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Pre-Feasibility Study

Prime Ministers Small Business Loan


Scheme
(Broiler Farming-10,000 Birds)


Small and Medium Enterprises Development Authority
Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan e Iqbal, Egerton Road,
Lahore
Tel 92 42 111 111 456, Fax 92 42 36304926-7
helpdesk@smeda.org.pk

REGIONAL OFFICE
PUNJAB
REGIONAL OFFICE
SINDH
REGIONAL OFFICE
KPK
REGIONAL OFFICE
BALOCHISTAN

3
rd
Floor, Building No. 3,
Aiwan e Iqbal, Egerton Road
Lahore,
Tel: (042) 111-111-456
Fax: (042)6304926-7
helpdesk.punjab@smeda.org.pk
5
TH
Floor, Bahria
Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 5610572
helpdesk-khi@smeda.org.pk
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 9213046-47
Fax: (091) 286908
helpdesk-pew@smeda.org.pk
Bungalow No. 15-A
Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 831623, 831702
Fax: (081) 831922
helpdesk-qta@smeda.org.pk


September 2013

Pre-Feasibility Study Broiler Farming

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Table of Contents

1. DISCLAIMER .......................................................................................................................................... 3
2. PURPOSE OF THE DOCUMENT ......................................................................................................... 4
3. INTRODUCTION TO SMEDA .............................................................................................................. 4
4. INTRODUCTION TO SCHEME ........................................................................................................... 5
5. EXECUTIVE SUMMARY ...................................................................................................................... 5
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ........................................................................ 5
7. CRITICAL FACTORS ............................................................................................................................ 6
8. INSTALLED & OPERATIONAL CAPACITIES ................................................................................. 6
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ..................................................................... 6
10. POTENTIAL TARGET MARKET ................................................................................................... 6
11. PROJECT COST SUMMARY .......................................................................................................... 7
11.1 PROJECT ECONOMICS ................................................................................................................. 7
11.2 PROJECT FINANCING .................................................................................................................. 8
11.3 PROJECT COST .............................................................................................................................. 8
11.4 SPACE REQUIREMENT ................................................................................................................ 8
11.5 MACHINERY AND EQUIPMENT ................................................................................................ 9
11.6 OFFICE EQUIPMENT ...................................................................................................................10
11.7 RAW MATERIAL REQUIREMENTS ...........................................................................................10
11.8 HUMAN RESOURCE REQUIREMENT .......................................................................................12
11.9 REVENUE GENERATION ............................................................................................................12
11.10 OTHER COSTS ..............................................................................................................................12
12. CONTACTS SUPPLIERS AND EXPERTS ................................................................................ 13
13. ANNEXURE ...................................................................................................................................... 15
13.1 INCOME STATEMENT ................................................................................................................15
13.2 BALANCE SHEET .........................................................................................................................16
13.3 CASH FLOW STATEMENT..........................................................................................................17
13.4 USEFUL PROJECT MANAGEMENT TIPS ..................................................................................18
13.5 USEFUL LINKS .............................................................................................................................19
14. KEY ASSUMPTIONS ...................................................................................................................... 21










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












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2. PURPOSE OF THE DOCUMENT
The objective of the pre-feasibility study is primarily to facilitate potential
entrepreneurs in project identification for investment. The project pre-feasibility
may form the basis of an important investment decision and in order to serve this
objective, the document/study covers various aspects of project concept
development, start-up, and production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Broiler Farm by
providing them with a general understanding of the business with the intention of
supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes
such reports reveal certain thumb rules; best practices developed by existing
enterprises by trial and error, and certain industrial norms that become a guiding
source regarding various aspects of business set-up and its successful
management.
Apart from carefully studying the whole document one must consider critical
aspects provided later on, which form basis of any Investment Decision.
3. INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was
established in October 1998 with an objective to provide fresh impetus to the
economy through development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the
national income, through development of the SME sector, by helping increase
the number, scale and competitiveness of SMEs" , SMEDA has carried out
sectoral research to identify policy, access to finance, business development
services, strategic initiatives and institutional collaboration and networking
initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment
has been a successful hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business
development services is also offered to the SMEs by SMEDA. These services
include identification of experts and consultants and delivery of need based
capacity building programs of different types in addition to business guidance
through help desk services.
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4. INTRODUCTION TO SCHEME
Prime Ministers Small Business Loans Scheme, for young entrepreneurs, with
an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand
(100,000) beneficiaries, through designated financial institutions, initially through
National Bank of Pakistan (NBP) and First Women Bank Ltd. (FWBL).
Small business loans with tenure upto 7 years, and a debt: equity of 90 : 10 will
be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh,
Khyber Pakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and
Federally Administered Tribal Areas (FATA).
SMEDA has been tasked with an advisory role in the implementation of PMs
scheme by providing fifty (50) updated pre-feasibilities for referencing by SME
beneficiaries and participating banks to optimally utilize their financial resources.
5. EXECUTIVE SUMMARY
The broiler meat is a rich source of protein and its demand is growing with every
passing year. In Broiler farming, DOCs (Day Old Chicks) of Broiler birds,
purchased from a reputed company are raised on specially formulated feed for a
period of about six weeks, with a turnover of six flocks per year. Both rural and
semi-urban areas are suitable for this business.
Poultry farm management as per husbandry practices is the key success factor
in this business. After brooding and rearing period, birds are sold at farm gate on
Live Body Weight basis to traders or transported to market. The farm gate price
of live bird is determined on daily basis.
A Broiler farm of 10,000 birds is suggested in this pre-feasibility study as a viable
economic size to enter this business. The proposed business started in a rental
shed requires total estimated investment of Rs. 2.04 million and three persons
are employed. This project is proposed to be started on 90% debt and 10%
equity basis. The projects IRR, NPV and payback period are 47%, 3.9 million
and 2.48 years respectively.
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT
The broiler farm is a project of livestock sector, in which, the Day Old Chicks
(DOCs) of broiler are raised on high protein and energy feed on floor in
conventional open housing system for a period of six weeks (All in-All Out
system). The purpose built farm is acquired on rental basis and advance rent for
one year is paid.
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After six weeks, the finished broiler birds are sold on live body weight basis to
traders, wholesale markets or sold directly to the shopkeepers in the urban
markets. Broiler farming is a profitable venture depending on the demand of the
meat in the market. Annually, six flocks of birds are raised on the farm.
7. CRITICAL FACTORS
The farm supervisor should ensure timely feeding, watering and
vaccination as per best husbandry practices to ensure birds health and
disease-free environment.
The entrepreneur should be well aware of the supply and demand of
chicken in the market as the prices of chicken meat fluctuate
tremendously during a year.
Mortality losses should be kept below 8% by timely prophylactic measures
(vaccination, medication, disinfection etc.). Diseases like New Castle
Disease and Gamboro are extremely dangerous that can eradicate the
entire flock.
8. INSTALLED & OPERATIONAL CAPACITIES
In this pre-feasibility study, all the calculations have been based on a flock size of
10,000 birds. As six flocks are produced per year, hence total 60,000 birds are
reared per annum. There will be a lag time of two weeks for cleaning and
disinfection (e.g. fumigation) on the farm.
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT
Rural and peri- urban areas around the major cities of the country are suitable 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 grown-up birds. Sub-urban and rural areas
around big cities e.g. Lahore, Rawalpindi, Faisalabad, Hyderabad, Karachi,
Peshawar and Quetta and other similar major cities of the country are
recommended for starting a broiler farm.
10. POTENTIAL TARGET MARKET
The marketing of chickens follows the traditional channels of distribution.
Generally, grown-up broiler birds are distributed in the market through market
agents and intermediaries such as Arhti and wholesalers. In some cases, the
middleman provides DOCs and other farm inputs (feed, vaccination, medication
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etc.) to the broiler farmers under a contract to buy back the mature birds from
them.
Birds are transported to the urban market and are sold to retailers or market-
street poultry shops on Live Body Weight basis. There are few poultry meat
processing plants that process raw poultry meat into dressed chicken, quality
cuts or other forms and supply in the market. The integrated processing units
distribute frozen and dressed chicken packed in whole or cut-ups to the
consumer through retail shops under their brand names. The wholesale and
retail price of poultry meat is determined daily on consumers demand and supply
situation.
11. PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial
viability of Broiler Farm (10,000 birds) under the Prime Ministers Small Business
Loan Scheme. Various cost and revenue related assumptions along with results
of the analysis are outlined in this section.

The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as appendix
11.1 PROJECT ECONOMICS
All the figures in this financial model have been calculated for a flock of 10,000
broiler birds raised for 6 week, 6 flocks per annum at rented purpose built
conventional housing system. A target of 60,000 broiler birds would be produced
in year one. The following table shows internal rates of return and payback
period.
Table 1 - Project Economics
Description Details
Internal Rate of Return (IRR) 47%
Payback Period (yrs) 2.84
Net Present Value (NPV) 3,889,756
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11.2 PROJECT FINANCING
Following table provides details of the equity required and variables related to
bank loan;
Table 2 - Project Financing
Description Details
Total Equity (10%) Rs. 204,574
Bank Loan (90%) Rs. 1,841,164
Markup to the Borrower (%age/annum) 8%
Tenure of the Loan (Years) 7
11.3 PROJECT COST
Following requirements have been identified for operations of the proposed
business.
Table 3: Capital Investment for the Project
Capital Investment Amount (Rs.)
Machinery & Equipment 152,239
Furniture & fixtures 10,000
Office equipment 3,000
Pre-Operating Cost 145,256
Total Capital Costs 310, 495
Raw material inventory 1,395,200
Upfront building rent 240,044
Cash 100,000
Initial Working Capital 1,735,244
Total Project Cost 2,045,738
11.4 SPACE REQUIREMENT
The area has been calculated on the basis of space requirement for conventional
broiler sheds, management building, feed store, room for workers and boundary
walls. However, the units operating in the industry do not follow any set pattern.
Following table shows calculations for project space requirement. The layout of
open conventional shed should be north-south. The chicks should be kept in a
clean, dry and well-ventilated shed as this provides fresh air and carries off
humidity. The entire building including litter and all equipment should be properly
fumigated.


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Table 4: Space Requirement
Space Requirement Space (Sq.ft)
Management building 100
Shed Space 10,000
Feed Store 180
Room for workers 144
Pavement/ Boundary walls 104
Total Area 10,528

The rental cost is calculated at Rs. 20,000 per month.
11.5 MACHINERY AND EQUIPMENT
Following table provides list of machinery and equipment required for broiler farm
in open shed conventional housing system.
Table 5: List of Machinery and Equipment
Description Capacity
Birds/unit
Quantity Cost
Rs/unit
Total
Rs.
Brooder 500 20 1,000 20,000
Chick guard 200 50 150 7,500
Small waterers 50 182 90 16,364
Small feeding trays 50 182 90 16,364
Large automatic waterers 140 70 300 21,000
Large round feeders 130 80 300 24,000
Buckets 6 500 3,000
Manual balance 1 2,000 2,000
Exhaust fans 4 1,000 4,000
DOC shifting Boxes 10 1,800 18,000
Drum Heaters 4 2,000 8,000
Miscellaneous 1 5,000 5,000
Installation / Erection 5% 7,011
Total Machinery & Equipment

152,239

Main equipments for broiler farm are feeders, drinkers and brooders. Small
waterers and drinkers are required for DOCs till 7 days. After that, automatic/
round drinkers and feeders are required. The brooder is essential part of broiler
farming, also known as, Artificial Mother as it provides necessary heat to DOCs
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shortly after arrival till 7 days of age. These costs are based on the assumption
that a setup will be required to smoothly run the broiler farms operations.
11.6 OFFICE EQUIPMENT
These costs are based on the assumption that a setup will be required to ensure
the smooth running of project.

Table 6: Office Equipment Costs
Quantity Cost (Rs.) Amount
(Rs.)
Telephones 1 3,000 3,000
Furniture and Fixture 10,000 10,000
Total 13,000

11.7 RAW MATERIAL REQUIREMENTS
As already mentioned, one flock of 10,000 broiler birds would be reared as per
best farm management practices for a period of six weeks to attain FCR of 2.2.
Following table shows raw material requirement to raise 10,000 broilers per flock.
It is assumed that the capacity utilization at broiler farm in first year would be
85% i.e. 51,000 birds in 6 flocks per year or 8500 birds per flock.

Table 7: Cost of Material
Description Unit Rate
(Rs./
Unit)
Values (Rs. per
year)
Day Old Chicks (DOC) Per DOC 35 2,142,000
Total Feed required per birds @2.2
FCR
Per Bird 178.2 9,088,200
Vaccination. Medication and
Disinfection
Per Bird 8 408,000
Litter (Saw dust or rice husk) cost
per flock (Rs.)
Per Flock 8,000 84,000

The equipment and walls of the broiler shed should be checked for cleanliness,
disinfection and spraying before the arrival of birds. Disinfectants can be
prepared with Phenol, Potassium Permanganate, Carbolic Acid and Formalin. A
solution of Sodium Hydroxide/Caustic Soda with warm water can also be used to
clean the house.
To sanitize the broiler house from germs and insects, it is fumigated with
Formaldehyde Gas, produced by putting Formalin on Potassium Permanganate.
The rooms should be vacant and sealed for 30 minutes after the fumigation so
that the gas infiltrates in every corner of the room.
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Litter is spread on the floor to prevent the direct contact with the floor. Rice-husk
and sawdust are generally used for making the litter. It should be dry and free of
moulds. Caked or moldy material should be removed and refilled with fresh
materials. Extensively wet and dusty litter should also not be used. Using new
litter for each flock is good for raising disease-free broiler.

Broilers are usually fed with the following two types of ration:
Broiler Starter (Mash or Crumb form) fed up to four weeks of age.
Broiler finisher (Mash or Crumb form): fed from five to six week
Feeding three or four times each day will stimulate feed intake and prevents
wastage. There are many feed mills that prepare formulated Broiler Starter and
Broiler Finisher feed. These feed mixtures can be obtained in prepared form
(Mash or crumb form) from poultry feed mills.
Vaccination can be provided to chicks through eye drop, drinking water or
subcutaneous injections can also be mixed in the water and also through eye
drops. Average vaccination and medication price per bird mostly varies between
Rs 8-10. The feasibility has taken cost of vaccination at Rs.8 per bird. Following
is a typical Vaccination Schedule for Broilers
1
.

Table 8: Vaccination Schedule for Broiler Birds




1
As per recommended by Poultry Research Institute (PRI), Rawalpindi
Age in
Days
Disease Vaccination Procedure
1 day
Infectious Bronchitis
Disease (IBD)
IB-Vaccine
Aerial spray or
eye drops
5 days Newcastle Disease (ND)
ND-Vaccine
(Lasota)
Eye drops
8 days
Infectious Bursal
Disease (IBD)
IBD Vaccine
(Gamboro)
Eye drops
17-18 days
Hydro Pericardium
Disease
HPS- Hydro
Vaccine
Sub-cut injection
21-22 days
Infectious Bursal
Disease (IBD)
IBD Vaccine
(Gamboro)
In drinking water
25-26 days IBD+ND IBD+ND Vaccines In drinking water
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11.8 HUMAN RESOURCE REQUIREMENT
Table 9: Human Resource Requirement
Description No. of Employees
Monthly Salary
(Rs.)
Owner / Farm Manager 1 30,000
Farm Labor 2 24,000
Total Staff 3 54,000

The table above provides details of human resource required to run such a
business. Semi skilled workers are needed to look after the general poultry
husbandry operations such as feeding, watering, vaccination and cleaning
operations at the farm. A single person can handle 5,000 birds easily. Two
people will be hired to manage the operations of a broiler farm of 10,000 birds.
One attendant is given a monthly salary of Rs 12,000. In addition, owner would
act as farm manager to be hired at a monthly salary of Rs. 30,000. Salaries of all
employees are estimated to increase at 10% annually.

11.9 REVENUE GENERATION

Table 10: Revenue Generation
Description Unit Sale
Price
Rs.
First Year
Production
First Year
Revenue Rs.
Broiler Birds of 1.8 kgs.
Live Body Weight after 6
weeks
Per bird 145 51,000 13,311, 000
Other revenues(litter,
empty feed bags etc)
Per bird 8 51,000 408,000
Total Revenue 13,719,000

11.10 OTHER COSTS
An essential cost to be borne by the farmer is electricity expense. The variable
electricity expense is estimated to be Rs. 2.25 per bird for broiler shed. The fixed
electricity cost for rest of the area is estimated to be Rs. 800 per month for rest of
the area. Mostly, 24 hours light is provided during brooding and early growing
period. Initially, for first fifteen days, light intensity should be 40-60 watts per 200
sq. ft of space which can be replaced by 15 watts bulb in the start of third week.
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12. CONTACTS SUPPLIERS AND EXPERTS
Poultry Feed Suppliers DOC Suppliers
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
Rustum Feeds
Flat No.6, 1st Floor, United Center
Shamsabad, Murree Road, Rawalpindi
Phone: +92-51-4455362
Fax: +92-51-4847382
Sadiq Poultry Pvt Ltd
SB Plaza, 48-C, Satellite Town,
Chandni Chowk, Rawalpindi
Ph: 051-111-505-050
Fax : +92-51-4511191
Ghazi Brothers
Ghazi House, D-35, KDA Scheme, No.
1, Miran Muhammad Shah Road,
Karachi
Phone: +92-21-111250365


Machinery & Equipment Suppliers Consultants
Biovet (Pvt.) Ltd.
97-A, Jail Road Lahore
Phone : +92-42-37534508
Fax : +92-42-37534510
www.biovet.com.pk
Prof. Dr. M. Akram
Uni. Of Veterinary and Animal Sciences
(UVAS), Out Fall Road, Lahore
Mobile: +92-300-4238270
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Eastern Veterinary Services
4- C Chubirji Center, Near Venus
Cinema, Multan Road, Lahore.
Phone : +92-42-37417649-50
Dr. Abdul Rehman
Director,
Poultry Research Institute, Shamsabad,
Murree Road, Rawalpindi
Phone: +92-51-9290163-5
Dr. Fawwad
Facultay of Animal Husbandry,
University of Agriculture, Faisalabad
Ph: +92-41-9920161-70

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13. ANNEXURE
13.1 INCOME STATEMENT









Statement Summaries Broiler Farm
Income Statement
Rs. in actuals
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 13,719,000 15,935,400 18,457,170 21,323,460 23,407,806 25,700,587 28,222,645 30,996,910 34,048,601 37,405,461
Cost of goods sold 12,124,950 13,959,330 16,039,337 18,395,751 20,235,326 22,258,859 24,484,745 26,933,219 29,626,541 32,589,195
Gross Profit 1,594,050 1,976,070 2,417,834 2,927,709 3,172,480 3,441,728 3,737,901 4,063,691 4,422,060 4,816,266
General administration & selling expenses
Utilities expense 9,665 10,631 11,694 12,864 14,150 15,565 17,121 18,833 20,717 22,788
Professional fees (legal, audit, etc.) - - - - - - - - - -
Depreciation expense 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524
Amortization expense 29,051 29,051 29,051 29,051 29,051 - - - - -
Mortality 484,998 558,373 641,573 735,830 809,413 890,354 979,390 1,077,329 1,185,062 1,303,568
Subtotal 1,151,081 1,286,508 1,437,964 1,607,302 1,763,474 1,906,213 2,095,182 2,303,048 2,531,700 2,783,218
Operating Income 442,969 689,562 979,870 1,320,407 1,409,005 1,535,515 1,642,719 1,760,643 1,890,359 2,033,048
Earnings Before Interest & Taxes 442,969 689,562 979,870 1,320,407 1,409,005 1,535,515 1,642,719 1,760,643 1,890,359 2,033,048
Interest expense 141,250 124,367 106,092 86,311 64,899 41,722 16,634 - - -
Earnings Before Tax 301,718 565,195 873,778 1,234,096 1,344,107 1,493,793 1,626,084 1,760,643 1,890,359 2,033,048
Tax - - - - - - - - - -
NET PROFIT/(LOSS) AFTER TAX 301,718 565,195 873,778 1,234,096 1,344,107 1,493,793 1,626,084 1,760,643 1,890,359 2,033,048
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13.2 BALANCE SHEET




Statement Summaries Broiler Farm
Balance Sheet
Rs. in actuals
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Assets
Current assets
Cash & Bank 422,998 1,308,872 1,443,527 1,786,917 2,487,888 3,128,986 3,753,685 4,346,250 5,232,476 6,040,425 15,907,700
Accounts receivable - - - - - - - - - - -
Raw material inventory 1,292,242 1,638,047 2,072,102 2,616,222 3,165,628 3,830,410 4,634,797 5,608,104 6,785,806 8,210,825 -
Pre-paid building rent 20,004 22,004 24,204 26,625 29,287 32,216 35,438 38,981 42,880 47,168 -
Total Current Assets 1,735,244 2,968,923 3,539,833 4,429,764 5,682,804 6,991,613 8,423,919 9,993,335 12,061,161 14,298,418 15,907,700
Fixed assets
Machinery & equipment 152,239 137,015 121,791 106,567 91,343 76,119 60,895 45,672 30,448 15,224 (0)
Furniture & fixtures 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 -
Office equipment 3,000 2,700 2,400 2,100 1,800 1,500 1,200 900 600 300 -
Total Fixed Assets 165,239 148,715 132,191 115,667 99,143 82,619 66,095 49,572 33,048 16,524 (0)
Intangible assets
Pre-operation costs 145,256 116,205 87,154 58,102 29,051 - - - - - -
Total Intangible Assets 145,256 116,205 87,154 58,102 29,051 - - - - - -
TOTAL ASSETS 2,045,738 3,233,842 3,759,178 4,603,533 5,810,999 7,074,232 8,490,015 10,042,907 12,094,209 14,314,942 15,907,700
Liabilities & Shareholders' Equity
Current liabilities
Accounts payable - 1,091,198 1,273,034 1,483,583 1,716,704 1,916,995 2,143,325 2,399,562 2,690,221 3,020,594 2,580,305
Total Current Liabilities - 1,091,198 1,273,034 1,483,583 1,716,704 1,916,995 2,143,325 2,399,562 2,690,221 3,020,594 2,580,305
Other liabilities
Long term debt 1,841,164 1,636,352 1,414,656 1,174,685 914,933 633,769 329,428 - - - -
Total Long Term Liabilities 1,841,164 1,636,352 1,414,656 1,174,685 914,933 633,769 329,428 - - - -
Shareholders' equity
Paid-up capital 204,574 204,574 204,574 204,574 204,574 204,574 204,574 204,574 204,574 204,574 204,574
Retained earnings - 301,718 866,914 1,740,692 2,974,788 4,318,894 5,812,687 7,438,771 9,199,414 11,089,773 13,122,821
Total Equity 204,574 506,292 1,071,488 1,945,265 3,179,362 4,523,468 6,017,261 7,643,345 9,403,988 11,294,347 13,327,395
TOTAL CAPITAL AND LIABILITIES 2,045,738 3,233,842 3,759,178 4,603,533 5,810,999 7,074,232 8,490,015 10,042,907 12,094,209 14,314,942 15,907,700
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13.3 CASH FLOW STATEMENT











Statement Summaries Broiler Farm
Cash Flow Statement
Rs. in actuals
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating activities
Net profit - 301,718 565,195 873,778 1,234,096 1,344,107 1,493,793 1,626,084 1,760,643 1,890,359 2,033,048
Add: depreciation expense - 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524
amortization expense - 29,051 29,051 29,051 29,051 29,051 - - - - -
Accounts receivable - - - - - - - - - - -
Raw material inventory (1,292,242) (345,805) (434,055) (544,120) (549,407) (664,782) (804,386) (973,307) (1,177,702) (1,425,019) 8,210,825
Pre-paid building rent (20,004) (2,000) (2,200) (2,420) (2,662) (2,929) (3,222) (3,544) (3,898) (4,288) 47,168
Accounts payable - 1,091,198 181,836 210,549 233,121 200,291 226,331 256,236 290,660 330,373 (440,289)
Cash provided by operations (1,312,246) 1,090,687 356,351 583,361 960,723 922,262 929,039 921,993 886,226 807,949 9,867,275
Financing activities
Change in long term debt 1,841,164 (204,813) (221,696) (239,971) (259,752) (281,164) (304,341) (329,428) - - -
Issuance of shares 204,574 - - - - - - - - - -
Cash provided by / (used for) financing activities 2,045,738 (204,813) (221,696) (239,971) (259,752) (281,164) (304,341) (329,428) - - -
Investing activities
Capital expenditure (310,495) - - - - - - - - - -
Cash (used for) / provided by investing activities (310,495) - - - - - - - - - -
NET CASH 422,998 885,874 134,655 343,390 700,971 641,098 624,698 592,565 886,226 807,949 9,867,275
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13.4 USEFUL PROJECT MANAGEMENT TIPS
Technology
List of Machinery & Equipment
Required spare parts & consumables: Suppliers credit agreements and
availability as per schedule of maintenance be ensured before start of operations
Energy Requirement: Should not be overestimated or installed in excess and
alternate source of energy for critical operations be arranged in advance
Machinery Suppliers: Should be asked for training and after sales services under
the contract with the machinery suppliers
Quality Assurance Equipment & Standards: Whatever means required
products quality standards need to be defined on the packaging and a system to
check them instituted, this improves credibility
Marketing
Product Development & Packaging: Expert's help may be engaged for
product/service and packaging design & development
Ads & P.O.S. Promotion: Business promotion and dissemination through
banners and launch events is highly recommended. Product broachers from good
quality service providers
Sales & Distribution Network: Expert's advise and distribution agreements
are required with.
Price - Bulk Discounts, Cost plus Introductory Discounts: Price should never
be allowed to compromise quality. Price during introductory phase may be lower and
used as promotional tool. Product cost estimates should be carefully documented
before price setting. Government controlled prices shall be displayed.
Human Resources
List of Human Resource
Adequacy & Competencies: Skilled and experienced staff should be
considered an investment even to the extent of offering share in business profit.
Performance Based Remuneration: Attempt to manage human resource
cost should be focused through performance measurement and performance based
compensation.
Training & Skill Development: Encouraging training and skill of self &
employees through experts and exposure of best practices is route to success.
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Least cost options for Training and Skill Development (T&SD) may be linked with
compensation benefits and awards.
13.5 USEFUL LINKS
Prime Ministers Office, www.pmo.gov.pk
Government of Pakistan, www.pakistan.gov.pk
Ministry of Industries & Production, www.moip.gov.pk
Ministry of National Food Security & Research, www.mnfsr.gov.pk
Ministry of Education, Training & Standards in Higher Education, www.moptt.gov.pk
Government of Punjab, www.punjab.gov.pk
Government of Sindh, www.sindh.gov.pk
Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk
Government of Balochistan, www.balochistan.gov.pk
Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk
Government of Azad Jamu Kashmir, www.ajk.gov.pk
Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk
Security Commission of Pakistan (SECP), www.secp.gov.pk
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
www.fpcci.com.pk
Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore
Tel. 042-99205201, www.pbit.gop.pk
Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center, Shahra-
e-Faisal, Karachi, Tel. 021-99207512-4, www.sbi.gos.pk
State Bank of Pakistan (SBP), www.sbp.org.pk
National Bank of Pakistan (NBP), www.nbp.com.pk
First Women Bank Limited (FWBL), www.fwbl.com.pk
Pakistan Poultry Association (PPA), Islamabad, www.ppacentral.pk
Pakistan Agricultural Research Council (PARC), Park Road, Islamabad Tel. 051-
9203966, www.parc.gov.pk
National Agricultural Research Centre (NARC), Islamabad, Tel. 051-9255061,
www.parc.gov.pk
National Veterinary Laboratory, NARC, Islamabad Tel. 051-9255108
Faculty of Animal Husbandry, University of Agriculture, Faisalabad, www.uaf.edu.pk
Faculty of Veterinary Sciences, University of Agriculture, Faisalabad, www.uaf.edu.pk
Faculty of Veterinary and Animal Sciences, Lasbela University of Agriculture, Water &
Marine Sciences, Lasbela, www.luawms.edu.pk
Faculty of Veterinary Sciences and Animal Husbandry, Sindh Agriculture University,
Tondojam, www.sau.edu.pk
Gomal College of Veterinary Sciences, Dera Ismail Khan, www.gu.edu.pk
KPK Agricultural University, Peshawar, www.aup.edu.pk
Pir Mehr Ali Shah Arid Agricultural University, Rawalpindi, www.uaar.edu.pk
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University College of Veterinary & Animal Sciences, Islamia University Bahawalpur
(IUB), www.iub.edu.pk
University of Veterinary & Animal Sciences (UVAS), Out Fall Road, Lahore,
www.uvas.edu.pk
College of Veterinary & Animal Sciences, Jhang, www.uvas.edu.pk/other_campuses
Bahauddin Zakariya University (BZU), Multan, www.bzu.edu.pk
Animal Husbandry In-Service Training Institute (AHITI), Peshawar, Tel. 091-2960109,
9210309
Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel. 042-99220140
Agribusiness Support Fund (ASF), Lahore, www.asf.org.pk
Directorate of Livestock Farms, L&DD, Lahore, Tel: 042-99201126-7
Poultry Research Institute (PRI), Rawalpindi, Tel: 051-9290162, 9290173,
www.poultry.punjab.gov.pk
Government Poultry Breeding Farm, Bahawalpur, Tel: 062-9255392
Government Poultry Breeding Farm, Dina, Tel: 0544-633326
Government Poultry Breeding Farm, Dera Gazi Khan, Tel: 064-9260521
Government Poultry Breeding Farm, Multan, Tel: 061-6528067
Government Poultry Breeding Farm, Sargodha, Tel: 048-9239120
Government Poultry Rearing Farm, Attock, c/o PRI, Rawalpindi, Tel: 051-9290162,
9290173
Government Poultry Rearing Farm, Bahawal Nagar, Tel: 063-9239038
Government Poultry Rearing Farm, Gujrat, Tel: 053-3600040
Government Poultry Rearing Farm, Mianwali, Tel: 045-9920146
Poultry Disease Diagnostic Lab, Gujar Khan, District Rawalpindi, Tel: 051-9290163
Poultry Disease Diagnostic Lab, Ghakkar, Dist. Gujranwala, Tel: 055-9200194
Poultry Disease Diagnostic Lab, Summandri, Dist. Faisalabad, Tel: 041-3420330
Poultry Disease Diagnostic Lab, Kamalia, Dist. Toba Tek Singh, Tel: 046-3412008
Poultry Disease Diagnostic Lab, Arifwala, Dist. Pak Pattan, Tel: 0457-834591
Poultry Disease Diagnostic Lab, Bahawalnagar, Dist. Bahawalnagar, Tel: 063-9239038
Poultry Disease Diagnostic Lab, Jhang, Dist. Jhang, Tel: 0477-651030
Poultry Disease Diagnostic Lab, Jhelum, Dist. Jhelum, c/o PRI, Rawalpindi, Tel: 051-
9290162, 9290173
Livestock & Fisheries Department, Government of Sindh, www.sindh.gov.pk
Agriculture & Livestock Department, Government of KPK,
www.khyberpakhtunkhwa.gov.pk
Govt. Poultry Farm, Peshawar c/o L&DD, Peshawar, Tel: 091-9210276
Livestock & Dairy Development, Government of Balochistan, www.balochistan.gov.pk
Govt. Feed Mill Quetta c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Pishin c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Nushki c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Zhob c/o L&DD Quetta, Tel: 081-9202564
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District Govt. Poultry Farm Khuzdar c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Kohlu c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Sibi c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Panjgoor c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Loralai c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Muslim Bagh c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Gwadur c/o L&DD Quetta, Tel: 081-9202564
District Govt. Poultry Farm Pasni c/o L&DD Quetta, Tel: 081-9202564

14. KEY ASSUMPTIONS
Table -1: Production Assumptions
Production Capacity Utilization 85%
Capacity Utilization Growth Rate 5%
Maximum Capacity Utilization 100%
Number of Birds per Flock 10,000
Number of Flocks per Year 6
Mortality Rate 8%
Annual Production (birds) 60,000
Time required per Flock (days) 42
Lag time between the Flock (weeks) 2
Average weight per bird (kg) 1.8
Table 2: Revenue Assumptions
Sales price( in Rs/kg Live Body Weight) 145
Sales price growth rate 7%
Table 3: Expense Assumptions
DOC (Day Old Chicks) in Rs. 35
Feed Conversion Ratio 2.20
Average Feed Requirement/bird/day (kg) 0.09
Cost of feed (in Rs/kg) 45
Feed Cost per bird (Rs.) 178.2
Cost of feed bag (Rs. per 50 Kgs Bag) 2,250
Vaccination Cost per bird in Rs. 8
Litter Cost per flock 6,000


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Table 5: Financial Assumptions
Project life (Years) 10
Debt Equity 90%-10%
Interest rate on long-term debt 8%
Interest rate on short term debt 8%
Debt tenure (Years) 7
Debt payments per year 12