Pre-Feasibility, Parboil Rice Processing Venture in Sindh · PRE-FEASIBILITY, CONTROLLED POULTRY HOUSE OF 30,000 BIRDS 2010 4 1. Overview of the Poultry Sector Poultry is an important

Pre-Feasibility Study

Environmentally Controlled

Poultry House

(30,000 Birds)

PRE-FEASIBILITY, CONTROLLED POULTRY HOUSE OF 30,000 BIRDS 2010

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Table of Contents

EXECUTIVE SUMMARY ........................................................................................................................................................................................ 3

1. OVERVIEW OF THE POULTRY SECTOR ................................................................................................................................................ 4

1.1. Industry Dynamics ................................................................................................................................................................................. 4

1.1.1. Segmentation ........................................................................................................................................................................................................... 5

1.2. Marketing Analysis ................................................................................................................................................................................ 5

1.3. Problems with Poultry in Pakistan ...................................................................................................................................................... 6

2. PRE-FEASIBILITY STUDY FOR ENVIRONMENTALLY CONTROLLED POULTRY HOUSE ....................................................... 8

2.1. Comparative Efficiency of ECH and COH ......................................................................................................................................... 8

2.2. Existing Marketing Practice & Pricing ................................................................................................................................................. 9

2.3. Farm Management ............................................................................................................................................................................... 10

3. THE PROJECT .............................................................................................................................................................................................. 13

3.1. Project Brief ........................................................................................................................................................................................... 13

3.2. Proposed Capacity ............................................................................................................................................................................... 13

3.3. The Product ........................................................................................................................................................................................... 13

3.4. Product Assumptions .......................................................................................................................................................................... 14

3.5. Manpower Requirements .................................................................................................................................................................... 15

3.6. Farm Equipment ................................................................................................................................................................................... 16

3.7. Land and Building ............................................................................................................................................................................... 17

3.7.1. Mode for Acquiring Land ........................................................................................................................................................................................ 17

3.7.2. Preferred Locations – Sindh ................................................................................................................................................................................... 18

3.7.3. Infrastructure Requirement ................................................................................................................................................................................... 18

3.8. Working Capital ................................................................................................................................................................................... 18

4. THE FINANCIAL ANALYSIS ..................................................................................................................................................................... 19

4.1. Project Economics................................................................................................................................................................................. 19

4.2. Financing Option .................................................................................................................................................................................. 20

4.3. Projected Income Statement ................................................................................................................................................................ 21

4.4. Projected Cash Flow Statement .......................................................................................................................................................... 22

5.5. Projected Balance Sheet ....................................................................................................................................................................... 23

KEY ASSUMPTIONS .............................................................................................................................................................................................. 24

ANNEX A .................................................................................................................................................................................................................. 27

ANNEX B .................................................................................................................................................................................................................. 28

ANNEX C .................................................................................................................................................................................................................. 29

IMPORTANT CONTACTS .................................................................................................................................................................................... 30


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Executive Summary This Pre-feasibility study is conducted for establishment of Environmentally Controlled Poultry Farm in Sindh. All the calculations have been based on a flock size of 30,000 birds, with raising 8 flocks per year. The controlled poultry farm is a project of Livestock Sector, in which, the day old chicks (also known as DOCs) are raised on high protein feed for a period of six weeks with a lag time of 10 – 15 days for the cleaning and fumigation of the sheds and the farm. The purpose of the controlled poultry farm is to provide all the facilities ranging from automatic operations of temperature control, feeding and nipple drinking system for the broiler birds, monitored by the concerned & technical staff, all in-house. Broiler farming in controlled environment is a profitable venture due to continuous increasing demand of the white meat in the market. Poultry is an important sub – sector of agriculture and has contributed enormously to food production by playing a vital role in the domestic economy. Poultry meat contributes 19% of the total meat production in the country. There is a tremendous opportunity for Environmental Control Poultry Houses in Pakistan. Currently there are 2,500 houses working in Pakistan, out of which 75% (1,875) are in Punjab and remaining 25% (625) are in other provinces1. The initial cost of the project is Rs. 29,596,720, including of an initial working capital of Rs. 5,774,720.

1. Projected Revenues for the project for year 1, year 2, year 3, year 4 and year 5 is Rs. 53,194,080, Rs.

58,513,488, Rs. 64,364,837, Rs. 70,801,320 and Rs. 77,881,453, respectively.

2. Gross profit / (loss) for year 1, year 2, year 3, year 4 and year 5 is Rs. 9,880,800, Rs. 11,556,336, Rs. 13,435,454, Rs. 15,540,431 & Rs. 17,895,872, respectively.

3. Payback period of the project is approximately 3.5 years.

4. The IRR of the project is 21.52%.

1 Source: Environmental Controlled Poultry Farm, SMEDA, April 2010


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1. Overview of the Poultry Sector

Poultry is an important sub – sector of agriculture and has contributed enormously to food production by playing a vital role in the domestic economy. It has great potential and can play a significant role in the national economy by contributing towards food security of the country, reducing pressure on demand for mutton and beef and earning of foreign exchange. Poultry industry can broadly be divided into three groups, viz. hatchery, poultry farming and feed sectors. This sector generates employment and income for about 1.5 million people in Pakistan. Its contribution in agriculture growth is 4.81% and in Livestock growth is 9.84%, whereas, the total poultry meat contributes to 23.8% of the total meat production in the country. Pakistan, with a population of 170 Million people, has gone through a sizeable growth in the production of poultry meat and eggs. Per capita availability went up from 23 in 1991 to 46 eggs in 2009 and poultry meat availability increased from 1.48kg to 2.88 kg during the same period2. In our Country per capita consumption of meat is only 7 KG and 60-65 eggs annually. Whereas developed world is consuming 41 KG meat and over 300 Eggs per capita per year. According to Industry sources there is capacity of 5,000 Environmental Control Houses in Pakistan and currently only 2,500 houses are working.

1.1. Industry Dynamics

The generation line of broiler comes from pure line (Strains) that make the Great Grand Parents (GGP), which are imported. These great grandparents produce grandparents which are available in Pakistan. These grandparents produce parent stocks (Breeders) and parent stock end up in producing the final product which is broiler. Pakistan’s poultry industry is importing 100,000 Grandparents (GP) chicks annually from Australia, Holland, Germany and USA with the cost of US$100 per day-old female chick. The farmers get day old broiler from hatcheries. These hatcheries maintain their breeder farms, or in some cases, purchase their hatching eggs from breeder farms. These breeder farms depend on producers of parent stock. Poultry feed mills are the major player in the poultry industry, which produce a specific formula feed mix. Poultry feed consists of rich protein elements like soya bean meal, canola meal, rapeseed meal, sunflower meal, feather meal and rich energy elements like grains, gluten, etc. When feed efficiency matters most you can gain the right weight of your bird. The major component of cost of production of chicken meat accounts for feed cost.

2 FAOSTAT (2009)


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1.1.1. Segmentation3

Total Investment Rs. 200 Billion

No. of Hatcheries 400

No of Feed Mills 150

Grand Parents 200,000

Parents 6 Million

Broiler 600 Million

Poultry Meat 621,000 Metric Ton

1.2. Marketing Analysis

The total Poultry population in Pakistan is approximately 610 Million. The chart below illustrates the increase in the number of poultry population over the years4.

Figure 1: Increase in the number of Poultry population in Pakistan (2000 - 2010)

Similarly, there has been a substantial increase in the Livestock products pertaining to Poultry i.e. Poultry meat and and Eggs3.

3 Source: Environmental Controlled Poultry Farm, SMEDA, April 2010

4 Source: Economic Survey of Pakistan 2010 – 2011

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Figure 2: Increase in the number of Poultry Eggs & Meat in Pakistan (2000 - 2010)

According to FAO, to produce chicken meat in 2008, 517 million birds were slaughtered and 601 million tonne meat was acquired. In the same year world total chicken meat production was 52,887 million ton. There are around 25,000 poultry farms are in the country5. The poultry production is concentrated around the large urban centres in the provinces of Sindh especially in Karachi. In the provinces of Sindh, there are farms in Mirpurkhas, Sukkar, Nawabshah as well as in small cities. Many big companies have established their poultry farms in different parts of the country. To name a few such key players are K&N, Sabir, Hitech, SB and Jadeed.

1.3. Problems with Poultry in Pakistan

A balanced diet is essential for good health, vigour and productive capacity of the people. Proteins play an important role in the formation of balanced human diet. There are mainly two sources of proteins i.e. animals and plants. The human diet in Pakistan is deficient in animal proteins, as approximately 66% Pakistanis are deficient in proteins. The requirement of proteins is 102.7 g per person per day, while only 69.61 g per person per day is being used in the country. The main sources of animal proteins in Pakistan are beef, mutton, milk, poultry meat and eggs. To overcome the gap between supply and demand of proteins, poultry meat is contributing a dominant share which can be enhanced by improving the profitability of producers and by decreasing prices at the retail level. The profitability can be increased through better management practices and establishment of fully equipped controlled poultry houses.

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


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Pakistan, being a tropical country, experience various temperatures throughout the year of which summer is the most common. During this period the temperature reaches over 40°C in different parts of Pakistan. This affects the efficiency of the poultry farms and the chickens. Hot and humid weather conditions coupled with manual and poor management practices increases the mortality in flocks, depresses their growth and makes poultry production an unmanageable and uneconomical pursuit. Chickens can tolerate high temperatures but react negatively if they are too warm. The body temperature of an adult chicken is 105-107°F (40.6 to 41.7°C). The thermo-neutral zone is 65-75°F (18-24°C), which allows chickens to maintain their body temperature. If the temperature is above this zone, heat must be lost in some way. Chickens have no sweat glands. Since eating increases body temperature, chickens reduce their feed intake during hot weather, and therefore gains will be less. Chickens begin panting at 85°F (29.4°C) to help dissipate heat, and drink more to avoid dehydration. A combination of high temperature and high humidity is a problem, because panting does not cool them under these conditions. During this period owner has to either continue his flock compromising with poor performance in feed intake, growth rate, weight gain, FCR (Feed Conversion Ratio) in broilers along with mortality or he has to totally close his business to avoid all these risks. This situation creates severe shortage of poultry meat which is the cheapest and easily available source of animal protein. The poultry industry also faces problems like the incidence of diseases, substandard and costly feed and inefficient marketing system. In all stages of development, there is a need for improving the efficiency and lowering the cost of distribution. Losses occur in case of death of birds due to diseases and poor handling. Grading is largely ignored in egg trade because of extra cost required for grading. Inadequate health facilities are one of the major constraints in poultry production. It is due to viral, bacterial infection and parasitic infestation. Environment controlled houses can overcome such critical situations, which counteracts the adverse effects of heat stress providing tunnel ventilation and enhancing the wind chill effect. These houses when equipped with highly mechanized system of automatic chain feeding and nipple drinking makes the environment quite conducive for poultry production and reduces the risk of bacteria during different seasons.


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2. Pre-Feasibility Study for Environmentally Controlled Poultry House

2.1. Comparative Efficiency of ECH and COH

The modern trend of environment control houses (ECH) in poultry production has brought a great revolution in poultry industry of Pakistan in the recent years. This has solved a great hurdle of heat stress in the way economical commercial poultry production. The ECH with evaporative cooling system, providing tunnel ventilation, giving the wind chill effect has markedly improved the broiler production system. The technology of ECH is rapidly becoming popular among broiler producers. A comparison is given below of ECH and a traditional house which highlights significant advantages of an ECH are given below:

No Specification Control House Traditional House

1 Feed Conversion Ratio 1.9 – 2.3 2. 5

2 Feed wastage Nil 10 %

3 Feed distribution Automatic Laborious

4 Body Wt / bird 42 days 1.9 Kg 1.65 Kg

5 Humidity of shed Controlled High

6 Brooding Energy saving Energy wastage

7 Carbon mono oxide poisoning Nil Very high

8 Ammonia poisoning Nil Very high

9 Mortality 5 – 8 % 10 – 30 %

10 Electricity Required No required

11 Rodent Control Successful Failed

12 Wild protection No risks High risky

13 Bio-security measure Very easy Very difficult

14 Noise stress Nil Very high

15 Environmental Stress Nil Very high

16 Mortality due to heat stress Nil 20-100 %

17 Over head / bird Rs.10.00 Rs.8.00


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18 Dosage of vaccine & medicine Accurate Wastage

19 Medication & vaccination application Appropriate Difficult

20 Litter humidity Under control Not control able

21 Flock Sizing One size Multiple size

22 Shed temperature Automatic Big variation

23 Expenditure of maintenance energy Accurate Wastage

24 Poultry environment (neighboring) Health Contaminated

25 Fly control Successful Not possible

26 Feed and water intake Recordable No recordable

27 Light intensity Controlled Not control able

28 Feed storage environment Appropriate Humid

29 Flock monitoring Computerized Error

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

2.2. Existing Marketing Practice & Pricing

The Broilers are distributed in the market through Middleman and Whole seller. Broilers are transported to the urban market and are sold on live-weight basis. The current pricing of the broilers and other poultry products are mentioned below6:

Product PKR Rs.

Chicken Meat per KG 170 – 200

Chicken (Live) 120 – 145

Eggs per Dozen 55 – 75

Day Old Chick Broiler 50 – 65

Day Old Chick Layer 60 – 70

6 Source: Pakistan Poultry Association (www.ppapaknorthern.com). There is an increase of 25% from what is mentioned on the PPA Website as

those rates are pertaining to the Punjab Province whereas in Sindh the rates are high.

http://www.ppapaknorthern.com/


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During the years 2008-09 and 2009-10 sharp fluctuations occurred in the prices of day old chicks. The data

made available by Poultry Research Institute shows price of day old broiler and layer chick was Rs 11 and Rs

35.5 respectively in January 2008. The lowest price during the period for broiler and layer day old chick was

Rs. 6 and Rs. 28 respectively and the highest price was Rs 71.9 and Rs 39 in October 2009. On the basis of

information provided by Poultry Research Institute and by leading companies of poultry industry to the CCP

the cost of production of day old broiler chick was around Rs 18 per chick. The chick was being sold below

cost during almost all months of the year 2008 and since January 2009 the prices rapidly increased and

touched the figure of Rs 71.9, leading towards proportional increase in the prices of poultry meat, since the

price of day old broiler chick are directly related to price of poultry meat. The current price of DOC’s range

from Rs. 50 – Rs. 65 whereas DOC layer costs Rs. 60 – Rs. 70.

The prices of poultry feed also showed a consistent increase during the years of 2008 to 2010. The average

price of a bag of 50 kg poultry feed had been Rs. 955 during year 2008, which rose to Rs. 1,450 in 2010. One

of the factors of increase in the prices of day old chicks and poultry meat is the increase in prices of feed that

is one of the basic inputs in poultry industry.

2.3. Farm Management

Farm input required for a broiler farm includes farm equipment (Automatic feeding system, water nipple system, exhaust fans, cooling pads, diesel heaters, control panels and other consumable items (feed, vaccines, medicines, rice husk, water, electricity etc.). The figure below illustrates what the farm will look like once constructed and ready for flock raising.


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Below are features of the Environmentally Controlled Poultry House: Day Old Chicks The Chicks should be uniform size, alert and bright eyed. The shank or leg covering (skin) of health chicks appears bright and shiny. Brooding Proper brooding temperature is required to keep the chicks in comfort. Diesel heaters supply heat at the stage of brooding in the Poultry Farm. In the first week 32 ‘C is quite comfortable. As chicks grow, the temperature may be reduced at the rate of 2 ’C per week until 24 ‘C reached in last week. Feeding Broilers re usually feed with following two types of broiler starter. It is feed to the broiler up to 5 weeks of age. Secondly, is the Broiler Finisher which is feed to the Broiler of more than 5 weeks and continued till the age of marketing. Housing The Broiler control house size 400 feet long and 50 feet side is enough for 30,000 birds. Feeders The pan feeders of automatic feeding system are for 65-70 birds. Therefore, 465 feeders in a house are enough for 30,000. Lighting The control house broiler grows on artificial light (not the sunlight). One house 20,000 sq feet requires 100 energy saver of 9 watts each i.e. 900 watts. Automatic feeding system The nipple is enough for 12-15 birds. In 30,000 broilers house total nipples required are 2500 there are automatic water system, whenever bird touches the nipple water flows out and when bird will away no water is there. Litter Litter is spread on the floor. Rice husk is usually for the making the litter. It should be dry and free of mould. Caked or mould material should be removed and refilled with fresh materials. Extensively wet and dusty litter should be also not be used. Using new litter for each flock is good for raising disease free broiler.


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Vaccination Vaccination can be provided through spray and drinking water. Disinfection It is essential to check all equipment and walls of the broiler house carefully that they are clean and washed with detergents, disinfectants. The house should be fumigated before the birds.


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3. The Project

3.1. Project Brief

The Broiler Control House is a project of Livestock sector, in which day old chicks (DCO’s) are raised on high protein feed for a period of six weeks. This pre-feasibility highlights the capacity and efficiency of Broiler Control House which covers all the required facilities for the fast growing broilers. Annually eight flocks of birds will be raised on the same premises of the farm.

3.2. Proposed Capacity

A Broiler farm of about 30,000 birds is considered to be economically viable size, which will justify the fixed and operational costs. In this pre-feasibility study, all calculations have been based on a flock size of 30,000 birds with raising seven flocks per year. An additional lag time of 10 days will be included for the cleaning and disinfection of the farm/house.

3.3. The Product

The proposed project should generate revenues from sale of chicken after they have been raised for 6-7 weeks in the Environmentally Controlled Poultry Shed. Assumptions used for the product mix are as follows:

Product Average Weight Price

Chicken 1.90 Kg 228

Hence, the cost of Price per Kg is 228/1.9 = Rs. 120. 7

7 This price is taken as the current average market rate (2010). Source: Pakistan Poultry Association (www.ppapaknorthern.com)


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3.4. Product Assumptions8

Number of Flocks per year 8

Number of Birds per Flock 30,600

Time required per Flock (Days) 35

Lag time required per Flock (Days) 10

Total Annual Production Capacity 244,800

Shed Space Required per Bird (Sq.ft) 0.65

Mortality Rate 5%

Average Rate per bird 1.9 Kg

Broiler Sale price per Kg (Live) Rs. 120

Sale price growth rate 10%

Cost of 50 Kg Feed bag Rs. 1,600

Cost of Feed per Kg bag Rs. 32

8 Analysis attached in Annexure A


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3.5. Manpower Requirements

Skilled and Semi skilled workers are needed to manage the operation of a broiler farm of 30,000 birds. These workers will look after the feeding, vaccination and cleaning operations at the farm. The personal needed for the farm is as under:

Description Required Personal Salary Per Month Salary for the Year

Supervisor 1 24,000 288,000

Doctor 1 12,000 144,000

Housemen 3 6,500 234,000

Electrician 1 10,000 120,000

Watchmen 2 7,500 180,000

Cleaner 3 6,000 216,000

Total 11 98,500 1,182,000


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3.6. Farm Equipment

In order to make sure the birds are being fed properly and in a timely manner the following farm equipments and technology have been identified. This technology for feeding, drinking and handling of birds is most suitable for a high tech. Controlled poultry house. A full illustration is provided in Annexure C

Description Amount PKR

Flux Pan feeding, Tope screw nipple drinking

system with BD sile (one house)9

2,300,000

Exhaust fan with 1 NP Motor type EOS50 1.06 Alu

(13 required at Rs. 60,000 each)

780,000

Evaporative cooling pads (91 required at Rs. 6,000

each)

546,000

Heater type combi term 140E (1 required) 420,000

Minimum ventilation system (1 required) 680,000

Electrical control panel (1 required) 250,000

Generator 50 – KVA (Perkins 1104A-44TG1) 950,000

Cost of Uniforms, shoes, bio-security equipments

& other miscellaneous expenses10

750,000

Installation cost 250,000

Total 6,926,000

9 Rates have been taken from Cumberland Poultry Services: http://www.cumberlandpoultry.com/

10 Equipments (Drinkers & Feeders for chicks) and trays, heaters, fire extinguishers etc.

http://www.cumberlandpoultry.com/


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3.7. Land and Building

Description Area (Sq.ft.) Cost Total

Land 1 Acre 1,000,000 1,000,000

Description Area (Sq.ft.) Cost (Rs. / Sq.ft.) Total

Shed Space (400x50’)

20,000 600 12,000,000

Feed Store (30x30’) 1,000 800 800,00

Room for Guards & Workers 1,200 1,000 1,200,000

Office Block11 1,200 1,100 1,320,000

Store Room 250 800 200,000

Generator Room 200 400 80,000

Water Container 1,000 Gallon 20,000

Boundary Wall (6 Feet High) 500,000

Total 16,640,000

3.7.1. Mode for Acquiring Land

It is assumed that the land available will be on a lease (on a subsidised rate) in the locations mentioned below.

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Includes changing room


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3.7.2. Preferred Locations – Sindh

Suburban and rural areas around the major cities of the country are the suitable areas 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 mature birds. Hence, areas like Gharo, Dhabeji, Bhambhore, Karachi and Hyderabad are identified as a prime location for this project.

3.7.3. Infrastructure Requirement

Poultry's farming needs to be handled tactically, right from the selection of the site to the final stage when the birds are sold. The farm should be located at a place where transportation of birds and feed can be handled easily. The entrepreneur should make sure that the following things are available at the farm site before setting up the farm: Electricity connection & drinking quality water.

3.8. Working Capital

Description Rate in Rs. Total Amount

Cost of Day Old Chicks

(Broilers 30,600)

52 1,591,200

Feed for 1st flock of birds 110 per bird for 35

days to gain on

average 1.9 Kg - 2

Kg weight

3,305,020

Salaries (For one month) 98,500

Cash 878,500

Total 5,774,720


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4. The Financial Analysis

4.1. Project Economics

Capital Investment Amount in PKR

Land 1,000,000

Building/Infrastructure 15,640,000

Machinery & Equipment 6,926,000

Furniture & fixtures 250,000

Total Capital Costs 23,816,000

Working Capital Amount in PKR

Inventory & Expenses** 4,896,220

Cash in Hand 878,500

Total Working Capital 5,774,720

**Inventory & Expenses include salary for one month, raw material i.e. fodder, one flock of birds, utilities, transport and fuel expenses

Total Investment PKR 29,590,720

An Environmentally Controlled Poultry House with a population of 30,000 birds established in a purpose-

built controlled shed needs a capital investment estimated at Rs. 23,816,000 for construction and purchasing

machinery & equipment. In addition to this, a sum of Rs. 5,774,720 is required as initial working capital,

which should be used for purchasing day old chicks and other inputs like feed, vaccines, etc and one month’s

salary of the staff. The total project cost is estimated at Rs. 29,590,720.


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4.2. Financing Option

Looking at the current market trends lending of up to 50% could be available on these projects. A list of

financial institutions willing to facilitate such projects in given in Annexure B. The bank will charge a rate of

at least 20% on financing per annum plus this need to be backed by 200% collateral.

Initial Financing Amount in PKR

Debt 50% 14,795,360

Equity 50% 14,795,360

4.2.1. Debt Assumptions

Debt Tenure 5 Years

Interest Rate on Long Term Debt 20%

Debt Payments Quarterly

4.3. Projected Income Statement

Statement Summaries EC Poultry House - SBI

Projected Income Statement

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue from Sales (Birds & Empty Feed Bags)

53,194,080 58,513,488 64,364,837 70,801,320 77,881,453

Cost of DOCs (12,093,120) (12,697,776) (13,332,665) (13,999,298) (14,699,263)

Cost of Feed per annum (26,440,160) (29,084,176) (31,992,594) (35,191,853) (38,711,038)

Cost of other goods (vaccination, electricity, diesel,

spray etc) (4,780,000) (5,175,200) (5,604,124) (6,069,739) (6,575,279)

Gross Profit 9,880,800 11,556,336 13,435,454 15,540,431 17,895,872

General administration & selling expenses

Administration expense (1,182,000) (1,300,200) (1,430,220) (1,573,242) (1,730,566)

Communications expense (phone, fax, mail, internet, etc.)

(50,000) (55,000) (60,500) (66,550) (73,205)

Office expenses (stationary, entertainment, janitorial

services, etc.) (45,000) (49,500) (54,450) (59,895) (65,885)

Professional fees (legal, audit, consultants, etc.)

(45,000) (49,500) (54,450) (59,895) (65,885)

Depreciation expense (2,986,700) (2,986,700) (2,986,700) (2,986,700) (2,986,700)

Sub Total (4,308,700) (4,440,900) (4,586,320) (4,746,282) (4,922,240)

Operating Profit 5,572,100 7,115,436 8,849,134 10,794,149 12,973,632

Less Financial Charges 2,809,907 2,391,408 1,880,884 1,258,133 498,515

Net Profit Before Tax 2,762,193 4,724,028 6,968,250 9,536,016 12,475,117

Provision For Income Tax 966,767 1,653,410 2,438,888 3,337,606 4,366,291

Net Profit/Loss After Taxes 1,795,425 3,070,618 4,529,363 6,198,411 8,108,826


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4.4. Projected Cash Flow Statement

Calculations Poultry - SBI

Cash Flow Statement

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Operating activities

Net profit - 1,795,425 3,070,618 4,529,363 6,198,411 8,108,826

Add: Depreciation expense - 2,986,700 2,986,700 2,986,700 2,986,700 2,986,700

Amortization expense - Pre-operating cost

- - - - -

Inventory (4,896,220) (524,538) (576,926) (634,618) (698,080) (767,889)

Cash provided by operations (4,896,220) 4,257,587 5,480,392 6,881,445 8,487,031 10,327,637

Financing activities

Change in long term debt 14,795,360 (1,913,931) (2,333,831) (2,845,852) (3,470,207) (4,231,539)

Change in short term debt

Issuance of shares 14,795,360 - - - - -

Cash provided by / (used for) financing activities 29,590,720 (1,913,931) (2,333,831) (2,845,852) (3,470,207) (4,231,539)

Investing activities

Capital expenditure (23,816,000)

Cash (used for) / provided by investing activities (23,816,000)

Net Cash 878,500 2,343,656 3,146,562 4,035,592 5,016,824 6,096,098

Cash balance brought forward 878,500 878,500 3,222,156 6,368,718 10,404,310 15,421,134

Cash available for appropriation

3,222,156 6,368,718 10,404,310 15,421,134 21,517,231

Dividend 0 0 0 0 0 0

Cash carried forward 878,500 3,222,156 6,368,718 10,404,310 15,421,134 21,517,231


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5.5. Projected Balance Sheet

Projected Balance Sheet

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Current Asset

Cash & Bank 878,500 3,222,156 6,368,718 10,404,310 15,421,134 21,517,231

Inventory 4,896,220 5,420,758 5,997,684 6,632,302 7,330,382 8,098,271

Total Current Assets 5,774,720 8,642,914 12,366,402 17,036,612 22,751,516 29,615,502

Fixed Asset

Land 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000

Furniture 250,000 212,500 175,000 137,500 100,000 62,500

Building/Infrastructure 15,640,000 14,076,000 12,512,000 10,948,000 9,384,000 7,820,000

Machinery & Equipment

6,926,000 5,540,800 4,155,600 2,770,400 1,385,200 -

Pre-operating cost Total Fixed Assets 23,816,000 20,829,300 17,842,600 14,855,900 11,869,200 8,882,500

Total Assets 29,590,720 29,472,214 30,209,002 31,892,512 34,620,716 38,498,002

Liabilities & Shareholders' Equity

Current liabilities - 1,913,931 2,333,831 2,845,852 3,470,207 4,231,539

Accounts payable - - - - - -

Total Current Liabilities - 1,913,931 2,333,831 2,845,852 3,470,207 4,231,539

Long Term Debt 14,795,360 12,881,429 10,547,598 7,701,746 4,231,539 -

Shareholders' Equity Paid-up capital 14,795,360 14,795,360 16,590,785 19,661,403 24,190,766 30,389,176

Retained Earnings 1,795,425 3,070,618 4,529,363 6,198,411 8,108,826

Total Equity 14,795,360 16,590,785 19,661,403 24,190,766 30,389,176 38,498,002

TOTAL CAPITAL AND LIABILITIES

29,590,720 29,472,214 30,209,002 31,892,512 34,620,716 38,498,002


24

Key Assumptions

Net Bird Calculation – Flocks/Year

Total birds per flock 30,600

No. of birds per flock 30,000

Excessive birds @ 2% of Birds 600

Mortality in Birds @ 5% of 30,600 = 1,538

Net birds after Mortality per flock 29,070

Net birds after Mortality for the

year

232,560

Net Bird Calculation – Cost of Feed

Description No. of Birds Amount in PKR

Total Mortal Birds 1,530

During first two weeks Mortal birds @ 50% of

Total Mortality

765 33,660

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

of Total Mortality

459 36,720

During 5th and 6th weeks Mortal birds @ 20%

of Total Mortality

306 37,000

Cost of Feed Consumed by Mortal Birds Per

Flock

1,530 107,320

Cost of Feed Consumed by Remaining Birds 29,070 3,197,700

Total Cost of Feed Consumed by the Birds Per

Flock

3,305,020

Total Cost of Feed Consumed by the Birds Per

Year

26,440,160


25

Expenses Assumption – Project Income Statement

Communication expense 4% of administration expense

Office expenses (Misc.) 4% of administration expense

Professional fees (legal, audit, consultants, etc.) 0.08% of revenue

Depreciation Assumptions

Depreciation Method Straight Line Method

Building depreciation rate 10%

Machinery & Equipment depreciation rate 10%

Office Equipment depreciation rate 10%

Furniture & Fixtures depreciation rate 15%

Cost of Goods Assumptions

DOC (Day Old Chicks) (Rs.) 52

Feed Conversion Ratio (FCR) i.e. Feed required

to gain 1 Kg weight (Kgs.)

1.90

Vaccination. Medication and Disinfection Cost

per Bird (Rs.)

6

Feed Price per Bag (50 Kgs) 1,445

Cost of Feed per Kg – Rs. 32

Price of Empty Feed Bags – Rs. 6


26

Growth Rate of Goods

Sales Growth Rate 10%

CGS Growth Rate (DOC, Vaccine & Medication,

Litter & Spray)

5%

Cost of Feed Growth Rate 5%

Salaries Growth Rate 10%

Electricity & Diesel Growth Rate 10%


27

Annex A

The product assumptions are based on real time data derived from useful resources and poultry associations in Pakistan. A

breakdown of the assumptions is explained below:

Number of Flocks per year

A flock will contain 30,600 birds i.e. Day Old Chicks, which will be raised 8 times in an year with a raising period of 35 days (45 days

including lag time)

Number of birds per flock

It is estimated that a flock will contain 30,600 birds as it will be viable to raise them in the ECH proposed location/area

Time required per flock

35 days is approximately estimated to raise the birds i.e. one flock (30,000 birds)

Lag time required per Flock (Days)

10 days are required to clean, paint & fumigate the farm/shed before the next lot is brought in. With the help of new technology

and machinery the lag time has been brought down to 10 days from 15 days, as conducted in previous studies.

Total Annual Production Capacity

Total birds produced in an year will be 30,600 x 8 (flocks per year) = 244,800 – morality rate of 5% = 232,560

Shed Space Required per Bird (Sq.ft)

Recent survey has indicated that these days Day Old Chicks requires very little space. But as they grow and after 5 weeks of

feeding the total space required by a bird would be 0.65 sq. ft. Hence, this figure is taken initially and the construction and area

will be build up according to these details.

Sale price growth rate

Keeping in view the past trends it would be viable to say that there will be a 10% increase in the sale price of the chicken. This

increase keeps in view different factors like quality of chicken, bird weight, other economic factors like inflation, taxes etc.

Production capacity utilization

The plant/shed would be used to its fullest capacity throughout the year apart from the days when it be closed down for cleaning

i.e. Lag Time.


28

Annex B

Name of Financial Institutions

ZTBL Khushali Bank Ltd

Habib Bank Limited Rozgar Microfinance Bank ltd

Bank Al-Falah Limited Tameer Microfinance bank ltd

Askari Bank Limited Kashf Bank Limited

United Bank Limited Muslim Commercial Bank


29

Annex C

FRONT SIDE

INSIDE CONTROL ROOM


30

IMPORTANT CONTACTS

SINDH BOARD OF INVESTMENT Government of Sindh Block B, 1

st Floor, FTC Building

Shahra-e-Faisal Karachi, Pakistan Tel: 021 – 99207512 – 4 Fax: 021 - 99207515 Email: [email protected] Website: http://www.sbi.gos.pk

MINISTRY OF FOOD, AGRICULTURE & LIVESTOCK

B Block, Pak Secretariat, Islamabad , Pakistan

Tel: +92-51-9203307, 9210351

Fax: +92-51-9210616

TRADE DEVELOPMENT AUTHORITY OF PAKISTAN (TDAP) 5th Floor, Block "A", Finance & Trade Centre, Shahra-e-Faisal, Karachi - Pakistan Tel: (92-21) 9206462 Fax: (92-21) 9206461

SMEDA 5 TH Floor, Bahria Complex II, M.T. Khan Road, Karachi - Pakistan Tel: (021) 111-111-456 Fax: (021) 5610572 Email: [email protected]

K&N 160 Banglore Town,

Shara-e-Faisal, Karachi-75350, Pakistan

Tel: 021 - 34533623 - 34541419

LIVESTOCK & FISHERIES DEPARTMENT - SINDH Barrack Number 90, Sindh Sectt. No. 48, Opp. Sindh Assembly Building Karachi – Pakistan Tel: 021 – 99203291

SUPREME FEEDS (PVT.) LTD. Head Office: 176-Shadman 1 Lahore. Phone: +92-42-37522104-7 Fax: +92-42-37573106

BIG BIRD POULTRY BREEDERS (PVT.) LTD. 2-A,Ahmed Block, New Garden Town Lahore Phone: +92-42-35835373-4 Fax: +92-42-35835371

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

HI-TECH POULTRY BREEDERS (PVT.) LTD. 1-A, Shadman Chowk Jail Road, Lahore Phone: +92-42-37564503 Fax: +92-42-37564508

ASIA FEED (PVT.) LTD. 359 Shamsabad Colony, Humayun Road Multan. Phone: +92-61-6224414 Fax: +92-61-6224414

ISLAMABAD POULTRY BREEDING CO. D-98, Satellite Town, Murree Road Rawalpindi. Phone: +92-51-4427139 Fax: +92-51-4421203

FAST POULTRY FEEDS 12-KM Near Nai Sabzi Mandi Jhang Road, Faisalabad. Phone: +92-41-2577171-2 Fax: +92-41-2517474

JADEED FARMS (PVT.) LTD. 6,Allied Commercial Plaza, Murree Road, Chandni Chowk Rawalpindi. Phone: +92-51-4851280-84 Fax: +92-51-4851255

mailto:[email protected]

http://www.sbi.gos.pk/

mailto:[email protected]


31

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

RUSTUM FEEDS Flat No.6, 1st Floor, United Centre Shamsabad, Murree Road, Rawalpindi Phone: +92-51-4455362 Fax: +92-51-4847382

PAKISTAN POULTRY ASSOCIATION NOTHERN ZONE(NWFP PUNJAB& AJK) HOUSE# 24, BLOCK R JOHAR TOWN, LAHORE PAKISTAN Tel: +92-42-7550132-7572764, +92-333 4888555

Golden Birds Poultry Agency S/No. 230 Kh. Shahbuddin Mkt. Sdr, Karachi Tel: 021 - 32253309

Ghazi Brothers D-35, KDA Scheme No. 1, Miran Muhammad Shah Road, Karachi Tel: 021 - 34543579, 34543785

Dastagir Poultry Nadim Centre,BS-38,Block-7,Opp.Dastagir Post Office, F.B Area, Karachi Tel: 021 - 36333283, 0300-2945245

M.R. Poultry Service Shop No. 57, Goal Mkt., Nr. Jama Masjid, Nazimabad No. 3, Karachi Tel: 021 - 36610436, 36681537

Bismillah Chicken Centre Garden West, Near Macca Masjid, Chandni Chowk, Karachi, Pakistan Tel: 0333-3002843

Amir Poultry Farm Shop No. 41, Gole Mkt., Nazimabad No. 3, Karachi, Pakistan Tel: 0333-2275130, 6614501

Data Poultry Farm Shop No. 43, Main Gole Mkt., Nazimabad No. 3, Karachi, Pakistan Tel: 6681019, 6614511

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