Pre-Feasibility Study

(Layer 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

REGIONAL OFFICE
Sindh

REGIONAL OFFICE
Khyber Pakhtunkhwa

REGIONAL OFFICE
Balochistan

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

5th Floor, Bahria

Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 35610572
helpdesk-khi@smeda.org.pk

Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 111-111-456
Fax: (091) 5286908
helpdesk-pew@smeda.org.pk

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 ..................................................................... 5
7. CRITICAL FACTORS ......................................................................................................................... 5
8. INSTALLED & OPERATIONAL CAPACITIES .............................................................................. 5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT .................................................................. 6
10. POTENTIAL TARGET MARKETS ................................................................................................ 6
11. LAYER PRODUCTION PROCESS ................................................................................................. 6
11.1
11.2
11.3
11.4
11.5
11.6
11.7

SELECTION OF DAY OLD CHICKS ................................................................................................. 6

PRE-BROODING MANAGEMENT ................................................................................................... 6
BROODING, REARING AND LAYING MANAGEMENT ..................................................................... 7
FEEDING ....................................................................................................................................... 7
DISEASE PREVENTION AND CONTROL .......................................................................................... 8
HOUSE TEMPERATURE AND VENTILATION ................................................................................... 9
CULLING OF UNPRODUCTIVE LAYERS .......................................................................................... 9

12. PROJECT COST SUMMARY.......................................................................................................... 9

12.1.
12.2.
12.3.
12.4.
12.5.
12.6.
12.7.
12.8.
12.9.
12.10.

PROJECT ECONOMICS ................................................................................................................... 9

PROJECT FINANCING .................................................................................................................. 10
PROJECT COST ........................................................................................................................... 10
SPACE REQUIREMENT ................................................................................................................ 11
MACHINERY & EQUIPMENT ....................................................................................................... 11
FURNITURE AND FIXTURE .......................................................................................................... 11
RAW MATERIAL REQUIREMENTS ............................................................................................... 11
HUMAN RESOURCE REQUIREMENT ............................................................................................ 12
REVENUE GENERATION.............................................................................................................. 12
OTHER COSTS ............................................................................................................................ 12

13. CONTACT DETAILS OF SUPPLIERS AND CONSULTANTS ................................................ 13

14. ANNEXURE...................................................................................................................................... 14
14.1.
14.2.
14.3.
14.4.
14.5.

INCOME STATEMENT .................................................................................................................. 14

CASH FLOW STATEMENT ........................................................................................................... 15
BALANCE SHEET ........................................................................................................................ 16
USEFUL PROJECT MANAGEMENT TIPS ....................................................................................... 17
USEFUL LINKS............................................................................................................................ 18

15. KEY ASSUMPTIONS ...................................................................................................................... 19

Pre-Feasibility Study

Layer Farm

1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the said 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

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Pre-Feasibility Study

Layer Farm

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 layer farming
by providing them a general understanding of the business with 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 hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business
development services is also offered to 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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Pre-Feasibility Study

Layer Farm

4. INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan 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 by the
National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Small business loans up to 2 million with tenure up to 8 years, inclusive of 01
year grace period 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).
5. EXECUTIVE SUMMARY
Commercial layer farms contribute about 70% towards total egg production in
Pakistan, whereas the remaining 30% comes from rural poultry. The Day Old
Chicks (DOCs) of layer are procured from hatcheries and breeder companies.
These are brooded and reared for a period of 6 months after which, they start
laying eggs for a period of next 12 months. On an average, one hen lays about
300-350 eggs. The price of egg varies with demand and supply and is generally
higher in winter. As these birds stop laying or feed-efficiency drops, the layers
are culled and sold in market. The selling price of these birds is determined on
live body weight basis.
Layer farm management in line with best husbandry practices is vital for the
success of this business. All farm operations would be done with strict
compliance to recommended husbandry practices including standard hygiene,
proper temperature, humidity, vaccination, medication, feeding and lighting
management.
A conventional farm of 5,000 layers is suggested in this pre-feasibility study,
which may be started in a rented, purpose built building / shed requiring a total
estimated investment of Rs 2.22 million. This includes a capital investment of Rs.
0.20 million and working capital of Rs. 2.02 millions. The Net Present Value
(NPV) of the project is around Rs. 24.17 million with an Internal Rate of Return
(IRR) of 84% and a payback period of 2.12 years. The project will generate direct
employment for 02 persons. Higher return on investment and a steady growth of
business is expected with the entrepreneur having some prior experience in the
related field of business.

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Pre-Feasibility Study

Layer Farm

6. BRIEF DESCRIPTION OF PROJECT & PRODUCT

In the proposed layer farm, the Day Old Chicks (DOCs) of commercial layer
strain (e.g. Hy-Line W-36) are brooded and reared on specially formulated feed
for a period of six months. After that, layers start laying eggs with changed
feeding regime for next 12 months. Purpose built conventional farm having shed
space of 8,750 sq. ft. will be acquired on rental basis. On an average, one bird
lays about 300-350 eggs, after which, the layers are culled and sold in the market
on live body weight basis to traders and wholesalers.
One flock is housed for 1.5 years at the same farm. In this pre-feasibility, a layer
farm of 5,000 layers is recommended. The layer is ready to lay eggs in October /
November. The demand for eggs increases during winter season, hence fetching
higher prices.
Eggs are packed in paper or plastic trays, sold in bulk in wholesale markets.
Losses in eggs business can be minimized by following careful transportation
methods as eggs are prone to damage during transportation. In this study,
estimated average price of eggs is taken as Rs. 100 per dozen.

7. CRITICAL FACTORS

Background knowledge and related experience of the entrepreneur in

commercial layer farm operations.

Application of good poultry husbandry practices such as timely feeding,

watering, lighting, vaccination, medication, temperature / humidity control
and culling of uneconomical layers to ensure flocks best performance and
higher efficiency in disease-free environment.

Awareness of supply and demand of eggs in the market. The farm gate
price of eggs is usually higher in winter as compared to summer.

Efficient marketing of the project and bulk supply to wholesalers.

8. INSTALLED & OPERATIONAL CAPACITY

In the proposed study, all calculations have been based on revolving flock size of
5,000 layers, kept for 1.5 years. There will be a lag time of one month for
cleaning and disinfection and necessary arrangements for preparation of next
flock. The flock will produce 10,287 dozen eggs per month.

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Pre-Feasibility Study

Layer Farm

9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Rural and peri-urban and rural areas around big cities e.g. Rawalpindi, Lahore,
Multan, Karachi, Hyderabad, Sukkur, Quetta, Ziarat, Peshawar, Charsadda,
Abbotabad and Swat are recommended for starting a layer farm. Setting up a
farm at an isolated place will minimize the risk of diseases. Proximity of farms to
cities enables the farmer to develop easy links with the market for the purchase
of farm inputs and for selling eggs and culled birds.

10. POTENTIAL TARGET MARKETS

Layer farming is a profitable venture. Sale is channelized through dealer
contracts on farm gate basis or supplied in bulk to the wholesalers or bulk
buyers. There are bakeries and confectioneries that need daily supply of eggs for
their production. The wholesale and retail price of eggs and poultry meat is
determined daily on demand and supply dynamics.

11. LAYER PRODUCTION PROCESS

Layer farming must begin with a clean and sanitized shed. The layout of open
conventional shed should be north-south to ensure clean, dry and well-ventilated
shed, as this provides fresh air and carries off humidity. The shed should remain
empty at least two weeks after disinfection and fumigation to control disease
outbreaks through removal of debris and exposure of surfaces to fumigants.
11.1

Selection of Day Old Chicks

For the proposed project, strain of White Leghorn breed i.e. Hy-Line W-36 is
recommended as it is considered the most efficient layer with excellent livability
and good egg production capacity. It lays dozens of good quality and strong
shelled eggs at minimum feed intake. The DOCs procured from reliable
hatcheries should be of uniform size, active, alert and bright eyed. The skin of
shanks of healthy chicks should be bright and shiny.
11.2

Pre-Brooding Management

Cleaning and disinfection of equipment, building interior and attached areas is

advised. 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 for cleaning. The
equipment requires regular cleaning with water.

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Pre-Feasibility Study

Farm is sanitized by fumigation with Formaldehyde gas, produced by putting

Formalin on Potassium Permanganate. The rooms should be vacant and
sealed for 30 minutes after fumigation so that the gas infiltrates in every
corner.
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 layer.
Ensure proper ventilation and temperature.
Remove all leftover feed from bins, hoppers and troughs.
Place rodenticide out of the reach of DOCs.
Check regularly the availability of water and feed for chicks.
11.3

Layer Farm

Brooding, Rearing and Laying Management

The DOCs should arrive at the farm early in the morning so that the
management has a full day to observe them for any issues.
Flushing should be done by offering 250 gm glucose per gallon of water as
readily available source of energy and to clear the digestive tract.
The brooder is an essential part of layer farming, also known as, Artificial
Mother as it provides necessary heat to DOCs shortly after arrival till 7 days
of age. The temperature for brooders should be 99 oF, encircled by chick
guard sheets.
Keep light at high intensity 2022 hours per day for the first week. Closely
regulate temperature of shed.
Starter feed should be offered as a source of energy to chicks as it is easily
digestible and a good source of energy.
During the first six weeks, offer feed twice a day. After six weeks, feed
consumption and body weights should be monitored against the given charts
provided by DOCs suppliers.
Follow the recommended vaccination schedule.
Remove dead birds immediately and dispose them properly. Send the dead
birds to lab for postmortem examination if there is excessive mortality.
At laying stage, properly placed nests are required so that layers could
produce eggs without any hindrance.
11.4

Feeding

Feeding requirement during laying period depends on the rate of egg production
and the body weight of layers. The birds require more feed in winter and less

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Pre-Feasibility Study

Layer Farm

feed in summer. During summer months, the flock is under severe stress and
therefore, it is suggested to temporarily change the feed to a higher level of
protein content. The actual feed consumption may be influenced by several
factors as follows;

Health, physical condition and body weight of the bird.

Rate of egg production.
Weather condition.
Feed quality such as protein and energy contents of feed.

The layers are fed following types of feed;

Chick Starter (Mash or crumb form): fed for one month

Grower (Mash or crumb form): fed from second to sixth month
Layer (Mash/ crumbs/ pallet): fed during laying period

Feeding three or four times daily will stimulate feed intake and prevents wastage.
There are many feed mills that prepare above mentioned formulated feed.
11.5

Disease Prevention and Control

Use effective medicines to prevent coccidiosis.

Keep feed free from aflatoxins.
Follow bio-security plans by not allowing visitors or attendants to enter
sheds without disinfected boots and clothes.
Start daily farm operations from youngest group of birds.
Mortality losses should be kept below 5% by timely prophylactic measures
(vaccination, medication, disinfection etc.). The New Castle Disease, Egg
Drop Syndrome and Avian Influenza are extremely dangerous diseases
and can eradicate the entire flock. Following is a typical vaccination
schedule for layers1;
Table 1: Vaccination Schedule for Layers

Age in Days
0
1 to 2
5 to 7
9
16
1

Disease

Vaccination Procedure

Maerks Disease
IB (H 120)

Sub Cut (At hatchery)

Eye drop/ aerial spray

New Castle Disease

Infectious Bursal Disease (IBD)
Gumboro
Infectious Bursal Disease (IBD)

Eye drop/ aerial spray

Eye drop/ aerial spray
Eye drop/ aerial spray

As per recommendions of Poultry Research Institute (PRI), Rawalpindi

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Pre-Feasibility Study

18
22
28
42
55
60
65
90
105
110
118 to 120

Gumboro
Hydro Pericardium
ND+IB
IB
Fowl Pox
ILT
Avian Influenza
ND+IB
Avian Influenza
Avian Influenza
ND+IB
EDS+IB

Layer Farm

Sub Cut
Eye drop
Eye drop
Sub Cut (Wing web)
Eye drop
Sub Cut
Sub Cut
Sub Cut/IM
Sub Cut/IM
Drinking Water
Sub-cut/ Drinking Water

Sub cut: Sub Cutaneous (under skin), IM: Intra Muscular

11.6

House Temperature and Ventilation

The temperature in shed after brooding stage should be maintained at 75 o F.

Proper ventilation is necessary to maintain temperature, relative humidity,
Oxygen, CO2 and Ammonia at recommended levels. The air movement
requirements are best determined by observing bird comfort, litter condition and
odor build up. If necessary, exhaust fan may be installed.
11.7

Culling of Unproductive layers

Layers with poor efficiency and performance should be culled to minimize the
cost of production. The birds that have laid well for short period but have stopped
laying for some reason should be culled. The sale price of culled birds in this
study is taken as Rs. 160/ bird according to market sources.
12. PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial
viability of layer farming. 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.
12.1.

Project Economics

All the figures in this financial model have been calculated for a flock of 5,000
layer birds kept for 1.5 years at rented premises. It is assumed that one layer
would be able to produce 315 eggs per laying period of one year, with an

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Pre-Feasibility Study

Layer Farm

estimated 1% loss through breakage, resulting in availability of 312 eggs per bird
per year.
The following table shows Internal Rate of Return, payback period and Net
Present Value;
Table 2: Project Economics
Description
Internal Rate of Return (IRR)
Payback Period (Yrs)
Net Present Value (NPV)

Details
84%
2.12
24,170,783

Return on investment and its profitability are highly dependent on the

entrepreneur having some practical knowledge about layer farming.
12.2.

Project Financing

Following table provides details of the equity required and variables related to
bank loan;
Table 3: Project Financing
Description
Total Equity (10%)
Bank Loan (90%)
Markup to the Borrower (%age/annum)
Tenure of the Loan (Years)
Grace Period (Year)
12.3.

Details
Rs.222, 170
Rs. 1,999,528
8%
8
1

Project Cost

Following requirements have been identified for operations of the proposed

business.
Table 4: Capital Investment for the Project
Capital Investment
Amount (Rs.)
Machinery & equipment
Furniture & fixtures
Total Capital Costs
Raw material inventory (incl. cost of DOCs)

182,500
20,000
202,500
1,861,198

Upfront building rent

90,000

Cash

68,000

Initial Working Capital

2,019,198

Total Project Cost

2,221,698

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Pre-Feasibility Study

12.4.

Layer Farm

Space Requirement

Following table shows calculations for project space requirements;

Table 5: Farm Space Requirements
Description
Area (Sq. ft)
Shed space

8,750

Feed store

64

Room for workers

144

Pavement/ Boundary walls

510

Total Area

9,468

Monthly rent for the premises is Rs. 15,000.

12.5.

Machinery & Equipment

Following table provides list of machinery and equipment for layer farm;
Table 6: Farm Machinery Details
Capacity
Cost
Total Cost
Description
Quantity
Birds/unit
Rs./unit
Rs.
Brooders

500

10

3,500

35,000

Water drinkers

100

100

300

30,000

Feeders

30-35

150

250

37,500

Nests

20-25

200

200

40,000

Water tank (500 Liters)

8,000

8,000

Water pump

20,000

20,000

50

12,000

Plastic egg trays

240

Total Machinery & Equipment

12.6.

182,500

Furniture and Fixture

Following furniture will be required at the farm;

Table 7: Furniture Costs
Description
Unit
Furniture (Tables, chairs etc.)
Lump sum
Total Furniture & Fixtures
12.7.

Total Cost (Rs)

20,000
20,000

Raw Material Requirements

Following table shows raw material requirements for proposed project.

Description

Table 8: Cost of Material

Unit
Quantity

Rate

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Cost
11

Pre-Feasibility Study

Layer Farm

(Rs./ Unit)
Day Old Chicks

Per DOC

Total feed cost

Bags

5,000

70

(Rs.)
year-1
350,000

2,182.5

2,100

4,583,250

5,000

20

100,000

Vaccination, medication and

disinfection

Per Bird

Litter (saw dust or rice husk)

Per Flock

25,000

25,000

Spray cost

Per Flock

20,000

20,000

Brooding cost

Per Flock

75,000

75,000

Direct labour per annum

Per month

22,000

264,000

Electricity*

Per bird

114,000

2.00

5,531,250

Total

* Electricity cost is estimated at Rs. 2.0 per bird per month for 4,750 birds (after 5% mortality)

12.8.

Human Resource Requirement

Two semi-skilled workers are needed to look after the general poultry husbandry
operations. Salaries are increased at 15% annually.
Table 9: Farm Staff Requirements
Description

No.

Farm Manager/Owner
Farm Labour
Total Staff
12.9.

1
1
2

Monthly Salary
(Rs)
12,000
10,000

Total Annual
Salary (Rs)
1,44,000
1,20,000
2,64,000

Revenue Generation

The revenue in first year would be generated at 6th month when birds start to lay.
Description

Eggs
Total Revenue
12.10.

Table 10: Revenues Generation

Unit
Sale Price
First Year
Rs./Dozen
Production
of eggs
(Dozens)
Dozen
100
61,720

Revenue in Year 1
(Rs.)
6,172,031
6,172,031

Other Costs

An essential cost to be borne by the farmer is electricity expense which is

estimated to be Rs. 2.0 per bird. Fixed electricity cost for the rest of the area is
estimated to be Rs. 1,000 per month.

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Pre-Feasibility Study

Layer Farm

13. CONTACT DETAILS OF SUPPLIERS AND CONSULTANTS

Table 11: Contacts of Suppliers and Consultants
Machinery & Equipment Suppliers
Biovet (Pvt.) Ltd.
97-A, Jail Road Lahore
Ph: 042-37534508

Eastern Veterinary Services

4- C Chuburji Center, Near Venus Cinema,
Multan Road, Lahore.
Ph: 042-37417649-50
DOC Suppliers

C & K Poultry Equipments, Kamboh

Brothers Poultry, Grain Market,
Samundari.
Ph: 041-3420581
Poultry Feed Suppliers

SB Chicks
48-C, Satellite Town, Near Chandni Chowk,
Rawalpindi

Ph: 051-4457 551-60

Consultants

Supreme Feeds (Pvt.) Ltd.

Head Office: 176-Shadman 1, Lahore.
Ph: 042-37522104-7

Prof. Dr. M. Akram

Department of Poultry Production,
Uni. Of Veterinary and Animal Sciences
(UVAS), Lahore
Ph: 042-99211461

Ghazi Brothers
Ghazi House, D-35, KDA Scheme, No. 1,
Miran Muhammad Shah Road, Karachi
Ph: 021-111250365

Dr. Abdul Rehman

Director,
Poultry Research Institute, Shamsabad,
Murree Road, Rawalpindi
Ph: 051-9290163-5

Asia Feed (Pvt.) Ltd.

359 Shamsabad Colony, Humayun Road
Multan.
Ph: 061-6224414

Dr. Fawwad Ahmad

Faculty of Animal Husbandry, University of
Agriculture, Faisalabad
Ph: 041-9920161-70

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13

Pre-Feasibility Study

Layer Farm

14. ANNEXURE
14.1.

Income Statement

Statement Summaries

SMEDA

Income Statement
Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Rs. in actuals
Year 10

6,172,031
5,531,250
640,781

7,831,075
5,756,775
2,074,300

14,194,026
6,976,581
7,217,445

8,378,091
6,836,414
1,541,677

14,239,367
8,136,819
6,102,548

16,315,842
8,949,535
7,366,307

11,770,614
9,208,424
2,562,190

24,553,417
11,477,406
13,076,011

17,828,676
11,482,246
6,346,430

16,536,865
12,422,427
4,114,438

180,000
24,000
20,250
224,250
416,531

198,000
27,600
20,250
245,850
1,828,450

217,800
31,740
20,250
269,790
6,947,655

239,580
36,501
20,250
296,331
1,245,346

263,538
41,976
20,250
325,764
5,776,784

289,892
48,273
20,250
358,414
7,007,892

318,881
55,513
20,250
394,644
2,167,545

350,769
63,840
20,250
434,860
12,641,151

385,846
73,417
20,250
479,513
5,866,917

424,431
84,429
20,250
529,110
3,585,328

Earnings Before Interest & Taxes

416,531

1,828,450

6,947,655

1,245,346

5,776,784

7,007,892

2,167,545

12,641,151

5,866,917

3,585,328

Interest expense
Earnings Before Tax

165,960
250,571

151,938
1,676,512

133,508
6,814,146

113,549
1,131,796

91,934
5,684,850

68,524
6,939,369

43,171
2,124,374

15,714
12,625,437

5,866,917

3,585,328

Tax
NET PROFIT/(LOSS) AFTER TAX

250,571

1,676,512

6,814,146

1,131,796

5,684,850

6,939,369

2,124,374

12,625,437

5,866,917

3,585,328

Balance brought forward

Total profit available for appropriation
Dividend
Balance carried forward

250,571
250,571

250,571
1,927,084
1,927,084

1,927,084
8,741,230
8,741,230

8,741,230
9,873,026
9,873,026

9,873,026
15,557,876
15,557,876

15,557,876
22,497,245
22,497,245

22,497,245
24,621,619
24,621,619

24,621,619
37,247,056
37,247,056

37,247,056
43,113,974
43,113,974

43,113,974
46,699,302
46,699,302

Revenue
Cost of goods sold
Gross Profit
General administration
& selling expenses
p
Rental expense
Utilities gexpense
p
(p
, ,
Depreciation expense
Amortization expense
Subtotal
Operating Income

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Pre-Feasibility Study

14.2.

Layer Farm

Cash Flow Statement

Statement Summaries

SMEDA

Cash Flow Statement

Year 0
Operating activities
Net profit
Add: depreciation expense
amortization expense
Raw material inventory
Pre-paid building rent
Pre-paid lease interest
Accounts payable
Other liabilities
Cash provided by operations
Financing activities
Change in long term debt
Change in short term debt
Issuance of shares
Purchase of (treasury) shares
Cash provided by / (used for) financing act
Investing activities
Capital expenditure
Acquisitions
Cash (used for) / provided by investing acti

(1,365,948)
(15,000)
(1,380,948)

1,999,528
222,170
2,221,698

(202,500)
(202,500)

Year 1

250,571
20,250
(175,680)
(1,500)
17,054
110,696

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

1,676,512
20,250
(744,099)
(1,650)
2,372
953,386

6,814,146
20,250
97,803
(1,815)
4,312
6,934,696

1,131,796
20,250
(710,565)
(1,997)
(357)
439,128

5,684,850
20,250
(948,260)
(2,196)
5,753
4,760,397

6,939,369
20,250
(29,291)
(2,416)
3,920
6,931,832

2,124,374
20,250
(1,555,371)
(2,657)
2,377
588,973

12,625,437
20,250
(1,024,502)
(2,923)
8,436
11,626,698

(222,043)
(222,043)

(240,472)
(240,472)

(260,432)
(260,432)

(282,047)
(282,047)

(305,457)
(305,457)

(330,810)
(330,810)

(358,267)
(358,267)

Year 9

5,866,917
20,250
(410,730)
(3,215)
3,235
5,476,457

Rs. in actuals
Year 10

3,585,328
20,250
6,866,643
35,369
(19,748)
10,487,842

NET CASH

638,250

110,696

731,343

6,694,224

178,696

4,478,349

6,626,375

258,163

11,268,431

5,476,457

10,487,842

Cash balance brought forward

Cash available for appropriation
Dividend
Cash carried forward

638,250
638,250

638,250
748,946
748,946

748,946
1,480,288
1,480,288

1,480,288
8,174,512
8,174,512

8,174,512
8,353,208
8,353,208

8,353,208
12,831,558
12,831,558

12,831,558
19,457,933
19,457,933

19,457,933
19,716,096
19,716,096

19,716,096
30,984,527
30,984,527

30,984,527
36,460,984
36,460,984

36,460,984
46,948,826
46,948,826

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Pre-Feasibility Study

14.3.

Layer Farm

Balance Sheet

Statement Summaries

SMEDA

Balance Sheet

Assets
Current assets
Cash & Bank
Accounts receivable
Raw material inventory
Pre-paid annual land lease
Pre-paid building rent
Pre-paid lease interest
Total Current Assets
Fixed assets
Building/Infrastructure
Machinery & equipment
Furniture & fixtures
Office vehicles
Office equipment
Total Fixed Assets
Intangible assets
Pre-operation costs
Total Intangible Assets
TOTAL ASSETS
Liabilities & Shareholders' Equity
Current liabilities
Accounts payable
Export re-finance facility
Short term debt
Other liabilities
Total Current Liabilities

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Rs. in actuals
Year 10

638,250
1,365,948
15,000
2,019,198

748,946
1,541,628
16,500
2,307,074

1,480,288
2,285,727
18,150
3,784,165

8,174,512
2,187,924
19,965
10,382,401

8,353,208
2,898,489
21,962
11,273,659

12,831,558
3,846,750
24,158
16,702,465

19,457,933
3,876,041
26,573
23,360,547

19,716,096
5,431,412
29,231
25,176,738

30,984,527
6,455,913
32,154
37,472,594

36,460,984
6,866,643
35,369
43,362,996

46,948,826
46,948,826

182,500
20,000
202,500

164,250
18,000
182,250

146,000
16,000
162,000

127,750
14,000
141,750

109,500
12,000
121,500

91,250
10,000
101,250

73,000
8,000
81,000

54,750
6,000
60,750

36,500
4,000
40,500

18,250
2,000
20,250

2,221,698

2,489,324

3,946,165

10,524,151

11,395,159

16,803,715

23,441,547

25,237,488

37,513,094

43,383,246

46,948,826

17,054
17,054

19,427
19,427

23,739
23,739

23,382
23,382

29,135
29,135

33,056
33,056

35,433
35,433

43,868
43,868

47,103
47,103

27,355
27,355

Other liabilities
p y
Long term debt
Total Long Term Liabilities

1,999,528
1,999,528

1,999,528
1,999,528

1,777,485
1,777,485

1,537,013
1,537,013

1,276,581
1,276,581

994,534
994,534

689,077
689,077

358,267
358,267

Shareholders' equity
Paid-up capital
Retained earnings
Total Equity
TOTAL CAPITAL AND LIABILITIES

222,170
222,170
2,221,698

222,170
250,571
472,741
2,489,324

222,170
1,927,084
2,149,253
3,946,165

222,170
8,741,230
8,963,400
10,524,151

222,170
9,873,026
10,095,196
11,395,159

222,170
15,557,876
15,780,046
16,803,715

222,170
22,497,245
22,719,415
23,441,547

222,170
24,621,619
24,843,789
25,237,488

Note: Total assets value will differ from project cost due to first installment of leases paid at the start of year 0

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16

222,170
37,247,056
37,469,226
37,513,094

222,170
43,113,974
43,336,143
43,383,246

222,170
46,699,302
46,921,472
46,948,826

Pre-Feasibility Study

14.4.

Layer Farm

Useful Project Management Tips

Technology

List of Machinery & Equipment: (As per Section 12.5)

DOCs Selection:
Selection of disease
characteristics, body conditions and health.

Feed, Vaccination and Medication: Should be procured from reputed and

reliable sources.

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 after sales services under the
contract with the machinery suppliers

Quality Assurance & Standards: Quality standards need to be defined on

the ear tags and a system of record keeping to check them to improve
credibility

free

birds

with

strain

Marketing

Product Development & Packaging: Experts help may be engaged for

packaging

Advertisements & Promotion: Business promotion and dissemination

through banners and launch events is highly recommended. Product brochures
should be developed from good quality service providers.

Sales & Distribution Network: Experts advice and distribution agreements

should be sought for developing the sales and distribution network.

Price / Bulk Discounts, Cost Plus Introductory Discounts: Pricing

decisions should never compromise quality of the products. Price during
introductory phase may be kept lower and used as promotional tool. Product
cost estimates should be carefully documented before price setting.
Government controlled prices need to be displayed, as required.

Human Resources

List of Human Resource: (As per Section 12.8)

Adequacy & Competencies: Skilled and experienced staff should be

considered an as assets of the business and investments should be made in
developing and motivating them through various means and incentives.

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Pre-Feasibility Study

Layer Farm

Performance Based Remuneration: Efforts to manage human resource cost

should be focused through performance measurement and performance based
compensation.Training & Skill Development: Encouraging training and skills
development of self & employees through experts and exposure of best
practices helps in continuous improvements in the business. Least cost options
for Training and Skill Development should be developed and linked with
compensation benefits and awards.
14.5.

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
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,
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. 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
University of Agriculture, Faisalabad, www.uaf.edu.pk
Lasbela University of Agriculture, Water & Marine Sciences, Lasbela,
www.luawms.edu.pk
Sindh Agriculture University, Tondojam, www.sau.edu.pk

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Pre-Feasibility Study

Layer Farm

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
Bahauddin Zakariya University (BZU), Multan, www.bzu.edu.pk
Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel. 04299220140
Agribusiness Support Fund (ASF), Lahore, www.asf.org.pk
Poultry Research Institute (PRI), Rawalpindi, Tel: 051-9290162, 9290173,
www.poultry.punjab.gov.pk
Livestock & Fisheries Department, Government of Sindh, www.sindh.gov.pk
Agriculture
&
Livestock
Department,
Government
of
KPK,
www.khyberpakhtunkhwa.gov.pk
Livestock
&
Dairy
Development,
Government
of
Balochistan,
www.balochistan.gov.pk

15. KEY ASSUMPTIONS

Table A: Revenue Assumptions
No. of birds per flock
No. of eggs laid/layer/year

5,000
315

Egg Loss (%)

No. of eggs per bird per year (Sale)

No. of eggs per bird per month

312
26

Selling price (Rs. Per dozen)

100

Culled birds sale price (Rs)

160

Table B: Expense Assumptions

DoC price (Rs.)

70

Vaccination cost per bird (Rs)

20

Feed cost/bag of 50 kgs. (Rs.)

2,100

Feed/bird/month (Laying period) Kgs.

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19