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Pre-Feasibility Study

Prime Minister’s Small Business Loan

Scheme

(Broiler Farming-10,000 Birds)

Small and Medium Enterprises Development Authority

Ministry of Industries & ProductionGovernment 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 [email protected]

REGIONAL OFFICE

PUNJAB REGIONAL OFFICE

SINDH REGIONAL OFFICE

KPK REGIONAL OFFICE

BALOCHISTAN

3rd

Floor, Building No. 3,Aiwan e Iqbal, Egerton Road

Lahore,

Tel: (042) 111-111-456

Fax: (042)6304926-7

[email protected]

5TH

Floor, BahriaComplex II, M.T. Khan Road,

Karachi.

Tel: (021) 111-111-456

Fax: (021) 5610572

[email protected]

Ground Floor State Life Building

The Mall, Peshawar.

Tel: (091) 9213046-47

Fax: (091) 286908

[email protected]

Bungalow No. 15-AChaman Housing Scheme

Airport Road, Quetta.

Tel: (081) 831623, 831702

Fax: (081) 831922

[email protected]

September 2013

mailto:[email protected]












Pre-Feasibility Study Broiler Farming

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 .......................................................................................11 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 ...................................................................................................................... 20

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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 fromcase 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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http://www.smeda.org.pk/






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 conceptdevelopment, 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 guidingsource regarding various aspects of business set-up and it’s 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 businessdevelopment 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 Minister’s ‘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 throughNational 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).

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 rentalshed 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 project’s 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.

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.

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7. CRITICAL FACTORS

• The farm supervisor should ensure timely feeding, watering and

vaccination as per best husbandry practices to ensure bird’s 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 areasaround 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

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

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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 consumer’s 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 Minister’s 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) 2.84Net 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 (in ft.) Sq.ft

Management building 100

Shed Space 10,000

Feed Store 180

Room for workers 144

Pavement/ Boundry 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. Smallwaterers 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 assumptionthat a setup will be required to smoothly run the broiler farm’s operations.

11.6 OFFICE EQUIPMENT

These costs are based on the assumption that a setup will be required to ensurethe 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 be85% 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 DOCs 35 2,142,000

Total Feed required per birds @2.2FCR

Bird 178.2 9,088,200

Vaccination. Medication andDisinfection

Per Bird 8 408,000

Litter (Saw dust or rice husk) costper 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. Asolution of Sodium Hydroxide/Caustic Soda with warm water can also be used toclean the house.

To sanitize the broiler house from germs and insects, it is fumigated withFormaldehyde Gas, produced by putting Formalin on Potassium Permanganate.The rooms should be vacant and sealed for 30 minutes after the fumigation sothat 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-huskand 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 freshmaterials. Extensively wet and dusty litter should also not be used. Using newlitter 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 preventswastage. 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 eyedrops. Average vaccination and medication price per bird mostly varies betweenRs 8-10. The feasibility has taken cost of vaccination at Rs.8 per bird. Followingis a typical Vaccination Schedule for Broilers1.

Table 8: Vaccination Schedule for Broi ler Birds

11.8 HUMAN RESOURCE REQUIREMENTTable 9: Human Resource Requirement

Description No. of Employees Salary per

month

1 As per recommended by Poultry Research Institute (PRI), Rawalpindi

Age in

DaysDisease Vaccination Procedure

1 dayInfectious Bronchitis

Disease (IBD)IB-Vaccine

Aerial spray or

eye drops

5 days Newcastle Disease (ND)

ND-Vaccine

(Lasota) Eye drops

8 daysInfectious Bursal

Disease (IBD)

IBD Vaccine

(Gamboro)Eye drops

17-18 daysHydro Pericardium

Disease

HPS- Hydro

VaccineSub-cut injection

21-22 daysInfectious Bursal

Disease (IBD)

IBD Vaccine

(Gamboro)In drinking water

25-26 days IBD+ND IBD+ND Vaccines In drinking water

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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 abusiness. 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 GenerationDescription Unit Sale

PriceRs.

First Year Productio

n

First Year Revenue

Rs.

Broiler Birds of 1.8 kgs. LiveBody Weight after 6 weeks

Broiler Bird 145 51,000 13,311, 000

Other revenues(litter, emptyfeed 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: +92-42-37522104-7Fax: +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: +92-51-4455362Fax: +92-51-4847382

Sadiq Poultry Pvt Ltd

SB Plaza, 48-C, Satellite Town,

Chandni Chowk, Rawalpindi

Ph: 051-111-505-050Fax : +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. AkramUni. 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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re-Feasibility Study Broiler Farming

3. ANNEXURE

3.1 INCOME STATEMENT

Statement Summaries Broiler Farm

Income StatementRs. 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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3.2 BALANCE SHEET


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)

Intangib le asse ts

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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3.3 CASH FLOW STATEMENT


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 act 2,045,738 (204,813) (221,696) (239,971) (259,752) (281,164) (304,341) (329,428) - - -

Investin g activitie s

Capital expenditure (310,495) - - - - - - - - - -

Cash (used for) / provided by investing acti (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 andavailability 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 credibilityMarketing

• Product Development & Packaging: Expert's help may be engaged for

product/service and packaging design & development

• Ads & P.O.S. Promot ion: 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 Minister’s Office, www.pmo.gov.pk

Small and Medium Enterprise Development Authority, www.smeda.org.pk

National Bank of Pakistan (NBP), www.nbp.com.pk

First Women Bank Limited (FWBL), www.fwbl.com.pk

Government of Pakistan, www.pakistan.gov.pk

Ministry of Industries & Production, www.moip.gov.pk

Ministry of Education, Training & Standards in Higher Education,

http://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

State Bank of Pakistan (SBP), www.sbp.org.pk

First Women Bank Limited (FWBL), www.fwbl.com.pk

Pakistan Institute of Fashion Design (PIFD), www.pifd.edu.pk

Pakistan Fashion Design Council (PFDC), www.pfdc.org

Pakistan Poultry Association

Poultry Research Institute

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http://www.pmo.gov.pk/






http://www.nbp.com.pk/



http://www.fwbl.com.pk/



http://www.pfdc.org/











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) 45Feed 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

Table 5: Financial Assumptions

Project li fe (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

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