POTATO / BANANA CHIPS

1.

Introduction Snack foods have become very popular among all age groups in Mauritius and its popularity is growing day by day. Mauritius consumption of snack foods (both imported and locally produced) was estimated to be around Rs 150 mn in 2007. A variety of snack foods are presently available at reasonable prices but potato / banana chips have gained popularity during the past years. They have great potential for growth due to their immense popularity and nutritional aspects.

2.

Raw Materials Required Potatoes and bananas which are readily available in Mauritius are the main ingredients required for making banana / potato chips. Other ingredients needed are cooking oils, turmeric powder and salt.

3.

Manufacturing Process Potatoes / bananas should be washed and sliced. Then they should be dipped in brine water to avoid oxidation. Sometimes, turmeric powder is also used for colouring the chips or to improve colour. The chips are fried in vegetable oil, cooled to room temperature. These chips are then packed in polythene bags of suitable gauge to prevent spoilage. It is highly advisable to use packaging materials which are appealing to customers.

4.

Quality Control Strict quality control norms and hygienic conditions as per Health regulations will have to be maintained at every stage in the production process. All ingredients used and expiry date will have to be clearly spelt out on each packed snack food. The entrepreneurs should also possess a Food Handler Certificate from the Ministry of Health

5.

Technical Training and Support All information relating to the technical aspect including processing, lab facilitation, training, quality, etc can be obtained from AREU, MSB and SEHDA.

6.

Markets Huge scope exist for banana / potato chips as these ready-to-eat snacks are much popular among students and the general public. They could be sold to hotels, restaurants, shops and supermarkets.

7.

Estimated Cost of the Project Machinery and Equipment One Frying Pan (50 litres capacity) Five stainless steel trays One Heat sealing machine One Abrasion Peeler 2 Slicers 2 Washing Tanks Total Tables and Chairs Pre-operational expenses Working Capital TOTAL (Rs) 5,000 5,000 5,000 6,000 2,000 3,000 ------------------26,000 ------------------6,000 5,000 ------------------77,875 ------------------114,875 ===========

8.

Financing Structure Finance to meet the cost of the project could be met through Personal contribution DBM Micro Credit TOTAL 39,375 75,000 ----------114,875 =======

9.

Projected Turnover

Potato / Banana Chips 350 kgs of banana chips at Rs 120 kg (1 kg=24 packets at Rs 5 per packet) 350 kgs of potato chips at Rs 120 kg (1 kg = 24 packets at Rs 5 per packet) TOTAL 10.

Monthly 42,000 42,000 84,000

Annually 504,000 504,000 1,008,000

A Detailed Breakdown of Monthly Expenses (Working Capital) Salaries of 2 part-time workers and 1 full time employee Rent Raw Materials 1500 kgs potatos (4 kgs for 1kg chip) at Rs 16 per kg 1500 kgs bananas (4 kgs for 1kg chip) at Rs 16 per kg 247.5 kg edible oil (0.33 kg for 1 kg chip) at Rs 50 per kg Other ingredients + plastic bags Electricity / (water/telephone) Travelling Expenses (Fuel costs) Miscellaneous Expenses (N.P.F contribution etc.) TOTAL Rs 24,000 Rs 24,000 Rs 12,375 Rs 1,000 Rs 1,500 Rs 1,500 Rs 1,500 ------------Rs 77,875 ======== Rs 11,000 Rs 1,000

11.

Financial Analysis

With an expected turnover of Rs 1,008,000 from the sale of potato/banana chips in the first year of operation and total expenses forecasted at Rs 958,650 during the same period assuming other factors constant, a net profit of Rs 49,350 is forecasted. This represents a rate of return of 42.9% on investment. 12. Comments This project could help housewives, unemployed and redundant EPZ and sugar industry workers start their own business as it requires little finance. 13. Implementation Schedule

Project implementation will take a period of 2 months. A break up of the activities and estimated relative time for each activity is shown below: Time Frame Business registration at the Registrar of Business Registration at SEHDA Approval/Permits for a BL.P (if necessary) at the Municipality/District Council Preparation / Approval of Business Plan Sanction of financial support Commissioning and installation of machinery Trial run and production : : : : : : : 1 Day 1 Day 3-15 days 1 week 1 month 2 weeks 1 week

Estimated Profit & Loss A/c for the 1st year of operation Rs Total Revenue projected form the sale of banana/ Potato chips Less Direct Expenses on raw materials other Ingredients used Gross Profit Overheads Rent (Rs 1000 monthly) Salaries of 2 part-time workers and 1 full time employee (RS 11,000) Electricity, water, telephone License Fees Miscellaneous Expenses including (N.P.F contribution etc.) Travelling Expenses (Fuel costs) Depreciation (15%) Bank charges (9%) Total Net Profit (before tax) 12,000 143,000 18,000 2,500 18,000 18,000 3,900 6,750 -------------222,150 -------------49,350 1,008,000 736,500 -------------271,500 --------------

NOTE:

It is to be underlined that this project profile is meant to facilitate decision making by entrepreneurs at the time of identifying business ideas. The exercise is based on a number of assumptions which may vary from business to business. As such every attempt has been made to provide as far as possible correct information and figures. However, implementation of the project and the operation of the business will depend upon a number of factors, including, the skills of the entrepreneur, quality of products and marketing strategy. The authors do not bear responsibility for changes witnessed during the implementation and operation.

25 January 2008