Josa Green Fuel Technologies Business Plan 20th May 2018

BUSINESS PLAN:
EXPANSION
AND
SCALING UP
OF JOSA GREEN TECHNOLOGIES LTD
BIO-FUEL BRIQUETTES
MANUFACTURING FACILITY
AT NANSANA
IN WAKISO DISTRICT
JOSA GREEN TECHNOLOGIES LIMITED

P.O. BOX 7264,
KAMPALA,
UGANDA.
Cell Phone: +256 (0) 782 803019 / 783 115192 / 752 484225 /704 907375
Landline: +256------------------
Fax: +256------------------
E‐Mail: josagreentechnologies@gmail.com
NOVEMBER 2015
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JOSAGREEN TECHNOLOGIES FUEL BRIQUETTES BUSINESS PLAN
A. TABLE OF CONTENTS
S/NO. DESCRIPTION PAGE
1.0 EXECUTIVE SUMMARY 1

1.1 Business Profile 1
1.2 Business Location 1
1.3 Business Objective 2
1.4 The Team 2
1.5 Funds Required 3
1.6 Production Plan 3
1.7 The Market 4
1.8 Marketing Strategy 4
1.9 Personnel Policy 5
1.10 Financial Performance 5
1.11 Local Social Impact of the Business" Products or Services 7
1.12 Keys to Success 8
1.13 Mission 8
1.14 Vision 8
2.0 PURPOSE OF THE DOCUMENT 9
3.0 INTRODUCTION & BACKGROUND 10

3.1 Biomass Policy 10
3.2 The Biomass Economy 10
3.3 An Approaching Crisis 11
3.4 Briquettes and their Potential 11
4.0 PROJECT DESCRIPTION 13

4.1 Project Brief & Opportunity Rationale 13
4.2 Business Model and Value Proposition 15
4.3 Funds Required 16
4.4 Total Project Cost 17
4.5 Project Financial Performance Parameters 17
5.0 COMPANY INFORMATION 19

5.1 Registered Name 19
5.2 Commencement of Operations 19
5.3 Company Profile 19
5.4 Mission Statement 20
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5.5 Vision Statement 20
5.6 Core Values 20
5.7 Strategic Objectives 21
5.8 Organizational Objectives 21
5.9 Business Highlights 22
5.1 Organizational Philosophy 22
5.11 Founders and Management Team 23
5.12 Shareholding Structure 23
6.0 PRODUCTS AND SERVICES 24

6.1 Product Description 24
6.2 Capacity Building Services 25
6.3 Other Services 27
6.4 Accomplished Assignments To date 27
7.0 MARKET STRUCTURE AND ANALYSIS 28

7.1 Biomass Use in Uganda 28
7.2 Briquette Markets 29
7.3 Target Market and Customer Base 30
7.4 Market Size and Potential 31
7.5 Competitor Analysis 32
7.6 Uganda Market Competitors 34
7.7 Competitive Advantage 36
8.0 THE UGANDA BRIQUETTE INDUSTRY 37
9.0 MARKETING AND DISTRIBUTION 41

9.1 Marketing and Communication 41
9.2 Distribution 41
9.3 Sales 41
9.4 Market Penetration Strategy 42
10.0 PROJECT TECHNICAL ASPECTS 44

10.1 Project Location & Facilities 44
10.2 Size and Capacity 44
10.3 Technical Description of Process 45
10.4 Processing Machinery and Equipment 46
10.5 Buildings and Civil Works 47
10.6 Vehicles 48
10.7 Biomass for Briquettes 48
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10.8 Sourcing of Raw Materials 50
10.9 Environmental Impacts 52
11.0 HUMAN RESOURCES AND MANAGEMENT STRUCTURE 53

11.1 Governance Structure 53
11.2 Organizational and Manpower Structure 53
11.3 Personnel & Payroll Plan 57
11.4 Training Requirement 57
11.5 Feedback & Control 57
INVESTMENT REQUIREMENT, PROJECT FINANCING

59
12.0 AND RETURNS
12.1 Capital Cost of Project 59
12.2 Financial Plan 61
12.3 Profit & Loss Account 61
12.4 Rates of Return 62
12.5 Payback Period 62
12.6 Capital: Output Ratio 63
12.7 Projected Cash Flow Statement 63
12.8 Projected Balance Sheet 64
12.9 Break-Even Analysis 65
12.10 Value Added/Contribution to GDP 66
13.0 IMPLEMENTATION SCHEDULE 68
14.0 PROJECT ECONOMICS 70

14.1 Project KPIs 70
14.2 Jobs Creation 70
14.3 Government Revenue 71
14.4 Socio-Economic Impacts 72
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B. LIST OF TABLES
T/NO. DESCRIPTION PAGE
1 Annual production of agricultural residues 9
2 Total Initial Project Investment Cost 17
3 Key Project Performance Parameters 18
4 Company Shareholding Structure 23
5 Josa Products and Services 26
6 Fuel Comparison: calorific values 30
7 Household Energy Consumption 31
8 Consumption of Firewood and Charcoal in Uganda 32
9 Different Energy Costs 33
10 Analysis of the Uganda Briquette Industry 38
11 Projected Revenues 42
12 Planned Monthly and Annual Production Output 44
Summary of advantages and disadvantages of briquette

13 production techniques 46
14 Estimated Cost of Machinery and Equipment 47
15 Estimated Cost of New Buildings & Civil Works 47
16 Biomass Potential 49
17 Manpower Requirement and Annual Labour Cost 58
18 Initial Capital Investment Cost of Project 59

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19 Summary Profit & Loss Account for First Five Years of the Project 62
20 Rates of Return 62
21 Calculation of Payback Period for Equity and Total Investment 63
22 Capital: Output Ratios 63
23 Projected Cash Flows 64
24 Projected Balance Sheet 65
25 Break-Even Analysis in Project Year 5 66
26 Calculation of Value Added 67
27 Project Economics 70
27-1: Total Project Cost (Planned Investment) 70
27-2: Project Returns 70
27-3: Financing Structure 70
28 Investment to Jobs Created Ratio 71
29 Corporate Income Tax Payments 71
30 Key Financial Modelling Assumptions 73

30-1: Project Assumptions 73
30-2: Plant Operating Assumptions 73
30-3: Production Budget Assumptions 74
30-4: Revenue Assumptions 76
30-5: Financial Assumptions 77
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C. LIST OF FIGURES
F/NO. DESCRIPTION PAGE
1 Performance Highlights (PY2 – PY5) 6
2 Charcoal price - per kg (2004 - 2011) 14
3 Energy Consumption in Uganda 15
4 Industrial Hammer mill Grinder 46
5 Roller Press 46
6 Josa Organizational Structure 54
7 Project Implementation Milestones 69

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D. LIST OF FINANCIAL ANALYTICAL SCHEDULES
S/NO. DESCRIPTION PAGE
1 Key Financial Modelling Assumptions 73
2/1: Initial Project Investment Costs 78
2/2: Source and Structure of Project Financing 79
3/1: Estimation of Briquettes and Cook Stoves Sales Revenues (PY 2) 80
3/2: Estimation of Briquettes and Cook Stoves Sales Revenues (PY 2 - PY 5) 81
4 Loan and Interest Service Schedule 82
Calculation of Working Capital: I Minimum Requirements of Current

5/1: Assets and Liabilities 83
5/2: Calculation of Working Capital: II Annual Production Cost – Estimate 84
5/3: Calculation of Working Capital: III Working Capital Requirements 85
6 Fixed Assets and Depreciation Allowances 86
7 Change inTotal Investment Costs 87
8 Change in Total Assets 87
9 Projected Cash Flow Table 88
10 Projected Cash flow Table and Calculation of Present Value 89
11 Projected Income Statement 90
12 Projected Balance Sheet 91
13 Calculation of Payback Period 92
14 Business Ratios/Ratio Analysis 93
15 Sensitivity Analysis 95
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E. LIST OF APPENDICES
A/NO. DESCRIPTION PAGE
I. Assignments Handled and Completed To date by Josa 96

1.0 EXECUTIVE SUMMARY
The purpose of this business plan is to raise US$ 60,000 (UGShs 210 million) from a
renewable energies funding source. Josa Green Technologies Ltd is a Ugandan-
registered Bio Energy (or renewable energy) investment companythat specializes in the
manufacture of Bio Mass Briquettes fuel which is also known as white coal (charcoal) in
the industry. The Bio Fuel is produced from agro waste and on burning it does not
create pollution. Josa Green Technologies Ltd seeks to apply the requisitioned funds to
acquire additional machinery and equipment for processing fuel briquettes and cooking
stoves/ovens, erect additional structures on the its current production site, acquire one
transportation truck, and finance working capital requirements for raw material
inventories and operating costs of the enterprise.
1.1 Business Profile
Biomass, an energy-producing source, is used principally in the form of firewood and

charcoal. It currently provides about 93% of Uganda‟s consumed energy. In
agricultural-based countries like Uganda however, there is a vast natural supply of
biomass found in the form of agro and forest residues. Often these residues are simply
burned in the fields; this is not only a waste of an energy source, but it is also a cause for
pollution in local regions. Josa‟s aim is to transform Uganda‟s agricultural waste into
briquettes. Besides reducing the increased exploitation of Uganda‟s primary forests,
briquettes also have a low production cost, which means they would be cheaper than
firewood or charcoal. They can be used in already existing stoves and have a longer
burning time because of their density and low moisture content. As a result, sales of
$205,294 or 918 tons are expected from the first year of operation.
The briquettes will be made out of charcoal-dust and dry agricultural wastes, sugar
cane trash (bagasse), and maize trash from farmers. Simple technologies will be
implemented to make it less expensive to produce briquettes. Thus, the briquettes will
be affordable by the local population.
Today, 31.58 million people in the country still use fire wood and wood charcoal for
their cooking needs, this population is a sizeable market for charcoal briquettes.
1.2 Business Location
The Josa Green Technologies Ltd's bio-fuel briquettes and energy-saving cook stoves
production (industrial) facility is located at Ochieng Zone opposite Njovu Estate at
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Nansana town in Wakiso District which is only about 10 kms from Kampala city centre
along the Kampala – Hoima road. The head office of Josa Green Technologies Ltd is
situated at Namuli Road at Bukoto behind Kabira Country Club, Namuli Zone found in
Nakawa Division in the eastern suburbs of Kampala city.
1.3 Business Objective
To provide a 5-year operating plan for the briquettes and energy-saving stoves business
focusing on;
 Increasing briquettes production (sustaining demand) from current 84 pieces of
honey comb briquettes per day each weighing 2.5 kgs equivalent to 210 kgs.
 To diversify briquette shapes to cater for all market segments that is produce
stick briquettes and pillow shaped briquettes.
 Increase on production of customized briquette stoves to create bigger market to
briquettes
 To guide and lay strategies of for accessing the feedstock for sustainable
briquette production as well as stove making.
 To upgrade our production facility and have our products certified by the
Uganda Bureau of Standards (UBOS).
 Increasing sales of briquettes of various shapes like honey comb, stick and pillow
shaped by sensitizing users and marketing through marketing materials &
branding.
 Develop new products of pillow briquettes, brooding kits and stick briquettes
within the next two years and acquire basic processing equipment for Josa Green
Technologies Ltd for improved quality and efficiency.
 Acquire bigger land and establish commercial production sites (factory) in
Wakiso District that will produce briquettes to serves the crated market in
schools, restaurants and poultry farms.
 Look out for regional and local opportunities in the biomass energy sub-sector.
1.4 The Team
The Management team is comprised of Asiimwe Samuel, Ninshaba Jonnah and

Mugisha Brian. The Management team is a highly motivated, experienced and well-
qualified outfit of young goal-driven Ugandans. The team is strongly positioned to take
advantage of this opportunity. Josa Green Technologies Ltd (Josa) is thus led by a
committed management team of three shareholders, who hold 95% of the shareholding
equity and three (3) board positions. The company (Josa) itself holds a 5% shareholding
equity stake in the company as an individual business entity.
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1.5 Funds Required
A total investment of US$ 60,000 is being sought as project recapitalization finance to be

used mostly for capital assets acquisition to scale up and expand Josa Green
Technologies Ltd‟s fuel briquettes and cook stoves output and sales capacity. The
required project funding will be spent as follows:
 US$ 4,150 (UShs 14.5 million) will be spent on construction of additional

building/production structures at Josa Green Technologies Ltd‟s current
production site.
 US$ 8,170 (UShs 28.6 million) to be used to purchase and install new primary
and fuel briquette processing machinery and equipment including an automated
piston extruder, roller press, automated double honeycomb press, an automated
mixer and small tools.
 US$ 206 (UShs 0.80 million) to be used to acquire a spray gun and grooving
machine that are used in the manufacture of cook stoves.
 US$ 11,430 (UShs 40.0 million) to be used to acquire one transportation truck for
transportation of raw materials from the raw material source areas and
movement of manufactured fuel briquettes to the designated sales outlets in
Kampala.
 The balance of USD 35,450 (UShs 124 million) to be applied as working capital
consisting of plant machinery and equipment installation charges, making
payments for pre-operational expenses and contingencies, covering the payroll
costs for staff during the first two months, and defraying the raw material cost of
purchasing biomass, charcoal dust and binders from the various suppliers in
Uganda.
1.6 Production Plan
There will be an initial production of 918 tons of briquettes during the first year of
operation. This will average 2.52 tons of briquettes per day. A kilogram of briquettes
will be sold at 23 cents and generate sales revenue of US$ 205,294.
Production during the second year of operation will increase by 15% to a level of 1,055.7
tons of briquettes. In order to meet the increased production limit that year, working
hours will be increased. As the market focus is extended around Kampala, the company
will realize US$ 247,893 of sales revenue during the second year.
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In the third year of operation, the project will produce 1,214 tons of briquettes a
production increase of 30% with sales revenue of US$ 299,330.
In 2016, Josa Green Technologies Ltd intends to expand its business to incorporate
more outlets using existing charcoal vendors and supplying to the tourism and the
hospitality industry. Josa Green Technologies Ltd‟s target is to sell 1,350 tons of
briquettes for 2020.
1.7 The Market
Carbonised briquettes can act as a replacement for charcoal for domestic and
institutional cooking and heating, where they are favoured for their near-smokeless use.
In comparison to charcoal, they generally burn for longer and have a more consistent
heat output, which is preferred by certain market segments such as restaurants,
hospitals and schools. Poultry farming is a large industry in Uganda and smokeless,
longer burning briquettes are also well suited to heating cages overnight when
temperatures are low as a cheaper alternative to electric heating lamps.
Josa Green Technologies Ltd. will select ten wood charcoal vendors in the seven (7)
large and well-known markets around Kampala. They will be asked to try the Josa‟s
biomass fuel briquettes and energy-efficient stoves. The selected charcoal vendors will
then sell the briquettes to households, chapatti (pancakes) businesses, restaurants, and
hotels.
The market end-users of bio fuel briquettes in Uganda include: households, chapati
businesses, restaurants and hotels, boarding schools, poultry farmers and hospitals in
both urban centres and some of the rural areas. These are the highest consumers of
charcoal. Josa Green Technologies Ltd. also intends to approach tourist lodges in the
national parks because they are very keen to see an alternative to wood charcoal,
especially the JGI (Jane Goodall Institute), Wild Frontiers, Ndali Lodge (Fort Portal),
Mihingo Lodge (Lake Mburo), and those lodges adjacent to Bwindi and Budongo.
1.8 Marketing Strategy
Flyers and posters will be made. They will have printed instructions for lighting the
briquettes and estimating their burning time. The flyers and posters will be an
educational tool, with both financial and environmental advantage. They will be
distributed to the selected vendors, will hand them out to clients as they buy the
briquettes.
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Josa Green Technologies Ltd will attend exhibitions like the Energy Week (organized
by the Ministry of Energy and Mineral Development), trade fairs, and agricultural
shows. These appearances will provide both promotional platforms and
communication forums.
As part of the initial training and promotional awareness raising, each vendor will be
given a 10 kgs pack of briquettes and a stove for trial purposes. This will allow them to
demonstrate charcoal briquettes to their wood charcoal clientele. All feedbacks will be
documented.
1.9 Personnel Policy
We intend to compensate our personnel well, so as to retain their invaluable expertise

and to ensure job satisfaction and enrichment through delegation of authority. We
intend to achieve optimal productivity whilst realizing the full potential of each of our
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 output – which will not only feature as a token of our appreciation to our
employees, but also to instill a sense of fun into the work environment and promote the
maintenance of high standards.
1.10 Financial Performance
The total capital investment cost of the proposed expansion and scaling up of the Josa
Green Technologies Ltd (Josa) bio-fuel briquettes and cook stoves production
enterprise is US$ 71,485. Out of this total capital investment cost, USD 8,571 (11.99%) is
the value of the existing site land; USD 4,150 (5.81%) will be used to construct
additional site building infrastructure; USD 8,400 (11.75%) will be used for the purchase
of bio-fuel briquettes and cook stoves manufacturing plant machinery and equipment;
USD 11,430 (15.99%) will be spent on purchasing a transportation truck for collecting
raw materials and moving products to market; and USD 35,450 (49.59%) will be spent
as working capital comprising of plant machinery installation and commissioning costs,
raw material purchase finance (start-up inventory), as well as contingencies and pre-
operational expenses.
The bio-fuel briquettes and cook stoves production enterprise is to be financed through
83.93% debt and 16.07% equity. The project NPV is around USD 452,440 at a discount
factor of 17%, with an IRR of 182.09%, payback period of 1.69 years and Break-even
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capacity utilization of 20.73%. The legal status of this business is proposed as „Limited
Liability Company‟.
The project composite bio-fuel briquettes and cook stoves sales turnover to increase
from USD 546,437 in the first year (Project Year 2) to USD 878,401 in the fourth year
(Project Year 5). Out of these amounts, pre-tax profits (operating profits) increase from
USD 132,661 in Project Year 2 to USD 350,293 in Project Year 5.
Relevant ratios such as the percentage of net profit to total sales, return on equity and
return on total investment show promising returns (Refer to Schedule 14 on pages 93 –
94).
Investment cost and income statement projection are used in estimating the project
payback period. The projects will payback fully the initial investment in 1.69 years
(Refer to Schedule 13 on page 92).
Ultimately the attractiveness of our venture lies with the fact that customers will choose
our bio fuel briquettes and energy-saving cook stoves above those of competitors
because of their high quality and price affordability. Hence Josa's ongoing initiatives
will be to drive sales, market share and productivity so as to provide additional impetus
towards attainment of the corporate goals and objectives.
NOTE: All currency figures in this plan are in US Dollars (USD).
Figure 1: Performance Highlights (PY2 – PY5)

Sales Gross Margin Net Profit
900,000
800,000
700,000
600,000
500,000
US$
400,000
300,000
200,000
100,000
0
PY 2 PY 3 PY 4 PY 5
6
1.11 Local Social Impact of the Business‟ Products or Services
1.11.1 Environmental Benefit
In order to make one ton of charcoal, ten tons of wood is burned. This explains why
Uganda‟s natural forests are being depleted at such a fast rate. For every one ton of
agro-waste, 300 kilograms of briquettes is realized. The manufacture and use of
technology in the briquette industry will reduce exploitation of the forests for fuel
wood.
The tree resources are very crucial for maintaining the environment; they preserve the
environment and endangered species; support both rural and urban communities; and
lower carbon and green house gas emission.
On the flyers and posters, additional information on environmental education will be

conveyed to prospective clients. This will increase awareness of environmental issues.
Half of the flyer and posters will be printed in indigenous languages like Kiswahili,
Luganda.
1.11.2 Socio-Economic Benefit
Josa Green Technologies Ltd (Josa) bio fuel briquettes and energy-saving cook stoves
production enterprise will definitely deliver a range of positive socio-economic impacts
to Uganda which can be highlighted as follows:
 Job opportunities are created through plant installation, operation and

maintenance.
 Fuel security is improved, thus increasing social security and the welfare of the
local community.
 The burden of collecting fuel for both women and children in rural areas of
Uganda is reduced.
 The health of women and children are improved by replacing polluting fuels with
cleaner fuel for cooking.
 Income is generated for the community from the collection and sale of bio mass
raw materials such as bagasse and maize cobs.
 The currency of fossil fuels such as kerosene is reduced.
 The industry created from the manufacture of briquettes contributes to the
growth of the country‟s GDP.
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 Hard currency is generated from carbon financing e.g. as a Clean Development
Mechanism (CDM) project, it can generate saleable credits.
1.11.3 Negative Impact
Briquettes will directly replace a percentage of wood and wood charcoal. While this has
good environmental benefits, the decline in demand for wood and wood charcoal will
affect the income of dealers involved in the wood and charcoal business.
1.12 Keys to Success
Josa Green Technologies Ltd has identified several keys to success that will be
instrumental in creating a sustainable business. If these keys are followed, the
likelihood of success will significantly increase.
1. Offer bio fuel renewable energy solutions that are demanded by customers.
2. Ensure all of the solutions have economic considerations built into the respective
models.
3. Only provide 100% customer satisfaction. All customers must have their
expectations exceeded.
4. Establish and build relationships and trust with customers to help shield from
future competition.
5. Expand rapidly to control the market.
6. Offer reasonable prices.
7. Get investment.
1.13 Mission
“To provide unparalleled services to organizations /firms /governments /individuals

with developmental projects that enhances sustainable environmental conservation and
improved livelihood.”
1.14 Vision
“A successful Company / business with Excellent Customer Service and loyal

Customers following translating into top sales for quality energy saving cook stoves,
charcoal briquettes, biogas digesters, equipment, agricultural products, & services in
the prosperity of environment management.”
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2.0 PURPOSE OF THE DOCUMENT
The objective of this Business Plan is primarily to inform the primary project promoters
– being Josa Green Technologies Ltd as well as its prospective renewable energy
investment partners about the basic project operation and business performance
indicators that will facilitate the assumption and implementation of key decisions to
finance and roll out bio mass fuel briquettes manufacturing enterprise based on the
huge availability of agro-waste and charcoal dust in Uganda. This Business Plan also
forms 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 production, marketing, finance and business management. The document also
provides some sector information and domestic market scenarios, which have some
bearing on the project itself.
The purpose of this document is also to facilitate the main project investors with
information on the aspects and advantages of investing in bio fuel briquettes processing
and domestic marketing by providing them with a macro and micro perspective of the
dynamics of bio-mass based renewable energies market in Uganda in the hope that the
information provided herein will aid potential investors in crucial investment decisions.
This report is based on the information obtained from industry sources as well as
discussions with market place players. In the financial model, since forecast/projections
relate to the future periods, actual results are likely to differ because of events and
circumstances that do not occur as expected.
business plan - bio fuel briquette manufacturing enterprise

renewable energy business plan
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3.0 INTRODUCTION & BACKGROUND
3.1 Biomass Policy
The most recent government strategy relating to biomass use is reflected in the
Renewable Energy Policy 2007, which is an extension to the wider Energy Policy for Uganda
2002. On the topic of biomass, the policy focuses on demand-side management through
thedissemination of more energy efficient technologies (such as improved cook stoves).
Wheresupply is considered, the approach is largely through afforestation and
reforestation, however Uganda‟s president, Yoweri Museveni, has recently been
reported1 as saying thathe wants the government to intervene by supporting Kampala‟s
Makerere University to research briquette technology.
With support from the UNDP, the government is also implementing key interventions
incharcoal production2 which includes increasing the charge that the National Forestry
Authority levies on charcoal burners. This could provide an opportunity for alternative
fuels tocompete further with the cost of charcoal.
Critical assessments of the government‟s ability to implement a biomass strategy have

beencarried out by the EAC in their Regional Strategy to Scale up Access to Modern Energy
Services (Uganda Report 2008), in which it praises the Renewable Energy Policy2007
andthe creation of a division within the Ministry with a specific mandate to handle
householdenergy issues but highlights the following weaknesses in governance:
 A lack of appropriate regulatory framework governing the use of biomass

resources, especially those on private lands.
 A lack of strong enough focus on wood fuel resources in the forestry policy.
 A lack of standards and quality assurance leading to production of sub-standard
products, lowering the adoption of new technologies
3.2 The Biomass Economy
The contribution of firewood and charcoal to Uganda‟s GDP is estimated at US$ 48

million and US$ 26.8 million respectively (UNDP, 2011). In terms of employment,
biomass production creates nearly 20,000 jobs for Ugandans. Nonetheless these
economic activities are also accumulating significant costs as a result of environmental
1All Africa, “Uganda: Museveni Re-Assures Citizens On State of Economy”, 22 September 2011
2Uganda Ministry of Energy and Mineral Development,2008 Annual report
10
degradation. Millions of Ugandan Shillings are estimated to be lost each year as a result
of biodiversity loss and degradation of soil resources.
Despite the on-going environmental degradation, it is clear that these industries

represent significant economic activity and any future alternative will have to fill this
gap.
3.3 An Approaching Crisis
The level of demand, coupled with unsustainable harvesting and poor management of
forests, means that Uganda risks approaching something of a biomass crisis. As a result,
increased attention has been given to small-scale rural based bio-energy technologies
such as improved cook stoves, gasification, biogas and briquettes. Nevertheless these
technologies must now be propagated on a much larger scale and across the country if
the issue is to be significantly addressed.
3.4 Briquettes and their Potential
Biomass briquettes are a form of solid fuel that can be burned for energy. They are
created by compacting loose biomass residues into solid blocks that can replace fossil
fuels, charcoal and natural firewood for domestic and institutional cooking and
industrial heating processes. Briquettes have the potential to be a source of renewable
energy if they are made from sustainably harvested biomass or waste agricultural
residues.
Crops grown in Uganda such as maize, cereals, roots, cane sugar and coffee all produce
residues that are suitable for briquetting as does dried organic municipal solid waste
(MSW). Data provided by the Ugandan government (see Table 1) indicates that 1.2
million tonnes of agricultural wastes are available each year and an additional 1,500
tonnes of MSW are estimated to be produced in the capital city Kampala daily3.
These two sources combined provide a theoretical limit which indicates that at most 6%
of the country‟s total wood consumption and up to 50% of the charcoal trade could be
replaced by briquettes from waste. Nevertheless practical limitations such as seasonal
variations, competing uses and collection significantly lower the amount of raw
material available for commercial opportunities. Hence, briquettes alone will not have
3Uganda Investment Authority, proposals for the Manufacture and Marketing of Charcoal Briquettes,
2010
11
the potential to fully address the approaching biomass crisis in Uganda, however they
will certainly be part of the solution and there is large scope for growth from an
industry that is starting from a very low base.
Table 1: Annual production of agricultural residues

Agricultural Residue Annual Production („000s tons/year)
Bagasse 590
Rice Husks 25-30
Rice Straw 45-55
Sunflower Hulls 17
Cotton Seed Hulls 50
Tobacco Dust 2-4
Maize Cobs 234
Coffee Husks 160
Groundnut Shells 63
Source: Uganda Renewable Energy Policy, MEMD, 2007
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4.0 PROJECT DESCRIPTION
4.1 Project Brief & Opportunity Rationale
4.1.1 Project Brief

charcoal. It currently provides about 93% of Uganda‟s consumed energy. In
agricultural-based countries like Uganda however, there is a vast natural supply of
biomass found in the form of agro and forest residues. Often these residues are simply
burned in the fields; this is not only a waste of an energy source, but it is also a cause for
pollution in local regions.
Josa Green Technologies Ltd‟s aim is to transform Uganda‟s agricultural waste into
briquettes. Besides reducing the increased exploitation of forests, briquettes also have a
low production cost, which means they would be cheaper than firewood or charcoal.
They can be used in already existing stoves and have a longer burning time because of
their density and low moisture content. As a result, sales of US$ 205,294 (fuel briquettes
alone) or 918 tons are expected from the first year of operation.
4.1.2 Opportunity Rationale: A Commercial Case for Briquette

Businesses
The availability of cheap (and often free) firewood and charcoal has been part of the
reason why such biomass has prevailed as the dominant source for energy in
developing countries. However in recent years Uganda has faced significant increases
in charcoal prices.
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Figure 2: Charcoal – price per kg (2004-2011)
Charcoal - price per kg (2004-2011)

1600
1400
1200
Uganda Shillings
1000
800
600
400
200
0
2004 2005 2006 2007 2008 2009 2010 2011
Year
Charcoal price estimated cut-off price for briquetting viability
Figure 2: Average market prices for selected goods in Kampala 2004-2011, Uganda Bureau of
Statistics2010 Statistical Abstract.Updated with prices reported for 2009-2011 in newvision.co.ug
In 2008 the average price of a 40 kg charcoal sack was USh 15,000 (US$6) and during
2009 it rose to USh 25,000 (US$10), an increase of 66% in just twelve months. Prices
increased substantially again in 2011, with the cost of a sack in the capital Kampala
reaching USh 60,000 (US$24). Meanwhile, 4 pieces of firewood (which is estimated to
substitute 3.3 kg of charcoal) were sold for USh 2,000 (US$0.8). Research by the Uganda
LPG Association4expects USh 80,000 (US$33) of charcoal to last 2 weeks, whereas USh
80,000 of LPG would last for between 4 to 10 weeks, depending on the family size and
cooking frequency. For the purpose of comparison, the assumption that briquettes can
replace charcoal weight for weight means that USh 80,000 could last for between 2 and
4 weeks.
These kinds of price trends are beginning to make an economic case for briquettes
which can cost between USh 32,000 (US$13) and USh 40,000 (US$16) for a similar 40 kg
sack and often last longer than traditional charcoal. As of December 2011, a Kenya
based briquette company, Chardust Ltd, estimate a minimum charcoal price of US$ 0.2
(sold by the sack at the point of delivery to urban wholesalers) as a pre-condition for the
financial viability of a briquette venture in an East African setting.
4ULPGAS, Shortage of LPG (cooking gas) in Uganda, www.uplgas.org, September 2011

14
4.2 Business Model and Value Proposition

charcoal briquettes. Currently, biomass provides about 93% of Uganda‟s consumed
energy source. Although Uganda is an agricultural country with vast amounts of forests
and trees, at the present time, the majority of its agricultural waste is not being fully
utilized for the production of energy.
Figure 3: Energy consumption in Uganda (Pie Chart)
Energy Consumption in Uganda

1%
10%
4%
5%
80%
woodfuel petroleum charcoal crop residues electricity
Source: Uganda Investment Authority
In agriculture-based countries like Uganda, there is a vast natural supply of biomass

found in the form ofagro and forest residues. Often these residues are simply burned in
the fields. This is not only anunfortunate waste of an energy source, but it is also a cause
for increased pollution in local regions.
Uganda‟s failure to transform her natural agricultural wastes into charcoal briquettes
has resulted in anincreased exploitation of Uganda‟s primary forests. Uganda‟s failure
to plan for ways to sustain its logging industry has resulted in forests that are currently
being depleted with no plans for replacement.This ravaging of our forests is causing an
even greater shortage of the woody biomass necessary formaking firewood and
charcoal. This results in the rural population having to spend increased time andeffort
in collecting biomass for their cooking energy needs.
15
Josa Green Technologies Ltd. will convert the natural and available agro waste
currently being burned, into auseful fuel that can go a long way in alleviating Uganda‟s
energy problems and increasing the availability of sustainable cooking fuel for
consumers.
There are currently only a handful of briquette producers in Uganda and availability of
the briquettes is nowhere near mainstream. Part of my business aim is to get ahead of
the market, being one of the firstUganda briquette produces to sell to a large cross
section of the domestic market. This more also pre-empts a shift towards more
sustainable fuels that Uganda, in the future will be forces to adopt.
4.3 Funds Required
A total investment of US$ 60,000 is being sought as project recapitalization finance to be

used mostly for capital assets acquisition to scale up and expand Josa Green
Technologies Ltd‟s fuel briquettes and cook stoves output and sales capacity. The
required project funding will be spent as follows:
 US$ 4,150 (UShs 14.5 million) will be spent on construction of additional

building/production structures at Josa Green Technologies Ltd‟s current
production site.
 US$ 8,170 (UShs 28.6 million) to be used to purchase and install new primary
and fuel briquette processing machinery and equipment including an automated
piston extruder, roller press, automated double honeycomb press, an automated
mixer and small tools.
 US$ 206 (UShs 0.80 million) to be used to acquire a spray gun and grooving
machine that are used in the manufacture of cook stoves.
 US$ 11,430 (UShs 40.0 million) to be used to acquire one transportation truck for
transportation of raw materials from the raw material source areas and
movement of manufactured fuel briquettes to the designated sales outlets in
Kampala.
 The balance of USD 35,450 (UShs 124 million) to be applied as working capital
consisting of plant machinery and equipment installation charges, making
payments for pre-operational expenses and contingencies, covering the payroll
costs for staff during the first two months, and defraying the raw material cost of
purchasing biomass, charcoal dust and binders from the various suppliers in
Uganda.
16
4.4 Total Project Cost
The total capital investment cost of the proposed expansion and scaling up of the Josa
Green Technologies Ltd fuel briquette manufacturing enterprises is US$ 71,485. Out of
this total capital investment cost, USD 11,485 (16.07%) is the value of the existing
company assets (including land, buildings and civil works, and plant machinery and
equipment). Out of the required loan amount of USD 60,000, a total of USD 8,400
(11.75%) will be used to purchase additional biomass briquetting and stoves
manufacturing equipment; USD 870 (0.80%) will be applied to acquisition of office
equipment; USD 11,430 (15.99%) will be spent on purchase of one transportation truck;
USD 5,450 (7.62%) will be allotted to cover pre-operational expenses, and a further
USD 30,000 (41.97%) will be used as a start-up inventory purchase account.
The project cost breakdown is given in Table 2.
Table 2: Total Initial Project Investment Cost (UShs)

S. No. Source of Finance Share (%) Josa Equity Loan Finance Total (USD)
1 Land 11.99% 8,571 0 8,571
2 Building & Civil Works 7.40% 1,143 4,150 5,293
3 Plant Mach & Equipment 14.23% 1,771 8,400 10,171
4 Office Equipment 0.80% 0 570 570
5 Motor Vehicles (1 unit) 15.99% 0 11,430 11,430
6 Pre-Operational Expenses 7.62% 0 5,450 5,450
7 Start-up Inventory Account 41.97% 0 30,000 30,000
TOTAL PROJECT FUNDING 100.00% 11,485 60,000 71,485
%age of Total Project Funding 16.07% 83.93% 100.00%
4.5 Project Financial Performance Parameters
The key project performance parameters for the Josa Green Technologies Ltd fuel
briquette manufacturing enterprise are highlighted in Table 3 below:
17
Table 3: Key Project Performance Parameters (USD)
KPI/Year Year 2 Year 3 Year 4 Year 5
Sales 546,437 659,823 796,736 878,401
Operating Profit 154,861 231,630 319,799 367,093
Tax 132,661 211,230 301,199 350,293
Net Profit / [Loss] 92,863 147,861 210,839 245,205
Gross Margin 80.59% 80.59% 80.59% 80.59%
Operating Margin 28.34% 35.10% 40.14% 41.79%
Net Margin 16.99% 22.41% 26.46% 27.91%
Return on Investment 129.90% 206.84% 294.94% 343.01%
Fixed Assets Turnover 16.43 21.19 28.76 39.45
Debt Coverage Ratio 4.67 7.69 11.72 14.92
Times Interest Earned Ratio 21.51 42.89 88.83 203.94
Break-even Point (BEP): USD 182,126 at a capacity utilization of 20.73%

Payback Period (Loan): 1.69 Years
NPV at 17%: USD 452,440
IRR: 182.09%
18
5.0 COMPANY INFORMATION
5.1 Registered Name
Josa Green Technologies Ltd.
5.2 Commencement of Operations
Josa Green Technologies Ltd (Josa) is an integrated multi-disciplinary business firm

founded in November 2012 and legally-registered in the Republic of Uganda under
registration number 164729. The Company was incorporated on 27th March 2013 under
humble circumstances by its three (3) extremely passionate and enthusiastic Directors.
Though still a relatively young company, the directors have solid vision and realize
their Company's good product market prospects and opportunity for growth given
implementation of the appropriate strategies, aided by the necessary finances.
5.3 Company Profile
Though the spearhead project promoters of Josa Green Technologies Ltd started out
from a very low capital base, it has made up for this financial capital limitation with its
huge initiative, passion, enthusiasm and practical experience in devising and
implementing renewable energy technologies, agro-forestry projects, and involvement
commercial tree-planting and commercial urban agriculture that have all translated
into the philosophy “think big start small” which later motivated them to have
initiative, work hard, persist & transform Josa Green Technologies Ltd into the
thriving renewable energy enterprise that it is today.
Josa Green Technologies is a young enterprise engaged in providing a full scale range
of environmental and energy solutions, products and services in the areas of Energy
Saving Cook stoves, Fuel Briquettes, feasibility studies, trainings and consultancies.
We are exclusively involved in activities that rotate around environmental conservation

and energy solutions among them being;
 Agro-processing of biomass waste into char and then briquettes as a renewable

energy source.
 The production of energy saving cook stoves customized for fuel briquettes.
 Briquette & Energy saving stove consultancy and advisory services so far done
locally in Uganda and internationally in Sierra Leone.
19
We are members of the Living Earth Energy Developers Cooperative, GVEP
International and Uganda National Alliance on Clean Cooking (UNACC) that are
mandated to develop and promote renewable and clean energy innovations.
5.4 Mission Statement
“To provide unparalleled services to organizations /firms /governments /individuals

with developmental projects that enhances sustainable environmental conservation and
improved livelihood.”
5.5 Vision Statement
“A successful Company / business with Excellent Customer Service and loyal

Customers following translating into top sales for quality energy saving cook stoves,
charcoal briquettes, biogas digesters, equipment, agricultural products, & services in
the prosperity of environment management.”
5.6 Core Values
 Quality and Excellence

Josa Green Technologies Ltd strives for quality of her products, and excellence in
service delivery so as to maximize the opportunities to fulfill her mission.
 Stewardship and Accountability

Josa Green Technologies Ltd Board, Management and Staff are committed to being
good stewards of its resources and those of its bankers, donors, creditors and
business partners by exercising thoughtful and cost-effective (Value for money) use
of time, skills and the finances.
 Respect
Josa Green Technologies Ltd is firmly committed to empowering its Board,
Management and staff to live their lives with dignity and respect. This respect is also
the foundation for relationships with the market and other stakeholders, such as
customers, other business partners, Banks, Donors and Creditors.
 Integrity
Josa Green Technologies Ltd Board, Management, and Staff commit to integrating
what they believe in with what they do. They will do the right things for the right
reasons whether or not anyone will know.
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 Innovativeness
Josa Green Technologies Ltd believe it applying innovative ideals to practice to
solve energy and environmental challenges
5.7 Strategic Objectives
At Josa we believe that sustainable utilization of natural resources and the environment
must be at the centre of any environmental management approach and poverty
reduction strategy coupled with practical technology solutions and development
process.
Our strategic objectives are therefore to:

 Reach out to communities; practically address environmental, livelihood issues
in their local areas, with special emphasis on energy needs, solid waste
management, sanitation, and aesthetic enhancement of the environment through
Briquette making, tree planting, urban agriculture and beekeeping.
 Create linkages to promote sustainable environmental management and
development.
 Work with Non-governmental organizations, government, communities and the
private sector to promote environmental education; increasing awareness,
commitment and ability to bring about desired changes in attitude and practices
on environmental, agriculture and energy issues
5.8 Organizational Objectives
To provide a 5-year operating plan for the briquettes and energy-saving stoves business
focusing on;
 Increasing briquettes production (sustaining demand) from current 84 pieces of
honey comb briquettes per day each weighing 2.5 kgs equivalent to 210 kgs.
 To diversify briquette shapes to cater for all market segments that is produce
stick briquettes and pillow shaped briquettes.
 Increase on production of customized briquette stoves to create bigger market to
briquettes
 To guide and lay strategies of for accessing the feedstock for sustainable
briquette production as well as stove making.
 To upgrade our production facility and have our products certified by the
Uganda Bureau of Standards (UBOS).
21
 Increasing sales of briquettes of various shapes like honey comb, stick and pillow
shaped by sensitizing users and marketing through marketing materials &
branding.
 Develop new products of pillow briquettes, brooding kits and stick briquettes
within the next two years and acquire basic processing equipment for Josa Green
Technologies Ltd for improved quality and efficiency.
 Acquire bigger land and establish commercial production sites (factory) in
Wakiso District that will produce briquettes to serves the crated market in
schools, restaurants and poultry farms.
 Look out for regional and local opportunities in the biomass energy sub-sector.
5.9 Business Highlights
 Generate a strong business cash flow to support cash purchases to enhance

business alliances between Josa Green Technologies Ltd and suppliers of feed
stock (char, biomass waste) for consistent supply of high quality feed stock and
also establishing big markets for all briquettes produced.
 Sensitize stove and briquette users on other products produced like fixed
briquette stoves, brooding kits and other briquette shapes.
 Good line of production equipments in good operating conditions to enhance
effectiveness and efficiency in quality production of both briquettes and stoves.
 All our business activities and products should be able to promote Josa Green
Technologies Ltd commonly known as Josa as a household name or reference
for Green Conservation Solutions.
5.10 Organizational Philosophy
Our philosophy is a very simple one: “Your Green Conservation Solutions.” We make it
possible for anyone to love, appreciate &use eco-friendly fuels with easy and ultimate
benefit. In Uganda and the world over, energy is a fundamental aspect for human
existence. It is therefore the principal means for providing access to basic needs such as
food, water and it facilitates various opportunities for the achievement of a decent
quality of life. In Uganda according to the Uganda National Housing census report;
2002 states that 81.8 % of Ugandan households use firewood for cooking while 15.2 %
use charcoal. Biomass thus makes up over 95% of all energy consumed in Uganda
therefore Josa Green Technologies Ltd. is definitely taking the right direction in
contributing positively towards environment conservation and energy needs to the
communities, nation and the world at large. However, when it comes to briquettes and
energy saving stoves it‟s another way to conserve the environment through conversion
22
and utilization of biodegradable waste inform of energy. We are trying to change the
attitude and negative perception that lingers in peoples‟ minds to adapt to the use of
briquettes and customized briquette stoves.
5.11 Founders and Management Team
The Management team is comprised of Asiimwe Samuel, Ninshaba Jonnah and

Mugisha Brian. The Management team is highly motivated, experienced and well
qualified. The team is strongly positioned to take advantage of this opportunity. The
team has:
 Proven business start-up skills, with bottom line responsibility

 Experience in business start up (finance, marketing, operations and legal aspects)
 Personality profiles that reflect the synergies of cohesive group dynamics
Samuel has significant skills and experience in business management consulting,

renewable energies manufacturing and business management and stewardship
capabilities. Jonnah is good on product development, financial management and
general business administration (man-management) responsibilities. Brian is adept at
business development and market networking that he combines well withexcellent
public relations skills and human resource training capabilities.
5.12 Shareholding Structure
The current company shareholding structure is as follows:
Table 4: Company Shareholding Structure

Shareholder Shares held (UGShs) [%age]
1. Asiimwe Samuel 1,000,000 50%
2. Ninshaba Jonnah 800,000 40%
3. Mugisha Brian 100,000 5%
4. Josa Green Technologies 100,000 5%
TOTAL 2,000,000 100%
NB: 1 USD = UGShs. 3,500
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6.0 PRODUCTS AND SERVICES
6.1 Product Description
The briquettes will be made out of charcoal-dust, dry agricultural wastes, sugar
canetrash, and maize trash from farmers. Trash is defined as “fibrous material left in
thefield after harvesting.
The trash is burned in a carbonizing unit to form charcoal. The charcoal is then
mixed,molded, and dried. Finally, the charcoal briquettes are packaged in various
quantitiessuitable for sale to both commercial and domestic buyers.
General characteristics of the carbonized Briquettes
 Moisture Content: 7.1% - 7.8%

 Volatile Matter: 13.0% - 13.5%
 Fixed Carbon: 81.0% - 83.0%
 Ash: 3.1% - 3.7%
 Heating Matter: 7,100 – 7,300 kcal/kg
 Density: 970 kg/m3
Advantages of the Briquettes:
 Briquettes burn without any smoke during ignition and burning.

 Minimum residual ash is formed (less than 5% of the original weight of the
charcoal).
 The concentration of fixed carbons will be about 82%. The calorific value of
charcoal briquettes is 7500 Kcal/KG.
 Briquettes contain minimum evaporative substances, thus eliminating the
possibility of odour.
 Briquettes burn twice as long as hardwood charcoal due to fewer cracks and
increased strength.
 Briquettes do not produce sparks as do the hardwood charcoal.
 Briquettes can be made in a uniform size and shape.
 Briquettes are dust free.
Josa Green Technologies Ltd‟s charcoal briquettes will be made utilizing simple
technology. This will assure aproduct that is not only inexpensive and affordable to its
customers, but also of good quality. Customers will want to tell others about them. Josa
24
Green Technologies Ltd will manufacture three types of briquettes, namely:
honeycomb briquettes, briquette sticks, and pillow-shaped briquettes.
Besides the production of fuel briquettes, Josa Green Technologies Ltd will also
manufacture efficient fuel-saving cook stoves that can best fit our bio fuel briquette
products. The range of stoves to be manufactured include moveable household stoves
(3 types), as well as institutional moveable and fixed stoves and customized ovens.
6.2 Capacity Building Services
Josa Green Technologies Ltd partners with government and its bodies, NGOs, CBOs,
private sector companies, individual entrepreneurs and any other interested parties in
capacity building to offer the following range of technical training and advisory
services:
25
Table 5: Josa Products and Services
Products Product Name Supply/ Training
Construction
Energy saving stoves
Briquette institutional stove √
Household movable stoves √ √
Movable institutional stove

√
Briquettes
Honey comb briquettes √ √
Stick briquettes √ √
Briquette press & making machines

Honey comb press √
Stick press √
Charring drum √
Auto Grinder √
Biogas
Biogas digesters √
Urban Agriculture
Covers: gardening, manure
making, Mushroom growing
√
Animal feeds (Poultry, Cattle √

and Pigs).
Beekeeping
Apiary setup & management
√ √
26
Wax candles
√ √
Bee hives
√ √
6.3 Other Services
 Plastic waste collection, recycling and best practices of its management

 Establishment of nursery beds for tree planting projects and commercial tree
planting.
 Management of trees and bee keeping projects
 Business management skills
 Environmental Impact Assessment and baseline studies.
 Entrepreneurship Training
 Management and Organization training.
Josa Green Technologies Ltd has the experience & expertise to effectively carry out the
above tasks in specialized skills training & equipping the communities in their areas of
interest. We also possess strong capabilities to work with and transform communities
and vulnerable groups of women, children and the disabled people.
6.4 Accomplished Assignments To date
For details on the assignments that have already been handled and completed by Josa
Green Technologies Ltd since 2013 to date, please refer to Appendix I at the end of this
business plan.
27
7.0 MARKET STRUCTURE AND ANALYSIS
7.1 Biomass Use in Uganda
7.1.1 Demand
With only 5% of the rural population having access to electricity, more than 90% of
thecountry‟s total energy needs in Uganda come from biomass sources. Of this, wood
accountsfor 80%, charcoal 10% and crop residues at nearly 4%5. The use of dung for fuel
is rare,although recent implementation of a national biogas programme is seeking to
utilise it more on a domestic scale.
For households specifically, the 2009-10 Household Survey conducted by the

UgandaNational Bureau of Statistics provides a more detailed analysis, reporting that
82% ofhouseholds use firewood for cooking while 15% use charcoal. Firewood was
mostcommonly used by rural households (86%) while charcoal is commonly used in
urban areas(70%). In Kampala, 76% of the population use charcoal as their main source
of fuel forcooking.
As quantities, the household consumption of firewood and wood for charcoal was
estimated at 22.2 million tonnes in 20066, with small industries consuming a further 5.5
million tones creating a total annual biomass demand of 27.7 million tonnes nationwide.
Annual biomassconsumption per capita is estimated, for rural and urban areas
respectively, at 680 kg and 240 kg of firewood and 4 kg and 120 kg of charcoal.
Approximately 4 million tonnes of wood (15% of the total) are consumed to meet the
annualdemand for charcoal, which in 2010 was estimated by different sources to be
between700,000 and 850,000 tonnes7. In Kampala alone charcoal demand was 205,852
tonnes. Used mainly in urban areas, charcoal use is estimated to increase at 6% per year,
whichmatches the rate of urbanization.
Methods of charcoal production remain highly wasteful with traditional methods

achievingconversion efficiencies as low as 8-15%. Despite efforts to improve the
efficiencies oftraditional biomass energy technologies, including wood and charcoal
stoves, significantresults are yet to be seen and many continue to be inefficient.
5Data from the Uganda Ministry of Energy and Mineral Development (MEMD), Energy balance 2008
6UgandaRenewable Energy Policy, MEMD, 2007
7Individual studies by the National Forest Authority and UN Department of Social and Economic Affairs
28
7.1.2 Supply
Following a comprehensive study8 into the biomass resource during the 1990s, the
totalbiomass stock (air-dry, above ground) in Uganda in 2002 was estimated to be 468
million tonnes. Of this, approximately 33% was in protected forest areas leaving the
amountavailable for energy uses around 312 million tonnes. While predicting that
Uganda canexpect a total annual growth of 50 million tonnes of biomass per year, the
study concludesthat despite a positive growth rate in protected areas, the biomass stock
on private lands(and thus available for wood fuel) will soon face a deficit. Such a
detailed study has not beencarried out since; however more recent estimates support its
conclusions. The FAO reportedthat between 1990 and 2005 Uganda lost 26% of its
forests (78% in areas around Kampala),estimated now to be 24% of total land cover, and
the National Environment ManagementAuthority (NEMA) State of the Environment
Uganda 2008 report predict that this deficit willlead to complete depletion of the
nation‟s forests by 2050. What is clear is that Uganda‟sheavy dependence on biomass is
severely impacting the destruction of the country‟s forestcover.
While wood from trees constitutes the greatest amount of biomass stock available in
Ugandaand consequently the most used form of biomass by locals, agricultural residues
are alsoutilized. Crops can produce biomass energy from agricultural residue made
available fromgrowing, harvesting and processing food crops such as cereals and roots
as well as cashcrops such as tea, cane sugar and coffee. Data provided by the
government in the UgandaRenewable Energy Policy 2007 suggests that 1.2 million tons of
agricultural residues areavailable each year.
7.2 Briquette Markets
Carbonised briquettes can act as a replacement for charcoal for domestic and
institutionalcooking and heating, where they are favoured for their near-smokeless use.
In comparison to charcoal, they generally burn for longer and have a more consistent
heat output, which is preferred by certain market segments such as restaurants,
hospitals and schools. Poultry farming is a large industry in Uganda and smokeless,
longer burning briquettes are also well suited to heating cages overnight when
temperatures are low as a cheaper alternative to electric heating lamps.
If the price of a briquette is competitive to charcoal, then domestic users among rural
populations as well as the urban and peri-urban poor can adopt them to replace
charcoal for cooking. In terms of burning characteristics, households and institutions
8Uganda Forest Department, Ministry of Water Lands and Environment, National Biomass Study, 2002
29
have similar requirements as both require the fuel for cooking. The size and shape
however may be different because institutions will typically have larger stoves.
Non-carbonised briquettes on the other hand serve as a replacement to natural firewood

and rawbiomass fuel. They offer greater energy per unit weight than wood or raw
biomass (see Table 6) but release as much smoke. Consequently these are more
appropriate for industrial processesor institutions where emissions can be controlled.
They can also be offered as a replacement fuel among rural populations where firewood
is still dominant. Further commercial processes such as crop drying, tea drying, tobacco
curing, ceramics/brick firing can also make use of briquettes.
Table 6: Fuel Comparison: calorific values

Type of Fuel Energy (Kcal/kg)
LPG 11,100
Natural gas 9,100
Wood charcoal 7,500
Charcoal dust briquette (carbonized) 7,400
Saw dust briquette (non-carbonized) 4,800
Raw wood 4,100
7.3 Target Market and Customer Base
Uganda‟s national development objective is an accelerated, economic growth through

increased productivity and enhanced agricultural and industrial production which will
result in increasing employment opportunities, an equitable distribution of income, and
a reduction of poverty. The realizationof this objective requires, amongst others, that
quality energy services be made available to people in asustainable, cost-effective, and
affordable manner.
In Uganda, wood charcoal is supplied by charcoal dealers from Nakasongola, Kayunga,

Kamuli, Luweero and Masindi districts to semi-urban and urban centres of Kampala,
Wakiso, Jinja and Mukono districts. The charcoal is sold through vendors in semi-urban
and urban centres who sell the charcoal tohouseholds, restaurant and hotels.
Josa Green Technologies Ltd. will select ten wood charcoal vendors in Owino (St.
Balikuddembe), Nakawa, Banda, Kibuye, Kamwokya, Kalerwe, and Namasuba; these
are all markets around Kampala. They will be asked to try the Josa‟s biomass fuel
briquettes and energy-efficient stoves. The selected charcoal vendors will then sell the
briquettes to households, chapatti (pancakes) businesses, restaurants, and hotels.
30
The changeover from wood charcoal to briquettes requires little behavioural change.
This is because there is a direct substitution of wood charcoal to briquettes which
eliminates the need to modify the stoves.
7.4 Market Size and Potential
The market end-users of bio fuel briquettes include: households, chapati businesses,
restaurants and hotels, boarding schools, poultry farmers and hospitals in both urban
centres and some of the rural areas. These are the highest consumers of charcoal. Josa
Green Technologies Ltd. also intends to approach tourist lodges in the national parks
because they are very keen to see an alternative to wood charcoal, especially the JGI
(Jane Goodall Institute), Wild Frontiers, Ndali Lodge (Fort Portal), Mihingo Lodge
(Lake Mburo), and those lodges adjacent to Bwindi and Budongo.
Future opportunities exist, especially if the Government and local authorities decide to
enforce the restriction on cutting down trees.
Uganda‟s population is estimated at 34.85 million people and is growing at a rate of

3.5% per year. Of Uganda's population, 31.58 million people use firewood and charcoal
as a fuel for cooking. This is a sizable market for charcoal briquettes.
Table 7 shows household energy consumption. Electricity was consumed by a small

percentage who uses it for lighting purposes. The majoring of households used
firewood and charcoal for cooking.
Table 7: Household Energy Consumption

HH energy consumption in percentage (%)
Year
Type 2005/06 2009/10
Electricity for lighting 0.20 0.60
Tadooba for lighting 1.20 2.60
Firewood for cooking 77.80 73.00
Charcoal for cooking 18.20 21.50
Kerosene for cooking & lighting 2.50 2.30
Average HH has 4.7 members
Source: Uganda Bureau of Statistics, 2002
31
According to the 2009/10 Uganda National Household Survey results, the proportion of
people using firewood decreased from 77.8% to 73.0%. During the same period, the
percentage of those using charcoal rose from 18.2% to 21.5%.
Firewood and charcoal consumption in Uganda is shown in Table 2.
Table 8 shows the biomass residential consumption of Uganda. Kampala district

consumed 245,000 tons of charcoal in 2003.
The demand for charcoal is expected to increase because of increasing population.

Wood charcoal production, on the other hand, is slowly decreasing because trees are
being depleted. Therefore, manufactured briquettes are an alternative to wood charcoal.
Table 8: Consumption of Firewood and Charcoal in Uganda

Residential Biomass Consumption
Source: Consumption factors on „Basic Data and Assumptions‟
Residence Rural Urban Kampala TOTAL TOTAL
Weight Energy
Energy carrier 1000 t/yr 1000 t/yr 1000 t/yr 1000 t/yr TOE t/yr
Wood 13,849 693 134 14,676 5,257,983
Charcoal 45 223 245 513 367,431
Residues 1,169 30 1 1,201 430,171
Biomass Consumption in all sectors
Sector Wood Wood Charcoal Charcoal Residues
Energy carrier 1000 t/yr TOE t/yr 1000 t/yr TOE t/yr TOE t/yr
Residential 14,676 5,257,983 513 367,431 430,171
Commercial 2,952 1,057,520 184 131,714 0
Industrial 2,127 762,076 0 0 0
TOTAL 19,755 7,077,579 697 499,145 430,171
Source: Uganda Bureau of Statistics, 2003
7.5 Competitor Analysis
My main business competitors in the charcoal business are the charcoal dealers. These
are the individuals who buy the wood charcoal from various charcoal supply areas.
They transport the wood charcoal by trucks to urban and semi-urban centres. In 2003,
over 697,000 tons of charcoal was supplied across Uganda (See Table 8).
Kampala Jellitone Suppliers Ltd, a local company in Natete, is currently producing

compressed briquettesthat are made from coffee husks and saw-dust. The company
started the production of non-carbonized briquettes in Uganda, this was initiative by
32
the company. Non-carbonized briquettes burn slowly andproduce smoke which leaves
soot of cooking potswhile carbonized briquettes burn slowly withoutproducing smoke.
The company has targeted large institutions like schools and hospitals. The company
sees the demand for briquettes increasing in schools.
ARTI a local NGO is also making carbonized briquettes and promotes them in villages.
Although wood fuel is the least expensive, its soot blackens the cooking utensils and the
given off smokeis a serious health risk.
Electricity, gas, and kerosene costs are too high to be used daily as a cooking fuel for the
majority ofUgandans. Charcoal offers a high level of convenience and cleanliness at an
affordable price andbriquettes made from waste can be sold at an ever cheaper price
than conventional charcoal.
Household energy costs are shown in the table below, two households incomes were
considered, that isthe high income (HI) household and middle income (MI) household.
Table 9: Different Energy Costs

Household (USD)
Item Unit HI MI
Electricity 150 kWh 39.63 39.63
Kerosene One ltr 0.97 0.97
Charcoal Tin (500 gms) 0.19
Charcoal Sack (38 kgs) 15.28
Firewood Kg 0.11 0.10
Propene gas 38.89 33.33
Briquettes Kg 0.31 0.31
Source: UBOS, 2005
HI = High Income; MI = Middle Income
One kilogram of wood charcoal was sold at 39 cents, firewood went for 11 cents and
briquettes were sold at 31 cents.
33
7.6 Uganda Market Competitors
7.6.1 Kampala Jellitone Suppliers Ltd
This is a large-scale company established in 1991 to produce uncarbonised briquettes

from sawdust, groundnut shells, maize bran, rice bran, maize cobs, coffee husks, wheat
bran and other types of agricultural waste. So far, the total investment cost is estimated
to exceed USHS 600-million (US$240,000). The company currently employs
approximately 54 workers and sources raw materials from several districts. Some are
situated more than 300km away from Kampala, where the factory is located. The
company organizes farmers into groups to gather agricultural waste, enabling them to
earn an income from waste that would otherwise have been burnt or thrown away. The
annual production capacity is about 3,500 metric tonnes, which is still below maximum
potential. Its main clients are schools around Kampala and commercial operations
including restaurants and bakeries.
7.6.2 Green Bio Energy
Green Bio Energy produces carbonized briquettes from charcoal dust and plans to
blend charcoal dust with carbonized municipal waste. This plan involves
subcontracting the carbonization of municipal waste to grassroots entrepreneurs who
will be assisted to purchase the carbonization drums. The company, whose current
production capacity stands at one tonne per day, has clients who are spread across
Kampala, Entebbe, Mukono and areas around Wakiso. It packages its briquettes in 1kg
packs targeting the lower-income households, 5.5kg for supermarkets and petrol
stations, and 50kg sacks for institutional customers.
7.6.3 Green Resources (Busoga Forestry Company)
Green Resources (Busoga Forestry Company) started producing charcoal briquettes in

2012.The company is a leading producer of Eucalyptus spp. for electricity poles. It uses
offcuts and other byproducts to produce the charcoal, which it pulverizes then uses the
charcoal fines as raw materials for the briquettes. Current installed capacity stands at
500kg of briquettes per hour. The project was made possible by a €350 000 grant from
the Nordic Development Fund. Cassava is used as a binder for household briquettes,
while molasses is used in briquettes for industrial applications. At the time of this
study, the company‟s key concern was accessto substantial markets.
34
7.6.4 Swijo Development Services Limited (Living earth Uganda)
Swijo Development Services Limited is a medium-scale producer of carbonised

briquettes from charcoal dust, municipal waste and agricultural wastes. Cassava flour is
used as a binder. The company started with an initial investment of USH10 000 000
(US$3 900); it currently produces 75kg of briquettes per hour. Their main clients are
households and institutions. The company‟s biggest challenges have been identified as
drying the feedstock and briquettes, access to cheap packaging material and access to
finance.
7.6.5 Promoters of Efficient Technologies for Sustainable Development
This company started in 2004 with an initial capital of USH 1,500,000 (US$ 590); it
currently employs six staff members. The company uses charcoal dust and municipal
waste as feedstock, and cassava flour as the binder. The main challenges include the
limited access to viable finance to scale up their activities and very high interest rates
from financial institutions. Linking briquette producers to financial institutions with
low interest rates and development partners,developing dedicated lines of credit for
briquette producers and providing seed capital to upcoming briquette producers were
reported as viable options of addressing this barrier – which is common among
briquette producers.
7.6.6 Nakulabye Briquette Making Technology
A local entrepreneur, Ms Alice Zalwango, who is a political representative and nurse in

her community established Nakulabye Briquetting technology in 2010.
The business currently employs eight women and seven men and produces about 200kg
of briquettes per day from municipal waste collected from the nearby Nakulabye
market. All the company‟s operations are manual – a factor that constrains the up
scaling of production. Other challenges include a lack of space to dry the feedstock and
the finished products, which hinders production during the rainy reason. The
company‟s clients are mainly households, roasting businesses and restaurants.
7.6.7 Kyebando Energy and Environment Project
This is a Kampala-based small-scale briquette production business set up in 2011 to

produce briquettes from charcoal dust and municipal waste. The company‟s production
capacity is 1.8 tonnes per month and is constant throughout the year; the main clients
are households and institutions (restaurants and schools). The business has been able to
35
get credit services from financial institutions through FINCA, a village banking micro-
finance institution programme. The challenges that it faces include low briquette
promotional activities and poor marketing (which has greatly affected sales of the
product), low investment returns (which have hindered their expansion plans), and a
lack of advanced machinery (which has resulted in-low quality briquettes that fetch low
prices). Efforts to assist the venture in scaling up can be channeled towards accessing
financial services from financial lending institutions to enable it to advance its
production and marketing processes.
7.7 Competitive Advantage
Briquettes have a high bulk density compared to fire wood and loose biomass. Because
of their densityand low moisture content, the briquettes give a longer burning time
which will translate to cost savingsfor the customer.
The cost of cooking fuel is one of the most important factors in determining which fuel
to use. In Uganda,people are looking for the cleanest, the most convenient, and the most
affordable cooking fuel. Briquetteshave additional benefits, including reduction on
deforestation and carbon emissions.
In Uganda, wood charcoal cost prices range from $12.78 to $16.67 per bag of 35kgs. This
means thatevery kg of wood charcoal costs is in range of $0.37 to $0.45.
An average Ugandan household consumes from 42 to 56 kg of wood charcoal per

month, at a cost ofabout $16.89 to $22.47. By using Josa Green Technologies Ltd
briquettes, a family will spend between $13.02 and $17.36 on briquettes per month for
the same quantity of wood charcoal used. What does this meanin term of saving? If a
household used 42 kg of briquettes in a month, they will be able to save $3.87.
36
8.0 THE UGANDA BRIQUETTE INDUSTRY
Briquette producers in Uganda fall into distinct scales of operation characterized mainly
by their type of briquette machine. Examples of these businesses, their equipment,
products and value chain are detailed in Table 10 on the following page.
There are hundreds of micro-scale producers in operation who use primitive equipment
and are largely engaged in income supplementing ventures. Most are making briquettes
by hand in quantities of less than 2 tonnes per year and for their own consumption as
well as to sell in their local neighbourhood. Many of the more enterprising of these,
often with support such as from the DEEP (Developing Energy Enterprises Programme)
programme have purchased manual machines to enable them to produce up to 20
tonnes per year.
Motorized machines fabricated by skilled artisans are capable of manufacturing up to

200 tonnes of briquettes per year. This is a typical entry point for entrepreneurs to enter
the market with powered machinery that they can purchase locally.
While a few businesses of this size operate within the DEEP programme in Kenya
(where further advancements have been made in local machine fabrication) there are
not any DEEP entrepreneurs at this scale yet in Uganda, however a few other ventures
have known to be started over the last year as the commercial potential for briquettes is
starting to be realized. However, this middle-scale of production appears to face the
most challenges; not having the investment to progress to using imported equipment
and unable to produce enough output to justify some of the key production and supply
chain processes such as transportation, carbonization and accelerated drying.
To get production to multiple thousands of tonnes per year, imported machinery is

required. This represents a big step up in investment and so far Kampala Jellitone
Suppliers is the only company operating at this level in Uganda. A few others of this
scale are operating around EastAfrica and profiles of these businesses are included later
in the chapter. These larger businesses are each operating quite different business
models, suggesting that a „one-size-fits-all‟ model is not an option. Varying availability
of feedstocks, differing markets and unique country economic conditions mean that a
company of this size must explore models that will work in its local context.
An important note is that almost all of the 2,000 tonnes per year businesses in East Africa have
benefited from grant funding to get them started and 3 out of the 4 largest have been set up by
foreign participants. They also all entered the market at this scale of operation.
37
Table 10: Analysis of the Ugandan Briquette Industry
Number Currently
Operating in Uganda 100s < 10 1 0
Example Businesses  Top DEEP Producers (Uganda)  Eco-Fuel Africa (Uganda)  KJS (Uganda)  UIA Tender (Kampala,
 NGO-supported micro-  Green Bio Energy (Uganda)  Chardust (Kenya) Uganda)
including those in other entrepreneurs  Top DEEP Producers (Kenya)  EA Briquette Company
East African countries (Tanazania)
< 20 tonnes/year < 200 < 2,000 < 20,000

tonnes/year tonnes/year tonnes/year
Equipment  1 or 2 manual machines  Motorised machines that are  Motorized machines that are  Large-scale industrial
 E.g. lever extruder / manual screw fabricated locally imported machinery,imported
extruder  E.g. electric screw extruders  E.g. roller press / large (flywheel)  E.g. 8 t/hr hydraulic pellet press
 Single Drum Kilns  Sun-drying / solar driers piston  Accelerated drying
 Sun-drying  Sun-drying / flash drier
Premises  Often in entrepreneurs house  Can do at entrepreneurs  Dedicated factory needed  Large centralized factory based
and garden residence or in a large garden  Approx. 2 acres of land within Kampala city
Feedstock  Typically charcoal dust, but also  Mainly charcoal dust  Charcoal dust
carbonised leaves, banana peels  Some agricultural wastes (but  Non-carbonised agricultural  Dried organic municipal
and garden wastes (this quantity required quantity is too much to waste solidwaste
is easily charred by a drum kiln) carbonize without heavy  Carbonised agricultural waste
equipment) (carbonising and transport
become more economical at this
scale
Supply  Collect from local charcoal  Collect from local charcoal  Agricultural waste bought on  Centralised collection
vendors vendors bulk from farmers (contractual throughcity waste collectors
 Garden wastes  Agricultural waste bought from arrangements)  Centralised sorting centres
 No shortage at required farmers (usually small-holders)  Collect most charcoal dust in
quantities  Small carbonisation kilns leased vicinity and further afield
to farmers  Transport network established
 Not economical to transport
raw materials from afar
Distribution • Sell to neighbours and local  Sell in a few fixed market  Sell to institutions who are  Sell through well-established
 domestic users outlets often regular customers retail outlets in Kampala
 Opportunistically at market  Domestic users through
38
days organized retail network
 hawking
Investment Required < US$ 1,000 US$ 5,000 assuming land is US$ 50,000 - US$ 100,000 US$ 2.2 million
already owned
39
In 2010 the Uganda Investment Authority (UIA) put forward investment proposals for a
70-tonne per day (20,000 tonnes per year) manufacturing plant for briquettes made from
municipal solid waste collected from households and surrounding markets in Kampala.
At the time of writing, the UIA were unable to comment on the status of this tendor,
however their business plan analysis does suggest that there is potential for one
industrial scale briquette plant to operate in Kampala.
The supply and distribution models of businesses operating at each level of production
differ, asdo the challenges faced by each. The following case studies give an insight into
some of the people working in these different sized briquette businesses.
40
9.0 MARKETING AND DISTRIBUTION
9.1 Marketing and Communication
Flyers and posters will be made. They will have printed instructions for lighting the
briquettes and estimating their burning time. The flyers and posters will be an
educational tool, with both financial andenvironmental advantage. They will be
distributed to the selected vendors, will hand them out to clientsas they buy the
briquettes.
Josa Green Technologies Ltd will attend exhibitions like the Energy Week (organized
by the Ministry of Energyand Mineral Development), trade fairs, and agricultural
shows. These appearances will provide both promotional platforms and
communication forums.
9.2 Distribution
The manufactured briquettes will be distributed to the ten selected charcoal vendors
around Kampala in Owino, Nakawa, Banda, Kibuye, Kamwokya, Kalerwe, Namasuba.
As part of the initial training and promotional awareness raising, each vendor will be
given a 10 kgs pack of briquettes and a stove for trial purposes. This will allow them to
demonstrate charcoal briquettes to their wood charcoal clientele. All feedbacks will be
documented.
9.3 Sales
There will be an initial production of 918 tons of briquettes during the first year of
operation. This will average 2.52 tons of briquettes per day. A kilogram of briquettes
will be sold at 23 cents and generate sales revenue of US$ 205,294.
Production during the second year of operation will increase by 15% to a level of 1,055.7
tons of briquettes. In order to meet the increased production limit that year, working
hours will be increased. As the market focus is extended around Kampala, the company
will realize US$ 247,893 of sales revenue during the second year.
In the third year of operation, the project will produce 1,214 tons of briquettes a
production increase of 30% with sales revenue of US$ 299,330.
41
In 2016, Josa Green Technologies Ltd intends to expand its business to incorporate
more outlets using existing charcoal vendors and supplying to the tourism and the
hospitality industry. Josa Green Technologies Ltd‟s target is to sell 1,350 tons of
briquettes for 2020. This represents 5.51 percent of the entire charcoal consumption of
Kampala.
Table 11 shows the briquette sales revenue of the first three years of operation, as
extracted from the budget spreadsheet.
Table 11: Projected Revenues (In USD)

Item Description Year 1 Year 2 Year 3 Year 4 Year 5
Briquettes:
Honey Combs 46,286 55,890 67,488 74,405 82,737
Briquette Sticks 101,408 122,450 147,859 163,014 181,268
Pillow-shaped briquettes 57,600 69,552 83,984 92,592 102,961
Sub-Total 205,294 247,893 299,330 330,012 366,965
Stoves:
Moveable Stoves Type 1 51,429 62,101 74,986 82,672 91,930
Institutional moveable 102,857 124,200 149,971 165,343 183,858
stoves
Institutional fixed stoves 68,571 82,799 99,980 110,228 122,571
Customized Ovens 51,429 62,101 74,986 82,672 91,930
Sub-Total 341,143 411,930 497,406 548,390 609,796
TOTAL SALES 546,437 659,823 796,736 878,401 976,761
9.4 Market Penetration Strategy
Josa Green Technologies Ltd will employ a four-pronged market penetration

strategyin accessing and growing the emerging bio fuel briquettes/pellets market in
Uganda. The integral elements of this market penetration strategy include: product
pricing; product distribution; product promotion; and product innovation.
Product Pricing
Josa Green Technologies Ltd makes use of low-priced raw materials, ample labour
supply and a good measure of innovation, set out to produce fuels that could sell
42
directly into traditional charcoal markets and compete head-to-head on both price
and quality.
Product Distribution
Josa Green Technologies Ltd will mostly target institutional customers such as poultry
farms, chapati businesses, hotels, lodges and restaurants, boarding schools, hospitals, as
well as to charcoal dealers and individuals for direct sales into the domestic market that
collectively represent the largest market segment of product end-users.
Product Promotion
 For introducing the Josa Green Technologies Ltd bio fuel briquette products on
the market, we will market our product(s) through different mediums (Company
Website, Emails and Social Media, Print Media, and FM Radio and TV etc).
 Different types of awareness programs will be used to make people buy bio fuel
briquettes and pellets products.
Product Innovation
Josa Green Technologies Ltd will at a later stage also produce a premium charcoal
briquette made from selected vendors' waste and natural binders. This lower ash
product will be designed for the domestic barbecue market and will be sold mainly
through supermarkets within the city of Kampala.
Josa Green Technologies Ltd will also introduce agglomeration machinery to its
production line for the fabrication of spherical briquettes that will be aimed at the urban
mid-scale market.
43
10.0 PROJECT TECHNICAL ASPECTS
10.1 Project Location & Facilities
The Josa Green Technologies Ltd's bio-fuel briquettes production facility is located at
Nansana town in Wakiso District which is only about 10 kms from Kampala city centre
along the Kampala – Hoima road. The actual physical location of the existing processing
plant is at Ochieng Zone, Wamala Road near Njovu Estate at Nansana. The head office
of Josa Green Technologies Ltd is situated at Namuli Road at Bukoto behind Kabira
Country Club, Namuli Zone found in Nakawa Division in the eastern suburbs of
Kampala city.
10.2 Size and Capacity
The planned production monthly and annual output of bio fuel briquettes and stoves
after the installation of additional plant manufacturing capacity on site is indicated in
Table 12 below. Apart from honeycomb briquettes, the planned production output of
all the other bio fuel briquettes and stoves are indicated in kilograms and units
respectively. The production output of honeycomb briquettes is indicated in terms of
„sticks‟ with each stick weighing 2.5 kgs.
Table 12: Planned Monthly and Annual Production Output (Project Year 1)
Item Description Units Monthly Annual
Production Production
A. BIO FUEL BRIQUETTES
Honey Combs Sticks 9,000 108,000
Briquette Sticks Kgs 30,000 360,000
Briquettes Kgs 24,000 288,000
B. STOVES & OVENS

Moveable Stoves Type 1 Units 300 3,600
Institutional Moveable Stoves Units 50 600
Institutional Fixed Stoves Units 4 48
Customized Ovens Units 5 60
44
10.3 Technical Description of Process
Briquette production will take sugar cane trash, bagasse and leaves, maize waste and
charcoal dust: which will be supplied by local farmers, sugarcane processing factories,
and the charcoal dust collectors.
The production processes include:
1. Buy dry agricultural wastes/char or charcoal dust, sugar cane trash, and maize
trash from farmers: „Trash‟ is defined as fibrous material left in the field after
harvesting.
2. The trash is burned to form char. For every one ton of dry agricultural waste, 300
tons of char is realized.
3. Char is molded, dried, and packaged as briquettes in various quantities suitable
for sale to both commercial and domestic buyers.
Carbonization Preparation of Mixing with a Compaction/ Drying

feed stocks binder Briquetting
Development of briquette include other „waste‟ raw material

Possible raw materials include banana peelings, rice stalks, cotton stalks, mustard
stalks, and coffee husks. However, Josa Green Technologies Ltd still needs to do more
research on the blends and ratios of these materials. Heat recovery is a possibility too
but it requires proper engineering technology.
45
Table 13: Summary of advantages and disadvantages of briquette production
techniques
TECHNIQUE/TECHNOLOGY ADVANTAGES DISADVANTAGES
MANUAL PRESS  low capital costs US$150  low capacity 6kg per hour
(LOW PRESSURE PRESS)  locally fabricated and  briquettes easily
enable access to briquetting disintegrate
technology especially in  low maintenance
rural areas  low-tech requiring little to
 does not require electricity no technicalskills to operate
PISTION PRESS  high capacity up to 750kg  very high capital costs
per hour US$20 000 - 30 000
 can be fabricated by local  import required
mechanical technicians
SCREW PRESS  low capacity costs US$1 350  low capacity 150kg per hour
 simple mechanism
 can be fabricated by local
mechanical technicians
ROLLER PRESS  high production capacity  high capital cost US$14,000
1,500kilogrammes per hour -19 000
 suited for briquetting of  import related
wet powder  low compaction rate
10.4 Processing Machinery and Equipment
The total cost of the Josa Green Technologies Ltd bio fuel briquetting machinery and
equipment is estimated at USD 10,170 (UGShs 35,600,000) out of which USD 1,770
(UGShs 6,200,000) is the value of the existing plant machinery and equipment and USD
8,400 (UGShs 29,600,000) will be spent on acquisition of additional fuel briquetting
machinery and equipment. Detailed list of machinery and equipment and their cost
estimates are given in Table 14.
Figure 4: Industrial Hammer Figure 5: Roller Press

mill Grinder
46
Table 14: Estimated Cost of Machinery and Equipment
Item Description Units Unit Cost Total Cost
(USD) (USD)
A. EXISTING PLANT EQUIPMENT
Honeycomb Presses 2 171.43 342.86
Grinder 1 428.57 428.57
Stick Press 1 1,000.00 1,000.00
Sub-Total 1,771.43
B. PLANNED PLANT EQUIPMENT

Equipment for Briquettes
Automated Piston Extruder 1 1,430.00 1,430.00
Roller Press 1 2,486.00 2,486.00
Automated double honeycomb press 1 2,430.00 2,430.00
Automated Mixer 1 1,143.00 1,143.00
Small Tools – 681.00 681.00
Sub-Total 8,170.00
Equipment for Stoves
Grooving Machine 1 143.00 143.00
Pressure Spray Gun 1 87.00 87.00
Sub-Total 230.00
TOTAL COST 10,170.00
10.5 Buildings and Civil Works
Josa Green Technologies Ltd plans to construct additional building infrastructure at

the existing production site that are estimated to cost USD 4,150 (UGShs 14,500,000) to
put up. The buildings that are of immediate priority are the liner production structure,
stores shade structure, and toilets. The detailed particulars and estimated costing for the
proposed building infrastructure are provided in Table 15 below.
Table 15: Estimated Cost of New Buildings & Civil Works

Item Description Units Unit Cost (USD) Total Cost (USD)
Liner production structure 1 2,573 2,573
Stores shade structure 1 860 860
Toilets 1 717 717
TOTAL COST 4,150
47
10.6 Vehicles
Josa Green Technologies Ltd will require 1 (one) medium-sized transportation truck
for picking up the biomass and charcoal dust raw materials for the processing of bio
fuel briquettes from the identified raw material source centres or production areas and
delivering it to the bio fuel briquetting plant on a routine daily/weekly basis. The cost
of this medium-sized truck is estimated at USD 11,430 (UGShs 40,000,000).
10.7 Biomass for Briquettes
10.7.1 Overview
Briquettes can be made out of any biomass material, although the choice of feedstock
can determine its heating potential as a fuel.
The available biomass resource consists primarily of:
 Wood
 Agricultural Waste (field residues and process residues)
 Animal Manure
 Municipal Solid Waste (Household and Food Processing Wastes)
While wood from trees constitutes the greatest amount of biomass stock available in
Uganda and consequently the most used form of biomass (including its use for
charcoal), crop residues are also utilized and are receiving increased attention as
awareness of the unsustainability of the wood and charcoal trades grows. Table 16
highlights the most widely available residues in Uganda, of which up to 1.2 million tons
are estimated to be available each year.
Animal manure results in a briquette with a low calorific value, and so is normally used
to add bulk to other woody material, however this is rarely done and the scattering of
livestock in ruralUganda makes collection on a commercial scale difficult. The use of
dried organic municipal solid waste (MSW) offers potential for briquetting purposes
and pilot projects have been carried out in Rwanda, but this resource remains largely
untapped in Uganda. In 2010 the Uganda Investment Authority put forward
investment proposals for a 70-tonne per day manufacturing plant for briquettes made
from MSW collected from households and surrounding markets inKampala, of which it
estimates 1,500 tonnes are produced daily.
48
10.7.2 Raw Material Supply Situation
The sugarcane trash is so highly lignified and silicified which means that they cannot be
used as fodder. As a result, out growers burn the sugar cane leaves in the fields. These
leaves can be carbonized in a kiln to form char.
The char from maize cob will be bought from farmers and farmer groups; I will be
buying maize waste char because it is not economical to transport maize cob from
farmers who are scatted all over the country. A centralized carbonized will be provided
for farmers to use. Bagasse will be purchased from The Sugar Corporation of Uganda
Ltd and Kakira Sugar Works Ltd; these companies are located in Jinja. They burnt over
452,000 tons of bagasse in 2004 (Ref. Table 16 below).
Table 16: Biomass Potential

Biomass Potential (tons) Moisture content
Bagasse 452,200 50
Maize cob 234,000 15
(Source: Bingh, 2004)
Equation 1, below shows bagasse potential
Potential: 452,500 tons of bagasse x 37.5 = 170,000 tons of charcoal

100
The rate of transformation of bagasse to charcoal is 35 to 40% efficiency. The potential of

charcoal production from bagasse in Uganda is shown in Equation 1 above.
Assumption for the supply of raw material is 2,624 tons in the first year;
 Dry agro-waste 2,244 tons

 Charcoal dust 380 tons
According to the UN Statistics Division Energy Statistics Database (2011), the total
production of charcoal in Uganda in 2001 was 956,890 tons, which means that
theoretically, the briquettes from bagasse can replace 17.77% of the charcoal produced
in 2011.
49
Supply agreements will be secured from Jinja based Kakira Sugar Works Ltd and Sugar
Corporation of Uganda Ltd, to supply 28,800 tons of bagasse. This is 6.37% of the
wasted bagasse.
Charcoal dust will be supplied by the charcoal traders. Since charcoal dust is regarded
as a waste, they will be glad to sell from the waste.
In the future, maize cob will be used in order to lower the use of charcoal dust.
10.8 Sourcing of Raw Materials
10.8.1 Biomass Waste
Materials for briquette making are mainly got from agricultural residues that include
ground nut shell, stems, bean stalk and peels, maize stalk & cobs, food peels, sugar cane
residues and off cuts, grass and sticks, jack fruit residues, leaves and papers. All these
must be in a dry form.
Much of the waste Josa Green Technologies Ltd has been using to make briquettes has
been collected at household level where suppliers of the feed stock (dry waste) have
been collecting biomass waste in various households, sort, dry and later sell to Josa
Green Technologies Ltd for further processing into char through a process of
carbonization (gasification using down draft process). This however, has proved to be
time consuming while carbonizing and wasteful in form of waste: char conversion ratio
where approximately 30% of waste is converted into char a primary raw material for
briquette making. This is mainly because Josa Green Technologies Ltd operates with
low-output technology equipments to convert waste into char yet there is an increase in
waste generated suitable for briquette making. This is attributed by increase in human
population in Kampala and the surrounding Wakiso District. Kampala Capital City
Authority (KCCA) alone produces 1,500metric tonnes of waste/day suitable for
briquette making which finds its way to Kitezi landfill.
Biomass waste needed

Using the current equipments we have while carbonizing 60 kgs of biomass waste gives
14kgs of char. During briquette production this gives 16 kgs of stick briquettes and
when it is honey combs that are produced using the produced char 6 pieces of honey
comb briquettes are produced. Therefore Josa Green Technologies needs 864 kgs of dry
waste that provides 208kg of char to sustain its daily briquette production of 84 pieces
of honey comb.
50
Strategy
Josa Green Technologies Ltd in a period of 2 years should acquire a better facility with
high waste – char conversion to carbonize.
Josa Green Technologies Ltd should train suppliers of waste in carbonization process
to provide char rather than waste in its raw form. This will guarantee steady supply of
raw material for sustainable briquette production rather than Josa Green Technologies
Ltd engage in both production of char and briquette production.
10.8.2 Charcoal Dust
Charcoal dust is loose charcoal obtained either from poor conversion of wood into
charcoal or during transport, handling and storage. Presently traditional kilns used in
charcoaling are about 12% efficient. This has created a huge opportunity for briquette
industry to access raw material for briquette making. Research also reviled that a
significant volume (10-35%) of charcoal in the form charcoal dust is lost during
transportation and improper storage (Knöpfle 2004). The charcoal briquette technology
is assumed to offer a viable and low-cost alternative to charcoal. This also gives Josa
Green Technologies Ltd an age is accessing for charcoal dust as a raw material.
Charcoal dust needed

This type of material is less time consuming and it enables high production levels since
no time is invested to charring process. For Josa Green Technologies Ltd to produce 84
pieces of honey comb briquettes it requires 202 kgs of charcoal dust daily.
Strategy
Currently Josa Green Technologies Ltd is working with various charcoal venders in
markets of Nakulabye, Mengo, Kamwokya, Old Kampala and Nansana to access
charcoal dust. This is mainly in during rainy seasons when char from waste is
insufficient and difficult to get. This has provided a safe fallback position for Josa Green
Technologies Ltd to sustain briquette production mainly in wet season. Josa Green
Technologies Ltd needs to create a strong bond with current charcoal venders it works
with but more so, look for other partnerships to guarantee steady supply of the
feedstock.
Binder:
In addition to biomass mixing, an appropriate binder is added and mixed with the
biomass thoroughly. This enhances the compactness of the biomass materials and
prevents them from falling apart. Examples of such binders include starch, molasses.
51
These are less costly and can be easily accessed either from the factories that produce
sugar as a bio-waste or through use of off cuts and residues of food staffs rich in starch.
Filler:
This is another essential ingredient needed in briquette production.
10.9 Environmental Impacts
The environmental impact can be estimated if making the assumption that briquettes
are directlyreplacing charcoal consumption. As all the briquettes are currently made out
of waste material,the greenhouse gas emission savings can be thought of in terms of the
number of trees leftstanding as a result of replacing firewood and charcoal. It is
estimated that each tonne of charcoal requires the felling of 88 medium size trees. Using
this figure, the total amount ofdeforestation avoided by the production of fluke
briquettes by Josa Green Technologies Ltd can be roughly estimated at 80,784 trees
annually (i.e. 918 metric tonnes x 88 trees).
Other salient environmental impacts of this bio fuel briquetting project are as follows:
 Waste materials are used to produce useable fuel, and the efficient use of
resources is promoted.
 Greenhouse gas emissions, particularly methane, produced from the decay of the
organic materials (biomass) used to make the briquettes, are avoided.
 Deforestation is reduced as the fuel briquettes offer a substitute for fuel wood and
charcoal.
 Quality of both surface and ground water is improved by reducing land erosion
through decreased deforestation practices.
 By replacing polluting fossil fuels, environmental quality is improved and the
impacts of climate change are reduced.
52
11.0 HUMAN RESOURCES AND MANAGEMENT STRUCTURE
The Josa Green Technologies Ltd bio fuel briquetting enterprise/plant will create job
opportunities for 20 persons. Detailed descriptions are found in the following sub-
sections.
11.1 Governance Structure
Josa Green Technologies Ltd has a well-developed governance structure comprising of

Board of Directors.
11.2 Organizational and Manpower Structure
The Company has a sound management structure in place with a well developed
organizational set up headed by the Managing Director who handles day to day
activities of the Company and is assisted by heads of departments and other staff
including Artisans. Management is supported by Associate consultants with different
specializations who are engaged from time to time depending on the nature of projects.
The following are the key responsibilities of each of Josa‟s departmental heads and
other key personnel:
Finance & Administration Manager:
 Develop all financial strategies, policies and procedures for the company.
 Set the long term objectives of the department and communicate it to the
subordinates.
 Review of payment vouchers, journal entries, credit/debit notes, along with
source documents.
 Prepare the periodical financial statements that represent the organizations
financial position, including comprehensive income statement, balance sheet,
cash flow statement, and changes in shareholders' equity statement.
 Monitor the results of periodical cash count as well as the physical count and
ensuring their compliance with the accounting records.
53
Figure 6: Josa Organizational Structure
BOARD OF
DIRECTORS
MANAGING
DIRECTOR
BUSINESS PRODUCTION SALES & MARKETING FINANCE &

MANAGER MANAGER MANAGER ADMINISTRATION
MANAGER
CONSULTANTS BRIQUETTES & SALES

(2) STOVES ARTISANS (7) EXECUTIVES (3)
SUPPORT ACCOUNTANT
STAFF (2) (1)
Sales & Marketing Manager:
 Set the short- and long-term objectives of the department and communicate it to
the subordinates.
 Coordinate with the production department to ensure that bio fuel briquette
supply consignments to customers are dispatched and delivered on time.
 Follow up on marketing campaigns and ensure that they are directed towards
the targeted market.
 Monitor and follow up with sales account managers to achieve sales targets and
supervise the sales cycle.
 Make thorough assessments of the demand and supply of bio fuel briquettes on
the domestic and regional export market and as well as the price situations in the
world market.
 Intensively deal with the processing of local market sales documents (slaes
invoices and vouchers) including transportation to targeted market clients.
Process and follow up Local Purchase Orders (LPOs) with the concerned
advising and correspondent banks.
54
Business Manager:
 Assist Josa Green Technologies Ltd in reaching its goals and objectives related
to sales, productivity, profitability and industry penetration, among other areas;
 Analyze data;
 Make crucial business decisions;
 Hire, train and evaluate company employees;
 Ensure that Josa Green Technologies Ltd is on track to meet financial goals;
 Develop and implement Josa in reaching its budgets;
 Prepare reports for the Josa Board of Directors, MD, and senior management;
 Ensure that workers have the resources to complete their work;
 Assess the performance of Josa against goals and plans;
 Perform human resource activities such as performance evaluations, hiring and
discipline;
 Motivate workers through incentives and positive feedback;
 Assume day-to-day tasks like purchasing, hiring, training, and quality control.
Production Manager:
 Setting the department long and short- and long-term objectives and
communicate them to all subordinates.
 Supervise and oversee the production processes, set up the production schedule
for Josa‟s different product lines, and adjust schedules as needed.
 Take responsibility for the processing and packaging of bio fuel briquettes for
sale on the domestic market.
 Ensure that the bio fuel briquetting/processing operations are cost effective and
within the assigned budget.
 Ensure that bio fuel briquettes and stoves/ovens are manufactured and
packaged on time, and are of good quality that is in compliance with the
minimum renewable energy industry standards
 Work closely with Josa‟s other sections heads to implement the Josa‟s policies
and meet the organization objectives.
 Supervise and motivate the production department team and ensure that Health
and Safety guidelines are followed.
 Identify training needs of section employees and make the necessary
recommendations to the upper management.
55
Sales Executives:
Josa sales executives will sell the company's range of products and services. Customers
include individuals, businesses and government organizations and sales may be
domestic (within Uganda) or regional (at a later stage), or a combination of both.
As well as approaching potential customers with the aim of winning new business; the
Josa sales executives will work to maintain good relationships with existing clients,
gaining repeat business wherever possible.
Typical activities for the Josa sales executives generally include:
 Listening to customer requirements and presenting appropriately to make a sale;

 Maintaining and developing relationships with existing customers in person and via
telephone calls and emails;
 Cold calling to arrange meetings with potential customers to prospect for new
business;
 Responding to incoming email and phone enquiries;
 Acting as a contact between a company and its existing and potential markets;
 Negotiating the terms of an agreement and closing sales;
 Gathering market and customer information;
 Representing Josa Green Technologies Ltd at trade exhibitions, events and
demonstrations;
 Negotiating on price, costs, delivery and specifications with buyers and managers;
 Challenging any objections with a view to getting the customer to buy;
 Advising on forthcoming product developments and discussing special promotions;
 Creating detailed proposal documents, often as part of a formal bidding process
which is largely dictated by the prospective customer;
 Liaising with suppliers to check the progress of existing orders;
 Checking the quantities of goods on display and in stock;
 Recording sales and order information and sending copies to the sales office, or
entering figures into a computer system;
 Reviewing Josa sales performance, aiming to meet or exceed targets;
 Gaining a clear understanding of customers' businesses and requirements;
 Making accurate, rapid cost calculations and providing customers with quotations;
 Feeding future buying trends back to employers;
 Attending team meetings and sharing best practice with colleagues.
56
11.3 Personnel & Payroll Plan
We believe this plan meets the commitments of our mission and business objectives. We
intend to grow into a large coffee trading organization, though in doing so we will
ensure that we wish to stay responsive to customers‟ orders and requests. We want the
company to stay lean and flexible so that we can respond to our markets' needs quickly.
As we expand and increase in size we do expect to increase our personnel.
Josa Green Technologies Ltd (Josa) recognizes that our employees contribute
fundamentally to the Company's long-term prosperity, acknowledging our obligation
to remunerate them competitively. We intend to compensate our personnel well, so as
to retain their invaluable expertise and to ensure job satisfaction and enrichment
through delegation of authority. Our compensation will include a competitive salary,
generous profit sharing, plus a minimum of three weeks‟ vacation. As time progresses
we intend to enhance our capacity to attract and retain people of quality, inter alia,
through benefits such as housing and family education grants.
The proposed manpower requirement and the estimated annual labour cost including
fringe benefits are given in Table 17.
11.4 Training Requirement
The production manager should be given on-the-job training for a period of one month
by experts of the supplier of the machinery and equipment. The ten (10) briquettes and
stoves artisans should also obtain a 15 days on–the–job training on how to operate the
equipment and handle the inputs. The estimated training cost is USD 1,500.
11.5 Feedback & Control
1. Important notices and developments will be continuously communicated to

employees to keep them abreast of developments and promoting a sense of
belonging and oneness in the organization.
2. We will encourage our employees to put forward any suggestions they might
have regarding the improvement of any of the company's functions-an open
door philosophy. Such a culture will enhance innovativeness and creativity, in
turn leading to job satisfaction and enrichment.
57
3. We intend to make sure that our employees understand the goals of the firm, are
customer focused, proud of their work and work as a team. This will encourage
employees to become entrepreneurial and customer responsible, in addition to
unifying staff in customer focus and values.
Table 17: Manpower Requirement and Annual Labour Cost

Position Nos. Monthly Total Annual
Salary (USD) Monthly Salary (USD)
Salary (USD)
Managing Director (MD) 1 1,500 1,500 18,000
Business Manager 1 1,000 1,000 12,000
Production Manager 1 1,000 1,000 12,000
Sales & Marketing Manager 1 1,000 1,000 12,000
Finance & Admin. Manager 1 1,000 1,000 12,000
Consultants 2 800 1,600 19,200
Sales Executives 3 600 1,800 21,600
Accountant 1 900 900 10,800
Finance Dept. Support Staff 2 600 1,200 14,400
Plant Artisans 7 300 2,100 25,200
TOTAL 20 13,100 157,200
Fringe Benefits (40% of the above) 62,880
TOTAL ANNUAL WAGE BILL 220,080
58
12.0 INVESTMENT REQUIREMENTS, PROJECT FINANCING AND RETURNS
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 on pages 73 to 95.
12.1 Capital Cost of Project
Total project cost including working capital is estimated at US$ 71,486. Schedule 02/1:
Initial Project Investment Costs on page 78 provides the details on project capital
investment costs. The major breakdown of the total initial investment cost is shown in
Table 18.
Table 18: Initial Capital Investment Cost of Project (In US$)

Description Local Foreign Total
Currency Currency
A. EXISTING ASSETS
Land Assets 8,571 0 8,571
Buildings 1,143 0 1,143
Briquettes Processing Equipment 1,771 0 1,771
Sub-Total Existing Assets 11,486 0 11,486
B. PLANNED INVESTMENT
Buildings 4,150 0 4,150
Equipment for Briquettes 0 8,170 8,170
Equipment for Stoves 0 230 230
Vehicle(s) 11,430 0 11,430
Office Equipment 570 0 570
Sub-Total Planned Investment 16,150 8,400 24,550
Fixed Cost 27,636 8,400 36,036
Pre-Operational Expenses 5,450 0 5,450
Working Capital (Start-up Inventory) 30,000 0 30,000
TOTAL PROJECT COST 63,086 8,400 71,486
Funds will be required for purchase and installation biomass fuel briquettes and stoves
manufacturing plant machinery and equipment, finance the construction of additional
building structures, purchase one transportation truck unit, and cover pre-operational
and working capital expenses. The production process of the biomass fuel briquettes
59
and cook stoves processing plant is a continuous process and capacity has been
calculated basing on 10 hours per day. It is expected that this biomass fuel briquettes
and cook stoves processing plant will run for 365 days a year and in the second year
capacity utilization will start off 100%, for the reason that the project has to utilize
economies of scale to break even early and effectively service debt.
Land:
The Josa Green Technologies Ltd's bio-fuel briquettes production facility is located at
Ochieng Zone opposite Njovu Estate at Nansana town in Wakiso District which is only
about 10 kms from Kampala city centre along the Kampala – Hoima road. This plot of
land belongs to Josa and measures 7,000 square feet (approx. 650 square metres) in size.
Based on the available information the cost of land in the peri-urban areas Kampala is
assumed at USD 150,000 per acre (including the developmental cost) – basing on the
fact that it is near the principal commercial and economic hub of Uganda and the added
fact that in touches on one of the major trunk roads into and out of Kampala city. Being
located only 10 kms from Kampala along the Kampala – Hoima highway (which will
soon become a busy route on account of the upcoming oil industry activities in Bunyoro
region), the cost of land in this area is high and for a plot of this size is estimated at
USD 8,571 (approx. UGShs 30 million).
Building & Construction:

Josa Green Technologies Ltd plans to construct additional building infrastructure at
the existing production site that are estimated to cost approximately USD 4,150 (UGShs
14,500,000) to put up. The buildings that are of immediate priority are the liner
production structure, stores shade structure, and the toilets.
Machinery and Equipment:

The total cost of the Josa Green Technologies Ltd bio fuel briquetting machinery and
equipment is estimated at USD 10,170 (UGShs 35,600,000) out of which USD 1,770
(UGShs 6,200,000) is the value of the existing plant machinery and equipment and USD
8,400 (UGShs 29,600,000) will be spent on purchase and installation of additional fuel
briquetting machinery and equipment. The total cost of additional investment in
machinery and equipment also includes the cost of office equipment valued at USD 570
(UGShs 2,000,000).
Transportation Vehicles:
Josa Green Technologies Ltd will require 1 (one) medium-sized transportation truck
for picking up the biomass and charcoal dust raw materials for the processing of bio
60
fuel briquettes from the identified raw material source centres or production areas and
delivering it to the bio fuel briquetting plant on a routine daily/weekly basis. The cost
of this medium-sized truck is estimated at USD 11,430 (UGShs 40,000,000).
Working Capital:
Dealing in renewable energy 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 raw material biomass such as bagasse and other agricultural/forestry waste and
charcoal dust is purchased on a 1-week cash basis and the finished product is sold on
cash.. Working capital is mostly required to pay for the initial purchases of raw material
biomass and charcoal dust from the existing sugar plantations, sawmills, primary
agricultural producers and charcoal dealers throughout Uganda, as well as to pay for
other industrial consumables, packaging material, and finished products including the
packaged fuel briquettes and environmental cook stoves/ovens and prepared for
delivery and distribution through the designated Josa product distribution and sales
network, for marketing and sales promotion, for sales invoicing and documentation
paperwork, for payments of utility bills, salaries & wages, fuel for vehicles and for
purchase of industrial and motor vehicle spares. The start-up working capital
requirements have been estimated at USD 35,450 (UGShs 124 million) for the first two
(2) months of operation and includes pre-operational expenses worth USD 5,450
(UGShs 19 million) and start-up inventory account worth USD 30,000 (UGShs 105
million).
12.2 Financial Plan
The project is proposed to be financed through a combination of company equity and

medium-term institutional financing in the ratio of 84:16 approximately. The financial
models show the medium-term loan bearing an interest rate of 5 percent per annum
payable over a period of ten years. Schedule 02/2: Source and Structure of Project
Financing on page 79 hereby refers.
12.3 Profit & Loss Account
A summarized version of the profit & loss account is given in Table 19 below.
61
Table 19: Summary Profit & Loss Account for First Five Years of the Project (In USD)
Description Year 2 Year 3 Year 4 Year 5
Sales 546,437 659,823 796,736 878,401
Less: Cost of Sales 106,058 128,065 154,640 170,490
Gross Profit 440,379 531,758 642,096 707,911
Less: Operating Costs 285,518 300,128 322,297 340,819
Operating Profit 154,861 231,630 319,799 367,093
Less: Interest service 7,200 5,400 3,600 1,800
Less: Loan service 15,000 15,000 15,000 15,000
Provision for Tax 39,798 63,369 90,360 105,088
Net Profit 92,863 147,861 210,839 245,205
Cum. Retained Earnings 92,863 240,724 451,563 696,768
12.4 Rates of Return
On the basis of the earnings forecast and related projections, rates of return for the
project are calculated below:
Table 20: Rates of Return (In Percentages)

Gross Profit to Sales 80.59 80.59 80.59 80.59
Operating Profit to Sales 28.34 35.10 40.14 41.79
Net Profit to Sales 16.99 22.41 26.46 27.91
Net Profit to Total Investment 129.90 206.84 294.94 343.01
12.5 Payback Period
Payback period for the project, both in terms of owner‟s equity and total investment, is
calculated below:
Total Capital Investment = US$ 71,485

Josa‟s Equity = US$ 11,485
“Profits” = Net Profit + Interest + Depreciation
62
Table 21: Calculation of Payback Period for Equity and Total Investment
Year Amount paid back from “Profits” Balance of Total Balance of Total
Investment Equity
1 0 -71,486 -11,489
2 103,687 32,201 92,198
3 156,885 189,086 249,083
4 218,063 407,149 467,146
5 250,629 657,778 717,775
Payback period for Equity = 1.69 Years

Payback period for Total Capital Investment = 1.11 Years
12.6 Capital: Output Ratio
Capital output ratios, representing the production potential of the project in relation to
the investment involved in its establishment, are calculated below:
Table 22: Capital: Output Ratios (In USD)

Total Investment 71,485 _ _ _
Sales (Output) 546,437 659,823 796,736 878,401
Capital: Output Ratio 1: 7.64 1: 9.23 1: 11.15 1: 12.29
12.7 Cash Flow Statement
The projected cash flow for the first five years of the project is shown hereunder:
63
Table 23: Projected Cash Flows (In USD)
Project Year 1 2 3 4 5
Costs (US Dollars)
A. Cash inflow 71,486 546,437 659,823 796,736 878,401
1. Financial resources Total 71,486 _ _ _ _
2. Sales revenue total _ 546,437 659,823 796,736 878,401
B. Cash outflow -71,486 -643,518 -531,181 -608,887 -649,869

1. Total assets schedule
including replacements -71,486 -189,484 -18,759 -22,530 -16,213
2. Operating Costs _ -391,576 -428,193 -476,937 -511,309
3. Debt Service
a) Interest _ -7,200 -5,400 -3,600 -1,800
b) Repayments _ -15,000 -15,000 -15,000 -15,000
4. Corporate tax _ -39,798 -63,369 -90,360 -105,088
5. Dividends 4% on equity _ -460 -460 -460 -460
C. Surplus / deficit 0 -97,081 128,642 187,849 228,532
D. Cumulative cash bal. 0 -97,081 31,560 219,409 447,941
12.8 Balance Sheet
Projected balance sheet for the first five years of operation is shown below:
64
Table 24: Projected Balance Sheet (In USD)
CAPITAL EMPLOYED: YR.1 YR.2 YR.3 YR.4 YR.5
Share Capital 11,489 11,489 11,489 11,489
Retained Earnings 92,863 240,724 451,563 696,768
Shareholder's Equity/Deficit 104,352 252,213 463,052 708,257
Long-Term Liabilities 60,000 45,000 30,000 15,000
164,352 297,213 493,052 723,257
EMPLOYMENT OF
CAPITAL:
Plant Buildings 5,286 5,022 4,757 4,493 4,229
Production Plant Equip. &
Machinery 10,171 9,154 8,137 7,120 6,103
Office Equipment 570 513 456 399 342
Vehicles 11,430 9,144 6,858 4,572 2,286
LONG-TERM ASSETS: 23,833 20,208 16,584 12,959
CURRENT ASSETS: 160,717 297,960 498,712 732,583
Accounts Receivable 32,631 35,683 39,745 42,609
Stock (Inventory) 144,451 159,588 177,157 189,781
Bank Balance and Cash 12,402 12,973 13,872 14,596
Other Current Assets -28,767 89,716 267,938 485,596
CURRENT
LIABILITIES/DEBT: 20,198 20,956 22,244 22,285
Accounts Payable 12,998 15,556 18,644 20,485
Current Portion of Long-
term Liabilities 7,200 5,400 3,600 1,800
NET CURRENT ASSETS: 140,519 277,004 476,468 710,297
TOTAL CAPITAL 164,352 297,213 493,052 723,257
12.9 Break-Even Analysis
The project‟s commercial break-even level (profitability break-even) in Project Year 5 is

calculated below:
65
Table 25: Break-Even Analysis in Project Year 5 (In USD)
Items Variable Cost Fixed Cost Total Cost
Raw materials 170,490 0 170,490
Salaries & wages 196,928 65,643 262,570
Third Party Costs 6,065 2,022 8,087
Repairs & Maintenance 1,942 971 2,914
Storage, Fuel & Marketing 29,848 14,924 44,772
Office Overheads 16,857 5,619 22,476
Other Costs 0 0 0
Depreciation 0 3,624 3,624
Financial Expenses 0 1,800 1,800
TOTAL 422,130 94,602 516,733
Sales Value of Production = US$ 878,401
Break-even Sales = 94,602 94,602 94,602

1 – 422,130 1 –0.481 0.519
878,401
Break-even Sales = US$ 182,126
Capacity utilization required to Break-even = US$ 182,126 x 100 = 20.73%

US$ 878,401
Margin of Safety = 100% – 20.73% = 79.27%
12.10 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.
66
Table 26: Value Added/Contribution to GDP (In USD)
Value of Production (Sales) 546,437 659,823 796,736 878,401
Less Intermediate Input:
Cost of Sales 106,058 128,065 154,640 170,490
Storage, Fuel & Marketing 27,852 33,631 40,610 44,772
Office Overheads 13,982 16,883 20,387 22,476
Depreciation 3,624 3,624 3,624 3,624
Total Intermediate Inputs 151,516 182,203 219,261 241,362
Value Added 394,921 477,620 577,475 637,039
Value Added as % of output 72.27% 72.39% 72.48% 72.52%
Value Added per Worker (US$) 19,746 23,881 28,874 31,852
67
13.0 IMPLEMENTATION PLAN
It is expected that it will take approximately 9 months to have this project put into
operation from the day funds for its execution are secured. The preparatory stage which
involves the negotiation and eventual approval for project funding is assumed to take 3
months from the date of its first submission to project financiers by the project
promoters. The follow-on project implementation activities are expected to take an
additional 6 months to completion – which altogether adds up to 9 months. This has
been rounded off to 1 year to account for a three (3) months contingency period to cover
for any unforeseen time and cost overruns in the course of civil infrastructure
development and set up at site and any delays that might occasioned in procuring,
delivering and installing any of the other project‟s capital equipment at Josa Green
Technologies Ltd‟s existing land facility.
The following Gantt chart presented in Figure 7 highlights the important project
implementation milestones.
68
Figure 7: Project Implementation Milestones
Commence Operations
Commissioning of New Fuel
Briquettes Processing Plant
Three (3) months contingency
planning period
Establish fuel briquettes/stoves
market contacts (4 months)
Recruitment of other Company
Staff (2 months)
Hiring Key Executives (2
months)
Arrangements for raw material
supplies (1)
Industry Plant & Equipment:
Installation & Commissioning
(1 month)
Fuel Briquetting Plant &
Equipment: Freight & Delivery
(2.5 months)
Fuel Briquetting Plant &
Equipment: Identification of
Equipment Suppliers/Opening
of LCs and Order of Equipment
(1 month)
Additional Site
Development/Infrastructure &
Civil Works (6 months)
Acquisition of Seed Financing
(3 months)
Period (Months) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
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14.0 PROJECT ECONOMICS
14.1 Project KPIs
The total investment capital required for expanding and scaling up the proposed Josa
Green Technologies Ltd (Josa) bio fuel briquettes and cook stoves manufacturing plant
in Uganda is USD 60,000. With existing project equity assets valued at USD 11,485, the
total value of the bio fuel briquettes and cook stoves manufacturing project including
scale-up is USD 71,485. The capital cost incurred in acquiring new bio fuel briquettes
and cook stoves manufacturing plant and equipment and putting up new industrial
housing is USD 24,550 and the working capital plus pre-operating costs and physical
contingencies is USD 35,450. The total cost, project returns and financial plan are
summarized in Tables 27-1 to 27-3 below.
Table 27-1: Total Project Cost (Planned Investment) - (In USD)

Account Head Total Cost (USD)
Capital Cost 35,450
Working Capital + Pre-Operating Expenses 24,550
Total Project Cost 60,000
Table 27-2: Project Returns (In USD)
NPV (UShs) @ 17% 452,440
FIRR 182.09%
Payback Period (Years) 1.69
Table 27-3: Financing Structure (In USD)
Financing Ratio USD
Existing Equity Assets 16.07% 11,485
Debt 83.93% 60,000
Total Project Financing (Existing + Planned) 100.00% 71,485
14.2 Jobs Creation
The Josa Green Technologies Ltd (Josa) bio fuel briquettes and cook stoves
manufacturing enterprise will create 20 direct employment opportunities and
thousands in indirect jobs through the interlinked distribution and marketing induced
activities.
The net employment effect is generally expected to grow in tandem with the gradual
commercial development of the renewable energy enterprise and the consolidation of
its business/marketing position within the local and regional export markets.
70
The throughput of the Josa Green Technologies Ltd‟s raw material purchase and bio
fuel briquettes and cook stoves production activity on the domestic market 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 5-year financial analysis period).
Table 28: Investment to Jobs Created Ratio (IJCR)

Coffee Processing and Exporting Enterprise Total Initial No. of Jobs IJCR (In
Investment* (In Created UShs/job)
USD)
Josa Green Technologies Ltd 71,485 20 3,574
* Total investment excluding existing assets
14.3 Government Revenue
The proposed expansion and scaling up of the Josa Green Technologies Ltd (Josa) bio
fuel briquettes and cook stoves manufacturing project is vested with a sustainable and
financially sound income-generating base that will yield substantial revenue for the
Government Treasury in the form of Corporate Income Tax (CIT) and personal income
taxes paid out annually. Financial analyses in Schedules 9 (page 88) and 11 (page 90)
show the Corporate Income Tax (taken at 30% of gross income) – building up on
incremental trend. Total CIT payments to the Government exchequer are summarized
in Table 29 and represent the aggregate annual CIT projections from Project Year 2 to
Project Year 5.
Table 29: Corporate Income Tax Payments

Renewable Energy Enterprise Total CIT Payments for PY 2 – Average CIT
PY 5 (In USD) Payments/Annum (In
USD)
Josa Green Technologies Ltd 298,615 74,654
The project management however generally expects to surpass these corporate tax
revenue projections by exceeding the stated sales projections and thus make bigger
Corporate Income Tax revenue cheques to Government a feasible and practical reality.
71
14.4 Socio-Economic Impacts
Josa Green Technologies Ltd (Josa) bio fuel briquettes and cook stoves production
enterprise will definitely deliver a range of positive socio-economic impacts to Uganda
which can be highlighted as follows:
 Job opportunities are created through plant installation, operation and

maintenance.
 Fuel security is improved, thus increasing social security and the welfare of the
local community.
 The burden of collecting fuel for both women and children in rural areas of
Uganda is reduced.
 The health of women and children are improved by replacing polluting fuels with
cleaner fuel for cooking.
 Income is generated for the community from the collection and sale of bio mass
raw materials such as bagasse and maize cobs.
 The currency of fossil fuels such as kerosene is reduced.
 The industry created from the manufacture of briquettes contributes to the
growth of the country‟s GDP.
 Hard currency is generated from carbon financing e.g. as a Clean Development
Mechanism (CDM) project, it can generate saleable credits.
72
Schedule 01: Key Assumptions and Project Summary Results
Table 30-1: Project Assumptions

Period of construction & machinery delivery 6 Months
Total Land Area 0.16 Acres (650 sq mtrs)
Business analysis period 5 Years
Table 30-2: Plant Operating Assumptions

No. of working days in one year 365
No. of working shifts per day 1
No. of working hours in one shift 10
Annual plant operating expenses growth rate 5%
Depreciation Rates
Briquette Processing Plant Buildings 5%
Briquette Processing Plant Equipment & Machinery 10%
Office Equipment 10%
Vehicles 20%
73
Table 30-3: Production Budget Assumptions (In USD)
Budget Item/Year PY 2 PY 3 PY 4 PY 5
No. of Price/Unit Total No. of Price/Unit Total No. of Price/Unit Total No. of Price/Unit Total
Units (USD) (USD) Units (USD) (USD) Units (USD) (USD) Units (USD) (USD)
Cost of Sales/Direct Costs
Char from 4,190 2.78 11,647 4,818 2.92 14,064 5,540 3.06 16,980 5,817 3.22 18,720
agricultural waste
(tons)
Charcoal dust (tons) 711 11.11 7,896 817 11.67 9,534 940 12.25 11,513 987 12.86 12,693
Binder (tons) 178 83.33 14,806 204 88.16 18,015 235 92.57 21,753 247 97.20 23,982
Utilities 12 2,591 31,092 12 3,129 37,544 12 3,778 45,334 12 3,967 47,601
Packaging materials 892,050 0.04 35,682 1,025,858 0.04 43,086 1,142,000 0.05 52,041 1,250,000 0.05 59,811
(units)
Transportation 1 4,935 4,935 1 5,823 5,823 1 7,020 7,020 1 7,683 7,683
Sub-Total 106,058 128,065 154,640 170,490
Storage, fuel, marketing

Marketing costs 1 6,850 6,850 1 8,271 8,271 1 9,988 9,988 1 11,011 11,011
Storage 1 4,107 4,107 1 4,959 4,959 1 5,988 5,988 1 6,602 6,602
Fuel 3,000 2.89 8,670 3,450 3.03 10,469 3,968 3.19 12,641 4,166 3.35 13,937
Advertising & 1 8,225 8,225 1 9,932 9,932 1 11,993 11,993 1 13,222 13,222
promotion
Sub-Total 27,852 33,631 40,610 44,772
74
Table 30-3: Production Budget Assumptions (In USD) ….. continued
Budget Item/Year PY 2 PY 3 PY 4 PY 5
Staff costs
Managers 5 18,480 92,400 5 19,404 97,020 5 20,374 101,871 5 21,393 106,965
Middle Personnel 8 11,550 92,400 8 12,128 97,020 8 12,734 101,871 8 13,371 106,965
Labour 7 5,040 35,280 7 5,292 37,044 7 5,557 38,896 7 5,834 40,841
Total Number of Staff 20 20 20 20
Insurance/Pension 1 5,000 5,000 1 5,000 5,000 1 5,000 5,000 1 5,000 5,000
Training 1 2,800.00 2,800 1 2,800.00 2,800 1 2,800 2,800 1 2,800 2,800
Sub-Total 227,880 238,884 250,438 262,570
Office costs
Rent 12 0 0 12 0.00 0 12 0.00 0 12 0 0
Telephone 12 274.17 3,290 12 331.06 3,973 12 399.75 4,797 12 441 5,289
Stationery 12 274.17 3,290 12 331.06 3,973 12 399.75 4,797 12 441 5,289
Electricity 12 616.83 7,402 12 744.83 8,938 12 899.38 10,793 12 992 11,899
Sub-Total 13,982 16,883 20,387 22,476
Equipment maintenance costs

Briquettes maintenance 12 163.80 1,966 12 171.99 2,064 12 180.59 2,167 12 189.62 2,275
Buildings maintenance 12 44.05 529 12 46.25 555 12 48.56 583 12 50.99 612
Stoves maintenance 12 1.92 23 12 2.01 24 12 2.11 25 12 2.22 27
Sub-Total 2,517 2,643 2,775 2,914
Third Party costs
Bank charges & fees 3 1,234 3,702 3 1,234 3,702 3 1,234 3,702 3 1,234 3,702
Legal costs 1 2,740 2,740 1 2,740 2,740 1 2,740 2,740 1 2,740 2,740
Insurance 1 1,645 1,645 1 1,645 1,645 1 1,645 1,645 1 1,645 1,645
Sub-Total 8,087 8,087 8,087 8,087
Other costs
Water connection fees 1 2,000 2,000
Electricity connect fees 1 3,200 3,200
Sub-Total 5,200 0 0 0
Total Operating Costs 391,576 428,194 476,937 511,309
75
Table 30-4: Revenue Assumptions
Units:
Honeycomb Briquettes Sticks @ 2.5 kgs
Other Bio Fuel Briquettes Kgs
Stoves/Ovens Units
Production Quantities (PY 2 only):
Briquettes:
Honey Combs 9,000 sticks p.a.
Briquette Sticks 30,000 kgs p.a.
Pillow-shaped briquettes 24,000 kgs p.a.
Stoves:
Moveable stoves 1 300 units p.a.
Institutional moveable stoves 50 units p.a.
Institutional fixed stoves 4 units p.a.
Customized Ovens 5 units p.a.
Annual Production & Sales Volume Growth Rate:
PY 3 15% p.a.
PY 4 15% p.a.
PY 5 5% p.a.
Sales Prices (PY 2 only):
Briquettes:
Honey Combs US$ 0.43/stick
Briquette Sticks US$ 0.28/kg
Pillow-shaped briquettes US$ 0.20/kg
Stoves:
Moveable stoves 1 US$ 14.29/unit
Institutional moveable stoves US$ 171.43/unit
Institutional fixed stoves US$ 1428.57/unit
Customized Ovens US$ 857.14/unit
Unit sales prices growth rates 5% p.a. /unit
76
Table 30-5: Financial Assumptions
Medium-Term Loan Financing 83.93%
Josa Equity 16.07%
Interest Rate on medium term debt 12% p.a.
Grace Period 1 Year
Debt payments per year (Loan Annuities/Year) 1
Exchange rate US$ 1 = UGX 3,500
Inflation rate 5%
77
Schedule 02/1: Initial Project Investment Costs (In USD)
Description Cost (USD)

Land 8,571
Buildings & Civil Works 5,293
Plant Machinery & Equipment 10,171
Office Equipment 570
Motor Vehicles (1 unit) 11,430
Fixed Cost 36,035
Pre-Operational Expenses 5,450
Start-up Inventory Account 30,000
TOTAL PROJECT COST 71,485
78
Schedule 02/2: Source and Structure of Project Financing (In USD)
S. No. Source of Finance Share (%) Josa Equity Loan Finance Total (USD)
1 Land 11.99% 8,571 0 8,571
2 Building & Civil Works 7.40% 1,143 4,150 5,293
3 Plant Mach & Equipment 14.23% 1,771 8,400 10,171
4 Office Equipment 0.80% 0 570 570
5 Motor Vehicles (1 unit) 15.99% 0 11,430 11,430
6 Pre-Operational Expenses 7.62% 0 5,450 5,450
7 Start-up Inventory Account 41.97% 0 30,000 30,000
TOTAL PROJECT FUNDING 100.00% 11,485 60,000 71,485
%age of Total Project Funding 16.07% 83.93% 100.00%
79
Schedule 03/1: Estimation of Briquettes and Cook Stoves Sales Revenues (PY 2
in USD)
Item Description Production/Sales Units Sales Monthly Annual Sales
Quantity/Month Price/Unit Sales (USD) (USD)
(USD)
Briquettes:
Honey Combs 9,000 Sticks 0.43 3,857 46,286
Briquette Sticks 30,000 kgs 0.28 8,451 101,408
Pillow-shaped briquettes 24,000 kgs 0.20 4,800 57,600
Sub-Total 17,108 205,294
Stoves:
Moveable stoves 1 300 units 14.29 4,286 51,429
Institutional moveable units 171.43 8,571 102,857
stoves 50
Institutional fixed stoves 4 units 1428.57 5,714 68,571
Customized Ovens 5 units 857.14 4,286 51,429
Sub-Total 28,429 341,143
TOTAL SALES 45,536 546,437
80
Schedule 03/2: Estimation of Briquettes and Cook Stoves Sales Revenues (PY 2 –
PY 5 in USD)
Item Description Year 1 Year 2 Year 3 Year 4 Year 5
Briquettes:
Honey Combs 46,286 55,890 67,488 74,405 82,737
Briquette Sticks 101,408 122,450 147,859 163,014 181,268
Pillow-shaped briquettes 57,600 69,552 83,984 92,592 102,961
Sub-Total 205,294 247,893 299,330 330,012 366,965
Stoves:
Institutional moveable 102,857 124,200 149,971 165,343 183,858
stoves
Institutional fixed stoves 68,571 82,799 99,980 110,228 122,571
Customized Ovens 51,429 62,101 74,986 82,672 91,930
Sub-Total 341,143 411,930 497,406 548,390 609,796
TOTAL SALES 546,437 659,823 796,736 878,401 976,761
81
Schedule 04: Loan and Interest Service Schedule (In USD)
Section Years
LOAN AMOUNT (USD) 60,000
Year 1 2 3 4 5
Loan Repayment 0 15,000 15,000 15,000 15,000
Interest 0 7,200 5,400 3,600 1,800
Total Loan Service 22,200 20,400 18,600 16,800
82
Table 05/1: Calculation of Working Capital: I Minimum Requirements of Current
Assets and Liabilities
(a) Accounts receivable: 30 days at production costs minus depreciation and

interest
(b) Inventory:
Cost of Sales: 30 days
Labour Costs: 90 days
Processing Plant Operations: 60 days of cost of sales + repairs and maintenance +
storage, fuel & marketing
Machinery & vehicle maintenance: 180 days
Work in progress: 9 days of cost of sales + salaries and wages + repairs
and maintenance + storage, fuel & marketing
Finished products: 45 days of cost of sales + salaries and wages + repairs
and maintenance + storage, fuel & marketing
© Cash-in-hand: 15 days, see separate calculations at the bottom of this
schedule
(d) Accounts payable: 30 days of cost of sales + third party costs + storage,
fuel & marketing + office overheads.
N.B.: All the local cost price factors for the bio fuel briquetting plant costs/inputs,
utilities and working capital are indicated US dollars for the ease of computational and
financial analysis.
83
Table 05/2: Calculation of Working Capital: Annual Production Cost Estimates (In
USD)
ACCOUNT HEAD FINANCIAL YEAR OF OPERATION
YEAR 1 2 3 4 5
Operating Costs (US$)
Cost of Sales 106,058 128,065 154,640 170,490
Salaries & wages 227,880 238,884 250,438 262,570
Third Party Costs 8,087 8,087 8,087 8,087
Repairs & Maintenance 2,517 2,643 2,775 2,914
Storage, Fuel & Marketing 27,852 33,631 40,610 44,772
Office Overheads 13,982 16,883 20,387 22,476
Other Costs 5,200 0 0 0
Total Operating Costs 391,576 428,193 476,937 511,309
Financial Costs (US$)

Interest on Medium Term 7,200 5,400 3,600 1,800
Loan (12% p.a.)
Depreciation 3,624 3,624 3,624 3,624
Total Financial Costs 10,824 9,024 7,224 5,424
Total Production Costs 402,400 437,217 484,161 516,733
84
Schedule 05/3: Calculation of Working Capital: Working Capital Requirements (In
USD)
Item X Y Requirements (USD)
Minimum Coefficient of Full Capacity
days
of coverage turn-over 2 3 4 5
I. Current assets
A. Accounts receivable 30 12 32,631 35,683 39,745 42,609
B. Inventory
a) Cost of Sales 30 12 8,838 10,672 12,887 14,208
b) Salaries & Wages 90 4 56,970 59,721 62,610 65,643
c) Plant Operations 60 6 22,738 27,390 33,004 36,363
d) Maintenance & Repair 180 2 1,259 1,321 1,387 1,457
e) Work-in-Process 9 40 9,108 10,081 11,212 12,019
f) Finished Products 45 8 45,538 50,403 56,058 60,093
C. Cash-in-hand 15 24 12,402 12,973 13,872 14,596

( from V below)
D. Current assets _ _ 189,484 208,243 230,774 246,986
II. Current Liabilities

A. Accounts payable 30 12 -12,998 -15,556 -18,644 -20,485
III. Working Capital

A. Net Working Capital 176,486 192,688 212,130 226,501
B. Increase in Working _ 16,202 19,442 14,371
Capital
IV. Total Production Costs _ _ 402,400 437,217 484,161 516,733
Less: Raw Materials _ _ 70,031 84,699 102,286 115,206

Utilities _ _ 31,092 37,544 45,334 47,601
Depreciation _ _ 3,624 3,624 3,624 3,624
15 24 297,653 311,350 332,917 350,302
V. Required Cash Balance _ _ 12,402 12,973 13,872 14,596
85
Schedule 06: Fixed Assets and Depreciation Allowances (In USD)
Year 1 2 3 4 5
Initial Dep Dep Dep Dep
Asset Value Allowance Allowance Allowance Allowance
Plant Building 5,286 264 264 264 264
Production Plant and

Equipment 10,171 1,017 1,017 1,017 1,017
Motor Vehicles 11,430 2,286 2,286 2,286 2,286
TOTALS 27,457 3,624 3,624 3,624 3,624
86
Schedule 07: Change in Total Investment Costs (In USD)
Period Construction Full Capacity
Year 1 2 3 4 5 Total
1. Fixed Investment Costs 36,036 0 0 0 0 36,036

a) Initial fixed investment 36,036 0 0 0 0 36,036
costs
b) Replacement 0 0 0 0 0 0
2. Pre-operational expenses 5,450 0 0 0 0 5,450
3. Start-Up Inventory 30,000 0 0 0 0 30,000
3. Working Capital increase 0 176,486 16,202 19,442 14,371 226,501
Total Investment Costs 71,486 176,486 16,202 19,442 14,371 297,987
Schedule 08: Change in Total Assets (In USD)

Year 1 2 3 4 5 Total
1. Fixed Investment Costs 36,036 0 0 0 0 36,036

a) Initial fixed investment
costs 36,036 0 0 0 0 36,036
b) Replacement 0 0 0 0 0 0
2. Pre-operational expenses 5,450 0 0 0 0 5,450
3. Start-Up Inventory 30,000 0 0 0 0 30,000
3. Current Assets increase 0 189,484 18,759 22,530 16,213 246,986
Total Investment Costs 71,486 189,484 18,759 22,530 16,213 318,472
87
Schedule 9: Projected Cashflow Table (In USD)
Period Construction
Year 1 2 3 4 5 *Sal val Total

Costs (US Dollars)
A. Cash inflow 71,486 546,437 659,823 796,736 878,401 _ 2,952,883
1. Financial resources total 71,486 _ _ _ _ _ 71,486
2. Sales revenue total _ 546,437 659,823 796,736 878,401 _ 2,881,397
B. Cash outflow -71,486 -643,518 -531,181 -608,887 -649,869 239,301 -2,265,641

1. Total assets schedule
including replacements -71,486 -189,484 -18,759 -22,530 -16,213 239,301 -79,171
2. Operating Costs (Cost of Sales) _ -391,576 -428,193 -476,937 -511,309 _ -1,808,015
3. Debt Service
a) Interest _ -7,200 -5,400 -3,600 -1,800 _ -18,000
b) Repayments _ -15,000 -15,000 -15,000 -15,000 -60,000
4. Corporate tax _ -39,798 -63,369 -90,360 -105,088 _ -298,615
5. Dividends 4% on equity _ -460 -460 -460 -460 _ -1,840
C. Surplus / deficit 0 -97,081 128,642 187,849 228,532 239,301 687,242
D. Cumulative cash bal. 0 -97,081 31,560 219,409 447,941 687,242
*Salvage values. Land: 8,571; 4/5 of buildings: 4,229; Working Capital: 226,501 239,301
88
Schedule 10: Projected Cashflow Table and Calculation of Present Value (In USD)
Year 1 2 3 4 5 *Sal val Total
Constr.
Investment Costs -71,486 _ _ _ _ _ -71,486

Net Profit after Tax _ 92,863 147,861 210,839 245,205 _ 696,768
Depreciation _ 3,624 3,624 3,624 3,624 _ 14,496
Interest Add back
Mid-term Loan _ 7,200 5,400 3,600 1,800 _ 18,000
NET CASH FLOWS -71,486 103,687 156,885 218,063 250,629 239,301 897,079
Discount Factors at 14% 0.8772 0.7695 0.675 0.5921 0.5194 0.5194 _

PV at 14% -62,708 79,787 105,897 129,115 130,177 124,293 506,561
NPV at 14% 506,561
Discount Factors at 17% 0.8547 0.7305 0.6244 0.5337 0.4561 0.4561 _
PV at 17% -61,099 75,743 97,959 116,380 114,312 109,145 452,440
NPV at 17% 452,440
Internal Rate of Return = 182.09%

182.09%
NPV at 14% = $506,561
NPV at 17% = $452,440
89
Schedule 11: Projected Income Statement (In USD)
Year 1 2 3 4 5
Sales _ 546,437 659,823 796,736 878,401

Cost of Sales _ 106,058 128,065 154,640 170,490
GROSS PROFIT _ 440,379 531,758 642,096 707,911
Less: Operating Costs

(excl. Cost of Sales) _ 285,518 300,128 322,297 340,819
OPERATING PROFIT _ 154,861 231,630 319,799 367,093
Less: Accrued interest on

Medium-Term Loan (@ 12% p.a.) _ 7,200 5,400 3,600 1,800
Less: Annual Repayments _ 15,000 15,000 15,000 15,000
NET PROFIT BEFORE TAX _ 132,661 211,230 301,199 350,293
Corporation Tax 30% _ 39,798 63,369 90,360 105,088
NET PROFIT _ 92,863 147,861 210,839 245,205
Accumulated Net Profit (Loss) _ 92,863 240,724 451,563 696,768

Net Profit Margin _ 0.1699 0.2241 0.265 0.279
Gross Profit Margin 0.806 0.806 0.806 0.806
Rate of Return on Investment _ 130% 207% 294.94% 343%
Operating Profit Margin _ 0.283 0.351 0.401 0.418
90
Schedule 12: Projected Balance Sheet (In USD)
CAPITAL EMPLOYED: YR.1 YR.2 YR.3 YR.4 YR.5
Share Capital 11,489 11,489 11,489 11,489
Retained Earnings 92,863 240,724 451,563 696,768
Shareholder's Equity/Deficit 104,352 252,213 463,052 708,257
Long-Term Liabilities 60,000 45,000 30,000 15,000

164,352 297,213 493,052 723,257
EMPLOYMENT OF CAPITAL: `
Plant Buildings 5,286 5,022 4,757 4,493 4,229

Production Plant Equip. & Machy 10,171 9,154 8,137 7,120 6,103
Vehicles 11,430 9,144 6,858 4,572 2,286
LONG-TERM ASSETS: 23,833 20,208 16,584 12,959
CURRENT ASSETS: 160,717 297,960 498,712 732,583
Accounts Receivable 32,631 35,683 39,745 42,609

Stock (Inventory) 144,451 159,588 177,157 189,781
Bank Balance and Cash 12,402 12,973 13,872 14,596
Other Current Assets -28,767 89,716 267,938 485,596
CURRENT LIABILITIES: 20,198 20,956 22,244 22,285

Accounts Payable 12,998 15,556 18,644 20,485
Current Portion of Long-term
Liabilities 7,200 5,400 3,600 1,800
NET CURRENT ASSETS: 140,519 277,004 476,468 710,297

TOTAL CAPITAL 164,352 297,213 493,052 723,257
TOTAL ASSETS 184,550 318,168 515,295 745,542
91
Schedule 13: Calculation of Payback Period (In USD)
YEAR/ITEM 2 3 4 5
Net Profit 92,863 147,861 210,839 245,205

Interest 7,200 5,400 3,600 1,800
Depreciation 3,624 3,624 3,624 3,624
"Profit" 103,687 156,885 218,063 250,629
Year Amount Balance of

paid
back from total
"profits" Investment
1 0 -71,486 -11,489
2 103,687 32,201 92,198
3 156,885 189,086 249,083
4 218,063 407,149 467,146
5 250,629 657,778 717,775
6 0 657,778 657,778
7 0 657,778 657,778
8 0 657,778 657,778
9 0 657,778 657,778
10 0 657,778 657,778
Pay Back Period = 1.69 YEARS
92
Schedule 14: Business Ratios/Ratio Analysis
Year 1 2 3 4 5
Sales Growth 5% 5% 5%
Percent of Total Assets

Accounts Receivable 17.68% 11.22% 7.71% 5.72%
Inventory 78.27% 50.16% 34.38% 25.46%
Other Current Assets -15.59% 28.20% 52.00% 65.13%
Total Current Assets 87.09% 93.65% 96.78% 98.26%
Long-term Assets 12.91% 6.35% 3.22% 1.74%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 10.94% 6.59% 4.32% 2.99%

Long-term liabilities 32.51% 14.14% 5.82% 2.01%
Total Liabilities 43.46% 20.73% 10.14% 5.00%
Net Worth (Total Capital) 89.06% 93.41% 95.68% 97.01%
Percent of Revenues
Revenues 100.00% 100.00% 100.00% 100.00%
Gross Margin 80.59% 80.59% 80.59% 80.59%
Management / Administration 2.56% 2.56% 2.56% 2.56%
Net Profit (after Interest & Tax) 16.99% 22.41% 26.46% 27.91%
Main Ratios
Current 7.96 14.22 22.42 32.87
Quick 0.81 6.60 14.46 24.36
Total Debt to Total Assets 32.51% 14.14% 5.82% 2.01%
Pre-tax Return on Net Worth 80.72% 71.07% 61.09% 48.43%
Pre-tax Return on Assets 71.88% 66.39% 58.45% 46.98%
Business Vitality Profile

Revenue per Employee $27,322 $32,991 $39,837 $43,920
93
Schedule 14: Business Ratios/Ratio Analysis (continued…)
Additional Ratios
Net Profit Margin 16.99% 22.41% 26.46% 27.91%
Return on Equity 20.05% 58.63% 45.53% 34.62%
Activity Ratios
Accounts Receivable Turnover 1.67 1.85 2.00 2.06
Collection Days 30 30 30 30
Inventory Turnover 0.73 0.80 0.87 0.90
Accounts Payable Turnover 0.86 0.82 0.83 0.83
Payment Days 30 30 30 30
Total Assets Turnover 2.96 2.07 1.55 1.18
Fixed Assets Turnover 16.43 21.19 28.76 39.45
Debt Ratios
Debt to Net Worth 0.37 0.15 0.06 0.02
Current Liability to Liability 0.34 0.47 0.74 1.49
Debt-Service Coverage Ratio 4.67 7.69 11.72 14.92
Liquidity Ratios
Net Working Capital $176,486 $192,688 $212,130 $226,501
Interest Coverage [Times Inte-
rest Earned Ratio - TIE] 21.51 42.89 88.83 203.94
Additional Ratios
Assets to Revenue 0.34 0.48 0.65 0.85
Current Debt / Total Assets 3.90% 1.70% 0.70% 0.24%
Acid Test 0.81 6.60 14.46 24.36
Sales/Net Worth 3.32 2.22 1.62 1.21
94
Schedule 15: Sensitivity Analysis (In USD)
Items PAT BEP IRR Payback
Base Case 245,205 20.73% 182.09% 1.69 Yrs
Increase in Operating Costs by 5% 233,276 22.33% 169.92% 2.67 Yrs
Selling Prices up by 25% 398,925 14.00% 310.61% 1.36 Yrs
Decrease in Raw Materials by 10% 257,139 19.99% 191.88% 1.64 Yrs
Increase in Raw Materials by 10% 233,270 21.54% 172.34% 1.74 Yrs
Key:
BEP: Break-Even Point
IRR: Internal Rate of Return
PAT: Profit after Tax
95
APPENDIX I: ASSIGNMENTS HANDLED AND COMPLETED TO DATE BY JOSA
No Client Assignment
1. Old Kampala Primary School Supply of briquettes
2. Buy Fresh Restaurant Supply of briquettes.
3. Akandonda Family Construction of briquette institutional stoves.
4. 1Kibale View Ltd Capacity building for the staff of Kibale View Eco
. tourism site to adapt briquette production and usage to
conserve Kibale National Park.
5. 2Youth on Track - Jinja Supply of Briquette production equipments.
.
6. 3Hope family Group Capacity building for group members in briquette
. production, entrepreneurship skills and supply of
briquette production equipments.
7. 6AMREF Supply of tools, equipments and machines and exposure
training to waste utilization for community groups.
8. Caritas Buikwe Training for trainer of trainers (TOT) in charcoal
briquette making and tailored energy saving stove
making.
Train in business and financial management skills.
9. Compassion Busia cluster Briquette training out of biodegradable waste;
Train in business and financial management skills;
Supply of Briquette Production Machines.
10. Living Earth Foundation UK Energy saving stoves training for entrepreneur groups.
& ACEDO – Sierra Leone.
11. Bread for Life Briquette training and machine supply.
12. ST. Therese Youth Supply of Briquette press machines.
Development Project
13. Strong Youth for Supply of energy saving stove metallic Liners.
Development International
14. Living Earth Uganda Briquette training for Youth in Hoima municipality.
15. D & J Impex Ltd Training in briquette making & Supply of Briquette
press machines.
16. JNR Consults Environmental and Social Impact Assessment (ESIA) for
the Bududa – Nabweya Gravity Flow Scheme contracted
by Robert Ndyabarema the main consultant.
17. Living Earth Uganda Briquette training for Youth group in Bulisa District –
Kihungya Sub County.
18. Living Earth Foundation- UK Briquette training for CBOs and NGOs in Makeni Town -
Sierra Leone.
96
19. Kick Carbon out of Kitchen Supply of Briquette press machines.
Uganda (COOK- Uganda)
20. Kittutu Child Development Supply of Briquette press machines.
Centre
21. Kyebando Basoka Kwavula Supply of Briquette press machines.
Association.
22. Boroboro Manufacturing Supply of Briquette press machines.
Company
23. Rubaga Child Development Supply of Briquette press machines.
Centre
24. AMONKA Ltd Briquette training and Supply of Briquette press
machines.
25. Individuals organised by Conduct functional skills training in briquette
LEU. production and energy saving stoves.
26. Golden Bees Ltd under SNV Building capacity of bee keepers to adopt honey
production through use of transitional hives in districts
of; Kasese, Kabarole, Kamwenge Kyegegwa, Kyenjojo,
Bundibujo, Arua, Yumbe, Moyo, Kapchorwa and Lira in
partnership with Golden Bees.
27. Bukanga Child Development Supply of Briquette press machines.
Centre
28. Kabugo Restaurant Supply of institutional stoves & briquettes.
29. Busulumba Child Supply of Briquette press machines.
Development Centre
30. Individuals clients organised Train in briquette production, marketing and financial
by LEU management.
31. Self Help Groups Provide training in Plastic collection and briquette
entreprise for cluster level groups.
32. Walukuba Child Training Jinja - Compassion groups in briquette
Development Centre. (CDC) production, handling and marketing.
33. Individuals client organized Briquette training conducted at Namirembe Resource
by LEU centre.
34. Caritas Lugazi Conducted training in Briquette making and Energy
saving stove making at Kayunga Roman Catholic Parish.
97

Josa Green Fuel Technologies Business Plan 20th May 2018

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BUSINESS PLAN:

OF JOSA GREEN TECHNOLOGIES LTD

JOSA GREEN TECHNOLOGIES LIMITED

S/NO. DESCRIPTION PAGE

1.0 EXECUTIVE SUMMARY 1

2.0 PURPOSE OF THE DOCUMENT 9

3.0 INTRODUCTION & BACKGROUND 10

4.0 PROJECT DESCRIPTION 13

5.0 COMPANY INFORMATION 19

6.0 PRODUCTS AND SERVICES 24

7.0 MARKET STRUCTURE AND ANALYSIS 28

8.0 THE UGANDA BRIQUETTE INDUSTRY 37

9.0 MARKETING AND DISTRIBUTION 41

10.0 PROJECT TECHNICAL ASPECTS 44

11.0 HUMAN RESOURCES AND MANAGEMENT STRUCTURE 53

INVESTMENT REQUIREMENT, PROJECT FINANCING

13.0 IMPLEMENTATION SCHEDULE 68

14.0 PROJECT ECONOMICS 70

T/NO. DESCRIPTION PAGE

1 Annual production of agricultural residues 9

2 Total Initial Project Investment Cost 17

3 Key Project Performance Parameters 18

4 Company Shareholding Structure 23

5 Josa Products and Services 26

6 Fuel Comparison: calorific values 30

7 Household Energy Consumption 31

8 Consumption of Firewood and Charcoal in Uganda 32

9 Different Energy Costs 33

10 Analysis of the Uganda Briquette Industry 38

12 Planned Monthly and Annual Production Output 44

Summary of advantages and disadvantages of briquette

14 Estimated Cost of Machinery and Equipment 47

15 Estimated Cost of New Buildings & Civil Works 47

17 Manpower Requirement and Annual Labour Cost 58

18 Initial Capital Investment Cost of Project 59

21 Calculation of Payback Period for Equity and Total Investment 63

22 Capital: Output Ratios 63

23 Projected Cash Flows 64

24 Projected Balance Sheet 65

25 Break-Even Analysis in Project Year 5 66

26 Calculation of Value Added 67

28 Investment to Jobs Created Ratio 71

29 Corporate Income Tax Payments 71

30 Key Financial Modelling Assumptions 73

F/NO. DESCRIPTION PAGE

1 Performance Highlights (PY2 – PY5) 6

2 Charcoal price - per kg (2004 - 2011) 14

3 Energy Consumption in Uganda 15

4 Industrial Hammer mill Grinder 46

6 Josa Organizational Structure 54

7 Project Implementation Milestones 69

S/NO. DESCRIPTION PAGE

1 Key Financial Modelling Assumptions 73

2/1: Initial Project Investment Costs 78

2/2: Source and Structure of Project Financing 79

3/1: Estimation of Briquettes and Cook Stoves Sales Revenues (PY 2) 80

3/2: Estimation of Briquettes and Cook Stoves Sales Revenues (PY 2 - PY 5) 81

4 Loan and Interest Service Schedule 82

Calculation of Working Capital: I Minimum Requirements of Current

5/2: Calculation of Working Capital: II Annual Production Cost – Estimate 84

5/3: Calculation of Working Capital: III Working Capital Requirements 85

6 Fixed Assets and Depreciation Allowances 86

7 Change inTotal Investment Costs 87

8 Change in Total Assets 87