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, Egerton Road, Lahore Tel 92 42 111 111 456, Fax 92 42 36304926-7 helpdesk@smeda.org.pk
3 1. DISCLAIMER This information memorandum is to introduce the subject matter and provide a general idea and information on the said matter. 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
Pre-Feasibility Study Broiler Farming
4 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, and production, marketing, finance and business management. The purpose of this document is to facilitate potential investors in Broiler Farm by providing them with 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. Pre-Feasibility Study Broiler Farming
5 4. INTRODUCTION TO SCHEME Prime Ministers Small Business Loans Scheme, 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 through National Bank of Pakistan (NBP) and First Women Bank Ltd. (FWBL). Small business loans with tenure upto 7 years, and a debt: equity of 90 : 10 will be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA). SMEDA has been tasked with an advisory role in the implementation of PMs scheme by providing fifty (50) updated pre-feasibilities for referencing by SME beneficiaries and participating banks to optimally utilize their financial resources. 5. EXECUTIVE SUMMARY The broiler meat is a rich source of protein and its demand is growing with every passing year. In Broiler farming, DOCs (Day Old Chicks) 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. Poultry farm management as per husbandry practices is the key success factor in this business. 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 and three persons are employed. This project is proposed to be started on 90% debt and 10% equity basis. The projects IRR, NPV and payback period are 47%, 3.9 million and 2.48 years respectively. 6. BRIEF DESCRIPTION OF PROJECT & PRODUCT The broiler farm is a project of livestock sector, in which, the Day Old Chicks (DOCs) of broiler are raised on high protein and energy feed on floor in conventional open housing system for a period of six weeks (All in-All Out system). The purpose built farm is acquired on rental basis and advance rent for one year is paid. Pre-Feasibility Study Broiler Farming
6 After six weeks, the finished broiler birds are sold on live body weight basis to traders, wholesale markets or sold directly to the shopkeepers in the urban markets. Broiler farming is a profitable venture depending on the demand of the meat in the market. Annually, six flocks of birds are raised on the farm. 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 well aware of the supply and demand of chicken in the market as the prices of chicken meat fluctuate tremendously during a year. Mortality losses should be kept below 8% by timely prophylactic measures (vaccination, medication, disinfection etc.). Diseases like New Castle Disease and Gamboro 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 the major cities of the country 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 have a quick communication with the market for the purchase of Day Old Chicks, farm inputs (feed, etc.), and selling of grown-up birds. Sub-urban and rural areas around big cities e.g. Lahore, Rawalpindi, Faisalabad, Hyderabad, Karachi, Peshawar and Quetta and other similar major cities of the country are recommended for starting a broiler farm. 10. POTENTIAL TARGET MARKET The marketing of chickens follows the 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 Pre-Feasibility Study Broiler Farming
7 etc.) to the broiler farmers under a contract to buy back the mature birds from them. Birds are transported to the urban market and are sold to retailers or market- street poultry shops on Live Body Weight basis. There are few poultry meat processing plants that process raw poultry meat into dressed chicken, quality cuts or other forms and supply in 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 consumers 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 Small 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 rented purpose built conventional housing system. A target of 60,000 broiler birds would be produced in year one. The following table shows internal rates of return and payback period. Table 1 - Project Economics Description Details Internal Rate of Return (IRR) 47% Payback Period (yrs) 2.84 Net Present Value (NPV) 3,889,756 Pre-Feasibility Study Broiler Farming
8 11.2 PROJECT FINANCING Following table provides details of the equity required and variables related to bank loan; Table 2 - Project Financing Description Details Total Equity (10%) Rs. 204,574 Bank Loan (90%) Rs. 1,841,164 Markup to the Borrower (%age/annum) 8% Tenure of the Loan (Years) 7 11.3 PROJECT COST Following requirements have been identified for operations of the proposed business. Table 3: Capital Investment for the Project Capital Investment Amount (Rs.) Machinery & Equipment 152,239 Furniture & fixtures 10,000 Office equipment 3,000 Pre-Operating Cost 145,256 Total Capital Costs 310, 495 Raw material inventory 1,395,200 Upfront building rent 240,044 Cash 100,000 Initial Working Capital 1,735,244 Total Project Cost 2,045,738 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 north-south. The chicks should be kept in a clean, dry and well-ventilated shed as this provides fresh air and carries off humidity. The entire building including litter and all equipment should be properly fumigated.
Pre-Feasibility Study Broiler Farming
9 Table 4: Space Requirement Space Requirement Space (Sq.ft) Management building 100 Shed Space 10,000 Feed Store 180 Room for workers 144 Pavement/ Boundary walls 104 Total Area 10,528
The rental cost is calculated at Rs. 20,000 per month. 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 Capacity Birds/unit Quantity Cost Rs/unit Total Rs. Brooder 500 20 1,000 20,000 Chick guard 200 50 150 7,500 Small waterers 50 182 90 16,364 Small feeding trays 50 182 90 16,364 Large automatic waterers 140 70 300 21,000 Large round feeders 130 80 300 24,000 Buckets 6 500 3,000 Manual balance 1 2,000 2,000 Exhaust fans 4 1,000 4,000 DOC shifting Boxes 10 1,800 18,000 Drum Heaters 4 2,000 8,000 Miscellaneous 1 5,000 5,000 Installation / Erection 5% 7,011 Total Machinery & Equipment
152,239
Main equipments for broiler farm are 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 Pre-Feasibility Study Broiler Farming
10 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.
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 to attain FCR of 2.2. Following table shows raw material requirement to raise 10,000 broilers per flock. 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 8500 birds per flock.
Table 7: Cost of Material Description Unit Rate (Rs./ Unit) Values (Rs. per year) Day Old Chicks (DOC) Per DOC 35 2,142,000 Total Feed required per birds @2.2 FCR Per Bird 178.2 9,088,200 Vaccination. Medication and Disinfection Per Bird 8 408,000 Litter (Saw dust or rice husk) cost per flock (Rs.) Per Flock 8,000 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 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. Pre-Feasibility Study Broiler Farming
11 Litter is spread on the floor to prevent the 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.
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 prevents 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 drop, drinking water or subcutaneous injections can also be mixed in the water and also 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 1 .
Table 8: Vaccination Schedule for Broiler Birds
1 As per recommended by Poultry Research Institute (PRI), Rawalpindi Age in Days Disease Vaccination Procedure 1 day Infectious Bronchitis Disease (IBD) IB-Vaccine Aerial spray or eye drops 5 days Newcastle Disease (ND) ND-Vaccine (Lasota) Eye drops 8 days Infectious Bursal Disease (IBD) IBD Vaccine (Gamboro) Eye drops 17-18 days Hydro Pericardium Disease HPS- Hydro Vaccine Sub-cut injection 21-22 days Infectious Bursal Disease (IBD) IBD Vaccine (Gamboro) In drinking water 25-26 days IBD+ND IBD+ND Vaccines In drinking water Pre-Feasibility Study Broiler Farming
12 11.8 HUMAN RESOURCE REQUIREMENT Table 9: Human Resource Requirement Description No. of Employees Monthly Salary (Rs.) Owner / Farm Manager 1 30,000 Farm Labor 2 24,000 Total Staff 3 54,000
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
Table 10: Revenue Generation Description Unit Sale Price Rs. First Year Production First Year Revenue Rs. Broiler Birds of 1.8 kgs. Live Body Weight after 6 weeks Per bird 145 51,000 13,311, 000 Other revenues(litter, empty feed bags etc) Per bird 8 51,000 408,000 Total Revenue 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 for rest of the area. 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. Pre-Feasibility Study Broiler Farming
Machinery & Equipment Suppliers Consultants Biovet (Pvt.) Ltd. 97-A, Jail Road Lahore Phone : +92-42-37534508 Fax : +92-42-37534510 www.biovet.com.pk Prof. Dr. M. Akram Uni. Of Veterinary and Animal Sciences (UVAS), Out Fall Road, Lahore Mobile: +92-300-4238270 Pre-Feasibility Study Broiler Farming
14 Eastern Veterinary Services 4- C Chubirji 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 Facultay of Animal Husbandry, University of Agriculture, Faisalabad Ph: +92-41-9920161-70
Statement Summaries Broiler Farm Balance Sheet Rs. in actuals Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Assets Current assets Cash & Bank 422,998 1,308,872 1,443,527 1,786,917 2,487,888 3,128,986 3,753,685 4,346,250 5,232,476 6,040,425 15,907,700 Accounts receivable - - - - - - - - - - - Raw material inventory 1,292,242 1,638,047 2,072,102 2,616,222 3,165,628 3,830,410 4,634,797 5,608,104 6,785,806 8,210,825 - Pre-paid building rent 20,004 22,004 24,204 26,625 29,287 32,216 35,438 38,981 42,880 47,168 - Total Current Assets 1,735,244 2,968,923 3,539,833 4,429,764 5,682,804 6,991,613 8,423,919 9,993,335 12,061,161 14,298,418 15,907,700 Fixed assets Machinery & equipment 152,239 137,015 121,791 106,567 91,343 76,119 60,895 45,672 30,448 15,224 (0) Furniture & fixtures 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - Office equipment 3,000 2,700 2,400 2,100 1,800 1,500 1,200 900 600 300 - Total Fixed Assets 165,239 148,715 132,191 115,667 99,143 82,619 66,095 49,572 33,048 16,524 (0) Intangible assets Pre-operation costs 145,256 116,205 87,154 58,102 29,051 - - - - - - Total Intangible Assets 145,256 116,205 87,154 58,102 29,051 - - - - - - TOTAL ASSETS 2,045,738 3,233,842 3,759,178 4,603,533 5,810,999 7,074,232 8,490,015 10,042,907 12,094,209 14,314,942 15,907,700 Liabilities & Shareholders' Equity Current liabilities Accounts payable - 1,091,198 1,273,034 1,483,583 1,716,704 1,916,995 2,143,325 2,399,562 2,690,221 3,020,594 2,580,305 Total Current Liabilities - 1,091,198 1,273,034 1,483,583 1,716,704 1,916,995 2,143,325 2,399,562 2,690,221 3,020,594 2,580,305 Other liabilities Long term debt 1,841,164 1,636,352 1,414,656 1,174,685 914,933 633,769 329,428 - - - - Total Long Term Liabilities 1,841,164 1,636,352 1,414,656 1,174,685 914,933 633,769 329,428 - - - - Shareholders' equity Paid-up capital 204,574 204,574 204,574 204,574 204,574 204,574 204,574 204,574 204,574 204,574 204,574 Retained earnings - 301,718 866,914 1,740,692 2,974,788 4,318,894 5,812,687 7,438,771 9,199,414 11,089,773 13,122,821 Total Equity 204,574 506,292 1,071,488 1,945,265 3,179,362 4,523,468 6,017,261 7,643,345 9,403,988 11,294,347 13,327,395 TOTAL CAPITAL AND LIABILITIES 2,045,738 3,233,842 3,759,178 4,603,533 5,810,999 7,074,232 8,490,015 10,042,907 12,094,209 14,314,942 15,907,700 Pre-Feasibility Study Broiler Farming
17 13.3 CASH FLOW STATEMENT
Statement Summaries Broiler Farm Cash Flow Statement Rs. in actuals Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Operating activities Net profit - 301,718 565,195 873,778 1,234,096 1,344,107 1,493,793 1,626,084 1,760,643 1,890,359 2,033,048 Add: depreciation expense - 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 amortization expense - 29,051 29,051 29,051 29,051 29,051 - - - - - Accounts receivable - - - - - - - - - - - Raw material inventory (1,292,242) (345,805) (434,055) (544,120) (549,407) (664,782) (804,386) (973,307) (1,177,702) (1,425,019) 8,210,825 Pre-paid building rent (20,004) (2,000) (2,200) (2,420) (2,662) (2,929) (3,222) (3,544) (3,898) (4,288) 47,168 Accounts payable - 1,091,198 181,836 210,549 233,121 200,291 226,331 256,236 290,660 330,373 (440,289) Cash provided by operations (1,312,246) 1,090,687 356,351 583,361 960,723 922,262 929,039 921,993 886,226 807,949 9,867,275 Financing activities Change in long term debt 1,841,164 (204,813) (221,696) (239,971) (259,752) (281,164) (304,341) (329,428) - - - Issuance of shares 204,574 - - - - - - - - - - Cash provided by / (used for) financing activities 2,045,738 (204,813) (221,696) (239,971) (259,752) (281,164) (304,341) (329,428) - - - Investing activities Capital expenditure (310,495) - - - - - - - - - - Cash (used for) / provided by investing activities (310,495) - - - - - - - - - - NET CASH 422,998 885,874 134,655 343,390 700,971 641,098 624,698 592,565 886,226 807,949 9,867,275 Pre-Feasibility Study Broiler Farming
18 13.4 USEFUL PROJECT MANAGEMENT TIPS Technology List of Machinery & Equipment 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 overestimated or installed in excess 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 products quality standards need to be defined on the packaging and a system to check them instituted, this improves credibility Marketing Product Development & Packaging: Expert's help may be engaged for product/service and packaging design & development Ads & P.O.S. Promotion: Business promotion and dissemination through banners and launch events is highly recommended. Product broachers from good quality service providers Sales & Distribution Network: Expert's advise and distribution agreements are required with. 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 List of Human Resource Adequacy & Competencies: Skilled and experienced staff should be considered an investment even to the extent of offering share in business profit. 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 route to success. Pre-Feasibility Study Broiler Farming
19 Least cost options for Training and Skill Development (T&SD) may be linked with compensation benefits and awards. 13.5 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 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 Security 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, Shahra- e-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. 051- 9203966, 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 Pre-Feasibility Study Broiler Farming
20 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 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: 051- 9290162, 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 Pre-Feasibility Study Broiler Farming
21 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
14. KEY ASSUMPTIONS Table -1: Production Assumptions Production Capacity Utilization 85% Capacity Utilization Growth Rate 5% Maximum Capacity Utilization 100% Number of Birds per Flock 10,000 Number of Flocks per Year 6 Mortality Rate 8% Annual Production (birds) 60,000 Time required per Flock (days) 42 Lag time between the Flock (weeks) 2 Average weight per bird (kg) 1.8 Table 2: Revenue Assumptions Sales price( in Rs/kg Live Body Weight) 145 Sales price growth rate 7% Table 3: Expense Assumptions DOC (Day Old Chicks) in Rs. 35 Feed Conversion Ratio 2.20 Average Feed Requirement/bird/day (kg) 0.09 Cost of feed (in Rs/kg) 45 Feed Cost per bird (Rs.) 178.2 Cost of feed bag (Rs. per 50 Kgs Bag) 2,250 Vaccination Cost per bird in Rs. 8 Litter Cost per flock 6,000
Pre-Feasibility Study Broiler Farming
22 Table 5: Financial Assumptions Project life (Years) 10 Debt Equity 90%-10% Interest rate on long-term debt 8% Interest rate on short term debt 8% Debt tenure (Years) 7 Debt payments per year 12
Mastering Financial Analysis: Techniques and Strategies for Financial Professionals: Expert Advice for Professionals: A Series on Industry-Specific Guidance, #1