Quail Farming

Pre-Feasibility Study QUAIL FARMING (40,000 Birds)

Small and Medium Enterprise Development Development Authority Government of Pakistan www.smeda.org.pk HEAD OFFICE th

6 Floor, LDA Plaza, Egerton Road, Lahore. Tel: (042) 111-111-456, Fax: (042) 6304926-27 [email protected]

REGIONAL OFFICE PUNJAB

REGIONAL OFFICE SINDH

REGIONAL OFFICE NWFP

8th Floor, LDA Plaza, Egerton Road, lahore. Tel: (042) 111-111-456 111-111-456 Fax: (042) 6304926-27 [email protected]

REGIONAL OFFICE BALOCHISTAN

5TH Floor, Bahria

Ground Floor

Bungalow No. 15-A

Complex II, M.T. Khan Road, Karachi.

State Life Building

Chaman Housing Scheme

The Mall, Peshawar.

Airport Road, Quetta.

Tel: (021) 111-111-456 111-111-456

Tel: (091) 9213046-47

Tel: (081) 831623, 831702

Fax: (091) 286908

Fax: (081) 831922

[email protected]

[email protected]

Fax: (021) 5610572 [email protected]

May,2009

Pre-feasibility Study

Quail Farm (40,000 Birds)

TABLE OF CONTENT 1.

INTRODUCT INTRODUCTION ION TO SMEDA........................... SMEDA....................................... ...................... .................... .................... .................... ...................... .............. .. 4

2

PROJECT PROJECT PROFILE PROFILE ................... ............................. .................... .................... ...................... ........................ ........................ ...................... .................... .............. .... 4

2.1 2.2 2.3 2.4 2.5 2.6 3

CRUCIAL CRUCIAL FACTORS FACTORS & STEPS STEPS IN DECISION DECISION MAKING MAKING FOR INVESTM INVESTMENT.... ENT.............. .......... 7

3.1 3.2 3.3 3.4 4

STRENGTHS..................... ............................... .................... .................... .................... ...................... ........................ ........................ ...................... .................... ............ 7 WEAKNESSES ................... ............................. .................... ...................... ...................... .................... .................... .................... ...................... ........................ ............ 7 THREATS ................... ............................... ........................ ........................ ........................ ...................... .................... .................... .................... ...................... .............. .. 8 OPPORTUNITIES................... ............................... ........................ ...................... .................... .................... .................... ...................... ........................ ................. ..... 8

CURRENT CURRENT INDUSTRY INDUSTRY STRUCTURE... STRUCTURE............. .................... ...................... ........................ ...................... .................... .................... .............. .... 9

4.1 4.2 4.3 5

PROJECT BRIEF ................... ............................... ........................ ...................... .................... .................... .................... ...................... ........................ ................. ..... 4 FEATURES OF QUAIL MEAT AND EGGS ................... ............................. .................... ...................... ........................ ........................ ............... ... 5 PRESERVATION METHODS ..................... ............................... .................... .................... .................... ...................... ........................ ....................... ........... 5 OPPORTUNITY R ATIONALE ............................. ...................... ........................ ........................ ...................... .................... .................... .......... 6 ATIONALE ................... TOTAL PROJECT COST ................... ............................. .................... ...................... ........................ ........................ ...................... .................... ................. ....... 6 PRODUCTION CAPACITY ................... ............................... ........................ ........................ ........................ ...................... .................... .................... ............ .. 6

GLOBAL PERSPECTIVE ................... ............................. .................... ...................... ........................ ........................ ...................... .................... ................. ....... 9 LOCAL PERSPECTIVE ................... ............................. .................... ...................... ...................... .................... .................... .................... ..................... ........... 10 MAJOR PLAYERS ................... ............................... ........................ ........................ ........................ ...................... .................... .................... .................... ............ 13

FARM MANAGEMEN MANAGEMENT... T............... ........................ ...................... .................... .................... .................... ...................... ........................ ...................... ............ 14

5.1

PROPOSED QUAIL FARM ................... ............................. .................... .................... ...................... ...................... .................... .................... ................. ....... 14

6

MARKETING MARKETING ................... ............................. .................... .................... ...................... ........................ ...................... .................... .................... .................... ............... ..... 15

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PRODUCT......... PRODUCT................... .................... .................... ...................... ...................... .................... .................... .................... ...................... ........................ ..................... ......... 15

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LAND & BUILDING. BUILDING............ ..................... .................... .................... .................... ...................... ...................... .................... .................... .................... .............. .... 16

8.1 8.2 8.3 8.4

SPACE R EQUIREMENT ............................... ...................... .................... .................... .................... ...................... ........................ .................. ...... 16 EQUIREMENT................... RECOMMENDED MODE FOR ACQUIRING LAND ................... ............................... ........................ ........................ ..................... ......... 16 SUITABLE LOCATIONS ................... ............................. .................... ...................... ........................ ........................ ...................... .................... ............... ..... 16 I NFRASTRUCTURE R ..................... ......... ...................... .................... .................... .................... ...................... ...................... .......... 16 NFRASTRUCTURE EQUIREMENT EQUIREMENT

9

MANPOWER MANPOWER REQUIRE REQUIREMENTS............. MENTS......................... ........................ ........................ ...................... .................... .................... .................. ........ 17

10

TECHNOLOG TECHNOLOGY Y ................... ............................. ...................... ........................ ........................ ...................... .................... .................... .................... .................... .......... 17

10.1 10.2 11

FINANCIA FINANCIAL L FEASIBILITY. FEASIBILITY........... ...................... ...................... .................... .................... .................... ...................... ........................ ..................... ......... 18

11.1 11.2 11.3 11.4 12

MACHINERY & EQUIPMENT R EQUIREMENT ............................. .................... ...................... ...................... .................. ........ 17 EQUIREMENT ................... MACHINERY SUPPLIERS................... ............................. .................... .................... ...................... ...................... .................... .................... ................. ....... 18

PROJECT COST ................... ............................. .................... ...................... ........................ ........................ ...................... .................... .................... ................ ...... 20 I NCOME STATEMENT ................... ............................. .................... ...................... ...................... .................... .................... .................... ..................... ........... 21 BALANCE SHEET ................... ............................... ........................ ........................ ........................ ...................... .................... .................... .................... ............ 22 CASH FLOW STATEMENT ................... ............................. .................... .................... ...................... ........................ ...................... .................... ............. ... 23

KEY ASSUMP ASSUMPTIO TIONS NS ................... ............................. ...................... ...................... .................... .................... .................... ...................... ........................ .............. 24 24

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DISCLAIMER The purpose and scope of this information memorandum is to introduce the subject matter and provide a general idea and information on the said area. All the material included in this document is based on data/information gathered from various sources and is based on certain assumptions. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA does not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. Therefore, the content of this memorandum should not be relied upon for making any decision, investment or otherwise. The prospective user of this memorandum is encouraged to carry out his/her own due diligence and gather any information he/she considers necessary for making an informed decision. The content of the information memorandum does not bind SMEDA in any legal or other form.

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1. INTRODUCTION TO SMEDA The Small and Medium Enterprise Development Authority (SMEDA) was established with the objective to provide fresh impetus to the economy through the launch of an aggressive SME support program. program. Since its inception in October 1998, SMEDA had adopted a sectoral SME development approach. A few priority sectors were selected on the criterion of SME presence. In depth research was conducted and comprehensive development plans were formulated after identification of impediments and retardants. The all-encompassing sectoral development strategy involved recommending changes in the regulatory environment by taking into consideration other important aspects including financial aspects, niche marketing, technology up gradation and human resource development. SMEDA has so far successfully formulated strategies for sectors including, fruits and vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear, textiles, surgical instruments, urban transport and dairy. Whereas the task of SME development at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s areas of operation. Along with the sectoral focus a broad spectrum of business development services is also offered to the SMEs by SMEDA. These services include identification of viable business opportunities for potential SME investors. In order to facilitate facilitate these investors, SMEDA provides business guidance through its help desk services as well as development of project specific documents. These documents consist of information required to make well-researched investment decisions. Pre-feasibility studies and business plan development are some of the services provided to enhance the capacity of individual SMEs to exploit viable business opportunities in a better way. This document is in the continuation of this effort to enable potential investors to make well-informed investment decisions.

2 2. 1

PROJECT PROFILE Pro ject Brief

The quail farming is a project of livestock sector, in which, the day old chicks (DOCs) are raised on high protein prote in feed for a period of 28 days. Quail meat is the good source of animal protein available in the country as compared to broiler. The time required for rearing quail birds is lesser than that for large animals as well as broilers. The consumption of white meat is increasing due to growing health consciousness in the masses. Annually, 11 flocks of birds will be reared on the same premises of the farm. Quails are sold to traders and the whole seller markets in the urban areas. Quails meat is also sold directly to the hotels inside the country. This unit will work for the production of quails. These birds are marked for meat purpose to the common masses. The quail chicks will be purchased from private hatchery. A flock of 40,000 commercial broiler chicks will be bought monthly, 10,000 DOCs per week. The chicks will be set in brooding on litter floor providing specific requirement 7 days and then finishing phase from 21 days. The entire specific 4



requirement will be met by temperature control, feeding and drinking system, which th will be monitored by the concerned staff. After marketing of broiler at 28 day of age the quail house will be given 3 days for the preparation to receive the new flock. During During this week, proper proper cleaning, cleaning, washing, washing, white white washing, washing, disinfecti disinfection on and fumigation will be performed prior to the arrival of the new flock. During flock rearing, strict measures for bio-security will be observed at the unit. In the last ten years, the little known Japanese quail [ Coturnix Japanica ] has been introduced to the Pakistan as an alternative avian species in the progressing of poultry industry to mitigate chronic protein deficiency among the Pakistani population. The Japanese quails are now contributing to broiler and layer type commercial quails. An exclusive quail market segment has lately been growing within the poultry meat sector to cater to the quality conscious meat consumers. Now, quail meat is not only regarded as a restaurant delicacy but is also consumed in quantity by the public due to its affordable prices. Approximately, one out of every ten broiler chicken consumers opts for quail. Domesticated quails differ from wild Coturnix Japanica, which are protected under the Wild Life (Protection) (Protection) Act in Pakistan. Pakistan. The introduction of the Japanese quail has opened a new path and an alternative for poultry farmers. Quail has also been identified worldwide as a laboratory animal because of its salient characteristics that include rapid growth, growth, early sex maturity, short generation interval and prolificacy in egg production. 2. 2

1

Features of Quail Meat and Eggs1

Quail meat is an ideal food and has no religious taboos. Japanese quails provide highly versatile muscle food. They are quickly replacing the chicken broiler broiler due to high nutritive nutritive value and medicinal medicinal properties. properties. Quail Quail meat has less fat fat and fewer calories, forming an ideal food for for health conscious consumers. Quail eggs and meat are renowned for being rich in vitamins, vitamins, essential amino amino acids, unsaturated fatty acids and phospholipids phospholipids,, which are vital for human human physical physical and mental development. development. Quail meat and eggs can be included in the diets of children, pregnant mothers and geriatric and convalescent patients. They are an essential part of the diet of socially and economically economically weaker sections sections of the society. 2. 3

Preservation Methods

The shelf life of quail eggs and meat can be enhanced by preserving the products as egg and meat packed in plastic plastic pouches. pouches. Quail meat and eggs are easily easily perishable perishable due to their high high water content content and bacteria, bacteria, moulds moulds or yeasts yeasts cause spoilag spoilage, e, supported supported by enzymes. The methods methods employed employed include include deprivation deprivation of water water and sometimes oxygen, excess of salt, increased acidity or extreme cold or heat. The modern quail meat will be welcomed as a meat variety of superior quality, tenderness and flavor. Considering the changing demands of avian meat consumers, 1

www.medallaquailfarm.multiply.com

5



the industry is is striving to produce quails weighing 200 grams grams at marketing marketing age (28 days). This modern variety of quail can be used for the production of cutlets, fingers, noodles, soup powder and egg puff. It is not an exaggeration to state that quails will occupy a considerable portion of the poultry market market in the days to come. 2. 4

Opportunity Rationale

Broiler meat is the cheapest source of animal protein available in the country. The time required for raising broiler birds is lesser than that for big animals. The consumption of white meat is increasing due to growing health consciousness in the masses. According to the Agriculture Statistics of Pakistan the per capita consumption of poultry meat is increasing at a rate of 4% per annum. The existing daily availability of protein quantity per capita in Pakistan deriving from animal source including beef, mutton, poultry and fish combined amounts to 11 grams. This is far less than the recommended daily dietary protein allowance from animal source of 26 gr ams according to the World Health Organization standards. Figure 2-1: Daily Protein Consumption

Recommended Daily Dietary Protein Allowance Vs Existing Existing Availability Availability 1991-2000 30 25

s 20 m 15 a r G 10 5 0 1991

1992

1993

1994

Avai Availlable able per per Day Day

2. 5

1995

1996

1997

1998

1999

2000

Reco Recom mmend mend Dai Daily Diet Dietar ary y All Allowan owance ce

Total Pro ject Cost

A Quail Farm with a population of 40,000 birds established in a purpose-built shed will need a capital investment of about Rs 2,410,905 million for construction and purchasing farm machinery and equipment. In add ition to this, a sum o f Rs 976,025 million is required as working capital, which will be used for purchasing day old chicks and raw material (feed & vaccines) etc. 2. 6

Production Capacity

In this pre-feasibility study, all the calculations have been based on a flock size of 40,000 quails, with raising approximately 11 flocks per year. There will be a lag time of 3 days for cleaning and fumigation fumigation of o f the farm. 6


3


Crucial Factors & Steps in Decision Making f or Investment

Before making the decision, whether to invest in this project or not, one should carefully analyze the associated risk factors. A SWOT analysis can help in analyzing these factors which can play important role in making the decision. 3. 1

Strengths 

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3. 2

Quails have more immunity in their blood as compared to chicken therefore viral disease cannot affect them. There are also very less chances of bacterial diseases attack in them. the m. Vaccination is not needed and the drugs usually given to chickens do not have to be added to quail feed or drinking water. For meat production, the time is even shorter. In 28 days quail meat is ready for market. A quail egg is hatched in just 16 days and the hen is ready to lay eggs after 41 days. Nutrition-wise, quail meat is a source of economical econo mical protein for malnourished children. children. It fulfills fulfills 28% 28% protein requirem requirement ent which is much much higher than chicken which fulfills only 18% protein prote in requirement. Quail meat is dry meat so it contains 0% cholesterol in it. It has less fat and fewer calories, forming an ideal food for health conscious consumers. Quail eggs and meat are renowned for being rich in vitamins, essential amino acids, unsaturated fatty acids and phospholipids, which are vital for human physical and mental development. Quail meat and eggs can be included in the diets of children, pregnant mothers and geriatric and convalescent patients. Quails can be farmed easily as Indo-Pak environment is very suitable for them. 11 flocks of quails are ready every year for market as compared to 6 flocks of chicken per year. Price of quail’s DOC & feed is lesser than price of chicken DOC & feed. Like this its profitability profitability ratio is higher than chicken. Weaknesses

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Proper quail feed is not manufactured in Pakistan yet. Quails mortality rate is higher than chicken. Grand Parent technology is not introduced in Pakistan yet. It is required that government should take measures in developing breed or help in import of it, so that production could be increased & demand can be fulfilled inside the country. Quality quails should be produced for export purpose as quails which are produced in Pakistan are of less weight i.e. 150 grams and for export purpose quail weighing 250 to 300 grams is required. Quail demand would be less in summer but its production increases in summer. 7


3. 3


Threats 

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3. 4

The cost of production in Pakistan is comparatively high. The structure of the industry is changing with many urban units moving to rural areas in an effort to lower the cost of production while the rural sector is becoming more commercial. Seasonal variation in demand remains a major problem that makes the rate fluctuation a normal process. In summer when there is less demand, production of quail is higher & in winter demand is more and production is less. Political instability can affect the business and because of it could be closed down. Opportunities

Government has provided following incentives to increase livestock and poultry production in the country: 

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Regulatory measures include allowing import of high yielding animals, semen and embryos for crossbreeding, expansion/improvement and modernization of laboratory facilities to diagnose and treat livestock diseases; introduction of mobile animal health service to provide diagnostic services at the door steps of farmers, duty free import of veterinary dairy and livestock machinery/equipment, not manufactured in the country. Government has allowed import of Incubators, Brooders, Evaporation cooling pads, cooling system, Grain storage silos silos for poultry, poultry equipments, milk and meat processing machinery/equipment (not manufactured locally), at zero percent custom duty. Private sector has imported milk and meat processing 2 machinery/e machinery/equipmen quipmentt worth of Rs 285 million million during July-March, 2007-08. In order to reduce input costs in poultry production, poultry vaccines, feed additives, coccidiostats, Growth promoters premixes, Vitamin premixes, Fish feed, Zinc sulphate, Copper sulphate used in poultry feed has been zero-rated. Sales tax exemption has been allowed to un-cooked poultry meat; processed milk, yogurt, cheese flavored milk, and butter cream. In addition, poultry, vaccines, feed additives and coccidiostats used in poultry feed manufacturing have been allowed at zero percent custom duty. It’s a daily kitchen item and in few areas in Pakistan like Multan, quail meat and eggs are consumed on daily basis. If Grand Parent breed’s technology is imported by the help of Government than meeting demand inside the co untry and exports could be started easily.

Incentive to livestock promotion, Economic Survey 2007-2008

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4 4. 1


CURRENT INDUSTRY STRUCTURE Global perspective

There has been an increasing pressure on the livestock sector to meet the growing demand for high-value animal protein. The world’s livestock sector is growing at an unprecedented rate and the driving force behind this enormous surge is a combination of population growth, rising incomes and urbanization. Annual meat production is projected to increase from 218 million million tones in 1997-1999 to 376 million million tones by 3 2030 . As diets become richer and more diverse, the high-value protein that the livestock sector offers improves the nutrition of the vast majority of the world. Livestock products not o nly provide high-value pro tein but are also important sources of a wide range of essential micronutrients, in particular minerals such as iron and zinc, and vitamins such as vitamin A. For the large majority of people in the world, particularly in developing countries, livestock products remain a desired food for nutritional value and taste. Table shows trends in per capita consumption of livestock meat in different regions and country groups. Table 4-1: Per capita consumption of live stock meat in dif f fe rent regions & 4 company group Regions

Wor ld Develop ing countries Near east & north Africa Sub- Saharan Africa* Latin America & the Caribbean East Asia South Asia Industrialized countries Transit ion countries * Excluding South Africa

Meat ( kg per year ) 1964-1966 2 4 .2 1 0 .2 11.9 9 .9 3 1 .7 8.7 3 .9 6 1.5 4 2.5

1997-1999 3 6.4 2 5.5 21.2 9 .4 5 3.8 3 7 .7 5.3 8 8.2 4 6. 2

2030 45.3 36.7 35.0 13.4 76.6 58.5 11.7 100.1 60.7

In Spain there is a biggest quail farm producing 1.5 to 2.0 million birds daily. Most of the demand of Quail birds co mes from Middle East countries. Poultry meat is supplied chiefly by chickens and turkeys, although quails, duck’s, geese, guinea fowl etc & other fowl contributes therefore poultry meat is economical and quick and easy to prepare and serve. Also it has a number of desirable nutritional properties.

3 4

WHO, Global & regional food consumption pattern. WHO, Global & regional food consumption pattern.

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Nutritionally people peop le eat poultry meat for its high content of high quality qua lity protein prot ein and its low fat content. Quail and chicken meat is slightly higher in protein and slightly lower in fat than beef and other red meats. Additionally protein is rich source of al the essential amino acids. 5

5 Table 4-2: Approximate composition (per 100 gm edible protein)

Species Quail Broiler Turkey Duck 4. 2

Water 74.3 74.6 72.5 70.8

Proteins 13.1 12.1 13.7 12.8

Lipid 11.1 11.1 11.9 13.8

CHO 1.4 1 .2 1. 1 1.4

Minerals 1 .1 1 .0 0 .8 1 .2

Cholesterol 0 75mg 0 0

Local perspective

Livestock accounts for 52.2 percent of agricultural value added, contributes 11 percent to GDP and affects the lives o f 30 – 35 million million people in rural areas6. It is highly labour intensive and if proper attention is given to this sector, it will not only absorb more rural workforce but also help a lleviate rural poverty in Pakistan. Realizing its importance to rural poverty reduction, the government has started giving some attention only during the last two years. It is in this perspective that livestock development policy and poultry development policy have been put in place. Poultry sector is is one of the most vibrant segments of agriculture sector of Pakistan. This sector generates employment (direct/indirect) and income for about 1.5 million people. Poultry meat contributes 19 percent of the total meat production in the country. The current investment in Poultry Industry is about Rs 200 billion. Poultry 7 sector has shown a growth of o f 8-10 percent annually. More than 70 per cent production cost for poultry is incurred in feed prices. Poultry feed prices have gone up by 22 per cent in 2007-2008. In coming days, it is expected that feed prices would increase further. Wheat and rice are the two major poultry feed ingredients. Wheat contributes about 50 per cent in the manufacturing of various types of poultry feeds for layers, broilers and breeders while rice is the major ingredient. Soybean constitutes 25 per cent of the poultry diet. Its price has increased 8 by 100 per cent in one year. The production of domestic/rural domestic/rural & commercial and rural poultry and products for last three three years years is given given below:

5

www.pakissan.com (poultry industry & poultry products- basic for good nutrition) Economic Survey of Pakistan 2007-2008 7 Economic Survey of Pakistan 2007-2008 8 Economic Survey of Pakistan 2007-2008 6

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Quail Farm (40,000 Birds) 9

9 Table 4-3: Domestic / / Rural & Commercial Poult ry

Type

2005-2006

2006-2007

2007-2008

Million No’s = = = = 000 Tons Million Million No’s

72.95 8.61 34.23 30.12 3423 94.67 0.70

74.02 8.84 34.84 30.34 3484 96.54 0.67

75.11 9.08 35.47 30.57 3547 98.45 0.67

Eggs

=

31.14

29.85

29.85

Meat

000 Tons

0.95

0.91

0.91

23.20 337.00

24.82 370.70

26.56 407.77

Domestic poultry Cock Hens Chicken Eggs Meat Duck, drakes & ducklings ducklings

Units

Commercial poultry

Layers Broilers

Million No’s =

Breeding stocks

=

6.90

7.25

7.61

Day old chicks

=

352.00

387.20

425.92

Eggs

=

6258

6682

7136

Meat

000 Tons

416.55

456.95

501.30

Million No’s

352.00

387.20

425.92

Total poultry

Day old chicks Poultry birds

=

441

477

518

Eggs Poultry meat

= 000 Tons

9712 512

10197 554

10712 601

The government has allowed import of vaccines, feed additives and coccidiostats used in poultry feed manufacturing at zero per cent customs duty but it is not sure that these incentives would positively affect feed pr ices. Though this industry is a source of food and employment for million of people, but is facing a major impediments in its progress in the form of heat stress. Pakistan is a tropical country and during summer the temperature reached up to 40oC. Even the average temperature remains well beyond the higher side of thermo neutral zone for the greater part of the year. Their business is also adversely affected for four long months due to severe environment. During this period they have to either continue their flock compromising with poor performance in feed intake, growth rate, weight gain, FCR in broilers quails along with mortality or they have to totally close their

9

MINFAL (Livestock Wing)

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business to avoid all these risks. This situation creates severe shortage of poultry meat which is the cheapest and easily ea sily available source of animal protein. The generation line of broiler comes from pure line, which is imported. This produces grand parents for parent stocks and parent stock end up in producing the final product. The farmers get day old broiler quails from hatcheries. These hatcheries maintain their breeder farms, or in some cases, purchase their hatching eggs from breeder farms. These breeder farms depend on producers of parent stock. Poultry feed mills are the major player in the poultry industry, which produce a specific formula feed mix. Poultry feed consists of rich protein elements like grains, gluten, blood meal, fishmeal and soybean meal. The major component of cost of production of chicken meat accounts for feed cost. The poultry meat production has showed a growing trend over the past few years after a dip in 1997 due to the ban imposed on wedding dinners. The meat production trend of chicken meat, beef and a nd mutton from the year 1995-2006 is presented below. 10

Figure 4-1: Meat Production Trends10

1400 1200 ) 1000 s n o 800 800 T , 0 600 600 0 0 (

400 400 200 200 0 1995

1996

1997

1998

1999 Beef

2000

2001 Mutton

2002

2003

2004

2005

2006

Poultry Meat

The per capita poultry meat production stood at only 7 kg as compared with 41 kg in the developed countries. The annual consumption of eggs, at 60-65 per head, was way below the average for developed markets, which stood at over 300, meaning there was still great scope for the home ho me market to increase its consumption levels.11

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Agricultural Statistics of Pakistan 2005-2006

11

Ministry of Fisheries and Livestock

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Quail Farm (40,000 Birds) 12

Table 4-4: Population of domestic poultry birds by Administrative units12 Administrative units

Number of poultry birds 27,695,116 25,905,928 14,135,540 5,911,304 73,647,888

NWFP Punjab Sindh Baloc histan Pakistan

From last 30 yrs people are doing quail farming in Pakistan. They have also formed an association named ‘All Pakistan Quail Breeder & Traders Association’. Quail breeder company give imported breed to 50 poor families which are working as breeders and take eggs from them, after that they t hey either sell the t he eggs or DOCs in the market or they process the DOC into adult quail and sell its meat in the market In Pakistan 1.0 to 1.5 million quail farming is done in total out of which 0.4 to 0.5 million million quail farming is done Lahore. There are about 3,000 quail quail farms in in Pakistan out of which 250 breeding and hatchery farms are in Lahore. DOCs is easily available in market for Rs. 5 in summer and Rs. 6 in winters. Quail eggs are also easily available in the market. There are lots of breeds of quail but the breeds which are most popular in Pakistan are: 

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Coturnix Japanica (It gives one egg daily and its production & hatchability is more) Giant Quail Washington ( It has maximum quant ity of meat in it)

In Pakistan 50,000 to 100,000 birds are consumed daily. In summer consumption is less and in winter consumption is more. Major clients in Lahore are Pearl Continental, Avari Hotel, Village, Ziafat, Zenith, Metro, Food Street, Tolinton 13 Market, Supreme Court, Aiwan-e- Saddar & various 4 and 5 Star Hotels. 4. 3

Ma jo jor Players

Major players of Quail farm industry are: Name of Bu Bussiness & Supp pplliers Sadat Quail Breeding Farms & Hatchery Mr. Syed Asad Ali Rizvi Jumbo quail farm Prof. Dr. Muhammad Akram

Addres resses of Sup upp pliers

Near Sozo Water Park, Jallo, Lahore – 54000, Pakistan Ph no. 042-5069105, 042-6582013 Mob: 0300-4727214 ART Centre, UVAS Ferozpur Kasur Road, Lahore Mob: 0300-4238270

12

www.statpak.gov.pk

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All Pakistan Quail Breeder & Traders Association. President, Syed Asad Ali Rizvi

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4-A Faisal Park, Main Road, P.O, Baghbanpura, Lahore ph no. 042-6862812, 042-6815967 042-6815 967 Karachi Mob: 0300-2017668 Neela quail breeding farm & hatchery Joda pull, Lahore Mr. Kaleem Mob: 0321-4664093

Gold Pak Poultry, Breeding Farms & Hatcheries Mr. Shahzad Ahmed Zafar Breeding Farm Mr. Zafar

5

Farm management

Farm input required for a shed includes farm equipment (drinkers, feed trays, brooders, and feeders), electronic fixtures and other consumer items (feed, (feed, vaccines & medicines, rice-husk or saw-dust, water, electricity, etc.). 5. 1

Proposed quail f arm

This unit will work for the production of quails. The quail chicks will be purchased from private hatchery. A flock of 10,000 day old quail chicks will be bought every week. The chicks will be set in brooding on litter floor providing specific requirement during 28 days. days. The entire specific requirement requirement will be met met by feeding and nipple nipple drinking system, which will be monitored by the concerned staff. After marketing of th quails at 28 day the quail house will be given 3 days for the preparation to receive the new flock. During these days, proper cleaning, washing, disinfection and fumigation will be performed prior to the arrival of the new flock. During flock rearing, strict measures for bio-security will be observed at the unit. The following practices starting from arrival to marketing of quail will be performed under the supervision of an expert by which Quail farmers can protect there flocks flocks from 80% diseases and can improve there farm management: 











Sanitation and disinfection program will be strictly followed during and after the completion of one flock. Drinkers should be washed daily and feed trays should be washed atleast once in a week. Quail chicks should be given enough space according to their age as less space could give rise to different complexities. complexities. Feed should not be stored for long time as it would lose its nutrition & there is a chance that feed would get fungal and by eating such feed poisonous matter starts penetrating inside the quail chick. Quail chicks should be kept in separate place from adult quails as there is chance that different diseases could be transferred from adult quails to quail chicks. By keeping them separate, quail chicks immunity would increase with the passage of time. If same worker is employed to take care of chicks and adult quails then that worker should start his daily work from chicks to adult flocks so that their would be lesser chances of diseases spread among flocks. On quail farm it should be strictly prohibited for employees to keep there own quails or any other birds so that disease spread shou ld be controlled. 14


6


MARKETING

The marketing of chickens follows the traditional channels of distribution. Generally, broilers are distributed in the market through th rough middlemen (Arti) ( Arti) and who lesalers. The role of Arti is to identify a farm and negotiate ne gotiate the price. In some cases, the middleman provides Day Old Chicks and other ot her farm inputs (feed, etc.) to the t he broiler farmers and then agrees 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. Birds are sold on live-weight basis. The time spent in getting gett ing broilers from the farm to the retail shop is brief. Although collection and handling of birds has improved with the use of loader vehicles, but it is an established fact that greater the distance between the poultry producer and consumer, more complicated is the marketing system including their collection, handling and transportation to the consumer or processing plants. The processing plant produces dressed quail (slaughtered and cleaned). However, a very small amount of dressed quail is available in the local retail market. The integrated processing units distribute frozen and dressed quail packed in whole or cut-ups to the consumer through retail shops under their brand names. Most of the demand comes from Multan, Karachi, Gujranwala, Lahore & Islamabad. The trick in marketing is quick availability of market information of quail supply and demand, which will determine the selling price.

7

PRODUCT

This project will generate revenue from from sale of quails. Assumptions Assumptions used used for the product mix are as follows: Table 7-1: Product Mix Product Quail

Avg. Live Weight 110 grams

Sales Price p er bird Rs. 17

Table 7-2: Production Assumptions:

Number of Flocks per year

11.25

Number of Birds per Flock

40,000

Number of Sheds

8

Time required per Flock (Days)

28

Lag time required per Flock (Days)

3

Total Annual Production Capacity

450,000

Average weight per bird (gms)

110.00

Shed Space Required per Bird (Sq.ft.)

0.14

Sale price growth rate Production capacity utilization

10% 100% 15


8


LAND & BUILDING

8. 1

Space Requirement

The land requirement for this proposed project is 1.5 kanals which would cost Rs.300,000. Details for civil works are as follows: Table 8-1: Inf rast ructure Details Description Shed Space - Gro und Floo r Feed Store Roo ms for Guard and Workers Office block Wash rooms Pavement/driveway Grounds

Area (sq.ft.) 5,600 150 120 120 75 320 1,916

Total Building Infrastructure

8,301

8. 2

Cost (Rs. / sq.ft.) 250 250 300 500 500

Total 1,400,000 37,500 36,000 60,000 37,500

1,571,000

Recommended Mode f or Acquiring Land

It is recommended that the proposed propo sed project should be started on a purchased land. 8. 3

Suitable Locations

Most suitable location for opening quail farm is Punjab & Sindh. Quail farms should not be opened in cold areas. Suburban and rural areas around the major cities of the country are also 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 mature birds. 8. 4

Inf rastructu re Requirement

Quail farming needs to be handled tactically, right from the selection of the site to the final stage when the birds are sold. The farm should be located at a place where transportation of birds and feed can be b e handled easily. The entrepreneur should make sure that the following things are available at the farm site before setting up the farm: farm:  

Electricity Electricity connection Drinking quality water

16


9


MANPOWER REQUIREMENTS

The personal needed for the farm is as under : Table 9-1: Actual Human Resource Description Supervisor House man Watchman Total

No. 1 2 3

Salary per month 15,000 6,500 7,000

Total Salary 15,000 13,000 21,000

28,500

49,000

6

10 TECHNOLOGY 10.1 Machinery & Equipment Requirement

Various types of farm equipment are needed for feeding, drinking and handling the birds. List of farm equipment, which will be needed, is as under: Table 10-1: Machinery Details Description

Unit

DOC Drinker (4 (40 drinkers, small, 1 ltr. Capacit y) Feeders (40 feeders) Brooders Feed Gr inders Adult Drinkers (25, 4ltr.) Buckets Total Machinery Cost Desert cooler Exhaust fan Generato r set -3000 watts Fire extinguisher Total Machinery & Equipment Required Erection & installat ion Contingencies Total Machinery & Equipment Required (incl. Erection & Installation etc.)

17

Unit Cost

Amount (PKR)

320 320 240 1

50 15 400 10,000

16,000 4,800 96,000 10,000

200 240

200 50

40,000 12,000 178,800 48,000 20,000 25,000 25,000 296,800 2,968 2,968 302,736

8 8 1 1 1% 1%

6,000 2,500 25,000 25,000



10.2 Machinery Suppliers 

Rayvet Incorporation Mr. Hanif Rajput Mob: 0333-4211435

Table 10-2: Office Equipment Description Computer Printer Te lephone Sets

Qty. 1 1 2

Unit Rate 25,000 10,000 1,000

Total Cost 25,000 10,000 2,000

Total

37,000

Table 10-3: Office Furniture & Fixture Description Furniture Air Condit ioners

Qty. 1 1

Unit Rate 25,000 30,000

Total Cost 25,000 30,000

Total

55,000

11 Financial Feasibility Total investment required for the project is Rs. 3,386,930 million. Equity portion of this investment will be 50%, i.e. Rs. 1,693,465. Debt required for the project is 50% i.e. 1,693,465. Table 11-1: Total Investment Investment

Rs.

Land Building/Infrastructure Machinery & equipment Furniture & fixtures Office equipment Pre-operating costs Working Capital Total Investment

300,000 1,571,000 302,736 55,000 37,000 145,169 976,025 3,386,930

Table 11-2: Debt-Equity Split Initial Financing

Rs. In actual 1,693,465 1,693,465

Debt – 50% Equity – 50% Total

3,386,930

18



Table 11-3: Financial Viability Project

Internal Rate of Return (IRR) Payback Period (yrs) Net Present Value (NPV)

47% 2.93 6,115,524

19



11.1 Pro je ject Cost

Capital Investment Land Building/Infrastructure Machinery & equipment Furniture & fixtures Office equipment Pre-operating costs Total Capital Costs

Rs. in actuals 300, 000 1,571,000 302, 736 55,000 37,000 145, 169 2,410,905

Working Capital Raw material inventory* Cash Total Working Capital

Rs. in actuals 476, 025 500, 000 976, 025

Total Investment

3,386,930

Initial Financing Debt Equity * Raw material inventory based on per/flock approx.

Rs. in actuals 1,693,465 1,693,465

20



11.2 Income Statement Revenue

Year 1 8,100,000

Year 2 8,865,000

Year 3 9,706,500

Year 4 10,632,150

Year 5 11,650,365

Year 6 12,770,402

Year 7 14,002,442

Year 8 15,357,686

Year 9 16,848,454

Year 10 18,488,300

Cost of sales Cost of DOC Cost of Feed Op eration costs 1 (direct labo r) Medication & Disinfection Direct Exlectricity Op erating costs 5 (direct gas) Total cost of sales Gross Profit

2,475,000 3,237,300 336,0 00 225,0 00 225,0 00 6,498,300 1,601,700

2,598,750 3,399,165 369,600 236,250 247,500 6,851,265 2,013,735

2,728,688 3,569,123 406,560 248,063 272,250 7,224,683 2,481,817

2,865,122 3,747,579 447,216 260,466 299,475 7,619,858 3,012,292

3,008,378 3,934,958 491,938 273,489 329,423 8,038,185 3,612,180

3,158,797 4,131,706 541,131 287,163 362,365 8,481,163 4,289,239

3,316,737 4,338,292 595,244 301,522 398,601 8,950,396 5,052,046

3,482,574 4,555,206 654,769 316,598 438,461 9,447,608 5,910,078

3,656,702 4,782,967 720,246 332,427 482,307 9,974,650 6,873,805

3,839,537 5,022,115 792,270 349,049 530,538 10,533,510 7,954,790

252,0 00 7,5 60 60,000 18,000 24,000 120,0 00 2,5 20 2 ,5 ,5 20 20 4,0 50 118,0 24 29,034 637,7 07

277,200 8,316 66,000 19,800 26,400 132,000 2,772 2,772 4,433 118,024 29,034 686,750

304,920 9,148 72,600 21,780 29,040 145,200 3,049 3,049 4,853 118,024 29,034 740,697

335,412 10,062 79,860 23,958 31,944 159,720 3,354 3,354 5,316 118,024 29,034 800,038

368,953 11,069 87,846 26,354 35,138 175,692 3,690 3,690 5,825 118,024 29,034 865,314

405,849 12,175 96,631 28,989 38,652 193,261 4,058 4,058 6,385 118,024 908,083

446,433 13,393 106,294 31,888 42,517 212,587 4,464 4,464 7,001 118,024 987,066

491,077 14,732 116,923 35,077 46,769 233,846 4,911 4,911 7,679 118,024 1,073,948

540,184 16,206 128,615 38,585 51,446 257,231 5,402 5,402 8,424 118,024 1,169,518

594,203 17,826 141,477 42,443 56,591 282,954 5,942 5,942 9,244 118,024 1,274,645

General administration & selling expenses Administration expense Administration benefits expense Electricity expense Water expense Gas expense Travelling expense Communications expense (phone, fax, mail, internet, etc.) Office vehicles running expense O ff ff ic ic e e xp xp en en se se s ( st st at at io io na na ry ry , e nt nt er er ta ta in in me me nt nt , j an an it it or or ia ia l s er er vi vi ce ce s, s, e tc tc .) .) Pr ofessional fees ( legal, audit, consultants, etc.) Dep reciation expense Amortization of pr e-operating costs Subto tal



11.2 Income Statement Revenue

Year 1 8,100,000

Year 2 8,865,000

Year 3 9,706,500

Year 4 10,632,150

Year 5 11,650,365

Year 6 12,770,402

Year 7 14,002,442

Year 8 15,357,686

Year 9 16,848,454

Year 10 18,488,300

Cost of sales Cost of DOC Cost of Feed Op eration costs 1 (direct labo r) Medication & Disinfection Direct Exlectricity Op erating costs 5 (direct gas) Total cost of sales Gross Profit

2,475,000 3,237,300 336,0 00 225,0 00 225,0 00 6,498,300 1,601,700

2,598,750 3,399,165 369,600 236,250 247,500 6,851,265 2,013,735

2,728,688 3,569,123 406,560 248,063 272,250 7,224,683 2,481,817

2,865,122 3,747,579 447,216 260,466 299,475 7,619,858 3,012,292

3,008,378 3,934,958 491,938 273,489 329,423 8,038,185 3,612,180

3,158,797 4,131,706 541,131 287,163 362,365 8,481,163 4,289,239

3,316,737 4,338,292 595,244 301,522 398,601 8,950,396 5,052,046

3,482,574 4,555,206 654,769 316,598 438,461 9,447,608 5,910,078

3,656,702 4,782,967 720,246 332,427 482,307 9,974,650 6,873,805

3,839,537 5,022,115 792,270 349,049 530,538 10,533,510 7,954,790

General administration & selling expenses Administration expense Administration benefits expense Electricity expense Water expense Gas expense Travelling expense Communications expense (phone, fax, mail, internet, etc.) Office vehicles running expense O ff ff ic ic e e xp xp en en se se s ( st st at at io io na na ry ry , e nt nt er er ta ta in in me me nt nt , j an an it it or or ia ia l s er er vi vi ce ce s, s, e tc tc .) .) Pr ofessional fees ( legal, audit, consultants, etc.) Dep reciation expense Amortization of pr e-operating costs Subto tal Operating Income

252,0 00 7,5 60 60,000 18,000 24,000 120,0 00 2,5 20 2 ,5 ,5 20 20 4,0 50 118,0 24 29,034 637,7 07 963,9 93

277,200 8,316 66,000 19,800 26,400 132,000 2,772 2,772 4,433 118,024 29,034 686,750 1,326,985

304,920 9,148 72,600 21,780 29,040 145,200 3,049 3,049 4,853 118,024 29,034 740,697 1,741,120

335,412 10,062 79,860 23,958 31,944 159,720 3,354 3,354 5,316 118,024 29,034 800,038 2,212,254

368,953 11,069 87,846 26,354 35,138 175,692 3,690 3,690 5,825 118,024 29,034 865,314 2,746,866

405,849 12,175 96,631 28,989 38,652 193,261 4,058 4,058 6,385 118,024 908,083 3,381,156

446,433 13,393 106,294 31,888 42,517 212,587 4,464 4,464 7,001 118,024 987,066 4,064,980

491,077 14,732 116,923 35,077 46,769 233,846 4,911 4,911 7,679 118,024 1,073,948 4,836,130

540,184 16,206 128,615 38,585 51,446 257,231 5,402 5,402 8,424 118,024 1,169,518 5,704,287

594,203 17,826 141,477 42,443 56,591 282,954 5,942 5,942 9,244 118,024 1,274,645 6,680,145

Other income (interest on cash) Earnings Before Interest & Taxes

14,629 978,6 21

31,702 1,358,687

56,315 1,797,435

90,392 2,302,646

135,836 2,882,702

201,591 3,582,747

290,048 4,355,028

396,601 5,232,731

523,708 6,227,994

691,696 7,371,841

Interest exp ense on long term debt (Project Lo an) Interest exp ense on long term debt (Working Capital Loan) Subto tal Earnings Before Tax

173,4 31 95,771 269,2 02 709,4 19

146,315 80,761 227,076 1,131,611

113,802 62,815 176,617 1,620,818

74,929 41,359 116,288 2,186,358

28,452 15,705 44,157 2,838,546

3,582,747

4,355,028

5,232,731

6,227,994

7,371,841

Tax NET PROFIT/(LOSS) AFTER TAX

106,4 13 603,006

237,638 893,973

405,204 1,215,613

546,589 1,639,768

709,636 2,128,909

895,687 2,687,060

1,088,757 3,266,271

1,308,183 3,924,548

1,556,999 4,670,996

1,842,960 5,528,881

21



11.3 Balance Sheet

Assets Current assets Cash & Bank Accounts receivable Raw material inventory Tot al Current Assets Fixed assets Land Building/Infrastructure Machinery & equipment Furniture & fixtures Office equipment Tot al Fixed Assets Intangible assets Pre-ope ration costs Tot al Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Shareholders' Equity Current liabilities Accounts payable Tot al Current Lia bilities Other liabilities Long te rm debt Tot al Long Term Liabilities Shareholders' equity Paid-up capital

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Rs. in actuals Year 10

259 ,210 476 ,025 735 ,235

716,030 665,753 524,818 1,906,601

1,397,441 697,192 578,611 2,673,244

2,356,874 763,212 637,919 3,758,006

3,669,233 835,835 703,306 5,208,374

5,386,533 915,720 775,395 7,077,648

8,052,888 1,003,593 854,873 9,911,354

11,283,673 1,100,254 942,497 13,326,423

15,156,382 1,206,581 1,039,103 17,402,065

19,757,452 1,323,540 1,145,611 22,226,603

26,355,634 1,452,195 27,807,829

300 ,000 1,571, 000 302 ,736 55 ,000 37 ,000 2,265, 736

300,000 1,492,450 272,462 49,500 33,300 2,147,712

300,000 1,413,900 242,189 44,000 29,600 2,029,689

300,000 1,335,350 211,915 38,500 25,900 1,911,665

300,000 1,256,800 181,642 33,000 22,200 1,793,642

300,000 1,178,250 151,368 27,500 18,500 1,675,618

300,000 1,099,700 121,094 22,000 14,800 1,557,594

300,000 1,021,150 90,821 16,500 11,100 1,439,571

300,000 942,600 60,547 11,000 7,400 1,321,547

300,000 864,050 30,274 5,500 3,700 1,203,524

300,000 785,500 1,085,500

145 ,169 145 ,169 3,146,140

116,135 116,135 4,170,449

87,101 87,101 4,790,034

58,068 58,068 5,727,738

29,034 29,034 7,031,049

8,753,266

11,468,948

14,765,994

18,723,612

23,430,127

28,893,329

531,133 531,133

559,954 559,954

590,449 590,449

622,724 622,724

656,895 656,895

693,085 693,085

731,429 731,429

772,067 772,067

815,154 815,154

757,044 757,044

1,452, 675 1,452, 675

1,375,945 1,342,845

1,118,000 1,039,635

809,596 731,232

440,864 362,499

(78,364)

(85,933)

(93,501)

(101,070)

(108,638)

(116,206)

1 693 465

1,693,465

1,693,465

1,693,465

1,693,465

-

1,693,465

1,693,465

1,693,465

1,693,465

1,693,465

1,693,465



11.3 Balance Sheet

Assets Current assets Cash & Bank Accounts receivable Raw material inventory Tot al Current Assets Fixed assets Land Building/Infrastructure Machinery & equipment Furniture & fixtures Office equipment Tot al Fixed Assets Intangible assets Pre-ope ration costs Tot al Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Shareholders' Equity Current liabilities Accounts payable Tot al Current Lia bilities Other liabilities Long te rm debt Tot al Long Term Liabilities Shareholders' equity Paid-up capital Retained earnings Tot al Equity TOTAL CAPITAL AND LIABILITIES

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Rs. in actuals Year 10

259 ,210 476 ,025 735 ,235

716,030 665,753 524,818 1,906,601

1,397,441 697,192 578,611 2,673,244

2,356,874 763,212 637,919 3,758,006

3,669,233 835,835 703,306 5,208,374

5,386,533 915,720 775,395 7,077,648

8,052,888 1,003,593 854,873 9,911,354

11,283,673 1,100,254 942,497 13,326,423

15,156,382 1,206,581 1,039,103 17,402,065

19,757,452 1,323,540 1,145,611 22,226,603

26,355,634 1,452,195 27,807,829

300 ,000 1,571, 000 302 ,736 55 ,000 37 ,000 2,265, 736

300,000 1,492,450 272,462 49,500 33,300 2,147,712

300,000 1,413,900 242,189 44,000 29,600 2,029,689

300,000 1,335,350 211,915 38,500 25,900 1,911,665

300,000 1,256,800 181,642 33,000 22,200 1,793,642

300,000 1,178,250 151,368 27,500 18,500 1,675,618

300,000 1,099,700 121,094 22,000 14,800 1,557,594

300,000 1,021,150 90,821 16,500 11,100 1,439,571

300,000 942,600 60,547 11,000 7,400 1,321,547

300,000 864,050 30,274 5,500 3,700 1,203,524

300,000 785,500 1,085,500

145 ,169 145 ,169 3,146,140

116,135 116,135 4,170,449

87,101 87,101 4,790,034

58,068 58,068 5,727,738

29,034 29,034 7,031,049

8,753,266

11,468,948

14,765,994

18,723,612

23,430,127

28,893,329

531,133 531,133

559,954 559,954

590,449 590,449

622,724 622,724

656,895 656,895

693,085 693,085

731,429 731,429

772,067 772,067

815,154 815,154

757,044 757,044

1,452, 675 1,452, 675

1,375,945 1,342,845

1,118,000 1,039,635

809,596 731,232

440,864 362,499

(78,364)

(85,933)

(93,501)

(101,070)

(108,638)

(116,206)

1,693, 465 1,693, 465 3,146,140

1,693,465 603,006 2,296,471 4,170,449

1,693,465 1,496,979 3,190,444 4,790,034

1,693,465 2,712,593 4,406,058 5,727,738

1,693,465 4,352,361 6,045,826 7,031,049

-

1,693,465 6,481,270 8,174,735 8,753,266

1,693,465 9,168,331 10,861,796 11,468,948

1,693,465 12,434,602 14,128,067 14,765,994

1,693,465 16,359,150 18,052,615 18,723,612

1,693,465 21,030,146 22,723,611 23,430,127

1,693,465 26,559,027 28,252,492 28,893,329

22



11.4 Cash Flow Statement

Operating activities Net profit Add: depreciation expense a mortization expense Accounts receivable Raw material inventory Accounts payable Cash provided by operations Financing activities Change in long term debt Issuance of shares Cash Cash provi provided ded by / (us (used ed for) for) fina financ ncin ing g activ activ Investing activities Capital expenditure Cash Cash (us (used ed for for)) / prov provid ided ed by by inve invest stin ing g acti activi vi NET CASH

Year 0

Year 1

Year 2

Year 3

Year 4

(476,025) (476,025)

603,006 118,024 29,034 (665,753) (48,793) 531,133 533,551

893,973 118,024 29,034 (31,438) (53,794) 28,821 939,355

1,215,613 118,024 29,034 (66,021) (59,308) 30,494 1,267,837

1,639,768 118,024 29,034 (72,623) (65,387) 32,275 1,681,092

2,128,909 118,024 29,034 (79,885) (72,089) 34,171 2,158,164

1,452, 675 1,693, 465 3,14 3,146,1 6,140 40

(76,730) (76,730)

(257,945) (257,945)

(308,403) (308,403)

(368,733) (368,733)

(440,864) (440,864)

(2,410,905) (2,4 (2,410, 10,90 905) 5) 259 ,210

456,821

681,410

959,434

1,312,359

Year 5

1,717,300

Year 6 2,687,060 118,024 (87,873) (79,478) 36,191 2,666,355 2,666,355

Year 7 3,266,271 118,024 (96,661) (87,624) 38,343 3,230,784 3,230,784

Year 8 3,924,548 118,024 (106,327) (96,606) 40,638 3,872,709 3,872,709

Year 9 4,670,996 118,024 (116,959) (106,508) 43,087 4,601,071 4,601,071

Rs. in actuals Year 10 5,528,881 118,024 (128,655) 1,145,611 (58,110) 6,598,182 6,598,182



11.4 Cash Flow Statement

Operating activities Net profit Add: depreciation expense a mortization expense Accounts receivable Raw material inventory Accounts payable Cash provided by operations Financing activities Change in long term debt Issuance of shares Cash Cash provi provided ded by / (us (used ed for) for) fina financ ncin ing g activ activ Investing activities Capital expenditure Cash Cash (us (used ed for for)) / prov provid ided ed by by inve invest stin ing g acti activi vi NET CASH

Year 0

Year 1

Year 2

Year 3

Year 4

(476,025) (476,025)

603,006 118,024 29,034 (665,753) (48,793) 531,133 533,551

893,973 118,024 29,034 (31,438) (53,794) 28,821 939,355

1,215,613 118,024 29,034 (66,021) (59,308) 30,494 1,267,837

1,639,768 118,024 29,034 (72,623) (65,387) 32,275 1,681,092

2,128,909 118,024 29,034 (79,885) (72,089) 34,171 2,158,164

1,452, 675 1,693, 465 3,14 3,146,1 6,140 40

(76,730) (76,730)

(257,945) (257,945)

(308,403) (308,403)

(368,733) (368,733)

(440,864) (440,864)

(2,410,905) (2,4 (2,410, 10,90 905) 5) 259 ,210

456,821

681,410

959,434

1,312,359

Year 5

1,717,300

Year 6 2,687,060 118,024 (87,873) (79,478) 36,191 2,666,355

Year 7 3,266,271 118,024 (96,661) (87,624) 38,343 3,230,784

2,666,355

3,230,784

Year 8 3,924,548 118,024 (106,327) (96,606) 40,638 3,872,709

Year 9 4,670,996 118,024 (116,959) (106,508) 43,087 4,601,071

3,872,709

4,601,071

23



12 Key Assumptions Table 12-1: COGS Details: Description DOC (Day Old Chicks) (Rs.) Feed Conversion Ratio (FCR) i.e. Feed required to gain 1 Kg weight (Kgs.) Feed requ ired per 1000 birds (50 Kgs bags) Feed Requirement/bird/day - Kg Vaccination. Medication and Disinfection Disinfection Cost per Bird (Rs.) Feed Price per Bag (50 Kgs) Cost of Feed per Kg – Rs. Sales Price Rs. / bird Table 12-2: Other Assumptions

Bird Bird Mort Mortal aliity %a

0.0% 0.0%

% of COGS COGS

5.5 2.73 6.00 0.01 1.00 1,200 24.00 17.00

Rs. in actuals Year 10 5,528,881 118,024 (128,655) 1,145,611 (58,110) 6,598,182 6,598,182



12 Key Assumptions Table 12-1: COGS Details: Description DOC (Day Old Chicks) (Rs.) Feed Conversion Ratio (FCR) i.e. Feed required to gain 1 Kg weight (Kgs.) Feed requ ired per 1000 birds (50 Kgs bags) Feed Requirement/bird/day - Kg Vaccination. Medication and Disinfection Disinfection Cost per Bird (Rs.) Feed Price per Bag (50 Kgs) Cost of Feed per Kg – Rs. Sales Price Rs. / bird

5.5 2.73 6.00 0.01 1.00 1,200 24.00 17.00

Table 12-2: Other Assumptions

Bird Bird Mort Mortal aliity %a %age ge Administra Administration tion benefits benefits expense Travel Travelin ing g expense expense Commu Communic nicati ation on expense expense Offic Officee expens expenses es (Misc.) (Misc.) Professional fees (legal, audit, consultants, etc.) Build Buildin ing g depre deprecia ciati tion on rate rate Machine Machinery ry & Equipmen Equipmentt deprec depreciat iatio ion n rate Offic Officee Equipmen Equipmentt depreci depreciati ation on rate Furni Furniture ture & Fixture Fixturess depreci depreciati ation on rate rate

24

0.0% 0.0% 3.0% 1.0% 1.0% 1.0% 0.05% 05% 5% 10% 10% 10%

% of COGS COGS % of administrat administration ion expense expense % of adminis administrat tration ion expens expensee % of adminis administrat tration ion expens expensee % of adminis administrat tration ion expens expensee % of reven venue % of Buil Buildi ding ng Cost Cost % of Machin Machinery ery & Eqp. Cost Cost % of Offic Officee equipme equipment nt Cost Cost % of Furni Furniture ture & fixtu fixture re Cost

Quail Farming

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