7 8 9 10 Total
Interest @ 12.5% p.a. 0 446,896 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 2,246,896
Loan Repayment 0 375,164 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 3,575,164
129
Schedule 05/1: CALCULATION OF WORKING CAPITAL
(a) Accounts receivable: 30 days at production costs minus depreciation and

interest
(b) Inventory:
Raw Material Inputs: 30 days at fresh (raw) cassava inputs.
Salaries & Wages: 90 days
Industrial Plant Operations: 60 days at administrative expenses + repairs &

maintenance + utilities + packaging materials +
consumables.
Machy & vehicle maintenance: 180 days
Work in progress: 9 days at raw materials + salaries & wages +

administrative expenses + repairs & maintenance +
utilities + packaging materials + insurance +
consumables.
Finished products: 45 days at raw materials + salaries & wages +

administrative expenses + repairs & maintenance +
utilities + packaging materials + insurance +
consumables.
© Cash-in-hand: 15 days, see separate calculations at the bottom of this

schedule.
(d) Accounts payable: 30 days of 10% of total operating costs.
N.B.: All the local cost price factors for cost of goods sold, utilities and working capital
are indicated in US Dollars for the ease of computational and financial analysis.
130
Schedule 05/2: CALCULATION OF WORKING CAPITAL
II: Annual Production - Cost Estimate (US$)

ACCOUNT HEAD FINANCIAL YEAR OF OPERATION
YEAR 1 2 3 4 5 6 7 8 9 10
Operating Costs (US$)
Raw materials 20,490,626 21,515,157 22,590,915 23,720,461 24,906,484 26,151,808 27,459,399 28,832,369 30,273,987
Salaries & wages 632,160 663,768 696,956 731,804 768,394 806,814 847,155 889,513 933,988
Administrative Expenses 60,000 63,000 66,150 69,458 72,930 76,577 80,406 84,426 88,647
Repairs & Maintenance 66,516 66,516 66,516 66,516 66,516 66,516 66,516 66,516 66,516
Utilities 132,674 139,308 146,273 153,587 161,266 169,329 177,796 186,686 196,020
Sales, Marketing & Training
Expenses 681,610 817,932 966,182 1,070,851 1,124,394 1,180,614 1,239,644 1,301,626 1,366,708
Packaging Material 450,000 472,500 496,125 520,931 546,978 574,327 603,043 633,195 664,855
Transport 3,230,769 3,392,307 3,561,923 3,740,019 3,927,020 4,123,371 4,329,539 4,546,016 4,773,317
Insurance 42,570 42,570 42,570 42,570 42,570 42,570 42,570 42,570 42,570
Cost of Consumables 204,906 215,152 225,909 237,205 249,065 261,518 274,594 288,324 302,740
Cost of Sales 25,991,831 27,388,210 28,859,519 30,353,401 31,865,617 33,453,444 35,120,662 36,871,240 38,709,348
Financial Costs (US$)

Interest on Medium Term
Loans 446,896 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000
Depreciation 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170
Total Financial Costs 710,066 663,170 613,170 563,170 513,170 463,170 413,170 363,170 313,170
Total Production Costs 26,701,896 28,051,380 29,472,689 30,916,571 32,378,787 33,916,614 35,533,832 37,234,410 39,022,518
131
Schedule 05/3: CALCULATION OF WORKING CAPITAL: WORKING CAPITAL REQUIREMENTS (US$)
X Y Requirements (US$)
Minimum Coefficient
days of Full-Capacity
of
Item coverage turn-over 2 3 4 5 6 7 8 9 10
I. Current assets
A. Accounts receivable 30 12 2,165,986 2,282,351 2,404,960 2,529,450 2,655,468 2,787,787 2,926,722 3,072,603 3,225,779
B. Inventory
a) Raw Materials 30 12 1,707,552 1,792,930 1,882,576 1,976,705 2,075,540 2,179,317 2,288,283 2,402,697 2,522,832
b) Salaries & Wages 90 4 158,040 165,942 174,239 182,951 192,099 201,704 211,789 222,378 233,497
c) Plant Operations 60 6 152,349 159,413 166,829 174,616 182,793 191,378 200,392 209,858 219,796
d) Maintenance & Repair 180 2 33,258 33,258 33,258 33,258 33,258 33,258 33,258 33,258 33,258
e) Work-in-Process 9 40 551,986 579,449 608,285 638,563 670,355 703,736 738,787 775,590 814,233
f) Finished Products 45 8 2,759,932 2,897,246 3,041,427 3,192,816 3,351,775 3,518,682 3,693,935 3,877,950 4,071,165
C. Cash-in-hand 15 24 242,309 255,573 269,680 282,473 293,661 305,513 318,061 331,341 345,389
(from V below)
D. Current assets _ _ 7,771,413 8,166,161 8,581,255 9,010,833 9,454,949 9,921,375 10,411,227 10,925,675 11,465,950
II. Current Liabilities

A. Accounts payable 30 12 -216,599 -228,235 -240,496 -252,945 -265,547 -278,779 -292,672 -307,260 -322,578
III. Working Capital

A. Net Working Capital 7,554,814 7,937,926 8,340,759 8,757,888 9,189,402 9,642,597 10,118,555 10,618,415 11,143,373
B. Increase in Working
Capital _ 383,112 402,833 417,129 431,514 453,194 475,958 499,860 524,957
IV. Total Production Costs _ _ 26,701,896 28,051,380 29,472,689 30,916,571 32,378,787 33,916,614 35,533,832 37,234,410 39,022,518
Less: Raw Material Inputs _ _ 20,490,626 21,515,157 22,590,915 23,720,461 24,906,484 26,151,808 27,459,399 28,832,369 30,273,987
Utilities _ _ 132,674 139,308 146,273 153,587 161,266 169,329 177,796 186,686 196,020
Depreciation _ _ 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170
15 24 5,815,426 6,133,745 6,472,331 6,779,354 7,047,867 7,332,306 7,633,467 7,952,186 8,289,341
V. Required Cash Balance _ _ 242,309 255,573 269,680 282,473 293,661 305,513 318,061 331,341 345,389
132
SCHEDULE 06: FIXED ASSETS AND DEPRECIATION ALLOWANCES (US$)
Year 1 2 3 4 5 6 7 8 9 10
Initial Dep Dep Dep Dep Dep Dep Dep Dep Dep
Asset Value Allowance Allowance Allowance Allowance Allowance Allowance Allowance Allowance Allowance
Plant Buildings 1,041,666 52,083 52,083 52,083 52,083 52,083 52,083 52,083 52,083 52,083
Production Plant and

Equipment 1,618,974 161,897 161,897 161,897 161,897 161,897 161,897 161,897 161,897 161,897
Utility & Others (10%) 161,897 16,190 16,190 16,190 16,190 16,190 16,190 16,190 16,190 16,190
Diesel Electric Genset 50,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
Miscellaneous Fixed Assets 80,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000
Motor Vehicles 100,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000
133
Schedule 07: TOTAL INVESTMENT COSTS (US$)
Period Dev’t Full Capacity
Year 1 2 3 4 5 6 7 8 9 10 Total
1. Fixed Investment Costs 3,252,537 0 0 0 0 0 0 0 0 0 3,352,537

a) Initial fixed investment costs 3,252,537 0 0 0 0 0 0 0 0 0 3,252,537
b) Replacement 0 0 0 0 0 100,000 0 0 0 0 100,000
2. Pre-operational expenses 747,463 0 0 0 0 0 0 0 0 0 747,463
3. Working Capital increase 0 7,554,814 383,112 402,833 417,129 431,514 453,194 475,958 499,860 524,957 11,143,373
Total Investment Costs 4,000,000 7,554,814 383,112 402,833 417,129 531,514 453,194 475,958 499,860 524,957 15,243,373
Schedule 08: TOTAL ASSETS (US$)

Year 1 2 3 4 5 6 7 8 9 10 Total
1. Fixed Investment Costs 3,252,537 0 0 0 0 0 0 0 0 0 3,352,537

a) Initial fixed investment costs 3,252,537 0 0 0 0 0 0 0 0 0 3,252,537
b) Replacement 0 0 0 0 0 100,000 0 0 0 0 100,000
2. Pre-operational expenses 747,463 0 0 0 0 0 0 0 0 0 747,463
3. Current Assets increase 0 7,771,413 394,749 415,093 429,578 444,116 466,426 489,852 514,448 540,275 11,465,950
Total Assets 4,000,000 7,771,413 394,749 415,093 429,578 544,116 466,426 489,852 514,448 540,275 15,565,950
134
Schedule 09: PROJECTED CASHFLOW TABLE (US$)
Year 1 2 3 4 5 6 7 8 9 10 *Sal val Total
Costs (US Dollars)
A. Cash inflow 4,000,000 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754 47,224,542 49,585,769 52,065,057 54,668,310 _ 393,982,391
1. Financial resources
total 4,000,000 _ _ _ _ _ _ _ _ _ 4,000,000
_
2. Sales revenue total _ 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754 47,224,542 49,585,769 52,065,057 54,668,310 _ 389,982,391
B. Cash outflow -4,000,000 -34,728,451 -29,949,674 -32,743,936 -35,025,175 -36,805,774 -38,479,199 -40,343,045 -42,301,834 -44,360,312 11,864,206 -326,873,194
1. Total assets schedule
including replacements -4,000,000 -7,771,413 -394,749 -415,093 -429,578 -544,116 -466,426 -489,852 -514,448 -540,275 11,864,206 -3,701,744
2. Operating Costs (Cost of Sales)
_ -25,991,831 -27,388,210 -28,859,519 -30,353,401 -31,865,617 -33,453,444 -35,120,662 -36,871,240 -38,709,348 _ -288,613,273
3. Debt Service
a) Interest (12.5%) _ -446,896 -400,000 -350,000 -300,000 -250,000 -200,000 -150,000 -100,000 -50,000 _ -2,246,896
b) Repayments _ -375,164 -400,000 -400,000 -400,000 -400,000 -400,000 -400,000 -400,000 -400,000 -3,575,164
4. Corporate tax _ -135,148 -1,358,715 -2,711,324 -3,534,195 -3,738,041 -3,951,329 -4,174,532 -4,408,145 -4,652,689 _ -28,664,118
5. Dividends 4% on equity _ -8,000 -8,000 -8,000 -8,000 -8,000 -8,000 -8,000 -8,000 -8,000 _ -72,000
C. Surplus / deficit 0 -7,464,067 2,767,587 5,903,328 7,808,877 8,169,979 8,745,342 9,242,723 9,763,223 10,307,998 11,864,206 67,109,197
D. Cumulative cash balance 0 -7,464,067 -4,696,480 1,206,848 9,015,725 17,185,704 25,931,046 35,173,770 44,936,993 55,244,991 67,109,197
*Salvage values. Land: 200,000; 1/2 of buildings: 520,833; Working Capital: 11,143,373 11,864,206
135
Schedule 10: PROJECTED CASHFLOW TABLE AND CALCULATION OF PRESENT VALUE (US$)
Year 1 2 3 4 5 6 7 8 9 10 *Sal val Total
Dev’t Full Capacity
Investment Costs -4,000,000 _ _ _ _ _ _ _ _ _ _ -4,000,000

Net Profit after Tax _ 315,346 3,170,336 6,326,422 8,246,455 8,722,096 9,219,768 9,740,575 10,285,672 10,856,273 _ 66,882,941
Depreciation _ 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170 _ 2,368,530
Interest Add back
Mid-term Loan _ 446,896 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 _ 2,246,896
NET CASH FLOWS -4,000,000 1,025,411 3,833,506 6,939,592 8,809,625 9,235,266 9,682,938 10,153,745 10,648,842 11,169,443 11,864,206 79,362,573
Discount Factors at 14% 0.8772 0.7695 0.675 0.5921 0.5194 0.4556 0.3996 0.3506 0.3075 0.2697 0.2076 _
PV at 14% -3,508,800 789,054 2,587,616 4,108,932 4,575,719 4,207,587 3,869,302 3,559,903 3,274,519 3,012,399 2,463,009 28,939,240
NPV at 14% 28,939,240
Discount Factors at 17% 0.8547 0.7305 0.6244 0.5337 0.4561 0.3898 0.3332 0.2848 0.2434 0.208 0.152 _
PV at 17% -3,418,800 749,063 2,393,641 3,703,660 4,018,070 3,599,907 3,226,355 2,891,787 2,591,928 2,323,244 1,803,359 23,882,213
NPV at 17% 23,882,213
Internal Rate of Return = 91.43%

91.43%
NPV at 14% = USD 28,939,240
NPV at 17% = USD 23,882,213
136
Schedule 11: PROJECTED INCOME STATEMENT (US$)
Year 1 2 3 4 5 6 7 8 9 10
Dev’t
Sales _ 27,264,384 32,717,261 38,647,264 42,834,051 44,975,754 47,224,542 49,585,769 52,065,057 54,668,310
Raw Materials _ 20,490,626 21,515,157 22,590,915 23,720,461 24,906,484 26,151,808 27,459,399 28,832,369 30,273,987
GROSS PROFIT _ 6,773,758 11,202,104 16,056,349 19,113,590 20,069,270 21,072,733 22,126,370 23,232,689 24,394,323
Less: Operating Costs

(excl. Raw Materials) _ 5,501,205 5,873,052 6,268,604 6,632,941 6,959,133 7,301,636 7,661,263 8,038,872 8,435,361
OPERATING PROFIT _ 1,272,553 5,329,051 9,787,745 12,480,650 13,110,137 13,771,098 14,465,107 15,193,817 15,958,962
Less: Accrued interest on

Long-Term Loan (@ 12.5% p.a.) _ 446,896 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000
Less: Annual Repayments _ 375,164 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000
NET PROFIT BEFORE TAX _ 450,494 4,529,051 9,037,745 11,780,650 12,460,137 13,171,098 13,915,107 14,693,817 15,508,962
Corporation Tax 30% _ 135,148 1,358,715 2,711,324 3,534,195 3,738,041 3,951,329 4,174,532 4,408,145 4,652,689
NET PROFIT _ 315,346 3,170,336 6,326,422 8,246,455 8,722,096 9,219,768 9,740,575 10,285,672 10,856,273
Accumulated Net Profit (Loss) _ 315,346 3,485,681 9,812,103 18,058,558 26,780,653 36,000,422 45,740,997 56,026,668 66,882,941
Net Profit Margin _ 0.0116 0.0969 0.164 0.193 0.194 0.195 0.196 0.198 0.199
Gross Profit Margin 0.248 0.342 0.415 0.446 0.446 0.446 0.446 0.446 0.446
Rate of Return on Investment _ 8% 79% 158.16% 206% 218.05% 230.49% 243.51% 257.14% 271.41%
Operating Profit Margin _ 0.047 0.163 0.253 0.291 0.291 0.292 0.292 0.292 0.292
137
Schedule 12: PROJECTED BALANCE SHEET (US$)
CAPITAL EMPLOYED: YR.1 YR.2 YR.3 YR.4 YR.5 YR.6 YR.7 YR.8 YR.9 YR.10
Share Capital 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000
Retained Earnings 315,346 3,485,681 9,812,103 18,058,558 26,780,653 36,000,422 45,740,997 56,026,668 66,882,941
Shareholder's Equity/Deficit 515,346 3,685,681 10,012,103 18,258,558 26,980,653 36,200,422 45,940,997 56,226,668 67,082,941
Long-Term Liabilities 3,200,000 2,824,836 2,424,836 2,024,836 1,624,836 1,224,836 824,836 800,000 400,000
3,715,346 6,510,517 12,436,939 20,283,394 28,605,489 37,425,258 46,765,833 57,026,668 67,482,941
EMPLOYMENT OF CAPITAL: `
Plant Buildings 1,041,666 989,583 937,499 885,416 833,333 781,250 729,166 677,083 625,000 572,916
Production Plant Equip. & Machinery 1,618,974 1,457,077 1,295,179 1,133,282 971,384 809,487 647,590 485,692 323,795 161,897
Utilities & Others + Genset 211,897 190,707 169,518 148,328 127,138 105,949 84,759 63,569 42,379 21,190
Miscellaneous Fixed Assets 80,000 72,000 64,000 56,000 48,000 40,000 32,000 24,000 16,000 8,000
Vehicles 100,000 80,000 60,000 40,000 20,000 100,000 80,000 60,000 40,000 20,000
LONG-TERM ASSETS: 2,789,367 2,526,196 2,263,026 1,999,855 1,836,685 1,573,515 1,310,344 1,047,174 784,003
CURRENT ASSETS: 1,589,473 4,612,556 10,764,409 18,836,483 27,284,351 36,330,522 45,898,161 56,386,755 67,071,516
Accounts Receivable 2,165,986 2,282,351 2,404,960 2,529,450 2,655,468 2,787,787 2,926,722 3,072,603 3,225,779
Stock (Inventory) 5,363,117 5,628,238 5,906,614 6,198,910 6,505,820 6,828,076 7,166,444 7,521,731 7,894,782
Bank Balance and Cash 242,309 255,573 269,680 282,473 293,661 305,513 318,061 331,341 345,389
Other Current Assets -6,181,940 -3,553,605 2,183,154 9,825,650 17,829,402 26,409,146 35,486,934 45,461,079 55,605,566
CURRENT LIABILITIES: 663,494 628,235 590,496 552,945 515,547 478,779 442,672 407,260 372,578
Accounts Payable 216,599 228,235 240,496 252,945 265,547 278,779 292,672 307,260 322,578
Current Portion of Long-term
Liabilities 446,896 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000
NET CURRENT ASSETS: 925,979 3,984,321 10,173,913 18,283,538 26,768,804 35,851,743 45,455,488 55,979,494 66,698,938
TOTAL CAPITAL 3,715,346 6,510,517 12,436,939 20,283,394 28,605,489 37,425,258 46,765,833 57,026,668 67,482,941
TOTAL ASSETS 4,378,840 7,138,752 13,027,435 20,836,339 29,121,036 37,904,037 47,208,505 57,433,929 67,855,519
138
Schedule 13: PROJECTED PAYBACK PERIOD (US$)
YEAR/ITEM 2 3 4 5 6 7 8 9 10
Net Profit 315,346 3,170,336 6,326,422 8,246,455 8,722,096 9,219,768 9,740,575 10,285,672 10,856,273
Interest 446,896 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000
Depreciation 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170 263,170
"Profit" 1,025,411 3,833,506 6,939,592 8,809,625 9,235,266 9,682,938 10,153,745 10,648,842 11,169,443
Year Amount paid Balance of Balance of

back from Total New Equity
"profits" Investment Investment
1 0 -4,000,000 -424,836
2 1,025,411 -2,974,589 600,575
3 3,833,506 858,917 4,434,081
4 6,939,592 7,798,508 11,373,672
5 8,809,625 16,608,133 20,183,297
6 9,235,266 25,843,399 35,078,665
7 9,682,938 35,526,337 45,209,276
8 10,153,745 45,680,082 55,833,827
9 10,648,842 56,328,924 66,482,669
10 11,169,443 67,498,367 77,652,112
Pay Back Period = 2.78 YEARS
139
Schedule 14: BUSINESS RATIO ANALYSIS (US$)
Year 1 2 3 4 5 6 7 8 9 10
Sales Growth 5% 5% 5% 5% 5% 5% 5% 5%
Percent of Total Assets

Accounts Receivable 49.46% 31.97% 18.46% 12.14% 9.12% 7.35% 6.20% 5.35% 4.75%
Inventory 122.48% 78.84% 45.34% 29.75% 22.34% 18.01% 15.18% 13.10% 11.63%
Other Current Assets -141.18% -49.78% 16.76% 47.16% 61.23% 69.67% 75.17% 79.15% 81.95%
Total Current Assets 36.30% 64.61% 82.63% 90.40% 93.69% 95.85% 97.22% 98.18% 98.84%
Long-term Assets 63.70% 35.39% 17.37% 9.60% 6.31% 4.15% 2.78% 1.82% 1.16%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Current Liabilities 15.15% 8.80% 4.53% 2.65% 1.77% 1.26% 0.94% 0.71% 0.55%
Long-term liabilities 73.08% 39.57% 18.61% 9.72% 5.58% 3.23% 1.75% 1.39% 0.59%
Total Liabilities 88.23% 48.37% 23.15% 12.37% 7.35% 4.49% 2.68% 2.10% 1.14%
Net Worth (Total Capital) 84.85% 91.20% 95.47% 97.35% 98.23% 98.74% 99.06% 99.29% 99.45%
Percent of Revenues
Revenues 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 24.84% 34.24% 41.55% 44.62% 44.62% 44.62% 44.62% 44.62% 44.62%
Management / Administration 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50%
Net Profit (after Interest & Tax) 1.16% 9.69% 16.37% 19.25% 19.39% 19.52% 19.64% 19.76% 19.86%
Main Ratios
Current 2.40 7.34 18.23 34.07 52.92 75.88 103.68 138.45 180.02
Quick -5.69 -1.62 8.23 22.86 40.30 61.62 87.50 119.98 158.83
Total Debt to Total Assets 73.08% 39.57% 18.61% 9.72% 5.58% 3.23% 1.75% 1.39% 0.59%
Pre-tax Return on Net Worth 12.13% 69.57% 72.67% 58.08% 43.56% 35.19% 29.75% 25.77% 22.98%
Pre-tax Return on Assets 10.29% 63.44% 69.37% 56.54% 42.79% 34.75% 29.48% 25.58% 22.86%
Business Vitality Profile

Revenue per Employee $454,406 $545,288 $644,121 $713,901 $749,596 $787,076 $826,429 $867,751 $911,138
140
Schedule 14: BUSINESS RATIO ANALYSIS (US$) …. CONT’D
Additional Ratios
Net Profit Margin 1.16% 9.69% 16.37% 19.25% 19.39% 19.52% 19.64% 19.76% 19.86%
Return on Equity 3.15% 86.02% 63.19% 45.16% 32.33% 25.47% 21.20% 18.29% 16.18%
Activity Ratios
Accounts Receivable
Turnover 1.26 1.43 1.61 1.69 1.69 1.69 1.69 1.69 1.69
Collection Days 30 30 30 30 30 30 30 30 30
Inventory Turnover 3.82 3.82 3.82 3.83 3.83 3.83 3.83 3.83 3.83
Accounts Payable Turnover 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20 1.20
Payment Days 30 30 30 30 30 30 30 30 30
Total Assets Turnover 6.23 4.58 2.97 2.06 1.54 1.25 1.05 0.91 0.81
Fixed Assets Turnover 9.32 10.84 12.75 15.18 17.35 21.26 26.80 35.21 49.37
Debt Ratios
Debt to Net Worth 0.86 0.43 0.19 0.10 0.06 0.03 0.02 0.01 0.01
Current Liability to Liability 0.21 0.22 0.24 0.27 0.32 0.39 0.54 0.51 0.93
Debt-Service Coverage Ratio _ 4.79 9.25 12.59 14.21 16.14 18.46 21.30 24.82
Liquidity Ratios
$7,554,81 $7,937,92 $8,340,75 $8,757,88 $9,189,40 $9,642,59 $10,118,55 $10,618,41 $11,143,37
Net Working Capital 4 6 9 8 2 7 5 5 3
Interest Coverage [Times Inte-
rest Earned Ratio - TIE] _ 13.32 27.96 41.60 52.44 68.86 96.43 151.94 319.18
Additional Ratios
Assets to Revenue 0.16 0.22 0.34 0.49 0.65 0.80 0.95 1.10 1.24
Current Debt / Total Assets 10.21% 5.60% 2.69% 1.44% 0.86% 0.53% 0.32% 0.17% 0.07%
Acid Test -5.69 -1.62 8.23 22.86 40.30 61.62 87.50 119.98 158.83
Sales/Net Worth 7.34 5.03 3.11 2.11 1.57 1.26 1.06 0.91 0.81
141
Schedule 15: SENSITIVITY ANALYSIS (US$)
Items PAT BEP IRR Payback
Base Case 8,246,455 15.92% 91.43% 2.77 Yrs
Increase in Operating Costs by 5% 8,014,302 16.81% 88.11% 2.87 Yrs
Selling Prices up by 20% 14,243,222 9.92% 171.00% 1.83 Yrs
Decrease in COGS by 10% 9,906,887 13.64% 117.18% 2.29 Yrs
Increase in COGS by 10% 6,586,023 19.12% 68.22% 3.39 Yrs
Legend:
PAT: Profit after Tax

BEP: Break-even Point
IRR: Internal Rate of Return
142
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BUSINESS PLAN:

ESTABLISHMENT AND OPERATION

HIGH QUALITY CASSAVA FLOUR PLANT

S/NO. DESCRIPTION PAGE

1.0 EXECUTIVE SUMMARY 1

2.0 PURPOSE OF DOCUMENT 12

THE ROLE OF GOVERNMENT, TAXATION,

4.0 PROJECT PROFILE 15

5.0 PRODUCTS & SERVICES 23

UGANDA CASSAVA PRODUCTION AND VALUE-

INDUSTRIAL UTILIZATION OF CASSAVA IN

8.0 CASSAVA MARKET STUDY 52

DEVELOPING INDUSTRIAL OPPORTUNITIES FOR

11.0 RAW MATERIALS AND PROCUREMENT 71

12.0 TECHNICAL ASPECTS 72

GOOD MANUFACTURING PRACTICE FOR HQCF

15.0 LAND & SERVICES INFRASTRUCTURE 93

16.0 GOVERNANCE & MANAGEMENT STRUCTURE 95

17.0 ENVIRONMENTAL ASPECTS 102

18.0 SCHEDULE OF IMPLEMENTATION 104

20.0 PROJECT ECONOMICS 116

21.0 KEY SUCCESS FACTORS 121

22.0 CONCLUSION & RECOMMENDATIONS 122

T/NO. DESCRIPTION PAGE

1 The Company Shareholders 17

2 Total Initial Project Investment Cost 21

Recommended inclusion levels of HQCF in different cassava-

Physical and chemical quality characteristics and requirements

Limit for chemical, biological and physical hazards in cassava

6 Cassava Production in Uganda, 2004 – 2008 30

7 Costs and margins within the fresh cassava value chain 37

8 Costs and margins within dried cassava value chain 40

9 Industrial options for high-grade cassava flour in Uganda 46

10 SWOT Analysis – Wheat milling industry 54

11 SWOT Analysis – Biscuit Industry 56

12 SWOT Analysis – Paperboard Industry 57

13 6-Year Sales Forecast 70

14 Starch Factory Equipment 82

15 Analytical Characteristics of Cassava Starch 85

16 Permissible Levels of Contaminants in Cassava Starch 86

17 Infrastructure Required at the Factory 88

19 Factory Personnel Requirements 98

Estimated Staff Remuneration per annum Cassava Starch

21 Cost of Project 106

22 Financial Plan 109

24 Rates of Return 110

25 Calculation of Payback Period for Equity and Total Investment 111

26 Capital: Output Ratios 111

27 Projected Cash Flows 112

28 Projected Balance Sheet 113

29 Break-Even Analysis in Project Year 5 114

30 Value Added/Contribution to GDP 115

31 Project Economics 116

32 Production Costs/Acre 117

33 Processing of 6,000 kgs at Processing Site 119

34 Economic and Livelihood Benefits to Communities 120

35 Key Financial Modelling Assumptions 106

F/NO. DESCRIPTION PAGE

1 Performance Highlights (PY2 – PY6) 8

2 Cassava Production Trends (1980 - 2011) 31

3 Fresh Cassava Value Chain 34

4 Dried Cassava Value Chain 41

5 Annual average retail prices of maize and cassava in Soroti 42

Options for improved market linkages between cassava