Professional Documents
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Layer Farming 10000 Birds
Layer Farming 10000 Birds
LAYER FARM
(10000 Birds)
REGIONAL OFFICE
PUNJAB
REGIONAL OFFICE
SINDH
REGIONAL OFFICE
NWFP
REGIONAL OFFICE
BALOCHISTAN
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 9213046-47
Fax: (091) 286908
helpdesk-pew@smeda.org.pk
May, 2006
Pre-Feasibility Study
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. Therefore, the content of this memorandum should not be
relied upon for making any decision, investment or otherwise. The prospective user
of this memorandum is encouraged to carry out his/her own due diligence and gather
any information he/she considers necessary for making an informed decision.
The content of the information memorandum does not bind SMEDA in any legal or
other form.
DOCUMENT CONTROL
Document No.
PREF-19
Revision
Prepared by
SMEDA-Punjab
Issue Date
April, 2002
Revision Date
May, 2006
Issued by
Library Officer
2
PREF-19/May, 2006/ Rev 2
Pre-Feasibility Study
INTRODUCTION
Grams
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
The figures above show the shortage of protein availability in the country. The
demand for eggs is increasing with the increase in the population.
3
PREF-19/May, 2006/ Rev 2
Pre-Feasibility Study
The following table shows the per capita consumption of eggs and poultry meat in
2005:
Table 1-1: Per Capita Consumption of Eggs and Poultry Meat
Per Capita
Eggs (Nos.)
Poultry Meat
Consumption
57
2.5 kg
According to studies, approximately 58.5% of the total egg production comes from
Farm eggs and the rest from Rural Poultry (Desi) eggs. In 2005, 4,886 layer farms
produced 4,992 million eggs. Egg availability in Pakistan has been growing at an
annual average rate of 2.6% during the years 2001 to 2005.
However, the poultry industry reports huge capacity under-utilization. The
operational capacity of hatcheries and feed mills is reported to be far below its total
installed capacity.
Layer population however, has increased at a growth rate of 4.5% during the last five
years.
4
PREF-19/May, 2006/ Rev 2
Pre-Feasibility Study
22.1
18.1
18.4
22.7
1 9.3
10.0
5.0
0.0
2001
2 002
2 003
2004
2005
1
2
Numbers
4,866
17,405
623
22,894
Million
22.69
292.05
6.78
321.52
Million
4,992
3,526
8,518
000 Tons
21.2
101
294.05
416.25
Pre-Feasibility Study
MARKETING
Layer starts giving eggs at the age of 26 weeks. Usually, layer farm is recommended
to start in the month of February or March. The layer is ready to lay eggs in
July/August. The demand for eggs is increased during the winter season and, as a
result of that, the prices of eggs are also increased.
Weighted average sale price at the farm gate for the year has been taken as Rs.33 per
dozen eggs sold.
Eggs are packed in trays and can be sold in bulk to the wholesale markets in the
urban cities. The eggs are more liable to be damaged during transportation. The
profits and losses in marketing of eggs depend on the proper transportation methods.
Eggs should be transported in proper containers. Bamboo baskets, wooden boxes,
and pitch board trays, collapsible cardboard boxes and in plastic trays are the
containers used for transporting eggs. Of these, Bamboo baskets and wooden boxes
are the safest way.
Retail buyers are also available who will directly purchase eggs from the farm. Egg
is perishable commodity and cannot be stored for longer period of time. The shelf
life of egg is short during summer (1 week) and long in winter season (4 weeks).
FARM MANAGEMENT
Pre-Feasibility Study
7
PREF-19/May, 2006/ Rev 2
Pre-Feasibility Study
1
2
3
4
5
6
7
8
9
10
6
5
1
6
3
3
6
1
5
6
6
6
11
5
8
9
5
10
7
5
0
1
1
0
1
1
0
1
1
0
1
1
0
1
1
0
1
1
0
1
1
2
1
1
2
1
1
2
1
1
8
2
2
0
2
2
0
2
2
0
2
2
2
1
2
2
1
2
2
1
2
2
2
0
2
2
0
2
2
0
2
Pre-Feasibility Study
MANPOWER REQUIREMENTS
One person can handle 3000 birds easily. Two persons are sufficient to look after the
5000 birds. The feasibility has taken 4 attendants; each attendant will be paid a
monthly salary of Rs 3,500.
FARM MACHINERY
Unit
Unit Cost
Total Cost
20
600
12,000
1,200
2,400
100
90
9,000
200
180
36,000
400
140
56,000
100
26
2,600
10
832
1,800
18,000
136,000
Drum Heaters
Drinkers (Small)
Drinkers (Large)
Feeders
Nests
Shifting Box
Total
9
PREF-19/May, 2006/ Rev 2
Pre-Feasibility Study
Pavement/Driveway
510
20,718
1.25
26,000
Road
Electricity
Water
Drainage of rain water
10
PREF-19/May, 2006/ Rev 2
Pre-Feasibility Study
PROJECT COST
Rs.
136,000
136,000
467,008
310,770
777,778
913,778
Rs. in actual
0
913,778
0%
100%
35.92%
2,105,675
5.480
11
PREF-19/May, 2006/ Rev 2
Pre-Feasibility Study
Farm management
Professional farm management is the key success factor to increase the birds
productivity. The farm labor should be experienced enough to look after the
biological/disease matters of the farm. Timely feeding and vaccination is only
possible if some person is available at the farm 24 hours a day.
Market Information
Sale price of eggs fluctuates during a year. Generally, the sale price of eggs is lower
in summer season and higher in winter season. The entrepreneur should be well
aware of this price fluctuation. This will help the entrepreneur to negotiate well the
sale price of eggs.
Mortality is the most critical component in determining the viability of a Layer farm.
Some times the epidemic diseases results in heavy mortality of up to 25%. Proper
vaccination and medication is very helpful to reduce the mortality loss up to 10%.
Egg prices are determined by supply and demand phenomenon in the market. The
prices of eggs go up in winter season as the demand is increased.
Disease
Mortality is the most alarming threat to the viability of the farm. In this regard, Bird
flu is considered to be the most fatal issue, according to a study, during Bird Flu
40% of the investors withdraws their investment from the industry.
Shelf life
Egg is a perishable commodity and cannot be stored for a long time at the room
temperature. It needs to be either sold within short time or has to be stored at a cool
temperature.
12
PREF-19/May, 2006/ Rev 2
Pre-Feasibility Study
11 FINANCIAL ANALYSIS
11.1 Projected Income Statement
Const Year
Year-1
Year-2
Year-3
Year-4
Year-5
Year-6
Year-7
Year-8
Year-9
Year-10
Sales
3,745,020
4,516,677
8,720,313
4,161,105
7,826,508
9,610,445
5,538,431
12,832,594
10,134,438
7,371,652
4,076,752
168,000
0
10,000
0
4,254,752
4,019,329
176,400
0
10,500
0
4,206,229
4,870,307
185,220
0
0
0
5,055,527
4,198,345
194,481
0
11,576
0
4,404,403
4,969,276
204,205
0
12,155
0
5,185,637
5,305,768
214,415
0
0
0
5,520,183
4,955,379
225,136
0
13,401
0
5,193,916
6,118,832
236,393
0
14,071
0
6,369,296
5,757,502
248,213
0
0
0
6,005,715
5,736,470
260,623
0
15,513
0
6,012,607
Gross Profit
(509,732)
310,448
3,664,786
(243,297)
2,640,871
4,090,261
344,515
6,463,298
4,128,723
1,359,045
OPERATING EXPENSE
Payroll (Admin)
Payroll (Marketing and Sale)
Litter Cost
Spray Cost
Fixed electricity
Insurance Expense
Administrative & Factory Overheads
Amortization (Pre-operational Expenses)
Depreciation
Mortality loss
Total
0
0
10,000
5,000
102,000
0
18,725
0
13,600
128,511
277,836
0
0
10,500
5,250
112,200
0
22,583
0
13,600
121,873
286,007
0
0
0
2,756
123,420
0
43,602
0
13,600
64,783
248,160
0
0
11,576
5,788
135,762
0
20,806
0
13,600
143,893
331,425
0
0
12,155
6,078
149,338
0
39,133
0
13,600
121,076
341,379
0
0
0
3,191
164,272
0
48,052
0
13,600
96,002
325,117
0
0
13,401
6,700
180,699
0
27,692
0
13,600
166,574
408,667
0
0
14,071
7,036
198,769
0
64,163
0
13,600
116,999
414,638
0
0
0
3,694
218,646
0
50,672
0
13,600
135,454
422,066
0
0
15,513
7,757
240,511
0
36,858
0
13,600
192,830
507,069
Operating Profit
(787,568)
24,442
3,416,625
(574,722)
2,299,492
3,765,144
(64,151)
6,048,660
3,706,657
851,976
NON-OPERATING EXPENSE
Financial Charges on Long-term Loan
Financial Charges on Running Finance
Land Lease
Building Rental
Total
0
0
0
273,270
273,270
0
195,531
0
300,597
496,128
0
271,981
0
330,657
602,638
0
21,819
0
363,722
385,542
0
95,801
0
400,095
495,895
0
0
0
440,104
440,104
0
0
0
484,114
484,114
0
0
0
532,526
532,526
0
0
0
585,779
585,779
0
0
0
644,356
644,356
(1,060,838)
0
(1,060,838)
0
(1,060,838)
(471,686)
0
(471,686)
(1,060,838)
(1,532,524)
2,813,988
562,798
2,251,190
(1,532,524)
718,666
(960,264)
0
(960,264)
718,666
(241,598)
1,803,596
360,719
1,442,877
(241,598)
1,201,280
3,325,040
665,008
2,660,032
1,201,280
3,861,312
(548,266)
0
(548,266)
3,861,312
3,313,046
5,516,135
1,103,227
4,412,908
3,313,046
7,725,953
3,120,879
624,176
2,496,703
7,725,953
10,222,657
207,620
41,524
166,096
10,222,657
10,388,752
13
PREF-19/May, 2006/ Rev2
Pre-Feasibility Study
Operating activities
Net profit
Amortization (Pre-operational Expenses)
Depreciation
Accounts receivable
Equipment Spare Parts Inventory
Up-Front Insurance payment
Stocks-RM
Accounts payable
Cash provided by operations
0
0
(452,972)
0
(452,972)
Year-1
Year-2
Year-3
Year-4
Year-5
Year-6
Year-7
Year-8
Year-9
Year-10
(1,060,838)
0
13,600
(312,085)
0
0
0
0
(1,359,323)
(471,686)
0
13,600
(64,305)
0
0
6,380
0
(516,011)
2,251,190
0
13,600
(350,303)
0
0
(94,553)
0
1,819,934
(960,264)
0
13,600
379,934
0
0
74,662
0
(492,067)
1,442,877
0
13,600
(305,450)
0
0
(85,659)
0
1,065,368
2,660,032
0
13,600
(148,661)
0
0
(37,388)
0
2,487,583
(548,266)
0
13,600
339,334
0
0
38,932
0
(156,399)
4,412,908
0
13,600
(607,847)
0
0
(129,273)
0
3,689,388
2,496,703
0
13,600
224,846
0
0
40,148
0
2,775,297
166,096
0
13,600
230,232
0
0
2,337
0
412,265
0
273,270
(300,597)
0
0
0
300,597
(330,657)
0
(1,396,650)
0
330,657
(363,722)
0
(1,942,720)
0
363,722
(400,095)
0
(155,852)
0
400,095
(440,104)
0
(684,291)
0
440,104
(484,114)
0
0
0
484,114
(532,526)
0
0
0
532,526
(585,779)
0
0
0
585,779
(644,356)
0
0
0
644,356
(708,792)
0
0
Financing activities
Long term debt principal repayment
Add: building rent expense
Building rent payment
Addition to long term debt
Repayment of Running Finance
Issuance of share
Cash provided by/ (used for) financing activities
(273,270)
0
862,242
588,972
(27,327)
(1,426,710)
(1,975,786)
(192,224)
(724,301)
(44,010)
(48,411)
(53,253)
(58,578)
(64,436)
Total
136,000
(1,386,650)
(1,942,720)
(155,852)
(684,291)
341,067
2,443,572
(204,811)
3,636,135
2,716,719
347,829
Investing activities
Capital expenditure
Cash (used for)/ provided by investing activities
Net Cash
Cash balance brought forward
Cash Balance
Running Finance
Cash carried forward
(136,000)
(136,000)
0
0
0
0
-
(1,386,650)
0
(1,386,650)
1,396,650
10,000
(1,942,720)
10,000
(1,932,720)
1,942,720
10,000
(155,852)
10,000
(145,852)
155,852
10,000
(684,291)
10,000
(674,291)
684,291
10,000
341,067
10,000
351,067
0
351,067
2,443,572
351,067
2,794,640
0
2,794,640
(204,811)
2,794,640
2,589,829
0
2,589,829
3,636,135
2,589,829
6,225,964
0
6,225,964
2,716,719
6,225,964
8,942,684
0
8,942,684
347,829
8,942,684
9,290,513
0
9,290,513
14
PREF-19/May, 2006/ Rev2
Pre-Feasibility Study
Year-1
Year-2
Year-3
Year-4
Year-5
Year-6
Year-7
Year-8
Year-9
Year-10
Current Assets
Cash
Equipment Spare Parts Inventory
Up-Front Insurance payment
Stocks and Inventory
Receivable
Pre-paid building rent
Total
0
0
0
452,972
0
273,270
726,242
10,000
0
0
452,972
312,085
300,597
1,075,654
10,000
0
0
446,592
376,390
330,657
1,163,639
10,000
0
0
541,145
726,693
363,722
1,641,560
10,000
0
0
466,483
346,759
400,095
1,223,336
351,067
0
0
552,142
652,209
440,104
1,995,522
2,794,640
0
0
589,530
800,870
484,114
4,669,154
2,589,829
0
0
550,598
461,536
532,526
4,134,488
6,225,964
0
0
679,870
1,069,383
585,779
8,560,996
8,942,684
0
0
639,722
844,536
644,356
11,071,299
9,290,513
0
0
637,386
614,304
708,792
11,250,995
136,000
0
136,000
136,000
13,600
122,400
136,000
27,200
108,800
136,000
40,800
95,200
136,000
54,400
81,600
136,000
68,000
68,000
136,000
81,600
54,400
136,000
95,200
40,800
136,000
108,800
27,200
136,000
122,400
13,600
136,000
136,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
862,242
1,198,054
1,272,439
1,736,760
1,304,936
2,063,522
4,723,554
4,175,288
8,588,196
11,084,899
11,250,995
Current Liabilities
Running Finance
Accounts payable
1,396,650
0
1,942,720
0
155,852
0
684,291
0
0
0
0
0
0
0
0
0
0
0
0
0
Total
1,396,650
1,942,720
155,852
684,291
Long-term liabilities
Long-term Loan
Total
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Equity
Paid-up Capital
Retained Earnings
Total
862,242
0
862,242
862,242
(1,060,838)
(198,595)
862,242
(1,532,524)
(670,282)
862,242
718,666
1,580,908
862,242
(241,598)
620,645
862,242
1,201,280
2,063,522
862,242
3,861,312
4,723,554
862,242
3,313,046
4,175,288
862,242
7,725,953
8,588,196
862,242
10,222,657
11,084,899
862,242
10,388,752
11,250,995
862,242
1,198,054
1,272,439
1,736,760
1,304,936
2,063,522
4,723,554
4,175,288
8,588,196
11,084,899
11,250,995
Intangible Assets
Pre-operational Expenses
Total
Total Assets
15
PREF-19/May, 2006/ Rev2
Pre-Feasibility Study
12 KEY ASSUMPTIONS
Table 12-1:Production Assumptions
Maximum Capacity Utilization
Number of Birds per Flock
Number of Flocks per Year
Total Mortality Rate
Mortality Rate (Rearing Period)
Mortality Rate (Laying Period)
Total Mortality Loss (Birds)
Total number of Birds Laying Eggs
Length of Rearing Period (Months)
Length of Laying Period (Months)
Lag time between the Flock(Weeks)
100%
10,000
1
10%
8%
2%
1000
9,000
6
12
4
10%
5%
16
PREF-19/April, 2002/ Rev 1
0.5%
5%
25
50
638
1.95
24.88
3.3
42.11
3
5,000
3,000
8,500
12
Pre-Feasibility Study
2
6
122,708
33
40
3,000
5
10%
40
30
17
PREF-19/April, 2002/ Rev 1
10
0%
100%
14%
14%
5
1
17%
10,000