BROILER CONTRACT GROWING BROILER CONTRACT GROWING Achieving Better Profitability Achieving Better Profitability Through Modernization Through Modernization DR. VICENTE C. MANALO, JR, EMBA DR. VICENTE C. MANALO, JR, EMBA Bounty Fresh Food Inc Bounty Fresh Food Inc Contract Growing Contract Growing- Controlled Environment Systems Department Controlled Environment Systems Department BFFI BFFI- CG CES CG CES
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DR. VICENTE C. MANALO, JR, EMBADR. VICENTE C. MANALO, JR, EMBABounty Fresh Food IncBounty Fresh Food Inc
Contract GrowingContract Growing-- Controlled Environment Systems DepartmentControlled Environment Systems DepartmentBFFIBFFI-- CG CESCG CES
OUR COMPANYOUR COMPANY
ØØ Bounty Fresh Food Inc (BFFI), together with its sister Bounty Fresh Food Inc (BFFI), together with its sister company Bounty Agro ventures (BAVI), is the second company Bounty Agro ventures (BAVI), is the second biggest broiler integrator in the Philippines.biggest broiler integrator in the Philippines.
ØØ A fully integrated broiler operations, will produce A fully integrated broiler operations, will produce 140M in 2010.140M in 2010.
ØØ The two companies operate in 19 branches nationwide.The two companies operate in 19 branches nationwide.ØØ 80% of company80% of company’’s income come from broilers.s income come from broilers.ØØ Only company in the Philippines that continue to invest Only company in the Philippines that continue to invest
on company owned facilities (broiler farms, GP and PS on company owned facilities (broiler farms, GP and PS breeder farms, hatcheries, breeder farms, hatcheries, feedmillsfeedmills). ).
ØØ Company is in Hog breeders, slaughter hogs, colored Company is in Hog breeders, slaughter hogs, colored broilers, daybroilers, day--old chick sales, commercial layers, layer old chick sales, commercial layers, layer DOPsDOPs and RTL pullets.and RTL pullets.
OUR COMPANYOUR COMPANYØØ Recipient of Recipient of ““ASIAN LIVESTOCK INDUSTRY AWARD ASIAN LIVESTOCK INDUSTRY AWARD
2009, given last October 2009 in Malaysia.2009, given last October 2009 in Malaysia.ØØ First and only Philippine Agricultural company to First and only Philippine Agricultural company to
ChallengesChallenges§§ High cost of productionHigh cost of production§§ High cost of feed inputsHigh cost of feed inputs§§ High cost of importationHigh cost of importation
§§ Poor productivity of broiler farmersPoor productivity of broiler farmers§§ HousingHousing§§ MycotoxinsMycotoxins§§ DiseasesDiseases
§§ Effect of environmentEffect of environment§§ Third quarter syndromeThird quarter syndrome§§ Heat Stress, El Nino, La NinaHeat Stress, El Nino, La Nina
§§ Imports and High farm gate pricesImports and High farm gate prices§§ AFTAAFTA
MODERNIZATIONMODERNIZATION§§ Continuous investment on new technologies Continuous investment on new technologies
all throughall through--out the production chain.out the production chain.
Broiler HatcheriesBroiler Hatcheries(Additional 20 machines in 2010(Additional 20 machines in 2010
Grand Parent/ Parent FarmsGrand Parent/ Parent Farms(Controlled Environment)(Controlled Environment)
§§ To produce better quality broilers throughout To produce better quality broilers throughout the yearthe year§§ To have consistent efficiency in broiler To have consistent efficiency in broiler
performanceperformance§§ To cope up with the new technology in growing To cope up with the new technology in growing
high quality broilerhigh quality broiler§§ To have a better income and offset high To have a better income and offset high
production costproduction cost§§ Improve environment of broilers through use of Improve environment of broilers through use of
modern equipments.modern equipments.§§ Ensure good return on investments for business Ensure good return on investments for business
partners.partners.
What is Tunnel Ventilation ? What is Tunnel Ventilation ? Tunnel ventilation is a system where exhaust fans are Tunnel ventilation is a system where exhaust fans are located at one end of the house and two large openings located at one end of the house and two large openings are installed at the opposite end. Air is drawn through are installed at the opposite end. Air is drawn through these openings, down the house, and out the fans, like a these openings, down the house, and out the fans, like a wind tunnel.wind tunnel.
A ventilation system alone can never reduce inside A ventilation system alone can never reduce inside temperatures to levels below temperatures outside the temperatures to levels below temperatures outside the building. If lower temperatures are desired, then a building. If lower temperatures are desired, then a Cooling SystemCooling System must be utilizedmust be utilized
Evaporative cooling refers to the cooling effect produced when Evaporative cooling refers to the cooling effect produced when water evaporates. The energy used to evaporate water water evaporates. The energy used to evaporate water is taken from the air, cooling the air as energy is is taken from the air, cooling the air as energy is removed. removed.
Evaporative cooling is the most inexpensive way to cool air. Evaporative cooling is the most inexpensive way to cool air. The pumps and fans needed for evaporative cooling The pumps and fans needed for evaporative cooling are less expensive to buy and much less expensive to are less expensive to buy and much less expensive to operate than conventional air conditioning that uses operate than conventional air conditioning that uses refrigerants and compressors. refrigerants and compressors.
Evaporative Cooling SystemEvaporative Cooling System
Advantages vs. Open Side SystemsAdvantages vs. Open Side Systems
§§ Can grow more birds per square foot / can Can grow more birds per square foot / can load up to 45% more broilersload up to 45% more broilers§§ No problem with environmental stresses No problem with environmental stresses
especially heat stress especially heat stress –– can grow big birds can grow big birds even during summereven during summer§§ Birds grow faster and more uniformBirds grow faster and more uniform§§ Better broiler efficiencyBetter broiler efficiency§§ More cycle per yearMore cycle per year§§ Better incomeBetter income
•• Higher capital outlayHigher capital outlay•• Needs highly trained personnel.Needs highly trained personnel.
DisadvantagesDisadvantages
Advantages with BFFIAdvantages with BFFI
§§ We have 4 company owned broiler We have 4 company owned broiler complexes.complexes.§§ We recommend based on our experience We recommend based on our experience
to reduce / minimize learning curve.to reduce / minimize learning curve.§§ We have competent technical serviceman We have competent technical serviceman
knowledgeable about the system.knowledgeable about the system.
•the first contract grower in the Philippines with pre-fabricated buildings,•the first double deck building designed with a wind load of 200 km/hour in Asia
House ft/deck 40 x 400Floor Area ft2 16,000 Density (ft/bird) 0.55 House L xw (m)
Floor Area m2 1,487 Birds/m2 19.56 Population/cycle 29,091
Single Deck Pre Fab
GrowerGrower’’s OPEX per Cycle (Prefab)s OPEX per Cycle (Prefab)
•• Income from manure is for cool cell farms with slats.Income from manure is for cool cell farms with slats.••Cost of LWP and LPG is lower with prefab as compared to Cost of LWP and LPG is lower with prefab as compared to regular cool cell since prefab is well insulated & without leaksregular cool cell since prefab is well insulated & without leaks..
Timing fromChick-in Cool Cell Amount
Light, water and power monthly 1.00 30,189 LPG -7 0.60 18,113 Labor / Food monthly 1.75 52,830 Litter Material -4 0.50 15,094 Med/Vac 52 0.50 15,094 Repair & Maintenance 52 0.15 4,528 Others 52 0.25 7,547 Income from Manure -0.50 (15,094) Income from Sacks -0.25 (7,547)
4.00 120,755
ROIROI§§ Assume P 14 growerAssume P 14 grower’’s fee less P 4.00 OPEX, 7 cycles per years fee less P 4.00 OPEX, 7 cycles per year§§ Assume 0.55 ft2/birdAssume 0.55 ft2/bird§§ Assume P 10M total house cost (preAssume P 10M total house cost (pre--fabricated building and fabricated building and
equipment), 70% loan, 10% pa (loan payable in 5 years).equipment), 70% loan, 10% pa (loan payable in 5 years).§§ ROI of 20%ROI of 20%
Five-Year Loan Year 1 Year 2 Year 3 Year 4 Year 5Gross Income 2,840,151 2,840,151 2,840,151 2,840,151 2,840,151 Less OPEX (811,472) (811,472) (811,472) (811,472) (811,472) Net Income 2,028,679 2,028,679 2,028,679 2,028,679 2,028,679
Less Loan Amortization 1,569,595 1,569,595 1,569,595 1,569,595 1,569,595 Net Income 459,084 459,084 459,084 459,084 459,084 Net Income Per Bird 2.26 2.26 2.26 2.26 2.26
Contract GrowersContract Growers-- Cool CellCool CellOwn ConstructionOwn Construction
BB§§ Own construction, double deckOwn construction, double deck
FinancingFinancing
§§ Company has made similar presentations to Company has made similar presentations to different banks (different banks (LandbankLandbank, Security Bank, , Security Bank, PlanterPlanter’’s Bank, etc.).s Bank, etc.).§§ Funding from ACEF (interest free, 30Funding from ACEF (interest free, 30--40% 40%
equity).equity).
Design / SpecificationDesign / SpecificationThree important points for effective ventilationThree important points for effective ventilation§§ East East –– West orientationWest orientation§§ InsulationInsulation§§ TightnessTightness
REQUIREMENTS FOR NEW FARMSREQUIREMENTS FOR NEW FARMS
Site for Inspection
• minimum area of one (1) hectare• within the agricultural zone of the
community• one (1) km away from residential area• one (1) km away from nearest poultry or
piggery farms• with reliable source of electricity and
adequate potable water• All-weather road leading to and within the