Poultry Farm Pakistan

Pre-Feasibility Study (Broiler 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

[email protected]

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

[email protected]

5th Floor, Bahria Complex II, M.T. Khan Road,

Karachi. Tel: (021) 111-111-456 Fax: (021) 35610572

[email protected]

Ground Floor State Life Building

The Mall, Peshawar. Tel: (091) 111-111-456

Fax: (091) 5286908 [email protected]

Bungalow No. 15-A Chaman Housing Scheme

Airport Road, Quetta. Tel: (081) 2831623, 2831702

Fax: (081) 2831922 [email protected]

Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost December, 2013

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Table of Contents

1. DISCLAIMER .......................................................................................................................................... 2 2. PURPOSE OF THE DOCUMENT ......................................................................................................... 3 3. INTRODUCTION TO SMEDA .............................................................................................................. 3 4. INTRODUCTION TO SCHEME ........................................................................................................... 4 5. EXECUTIVE SUMMARY ...................................................................................................................... 4 6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ........................................................................ 4 7. CRITICAL FACTORS ............................................................................................................................ 5 8. INSTALLED & OPERATIONAL CAPACITIES ................................................................................. 5 9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ..................................................................... 5 10. POTENTIAL TARGET MARKET ................................................................................................... 5 11. BROILER PRODUCTION PROCESS ............................................................................................. 6 12. PROJECT COST SUMMARY .......................................................................................................... 8 12.1. PROJECT ECONOMICS ............................................................................................................................ 8 12.2. PROJECT FINANCING ...................................................................................................................... 8 12.3. PROJECT COST .................................................................................................................................. 9 12.4. SPACE REQUIREMENT .................................................................................................................... 9 12.5. MACHINERY AND EQUIPMENT .................................................................................................... 9 12.6. OFFICE EQUIPMENT & FURNITURE ........................................................................................... 10 12.7. RAW MATERIAL REQUIREMENTS .............................................................................................. 10 12.8. HUMAN RESOURCE REQUIREMENT .......................................................................................... 11 12.9. REVENUE GENERATION ............................................................................................................... 11 12.10. OTHER COSTS ................................................................................................................................. 11

13. CONTACTS OF SUPPLIERS AND EXPERTS ............................................................................ 12 14. ANNEXURE ...................................................................................................................................... 13 14.1. INCOME STATEMENT ................................................................................................................... 13 14.2. BALANCE SHEET ............................................................................................................................ 14 14.3. CASH FLOW STATEMENT............................................................................................................. 15 14.4. USEFUL PROJECT MANAGEMENT TIPS ..................................................................................... 16 14.5. USEFUL LINKS ................................................................................................................................ 17

15. KEY ASSUMPTIONS ...................................................................................................................... 18

1. DISCLAIMER This information memorandum is to introduce the subject matter and provide a general idea and information on the subject. Although, the material included in this document is based on data / information gathered from various reliable sources; however, it is based upon certain assumptions which may differ from case to case. The information has been provided on as is where is basis without any warranties or assertions as to the correctness or soundness thereof. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA, its employees or agents do not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. The contained information does not preclude any further professional advice. The prospective user of this memorandum is encouraged to carry out additional diligence and gather any information which is necessary for making an informed decision, including taking professional advice from a qualified consultant / technical expert before taking any decision to act upon the information.

For more information on services offered by SMEDA, please contact our website: www.smeda.org.pk

SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST - 2

http://www.smeda.org.pk/

Pre-Feasibility Study Broiler 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 broiler farm by providing them a general understanding of the business with the intention of supporting potential investors in crucial investment decisions.

The need to come up with pre-feasibility reports for undocumented or minimally documented sectors attains greater imminence as the research that precedes such reports reveal certain thumb rules; best practices developed by existing enterprises by trial and error, and certain industrial norms that become a guiding source regarding various aspects of business set-up and its successful management.

Apart from carefully studying the whole document one must consider critical aspects provided later on, which form basis of any Investment Decision.

3. INTRODUCTION TO SMEDA The Small and Medium Enterprises Development Authority (SMEDA) was established in October 1998 with an objective to provide fresh impetus to the economy through development of Small and Medium Enterprises (SMEs).

With a mission "to assist in employment generation and value addition to the national income, through development of the SME sector, by helping increase the number, scale and competitiveness of SMEs" , SMEDA has carried out sectoral research to identify policy, access to finance, business development services, strategic initiatives and institutional collaboration and networking initiatives.

Preparation and dissemination of prefeasibility studies in key areas of investment has been a successful hallmark of SME facilitation by SMEDA.

Concurrent to the prefeasibility studies, a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of experts and consultants and delivery of need based capacity building programs of different types in addition to business guidance through help desk services.



4. INTRODUCTION TO SCHEME Prime Ministers Youth Business Loan, for young entrepreneurs, with an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide subsidized financing at 8% mark-up per annum for one hundred thousand (100,000) beneficiaries, through designated financial institutions, initially by the National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).

Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years inclusive of 1 year grace period, and a debt: equity of 90: 10 will be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered Tribal Areas (FATA).

5. EXECUTIVE SUMMARY

Broiler meat is a rich source of protein with an ever growing demand. In broiler farming, the Day Old Chicks (DOCs) of specific broiler strain e.g. Babcock, purchased from reputed hatchery/ company are raised on specially formulated feed for a period of about six weeks, with a turnover of six flocks per year. Both rural and semi-urban areas are suitable for this business.

Success of broiler farm largely depends on good management practices. After brooding and rearing period, birds are sold at farm gate on Live Body Weight basis to traders or transported to market. The farm gate price of live bird is determined on daily basis.

A conventional 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 rented shed requires total estimated investment of Rs. 2.16 million with a staff of 03 persons. This project is proposed to be started on 90% debt and 10% equity basis. The projects Internal Rate of Return (IRR), Net Present Value (NPV) and payback period are 51%, 4.96 million and 1.48 years respectively.

6. BRIEF DESCRIPTION OF PROJECT & PRODUCT In the proposed broiler farm, the Day Old Chicks (DOCs) are raised on high protein and energy feed in a conventional open housing system for a period of six weeks (All in-All out system). The purpose built farm is acquired on rental basis. After six weeks, the birds are sold on live body weight basis to traders, wholesale markets or sold directly to the shopkeepers in the urban markets. With ever



increasing demand for white meat, broiler farming can be a profitable venture. Annually, six flocks of birds are raised on the farm, depending on area climate.

7. CRITICAL FACTORS

Background knowledge and related experience of the entrepreneur in broiler farm operations.

Application of good poultry husbandry practices such as timely feeding, watering, lighting, vaccination, medication, temperature / humidity control and culling of uneconomical birds to ensure flocks best performance and higher efficiency in disease-free environment.

Awareness of supply and demand of chicken in the market as the price of chicken meat fluctuates throughout the year.

Efficient marketing of the project and bulk supply to wholesalers.

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

9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Rural and peri-urban areas around major cities are suitable for setting up a broiler farm. Setting up a farm at an isolated place will minimize the risk of disease. Proximity of the farm to the city enables the farmer to establish links with the market for buying farm inputs and selling of grown-up birds, swiftly. Sub-urban and rural areas around big cities e.g. Lahore, Rawalpindi, Faisalabad, Hyderabad, Karachi, Peshawar and Quetta are recommended for starting a broiler farm.

10. POTENTIAL TARGET MARKET Marketing of chickens follow traditional channels of distribution. Generally, grown-up birds are distributed in the market through market agents and intermediaries such as Arhti and wholesalers. In some cases, the middleman provides DOCs and other farm inputs (feed, vaccination, medication etc.) to the broiler farmers under a contract to buy back mature birds from them.

Birds are transported to the urban market and are sold to retailers or market-street poultry shops. Few poultry meat processing plants process raw poultry



meat into dressed chicken, quality cuts or other forms to the market. The integrated processing units distribute frozen and dressed chicken packed in whole or cut-ups to the consumer through retail shops under their brand names. Major domestic markets include all major cities across the country including Karachi, Lahore, Peshawar and Quetta etc. The wholesale and retail price of poultry meat is determined daily on consumers demand and supply situation.

11. BROILER PRODUCTION PROCESS The broiler 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 entire building and all equipment should be properly disinfected and fumigated. The equipment and walls of the shed should be checked for cleanliness, disinfection and spraying before the arrival of DOCs. 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 shed from germs and insects, it is fumigated with Formaldehyde gas, produced by putting Formalin on Potassium Permanganate. The house should be vacant and sealed for 30 minutes after the fumigation so that the gas infiltrates in every corner.

Litter is spread on the floor to prevent direct contact of birds with the floor. Rice-husk and sawdust are generally used as litter. It should be dry and free of moulds. Caked or moldy material should be removed and refilled with fresh materials. Extensively wet and dusty litter should also not be used. Using new litter for each flock is good for raising disease-free broiler birds.

The DOCs should be procured from well reputed hatcheries and should be of uniform size, active and bright eyed, having healed navel. The skin of shanks should be shiny.

The DOCs should arrive at the farm early in the morning so that the management has a full day to observe them for any issue.

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.

Keep light at high intensity 2022 hours per day for the first week. Closely regulate temperature of shed.

Special attention should be given to temperature and relative humidity maintenance in the shed. The temperature for brooders should be 99 F, encircled by chick guard/sheets. The brooder is essential part of broiler



farming, also known as Artificial Mother as it provides necessary heat to DOCs shortly after arrival till 7 days of age.

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.

Starter feed should be offered as a source of energy to chicks as it is easily digestible and a good source of energy. Broilers are fed two types of ration i.e. broiler starter (mash or crumb form) fed up to four weeks of age and then broiler finisher (mash or crumb form) fed from fifth to sixth week. There are many feed mills that prepare these formulated feeds.

Feeding three or four times each day will stimulate feed intake and prevent wastage. The desired Feed Conversion Ratio (FCR) is 2.20. Check regularly the availability of water and feed for chicks.

Keep feed free from aflatoxins. Remove all leftover feed from bins, hoppers and troughs.

Place rodenticide out of the reach of DOCs. Remove dead birds immediately and dispose them properly. Send the

dead birds to lab for postmortem examination if there is excessive mortality.

Follow bio-security plans by not allowing visitors or attendants to enter sheds without disinfected boots and clothes.

Follow the recommended vaccination schedule. Vaccination can be provided to chicks through eye drops, drinking water and subcutaneous injections. Following is a typical vaccination schedule for broiler birds;

Table 1: Vaccination Schedule for Broiler Birds

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 (Gumboro) Eye drops

17-18 days Hydro Pericardium Disease HPS- Hydro Vaccine Sub-cut injection

21-22 days Infectious Bursal Disease (IBD) IBD Vaccine (Gumboro) In drinking water

25-26 days IBD+ND IBD+ND Vaccines In drinking water



Mortality losses should be kept below 8% by timely prophylactic measures (vaccination, medication, disinfection etc.). The New Castle Disease and Gumboro are extremely dangerous diseases that can eradicate the entire flock.

12. PROJECT COST SUMMARY A detailed financial model has been developed to analyze the commercial viability of broiler farm (10,000 birds) under the Prime Ministers Youth Business Loan scheme. Various cost and revenue related assumptions along with results of the analysis are outlined in this section. The projected Income Statement, Cash Flow Statement and Balance Sheet are attached as appendix.

12.1. Project Economics

The following table shows Internal Rate of Return, Net Present Value and payback period;

Table 2- Project Economics

Description Details Internal Rate of Return (IRR) 51% Payback Period (yrs) 1.48 Net Present Value (NPV) Rs.4,955,546

12.2. PROJECT FINANCING

Following table provides details of the equity required and variables related to bank loan;

Table 3 - Project Financing

Description Details

Total Equity (10%) Rs. 215,529

Bank Loan (90%) Rs. 1,939,761

Markup to the Borrower (%age/annum) 8%

Tenure of the Loan (Years) 8

Grace Period (Year) 1



12.3. 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 152,239 Furniture & fixtures 10,000 Office equipment 3,000 Pre-operating cost 144,625 Total Capital Cost 309,864 Raw material inventory 1,505,382 Upfront building rent 240,044 Cash in hand 100,000 Initial Working Capital 1,845,426 Total Project Cost 2,155,290

12.4. SPACE REQUIREMENT

Following table shows calculations for project space requirement;

Table 5: 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 approximately Rs. 20,000 per month.

12.5. MACHINERY AND EQUIPMENT

Following table provides list of machinery and equipment required for broiler farm in open shed conventional housing system;



Table 6: 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 16,380 Small feeding trays 50 182 90 16,380 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 6,979 Total Machinery & Equipment 152,239

12.6. OFFICE EQUIPMENT & FURNITURE

Table 7: Office Equipment & Furniture Description Quantity Cost (Rs.) Amount (Rs.)

Telephone 1 3,000 3,000 Furniture and fixture Lump sum 10,000 10,000 Total 13,000

12.7. RAW MATERIAL REQUIREMENTS

Following table shows raw material requirement for the proposed project; Table 8: Cost of Material

Description Unit Total units Rate

(Rs./ Unit) Values (Rs. per

year) *Day Old Chicks (DOC) Per DOC 60,000 35 2,100,000 Total feed required per birds @ 2.2 FCR (Incl. 2% extra DOCs)

Per Bird *56,304 178.2 10,033,372

Vaccination, medication and disinfection Per Bird *56,304 8 450,432



(Incl. 2% extra DOCs) Direct Electricity Cost Per bird 2.25 *56,304 126,684 Litter & Spray (Saw dust or rice husk) Per Flock 6 14,000 84,000

* 2% extra chicks provided by DOC supplier to cover the transportation mortality, hence total birds to consume feed and vaccination/ medication would be 56,304 per annum after 8% mortality loss.

12.8. HUMAN RESOURCE REQUIREMENT

Table 9: Human Resource Requirement

Description No. of Employees Monthly Salary per Employee (Rs.) Owner / Farm manager 1 30,000 Farm Labor 2 12,000 Total Staff 3 Two semi skilled workers are needed to look after the general poultry husbandry operations at the farm. In addition, owner would act as farm manager. The salaries are estimated to increase at 10% annually.

12.9. REVENUE GENERATION

Table 10: Revenue Generation Description Unit Sale Price Rs.

First Year Production

Revenue in First Year Rs.

Broiler birds (1.8-2.0 kg) after 6 weeks

Per bird 261 56,304 14,695,344

Other revenues (litter, empty feed bags etc.)

Per bird 8 56,304 450,432

Total Revenue 15,145,776 12.10. OTHER COSTS

An essential cost to be borne by the farmer is electricity expense which is estimated to be Rs. 2.25 per bird. The fixed electricity cost for rest of the area is estimated to be Rs. 800 per month. Average vaccination and medication cost per bird is taken at Rs.8.00 per bird.



13. CONTACTS OF SUPPLIERS AND EXPERTS Table 11: List of Suppliers and Consultants

Feed Suppliers DOC Suppliers Supreme Feeds (Pvt.) Ltd. Head Office: 176-Shadman 1 Lahore. Ph: 042-37522104-7

Big Bird Poultry Breeders (Pvt.) Ltd. 2-A,Ahmed Block, New Garden Town Lahore Ph: 042-35835373-4

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

Hi-Tech Poultry Breeders (Pvt.) Ltd. 1-A, Shadman Chowk Jail Road, Lahore Ph: 042-37564503

Asia Feed (Pvt.) Ltd. 359 Shamsabad Colony, Humayun Road Multan. Ph: 061-6224414

Islamabad Poultry Breeding Co. D-98, Satellite Town, Murree Road Rawalpindi. Ph: 051-4427139

Fast Poultry Feeds 12-KM Near Nai Sabzi Mandi Jhang Road, Faisalabad. Ph: 041-2577171-2

Jadeed Farms (Pvt.) Ltd. 6- Allied Commercial Plaza, Murree Road, Chandni Chowk Rawalpindi. Ph: 051-4851280-84

Rustum Feeds Flat No.6, 1st Floor, United Center Shamsabad, Murree Road, Rawalpindi Ph: 051-4455362

Sadiq Poultry Pvt Ltd SB Plaza, 48-C, Satellite Town, Chandni Chowk, Rawalpindi Ph: 051-111-505-050

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

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

Eastern Veterinary Services 4- C Chouburji Center, Near Venus Cinema, Multan Road, Lahore. Ph: 042-37417649-50

Dr. Abdul Rehman Director, Poultry Research Institute, Shamsabad, Murree Road, Rawalpindi Ph: 051-9290163-5

Dr. Fawwad Ahmad Faculty of Animal Husbandry, University of Agriculture, Faisalabad Ph: 041-9920161-70



14. ANNEXURE

14.1. INCOME STATEMENT

Statement Summaries Broiler FarmIncome Statement

Rs. in actualsYear 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Revenue 15,145,776 16,615,310 18,231,798 20,009,935 21,965,885 24,117,430 26,484,130 29,087,500 31,951,207 35,101,284 Cost of goods sold 13,082,489 14,390,738 15,829,811 17,412,793 19,154,072 21,069,479 23,176,427 25,494,070 28,043,477 30,847,824

Gross Profit 2,063,287 2,224,573 2,401,987 2,597,142 2,811,813 3,047,951 3,307,703 3,593,431 3,907,730 4,253,460

General administration & selling expensesUtilities expense 9,665 10,631 11,694 12,864 14,150 15,565 17,121 18,833 20,717 22,788 Professional fees (legal, audit, etc.) - - - - - - - - - - Depreciation expense 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 Amortization expense 28,925 28,925 28,925 28,925 28,925 - - - - - Mortality 523,300 575,630 633,192 696,512 766,163 842,779 927,057 1,019,763 1,121,739 1,233,913

Subtotal 1,189,257 1,303,638 1,429,456 1,567,857 1,720,098 1,858,638 2,042,849 2,245,482 2,468,378 2,713,563 Operating Income 874,030 920,935 972,530 1,029,285 1,091,715 1,189,313 1,264,854 1,347,948 1,439,353 1,539,897 Earnings Before Interest & Taxes 874,030 920,935 972,530 1,029,285 1,091,715 1,189,313 1,264,854 1,347,948 1,439,353 1,539,897

Interest expense 160,999 147,396 129,518 110,155 89,186 66,476 41,881 15,244 - - Earnings Before Tax 713,031 773,539 843,013 919,130 1,002,530 1,122,838 1,222,973 1,332,704 1,439,353 1,539,897

Tax 31,303 38,531 48,952 60,369 72,879 90,926 105,946 122,405 138,403 155,479 NET PROFIT/(LOSS) AFTER TAX 681,728 735,008 794,061 858,760 929,650 1,031,912 1,117,027 1,210,299 1,300,950 1,384,418

Balance brought forward 681,728 1,416,736 2,210,797 3,069,557 3,999,208 5,031,120 6,148,147 7,358,446 8,659,396 Total profit available for appropriation 681,728 1,416,736 2,210,797 3,069,557 3,999,208 5,031,120 6,148,147 7,358,446 8,659,396 10,043,814 Balance carried forward 681,728 1,416,736 2,210,797 3,069,557 3,999,208 5,031,120 6,148,147 7,358,446 8,659,396 10,043,814



14.2. BALANCE SHEET

Statement Summaries Broiler Farm Balance Sheet

Rs. in actualsYear 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

AssetsCurrent assets

Cash & Bank 429,254 2,065,675 2,444,877 2,817,420 3,175,115 3,507,378 3,800,652 4,037,714 4,196,819 4,613,466 13,563,326 Accounts receivable - - - - - - - - - - - Raw material inventory 1,396,169 1,689,364 2,044,131 2,473,398 2,992,812 3,621,303 4,381,776 5,301,949 6,415,358 7,762,584 - 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 1,845,426 3,777,043 4,513,212 5,317,443 6,197,214 7,160,896 8,217,866 9,378,644 10,655,057 12,423,218 13,563,326

Fixed assetsMachinery & equipment 152,239 137,015 121,791 106,567 91,343 76,120 60,896 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 82,620 66,096 49,572 33,048 16,524 0

Intangible assetsPre-operation costs 144,625 115,700 86,775 57,850 28,925 - - - - - -

Total Intangible Assets 144,625 115,700 86,775 57,850 28,925 - - - - - - TOTAL ASSETS 2,155,290 4,041,458 4,732,178 5,490,960 6,325,283 7,243,516 8,283,961 9,428,216 10,688,105 12,439,742 13,563,326

Liabilities & Shareholders' EquityCurrent liabilities

Accounts payable - 1,173,137 1,305,725 1,454,778 1,622,618 1,811,938 2,025,873 2,268,076 2,542,819 2,855,103 2,438,791 Total Current Liabilities - 1,173,137 1,305,725 1,454,778 1,622,618 1,811,938 2,025,873 2,268,076 2,542,819 2,855,103 2,438,791

Other liabilitiesLong term debt 1,939,761 1,939,761 1,724,355 1,491,070 1,238,423 964,807 668,480 347,558 - - -

Total Long Term Liabilities 1,939,761 1,971,064 1,794,189 1,609,856 1,417,578 1,216,841 1,011,439 796,464 571,311 709,714 865,193

Shareholders' equityPaid-up capital 215,529 215,529 215,529 215,529 215,529 215,529 215,529 215,529 215,529 215,529 215,529 Retained earnings - 681,728 1,416,736 2,210,797 3,069,557 3,999,208 5,031,120 6,148,147 7,358,446 8,659,396 10,043,814

Total Equity 215,529 897,257 1,632,265 2,426,326 3,285,086 4,214,737 5,246,649 6,363,676 7,573,975 8,874,925 10,259,343 TOTAL CAPITAL AND LIABILITIES 2,155,290 4,041,458 4,732,178 5,490,960 6,325,283 7,243,516 8,283,961 9,428,216 10,688,105 12,439,742 13,563,326

- - - - - - - - - -

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



14.3. CASH FLOW STATEMENT

Statement Summaries Broiler FarmCash Flow Statement

Rs. in actualsYear 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Operating activitiesNet profit - 681,728 735,008 794,061 858,760 929,650 1,031,912 1,117,027 1,210,299 1,300,950 1,384,418 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 - 28,925 28,925 28,925 28,925 28,925 - - - - - Accounts receivable - - - - - - - - - - - Raw material inventory (1,396,169) (293,195) (354,767) (429,267) (519,414) (628,491) (760,474) (920,173) (1,113,409) (1,347,225) 7,762,584 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 - 1,173,137 132,587 149,054 167,840 189,320 213,934 242,203 274,743 312,284 (416,312)

Cash provided by operations (1,416,173) 1,636,421 594,608 605,827 610,343 605,879 589,601 557,984 506,664 416,647 8,949,860

Financing activitiesChange in long term debt 1,939,761 - (215,406) (233,285) (252,647) (273,617) (296,327) (320,922) (347,558) - - Issuance of shares 215,529 - - - - - - - - - -

Cash provided by / (used for) financing act 2,155,290 - (215,406) (233,285) (252,647) (273,617) (296,327) (320,922) (347,558) - -

Investing activitiesCapital expenditure (309,864) - - - - - - - - - -

Cash (used for) / provided by investing acti (309,864) - - - - - - - - - -

NET CASH 429,254 1,636,421 379,202 372,543 357,695 332,263 293,274 237,062 159,106 416,647 8,949,860

Cash balance brought forward 429,254 2,065,675 2,444,877 2,817,420 3,175,115 3,507,378 3,800,652 4,037,714 4,196,819 4,613,466 Cash available for appropriation 429,254 2,065,675 2,444,877 2,817,420 3,175,115 3,507,378 3,800,652 4,037,714 4,196,819 4,613,466 13,563,326 Cash carried forward 429,254 2,065,675 2,444,877 2,817,420 3,175,115 3,507,378 3,800,652 4,037,714 4,196,819 4,613,466 13,563,326



14.4. USEFUL PROJECT MANAGEMENT TIPS

Technology

List of Machinery & Equipment (As per Section 12.5)

DOCs Selection: Selection of disease free birds with strain 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: Whatever means required for animal production quality standards need to be defined on the ear tags and a system of record keeping to check them to improve credibility

Marketing

Product Development: Expert's help may be engaged for marketing of each batch of animal

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 (As per Section 12.8)

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. Least cost options for Training and Skill Development (T&SD) may be 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. 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 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 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


http://www.fpcci.com.pk/http://www.pbit.gop.pk/http://www.sbi.gos.pk/http://www.nbp.com.pk/http://www.fwbl.com.pk/http://www.parc.gov.pk/http://www.parc.gov.pk/http://uaf.edu.pk/http://www.luawms.edu.pk/http://www.sau.edu.pk/http://www.gu.edu.pk/N/faculties/Science/Veternary/Veterinary.asphttp://www.aup.edu.pk/http://www.uaar.edu.pk/http://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. 042-99220140 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 12: Production Assumptions

Production capacity utilization 100% Maximum capacity utilization 100% Number of birds per flock 10,000 Extra Chicks supplied by DOC supplier (2%) 200 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

Table 13: Revenue Assumptions Sales price per bird (1.8 Kg approx) 261 Average weight per bird (kg) 1.8-2.0

Table 14: Expense Assumptions Day Old Chicks (DOC) in Rs. 35 Feed Conversion Ratio (FCR) 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 Spray cost per flock 6,000


http://www.uvas.edu.pk/http://www.bzu.edu.pk/http://www.asf.org.pk/http://www.sindh.gov.pk/http://www.khyberpakhtunkhwa.gov.pk/http://www.balochistan.gov.pk/

Title for Broiler Farm-Feb2014Broiler Farm (F3) - JA1. DISCLAIMER2. PURPOSE OF THE DOCUMENT3. INTRODUCTION TO SMEDA4. INTRODUCTION TO SCHEME5. EXECUTIVE SUMMARY6. BRIEF DESCRIPTION OF PROJECT & PRODUCT7. CRITICAL FACTORS8. INSTALLED & OPERATIONAL CAPACITIES9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT10. POTENTIAL TARGET MARKET11. BROILER PRODUCTION PROCESS12. PROJECT COST SUMMARY12.1. Project Economics12.2. PROJECT FINANCING12.3. PROJECT COST12.4. SPACE REQUIREMENT12.5. MACHINERY AND EQUIPMENT12.6. OFFICE EQUIPMENT & FURNITURE12.7. RAW MATERIAL REQUIREMENTS12.8. HUMAN RESOURCE REQUIREMENT12.9. REVENUE GENERATION12.10. OTHER COSTS

13. CONTACTS OF SUPPLIERS AND EXPERTS14. ANNEXURE14.1. INCOME STATEMENT14.2. BALANCE SHEET14.3. CASH FLOW STATEMENT14.4. USEFUL PROJECT MANAGEMENT TIPS14.5. USEFUL LINKS

15. KEY ASSUMPTIONS

Documents

Poultry Farm Pakistan