10.1 Single Costs
10.2 Production Costs
The costs of the most important equipment used for canning tuna, Sardines, fish paste products, salmon and shrimp are given in the following chapters. The costs given are based on a 1983 fob level. All prices are given in '000 NOK.
Dock hoist crane(2 tons) | 200 |
Fork lift (1.5 tons) | 130 |
Battery charging unit | 20 |
Hand lifting truck | 5 |
Stainless steel cart | 4 |
Internal pallets (polyethylene), nos 100 | 15 |
Containers 750 l (polyethylene) (not insulated) | 1.2 |
Containers 1 000 l (polyethylene) (not insulated) | 1.5 |
Ice production equipments (3 tons/24 h) | 180 |
Steel or wire belt conveyor approximately per 1m | 6 |
Plastic or wire belt conveyor approximately per 1m | 3 |
Roller conveyor | 1.5 |
Hydraulic container lifter for discharging steel and HD containers | 60 |
Automatic scale | 30-75 |
Steam boiler (1 500 kg/h) | 200 |
Steam boiler (3 500 kg/h) | 350 |
Steam boiler (5 000 kg/h) | 450 |
Compressed air plant (2 500 l/h) | 25 |
Combined oil. brine and tomato filling machine (150 cans per min) | 125 |
Tomato mixing machine (1 000 kg/h) | 30 |
Aut. can seaming machines with clincher (capacity 100 cans per minute) | 240 |
Fully automatic can seaming machine with clincher (capacity 100 cans per minute) | 300 |
Aut. can seaming machines with aut. after filling device, clincher, lid plunger and control device (capacity 150 cans per min) | 380 |
Aut. steam vacuum seaming machine, 1 type of can | 700 |
Overpressure retort (5 500 cans of 450 g capacity) | 450 |
Washing & drying machine | 135 |
Automatic labelling machine (55-60 cans/min) | 110 |
Can stacking machine (9-10 000 cans/min) | 85 |
Semi automatic carton filling machine | 143 |
Carton adhesive machine (10 000 cans/min) | 28 |
Oil separator (500 l/h) | 350 |
Seam cross cutting saw | 1.4 |
Bulk elevators | 30 to 100 |
Semi-automatic gutting machine arr. with cleaning section for skipjack | 150 |
Electric hand saws | 1.1 |
Electric meat cutter (bandsaw) | 35 |
Automatic grading machine for tuna (skipjack) | 75 |
Rotor cooker with counter flow, cooler and discharge belt | 750 |
Filleting arr. for loins 20 operators | 200 |
Filleting arrangements for small tuna, 4 operators each | 350 |
Automatic scale | 136 |
Overlying conveyor for accumulation of fillets | 30 |
Hydraulic press for moulds | 75 |
Pack shaper for skipjack line | 460 |
Thawing device, capacity 15 t/d | 140 |
Grading machine | 160 |
Automatic nobbing machine (400-550 fishes per minute) | 250 |
Flash cooker (capacity 2 tons/h) | 1 000 |
Rodding table | 10 |
Pre-smoking unit 5 t/8 h | 280 |
Automatic cutting machine for heads | 110 |
Rod washing machine | 12 |
Packing line, 30 operators | 300 |
Packing line, 16 operators | 160 |
Try-washing machine | 100 |
Brine making unit | 46 |
Continuous brining unit | 155 |
Splitting equipment | 50 |
Meat separator | 200 |
Screw press | 150 |
Mincer | 650 |
Pump | 25 |
Cooker and former | 350 |
Fryer and former | 300 |
Product filling table for fish balls | 250 |
Product filling table for fish cakes | 250 |
Butchering machine (1 000 kg/h) | 260 |
Sliming and washing table (8 operators) | 45 |
Cutting machine (l 000 kg/h) | 35 |
Feeding tank and peeling machine (450 kg/h) | 368 |
Cleaner (900 kg/h) | 40 |
Steam cooker (450 kg/.h) | 16 |
Production costs will vary depending on local' conditions (prices. wages, etc.). As an example cash flow projection and internal rate of return are calculated for the sardine cannery while production costs are shown for the fish paste cannery. The costs are partly based on production in existing canneries and partly in assumptions made in the report. (All prices are NOK '000).
10.2.1 Production costs for canning sardines in oil .
Basis for calculation:
Investment costs: | NOK '000 |
Land | 165 |
Civil works | 700 |
Total site costs | 865 |
Buildings | 7 162 |
Equipment (depreciation 5 years) | 1 860 |
Equipment (depreciation 10 years) | 9 411 |
Total investment costs | 19 298 |
Costs per 100 l/4 club cans based on costs in existing canneries (yield 50%):
Sardines | NOK |
28.77 |
|||
-waste | NOK |
(1.50) |
|||
Sub-total | NOK |
27.27 |
|||
Other costs: | |||||
Freight costs | NOK |
5.50 |
|||
Freezing costs | NOK |
14.00 |
|||
Sub-total | NOK |
46.77 |
|||
Other raw materials | |||||
Oil/sauce/salt | NOK |
18.98 |
|||
Ingredients | NOK |
0.40 |
|||
Lithographed cans, cartons | NOK |
9.28 |
|||
Sub-total | NOK |
28.66 |
|||
Sub-total | NOK |
28.66 |
|||
Raw materials | NOK |
75.38 |
|||
Labour: | |||||
Hour/100 cans: | 1 002 hours |
||||
Direct labour | NOK |
36.61 |
|||
37% soc expenses | NOK |
13.55 |
|||
Sub. Direct labour | NOK |
50.16 |
NOK |
50.16 |
|
Total production costs | NOK |
125.54 |
|||
Production costs per can | NOK |
1.255 |
Cash flow projection and internal rate of return are shown in Table 29. The calculations are based on the assumptions above and given in the following notes:
Basis for calculations:
Example I:
Raw materials:
Production capacity:
Example II:
Raw materials:
Production capacity:
The waste (offal) is sold unfrozen for a price equal to 10% of the price of the fish raw material.
Note: Normally the weight increase during the cooking is approximately 12%.
Table 29 Cash flow projection -canning sardines in. Oil. Capacity 15 tons raw fish per 8 hours. (NOK 000)
YEARS |
1 |
2 |
* |
6 |
7 |
12 |
17 |
20 |
1. CASH INFLOW | ||||||||
GROSS SALES CANNED PROD. 1) | 34 104 |
34 104 |
34 104 |
34 104 |
34 104 |
34 104 |
||
GROSS SALES WASTE 2) | 108 |
108 |
108 |
108 |
108 |
108 |
||
TOTAL GROSS INCOME | 34 212 |
34 212 |
34 212 |
34 212 |
34 212 |
34 212 |
||
BORROWERS CONTR. 3) | 803 |
1 127 |
||||||
LOAN AMOUNT 4) | 7 224 |
10 144 |
||||||
TOTAL CASH INFLOW | 8 027 |
11 271 |
34 212 |
34 212 |
34 212 |
34 212 |
34 212 |
34 212 |
2. CASH OUTFLOW | ||||||||
OPERATING COSTS | ||||||||
PURCHASE OF FISH 5) | 5 451 |
5 451 |
5 451 |
5 451 |
5 451 |
5 451 |
||
FILLER AND SALT 6) | 3 672 |
3 672 |
3 672 |
3 672 |
3 672 |
3 672 |
||
CANS AND CARTONS 7) | 1 758 |
1 758 |
1 758 |
1 758 |
1 758 |
1 758 |
||
LABOUR 8) | 9 954 |
9 954 |
9 954 |
9 954 |
9 954 |
9 954 |
||
WATER 9) | 202 |
202 |
202 |
202 |
202 |
202 |
||
ELECTRICITY 10) | 180 |
180 |
180 |
180 |
180 |
180 |
||
FUEL OIL 11) | 1 656 |
1 656 |
1 656 |
1 656 |
1 656 |
1 656 |
||
INSURANCE 12) | 81 |
243 |
243 |
243 |
243 |
243 |
243 |
243 |
MAINTENANCE AND SPARES 13) | 487 |
487 |
487 |
487 |
487 |
487 |
||
FREEZING 14) | 2 653 |
2 653 |
2 653 |
2 653 |
2 653 |
2 653 |
||
FREIGHT 15) | 1 042 |
1 042 |
1 042 |
1 042 |
1 042 |
1 042 |
||
MISCELLANEOUS 16) | 100 |
100 |
100 |
100 |
100 |
100 |
||
INTEREST OF WORK. CAP. 17) | 1 |
4 |
397 |
397 |
397 |
397 |
397 |
397 |
TOTAL OPERATING COSTS | 82 |
247 |
27 795 |
27 795 |
27 795 |
27 795 |
27 795 |
27 795 |
INVESTMENT COSTS 18) | 8 027 |
11 271 |
1 860 |
11 271 |
1 860 |
- 4 578 |
||
DEBT. SERVICE 19) | 3 800 |
3 800 |
3 800 |
3 800 |
3 800 |
|||
TOTAL CASH OUTFLOW | 8 109 |
11 518 |
27 795 |
31 595 |
33 455 |
42 866 |
33 455 |
27 017 |
NET CASH FLOW | - 82 |
- 247 |
6 417 |
2 617 |
757 |
- 8 654 |
757 |
7 195 |
FINANCIAL B/C | ||||||||
BENEFITS | 34 212 |
34 212 |
34 212 |
34 212 |
34 212 |
34 212 |
||
COSTS | 8 109 |
11 518 |
27 795 |
27 795 |
29 655 |
39 066 |
29 655 |
23 217 |
NET BENEFITS | - 8 109 |
- 11 518 |
6 417 |
6 417 |
4 557 |
- 4 854 |
4 557 |
10 995 |
FINANCIAL RATE OF RETURN: 27.1% * ALL OTHER YEARS |
Example I
Quantity per shift a/ |
Cost per shift |
Per can |
||||
Unit |
Quantity |
Unit price |
Total cost |
Quantity |
Cost |
|
Fish raw material: | ||||||
Headed, gutted | kg |
9 500 |
6.00 |
57 000 |
0.380 |
2.280 |
waste (yield 75%) | kg |
(2 375) |
0.60 |
(1 425) |
0.095 |
(0.057) |
Sub-total | kg |
7 125 |
55 575 |
0.285 |
2.223 |
|
Sundry raw materials: | ||||||
Milk | kg |
4 000 |
2.04 |
8 160 |
0.160 |
0.326 |
Potato floor | kg |
1 000 |
7.50 |
7 500 |
0.040 |
0.300 |
Salt | kg |
250 |
1.06 |
265 |
0.010 |
0.002 |
MSG | kg |
15 |
13.00 |
195 |
0.001 |
0.001 |
Species | kg |
20 |
77.00 |
1 540 |
0.001 |
0.062 |
Subtotal sundry raw material | kg |
5 285 |
17 660 |
0.212 |
0.691 |
|
Total raw materials | kg |
12 410 |
73 235 |
0.497 |
2.914 |
|
Packing materials: | ||||||
Cans (0.5% waste) | Nos |
25 125 |
1.61 |
40 450 |
1.618 |
|
Labels (1.0% waste) | Nos |
25 250 |
0.08 |
2 020 |
0.081 |
|
Card-board (trays) | Nos |
2 100 |
0.75 |
1 575 |
0.063 |
|
Plastic | kg |
75 |
10.00 |
750 |
0.030 |
|
Pallets | Nos |
26 |
65.00 |
1.690 |
0.068 |
|
Sub-total packing material | - |
46.485 |
1.860 |
|||
Total raw mat + packing | 119.720 |
4.774 |
||||
Labour: | ||||||
Filleting department | hrs |
128 |
38 |
4 864 |
0.00512 |
0.195 |
Production | hrs |
88 |
38 |
3 344 |
0.00352 |
0.134 |
Retorts and packing | hrs |
56 |
43 |
2 408 |
0.00224 |
0.096 |
Auxiliary act + cleaning | hrs |
50 |
40 |
2 000 |
0.00200 |
0.080 |
Sub-total direct labour | hrs |
322 |
12 616 |
0.01288 |
0.505 |
|
37% soc. expenses | 4 668 |
0.186 |
||||
Total direct labour | 17 284 |
0.695 |
||||
Total production costs | 137 004 |
5.469 |
Example II
Industrial fish, ungutted, head on, average size 300-500 g. Compared with gutted headless fish,. the yield will decrease from 75% to 50%. Labour expenses at filleting department will increase by 25%.
Milk powder and water are substitutes for fresh milk, 0.014 kg milk powder/can.
Raw material price | NOK |
3.00/kg |
||
Milk powder price | NOK |
20.00/kg |
||
New calculations: | ||||
New material, total | 14 250 kg x 3 NOK/kg |
NOK |
42 750 |
|
-Sale of waste | 7 125 kg x 0.30 NOK/kg |
NOK |
2 140 |
|
Raw material, net price total | NOK |
40 610 |
||
Price raw material per can | (25 000 cans) |
NOK |
1.624 |
|
Price milk powder per can | (0014 x 20.00) |
NOK |
0.280 |
|
Labour exp. filleting dept. | (0 195 + 25%) |
NOK |
0.244 |
|
+ 37% soc. expenses | NOK |
0.091 |
||
Labour exp. filleting dept. per can | NOK |
0.335 |
Difference from Example I to Example II
Raw material | 2.283 - 1.624 |
NOK |
0.659 |
Milk | 0.326 - 0.280 |
NOK |
0.046 |
Labour | 0.267 - 0.335 |
-NOK |
0.067 |
Decrease in costs (per can) | NOK |
0.638 |
|
Total production costs for alternative II: | |||
Price for alternative I (per can) | NOK |
5 469 |
|
-Price difference | NOK |
0.638 |
|
Total production costs | NOK |
4 83l |
The production costs for example II will depend almost entirely on the price for the raw material.
If the price for the fish raw material used in example II is lower than NOK 4.06 per kg, the production costs will be lower using this type of raw material (industrial fish).
To choose between different raw materials is normally not only a question of price, but more often, availability. This refers also to fresh milk and milk powder; especially in developing countries where the supply of fresh good quality milk is not reliable, and because of this it is therefore advisable to base the recipes on milk powder.
Regarding labour expenses it is obvious that this will, to a great extent, depend on the size of the fish. It will, therefore, always be necessary to compute price, and if possible also a price comparison, between different types of raw materials.
The costs shown in the above mentioned examples are only direct production costs.
No general overheads, indirect labour, energy, sales expenditure, etc. are included.