Pre-Feasibility Study

CALF FATTENING FARM(FEEDLOT SYSTEM)
Small and Medium Enterprise Development Authority
Government of Pakistan
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June, 2005
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
PREF-17/June, 2005/Rev 2
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1 INTRODUCTION TO SMEDA.......................................................................................................... 4
2 PURPOSE OF THE DOCUMENT..................................................................................................... 4
3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT.......................... 5
3.1 STRENGTHS.....................................................................................................................................5
3.2 WEAKNESSES..................................................................................................................................5
3.3 OPPORTUNITIES...............................................................................................................................5
3.4 THREATS.........................................................................................................................................6
4 PROJECT PROFILE ......................................................................................................................... 7
4.1 OPPORTUNITY RATIONALE...............................................................................................................7
4.2 MARKET ENTRY TIMING..................................................................................................................8
4.3 PROPOSED BUSINESS LEGAL STATUS................................................................................................8
4.4 PROPOSED CAPACITY ......................................................................................................................8
4.5 PROJ ECT INVESTMENT .....................................................................................................................8
4.6 PROPOSED LOCATION ......................................................................................................................9
4.7 KEY SUCCESS FACTORS/PRACTICAL TIPS FOR SUCCESS....................................................................9
5 SECTOR & INDUSTRY ANALYSIS .............................................................................................. 10
5.1 MAJ OR PLAYERS...........................................................................................................................10
5.2 HUBS OF CALF FATTENING FARMING.............................................................................................11
6 MARKET INFORMATION............................................................................................................. 12
6.1 SECTOR CHARACTERISTICS............................................................................................................12
6.2 MARKET POTENTIAL......................................................................................................................13
6.3 TARGET CUSTOMERS.....................................................................................................................13
7 FARM INPUTS................................................................................................................................. 14
7.1 LAND............................................................................................................................................14
7.1.1 Land Requirement................................................................................................................14
7.1.2 Land Lease ..........................................................................................................................14
7.1.3 Suitable Locations ...............................................................................................................14
7.1.4 Herd Mix.............................................................................................................................14
7.2 ANIMAL MARKETS ........................................................................................................................15
7.3 ANIMAL HOUSING.........................................................................................................................15
7.4 FARM MACHINERY ........................................................................................................................16
7.5 FEED.............................................................................................................................................17
7.5.1 Ration for Calf Fattening.....................................................................................................17
7.5.2 Green Fodder for Calves......................................................................................................17
7.5.3 Fodder Production Economics.............................................................................................18
7.5.4 Daily Fodder Requirement ...................................................................................................19
7.5.5 Daily Total Mixed Ration Requirement.................................................................................19
7.5.6 Total Mixed Ration (TMR) Formula for calves:....................................................................19
7.5.7 Mineral Mixture...................................................................................................................20
7.5.8 Wheat Straw (Bhoosa or Turi)..............................................................................................20
7.6 VACCINATION & MEDICATION......................................................................................................20
7.7 CALF QUARANTINE .......................................................................................................................20
7.8 LABOR REQUIREMENT ...................................................................................................................21
8 FARM OUTPUT............................................................................................................................... 21
8.1 FATTENING PERIOD .......................................................................................................................21
8.2 MEAT COMPOSITION......................................................................................................................22
8.3 INCREASE IN WEIGHT GAINS...........................................................................................................22
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
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8.4 SALE PRICE...................................................................................................................................22
9 USEFUL TERMINOLOGY............................................................................................................. 23
10FINAICIAL ANALYSIS................................................................................................................... 24
10.1 PROJ ECTED INCOME STATEMENT...............................................................................................24
10.2 PROJ ECTED CASHFLOW STATEMENT..........................................................................................25
10.3 PROJ ECTED BALANCE SHEET.....................................................................................................26
11KEY ASSUMPTIONS ...................................................................................................................... 27
12ANNEXURE 1................................................................................................................................... 29
13ANNEXURE 2................................................................................................................................... 31
14ANNEXURE 3................................................................................................................................... 33
15ANNEXURE 4................................................................................................................................... 34
Pre-Feasibility Study Calf Fattening Farm
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DISCLAIMER
The purpose and scope of this information memorandum is to introduce the subject
matter and provide a general idea and information on the said area. All the material
included in this document is based on data/information gathered from various sources
and is based on certain assumptions. Although, due care and diligence has been taken
to compile this document, the contained information may vary due to any change in
any of the concerned factors, and the actual results may differ substantially from the
presented information. SMEDA does not assume any liability for any financial or
other loss resulting from this memorandum in consequence of undertaking this
activity. The prospective user of this memorandum is encouraged to carry out
additional diligence and gather any information he/she feels necessary for making an
informed decision.
DOCUMENT CONTROL
Document No. PREF-24
Revision 2
Prepared by SMEDA-Punjab
Issue Date March 2002
Revised In J une 2005
Issued by Library Officer
Pre-Feasibility Study Calf Fattening Farm
PREF-24/June, 2005/Rev 2
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1 INTRODUCTION TO SMEDA
The Small and Medium Enterprise Development Authority (SMEDA) was established
with the objective to provide fresh impetus to the economy through the launch of an
aggressive SME support program.
Since its inception in October 1998, SMEDA had adopted a sectoral SME development
approach. A few priority sectors were selected on the criterion of SME presence. In depth
research was conducted and comprehensive development plans were formulated after
identification of impediments and retardants. The all-encompassing sectoral development
strategy involved recommending changes in the regulatory environment by taking into
consideration other important aspects including finance, marketing, technology and
human resource development.
SMEDA has so far successfully formulated strategies for sectors including, fruits and
vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear,
textiles, surgical instruments, transport and dairy. Whereas the task of SME development
at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s
areas of operation.
Along with the sectoral focus a broad spectrum of business development services is also
offered to the SMEs by SMEDA. These services include identification of viable business
opportunities for potential SME investors. In order to facilitate these investors, SMEDA
provides business guidance through its help desk services as well as development of
project specific documents. These documents consist of information required to make
well-researched investment decisions. Pre-feasibility studies and business plan
development are some of the services provided to enhance the capacity of individual
SMEs to exploit viable business opportunities in a better way.
This document is in the continuation of this effort to enable potential investors to make
well-informed investment decisions.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk.
2 PURPOSE OF THE DOCUMENT
The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs
to facilitate investment and provide an overview about dairy and livestock farming. The
project pre-feasibility may form the basis of an important investment decision and in
order to serve this objective, the document covers various aspects of dairy and livestock
concept development, start-up, production, finance and business management. The
document also provides sectoral information, brief on government policies and
international scenario, which have some bearing on the project itself.
This particular pre-feasibility is regarding “Calf Fattening Farm” which comes under
“Livestock and Agriculture” sector. Before studying the whole document one must
consider following critical aspects, which form the basis of any investment decision.
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3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR
INVESTMENT
Calf fattening is all-inclusive activity, related to meat animal’s care, housing, medication,
feeding and management. It is defined as all those aspects and activities relating to
raising of calves for meat purpose. Before making the decision, whether to invest in the
livestock farming or not, one should carefully analyze the associated risk factors. A
SWOT analysis can help in analyzing these factors, which can play important role in
making the decision.
3.1 Strengths
 Back bone and main stay of economy. Provides raw material for food & Leather
industry.
 Major source of food, i.e. Meat.
 Source of Farmyard Manure (FYM).
 Sizeable foreign exchanges earning through exports.
 Ample human resource employment sector.
 Stationed, Permanently located secured loaning sector.
 Contended nature. Low cost living standard.
 Full family involvement, Devoted & Hardworking Sector.
3.2 Weaknesses
 Animals are kept for social rather than commercial reasons.
 There is no registered beef breed in Pakistan.
 Low or lack of interaction with farmers. Poor information about each other. Lack of
extension services.
 Lack of education and initiative in farmer, traditional approach due to lack of skills
and management.
 Unorganized sector, unaware of basic farm management practices.
 Remote area, lack of farm to market approach & transportation.
 Non-availability of communication services.
 Lack of farm/ market infra structures & marketing information.
 Lack of record keeping on farm.
 No or low application of research work and record keeping.
 Management of livestock farm is a challenging job.
 Nutrition is still a problemhampering the livestock productivity in general and meat
production in particular
 Enormous production losses due to endemic diseases every year.
3.3 Opportunities
 Govt. of Pakistan & Sate Bank of Pakistan priority sector.
 Meat and meat products needs are much higher than supply.
 Ample opportunities are available in the Banking Sector.
 Commercially viable sector with great credit potential and absorption capacity.
Pre-Feasibility Study Calf Fattening Farm
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 Vast range of area of operation, more needs and scope of development.
 Value added meat products are in demand. If the government lifts the price fixing
taboo, then there are bright chances for the flourishing of meat market. Customers are
ready to pay prices for the good quality meat.
 Massive migration of labour to cities can be checked / stopped.
 Corporate financing will become a niche in lending market.
 Cooperatives can play a big role for development in livestock sector.
 Progressive meat retailing firms can promote the sale of processed and quality meat
cuts to consumers, which is packed and labeled at a price, including the cost of
processing, packaging and quality.
 Development of slaughtering and processing operations can help in obtaining
maximum value.
 Improving the control of external parasites may enhance the value of hide or skin.
 More opportunities to invest in this sector due to duty free import of livestock from
India.
3.4 Threats
 Implementation of WTO will result in open & competitive commodity pricing.
 Due to fear of default, baker community has reluctance for lending loans.
 High risks of diseases in live stock. Animals are subject to serious diseases that may
lead to mortality.
 The formal meat market not growing due to the government regulation of price fixing
as Municipal Corporation fixes the meat prices in the urban markets.
 The fixed prices are not likely to be viable for selling the quality meat.
 Butcher market not ready to pay the premium prices for the fattened animal.
 Defective and unorganized markets.
 Imbalance between prices of inputs & outputs.
 Rising trend of cost of production with higher rate of interest as compared to profit
ratio.
 Lack of media projection, non-recognition of problems and monopoly of
multinationals.
 Lack of community organizations and out dated farm practices.
 Lack of coordination towards common causes & goals.
 Lack of awareness about economics, demand & supply in market.
 Low saving, low holding capacity. Increasing level of poverty.
 Non-availability of subsidy & tax holidays.
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4 PROJECT PROFILE
4.1 Opportunity Rationale
Livestock production is an integral part of Pakistan's agriculture sector and plays a vital
role in national economy. At present, livestock is contributing about 49.1% to the
agricultural sector and 11.4 per cent to the GDP. Its net foreign exchange earnings in
2003-04 were 53 billion, which are about 11 percent of the overall export earnings of the
country. The role of livestock in rural economy may be assessed by the fact that 30 to 35
million of the total rural population is engaged in livestock farming, having 2 to 3
cattle/buffalo and 5 to 6 sheep/goats per family deriving 30 to 40 per cent of income from
it. During year 2003-04, the total red meat production was 1.09 and 0.72 million tons for
beef and mutton, respectively. The per capita consumption indicates a growing demand
of meat in the years to come. Calves for fattening may come from the dairy herd.
Table 4-1: Population of livestock (million)
1
Species 1999-00 2000-01 2001-02 2002-03 2003-04(E
2
)
Cattle 22.0 22.4 22.8 23.3 23.8
Buffalo 22.7 23.3 24.0 24.8 25.5
Sheep 24.1 24.2 24.4 24.6 24.7
Goats 47.4 49.2 50.9 52.8 54.7
Table 4-2: Production of Livestock Products
Product 1998-99 1999-00 2000-01 2001-02 2002-03
Milk (million tones) 24.88 25.57 26.28 27.03 27.81
Beef (000,tones) 963 986 1,010 1,034 1,060
Mutton(000,tones) 633 649 666 683 702
Livestock production is growing rapidly as a result of the increasing demand for animal
products. In a Food & Agriculture Organization (FAO) study: Livestock to 2020: The
Next Food Revolution, it is suggested that global meat production and consumption will
rise from 233 million tones (2000) to 300 million tones (2020), and milk from 568 to 700
million tones over the same period. Egg production will also increase by 30%
3
. These
predictions show a massive increase in animal protein demand, needed to satisfy the
growth in the human population.
Calf fattening enterprise is an agro-based project. The calves, preferably males, 8-9
months of age are fed on concentrated feed and fodder produced from the agricultural
land. Balanced feed is given to calves for a period of 120 days to get higher weight gain.
Live weight of these calves is between 80-90 kg. If these calves are fed properly on the
formulated fattening feed, their weight can be raised up to 180-200 kg during the
fattening period. The daily weight gain of fattened calves varies between 800-1000

1Source =Economic Survey of Pakistan, 2003-04
2 E= Estimated
3
The Livestock to 2020 study used base figures for 1993 and these have been recalculated for the year
2000 based on FAO STAT data.
Pre-Feasibility Study Calf Fattening Farm
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grams. There is a shortage of beef in the country. This shortage is being observed through
meat-less days. If the calf fattening projects are carried out in the country then the
domestic demand of beef could be fulfilled. As the fattened animals have higher meat
contents (55%) as compared to grazing animals (48%).
4.2 Market Entry Timing
Since beef demand is increasing day by day, therefore, the demand of fattened calves is
also higher. The demand increases especially before occasions like Eid-ul-Fitr and Eid-
ul-Azha. That’s why the animals in such occasions are sold at a bit higher prices as
compared to other days. The proposed business can be started before these occasions or
any time through out the year. At the commencement of the proposed business, it is
important that the entrepreneur must have good knowledge of the production and have
contacts with the livestock breeders and farmers. The ability to work with people/
animals and efficient use of resources are important aspects in modern and commercial
calf fattening farm.
4.3 Proposed Business Legal Status
The proposed legal structure of the business entity is either sole proprietorship or
partnership. Although selection totally depends upon the choice of the entrepreneur but
this financial feasibility is based on Sole Proprietorship.
4.4 Proposed Capacity
The pre-feasibility suggests producing 390 calves a year in 3 production cycles, each of 4
months. This size of a farm justifies the recurring costs of this project.
4.5 Project Investment
The total cost of the project is Rs.1, 307, 615 out of which capital cost of the project is
Rs. 1,121,000 for purchasing the animals and constructing the building and the rest is
used to meet the working capital requirement.
Table 4-3: Project Costs
Capital Investment 1,121,000
Working Capital Requirement 186,615
Total Investment 1,307,615
The proposed pre-feasibility is based on the assumption of 50% debt and 50% equity.
However this composition of debt and equity can be changed as per the requirement of
the investor.
Pre-Feasibility Study Calf Fattening Farm
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Table 4-4: Details of Project Costs
Description Amount (in Rs.)
Land & Building 1,062,000
Machinery & Equipment 59,000
Total Fixed Cost 1,121,000
Working Capital 186,615
Total 1,307,615
Table 4-5: Project Financing
Debt 50% 653,808
Equity 50% 653,808
Total Project Investment 1,307,615
Table 4-6: Project Economics
Viability Project
IRR (%) 47.20
NPV @20% (Rs) 2,758,560
Pay Back Period (year) 2.87
4.6 Proposed Location
The development of urban or peri-urban commercial calf fattening farms is something
new in livestock production. Metropolitan cities like Lahore, Karachi, Multan,
Faisalabad, Rawalpindi, etc are the major markets of meat. Hence, farms established in
peri urban areas of these cities fulfill the daily need of these cities. The other locations
may be around the bigger cities e.g. Sialkot, J hang, Rahim Yar Khan, Bahawalnagar,
Bahawalpur, Sahiwal, Okara etc.
4.7 Key Success Factors/Practical Tips for Success
The livestock production research institutes and universities have conducted many studies
to ascertain the beef production potential of indigenous livestock under the feedlot
fattening regimes. Weight, growth and efficiency are major factors influencing the
economical meat production.
The carcass yield depends upon several factors such as breed, age, sex and degree of
finishing. The studies suggest substantial live weight gain and carcass yield from the
buffalo and different indigenous breeds of cow calves. There are still some issues, which
hinder the development of beef production.
The thrust in calf fattening farm is on the increased use of capital and management.
Successful farming harnesses all available resources into productive and profitable unit.
Calf fattening is highly complex as it includes farm management, feeding, housing,
disease control and hygienic production of milk on farm. The judicial use of means and
resources to achieve clearly defined goals is the key success factor i.e. the art of
maximization and optimal utilization of resources and means for maximizing productivity
and profits.
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Feeding meat animals on nutritious compound feed along with green fodder can be
adopted. Other farm management practices include comfortable and ventilated barns,
drinking water and feed according to the requirements. Timely vaccination against
Rinderpest, Black Quarter and Foot & Mouth Disease. The prevention of internal and
external parasites will also improve the over all performance of herd. The absence of calf
weaning program is a shortcoming to the development of beef industry. Too many young
male calves are slaughtered quite young due to high cost of milk required to feed them.
Those left are generally underfed and stunted thus unable to achieve the normal growth.
A suitable plan could provide animals of 100-150 kgs of weight, which could be raised to
the desired market demand.
An efficient program aim at moving the calves from liquid to dry feed as quickly as
possible if calf fattening is integrated with dairy farming. High quality calf starter feed
with digestibility, palatability and composition should be fed free of choice from the third
day of birth. Quality of diet is the key to a successful early weaning system. Weaning
could be started once the consumption reaches 800 grams a day, which would provide
healthy and thrifty calves. The changing of this system by small farmers and peri-urban
dairy farm entrepreneurs will be a long and difficult process to which some incentives are
essential. Another option is to buy feeder calves from the cattle markets.
Attention must be given to the selection of animals. Once the calves are purchased and
placed in pens, farmers would face many technical problems affecting the success of their
operation. It will be worthwhile to get technical assistance from the livestock
professionals and experts. It is advisable to purchase fattening rations initially from the
public or private sector feed mills. Once the experience is gained and practices are
established, feed processing equipment, such as the grinder-mixers can be installed as per
capacity of the farm.
5 SECTOR & INDUSTRY ANALYSIS
5.1 Major Players
Though livestock production is fragmented and most units in Punjab are small with 10
per cent holding around 10 to 20 buffalo cows, and only five per cent over 20 heads each.
Such units are often run by capable and business-oriented farmers who are open to
change and eager to adopt improved production practices. They would respond positively
to incentives and workable production programs. In mid 90’s the US Feed Grain Council
introduced commercial meat production. A number of farmers from Punjab and Sindh
participated in the program. They produced many ‘lots’ of fattened animals but felt
difficulty in selling the animals at proper price.
Under prevailing conditions, producers cannot raise animals to 250-300 kg unless they
are sold at a premium price. Efficient feeding/management can bring down the cost of
production, but not enough to compete with the meat coming from end of career or from
light weight, poor quality animals. A positive measure could be to terminate the ceiling
price policy and create integrated production-distribution projects.
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Table 5-1: Male Calves Population (000Heads)
4
Year Buffalo Cattle Total
2000-01 3782 3917 7699
2001-02 3895 3993 7888
2002-03 4012 4071 8083
Table 5-2: Meat Production (000 Tons)
5
Year Beef Mutton Poultry Total
2000-01 1009 666 339 2014
2001-02 1035 683 355 2073
2002-03 1060 702 372 2134
Table.5-3: Land Holdings
6
Size of the Farm (hectares) No. of Farms Farm Area Avg. size of Farm
Area (ha)
Number Hectare
Private Farms 5,070,963 19,149,673 3.8
Government Farms 149 103,035 -
All Farms 5,071,112 19,252,672 100
Under 0.5 678,538 193,126 0.3
0.5 -<1.0 689,233 510,397 0.7
1- <2 1,036,286 1,446,796 1.4
2- <3 841,295 1,973,800 2.3
3- <5 857,387 3,309,432 3.9
5- <10 623,110 4,134,346 6.6
10- <20 237,929 3,032,872 12.7
20- <60 91,831 2,613,767 28.5
More than 60 15,354 1,935,101 126.0
5.2 Hubs of Calf Fattening Farming
Karachi is a big market for good quality meat. The Karachi market is expanding, as daily
requirement of meat is about 620 metric tons. Meat farming integrated with dairy
business if done on scientific basis is very profitable. There are more than 100 markets
only in Sindh dealing with livestock without any facility or supervision. The major
markets are Tharparkar, Mirpurkhas, Sanghar, Dadu and Badin. All this will facilitate
farmers in rearing their livestock in a more healthy way.

4
Source: Agricultural Statistics of Pakistan, 2002-03
5
Source: Agricultural Statistics of Pakistan, 2002-03
6
Source: Agricultural Census of Pakistan, 2000
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The countries can also be grouped by the percentage of the beef herd in the total cattle
herd, a situation that is reflected in the typical farms:
 Milk Countries: with the beef herd as <25 percent of the total are Poland, Pakistan,
Hungary, Czech Republic and Germany.
 Mix Countries: with a share between 25 and 75 percent of the beef herd of the total
are Austria, France, Ireland and Spain.
 Beef Countries: with >75 percent of the beef herd of the total are U.S., Brazil,
Australia, Argentina and Uruguay.
6 MARKET INFORMATION
6.1 Sector Characteristics
Currently, meat sector in Pakistan is working on an informal basis from animal raising to
meat selling. Animal traders purchase animals from the rural areas and sell them to the
animal markets in the urban areas. Butchers purchase these animals from animal markets
and slaughter themin the slaughterhouses. Butchers act as meat traders and dominate the
meat market both in rural and urban areas. The animals sold in these markets are
generally diseased and culled animals. Butchers/traders prefer to buy these cheap
animals.
Pakistan has ten semi-automated slaughterhouses and a meat processing plant. The only
meat processing plant was installed in 1995. It has a capacity of 50,000 Kg. per month,
but is operating below its capacity. It processes both chicken and beef into a variety of
processed products such as sausages and smoked meats.
The current red meat production system is both traditional and inefficient. Beef mostly
comes from the end of career, or emergency slaughtered animals. A lot of baby buffaloes
and calves are slaughtered when these are only 1-2 weeks old. Few calves are raised to
60-80kg but on extremely poor and unbalanced diets. Lack of commercial, on-farm
livestock feeding could be blamed for existing price ceiling, which is fixed too low to
recover the production cost. Traditional and unhygienic slaughtering techniques are
major constraints, which are not acceptable to those who believe in health and hygiene.
The livestock resources hold potential for increasing the production of meat. It is
estimated that about 6-7 million buffalo/cattle male calves if raised on balanced diet
could double the production. Sheep and goats can also be raised for quality meat
production.
The meat industry as a whole, from livestock farming to marketing of meat is in a poor
state at the moment. General crop farming has progressed from the 'subsistence level
farming' to 'commercial farming', at least in major crops in the country because of
research, extension focus and 'market pull factors'. Whereas the livestock farming has
remained least commercialized and survives under subsistence farming conditions. Beef
yield has remained low due to the following constraints:
 Despite immense potential, breeding has not been done for increasing productivity.
 Feeding methods are primitive with hardly any feed management. Despite abundant
fodder production, there is always a shortage between seasons. This shortage is met
by "bhoosa" (wheat straw) which has very low nutritional value. Quality feed
concentrates from existing by-products is not being used efficiently.
Pre-Feasibility Study Calf Fattening Farm
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 Large-scale livestock farming has not been practiced due to the total manual
procedures adopted in feeding and herd management. Reliability of manual labour is
severe especially in view of illiteracy and poor farmer education on the subject.
6.2 Market Potential
In Pakistan, the beef industry is an important segment of livestock production. The
increasing population and the rising consumer buying power have together contributed to
an increase in demand resulting in relatively favorable prices for beef. Worldwide
consumption of meat during 1983 for developed world was 74kg compared to 14kg for
developing countries and 11 kg for Pakistan. The data for 1993 indicates 76kg, 21kg and
16kg for the three, respectively. The challenge for Pakistan now is to achieve 47kg per
capita consumption by 2020. According to statistics there is a gap in demand and supply
of beef in the market. This gap is met through meatless days and through poultry meat.
Figure 6-1: Market Value of Dairy & Livestock in Pakistan
(Source: Agricultural Statistics of Pakistan, 2003-04)
6.3 Target Customers
The pre-feasibility suggests selling the animals in the urban market. The buyers could be
the corporate buyers e.g. hotels and exporters. The animal mandies of big metropolitan
cities can also be considered for selling the animals in bulk. The animals will be sold on
live weight basis. The price of fattened calves varies between Rs 50-60 kg depending
upon the supply and demand of meat in the market. The feasibility has taken Rs 55 per kg
live body weight as the selling price. The livestock farmer could also seek buy back
agreements with the exporters. Following are some of the target clients for a calf-
fattening farmer.
1. Local people
2. Butchers
3. Contractors
4. Slaughter house owners
The cost of production per kg of meat should be lower than its sale price so that farmer
could feel it economical.
Market Value of Dairy & Livestock in Pakistan
( (year 2003-04) : Rs 362 Billion
Milk
58%
Meat
28%
Other
Livestock
Products
14%
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7 FARM INPUTS
7.1 Land
7.1.1 Land Requirement
About 4.35 acres of land is required for a calf-fattening project of 390 animals in a period
of one year. Majority of this land would be used for green fodder production, which is
sufficient for 130 calves in 120 days. The preferred practice is to divide the area in plots
and grow the multi cut fodder like Mott grass, Sadabahar etc. in rotation so as to get the
maximum fodder from minimum land throughout the year. The details of such fodder are
given in annexure 2. The rest would be used for building a shed for the animals to protect
themfrom severity of the weather.
Table 7-1: Land Requirements
Description Area (Sq. ft)
Shed for Calves 4,680
Open Paddock for Calves 7,800
Stores (Feed & machine) 120
Servant Room, Wash room 120
Land for fodder 144,000 (4 Acre)
Sq. ft 156,720 Total Land Requirement
Acres 4.35
7.1.2 Land Lease
Leaseis a better option for a new investor. Land on lease is available in rural areas for a
period of 5-15 years. Advance rent for a few years will be charged initially. Good
agriculture land is available with an annual rent of Rs 5,000-10,000 per acre.
7.1.3 Suitable Locations
Peri urban and rural areas where water is available are suitable locations for establishing
a calf-fattening farm.
7.1.4 Herd Mix
Some breeds of cattle are known as 'dual purpose' because they are suitable for producing
milk and beef. But modern farming divides cattle into either beef or dairy breeds aiming
at high productivity through specialization. British beef breeds include Hereford,
Galloway, Beef Shorthorn, Aberdeen Angus and South Devon. A recent trend in the UK
has been the introduction of large Continental breeds such as Charolais, Limousin and
Simmental. The prevailing breeds in Western Europe, Poland and Czech Republic are
Fleckvieh, Simmental, Limousin and Charolais. In Hungary, Ireland, the U.S. and the
Southern Hemisphere, breeds of British origin (mainly Hereford, Angus and their
crosses) dominate. Particular cases are Brazil (Nelore, coming from India) and Pakistan
Pre-Feasibility Study Calf Fattening Farm
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15
where the local buffalo breed is used for both milk and beef production. (IFCN Beef Report
2004).
The Calves of different breeds (7-8 months of age) can be used for fattening purpose at
an average body weight of 80-100 kgs for 90-120 days. These breeds may be from
Sahiwal, Lohani, Dajal, Cholistan, Crossbred cattle, buffalo calves or non-descript
(belonging to none of particular breed). Experiments carried out on Livestock Production
Research Institute, Bahadurnagar, Okara shows that cost of meat production for
Cholistani and Crossbred calves is relatively cheaper than Sahiwal, Dajal, Non-descript
and buffalo calves fed on the same Total Mixed Ration (TMR).
7.2 Animal Markets
The feasibility suggests purchasing calves on live weight basis from the rural areas or
animal mandies. The animals are being traded across the country in animal mandies
round the year. Most of which operate on weekly basis. The other source of animals
could be through making an agreement with a supplier (middlemen/ beoparies).
Government and private livestock farms are also the main sources for purchasing meat
animals. Animal markets are situated in different places in Punjab, which includes
Sheikupura, Okara, Sahiwal, Arifwala, Muridke and J helum. These markets operate on
rotational basis in a week, or once a month. There are different contractors available in
the markets who help locating the proper animals. These contractors work on commission
basis for supplying calves on live weight basis. Commission rate charged may vary from
some %age of the animal price.
7.3 Animal Housing
There is a general trend to keep the fattened calves in semi-confinement in order to
control waste production, where these calves are confined and housed over slatted floors.
All faeces and urine can be collected, thus eliminating the need for using bedding
material. At present most of the cattle in feedlots are still kept on concrete floors, or in
dry regions, on an unpaved area. More efficient growth rates will be achieved if shade is
provided. Solids from manure are either collected daily and stored, or allowed to dry in
the feedlot and removed periodically before spreading on fields. Collection of urine is
limited to feedlots with a slatted floor.
Sheds of the animals should be airy with protection of the animals from extreme
temperatures and strong winds. The animal housing should be facilitated with drinking
water for animals. There should be proper drainage system to keep hygiene at the farm. It
consists of a built up animal shed, a brick soling paddock for animals, one room for
storing farm equipment and one for compound feed storage. But the pre-feasibility has
taken feeding manger, open paddock and water trough as the major housing requirement
for the calves.
Animal sheds should be located with long axis north to south, to get direct sunlight and
yet face away from the direction of prevailing winds, whenever possible. Tree plantation
can be carried outside the sheds to provide natural shades and these trees will also act as
windbreakers.
Dimensions of water troughs will be the same as that of feeding mangers and water will
be available round the clock. Generally all the animals feed at the same time in a shed,
Pre-Feasibility Study Calf Fattening Farm
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16
but not all animals drink water simultaneously. The following figure shows the animal
housing layout for calf fattening farm.
Figure 7-1 Animal Housing Layout
W
a
t
e
r

T
r
o
u
g
h
W
a
t
e
r

T
r
o
u
g
h
Gate
Open paddock Fodder
Manger
Fodder
Manger
Open paddock
Gate
Table 7-2 Space Requirement
Description Sq ft
Shed for one calf 36
Open Paddock for one calf 60
Stores (feed & machine) 120
Servant room, washroom 120
Table 7-3 Total Infrastructure Cost
Description Sq.ft Rate/Sq.ft Total Cost
Shed for Calves 4,680 150 702,000
Open Paddock for Calves 7,800 40 312,000
Stores (feed & machine) 120 200 24,000
Servant Room, Wash room 120 150 24,000
Total Infrastructure Cost 12,720 1,062,000
7.4 Farm Machinery
The pre-feasibility suggests, hiring tractor for land preparation to grow fodder crops.
Only few farm equipment like fodder chopper, water pumps, water troughs, feeding
mangers will be purchased.
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Table 7-4 Farm Equipment
Farm supplies Rate Capacity (No. of Animal) Rs.
Toka machine (chef cutter) 12,000 100 12,000
Water pump 5,000 1 5,000
Tube Well
20,000 1 20,000
Mule Cart 5,000 50 5,000
Miscellaneous farm utensils 7, 500
Total Machinery Cost
59, 000
7.5 Feed
7.5.1 Ration for Calf Fattening
The ration is allowance of nutritionally balanced Total Mixed Ration (TMR) in 24 hours
to increase animal productivity. Wheat straw
7
is also used as dry roughage in TMR. The
cost of TMR will be lowered if feed ingredients are mixed on farm. The composition of
the rations fed in the finishing operations depends largely on the types of feed produced
local availability and on weights and grades of calves to be fattened. Rations can range
from high-roughage low energy rations to high-energy rations composed almost entirely
of concentrates. Examples of ingredients in rations are:
 Maize and maize silage with Soya bean meal and urea
 Barley, maize silage, by-products feeding large feed lots (e.g. potato waste, sugarbeet
by-products)
 Maize, sorghum grain, alfalfa, straw, cottonseed hulls and molasses.
Some hormone-like growth stimulators, antibiotic feed additives and ionophores (rumen
altering factors) are legalized to be included in the feed and are very commonly used.
Table 7-5: Average Production Parameters and Ranges
Reasonable Production Parameter Range Average
Starting weight (kg) 70-100 85
Daily gain (kg) 0.70 - 1.0 0.8
Feed Efficiency (kg growth per kg feed DM) 6 - 12 9
Fattening period (days) 90 - 150 120
Final weight (kg) 150-200 175
(Source: FAO Statistics, 1996)
7.5.2 Green Fodder for Calves
Fodder is grown at the land, which is acquired on lease or owned by the entrepreneur.
Due to increased demand, improved forage crops such as multi-cut oats, berseem,
lucerne, Sorghum- Sudan grass hybrids, mott grass, sorghum, maize and millet have been
developed. These have become very popular in irrigated areas such as Kasur,

7
A byproduct of wheat harvesting used as dry roughage for livestock and dairy animals
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Sheikhupura, Gujranwala, Faisalabad, Sargodha, and Renala Khurd (Punjab), Nowshera,
Charsada, Mardan, and Peshawar (North West Frontier Province), and Hyderabad,
Sukkur, Larkana and Nawabshah in Sindh for peri-urban dairies. Details of fodder
cultivars released by Research Institutions in Pakistan are given in Annex 2. Average
forage yields in Pakistan are extremely low compared to yields obtained on research
institutes and from well-managed farms and fields. These are very low as compared to
their potential, with 22.8 tons per hectare a recent estimate. (Reference: FAO Statistical
Databases)
Although improved varieties and technology are available, they have been slow to reach
the dairy farms. Recent medium scale on-farm work has indicated that yields can be
enhanced two to three fold by using available improved varieties and appropriate
agronomic techniques. In an area where land and irrigation are the major limiting factors
to enhancing fodder production, intensification is the only way to meet the needs for
forage. Intensive and economical forage production per unit area per season would be the
best choice. Also efforts should be made to produce and provide sufficient quantities of
seed of multicut forage varieties and hybrids like Mott grass to commercial dairy farms.
The fodder yield (except multi cut Mott Grass which yield 100-150 tones/ acre in 4 to 6
cuttings per year) varies between 10 tons to 40 tons per acre depending upon the fertility
of land, quality of seed and application of fertilizer.
Table 7-6 Types of Dry & Green roughage
Dry Roughage Green Roughage
Summer Fodder Winter Fodder
Wheat Straw Maize Barseem
Rice Straw Sorghum Alfalfa (Lucerne)
Oat Straw Millet Oats
Maize/Sorghum Stubble Mott Grass Rye Grass
Sugarcane Baggass Sadabahar Sugarcane tops
Cotton Seed Hulls Guar
Corn Cobs
(Reference: Livestock & Dairy Development Department, Lahore)
(Reference: FAO Statistical Databases)
7.5.3 Fodder Production Economics
The comparative economic feasibility of various forage crops produced under various
farming systems is shown in Table 7-7.
Table 7-7 Economics of forage production under improved production system
per hectare in Pakistan
Item Forage Crop
Maize Sorghum S. S hybrid Berseem Lucerne Oats
Land
preparation
938 974 974 875 875 750
Seed & Sowing 1,200 688 2,000 1,250 1,250 1,250
Fertilizer 1,750 1,750 5,000 2,500 2,500 2,250
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Irrigation 750 750 1000 1,100 750 500
Land
Revenue/rent
1,750 1,750 4,500 6,250 6,250 1,875
Harvesting/Tran
sport
1,875 1,750 3,500 3,000 3,750 3,000
Total
expenditure
8,263 7,662 13,774 14,825 15,635 9,625
Yield (Kilos) 80,000 79,750 160,000 102,500 103,750 115,000
Price/kg (Rs) 1.00 1.00 1.00 1.50 1.50 1.25
Variable Costs: Seeds, fertilizers, land preparation, irrigation, harvesting, Transport etc
Source: FAO Statistical Databases (2002)
7.5.4 Daily Fodder Requirement
There is no fixed fodder requirement for the animals but a rule of thumb says that an
animal needs daily fodder equal to 3% of live body weight on Dry Matter (DM) Basis.
One third of this DM will come from green fodder and 2/3 rd will be supplemented by
TMR in fattening calves to get maximum daily weight gains. According to these
estimates, one calf of 80 Kgs body weight will consume 8-10 kgs fodder daily for 120
days (preferred if fed free of choice i.e. ad libitum).
7.5.5 Daily Total Mixed Ration Requirement
Since an animal needs daily feed equal to 3% of its live body weight on Dry Matter (DM)
Basis. The 2/3 rd of this DM will be supplemented by TMR. For an animal of 80 kgs
body weight, it will be 3-5 kgs per day (Preferred if fed free of choice i.e. ad libitum)
7.5.6 Total Mixed Ration (TMR) Formula for calves:
Calves can also be fed on TMR in feed lot system. The Crude Protein (CP) value of this
ration should be 12-13 % with 65-70 % Total Digestible Nutrients (TDN). These feed
ingredients when mixed according to feed formula will provide adequate energy
according to energy and protein requirements of animal.
Table 7-8 Details of Raw Material
Material Percentage
Input
Cost
(Rs./Kg)
Total Cost (Rs.)
Cottonseed cake/ Maize grain 9% 9 81
Corn gluten meal (20%) 8% 6 48
Rice Polish 15% 7 105
Wheat bran 20% 6 120
Wheat Straw 26% 2 52
Molasses 17% 3 51
Urea 1% 11 11
Salt 2% 2 4
DCP 2% 14 28
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Total 100% 500
Crude Protein (CP) 12.7%
Total Digestible Nutrients (TDN) 65%
7.5.7 Mineral Mixture
This is used as a feed supplement. It includes a mix of minerals (magnesium, iron,
sodium and salts). Mineral mixtures are good source of energy and increase the animal
productivity to produce more lean meat. Urea Molasses Blocks can also be used to
supplement the minerals.
7.5.8 Wheat Straw (Bhoosa or Turi)
Wheat straw is a major, typical, and very popular feed, it is always chaffed, and is the
main or even only major dry roughage used on almost all the farms. Traditional threshing
methods break the straw into short pieces. Modern mechanical threshers have been
designed to break the straw. In places where it is produced, it is available at Rs.1.0 per
kilo. In recent years baling units have been installed in central Punjab; bales are
transported to major cities, even to Gilgit, Skardu, and Chitral.
Table 7-9:Daily Feed Requirements for One Fattened Calves in 120 Days
Fattening
Days
Body Weight
(Kgs.)
Feed
Requirement/ Day
Daily Feed Cost
(Rs.)
Daily Fodder Cost
(Rs)
1 80 4 20 0.80
30 103 5 26 1.03
60 127 6 32 1.27
90 151 8 38 1.51
120 175 9 44 1.75
Total Feed Cost 3,828 153
7.6 Vaccination & Medication
Vaccination & medication is required to prevent any disease out break in the animal herd.
Each new animal will be vaccinated before putting into the farm. Anthelmantics are used
to treat the animals for internal parasites where as spraying and dipping with some dis
infecting solution is used to eradicate external parasites. The total cost will be Rs.200 per
animal. Vaccines are produced at Veterinary Research Institute, Ghazi Road, Lahore. The
vaccines are provided to the Government Farms and Hospitals on payment. Farmers can
also obtain these vaccines on payment according to prescribed schedule from the
Institute. Technical guidance is also provided to the farmers. Farmers can have their
animals vaccinated from the field Veterinary Hospitals and Centres.
7.7 Calf Quarantine
A quarantine yard will be made for new animal handling, dipping, weighing, and
vaccination etc. The newly purchased animals will be dewormed and medicated with
proper and necessary vaccinations in this yard. Only the disease free animals will proceed
Pre-Feasibility Study Calf Fattening Farm
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21
to the feedlot from the quarantine sheds. Quarantine arrangements will minimize the
chances of disease spread in the farm by ensuring that the new animals do not carry any
disease before they are taken to the main sheds. This seven-day period will also be
helpful in acclimatizing the new animals before they enter the main feedlot sheds. The
behavior of the animal will be recorded during these seven days and then its requirement
of feed will be calculated accordingly before sending it to the main feedlot.
7.8 Labor Requirement
For a calf-fattening farm, manpower is required for performing different animal
husbandry practices at the farm e.g. housing, feeding, watering, medication and care of
animals etc. One person can handle 25 calves easily for feeding and other management.
Five persons will be required to look after the fattening farm. The feasibility has taken
monthly salary of each attendant as Rs 3000. A supervisor cum farm manager can be
hired to supervise all the farm activities. The supervisor with a B.Sc. (Honors) degree in
Animal Husbandry (AH) may be hired as a farm manager so that he can handle the farm
practices, administration & account matters at the dairy farm.
Table 7-10 Labor Requirements
Description No. Salary/month/Person Annual Salary
Farm Manager 1 10,000 120,000
Workers 4 3,000 144,000
Total Labor Cost 5 264,000
8 FARM OUTPUT
8.1 Fattening Period
The fattening period is the period during which the animal puts on weight. These animals
are called fattened animals. Generally the period is 90-120 days. Following are the
desirable size and thickness of fattened animals. Large frame size with no.1 thickness is
desirable.
Figure 8-1 Frame size and Thickness Grades of Fattened Animals
Pre-Feasibility Study Calf Fattening Farm
PREF-24/June, 2005/Rev 2
22
8.2 Meat Composition
Like all meat, beef is also very high in protein. It also contains significant quantities of 'B'
vitamins and minerals such as sodium, potassium and phosphorus. Offal, particularly
liver, is rich in Vitamin B
12
, A, C and D, folic acid, iron and riboflavin. The moisture
content of lean meat is 75-79 % where as the crude protein content is 18-22 %. There is a
5-6.5 % mineral content in it. The percentage of lean meat, bone and other tissues of
carcasses of different breeds is given as under;
Table 8-1 Meat Composition of Different Breeds
Parameters Sahiwal Dajal Cholistani Non-
Descript
Cross
bred
Buffalo
Lean meat % 67.2 70.6 66.7 67.7 67.5 62.8
Bone % 16.3 15.2 16.8 17.3 16.3 17.6
Fat% 12.7 10.3 12.5 11.7 11.7 14.9
Other tissues % 3.4 3.7 3.7 4.1 4.3 4.6
Dressing % 55.5 58.0 56.5 53.6 54.4 51.6
Source: Livestock Production Research Institute, Bbahadurnagar, Okara
8.3 Increase in weight gains
Average weight gains and feed efficiency values as such of different breeds of calves are
given as under;
Table 8-2 Values of Different Parameters for Different Breeds
Parameters Sahiwal Dajal Cholistani Non-
descript
Cross
bred
Buffalo
Total weight
gain (kgs)
78.20 84.0 82.6 82.6 82.8 86.2
Daily weight
gain (kgs)
0.85 0.91 0.90 0.90 0.90 0.84
Feed efficiency
(as such basis)
8.48 8.69 8.34 8.60 9.40 7.63
Source: Livestock Production Research Institute, Bbahadurnagar, Okara
8.4 Sale Price
Selling price is another limiting factor for the determination of the profitability of this
business. In Pakistan, the beef business is controlled by the informal sector. There are no
organized markets for the beef sale and purchase. The meat business is in the hands of a
community called butchers or Kassab.
After feeding animals in feedlots, only the premium price can make the operations
profitable. In this pre feasibility study, the animals will be sold on farm at Rs. 50 per Kg
live body weight. Only fetching good price can justify the costs incurred on rearing
animal in feed lots. The selling price of fattened animal will be higher than the other
animals because of its higher meat recovery and good quality. To avoid the risk of price
fluctuations, certain buy back agreements with institutional buyers will be a good
Pre-Feasibility Study Calf Fattening Farm
PREF-24/June, 2005/Rev 2
23
approach for the success of this business. Linking the project with the live animal export
or beef exports will assure good returns on the business. Near the urban market and
especially around Eid-ul-Azha, the selling price of beef is Rs. 100-105 per kg live body
weight.
9 USEFUL TERMINOLOGY
 Cake
Mass resulting from the processing of seeds, which is rich in protein and is used as a
source of feed for livestock, e.g. cottonseed cake.
 Calf
Young animal of dairy origin between seven and 120 days of age.
 Compound feed
Any ground mixture of ingredients intended for feeding the animals. It includes a
concentrate mixture accordingly to formula.
 Dressing percent
Dressing percent is important because it reflects the amount of carcass in relation to the
animal’s live weight. Dressing percent is calculated by using the following formula:
Dressing % = Hot Carcass Wt. x 100
Live Animal Wt.
Dressing percent is affected by the fill, finish, muscling, sex, type, and if the animal is
pregnant or not. Normal Range is 55-67% for young fattened calves.
 Fat Thickness
The primary estimate of fatness is fat thickness at the 12
th
rib. It is used to assess total fat
on the carcass. (Average: 0.5 inches)
 Feedstuffs
Any substance of nutritive and biological value used in production of compound feed.
 Home Mixed Feed
Feed prepared on farm of the owner.
 Live Weight
Cattle have a wider range of market weights than other species due to differences in type
and maturity.
 Ration
Amount of balance feed in 24 hours
 Weaning Calf
Young animal of between five and nine months coming from the cow-calf enterprise and
being reared by a suckling cow until weaning. The term is used to indicate a difference of
calves from dairy herds, referred to as ‘dairy calves’.
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
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24
10 FINAICIAL ANALYSIS
10.1 Projected Income Statement
Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Year-10
Sales 3,329,040 3,661,944 4,028,138 4,430,952 4,874,047 5,361,452 5,897,597 6,487,357 7,136,093 7,849,702
COST OF GOODS SOLD
Raw Material 2,566,637 2,694,969 2,829,717 2,971,203 3,119,763 3,275,751 3,439,539 3,611,516 3,792,092 3,981,696
Payroll (Production Staff) 180,000 189,000 198,450 208,373 218,791 229,731 241,217 253,278 265,942 279,239
Direct Electricity 14,308 15,739 17,313 19,044 20,949 23,044 25,348 27,883 30,671 33,738
Total 2,760,945 2,899,708 3,045,480 3,198,620 3,359,503 3,528,526 3,706,104 3,892,677 4,088,705 4,294,673
Gross Profit 568,095 762,236 982,658 1,232,332 1,514,544 1,832,927 2,191,493 2,594,681 3,047,388 3,555,029
OPERATING EXPENSE
Payroll (Admin) 120,000 126,000 132,300 138,915 145,861 153,154 160,811 168,852 177,295 186,159
Administrative & Factory Overheads 6,658 7,324 8,056 8,862 9,748 10,723 11,795 12,975 14,272 15,699
Depreciation 59,000 59,000 59,000 59,000 59,000 59,000 59,000 59,000 59,000 59,000
Mortality loss 28,080 29,484 30,958 32,506 34,131 35,838 37,630 39,511 41,487 43,561
Total 213,738 221,808 230,314 239,283 248,740 258,715 269,237 280,338 292,054 304,420
Operating Profit 354,357 540,428 752,344 993,049 1,265,804 1,574,212 1,922,257 2,314,342 2,755,334 3,250,609
NON-OPERATING EXPENSE
Financial Charges on Long-term Loan 5,451 5,430 5,408 5,387 5,365 5,343 5,321 5,298 5,275 5,252
Financial Charges on Running Finance 26,126 27,432 28,804 30,244 31,756 31,756 31,756 31,756 31,756 31,756
Land Lease 43,533 43,533 43,533 43,533 43,533 43,533 43,533 43,533 43,533 43,533
Total 75,110 76,395 77,746 79,164 80,655 80,633 80,610 80,588 80,565 80,542
PROFIT BEFORE TAX 279,247 464,033 674,598 913,885 1,185,149 1,493,579 1,841,646 2,233,755 2,674,769 3,170,067
Tax 22,906 61,508 114,150 194,860 289,802 397,753 519,576 656,814 811,169 984,523
PROFIT AFTER TAX 256,341 402,525 560,449 719,025 895,347 1,095,827 1,322,070 1,576,940 1,863,600 2,185,543
Retained Earnings beginning of year 0 256,341 658,866 1,219,314 1,938,340 2,833,687 3,929,513 5,251,584 6,828,524 8,692,124
Retained Earnings end of year 256,341 658,866 1,219,314 1,938,340 2,833,687 3,929,513 5,251,584 6,828,524 8,692,124 10,877,668
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
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10.2 Projected Cashflow Statement
Const Year Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Year-10
Operating activities
Net profit 256,341 402,525 560,449 719,025 895,347 1,095,827 1,322,070 1,576,940 1,863,600 2,185,543
Depreciation 59,000 59,000 59,000 59,000 59,000 59,000 59,000 59,000 59,000 59,000
Stocks-RM (186,615) (9,331) (9,797) (10,287) (10,802) (11,342) (11,909) (12,504) (13,129) (13,786) 289,501
Cashprovidedbyoperations (186,615) 306,010 451,728 609,161 767,224 943,006 1,142,918 1,368,566 1,622,811 1,908,814 2,534,045
Financing activities
Longtermdebt principal repayment (1,803) (1,824) (1,846) (1,867) (1,889) (1,911) (1,933) (1,956) (1,979) (2,002)
Additiontolongtermdebt 467,193
Additiontorunningfinance 186,615 9,331 9,797 10,287 10,802 11,342 11,909 12,504 13,129 13,786 (289,501)
Issuanceof share 653,808
Cashprovidedby/ (usedfor) financingactivities 1,307,615 7,527 7,973 8,441 8,934 9,453 9,998 10,571 11,173 11,807 (291,503)
Total 1,121,000 313,538 459,700 617,603 776,158 952,458 1,152,915 1,379,137 1,633,985 1,920,621 2,242,542
Investing activities
Capital expenditure (1,121,000)
Cash(usedfor)/ providedbyinvestingactivities (1,121,000)
Net Cash 0 313,538 459,700 617,603 776,158 952,458 1,152,915 1,379,137 1,633,985 1,920,621 2,242,542
Cashbalancebrought forward 0 0 313,538 773,238 1,390,841 2,166,999 3,119,457 4,272,373 5,651,510 7,285,494 9,206,116
Cashcarriedforward 0 313,538 773,238 1,390,841 2,166,999 3,119,457 4,272,373 5,651,510 7,285,494 9,206,116 11,448,657
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
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26
10.3 Projected Balance Sheet
Const Year Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Year-10
Current Assets
Cash 0 313,538 773,238 1,390,841 2,166,999 3,119,457 4,272,373 5,651,510 7,285,494 9,206,116 11,448,657
Stocks and Inventory 186,615 195,946 205,743 216,030 226,832 238,173 250,082 262,586 275,715 289,501 0
Total 186,615 509,483 978,981 1,606,871 2,393,831 3,357,631 4,522,455 5,914,096 7,561,210 9,495,617 11,448,657
Gross Fixed Assets 1,121,000 1,121,000 1,121,000 1,121,000 1,121,000 1,121,000 1,121,000 1,121,000 1,121,000 1,121,000 1,121,000
Less: Accumulated depreciation 0 59,000 118,000 177,000 236,000 295,000 354,000 413,000 472,000 531,000 590,000
Net Fixed Assets 1,121,000 1,062,000 1,003,000 944,000 885,000 826,000 767,000 708,000 649,000 590,000 531,000
Total Assets 1,307,615 1,571,483 1,981,981 2,550,871 3,278,831 4,183,631 5,289,455 6,622,096 8,210,210 10,085,617 11,979,657
Current Liabilities
Running Finance 186,615 195,946 205,743 216,030 226,832 238,173 250,082 262,586 275,715 289,501 0
Total 186,615 195,946 205,743 216,030 226,832 238,173 250,082 262,586 275,715 289,501 0
Long-term liabilities
Long-termLoan 467,193 465,389 463,565 461,719 459,852 457,963 456,052 454,119 452,163 450,184 448,182
Total 467,193 465,389 463,565 461,719 459,852 457,963 456,052 454,119 452,163 450,184 448,182
Equity
Paid-up Capital 653,808 653,808 653,808 653,808 653,808 653,808 653,808 653,808 653,808 653,808 653,808
Retained Earnings 0 256,341 658,866 1,219,314 1,938,340 2,833,687 3,929,513 5,251,584 6,828,524 8,692,124 10,877,668
Total 653,808 910,148 1,312,673 1,873,122 2,592,147 3,487,494 4,583,321 5,905,391 7,482,332 9,345,932 11,531,475
Total Liabilities And Equity 1,307,615 1,571,483 1,981,981 2,550,871 3,278,831 4,183,631 5,289,455 6,622,096 8,210,210 10,085,617 11,979,657
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
PREF-24/June, 2005/Rev 2
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11 KEY ASSUMPTIONS
Table 11-1: F Fi in na an nc ci ia al l A As ss su um mp pt ti io on ns s
Project life (years) 10
Debt Equity ratio 50:50
Interest rate on short term debt 14%
Debt tenure (years) 10
Debt payments per year 4
Table 11-2: R Re ev ve en nu ue e A As ss su um mp pt ti io on ns s
Annual Production (calves) 390
Number of Calves per herd 130
Number of production herds per year 3
Capacity Utilization 100%
Live body weight at purchase time (kg) 80
Average daily weight gain 0.8
Feeding days 120
Selling price (Rs/ kg live body weight) 50
Table 11-3: E Ex xp pe en ns se e A As ss su um mp pt ti io on ns s
Purchase price (Rs/kg live body weight) 30
Mortality Rate 2.5%
Vaccination/ Medication cost (per calf) 200
Total Mixed Ration (TMR) price (Rs/ kg) 5
Green Fodder price (Rs/ kg) 0.1
Wheat Straw price (Rs/ kg) 2
Open Space per animal (Sq. ft) 60
Total Mixed Ration requirement (% of live bodyweight) 5
Price of Total Mixed Ration (Rs. Per Kg) 5
Fodder Requirement (% of live bodyweight) 10%
Fodder Rate (in Rs. Per kg) 0.1
Table 11-4: E Ec co on no om my y- -R Re el la at te ed d A As ss su um mp pt ti io on ns s
Electricity growth rate 10%
Wage growth rate 5%
Table 11-5: Cashflow Assumptions
Raw Material Inventory (Days) 30
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
PREF-24/June, 2005/Rev 2
28
Table 11-6 Financial Assumptions
Project life (years) 10
Debt 50%
Equity 50%
Interest rate on long-term debt 14%
Interest rate on short term debt 14%
Debt tenure (years) 10
Debt payments per year 5
Debt payments per year 1
Discount rate 17%
Minimum Cash Balance Required 10,000
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
PREF-24/June, 2005/Rev 2
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12 ANNEXURE 1
Table 12-1:Vital Statistics of Cattle & Buffaloes
Parameters
Rectal Temperature 101.5 degrees F (38.5 degree C)
Heart Rate 60-70 beats/minute
Respiratory Rate 30 breaths/minute
Table 12-2 Common Diseases of Livestock
Infectious Diseases
Disease Symptoms Preventive measures Medication
Anthrax Fever, grinding of teeth,
release of blackish blood from
natural openings, which
doesn’t clot.
Vaccination in February.
Dead animal should be
buried in 6 feet deep pit
without any postmortem.
Antibiotic therapy
Foot and mouth
Disease
Excessive salivation, Pustules
on lips, tongue and between
the cleft of hooves, staggering
gait weakness due to inability
of ingestion.
FMD vaccine after every
4 months especially
before the onset of rainy
season.
FMD Serum, cleaning
of pustules by
potassium
permanganate solution,
cleaning of hooves by
phenyl solution
Non Contagious Diseases
Indigestion Loss of appetite, watering
from mouth, stiffening of
rumen, bloating, severe pain in
stomach
5 grams Stomach
powder (mixed in feed
or dissolved in water)
twice a day
Bloating
(air trapped in
stomach)
Difficult breathing due to air
trapped in stomach, animal
may die due to suffocation
Avoid grazing early in
morning especially on
fodder with dewdrops.
Mustard (Sarson) oil &
turpentine oil mixed
with chloral hydrate
mixed in drinking
water.
Dysentery Diarrhea, smelling feces,
weakness
Avoid excessive intake of
milk especially in
newborn kids.
Avoid wheat straw or stiff
feed during dysentery
Calcium carbonate,
magnesium carbonate
and bismuth carbonate
dissolved in water OR
entox tablets OR
nimkol with
sulfademadine (4-5 cc).
Offer rice groule to
affected animals
Internal Parasites
Liver flukes Weakness, off feed, jaundice
in severe cases, swelling on
joints
No grazing around
stagnant water
Zanil or Carbon tetra
chloride OR nilzan
plus, oral
administration
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
PREF-24/June, 2005/Rev 2
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Round Worms Weakness, diarrhea, anemia,
hair fall from body coat
Fecal samples should be
examined for
roundworms.
Systamax or rental, oral
administration
Ectoparasites
Flies/ ticks/
maggots
Irritation on body coat,
sometimes holes in skin, loss
of hair from body coat
Cleanliness in sheds,
Spray of DDT in shed
Apply sulfur oil,
tetmasol or ecoflax on
wounds and dipping of
whole herd with a 0.15
% solution of negavan.
Table 12-3 Vaccination Schedule
Name of Disease Name of
Vaccine
Qty
administered
(ml)
Time for
Vaccination
Duration
of
Immunity
Preventive
Measures
Foot & Mouth
Disease
(FMD)
Foot & Mouth
Vaccine
5 ml Start of spring 4 months Should be given 4
months prior to the
expected symptoms
of disease.
Anthrax Anthrax spore
vaccine
0.5 ml March-April
or monsoon
season
One year Every year
vaccination should
be done every year.
Rabies
(Bowla Pun)
Anti rabies
vaccine
10 ml According to
need
One year Vaccine should be
used right after
preparation.
Hemorrhagic
Septicemia (HS)
HS vaccine 5-10 ml Start of Spring 4 months Should be given 4
months prior to the
expected symptoms
of disease.
Table 12-1 List of vaccines and their prices at Veterinary Research Institute,
Ghazi Road, Lahore.
Vaccines/Sera/Antigens Packing With Bottles Price
Haemorrhagic Septicaemia Bottle of 300 ml (60 doses) Rs.90.00
Black Quarter Vaccine Bottle of 300 ml (60 doses) Rs.80.00
Enterotoxaemia Bottle of 300 ml (100 doses) Rs.67.00
Foot and Mouth Vaccine Bottle of 320 ml (64 doses) Rs.484.00
Foot and Mouth Vaccine Bottle of 300 ml (60 doses) Rs.454.00
Foot and Mouth Serum Bottle of 300 ml (6 doses) Rs.380.00
Foot and Mouth Vaccine Bottle of 100 ml (20 doses) Rs.165.00
Anti Rinderpest Serum Bottle of 300 ml (20 doses) Rs.374.00
Anthrax Spore Vaccine Bottle of 50 ml (100 doses) Rs.70.00
Rinderpest Vaccine (TCRV/CTV) Ampoule of 100 doses Rs.21.00
Anti Rabies Vaccine 440 cc bottle for Cow/Horse Rs.840.00
For further inquiry contact:
Director General (Research), Veterinary Research Institute, Ghazi Road, Lahore.
(Ph) 042-9220143
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
PREF-24/June, 2005/Rev 2
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13 ANNEXURE 2
Table 13-1 Forage Cultivars Released by Various Institutes
Crop Cultivar Institution Year
Oats (Avena sativa)
Avon FRI, Sargodha, Punjab 1983
PD2-LV65 FRI, Sargodha, Punjab 1983
Sargodha-81 FRI, Sargodha, Punjab 1983
Barley (Hordeum sativum)
Frontier-87 CCRI, Pirsabak, NWFP 1988
J au-83 AARI, Faisalabad, Punjab 1985
J au-87 AARI, Faisalabad, Punjab 1985
Berseem (Trifolium alexandrinum)
Agaiti FRI, Sargodha, Punjab 1986
Pachaiti FRI, Sargodha, Punjab 1986
Maize (Zea mays)
Akbar MMRI, Sahiwal, Punjab 1972
Azam CCRI, Pirsabak, NWFP 1973
Kisan-90 CCRI, Pirsabak, NWFP 1990
Sultan MMRI, Sahiwal, Punjab 1986
Mazenta Maize x Teosinte FRI, Sargodha, Punjab 1991
Millet (Pennisetumamericanum)
Barani bajra RARI, Bahawalpur, Punjab 1986
Hairy dwarf RARI, Bahawalpur, Punjab 1986
Composite-75 RARI, Bahawalpur, Punjab 1986
MB-87 FRI, Sargodha, Punjab 1991
Sorghum (Sorghum bicolor)
J owar-86 RARI, Bahawalpur, Punjab 1986
BR-307 RARI, Bahawalpur, Punjab 1986
BR-319 RARI, Bahawalpur, Punjab 1986
Sorghum Sudan grass Hybrid
Pak-sudax FRI, Sargodha, Punjab 1986
SSG-988 Pioneer Seed Pvt. Ltd. 1992
RasBheri Cargill Seeds Pvt. Ltd 1993
FRI: Fodder Research Institute
AARI: Ayub Agriculture Research Institute
MMRI: Maize & Millet Research Institute
CCRI: Cereal Crop Research Institute
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
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Table 13-2: Livestock Experimentation Stations, Livestock & Dairy Development
Department, Punjab
Sr.
No.
Name of LES /
GLF
Total Area
(acre)
Designation of
farm Incharge
Farm Address
1. Khushab 968 Superintendent Livestock Experiment Station, Khushab Tehsil &
District Khushab
2. Khizerabad 7669 Superintendent Livestock Experiment Station, Khizarabad Chak
No. 60-NB, via Bhalwal, Tehsil & District
Sarghoda.
3. J ahangirabad 3373 Superintendent Livestock Experiment Station, J ahangirabad via
Kacha Khuh, Tehsil & District Khanewal.
4. Shah J ewena 597 Manager Livestock Experiment Station, Shah J ewena Tehsil
& District J hang.
5. Rakh Mahni 9171 Superintendent Government Livestock Farm, Rakh Mahni Camp
Office, Hyderabad Thall, Tehsil Mankara, District
Bhakkar
6. Rakh
Khairewala
14472 Officer Incharge Livestock Experiment Station, Khairewala,
(Angora Goat) P.O. Khairewala, Tehsil Choubara,
District Layyah
7. TDA / 205 926 Manager Fine Wool Sheep Farm, 205 / TDA
Chak No. 205/TDA, Sarai Mahajar, Tehsil
Mankara, District Bhakkar
8. Kallurkot 3592 Superintendent Government Livestock Farm, Kallurkot Tehsil
Kallurkot, District Bhakkar
9. Rakh Ghulaman 10273 Superintendent Government Livestock Farm, Rakh Ghulaman
Tehsil Kallurkot, District Bhakkar
10. Allahdad 2117 Manager Livestock Experiment Station, Allahdad via
J ahanian, Tehsil & District Khanewal
11. Sher Garh 1451 Manager Livestock Experiment Station, Sher Garh via
Renala Khurd, Tehsil & District Okara
12. Darkhana 2810 Manager Livestock Experiment Station, Darkhana Tehsil
Kabirwala, District Khanewal
13. Fazilpur 3501 Officer Incharge Livestock Experiment Station, Fazilpur Tehsil
Fazilpur, District Rajanpur
14. Chak Katora 1304 Officer Incharge Livestock Experiment Station, Chak Katora
via Hasilpur, Tehsil Hasilpur, District Bahawalpur
15. J ogaitpeer 5200 Superintendent Government Livestock Farm, J ogaitpeer
Tehsil & District Bahawalpur
16. Haroonabad 627 Manager Livestock Experiment Station, Haroonabad
Tehsil Haroonabad, District Bahawalnagar
17. Kot Amir Shah 198 Manager Livestock Experiment Station, Kot Amir Shah
Tehsil Chiniot, District J hang
18. Rakh Dera
Chahl
705 Manager Livestock Experiment Station, Rakh Dera Chal
Bedian Road, Tehsil & District Lahore
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
PREF-24/June, 2005/Rev 2
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14 ANNEXURE 3
Table 14-1 D Di is sp po os sa al l of Death
Sr. no Calf No. Date of purchase Sex Mode Cost Remarks
1.
2.
Table 14-2 Details of Purchase / Sale of product/byproduct (Feed and fodder's,
medicines, ingredients, animal, etc.)
Sr.
no
Particulars Quantity Per unit rate Total cost Remarks
Table 14-3 Calf Disposal
Sr. no Wt. Of calf Disposal Date Remarks
Table 14-4 Herd Health Register
Date Animal Symptoms Diagnosis Treatment Detail of
vaccination/
medication
Cost of treatment
Table 14-5 Monthly Expenses & Income Report
Sr. no Particulars Quantity Rate (per unit) Total cost
--
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
PREF-24/June, 2005/Rev 2
34
15 ANNEXURE 4
Different Breeds of Buffaloes and Cows

Kundi Nili Ravi
Lohani Red Sindhi Bull Sahiwal Cow

Rojhan Dajal Tharparker

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