Pre-Feasibility Study: (Poultry Farm)

Pre-Feasibility Study
(Poultry Farm)
Small and Medium Enterprises Development Authority Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road, Lahore Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
helpdesk@smeda.org.pk
REGIONAL OFFICE Punjab 3rd Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road Lahore, Tel: (042) 111-111-456 Fax: (042) 36304926-7 helpdesk.punjab@smeda.org.pk REGIONAL OFFICE Sindh 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 35610572 helpdesk-khi@smeda.org.pk REGIONAL OFFICE Khyber Pakhtunkhwa Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 111-111-456 Fax: (091) 5286908 helpdesk-pew@smeda.org.pk REGIONAL OFFICE Balochistan Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 2831623, 2831702 Fax: (081) 2831922 helpdesk-qta@smeda.org.pk
Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost December, 2013
Table of Contents
1. DISCLAIMER .......................................................................................................................................... 2 2. PURPOSE OF THE DOCUMENT ......................................................................................................... 3 3. INTRODUCTION TO SMEDA .............................................................................................................. 3 4. INTRODUCTION TO SCHEME ........................................................................................................... 4 5. EXECUTIVE SUMMARY ...................................................................................................................... 4 6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ........................................................................ 4 7. CRITICAL FACTORS ............................................................................................................................ 5 8. INSTALLED & OPERATIONAL CAPACITIES................................................................................. 5 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ..................................................................... 5 10. 11. 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10 12. 13. 13.1 13.2 13.3 13.4 13.5 14. POTENTIAL TARGET MARKET ................................................................................................... 5 PROJECT COST SUMMARY .......................................................................................................... 6 PROJECT ECONOMICS..................................................................................................................... 6 PROJECT FINANCING ...................................................................................................................... 7 PROJECT COST .................................................................................................................................. 7 SPACE REQUIREMENT .................................................................................................................... 7 MACHINERY AND EQUIPMENT .................................................................................................... 8 OFFICE EQUIPMENT ........................................................................................................................ 9 RAW MATERIAL REQUIREMENTS................................................................................................ 9 HUMAN RESOURCE REQUIREMENT .......................................................................................... 11 REVENUE GENERATION ............................................................................................................... 11 OTHER COSTS ................................................................................................................................. 11 CONTACTS SUPPLIERS AND EXPERTS ................................................................................ 12 ANNEXURE ...................................................................................................................................... 14 INCOME STATEMENT ................................................................................................................... 14 BALANCE SHEET............................................................................................................................ 15 CASH FLOW STATEMENT............................................................................................................. 16 USEFUL PROJECT MANAGEMENT TIPS..................................................................................... 17 USEFUL LINKS ................................................................................................................................ 17 KEY ASSUMPTIONS ...................................................................................................................... 20
1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a general idea and information on the subject. Although, the material included in this document is based on data / information gathered from various reliable sources; however, it is based upon certain assumptions which may differ from case to case. The information has been provided on as is where is basis without any warranties or assertions as to the correctness or soundness thereof. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA, its employees or agents do not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The contained information does not preclude any further professional advice. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information which is necessary for making an informed decision, including taking professional advice from a qualified consultant / technical expert before taking any decision to act upon the information. For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST -
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2. PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs in project identification for investment. The project pre-feasibility may form the basis of an important investment decision and in order to serve this objective, the document/study covers various aspects of project concept development, start-up, production, marketing, finance and business management. The purpose of this document is to facilitate potential investors in broiler farming by providing them a general understanding of the business with the intention of supporting potential investors in crucial investment decisions. The need to come up with pre-feasibility reports for undocumented or minimally documented sectors attains greater imminence as the research that precedes such reports reveal certain thumb rules; best practices developed by existing enterprises by trial and error, and certain industrial norms that become a guiding source regarding various aspects of business set-up and its successful management. Apart from carefully studying the whole document one must consider critical aspects provided later on, which form basis of any Investment Decision.
3. INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was established in October 1998 with an objective to provide fresh impetus to the economy through development of Small and Medium Enterprises (SMEs). With a mission "to assist in employment generation and value addition to the national income, through development of the SME sector, by helping increase the number, scale and competitiveness of SMEs" , SMEDA has carried out sectoral research to identify policy, access to finance, business development services, strategic initiatives and institutional collaboration and networking initiatives. Preparation and dissemination of prefeasibility studies in key areas of investment has been a successful hallmark of SME facilitation by SMEDA. Concurrent to the prefeasibility studies, a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of experts and consultants and delivery of need based capacity building programs of different types in addition to business guidance through help desk services.
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4. INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan, for young entrepreneurs, with an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide subsidised financing at 8% mark-up per annum for one hundred thousand (100,000) beneficiaries, through designated financial institutions, initially by the National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL). Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years inclusive of 1 year grace period, and a debt: equity of 90: 10 will be disbursed to SME beneficiaries+ across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA).
5. EXECUTIVE SUMMARY
Broiler meat is a rich source of protein with an ever growing demand. In Broiler farming, Day Old Chicks (DOCs) of broiler birds purchased from a reputed company are raised on specially formulated feed for a period of about six weeks, with a turnover of six flocks per year. Both rural and semi-urban areas are suitable for this business. Success of poultry farm business largely depends on good management practices. After brooding and rearing period, birds are sold at farm gate on Live Body Weight basis to traders or transported to market. The farm gate price of live bird is determined on daily basis. A broiler farm of 10,000 birds is suggested in this pre-feasibility study as a viable economic size to enter this business. The proposed business started in a rental shed requires total estimated investment of Rs. 2.04 million with a staff of 3 persons. This project is proposed to be started on 90% debt and 10% equity basis. The projects IRR, NPV and payback period are 46%, 5.55 million and 2.48 years respectively.
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT

In the proposed broiler farm business, Broiler Day Old Chicks (DOCs) are raised through high protein energy feed in a conventional open housing system for a period of six weeks (All in-All out system). The purpose built farm is acquired on rental basis. After six weeks, the finished broiler birds are sold on body weight basis to traders, wholesale markets or sold directly to the shopkeepers in the urban markets. With ever increasing demand for white meat, broiler farming can be a
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profitable venture. Annually, six flocks of birds are raised on the farm, depending on area climate.
7. CRITICAL FACTORS
The farm supervisor should ensure timely feeding, watering and vaccination as per best husbandry practices to ensure birds health and disease-free environment. The entrepreneur should be aware of the supply and demand of chicken in the market as the prices of chicken meat fluctuate throughout the year. Mortality losses should be kept below 8% by timely prophylactic measures (vaccination, medication, disinfection etc.). Diseases like New Castle Disease and Gumboro are extremely dangerous that can eradicate the entire flock.
8. INSTALLED & OPERATIONAL CAPACITIES

In this pre-feasibility study, all the calculations have been based on a flock size of 10,000 birds. As six flocks are produced per year, hence total 60,000 birds are reared per annum. There will be a lag time of two weeks for cleaning and disinfection (e.g. fumigation) on the farm.
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Rural and peri- urban areas around major cities are suitable for setting up a poultry farm. Setting up a farm at an isolated place will minimize the risk of disease. Proximity of the farm to the city enables the farmer to establish links with the market for buying farm inputs and selling of grown-up birds, swiftly. Suburban and rural areas around big cities e.g. Lahore, Rawalpindi, Faisalabad, Hyderabad, Karachi, Peshawar and Quetta are recommended for starting a broiler farm.
10.
POTENTIAL TARGET MARKET
Marketing of chickens follow traditional channels of distribution. Generally, grown-up broiler birds are distributed in the market through market agents and intermediaries such as Arhti and wholesalers. In some cases, the middleman provides DOCs and other farm inputs (feed, vaccination, medication etc.) to the broiler farmers under a contract to buy back mature birds from them. Birds are transported to the urban market and are sold to retailers or marketstreet poultry shops on Live Body Weight basis. Few poultry meat processing plants process raw poultry meat into dressed chicken, quality cuts or other forms
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to the market. The integrated processing units distribute frozen and dressed chicken packed in whole or cut-ups to the consumer through retail shops under their brand names. The wholesale and retail price of poultry meat is determined daily on consumer demand and supply situation.
11.
PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial viability of Broiler Farm (10,000 birds) under the Prime Ministers Youth Business Loan scheme. Various cost and revenue related assumptions along with results of the analysis are outlined in this section. The projected Income Statement, Cash Flow Statement and Balance Sheet are attached as appendix
11.1.
PROJECT ECONOMICS
All the figures in this financial model have been calculated for a flock of 10,000 broiler birds raised for 6 week, 6 flocks per annum at a purpose built conventional housing system (rented). The following table shows internal rates of return and payback period. Table 1- Project Economics Description Internal Rate of Return (IRR) Payback Period (yrs) Net Present Value (NPV) Details 46% 2.48 Rs. 5,552,255
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11.2.
PROJECT FINANCING
Following table provides details of the equity required and variables related to bank loan; Table 2 - Project Financing Description Total Equity (10%) Bank Loan (90%) Markup to the Borrower (%age/annum) Tenure of the Loan (Years) Grace Period (Year) Details Rs. 204,518 Rs. 1,840,663 8% 8 1
11.3.
PROJECT COST
Following requirements have been identified for operations of the proposed business. Table 3: Capital Investment for the Project Capital Investment Machinery & Equipment Furniture & fixtures Office equipment Pre-operating Cost Total Capital Cost Raw material inventory Upfront building rent Cash in hand Initial Working Capital Total Project Cost Amount (Rs.) 152,239 10,000 3,000 144,698 309,937 1,395,200 240,044 100,000 1,735,244 2,045,181
11.4.
SPACE REQUIREMENT
The area has been calculated on the basis of space requirement for conventional broiler sheds, management building, feed store, room for workers and boundary walls. However, the units operating in the industry do not follow any set pattern. Following table shows calculations for project space requirement. The layout of open conventional shed should be facing north-south. The chicks should be kept in a clean, dry and well-ventilated shed as this provides fresh air and carries off
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humidity. The entire building and all equipment should be properly disinfected and fumigated. Table 4: Space Requirement Space Requirement Management building Shed space Feed store Room for workers Pavement/ Boundary walls Total Area The rental cost is calculated at Rs. 20,000 per month. Space (Sq.ft) 100 10,000 180 144 104 10,528
11.5.
MACHINERY AND EQUIPMENT
Following table provides list of machinery and equipment required for broiler farm in open shed conventional housing system. Table 5: List of Machinery and Equipment Description Brooder Chick guard Small waterers Small feeding trays Large automatic waterers Large round feeders Buckets Manual balance Exhaust fans DOC shifting Boxes Drum Heaters Miscellaneous Installation Total Machinery & Equipment Capacity Birds/unit 500 200 50 50 140 130 Quantity 20 50 182 182 70 80 6 1 4 10 4 1 Cost Rs/unit 1,000 150 90 90 300 300 500 2,000 1,000 1,800 2,000 5,000 Total Rs. 20,000 7,500 16,380 16,380 21,000 24,000 3,000 2,000 4,000 18,000 8,000 5,000 6,979 152,239
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Main equipment required for broiler farming is; feeders, drinkers and brooders. Small waterers and drinkers are required for DOCs till 7 days. After that, automatic/ round drinkers and feeders are required. The brooder is essential part of broiler farming, also known as Artificial Mother as it provides necessary heat to DOCs shortly after arrival till 7 days of age. These costs are based on the assumption that a setup will be required to smoothly run the broiler farms operations.
11.6.
OFFICE EQUIPMENT
These costs are based on the assumption that a setup will be required to ensure the smooth running of project. Table 6: Office Equipment Costs Description Telephones Furniture and Fixture Total Quantity 1 Cost (Rs.) 3,000 10,000 Amount (Rs.) 3,000 10,000 13,000
11.7.
RAW MATERIAL REQUIREMENTS
As already mentioned, one flock of 10,000 broiler birds would be reared as per best farm management practices for a period of six weeks. Following table shows raw material requirement to raise 10,000 broilers per flock. However, it is assumed that the capacity utilization at broiler farm in first year would be 85% i.e. 51,000 birds in 6 flocks per year or 8,500 birds per flock. Table 7: Cost of Material Description Day Old Chicks (DOC), 61,200 DOCs Total Feed required per birds @2.2 FCR (51,000 birds) Vaccination. Medication and Disinfection (51,000 birds) Litter & Spray (Saw dust or rice husk) cost per flock (Rs.) (6 flocks) Unit Per DOC Per Bird Per Bird Per Flock Rate Values (Rs. per (Rs./ year) Unit) 35 2,142,000 178.2 8 14,000 9,088,200 408,000 84,000
The equipment and walls of the broiler shed should be checked for cleanliness, disinfection and spraying before the arrival of birds. Disinfectants can be prepared with Phenol, Potassium Permanganate, Carbolic Acid and Formalin. A
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solution of Sodium Hydroxide/Caustic Soda with warm water can also be used to clean the house. To sanitize the broiler house from germs and insects, it is fumigated with Formaldehyde Gas, produced by putting Formalin on Potassium Permanganate. The rooms should be vacant and sealed for 30 minutes after the fumigation so that the gas infiltrates in every corner of the room. Litter is spread on the floor to prevent direct contact with the floor. Rice-husk and sawdust are generally used for making the litter. It should be dry and free of moulds. Caked or moldy material should be removed and refilled with fresh materials. Extensively wet and dusty litter should also not be used. Using new litter for each flock is good for raising disease-free broiler birds. Broilers are usually fed with the following two types of ration: Broiler Starter (Mash or Crumb form) fed up to four weeks of age Broiler finisher (Mash or Crumb form): fed from five to six week
Feeding three or four times each day will stimulate feed intake and prevent wastage. There are many feed mills that prepare formulated Broiler Starter and Broiler Finisher feed. These feed mixtures can be obtained in prepared form (Mash or crumb form) from poultry feed mills. Vaccination can be provided to chicks through eye drops, drinking water. Subcutaneous injections can also be mixed in the water or applied through eye drops. Average vaccination and medication price per bird mostly varies between Rs 8-10. The feasibility has taken cost of vaccination at Rs.8 per bird. Following is a typical Vaccination Schedule for Broilers. Table 8: Vaccination Schedule for Broiler Birds Age in Days 1 day 5 days 8 days 17-18 days 21-22 days 25-26 days Disease Infectious Bronchitis Disease (IBD) Newcastle Disease (ND) Infectious Bursal Disease (IBD) Hydro Pericardium Disease Infectious Bursal Disease (IBD) IBD+ND Vaccination IB-Vaccine ND-Vaccine (Lasota) IBD Vaccine (Gumboro) HPS- Hydro Vaccine IBD Vaccine (Gumboro) IBD+ND Vaccines Procedure Aerial spray or eye drops Eye drops Eye drops Sub-cut injection In drinking water In drinking water
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11.8.
HUMAN RESOURCE REQUIREMENT

Table 9: Human Resource Requirement Description No. of Employees 1 2 3 Monthly Salary per employee (Rs.) 30,000 12,000
Owner / Farm Manager Farm Labor Total Staff
The table above provides details of human resource required to run such a business. Semi skilled workers are needed to look after the general poultry husbandry operations such as feeding, watering, vaccination and cleaning operations at the farm. A single person can handle 5,000 birds easily. Two people will be hired to manage the operations of a broiler farm of 10,000 birds. One attendant is given a monthly salary of Rs 12,000. In addition, owner would act as farm manager to be hired at a monthly salary of Rs. 30,000. Salaries of all employees are estimated to increase at 10% annually.
11.9.
REVENUE GENERATION
Revenue in First Year Rs. 13,311, 000
Table 10: Revenue Generation Unit Sale First Year Price Rs. Productio n Broiler Birds of 1.8 kgs. Per bird 261 51,000 Live Body Weight after 6 weeks Other revenues (litter, Per bird 8 51,000 empty feed bags etc) Total Revenue Description
408,000 13,719,000
11.10.
OTHER COSTS
An essential cost to be borne by the farmer is electricity expense. The variable electricity expense is estimated to be Rs. 2.25 per bird for broiler shed. The fixed electricity cost for rest of the area is estimated to be Rs. 800 per month. Mostly, 24 hours light is provided during brooding and early growing period. Initially, for first fifteen days, light intensity should be 40-60 watts per 200 sq. ft of space which can be replaced by 15 watts bulb in the start of third week.
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12.
CONTACTS SUPPLIERS AND EXPERTS

Poultry Feed Suppliers DOC Suppliers Big Bird Poultry Breeders (Pvt.) Ltd. 2-A,Ahmed Block, New Garden Town Lahore Phone : +92-42-35835373-4 Fax : +92-42-35835371 Hi-Tech Poultry Breeders (Pvt.) Ltd. 1-A, Shadman Chowk Jail Road, Lahore Phone : +92-42-37564503 Fax : +92-42-37564508 Islamabad Poultry Breeding Co. D-98, Satellite Town, Murree Road Rawalpindi. Phone : +92-51-4427139 Fax : +92-51-4421203 Jadeed Farms (Pvt.) Ltd. 6, Allied Commercial Plaza, Murree Road, Chandni Chowk Rawalpindi. Phone: +92-51-4851280-84 Fax: +92-51-4851255 Sadiq Poultry Pvt Ltd SB Plaza, 48-C, Satellite Town, Chandni Chowk, Rawalpindi Ph: 051-111-505-050 Fax : +92-51-4511191
Supreme Feeds (Pvt.) Ltd. Head Office: 176-Shadman 1 Lahore. Phone: +92-42-37522104-7 Fax: +92-42-37573106 National Feeds Ltd. 171 Shadman II Lahore. Phone: +92-42 37551405-8 Fax: +92-42- 37573045 Asia Feed (Pvt.) Ltd. 359 Shamsabad Colony, Humayun Road Multan. Phone: +92-61-6224414 Fax: +92-61-6224414 Fast Poultry Feeds 12-KM Near Nai Sabzi Mandi Jhang Road, Faisalabad. Phone: +92-41-2577171-2 Fax: +92-41-2517474 Rustum Feeds Flat No.6, 1st Floor, United Center Shamsabad, Murree Road, Rawalpindi Phone: +92-51-4455362 Fax: +92-51-4847382 Ghazi Brothers Ghazi House, D-35, KDA Scheme, No. 1, Miran Muhammad Shah Road, Karachi Phone: +92-21-111250365 Machinery & Equipment Suppliers Biovet (Pvt.) Ltd. 97-A, Jail Road Lahore Phone : +92-42-37534508 Fax : +92-42-37534510 www.biovet.com.pk
Consultants Prof. Dr. M. Akram Chairman, Department of Poultry Production, Uni. Of Veterinary and Animal Sciences (UVAS), Out Fall Road, Lahore Ph: 042-99211461
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Eastern Veterinary Services 4- C Chouburji Center, Near Venus Cinema, Multan Road, Lahore. Phone : +92-42-37417649-50
Dr. Abdul Rehman Director, Poultry Research Institute, Shamsabad, Murree Road, Rawalpindi Phone: +92-51-9290163-5 Dr. Fawwad Ahmad Faculty of Animal Husbandry, University of Agriculture, Faisalabad Ph: +92-41-9920161-70
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13. 14.
ANNEXURE INCOME STATEMENT

Income Statement
Year 1 Revenue 13,719,000 Cost of sales Cost of DOC 2,142,000 Cost of Feed 9,088,200 Operation costs 1 (direct labor) 288,000 Vaccination, Medication & Disinfection 408,000 Direct Electricity 114,750 Litter and spray Cost 84,000 Total cost of sales 12,124,950 Gross Profit 1,594,050 General administration & selling expenses Administration expense 360,000 Building rental expense 240,044 Electricity expense 9,665 Travelling expense 3,600 Communications expense (phone, fax, mail, internet, etc.) 3,600 Office expenses (stationary, entertainment, janitorial services, 3,600 Depreciation expense 16,524 Amortization of pre-operating costs 28,940 Bird Mortility 484,998 Subtotal 1,150,970 Operating Income 443,080 Other income (interest on cash) Earnings Before Interest & Taxes 443,080 Interest expense on long term debt (Project Loan) 152,774 Subtotal 152,774 Earnings Before Tax 290,306 Tax NET PROFIT/(LOSS) AFTER TAX 290,306 Year 2 15,935,400 2,356,200 10,585,080 316,800 475,200 133,650 92,400 13,959,330 1,976,070 396,000 264,048 10,631 3,960 3,960 3,960 16,524 28,940 558,373 1,286,396 689,674 689,674 139,866 139,866 549,808 14,981 534,827 Year 3 18,457,170 2,591,820 12,290,454 348,480 551,760 155,183 101,640 16,039,337 2,417,834 435,600 290,453 11,694 4,356 4,356 4,356 16,524 28,940 641,573 1,437,852 979,981 979,981 122,901 122,901 857,080 51,062 806,018 Year 4 21,323,460 2,851,002 14,231,052 383,328 638,880 179,685 111,804 18,395,751 2,927,709 479,160 319,498 12,864 4,792 4,792 4,792 16,524 28,940 735,830 1,607,190 1,320,519 1,320,519 104,528 104,528 1,215,991 104,899 1,111,093 Year 5 23,407,806 3,136,102 15,654,157 421,661 702,768 197,654 122,984 20,235,326 3,172,480 527,076 351,448 14,150 5,271 5,271 5,271 16,524 28,940 809,413 1,763,363 1,409,117 1,409,117 84,629 84,629 1,324,488 121,173 1,203,315 Year 6 25,700,587 3,449,712 17,219,573 463,827 773,045 217,419 135,283 22,258,859 3,441,728 579,784 386,593 15,565 5,798 5,798 5,798 16,524 890,354 1,906,213 1,535,515 1,535,515 63,080 63,080 1,472,435 143,365 1,329,070 Year 7 28,222,645 3,794,684 18,941,530 510,210 850,349 239,161 148,811 24,484,745 3,737,901 637,762 425,252 17,121 6,378 6,378 6,378 16,524 979,390 2,095,182 1,642,718 1,642,718 39,741 39,741 1,602,977 168,095 1,434,882 Year 8 30,996,910 4,174,152 20,835,683 561,231 935,384 263,077 163,692 26,933,219 4,063,691 701,538 467,778 18,833 7,015 7,015 7,015 16,524 1,077,329 2,303,048 1,760,643 1,760,643 14,465 14,465 1,746,177 196,735 1,549,442 Year 9 34,048,601 4,591,567 22,919,252 617,354 1,028,923 289,384 180,061 29,626,541 4,422,060 771,692 514,555 20,717 7,717 7,717 7,717 16,524 1,185,062 2,531,700 1,890,359 1,890,359 1,890,359 225,572 1,664,788 Year 10 37,405,461 5,050,724 25,211,177 679,089 1,131,815 318,323 198,068 32,589,195 4,816,266 848,861 566,011 22,788 8,489 8,489 8,489 16,524 1,303,568 2,783,218 2,033,048 2,033,048 2,033,048 254,109 1,778,938
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BALANCE SHEET
Balance Sheet
Year 0 Assets Current assets Cash & Bank Raw material inventory Pre-paid building rent Total Current Assets Fixed assets Machinery & equipment Furniture & fixtures Office equipment Total Fixed Assets Intangible assets Pre-operation costs Total Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Equity Current liabilities Accounts payable Total Current Liabilities Other liabilities Deferred tax Long term debt (Project Loan) Total Long Term Liabilities Shareholders' equity Paid-up capital Retained earnings Total Equity TOTAL CAPITAL AND LIABILITIES 422,998 1,292,242 20,004 1,735,244 152,239 10,000 3,000 165,239 144,698 144,698 2,045,181 1,502,161 1,638,047 22,004 3,162,211 137,015 9,000 2,700 148,715 115,759 115,759 3,426,685 1,638,611 2,072,102 24,204 3,734,917 121,791 8,000 2,400 132,191 86,819 86,819 3,953,927 1,983,796 2,616,222 26,625 4,626,643 106,567 7,000 2,100 115,667 57,879 57,879 4,800,190 2,686,563 3,165,628 29,287 5,881,479 91,343 6,000 1,800 99,143 28,940 28,940 6,009,562 3,329,456 3,830,410 32,216 7,192,083 76,120 5,000 1,500 82,620 7,274,702 3,955,950 4,634,797 35,438 8,626,184 60,896 4,000 1,200 66,096 8,692,280 4,550,310 5,608,104 38,981 10,197,396 45,672 3,000 900 49,572 10,246,967 5,092,269 6,785,806 42,880 11,920,954 30,448 2,000 600 33,048 11,954,002 5,900,218 8,210,825 47,168 14,158,211 15,224 1,000 300 16,524 14,174,735 15,767,493 15,767,493 0 0 15,767,493 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
1,091,198 1,091,198 1,840,663 1,840,663 204,518 290,306 494,824 3,426,685
1,273,034 1,273,034 14,981 1,636,261 1,651,242 204,518 825,133 1,029,651 3,953,927
1,483,583 1,483,583 66,043 1,414,895 1,480,937 204,518 1,631,151 1,835,670 4,800,190
1,716,704 1,716,704 170,941 1,175,155 1,346,096 204,518 2,742,244 2,946,762 6,009,562
1,916,995 1,916,995 292,114 915,517 1,207,631 204,518 3,945,559 4,150,077 7,274,702
2,143,325 2,143,325 435,479 634,329 1,069,808 204,518 5,274,629 5,479,147 8,692,280
2,399,562 2,399,562 603,575 329,802 933,377 204,518 6,709,511 6,914,029 10,246,967
2,690,221 2,690,221 800,310 800,310 204,518 8,258,953 8,463,471 11,954,002
3,020,594 3,020,594 1,025,882 1,025,882 204,518 9,923,741 10,128,259 14,174,735
2,580,305 2,580,305 1,279,991 1,279,991 204,518 11,702,679 11,907,197 15,767,493
1,840,663 1,840,663 204,518 204,518 2,045,181
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CASH FLOW STATEMENT

Cash Flow Statement
Year 0 Operating activities Net profit Add: depreciation expense amortization of pre-operating costs Raw material inventory Accounts payable Cash provided by operations Financing activities Project Loan - principal repayment Additions to Project Loan Issuance of shares Cash provided by / (used for) financing activities Investing activities Capital expenditure Cash (used for) / provided by investing activities NET CASH Year 1 290,306 16,524 28,940 (345,805) 1,091,198 1,079,163 Year 2 534,827 16,524 28,940 (434,055) 181,836 340,852 (204,401) (204,401) 136,450 Year 3 806,018 16,524 28,940 (544,120) 210,549 566,552 (221,367) (221,367) 345,185 Year 4 1,111,093 16,524 28,940 (549,407) 233,121 942,507 (239,740) (239,740) 702,767 Year 5 1,203,315 16,524 28,940 (664,782) 200,291 902,532 (259,638) (259,638) 642,893 Year 6 1,329,070 16,524 (804,386) 226,331 907,682 (281,188) (281,188) 626,494 Year 7 1,434,882 16,524 (973,307) 256,236 898,886 (304,527) (304,527) 594,360 Year 8 1,549,442 16,524 (1,177,702) 290,660 871,761 (329,802) (329,802) 541,959 Year 9 1,664,788 16,524 (1,425,019) 330,373 807,949 807,949 Year 10 1,778,938 16,524 8,210,825 (440,289) 9,867,275 9,867,275
(1,292,242) (1,312,246)
1,840,663 204,518 2,045,181
(309,937) (309,937) 422,998 1,079,163
16
Broiler Farming
USEFUL PROJECT MANAGEMENT TIPS Technology Required spare parts & consumables: Suppliers credit agreements and availability as per schedule of maintenance be ensured before start of operations Energy Requirement: Should not be overlooked and alternate source of energy for critical operations be arranged in advance Machinery Suppliers: Should be asked for training and after sales services under the contract with the machinery suppliers Quality Assurance Equipment & Standards: Whatever means required for products quality standards need to be defined. A system to check them be instituted, this improves credibility
Marketing Ads & P.O.S. Promotion: Business promotion and dissemination through banners and incentives is recommended. Price - Bulk Discounts, Cost plus Introductory Discounts: Price should never be allowed to compromise quality. Price during introductory phase may be lower and used as promotional tool. Product cost estimates should be carefully documented before price setting. Government controlled prices shall be displayed.
Human Resources Adequacy & Competencies: Skilled and experienced staff should be considered an investment. Performance Based Remuneration: Attempt to manage human resource cost should be focused through performance measurement and performance based compensation. Training & Skill Development: Encouraging training and skill of self & employees through experts and exposure of best practices is recommended.
USEFUL LINKS Prime Ministers Office, www.pmo.gov.pk Government of Pakistan, www.pakistan.gov.pk Ministry of Industries & Production, www.moip.gov.pk Ministry of National Food Security & Research, www.mnfsr.gov.pk Ministry of Education, Training & Standards in Higher Education, www.moptt.gov.pk Government of Punjab, www.punjab.gov.pk Government of Sindh, www.sindh.gov.pk
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST 17
Broiler Farming
Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk Government of Balochistan, www.balochistan.gov.pk Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk Government of Azad Jamu Kashmir, www.ajk.gov.pk Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk Securities & Exchange Commission of Pakistan (SECP), www.secp.gov.pk Federation of Pakistan Chambers of Commerce and Industry (FPCCI) www.fpcci.com.pk Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore Tel. 042-99205201, www.pbit.gop.pk Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center, Shahrae-Faisal, Karachi, Tel. 021-99207512-4, www.sbi.gos.pk State Bank of Pakistan (SBP), www.sbp.org.pk National Bank of Pakistan (NBP), www.nbp.com.pk First Women Bank Limited (FWBL), www.fwbl.com.pk Pakistan Poultry Association (PPA), Islamabad, www.ppacentral.pk Pakistan Agricultural Research Council (PARC), Park Road, Islamabad Tel. 0519203966, www.parc.gov.pk National Agricultural Research Centre (NARC), Islamabad, Tel. 051-9255061, www.parc.gov.pk National Veterinary Laboratory, NARC, Islamabad Tel. 051-9255108 Faculty of Animal Husbandry, University of Agriculture, Faisalabad, www.uaf.edu.pk Faculty of Veterinary Sciences, University of Agriculture, Faisalabad, www.uaf.edu.pk Faculty of Veterinary and Animal Sciences, Lasbela University of Agriculture, Water & Marine Sciences, Lasbela, www.luawms.edu.pk Faculty of Veterinary Sciences and Animal Husbandry, Sindh Agriculture University, Tondojam, www.sau.edu.pk Gomal College of Veterinary Sciences, Dera Ismail Khan, www.gu.edu.pk KPK Agricultural University, Peshawar, www.aup.edu.pk Pir Mehr Ali Shah Arid Agricultural University, Rawalpindi, www.uaar.edu.pk University College of Veterinary & Animal Sciences, Islamia University Bahawalpur (IUB), www.iub.edu.pk University of Veterinary & Animal Sciences (UVAS), Out Fall Road, Lahore, www.uvas.edu.pk College of Veterinary & Animal Sciences, Jhang, www.uvas.edu.pk/other_campuses Bahauddin Zakariya University (BZU), Multan, www.bzu.edu.pk Animal Husbandry In-Service Training Institute (AHITI), Peshawar, Tel. 091-2960109, 9210309 Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel. 042-99220140 Agribusiness Support Fund (ASF), Lahore, www.asf.org.pk Directorate of Livestock Farms, L&DD, Lahore, Tel: 042-99201126-7
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST 18
Broiler Farming
Poultry Research Institute (PRI), Rawalpindi, Tel: 051-9290162, 9290173, www.poultry.punjab.gov.pk Government Poultry Breeding Farm, Bahawalpur, Tel: 062-9255392 Government Poultry Breeding Farm, Dina, Tel: 0544-633326 Government Poultry Breeding Farm, Dera Gazi Khan, Tel: 064-9260521 Government Poultry Breeding Farm, Multan, Tel: 061-6528067 Government Poultry Breeding Farm, Sargodha, Tel: 048-9239120 Government Poultry Rearing Farm, Attock, c/o PRI, Rawalpindi, Tel: 051-9290162, 9290173 Government Poultry Rearing Farm, Bahawal Nagar, Tel: 063-9239038 Government Poultry Rearing Farm, Gujrat, Tel: 053-3600040 Government Poultry Rearing Farm, Mianwali, Tel: 045-9920146 Poultry Disease Diagnostic Lab, Gujar Khan, District Rawalpindi, Tel: 051-9290163 Poultry Disease Diagnostic Lab, Ghakkar, Dist. Gujranwala, Tel: 055-9200194 Poultry Disease Diagnostic Lab, Summandri, Dist. Faisalabad, Tel: 041-3420330 Poultry Disease Diagnostic Lab, Kamalia, Dist. Toba Tek Singh, Tel: 046-3412008 Poultry Disease Diagnostic Lab, Arifwala, Dist. Pak Pattan, Tel: 0457-834591 Poultry Disease Diagnostic Lab, Bahawalnagar, Dist. Bahawalnagar, Tel: 063-9239038 Poultry Disease Diagnostic Lab, Jhang, Dist. Jhang, Tel: 0477-651030 Poultry Disease Diagnostic Lab, Jhelum, Dist. Jhelum, c/o PRI, Rawalpindi, Tel: 0519290162, 9290173 Livestock & Fisheries Department, Government of Sindh, www.sindh.gov.pk Agriculture & Livestock Department, Government of KPK, www.khyberpakhtunkhwa.gov.pk Govt. Poultry Farm, Peshawar c/o L&DD, Peshawar, Tel: 091-9210276 Livestock & Dairy Development, Government of Balochistan, www.balochistan.gov.pk Govt. Feed Mill Quetta c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Pishin c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Nushki c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Zhob c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Khuzdar c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Kohlu c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Sibi c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Panjgoor c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Loralai c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Muslim Bagh c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Gwadur c/o L&DD Quetta, Tel: 081-9202564 District Govt. Poultry Farm Pasni c/o L&DD Quetta, Tel: 081-9202564
19
Broiler Farming
15.
KEY ASSUMPTIONS
85% 5% 100% 10,000 6 8% 60,000 42 2 1.8
Table -1: Production Assumptions Production Capacity Utilization Capacity Utilization Growth Rate Maximum Capacity Utilization Number of Birds per Flock Number of Flocks per Year Mortality Rate Annual Production (birds) Time required per Flock (days) Lag time between the Flock (weeks) Average weight per bird (kg) Table 2: Revenue Assumptions Sales price per bird (1.8 Kg approx) Sales price growth rate Table 3: Expense Assumptions DOC (Day Old Chicks) in Rs. Feed Conversion Ratio Average Feed Requirement/bird/day (kg) Cost of feed (in Rs/kg) Feed Cost per bird (Rs.) Cost of feed bag (Rs. per 50 Kgs Bag) Vaccination Cost per bird in Rs. Spray Cost per flock Table 5: Financial Assumptions Project life (Years) Debt Equity Interest rate Debt tenure (Years) Grace Period (Year) Debt payments per year 10 90%-10% 8% 8 1 12 35 2.20 0.09 45 178.2 2,250 8 6,000 261 7%
20

Pre-Feasibility Study: (Poultry Farm)

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Pre-Feasibility Study: (Poultry Farm)

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Pre-Feasibility Study

2. PURPOSE OF THE DOCUMENT

6. BRIEF DESCRIPTION OF PROJECT & PRODUCT

8. INSTALLED & OPERATIONAL CAPACITIES

9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

POTENTIAL TARGET MARKET

PROJECT COST SUMMARY

MACHINERY AND EQUIPMENT

RAW MATERIAL REQUIREMENTS

HUMAN RESOURCE REQUIREMENT

Owner / Farm Manager Farm Labor Total Staff

CONTACTS SUPPLIERS AND EXPERTS

ANNEXURE INCOME STATEMENT

1,091,198 1,091,198 1,840,663 1,840,663 204,518 290,306 494,824 3,426,685

1,273,034 1,273,034 14,981 1,636,261 1,651,242 204,518 825,133 1,029,651 3,953,927

1,483,583 1,483,583 66,043 1,414,895 1,480,937 204,518 1,631,151 1,835,670 4,800,190

1,716,704 1,716,704 170,941 1,175,155 1,346,096 204,518 2,742,244 2,946,762 6,009,562

1,916,995 1,916,995 292,114 915,517 1,207,631 204,518 3,945,559 4,150,077 7,274,702

2,143,325 2,143,325 435,479 634,329 1,069,808 204,518 5,274,629 5,479,147 8,692,280

2,399,562 2,399,562 603,575 329,802 933,377 204,518 6,709,511 6,914,029 10,246,967

2,690,221 2,690,221 800,310 800,310 204,518 8,258,953 8,463,471 11,954,002

3,020,594 3,020,594 1,025,882 1,025,882 204,518 9,923,741 10,128,259 14,174,735

2,580,305 2,580,305 1,279,991 1,279,991 204,518 11,702,679 11,907,197 15,767,493

1,840,663 1,840,663 204,518 204,518 2,045,181

CASH FLOW STATEMENT

1,840,663 204,518 2,045,181

(309,937) (309,937) 422,998 1,079,163

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