Managemnet Accounting of Butali Sugar Company

Company Overview

There is continuous uncertainty in the United Kingdom makes planning important to the success of Butali Sugar Company. The company has been in the market since 2000. The company was initially growing sugarcane and selling it to other sugar production industries. Butali Sugar Company has now matured and is planning to start producing its sugar and molasses in the next six months. The company has grown enough sugarcane which it will use for manufacturing the two products. Butali Sugar Company is located at Kingston market about two kilometers from Kingston upon Thames town along the Kingston upon Thames road. It is the leading sugarcane producing Company in London, with its sugarcane market extending internationally mainly to the European Union. The Company has area coverage of four thousand hectares with three thousand nine hundred hectares under sugar cane. The Company is planning to produce white sugar, brown sugar, refined sugar and fortified sugar (sugar with vitamin A) together with molasses.

Our Mission

To be the best Sugar producing company in the region

Our Vision

To export 500,000 tonnes of sugar per month in the next two years

Our core values

Integrity: Ethical, Honest, Trustworthy

Teamwork: Inspiring, Visionary, Accountable

Excellence: Quality Focused, Competence, Disciplined

People Focused: Life Balance, Employee Development, Diversity

Market Analysis

Butali Sugar goals are to live longer as the market frontrunner. This drive can only be attained by offering the customer the exact product they require and in the way they need it. This action has seen development take place in accelerating sales therefore resulting to developments of customer-oriented products. Butali Sugar Company has established Fortified sugar. This product has been exhorted with Vitamin A muffing with the requirements for micronutrients. The aim was aimed towards a raised loyalty to the institution’s products (Brassington & Pettitt 2006).

Customer profile

Butali Sugar Company targets to sell its sugar to the surrounding communities before exporting the products. The immediate estimated customer is 1million people in the neighboring towns. There are several institutions around the Company which are likely to order sugar from the Company. Brewing industries and animal farms in the area are expected to order for molasses. Customers of all ages use sugar and so there is no age estimation of customers.

Competitors

Butali Sugar will be competing with two main Sugar Producing Industries in the area. These are West Sugar Company and Nzoia Sugar Company. West Sugar Company produces the largest amounts of sugar in the region. Nzoia Sugar Company is two years older than Butali. However, Nzoia has implemented modern technology and is growing rapidly. Butali Sugar Company has planned to employ modern technology so that it can fit in this competing environment.

Product Cost Estimate

White and Brown sugar has been established in the market to hauler for the partialities perceived on the local front. London holds a predilection for the white sugar with the Enfield and Eastern regions validating preference for the brown sugar. This in turn offers us the proper notion of what to gain to our dissimilar customers. Market division is the main reason behind the marvelous sales that has been witnessed. Packaging has recently been broken down in order to fit different packages. Company produces 2kg, 1/2kg, 1kg and 1/4kg sugar packs as well as 5gms sachet. (Direct Gov. 2010).

Butali Sugar is a family business owned by an extended family of the Mikes. The shareholders have saved $12million in the treasury for the production of the new products. However, production requires $26million dollars. Therefore, the company has a deficit of $14million to launch the new products. The Company expects to get support from banks, potential shareholders and family members who have not invested in this family business. Interested persons outside the family are also welcome to join the promising business (Direct Gov. 2010).

Sugar Processing

Population about 60% of the universe’ sugar fabrication originates from sugarcanes.  Sugarcane comprises 14% fibre, 70% water, 13.3% saccharose and 2.7% impurities that are soluble. Sugarcane is cleared, cut into lesser pieces, frayed and then approved through juice removal process. The juice is then clarified to remove mud, vanished to grimace syrup, preserved to disengage the liquor, centrifuged to scatter molasses from crystals. Hereafter, sugar is dehydrated and can be further refined before packaging for market. At Butali Sugar Company, the juice is removed by the process of diffuser and milling to increase the extraction using the minimum energy possible and reduced maintenance and operating costs. Sugar refining comprises removal of de-colorization and impurities. The steps followed include centrifugation AND mingling (affination), melting, de-colorization, clarification, evaporation, finishing and crystallization. De-colorization techniques use granular triggered carbon, powdered triggered carbon and ion exchange resins inclusive of other materials (Brassington & Pettitt 2006).

SWOT Analysis

Strengths

1. The company has enough sugar canes to produce the enough sugar and molasses.

2. The company has enough employees who have experience in field work.

3. It has enough piece of land for expending sugar cane growth is need rises

4. There is an established and working safety, health and environment section under the safety, health and environment manager working harmoniously with other departments. 

5. The company has streamlined safety and health administration.

6.  Company has developed and written a safety and health manual which sets the guidelines on safety and health standards to be observed.

Weaknesses

1. The company does not have enough money to establish its plan.

2. There are now qualified employees in the production section.

3. There are many accidents in the farms which discouraged employees and cause absenteeism.

1. Contracted firms do not meet the conditions laid out in the contractual agreement, pertaining to safety and health thus exposing their workers to occupational health hazards.

2. Low level of awareness on the safe use of chemicals by the chemical handlers.

3. The company is located at a strategic place where many customers can easily reach.

4. The company’s image in nationally known since it has been I n the market for a long time.

5. The competitors do not have large sugar cane farms as Butali.

6. The targeted market is likely to turn up since other Sugar Companies have higher prices.

7. The competitors have been in the market for a long time and they may have stronger strategies than Butali.

8. Government laws and regulations might increase pressure from taxes unexpectedly.

9. Unfavourable weather and climatic changes affect sugar cane plantations.

10. The society around dislike the Company as a result of the countless snakes emerging from sugar cane plantations.

Opportunities

Threats

Societal Impact

The company will offer job opportunities to the people around. Unfortunately, the society hates the snakes which emerge from sugar cane plantations. The company has a compensation plan to those attacked by the reptiles. There is a plan to kill all snakes in the farm using chemicals (Brassington & Pettitt 2006).

Environmental Impact

Butali Sugar Company will impact the environment negatively with chemicals from the agriculture and sugar crystallization section. Additionally, there will be a lot of noise coming from the sugar cane millers in the processing section. Dust from the bagasse store will affect the employees and the surrounding community.

Recommendations

• In put dust masks issued with respirators which are the appropriate equipment for handling chemicals.

• The employees handling chemicals should undergo training on safe use of chemicals

• The front door part should be raised to allow free moving of chemical spilled with minimal contamination

• Provide an inverted water tap at the store for emergency

• Provide a dustbin for collecting the solid chemical waste from the store. The bin should be clearly marked as “chemical waste” and the content should be disposed as per the Company’s chemical waste disposal  procedure

• The drinking water tap should be labelled as “Pure Drinking water’’

• The Company should ensure that, all employees working in this store undergo medical examination as required and results released to workers in order to give them an update of their health.

The assignment has enhanced my accounting management classes taught in class. I have also understood areas which I require to emphasize on when revising for the examination. I have learnt sugar production process and have identified a potential future business opportunity. The most interesting activity in the exercise was planning the 5 year budget. The SWOT analysis of the company was the most challenging activity (Direct Gov. 2010).