pre-feasibility study environmental controlled poultry...

Pre-Feasibility StudyPre-Feasibility Study

ENVIRONMENTAL CONTROLLEDENVIRONMENTAL CONTROLLEDPOULTRY FARMPOULTRY FARM

(60,000 Birds)(60,000 Birds)

Small and Small and Medium Enterprises Development AuthorityMedium Enterprises Development Authority

Government of PakistanGovernment of Pakistan

www.smeda.org.pkwww.smeda.org.pk

HEAD OFFICEHEAD OFFICE

66thth Floor , LDA PlFloor , LDA Plaza, Egerton Raza, Egerton Road, oad, LahoreLahoreTel: (042) 111-111-456, Fax: (042) 6304926-7Tel: (042) 111-111-456, Fax: (042) 6304926-7

[email protected] [email protected]

REGIONAL OFFICEREGIONAL OFFICE

PUNJABPUNJAB


SINDHSINDH


NWFPNWFP


BALOCHISTANBALOCHISTAN

88thth Floor LDA Plaza,Floor LDA Plaza,Egerton Road, Lahore.Egerton Road, Lahore.Tel: (042) 111-111-456Tel: (042) 111-111-456Fax: (042) 6304926-7Fax: (042) 6304926-7

[email protected] [email protected]

55THTH Floor, BahriaFloor, BahriaComplex II, M.T. Khan Road,Complex II, M.T. Khan Road,

Karachi.Karachi.Tel: (021) 111-111-456Tel: (021) 111-111-456

Fax: (021) 5610572Fax: (021) [email protected] [email protected]

Ground FloorGround FloorState Life BuildingState Life Building

The Mall, Peshawar.The Mall, Peshawar.Tel: (091) 9213046-47Tel: (091) 9213046-47


Bungalow No. 15-ABungalow No. 15-AChaman Housing SchemeChaman Housing Scheme

Airport Road, Quetta.Airport Road, Quetta.Tel: (081) 831623, 831702Tel: (081) 831623, 831702


April, 2010April, 2010

Pre-Feasibility Pre-Feasibility Study Study Environmental Environmental Controlled Controlled Farm Farm (60,000 (60,000 Birds)Birds)

DISCLAIMERDISCLAIMER

The purpose and scope of this information memorandum is to introduce the subjectThe purpose and scope of this information memorandum is to introduce the subject

matter and provide a general idea and information on the said area. All the materialmatter and provide a general idea and information on the said area. All the material

included in this document is based on data/information gathered from variousincluded in this document is based on data/information gathered from various

sources and is based on certain assumptions. Although, due care and diligence hassources and is based on certain assumptions. Although, due care and diligence has

been taken to compile this document, the contained information may vary due to anybeen 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 substantiallychange in any of the concerned factors, and the actual results may differ substantially

from the presented information. SMEDA does not assume any liability for anyfrom the presented information. SMEDA does not assume any liability for any

financial or other loss resulting from this memorandum in consequence of financial or other loss resulting from this memorandum in consequence of

undertaking this activity. Therefore, the content of this memorandum should not beundertaking this activity. Therefore, the content of this memorandum should not be

relied upon for making any decision, investment or otherwise. The prospective userrelied upon for making any decision, investment or otherwise. The prospective user

of this memorandum is encouraged to carry out his/her own due diligence and gatherof this memorandum is encouraged to carry out his/her own due diligence and gather

any information he/she considers necessary for making an informed decision.any information he/she considers necessary for making an informed decision.

The content of the information memorandum does not bind SMEDA in any legal orThe content of the information memorandum does not bind SMEDA in any legal or

other form.other form.

DOCUMENT CONTROLDOCUMENT CONTROL

Document Document No. No. PREF PREF 105105

Revision 1Revision 1

Prepared Prepared by by SMEDA-PunjabSMEDA-Punjab

Issue Issue Date Date April, April, 20102010

Issued Issued by by Library Library OfficerOfficer

PREF-105/April, 2010/Rev 1PREF-105/April, 2010/Rev 1

11

Pre-Feasibility Study Environmental Controlled Farm (60,000 Birds)

1 EXECUTIVE SUMMARY

The Environmental Controlled Poultry Farm is a project of livestock sector, inwhich, the day old chicks (DOCs) are raised on high protein feed for an approximateperiod of six weeks with a lag time of 15 days for cleaning and fumigation of thefarm. The entire specific requirement will be met by automatic operations of temperature control, feeding and nipple drinking system, which will be monitored bythe concerned staff. Broiler farming in controlled environment is a profitable venturedue to continuous increasing demand of the white meat in the market.

According to the World Health Organization standards, daily required dietary proteinallowance from animal sources are 27 grams but in Pakistan this amount is only 13.6grams. Poultry sector is one of the vibrant segments of agriculture industry of Pakistan. This sector generates employment (direct/indirect) and income for about1.5 million people. Its contribution in agriculture growth is 4.81% and in Livestock growth 9.84%. Poultry meat contributes 19% of the total meat production in thecountry. According to Industry sources there is capacity of 5,000 EnvironmentalControl Houses in Pakistan and currently 2,500 houses are working, out of which75% (1,875) are in Punjab and remaining 25% (625) are in other provinces.

An Environmentally Controlled Poultry House with a population of 60,000 birdsneeds a capital investment estimated at Rs. 28.43 million for construction andpurchasing machinery & equipment. In addition to this, an estimated sum of Rs.10.50 million is required as working capital, which should be used for purchasingday old chicks and other inputs like feed, vaccines, etc. The total project cost isestimated at Rs. 38.93 million. Projected IRR, Net Present Value and Payback of thisproject are 37%, Rs. 33,320,508 and 3.68 years respectively.

In this pre-feasibility study, all the calculations have been based on a flock size of 60,000 birds, with raising 7 flocks per year. These birds are kept in a double storyshed of 20,000 Sq. ft each. Proposed space of a bird is 0.65 Sq. ft.

PREF-105/April, 2010/Rev 1

2


2 INTRODUCTION

2.1 Project Brief

The Environmental Controlled Poultry Farm is a project of livestock sector, inwhich, the day old chicks (DOCs) are raised on high protein feed for an approximateperiod of six weeks. Broiler meat is the cheapest source of animal protein availablein the country. The time required for rearing broiler birds is lesser than that for largeanimals. The consumption of white meat is increasing due to growing healthconsciousness in the masses. Broiler farming in controlled environment is aprofitable venture due to continuous increasing demand of the white meat in themarket. Annually, seven flocks of birds will be reared on the same premises of thefarm. The broiler birds are sold to traders and the whole sellers markets in the urbanareas. Some times birds can also be sold directly to the shopkeepers in the urbanmarkets.

This unit is proposed for the rearing of broilers. These birds are marked for whitemeat purpose to the masses. The broiler chicks will be purchased from privatehatcheries. A flock of 60,000 commercial broiler chicks will be bought after every52 days. The chicks will be set in brooding on litter floor providing specificrequirement during 0-4 week and then finishing phase from 4-6 weeks. The entirespecific requirement will be met by automatic operations of temperature control,feeding and nipple drinking system, which will be monitored by the concerned staff.After marketing of broiler approximately at 6 weeks of age the broiler house will begiven 15 days for the preparation to receive the new flock. During these days, propercleaning, washing, white washing, disinfection and fumigation will be performedprior to the arrival of the new flock. During flock, strict measures for bio-securitywill be observed at the unit.

2.2 Opportunity Rationale

Poultry sector is one of the vibrant segments of agriculture industry of Pakistan. Thissector generates employment (direct/indirect) and income for about 1.5 millionpeople. Its contribution in agriculture growth is 4.81% and in Livestock growth9.84%. Poultry meat contributes 19% of the total meat production in the country.1

The existing daily availability of protein quantity per capita in Pakistan derivingfrom animal source including beef, mutton, poultry and fish combined amounts to13.6 grams. This is far less than the recommended daily dietary protein allowancefrom animal source of 27 grams, according to the World Health Organizationstandards. In our Country per capita consumption of meat is only 5 KG and 40-45eggs annually whereas developed world is consuming 41 KG meat and over 300Eggs per capita per year.2 According to Industry sources there is capacity of 5,000Environmental Control Houses in Pakistan and currently 2,500 houses are working,

3

1 Source: Economic Survey of Pakistan 2008-09. (Chapter No. 2 Page No.34)2 Source: Pakistan Poultry Association (www.ppapaknorthern.com)



out of which 75% (1,875) are in Punjab and remaining 25% (625) are in otherprovinces.

2.3 Total Project Cost

An Environmentally Controlled Poultry House with a population of 60,000 birdsestablished in a purpose-built controlled shed needs a capital investment estimated atRs. 28.43 million for construction and purchasing machinery & equipment. Inaddition to this, a sum of Rs. 10.50 million is required as working capital, whichshould be used for purchasing day old chicks and other inputs like feed, vaccines,etc. The total project cost is estimated at Rs. 38.93 million.

2.4 Proposed Capacity

In this pre-feasibility study, all the calculations have been based on a flock size of 60,000 birds, with raising 7 flocks per year. A lag time of 15 days for cleaning andfumigation of the farm is proposed.

3 CURRENT INDUSTRY STRUCTURE

The generation line of broiler comes from pure line (Strains) that make the GreatGrand Parents (GGP), which are imported. These great grand parents produce grandparents which are available in Pakistan. These grand parents produce parent stocks(Breeders) and parent stock end up in producing the final product which is broiler.Pakistan’s poultry industry is importing 100,000 Grandparents (GP) chicks annuallyfrom Australia, Holland, Germany and USA with the cost of US$100 per day-oldfemale chick. The farmers get day old broiler from hatcheries. These hatcheriesmaintain their breeder farms, or in some cases, purchase their hatching eggs frombreeder farms. These breeder farms depend on producers of parent stock.

Poultry feed mills are the major player in the poultry industry, which produce aspecific formula feed mix. Poultry feed consists of rich protein elements likesoyabean meal, canola meal, rapeseed meal, sunflower meal, feather meal and richenergy elements like grains, gluten, etc. When feed efficiency matters most you cangain the right weight of your bird. The major component of cost of production of chicken meat accounts for feed cost.

3.1 Sector Information3

Total Investment Rs. 200 Billion

No. of Hatcheries 400

No of Feed Mills 150

Grand Parents 200,000

Parents 6 Million

Broiler 600 Million

Poultry Meat 621,000 Metric Ton

4

3 Source: Pakistan Poultry Association (www.ppapaknorthern.com)



In this way, poultry sector is contributing its major share to provide animal protein tothe masses and is striving hard to fulfill the gap of animal protein in the country.

3.2 Problems faced by Poultry Industry

This important sector is facing a great problem in the form of heat stress. Pakistan isa tropical country and during summer the temperature reaches over 40°C. Even theaverage temperature remains well beyond the higher side of thermo neutral zone forthe greater part of the year. Hot and humid weather conditions coupled with manualand poor management practices increases the mortality in flocks, depresses theirgrowth and makes poultry production an unmanageable and uneconomical pursuit.Business is also adversely affected for four long months due to severe environment.During this period owner has to either continue his flock compromising with poorperformance in feed intake, growth rate, weight gain, FCR (Feed Conversion Ratio)in broilers along with mortality or he has to totally close his business to avoid allthese risks. This situation creates severe shortage of poultry meat which is thecheapest and easily available source of animal protein.

Environment controlled houses can overcome this critical situation, whichcounteracts the adverse effects of heat stress providing tunnel ventilation andenhancing the wind chill effect. These houses when equipped with highlymechanized system of automatic chain feeding and nipple drinking makes theenvironment quite conducive for poultry production.

3.3 Poultry Trend in Pakistan

Figure 3.1: Broilers' Population (1999-2009)4

Poultry (Mil lion Birds)

0

100

200

300

400

500

600

1 9 9 9

- 0 0

2 0 0 0

- 0 1

2 0 0 1

- 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0 4

2 0 0 4

- 0 5

2 0 0 5

- 0 6

2 0 0 6

- 0 7

2 0 0 7

- 0 8

2 0 0 8

- 0 9

M i l l i o n B i r d s

Poultry (Mill ion Bi rds)

It can be seen from above figure that Broilers’ Population is increasing year by year.

5

4 Source: Economic Survey of Pakistan 2008-09



The poultry meat production has showed a growing trend over the past few years.The meat production trend of chicken meat, beef and mutton from the year 1999-2009 is presented below.

Figure 3.2: Meat Production Trends55

Meat Production Trend

0

250

500

750

1000

1250

1500

1750

1 9 9 9

- 0 0

2 0 0 0

- 0 1

2 0 0 1

- 0 2

2 0 0 2

- 0 3

2 0 0 3

- 0 4

2 0 0 4

- 0 5

2 0 0 5

- 0 6

2 0 0 6

- 0 7

2 0 0 7

- 0 8

2 0 0 8

- 0 9

0 0 0 ,

T o n s

Bee f Mutton Poultry Meat

It can be seen from the above figure that from 1999-00 to 2004-05 the production of poultry meat was lower then the Mutton Meat but from 2005-06 to 2008-09 there is arise in the production of Poultry Meat. It is evident from the above figure thatPoultry has taken the share of Mutton although Beef production is always higherthen Poultry meat and Mutton.

3.4 Comparative Efficiency of Environment Control House (ECH) andConventional Open-Side House (COH)

The modern trend of environment control houses (ECH) in poultry production hasbrought a great revolution in poultry industry of Pakistan in the recent years. Thishas solved a great hurdle of heat stress in the way economical commercial poultryproduction. The ECH with evaporative cooling system, providing tunnel ventilation,giving the wind chill effect has markedly improved the broiler production system.The technology of ECH is rapidly becoming popular among broiler producers due toits following significant advantages:

1. The ECH brings down the temperature by 10°C to 15°C as compared to the COHand makes it comfortable like colder regions.

2. ECH maintains the uniform temperature round the clock providing veryconducive environment to the broilers avoiding fluctuation in the day and nighttemperature.

6

5 Source: Economic Survey of Pakistan 2008-09



3. Due to severe heat stress during four long summer months the broiler productionis stopped in COH, resultantly only 4-5 flocks are possible in such houses in ayear. However, in ECH 7 flocks are marketed without any break.

4. ECH being complete closed system has minimized the incidence of diseases,cutting down the cost of vaccine and medication of Rs. 2-3 per bird as comparedto COH.

5. Mortality in ECH has been decreased to 2 to 3 percent as compared to 10 percentin COH.

6. Installation of highly mechanized automatic feeding and nipple drinking systemin ECH has provided the solution of manual and poor management practices. 2housemen at daytime and 2 at night time are sufficient to look after a flock of 60,000 birds. In COH nearly 8-12 housemen are required to manage such a flock.

7. Equal distribution of feed and water to broilers through automatic system in ECHhas markedly improved the uniformity up to 95% as compared to 75% in COH.

8. In ECH a broiler flock is ready for market in 37 days as compared to 45 days inCOH.

9. An individual broiler in COH usually consumes 3 to 3.3 kg feed to gain 1.5 kgweight reflecting its Feed Conversion Ratio (FCR) = 2 to 2.2. Whereas thisfigure of FCR is improved to 1.8 in ECH.

All these significant features in ECH have reduced the cost of production of broilerto Rs. 7 to 8 Per Bird as compared to COH.

4 MARKETING

The marketing of chickens follows the traditional channels of distribution.Generally, broilers are distributed in the market through middlemen (Arti) andwholesalers. The role of Arti is to identify a farm and negotiate the price. In somecases, the middleman provides Day Old Chicks and other farm inputs (feed, etc.) tothe broiler farmers and then agrees to buy back the mature birds from them.

Birds are transported to the urban market and are sold to retailers. Birds are sold onlive-weight basis. The time spent in getting broilers from the farm to the retail shopis brief. Although collection and handling of birds has improved with the use of loader vehicles, but it is an established fact that greater the distance between thepoultry producer and consumer, more complicated is the marketing system includingtheir collection, handling and transportation to the consumer or processing plants.

The trick in marketing is quick availability of market information of chicken supplyand demand, which will determine the selling price.

5 FARM MANAGEMENT

Farm inputs required for a Controlled House include farm equipment (drinkers, feedtrays, brooders, and feeders) and other items like feed, vaccines & medicines, rice-husk or saw-dust, water, electricity, etc.


7


The following practices starting from arrival of the chicks to marketing of broilersshould be performed under the supervision of an expert.

1. Low temperature should be controlled with the help of diesel heaters andhigh temperature with evaporative cooling system.

2. Watering through automatic nipple drinking system.3. Feeding through automatic feeding system.4. Specific vaccination schedule should be adopted for disease control.5. Prophylactic medication should be provided according to requirement.6. Sanitation and disinfection program should be strictly followed during and

after the completion of one flock.7. Record should be maintained for feed intake, body weight, FCR and

mortality.8. Marketing of finished (ready) broilers.

6 PRODUCT

The proposed project should generate revenues from sale of chicken. Assumptionsused for the product mix are as follows:

Table 6.1: Product Mix

Product Avg. Live Weight(Kg)

Price per Kg6

Chicken 1.85 Rs. 100

Table 6.2: Production Assumptions

Number of Flocks per year 7

Number of Birds per Flock 60,000

Time required per Flock (Days) 37

Lag time required per Flock (Days) 15

Total Annual Production Capacity 420,000

Shed Space Required per Bird (Sq.ft) 0.65

Sale price growth rate 10%

Production capacity utilization 100%

7 MANPOWER REQUIREMENTS

Semi skilled workers are needed to look after the feeding, vaccination and cleaningoperations at the farm. Thirteen people should be hired to mange the operations of the automated shed. The personal needed for the farm is as under:

8

6 As per flock wise analysis, attached in Annexure 1



Table 7.1: Human Resource Requirement

Description No. Salary Per Month Salary for the Year

Supervisor 1 20,000 240,000

Housemen 5 7,500 450,000

Electrician 1 10,000 120,000

Watchmen 4 7,500 360,000

Cleaner 2 7,000 168,000

Total 13 1,338,000

8 TECHNOLOGY

8.1 Machinery & Equipment Requirement7

Various types of farm equipment are needed for feeding, drinking and handling thebirds. List of farm equipment, which should be needed, is as under:

Table 8.1: Machinery Details8

Description Unit Amount(PKR)

WATERING SYSTEM

Floor Regulator Kit with 30" Flex Standpipe 4

10' PVC Nipple pipe kit ( 20 high flow quinch nipples)with conduit and winching, 8' drop

156

End Assembly kit with 30" Flex Standpipe 4

1500Lb winch (Worm gear / split drum) 4

Winch handle for VB312 1

PVC Cement Glue – Pint 1

Installation / management manual for watering system 1

VAL-CO PAN FEEDING SYSTEM

End House Control Pan Unit - Mechanical Switch 3

1/2 HP Direct Drive Motor & Gearbox 368RPM -50HZ - 3PH - 380V

3

200 lb. Capacity Feed Hopper 3

Single Outlet Boot Assembly 3

Broiler Feeder Pan - 13" Dia, Low Profile 468

10' Tube – 4 Holes Ribbed Tube 117

1.75" Tube Clamp 96

7 List of Machinery Suppliers is attached in ANNEXTURE 2

9

8 Equipments are proposed of VALCO, USA based company.



10

Tube Hanger (for Ribbed Tube) 147

405 Roll – 1.438" O.D. Auger 3

Insulator Bracket & Tube Clamp Assembly 21

Spring for Anti-Roost Shocker Wire 21

1/16" Anti-Roost Shocker Wire 1230

1/16" Cable Clamp for Anti Roost Wire 25

Hopper Level Mechanical Switch - 3PH 1

FEEDER LINE WINCHING

390' Winching kit with 10' drops 3

Winch Handle 1

FEED BIN HOPPER AND FILL SYSTEM

30 Degree Plastic Upper Boot Transition-Green 1

3.5" HV Single Outlet Lower Boot 1

800KG Taper hopper 1

2 piece collar kit for 60 deg hopper 1

Basic Hardware Carton 1

3.5" 45 Degree Formed PVC Tube 3

PVC Cement – Quart 1

3.5" x 10" Straight PVC Tubes 7

3.5" PVC TUBE SPLICE 1

2.71" OD Auger 125

3.5" formed tube hanger 10

#2 Hanger Chain 250

S Hook ¼ x 2.25" 10

3.5" Standard Poly Drop With Shutoff 2

3.5" x 12' Translucent Downspout Tube 2

3.5" Stainless Steel Downspout Clamp 3

Poly Discharge Head - 3PH 1

3.5" HV Port & Driver Kit 1

0.75HP Direct Drive Motor & Gearbox box 368RPM- 50HZ - 3PH

1

TUNNEL VENTILATION SYSTEM

48" Hypermax GALV CONE FAN, 50 HZ, 3PH,380V

8

48" WHITE PVC SHUTTER 8

2.0 x 0.6 x 0.15 CoolPad, 45/45 FLUTE 60

MINIMUM AND TRANSITIONAL VENTILATIONSYSTEM

39" Galvanised Box Fan with 6 S/S blades 3

Adjustable Minimum Vent, With Bird Screen 42



11

3/16" Galvanised 7 x 7 cable 820

Adjustable Wall Puley Kit 4

3 1/2" Cast Iron Pulley with Eye Bolt 4

1200Lb ratchet winch 2

Right Angle Mounting Plate For Winch 2

3/16" Galv. Cable Clamp 24

3/8" x 3" Lag Screw 8

7/16" Clamp With Long Slot 42

ENVIRONMENTAL CONTROL

12 Channel GainTrac 1

Temperature Sensor 4

Relative Humidity Sensor 1

Sensor cable 2

Total Machinery Cost for 1 Shed 2,366,022

Total Machinery Cost for 2 Sheds 4,732,043

Generator Set (75 KVA) 2 1,500,000

Diesel Heaters 2 507,000

Fire Extinguisher etc. (Set) 2 84,500

Weigh Bridge 30 Ton, 8` X 16` 1 300,000

Other Equipments (Shovels, Hand Trolley, Uniforms, etc) 30,000

Total Machinery & Equipment Required 7,153,545

Erection & Installation of Machinery 118,300

Contingencies (3% of Total Machinery) 214,606

Total Machinery & Equipment Required (incl. Erection &Installation etc.)

7,486,450



9 LAND & BUILDING

Table 9.1: Land Requirement

Land Per Acre Cost Total Cost

3 Acre 1,000,000 3,000,000

Table 9.2: Building Requirement

DescriptionArea

(sq.ft.)Cost (Rs.

/ sq.ft.)Total (Rs.)

Shed Space Ground Floor (50' X 400') 20,000 350 7,000,000

Shed Space 1st Floor (50' X 400') 20,000 325 6,500,000

Building for Resident & Office PurposesGround Floor

Feed Store 500

Toilet Block 100

Admin Office 100

Areas for Corridor 150

Generator Set Room 400

Store for Vaccine & Medicines &Misc.

150

Total Area for Ground Floor 1,400 500 700,000

Changing/Store Room for Staff 100

Rooms for Staff 400

Kitchen 80

Total Area for 1st Floor 580 500 290,000

Feed Hopper Room Double Story 450 500 225,000

Water Tank 1,000 Gallon (2) 13,000 26,000

Boundary wall 7 feet height 700,000

Total Building & Infrastructure Cost 15,441,000

9.1 Recommended Mode for Acquiring Land

It is recommended that the proposed project should be started on a purchased land.

9.2 Suitable Locations

Suburban and rural areas around the major cities of the country are the suitable areasfor setting up a poultry farm. Setting up a farm at an isolated place will minimize therisk of disease.

Proximity of the farm to the city enables the farmer to have a quick communicationwith the market for the purchase of Day Old Chicks, farm inputs (feed, etc.), andselling of mature birds.


12


9.3 Other Requirements

Poultry's farming needs to be handled tactically, right from the selection of the site tothe final stage when the birds are sold. The farm should be located at a place wheretransportation of birds and feed can be handled easily.

The entrepreneur should make sure that the following things are available at the farmsite before setting up the farm:

• Electricity connection• Drinking quality water


13



14

10 PROJECT DETAIL

Table 10.1: Project Economics

Capital Investment Rs. in actuals

Land 3,000,000

Building/Infrastructure 15,441,000

Machinery & equipment 7,486,449

Furniture & fixtures 35,000

Office equipment 46,500

Pre-operating costs 2,417,200

Total Capital Costs 28,426,149

actuals

10,003,891

500,000

10,503,891

38,930,040

actuals

19,465,020

19,465,020

-

Project

I 37%

3.68

33,320,508

Working Capital Rs. in

Raw material inventory & Salaries etc (based on per/flock approx.)

Cash

Total Working Capital

Total Investment

Initial Financing Rs. in

Debt 50%

Equity 50%

Export re-finance facility

Project Returns Equity

nternal Rate of Return (IRR) 47%

Payback Period (yrs) 3.60

Net Present Value (NPV) Rs. 30,807,026


12 KEY ASSUMPTIONS

Table 12.1: Net Birds Calculation for Revenue

No. of Birds Per Flock 60,000

Excessive Birds @ 2% of Birds 9 1,200

Total Birds Per Flock 61,200

Mortality in Birds @ 3% of Total Birds 1,836

Net Birds after Mortality Per Flock 59,364

Net Birds after Mortality for the Year (ForRevenue)

415,548

Table 12.2: Net Birds Calculation for Cost of Feed

No. of Birds Amount inRs.


12 KEY ASSUMPTIONS

Table 12.1: Net Birds Calculation for Revenue

No. of Birds Per Flock 60,000

Excessive Birds @ 2% of Birds 9 1,200

Total Birds Per Flock 61,200

Mortality in Birds @ 3% of Total Birds 1,836

Net Birds after Mortality Per Flock 59,364

Net Birds after Mortality for the Year (ForRevenue)

415,548

Table 12.2: Net Birds Calculation for Cost of Feed

No. of Birds Amount inRs.

Total Mortal Birds 1,836

During first two weeks Mortal birds @ 50% of Total Mortality

918 30,524

During 3rd and 4th weeks Mortal birds @ 30%of Total Mortality

551 36,628

During 5th and 6th weeks Mortal birds @ 20%of Total Mortality

367 36,628

Cost of Feed Consumed by Mortal Birds Per Flock 1836 103,780

Cost of Feed Consumed by Remaining Birds 59,364 5,216,612

Total Cost of Feed Consumed by the Birds Per Flock 5,320,391

Total Cost of Feed Consumed by the Birds PerYear

37,242,740

Table 12.3: Expense Assumption

Administration benefits expense 3% of administration expense

Traveling expense 5% of administration expense

Communication expense 3% of administration expense

Office expenses (Misc.) 3% of administration expense

Professional fees (legal, audit, consultants, etc.) 0.05% of revenue

18

9 Excessive birds are given as per market practices.



Table 12.4: Depreciation Assumption

Depreciation Method Straight Line Method

Building depreciation rate 5%

Machinery & Equipment depreciation rate 10%

Office Equipment depreciation rate 10%

Furniture & Fixtures depreciation rate 10%

Table 12.5: COGS Details:

Description

DOC (Day Old Chicks) (Rs.) 55

Feed Conversion Ratio (FCR) i.e. Feed required to gain 1 Kg weight(Kgs.)

1.90

Feed required per 1000 birds - (50 Kgs bags) 70.3

Feed Requirement/bird/day - Kgs 0.10

Vaccination. Medication and Disinfection Cost per Bird (Rs.) 5.70

Feed Price per Bag (50 Kgs) 1,250

Cost of Feed per Kg – Rs. 25

Table 12.6: Growth Rate

Description

Sales Growth Rate 10%

CGS Growth Rate (DOC, Vaccine & Medication, Litter & Spray) 5%

Cost of Feed Growth Rate 7%

Salaries Growth Rate 10%

Electricity & Diesel Growth Rate 10%

Table 12.7: Debt Assumption

Debt Tenure 5 Years

Interest Rate on Long Term Debt 16%

Debt Payments Semi Annually

Working Capital Loan 14%

Debt Payment Monthly


19


13 ANNEXURE 1

Flock wise Calculation of Live Bird prices against Day Old Chick10

In this report it is assumed that the flock will be ready after 37 days, and 15 days forlag time. By analyzing the past data, keeping in view the flock preparation time andlag time, there is difference of 52 days for purchasing the new Day Old Chick and 37days for selling them into the market.For example if Day Old Chicks are purchased on January 01, 2008 the followingschedule of flocks will be formed.

Day OldChick

PurchasesDates

DOCRate

Live Birds SaleDates

Live BirdSale Rate

Difference

Flock 1 1-Jan-08 15 7-Feb-08 58 43

Flock 2 22-Feb-08 13 30-Mar-08 80 67

Flock 3 14-Apr-08 21 21-May-08 60 39

Flock 4 5-Jun-08 5 12-Jul-08 70 65

Flock 5 27-Jul-08 15 2-Sep-08 90 75

Flock 6 17-Sep-08 26 24-Oct-08 74 48

Flock 7 8-Nov-08 18 15-Dec-08 77 59

Flock 8 30-Dec-08 75 5-Feb-09 90 15

Flock 9 20-Feb-09 33 29-Mar-09 106 73

Flock 10 13-Apr-09 28 20-May-09 90 62

Flock 11 4-Jun-09 30 11-Jul-09 92 62

Flock 12 26-Jul-09 44 1-Sep-09 98 54

Flock 13 16-Sep-09 64 23-Oct-09 100 36

Flock 14 7-Nov-09 77 14-Dec-09 80 3

Flock 15 29-Dec-09 42 4-Feb-10 95 53

Flock 16 19-Feb-10 68 28-Mar-10 120 52

Average 35.88 86.25 50.38

From the above it can be seen that there is 50.38 Avg. price differences of Day OldChick and Live Bird Farm Gate rate. It means that from the past trend Live Birdfarm gate rate is Rs. 50.38 higher then the Day Old Chick rate that is purchasedbefore 37 days. In this report the price of Day Old Chick is taken at Rs. 55 and LiveBird Farm Gate rate at Rs. 100. So the difference of Rs. 45 has been proposedbetween Day Old Chick and Live bird farm gate rate.

20

10 As per the rates provided by Pakistan Poultry Association (PPA)



Day Old Chick Vs. Live Bird Farm Gate Rate

0

20

40

60

80

100

120

140

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Flocks

P a k R s .

DOC Rate Live Bird Farm Gate Rate

Linear (DOC Rate) Linear (Live Bird Farm Gate Rate)


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ANNEXURE 2

Table 13.1: Feed & DOC Supplier

Feed Suppliers DOC Suppliers

Supreme Feeds (Pvt.) Ltd.

Head Office: 176-Shadman 1 Lahore.Phone: +92-42-37522104-7Fax: +92-42-37573106

Big Bird Poultry Breeders (Pvt.) Ltd.

2-A,Ahmed Block, New Garden TownLahorePhone : +92-42-35835373-4Fax : +92-42-35835371

National Feeds Ltd.

171 Shadman – II Lahore.Phone: +92-42 37551405-8Fax: +92-42- 37573045

Hi-Tech Poultry Breeders (Pvt.) Ltd.

1-A, Shadman Chowk Jail Road, LahorePhone : +92-42-37564503Fax : +92-42-37564508

Asia Feed (Pvt.) Ltd.

359 Shamsabad Colony, Humayun RoadMultan.Phone: +92-61-6224414Fax: +92-61-6224414

Islamabad Poultry Breeding Co.

D-98, Satellite Town, Murree RoadRawalpindi.Phone : +92-51-4427139Fax : +92-51-4421203

Fast Poultry Feeds

12-KM Near Nai Sabzi Mandi JhangRoad, Faisalabad.Phone: +92-41-2577171-2Fax: +92-41-2517474

Jadeed Farms (Pvt.) Ltd.

6,Allied Commercial Plaza, MurreeRoad, Chandni Chowk Rawalpindi.Phone: +92-51-4851280-84Fax: +92-51-4851255

Rustum Feeds

Flat No.6, 1st Floor, United CenterShamsabad, Murree Road, RawalpindiPhone: +92-51-4455362Fax: +92-51-4847382

SB Poultries

SB PLAZA 48-C Satellite Town ,MurreeRoad, Chandni Chowk, Rawalpindi.Phone: +92-51-4457561Fax : +92-51-4511191


22


Table 13.2: Machinery Suppliers & Consultants

Machinery Suppliers Consultants

Biovet (Pvt.) Ltd.

97-A, Jail Road LahorePhone : +92-42-37534508Fax : +92-42-37534510www.biovet.com.pk

Dr. Imtiaz Alam

Mobile:+92-333-4093001

Eastern Veterinary Services

4- C Chubirji Center, Near VenusCinema, Multan Road, Lahore.Phone : +92-42-37417649-50

Dr. Ahtsham

Mobile:+92-300-6888807

B.A.Traders

H.No. 210-Riwaz Garden, Lower Mall,LahorePhone: +92-42-37225666Fax: +92-42-37323129www.batraders.com

Dr. Asim Cheema

Mobile:+92-300-4203674

Automation Masters

Office No. 1, 2nd floor, Block 2,National Business Center, ShamsabadMurree Road, Rawalpindi.Phone: +92-51-4841782-3Fax: +92-51-4451088

Dr. Asif Raza

Mobile:+92-301-8459002

PEPCO (Pvt.) Ltd.

Sialkot Bypass, Near Beacon HouseSchool, Mohala Haji Park, Gujranwala.Phone: +92-55-3204402-4Fax: +92-55-3204401

Dr. Anwar

Mobile:+92-300-4355542


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pre-feasibility study environmental controlled poultry...

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