Poultry Farm PDF

Pre-Feasibility Study
(Poultry Farm)
Small and Medium Enterprises Development Authority

Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
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Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
December, 2013
Table of Contents
1. DISCLAIMER .......................................................................................................................................... 2
2. PURPOSE OF THE DOCUMENT ......................................................................................................... 3
3. INTRODUCTION TO SMEDA .............................................................................................................. 3
4. INTRODUCTION TO SCHEME ........................................................................................................... 4
5. EXECUTIVE SUMMARY ...................................................................................................................... 4
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT ........................................................................ 4
7. CRITICAL FACTORS ............................................................................................................................ 5
8. INSTALLED & OPERATIONAL CAPACITIES................................................................................. 5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ..................................................................... 5
10. POTENTIAL TARGET MARKET ................................................................................................... 5
11. PROJECT COST SUMMARY .......................................................................................................... 6
11.1 PROJECT ECONOMICS..................................................................................................................... 6
11.2 PROJECT FINANCING ...................................................................................................................... 7
11.3 PROJECT COST .................................................................................................................................. 7
11.4 SPACE REQUIREMENT .................................................................................................................... 7
11.5 MACHINERY AND EQUIPMENT .................................................................................................... 8
11.6 OFFICE EQUIPMENT ........................................................................................................................ 9
11.7 RAW MATERIAL REQUIREMENTS................................................................................................ 9
11.8 HUMAN RESOURCE REQUIREMENT .......................................................................................... 11
11.9 REVENUE GENERATION ............................................................................................................... 11
11.10 OTHER COSTS ................................................................................................................................. 11
12. CONTACTS SUPPLIERS AND EXPERTS ................................................................................ 12
13. ANNEXURE ...................................................................................................................................... 14
13.1 INCOME STATEMENT ................................................................................................................... 14
13.2 BALANCE SHEET............................................................................................................................ 15
13.3 CASH FLOW STATEMENT............................................................................................................. 16
13.4 USEFUL PROJECT MANAGEMENT TIPS..................................................................................... 17
13.5 USEFUL LINKS ................................................................................................................................ 17
14. KEY ASSUMPTIONS ...................................................................................................................... 20
1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the subject. 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
SMEDA Services / Information related to PMs Youth Business Loan are FREE OF COST - 2
Pre-Feasibility Study Broiler Farming
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, production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in broiler farming
by providing them 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.
4. INTRODUCTION TO SCHEME
Prime Ministers Youth Business Loan, 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 by the
National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years inclusive of
1 year grace period, and a debt: equity of 90: 10 will be disbursed to SME
beneficiaries+ across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa,
Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered
Tribal Areas (FATA).
5. EXECUTIVE SUMMARY
Broiler meat is a rich source of protein with an ever growing demand. In Broiler
farming, Day Old Chicks (DOCs) 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.
Success of poultry farm business largely depends on good management
practices. 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 with a staff of 3
persons. This project is proposed to be started on 90% debt and 10% equity
basis. The projects IRR, NPV and payback period are 46%, 5.55 million and
2.48 years respectively.
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT

In the proposed broiler farm business, Broiler Day Old Chicks (DOCs) are raised
through high protein energy feed in a conventional open housing system for a
period of six weeks (All in-All out system). The purpose built farm is acquired on
rental basis.
After six weeks, the finished broiler birds are sold on body weight basis to
traders, wholesale markets or sold directly to the shopkeepers in the urban
markets. With ever increasing demand for white meat, broiler farming can be a
profitable venture. Annually, six flocks of birds are raised on the farm, depending
on area climate.
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 aware of the supply and demand of chicken in
the market as the prices of chicken meat fluctuate throughout the year.
Mortality losses should be kept below 8% by timely prophylactic measures
(vaccination, medication, disinfection etc.). Diseases like New Castle
Disease and Gumboro 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 major cities 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 establish links
with the market for buying farm inputs and selling of grown-up birds, swiftly. Sub-
urban and rural areas around big cities e.g. Lahore, Rawalpindi, Faisalabad,
Hyderabad, Karachi, Peshawar and Quetta are recommended for starting a
broiler farm.
10. POTENTIAL TARGET MARKET

Marketing of chickens follow 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 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. Few poultry meat processing
plants process raw poultry meat into dressed chicken, quality cuts or other forms
to 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 consumer 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 Youth 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 a purpose built conventional
housing system (rented). The following table shows internal rates of return and
payback period.
Table 1- Project Economics
Description Details
Internal Rate of Return (IRR) 46%
Payback Period (yrs) 2.48
Net Present Value (NPV) Rs. 5,552,255
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. 204,518
Bank Loan (90%) Rs. 1,840,663
Markup to the Borrower (%age/annum) 8%
Tenure of the Loan (Years) 8
Grace Period (Year) 1
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 144,698
Total Capital Cost 309,937
Raw material inventory 1,395,200
Upfront building rent 240,044
Cash in hand 100,000
Initial Working Capital 1,735,244
Total Project Cost 2,045,181
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 facing 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 and all equipment should be properly disinfected
and fumigated.
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
Capacity Cost Total
Description Quantity
Birds/unit Rs/unit Rs.
Brooder 500 20 1,000 20,000
Chick guard 200 50 150 7,500
Small waterers 50 182 90 16,380
Small feeding trays 50 182 90 16,380
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 6,979
Total Machinery &
152,239
Equipment
Main equipment required for broiler farming is; 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 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

Description 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. Following table shows
raw material requirement to raise 10,000 broilers per flock. However, 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 8,500 birds per flock.
Table 7: Cost of Material
Rate
Values (Rs. per
Description Unit (Rs./
year)
Unit)
Day Old Chicks (DOC), 61,200 Per DOC 35 2,142,000
DOCs
Total Feed required per birds @2.2 Per Bird 178.2 9,088,200
FCR (51,000 birds)
Vaccination. Medication and Per Bird 8 408,000
Disinfection (51,000 birds)
Litter & Spray (Saw dust or rice Per Flock 14,000 84,000
husk) cost per flock (Rs.) (6 flocks)
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.
Litter is spread on the floor to prevent 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 birds.
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 prevent
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 drops, drinking water.
Subcutaneous injections can also be mixed in the water or applied 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.
Table 8: Vaccination Schedule for Broiler Birds
Age in Days Disease Vaccination Procedure
Infectious Bronchitis Aerial spray or
1 day IB-Vaccine
Disease (IBD) eye drops
Newcastle Disease ND-Vaccine
5 days Eye drops
(ND) (Lasota)
Infectious Bursal IBD Vaccine
8 days Eye drops
Disease (IBD) (Gumboro)
Hydro Pericardium HPS- Hydro
17-18 days Sub-cut injection
Disease Vaccine
Infectious Bursal IBD Vaccine
21-22 days In drinking water
Disease (IBD) (Gumboro)
25-26 days IBD+ND IBD+ND Vaccines In drinking water
11.8. HUMAN RESOURCE REQUIREMENT
Table 9: Human Resource Requirement

Monthly Salary per
Description No. of Employees
employee (Rs.)
Owner / Farm Manager 1 30,000
Farm Labor 2 12,000
Total Staff 3
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 First Year Revenue in
Price Rs. Productio First Year
n Rs.
Broiler Birds of 1.8 kgs. Per bird 261 51,000 13,311, 000
Live Body Weight after 6
weeks
Other revenues (litter, Per bird 8 51,000 408,000
empty feed bags etc)
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. 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.
12. CONTACTS SUPPLIERS AND EXPERTS

Poultry Feed Suppliers DOC Suppliers
Supreme Feeds (Pvt.) Ltd. Big Bird Poultry Breeders (Pvt.) Ltd.
Head Office: 176-Shadman 1 Lahore. 2-A,Ahmed Block, New Garden Town
Phone: +92-42-37522104-7 Lahore Phone : +92-42-35835373-4 Fax
Fax: +92-42-37573106 : +92-42-35835371
National Feeds Ltd. Hi-Tech Poultry Breeders (Pvt.) Ltd.
171 Shadman II Lahore. 1-A, Shadman Chowk Jail Road, Lahore
Phone: +92-42 37551405-8 Phone : +92-42-37564503
Fax: +92-42- 37573045 Fax : +92-42-37564508
Asia Feed (Pvt.) Ltd. Islamabad Poultry Breeding Co.
359 Shamsabad Colony, Humayun D-98, Satellite Town, Murree Road
Road Multan. Rawalpindi. Phone : +92-51-4427139
Phone: +92-61-6224414 Fax : +92-51-4421203
Fax: +92-61-6224414
Fast Poultry Feeds Jadeed Farms (Pvt.) Ltd.
12-KM Near Nai Sabzi Mandi Jhang 6, Allied Commercial Plaza, Murree
Road, Faisalabad. Road, Chandni Chowk Rawalpindi.
Phone: +92-41-2577171-2 Phone: +92-51-4851280-84
Fax: +92-41-2517474 Fax: +92-51-4851255
Rustum Feeds Sadiq Poultry Pvt Ltd
Flat No.6, 1st Floor, United Center SB Plaza, 48-C, Satellite Town,
Shamsabad, Murree Road, Rawalpindi Chandni Chowk, Rawalpindi
Phone: +92-51-4455362 Ph: 051-111-505-050
Fax: +92-51-4847382 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. Prof. Dr. M. Akram
97-A, Jail Road Lahore Chairman,
Phone : +92-42-37534508 Department of Poultry Production,
Fax : +92-42-37534510 Uni. Of Veterinary and Animal Sciences
www.biovet.com.pk (UVAS), Out Fall Road, Lahore
Ph: 042-99211461
Eastern Veterinary Services Dr. Abdul Rehman

4- C Chouburji Center, Near Venus Director,
Cinema, Multan Road, Lahore. Poultry Research Institute, Shamsabad,
Phone : +92-42-37417649-50 Murree Road, Rawalpindi
Phone: +92-51-9290163-5
Dr. Fawwad Ahmad
Faculty of Animal Husbandry, University
of Agriculture, Faisalabad
Ph: +92-41-9920161-70
13. ANNEXURE
14. INCOME STATEMENT

Income Statement
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 sales
Cost of DOC 2,142,000 2,356,200 2,591,820 2,851,002 3,136,102 3,449,712 3,794,684 4,174,152 4,591,567 5,050,724
Cost of Feed 9,088,200 10,585,080 12,290,454 14,231,052 15,654,157 17,219,573 18,941,530 20,835,683 22,919,252 25,211,177
Operation costs 1 (direct labor) 288,000 316,800 348,480 383,328 421,661 463,827 510,210 561,231 617,354 679,089
Vaccination, Medication & Disinfection 408,000 475,200 551,760 638,880 702,768 773,045 850,349 935,384 1,028,923 1,131,815
Direct Electricity 114,750 133,650 155,183 179,685 197,654 217,419 239,161 263,077 289,384 318,323
Litter and spray Cost 84,000 92,400 101,640 111,804 122,984 135,283 148,811 163,692 180,061 198,068
Total cost of sales 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
Administration expense 360,000 396,000 435,600 479,160 527,076 579,784 637,762 701,538 771,692 848,861
Building rental expense 240,044 264,048 290,453 319,498 351,448 386,593 425,252 467,778 514,555 566,011
Electricity expense 9,665 10,631 11,694 12,864 14,150 15,565 17,121 18,833 20,717 22,788
Travelling expense 3,600 3,960 4,356 4,792 5,271 5,798 6,378 7,015 7,717 8,489
Communications expense (phone, fax, mail, internet, etc.) 3,600 3,960 4,356 4,792 5,271 5,798 6,378 7,015 7,717 8,489
Office expenses (stationary, entertainment, janitorial services, 3,600 3,960 4,356 4,792 5,271 5,798 6,378 7,015 7,717 8,489
Depreciation expense 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524
Amortization of pre-operating costs 28,940 28,940 28,940 28,940 28,940 - - - - -
Bird Mortility 484,998 558,373 641,573 735,830 809,413 890,354 979,390 1,077,329 1,185,062 1,303,568
Subtotal 1,150,970 1,286,396 1,437,852 1,607,190 1,763,363 1,906,213 2,095,182 2,303,048 2,531,700 2,783,218
Operating Income 443,080 689,674 979,981 1,320,519 1,409,117 1,535,515 1,642,718 1,760,643 1,890,359 2,033,048
Other income (interest on cash) - - - - - - - - - -
Earnings Before Interest & Taxes 443,080 689,674 979,981 1,320,519 1,409,117 1,535,515 1,642,718 1,760,643 1,890,359 2,033,048
Interest expense on long term debt (Project Loan) 152,774 139,866 122,901 104,528 84,629 63,080 39,741 14,465 - -
Subtotal 152,774 139,866 122,901 104,528 84,629 63,080 39,741 14,465 - -
Earnings Before Tax 290,306 549,808 857,080 1,215,991 1,324,488 1,472,435 1,602,977 1,746,177 1,890,359 2,033,048
Tax - 14,981 51,062 104,899 121,173 143,365 168,095 196,735 225,572 254,109
NET PROFIT/(LOSS) AFTER TAX 290,306 534,827 806,018 1,111,093 1,203,315 1,329,070 1,434,882 1,549,442 1,664,788 1,778,938
BALANCE SHEET
Balance Sheet
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 1,502,161 1,638,611 1,983,796 2,686,563 3,329,456 3,955,950 4,550,310 5,092,269 5,900,218 15,767,493
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 3,162,211 3,734,917 4,626,643 5,881,479 7,192,083 8,626,184 10,197,396 11,920,954 14,158,211 15,767,493
Fixed assets
Machinery & equipment 152,239 137,015 121,791 106,567 91,343 76,120 60,896 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 82,620 66,096 49,572 33,048 16,524 0
Intangible assets
Pre-operation costs 144,698 115,759 86,819 57,879 28,940 - - - - - -
Total Intangible Assets 144,698 115,759 86,819 57,879 28,940 - - - - - -
TOTAL ASSETS 2,045,181 3,426,685 3,953,927 4,800,190 6,009,562 7,274,702 8,692,280 10,246,967 11,954,002 14,174,735 15,767,493
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
Deferred tax - 14,981 66,043 170,941 292,114 435,479 603,575 800,310 1,025,882 1,279,991
Long term debt (Project Loan) 1,840,663 1,840,663 1,636,261 1,414,895 1,175,155 915,517 634,329 329,802 - - -
Total Long Term Liabilities 1,840,663 1,840,663 1,651,242 1,480,937 1,346,096 1,207,631 1,069,808 933,377 800,310 1,025,882 1,279,991
Shareholders' equity
Paid-up capital 204,518 204,518 204,518 204,518 204,518 204,518 204,518 204,518 204,518 204,518 204,518
Retained earnings 290,306 825,133 1,631,151 2,742,244 3,945,559 5,274,629 6,709,511 8,258,953 9,923,741 11,702,679
Total Equity 204,518 494,824 1,029,651 1,835,670 2,946,762 4,150,077 5,479,147 6,914,029 8,463,471 10,128,259 11,907,197
TOTAL CAPITAL AND LIABILITIES 2,045,181 3,426,685 3,953,927 4,800,190 6,009,562 7,274,702 8,692,280 10,246,967 11,954,002 14,174,735 15,767,493
CASH FLOW STATEMENT
Cash Flow Statement
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 290,306 534,827 806,018 1,111,093 1,203,315 1,329,070 1,434,882 1,549,442 1,664,788 1,778,938
Add: depreciation expense 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524 16,524
amortization of pre-operating costs 28,940 28,940 28,940 28,940 28,940 - - - - -
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
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) 1,079,163 340,852 566,552 942,507 902,532 907,682 898,886 871,761 807,949 9,867,275
Financing activities
Project Loan - principal repayment - (204,401) (221,367) (239,740) (259,638) (281,188) (304,527) (329,802) - -
Additions to Project Loan 1,840,663 - - - - - - - - - -
Issuance of shares 204,518 - - - - - - - - - -
Cash provided by / (used for) financing activities 2,045,181 - (204,401) (221,367) (239,740) (259,638) (281,188) (304,527) (329,802) - -
Investing activities
Capital expenditure (309,937) - - - - - - - - - -
Cash (used for) / provided by investing activities (309,937) - - - - - - - - - -
NET CASH 422,998 1,079,163 136,450 345,185 702,767 642,893 626,494 594,360 541,959 807,949 9,867,275
USEFUL PROJECT MANAGEMENT TIPS

Technology
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 overlooked 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 for
products quality standards need to be defined. A system to check them be instituted,
this improves credibility
Marketing
Ads & P.O.S. Promotion: Business promotion and dissemination through banners
and incentives is recommended.
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
Adequacy & Competencies: Skilled and experienced staff should be considered
an investment.
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 recommended.
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
Securities & Exchange 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
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
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
15. 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 per bird (1.8 Kg approx) 261
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
Spray Cost per flock 6,000
Table 5: Financial Assumptions

Project life (Years) 10
Debt Equity 90%-10%
Interest rate 8%
Debt tenure (Years) 8
Grace Period (Year) 1
Debt payments per year 12

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Pre-Feasibility Study

Small and Medium Enterprises Development Authority

2. PURPOSE OF THE DOCUMENT

6. BRIEF DESCRIPTION OF PROJECT & PRODUCT

8. INSTALLED & OPERATIONAL CAPACITIES

9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

10. POTENTIAL TARGET MARKET

11. PROJECT COST SUMMARY

11.1. PROJECT ECONOMICS

11.2. PROJECT FINANCING

11.3. PROJECT COST

11.4. SPACE REQUIREMENT

Table 4: Space Requirement

The rental cost is calculated at Rs. 20,000 per month.

11.5. MACHINERY AND EQUIPMENT

11.6. OFFICE EQUIPMENT

Table 6: Office Equipment Costs

11.7. RAW MATERIAL REQUIREMENTS

11.8. HUMAN RESOURCE REQUIREMENT

Table 9: Human Resource Requirement

11.9. REVENUE GENERATION

11.10. OTHER COSTS

12. CONTACTS SUPPLIERS AND EXPERTS

Machinery & Equipment Suppliers Consultants

Eastern Veterinary Services Dr. Abdul Rehman

14. INCOME STATEMENT

USEFUL PROJECT MANAGEMENT TIPS

Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk

Poultry Research Institute (PRI), Rawalpindi, Tel: 051-9290162, 9290173,

15. KEY ASSUMPTIONS

Table 2: Revenue Assumptions

Table 3: Expense Assumptions

Table 5: Financial Assumptions

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