HASSEN FOLLE PLC POLTRY FARM 2025

POULTRY FARM AND MEAT PROCESSING

PROJECT PROPOSAL

PROJECT LOCATION: AFAR REGIONAL STATE, DUBTI WEREDA

ADMNISTRATION
PROMOTER: HASSEN FOLLE PLC
PHONE NUMBER: - +251911887910
PROJECT SUMMITED TO: - ETHIOPIAN DEVELOPMENT BANK

March, 2025
Afar, Ethiopia

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Contents

1. Executive Summary ..................................................................................................... 4

1. Introduction ........................................................................................................................ 4

1.1 Background.................................................................................................................................... 4

1.2. Objectives of the Project and Justification.................................................................................. 6

1.3. Basic Features of Project Area .................................................................................................... 8

1.4. Socio Economic Activities of the Population: .............................................................................. 9

1.5. Infrastructural Development ..................................................................................................... 10

2. The Market Demand Potential ........................................................................................... 11

2.1. Current Supply and the Demand Gap ...................................................................................... 11

2.2. Commercial Production Systems ............................................................................................... 12

2.3. Village or Backyard Production ................................................................................................ 13

2.4. Poultry Value Chain Analysis .................................................................................................... 17

2.4.1. Marketing chains for traditional poultry production ................................................................................. 18
2.4.2. Marketing chains of breeding and rearing centers .................................................................................... 19
2.4.3. Marketing from large scale commercial operations .................................................................................. 19

2.5. Domestic Market ........................................................................................................................ 20

2.6. Export ......................................................................................................................................... 21

2.7. The Envisaged Project Target Market and Strategies ............................................................. 21

2.8. Poultry Feeds Availability .......................................................................................................... 22

2.9. The Production and the Sales Plan For Poultry Farm ............................................................. 23

Ostrich Products ............................................................................................................................... 23

Meat Demand ....................................................................................................................................................... 23
Hide ...................................................................................................................................................................... 24
Feathers ............................................................................................................................................................... 25
By-products .......................................................................................................................................................... 25
2.9.1. Production plan .......................................................................................................................................... 27

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3. ORGANIZATIONAL STRUCTURE.................................................................................. 32

3.1 The General Manager’s Duties and Responsibilities ................................................................. 33

3.2 General Administration and Finance Department .................................................................... 33

3.3 The Marketing Department ........................................................................................................ 33

3.4 The production Department ....................................................................................................... 34

4. FINANCIAL REQUIREMENT ......................................................................................... 35

4.1. Fixed Investment ........................................................................................................................ 35

4.1.1 Building & Construction............................................................................................................................. 35
4.1.2. Poultry Machines and Equipments ............................................................................................................ 36
4. 1.3 Vehicles...................................................................................................................................................... 36
4.1.4 Office Equipments ...................................................................................................................................... 37

4. 2 Expenses ...................................................................................................................................... 37
4. 2.1 Raw Material Purchase .............................................................................................................................. 37
4.2.2 Salary Expense ............................................................................................................................................ 38
4.2.3 Other Operating Expenses .......................................................................................................................... 39

4.3. Pre -Service Expense .................................................................................................................. 39

4.4. Summary of Financial Requirement and Source of Fund ........................................................ 40

Environmental and Social Impacts of the Project ................................................................ 455

Project Implementation Plan ............................................................................................... 455

Future Development& Exit Strategies ................................................................................. 455

Summary ............................................................................................................................ 46

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Executive Summary

1.Project Name Poultry Farm and Meat Processing

2.Project Owner Hassen Folle Plc

3.Nationality Ethiopian

4.Project location Afar regional state,dubtii Wereda administration

5.Project Composition Poultry Farming and Meat Processing ( Hen,Duke, Ostrich,

turkey and others
6.Primeses Required 10,000m2 or 1 hectare

7. Startup Capital For undertaking any activities. Hence for implementing this
project a total of
81,373,679.2 Eth birr is required. From this 30% or
24,412,103.76birr will be covered by the promoter of the project
while the rest 70% or 56,961,575.44 birr will be covered by
financial institutions, Ethiopian development bank

8.Employement This project deemed to employ a total of 400 individuals of which

opportunities 386 are unskilled and 14 are skilled and semi- skilled individuals.
9. For The region/ country Source of foreign currency, source of employment

1. Introduction

1.1 Background
Our country Ethiopia is a landlocked country located in the Horn of Africa. The country covers
approximately 1,221,900 square kilometers and shares frontiers with Sudan, Kenya, Somalia,
and Djibouti. Much of the Ethiopian landmass is part of the East African Rift Plateau. Ethiopia
has a general elevation ranging from 1,500 to 3,000 meters above sea level. The national capital
of Addis Ababa is located in the center of the country on the edge of the central plateau. The

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highlands that comprise much of the country are divided into northern and southern parts
separated by the Great Rift Valley. The Great Rift Valley runs from the Jordan Valley in the
Middle East to the Zambezi River's Shire tributary in Mozambique. The southern half of the
Ethiopian segment of the valley comprises several large lakes. The water bodies in these lakes
are often considered a source of migratory birds which could be carrier of avian flu virus. In July
2005 the country had a population of about 73 million. The population has been predominantly
rural though there has been a steady growth in the rate of urbanization in the country. The
percentage of population that resided in urban areas was merely 6% in 1960. It increased to
about 16% by 2006. Note that in developing countries such as in Ethiopia, the measure of
urbanization is often prone to measurement error. It has been pointed out in several places that
estimate of urbanization in Ethiopia could well be an overestimate owing to treatment of several
per-rural areas as urban in Ethiopia. Even though rate of urbanization has been increasing over
time it continues to be one of the lowest in Africa. Figure 1 shows the evolution of urbanization
in Ethiopia over time. In sub-Saharan Africa only Burundi and Uganda had levels of
urbanization that was below that of Ethiopia. The average annual population growth rate in
Ethiopia between 1985 and 2000 was 2.8%. The annual population growth rates for both the
rural and urban populations have also generally been declining since reaching a peak in 1990,
although the rural growth rates have declined at a faster pace than urban rates (WDI, 2002;
OECD 2004)
The poultry sector is almost exclusively dominated by backyard and small-scale production
using limited to no inputs in production and which is targeted for either self-consumption or the
market. Unlike other parts of the world, there are relatively few intermediaries operating between
producers and consumers in the Ethiopian poultry sector. However, because of increased urban
development, there are newly emerging private farms responding to growing consumer demand.
Indeed, rising demand for meat products has led to inflationary pressures on prices, with poultry
prices increasing fivefold in nominal terms over the past decade. Nonetheless, while growing,
broiler meat production remains fairly low, with most consumers favoring traditional forms of
poultry over processed products.

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The government of the country has been excreting its maximum effort to expand investment
opportunities in the country by designing different policies and strategies that will facilitate
investment through attracting both domestic and foreign investors. Likewise, the Afar regional
state government has been working day and night to make poverty history by making its door
open to investors both (domestic country and foreign) to come and invest in the region.
Therefore, it is this ample opportunity that attracts Poultry Farming and Meat Processing, to
come to Dubti Wereda Administration which is about 594 km far from capital city and engage in
this project which encompasses poultry farm. The investor has a long term business experience
in different activities for example in general farming, cattle production and related services.
Hence being one of the poultry farm and meat processing project, the center is planned to
provide: Life (day old chickens), eggs, and big chickens. The project is identified because of the
highly growing population of the country is in need of life chickens, and eggs.

1.2. Objectives of the Project and Justification

In this project, rate of urbanization is an extremely important variable owing to several reasons.
First, along with income, urbanization determines the tastes and preferences of the consumers.
The primary driving force behind the shift in consumption toward high-value agriculture (fruits
and vegetables, livestock products and processed food for example) is rising income but changes
in lifestyle with urbanization and shifts in the demographic structure also contribute towards
consumption diversification. As incomes rise, the share of the budget allocated to food tends to
decline, but the composition of the food budget also changes. Households devote a smaller share
of the food budget to grains and other starchy staples and a larger share to meat, eggs, milk, fish,

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fruits, and vegetables, processed and prepared foods. Alongside, urbanization changes diets
because urban consumers purchase a larger share of their food (rather than growing it), because
urban consumers face a wider range of foods from which to choose, and because urbanization is
associated with women‟s participation in the workforce, reducing the time available for food
preparation. In the context of this project, urbanization is important as it will directly affect the
demand of poultry products. Secondly, urbanization affects marketing of food products and that
includes poultry products as well. Urbanization creates demand for differentiated products as
greater variety of products are available owing to an access to a wide portfolio of products (for
example through imports). The opportunity cost of time also gets altered with urbanization
thereby increasing demand for processed products which work both towards value addition as
well as product differentiation. Additionally, the collection of buyers at a single location
facilitates emergence of modern marketing channels such as supermarkets. In Ethiopia, though
on a limited scale, some supermarkets have come up in Addis Ababa. The procurement as well
as marketing channels of poultry products are significantly different if the transaction occurs
through modern channels.
Since the project owner has a deep- rooted experience in the field, the envisaged project is
deemed to have the following objectives:
 To undertake the poultry farm through scientific methods and modern technology.
 To serve as the source of government foreign exchange revenue through distributing,
chickens, Egg, processed meat and natural fertilizers foreign market. Because the project is
assumed to export 20% of the total products to the foreign market in the future.
 To introduce modern technology that related to poultry farm in the country so that it
contributes somewhat to the technology diffusion.
 To serve as a role model for other investors and farmers that want to invest in similar
business undertakings.
 To contribute somewhat to the governments objectives of reducing the problem of
unemployment through creating employment opportunities to the citizens.
 To bridge the demand gap for products included in the area of engagement.

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1.3. Basic Features of Project Area

Location:
Awsi Rasu,Afar region this town Dubti extends between 11044‟ -14030‟ N and 41005‟ -42028‟ E‟
longitudes. With an elevation of 378 meters above sea level it is located in the northern part of
Afar. It is bordered with logiya –semera district in the west; by dobi district in the north; by
dulecha district in East; and dichoto district in south. Because of geographical location (i.e. near
to the primate city semera and three roads that leading to south and east part of the country &
coming to Adis Abeba do radiate through) the district has a great advantage for accessing the
local products to the market and creates ideal condition for provision of the demanded
commodities to the local communities. Currently kombolcha has areas devoted to industrial zone
and considered as industrial town.
Drainage:
Awsi Rasu,Afar region this town Dubti The total area of is fallen in Awash River basin. The
Awashi rever is a perennial river flow in Dubti district and empties into the Awshi Lake.
Climate:

Most part of Dubti district (about 90% of its surface area) belongs to sub-tropical steppe climate
agro-climate. The mean annual temperature over sub-tropical agro-climate ranges 20-170c.
Moderate temperate part of the district is restricted to the northern extreme. The rainfall is
weakly bi-modal with spring a small rainy season during the months of April and May while
summer along rainy season during the months of July, August and September. The vast area of
the district annual rainfall varies between 69.93 mm and 89 mm. and precipitation and has
114.37 rain days (31.33%of the time) annually

Soils:
The major soil categories of Dubti are Vertisols 305.02 km2 or 48.85% and Rendzinas and
Phaeozems 250 km2 or 36.77%, with limited area of cambisols and Luvisols 125.01 km2 or 11.35
% of the land area of Dubti . Vertisols are dark in color and are clay dominated. They expand
and contract with change in moisture content forming wide and vertical cracking when dry. All
these are limiting factors in its agricultural potential. With addition of Urea, farmers utilize these
soils for teff, wheat and pulses. Such soils are not suitable for root crops. Rendzinas and

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Phaeozems better media for plant growth. In the rift floor such soils usually develop from
volcanic ashes and have limited depth and are poorly drained and poorly workable. Thus, they
have limited agricultural value.
Cambisols and Luvisols too belong to a single soil category. Cambisols in places, due to lack of
cementation, have no or weak structure (aggregates) which reduces their level of productivity.
Most Luvisols have problems related to root distribution which in turn reduces their agricultural
usefulness. Compared to other tropical soils these are still good agricultural soils except those
situated on steep slopes.

The project requires about 10,000 m2 or 2 hectare of land and it is allocated as follows.

.
No Description Plot in hectare
1. Ostrich rearing section 1000m2
2. Turkey Raring section 500m2

3. Duke and other birds rearing section 1000m2

4. Chickens rearing section 1000m2

5. Eggs storage section 1000m2
6. Store ,Warehouse and processing area 500m2

7. Raw materials store 500m2

8. Meat processing and storing 1000m2
9. Employees Residence 500m2
10. Offices 500m2
11. Shop 500m2
12. Parking , fence and green areas and buffer zone 1000m2
Total 10,000m2
1.4Socio Economic Activities of the Population :
The Zone has relatively developed infrastructural facilities that could contribute toward its
development. The present favorable economic situation put the Zone at the advantage of
attracting the private sector investment. The establishment of the envisaged integrated poultry
Farm project will no doubt help the population of the town in getting new employment

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opportunities in addition to supplying poultry and cattle product in fair price. Other than being
employed in government and private organization, most of the population of the Town is
engaged in trading activities be it formal or informal. Unlike the urban people, the rural
population is engaged in farming. Therefore aside with all other projects which are undertaken
by private and government, this project is deemed to provide employment opportunities for about
400 individuals at the initial period and will continue employing every year.

1.5. Infrastructural Development

Afar region, Awsi Rasu district Dubti wereda Administration has relatively developed social and
economic infrastructures. Facilities such as transportation network, hydroelectric power, pipe
water and telecommunication services are available. Health and bank and other social services
are also sufficiently available in the Zone. Above all the availability of well-developed
transportation network is an important factor as it determines the project‟s proximity to the
market for both out puts and inputs
 Transport And Communications:
Road Transport: The total lengths of all-weather roads in district until the end of 1996 E.C.
were 82kms. With regard to the type 47km and 35km were respectively categorized to asphalted
and rural road. It accounts for about 18% of the zonal road length.
Road density is one of the variables for considering the extent and efficiency of road distribution
over land (defined as the length of roads in km over total area in km2 per 1000 km2). Thus, it has
road density of 112kms per 1000 km2.
Communications: Dichoto town is the only nearest town with automatic telephone service and
department post office that helps for provision of communication service for all the district
population within the district & other areas. Dichoto town has also manual telephone and an
agent post office.

Water Supply:
The district is endowed with surface and ground water resources. Springs and streams do act as
the community source of drinking water. They are serving as sources of drinking water to the
district people though they are polluted by disposals of the industries and urban sewerage from

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Awashi and Dubti areas without any treatment. Regarding water resource availability there are
conditions: the northern (north of mille town) parts of the district comprises Farmers

In Awsi Rasu, district Dubti wereda Administration most of pipe water is limited to certain urban
centers (Mille, awashi, dobi and dichoto ) and rural part. Water supply development schemes (14
water schemes) were constructed in different parts of the district. As a result the total population
access to potable water during 1995 E.C. was respectively 33%, 83% and 48.5% for rural, urban
and district

2. The Market Demand Potential

2.1. Current Supply and the Demand Gap

Poultry products such as egg and poultry meat are the central diets of Ethiopian‟s. “Doro Wet”
which is prepared from poultry meat and eggs is one of the favorite dishes of the local population
which is prepared especially during religious festivals and holidays, virtually in every household
in the country. Moreover, eggs as they are easy to prepare and digest, have good test and nutrient
are becoming the favored breakfast items in urban areas like Addis Ababa. Accordingly, due to
the traditional consumption habit and as the awareness of the population on the nutritional and
other advantages of poultry products increases the market for the products is also expected to
expand.

There are more than 20 private large scale commercial poultry production farms, all of which are
located in and around Addis Ababa, particularly in and around Debre Zeit (Yami and Dessie,
1997). ELFORA, Alema and Genesis are the top 3 largest commercial poultry farms with
modern production and processing facilities. Established in 1997, ELFORA has large scale
poultry farms at 4 different locations and sub-locations. ELFORA has modern broiler processing
(slaughter houses) and packing units and produces table eggs, broiler meat and day old chicks.
The slaughtering service has a capacity of 500,000 kg/year. ELFORA annually delivers around
420,000 chickens and over 34 million eggs to the markets in Addis Ababa
(www.ethiomarket.com Elfora). Alema Farm is the second largest enterprise delivering nearly
half a million broilers to Addis Ababa market every year. It has its own parent stock from
Holland, a feed processing plant, hatchery, slaughtering plant, cold storage and transport facility
at its sites of operation. Genesis farm is the third most important private poultry enterprise with
over 10,000 layers and its own parent stock and hatchery (Wossene, 2006). Genesis farm is the
major source of breeding stock and commercial feed for the modern private poultry sector (Yami
and Dessie, 1997). Individuals will wait for more than a year to get a day old chicken. Hence,
this shows that there is a wider gap in the supply of chicken in the domestic market.

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Eight of the modern poultry farms (ELFORA Agro Industry, Alema, Almaze, Genesis,
Kalehiwot, Sinkinesh, Tseday and Bora chicken farms) have formed a poultry farmers.“The
association known as Ethiopian Poultry Farmers Association” (http/www.ethiopianreporter).
These eight farms fall under Sector 1 of the FAO classification.

2.2. Commercial Production Systems

In Ethiopia, the commercial poultry are run as full time businesses, highly dependent on the
market for inputs. The owners are wealthy by Ethiopian standards. The small scale modern
poultry farms are run either as supplementary to the family income or as a full time business.
Reliable economic data concerning the value of commercial poultry products sold in any one
year is not available. The general indications are that the intensive poultry industry plays a key
role in supplying poultry meat and eggs to urban markets at a competitive price. The industry
also provides employment for a range of workers from poultry attendants to truck drivers to
professional managers.
There are about 18 large scale commercial (with 2,500 to 50,000) poultry farms located in and
around the capital with a collective capacity of 33,500 layers and 208,000 broilers per annum.
Table and fertile eggs, day old chicks and broilers meat are the major products of these farms.
There is also an emerging small scale intensive system in urban and per-urban areas, which
corresponds to sector 3 of the FAO classification. Under this system of production, a small
number of exotic breeds of chickens (50-1,000) are produced along commercial lines using
relatively modern management methods. This activity is being undertaken as a source of income
in and around major cities and towns such as awshi . Most of these farms obtain their feeds and
foundation stocks from Genesis and Alema commercial poultry farms and occasionally from
nearby government owned breeding and multiplication centers. They are also involved in the
production and supply of table eggs to various supermarkets, kiosks and small roadside
restaurants through middlemen. Comparatively larger scale intensive poultry production is also
poultry multiplication and distribution centres located in various regions such as Adama,
Bedelle, Awassa, Bonga, Kombolisha, Andessa and Mekele kombolcha ,desse, awshi breeding
and rearing centers.

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There are government-owned poultry breeding and rearing centers aimed at providing improved
dual purpose chickens of exotic breeds. The Ethiopian higher education and research institutions
run a number of modern poultry farms with the objectives of training and research. The
institutions distribute fertile eggs, baby chicks and pullets and cockerels for MoARD, NGOs and
individuals. The MoARD operates a total of 14 modern breeding and/ or rearing centers. Some
of them have hatchery units, brooder and layers houses, and veterinary clinic and feed processing
units. The centers directly import fertile eggs and day-old chicks of dual purpose chickens
(commonly RIR) as a parent stock. During the last 5 years (prior to February 2006) the centers
suffered from a shortage of financial resources, lack of replacement breeding stocks and periodic
disease outbreaks.

2.3. Village or Backyard Production

This system is characterized by a low input (scavenging is almost the only source of diet), low
input of veterinary services, minimal level of bio-security, high off-take rates and high levels of
mortality. Here, there are little or no inputs for housing, feeding or health care. As such it does
not involve investments beyond the cost of the foundation stock, a few handfuls of local grains,
and possibly simple night shades, mostly night time housing in the family dwellings. The
poultry are kept in close proximity to the human population. Mostly indigenous chickens are
kept although some hybrid and exotic breeds may be kept under this system (Nzietcheung 2008).
The few exotic breeds kept under this system are mainly a result of the government extension
programs. The size and composition of flocks kept by households vary from year to year owing
to various reasons such as mortality from diseases, agricultural activities and household income
needs. Mortality in local birds results mainly from disease and predators as well. A research
report indicated that 62% of small farmers reported disease as the major factor for high mortality
while 11% noted predator as a major factor too (Hailemariam, et. al. 2006). Newcastle disease is
identified as the major killer in the traditional system while other diseases including a number of
internal and external parasites contribute to the loss. The incidence of Newcastle disease is
widespread during the rainy season. It often wipes out the whole flocks when it strikes. In
particular, it was found that poultry production drops by 50% during the rainy season. Based on
Dessie et al., (2003), Dessie et al., (2001), Bush, (2006) and field interviews in Nzietcheung

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(2008), typical household flock sizes vary from 2 to 15 chickens. Flocks comprise chicks (0 to 8
weeks), pullets (8 to 20 weeks), cockerels (8 to 20 weeks), mature cocks and layers. In this
system, there exists great variation in the size and composition of bird flocks per household and
it is a common practice to keep all age and functional groups together.

Most of the birds kept under the backyard system belong to indigenous poultry. Rearing of
indigenous poultry offers farmers nutritional, socio-cultural and economic benefits (Nzietcheung
2008). In backyard poultry, women are mainly responsible for rearing poultry. The income
earned from poultry keeping is used to buy food and clothes for children. Poultry and egg offer a
quality protein source throughout most of the year. Poultry meat and eggs play a role in food
security. The level of consumption and sale of chickens and eggs varies during the year.
According to Aklilu et al. (2007) and field interview, there is an increase in chicken and eggs
consumption during the Ethiopian New Year, Christmas and Easter holidays (Nzietcheung
2008). The backyard poultry production systems are not business oriented rather destined for
satisfying the various needs of farm households. In this case, the major purposes of poultry
production include eggs for hatching (51.8%), sale (22.6%), and home consumption (20.2%)
while chickens for sale (26.6%) and home consumption (19.5%).

Backyard poultry move freely between families in the village. Movement can also be from
household to local market for sale, from market to household in case of unsold chicken or in
form of gifts from household to household. This free movement of backyard poultry could
contribute to the transmission of many infectious diseases in the backyard system (Nzietcheung
2008). Birds are left for scavenging system and households put little time, and resource for
chicken farming. As a result, poultry output is very low. For instance, local birds lay, on average,
40-60 eggs per annum. Moreover, egg sizes are small and chick survival rates are extremely low.
Village hens brood and hatch their own eggs. The high chick mortality rates along with the
unsuccessful hatching and rearing also accounts for low egg production. For instance, 50% of all
eggs laid are destined for hatching.
The Amhara and Tigray regional states collectively own about 43% of the total national poultry
population and the average number of chickens per household (flock size) is estimated at 7.2 and
4.4 in Tigray and Amhara regional state respectively, the values of which are above that of the

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national average of 4.1. Annual poultry meat and egg consumption per household is estimated at
2.19 Kg and 1.72 kg respectively in the Tigray regional state as compared to the national average
of 0.12 and 0, 14 kg respectively. Similarly, the annual live bird and egg sale per household is
estimated at 6 chicken and 100 eggs respectively in the Tigray Regional State. At current market
price, these figures represent an annual income of Birr 322 from household poultry, indicating
that village poultry in extremely poor areas of the country play important economic, nutritional
and socio-cultural roles in the livelihoods of the rural households.

According to Gueye (2007) rural households in these areas value most highly the possibility of
cash income from poultry keeping and believe that village poultry act as a “starter” that enables
people to raise themselves and their families from degrading poverty to a stronger livelihood.
According to Aklilu (2007), village poultry is the first step on the ladder for poor households to
climb out of poverty. It is also the only capital that households have left when livelihoods are
threatened by various reasons such as drought. An important function of poultry is their bartering
value. Layers and cocks are exchanged for farm implements in remote areas where there is no
circulation of currency. For example, in Alaje Woreda, two layers or cocks are bartered for a
Maresha (the traditional ox-plough).

Poultry is a source of self-reliance for women, since poultry and egg sales are decided by women
(Aklilu et al., 2007) and provide women with an immediate income to meet household expenses
such as food. Moreover, poultry are used for strengthening marriage partnerships and social
relationships. In the local culture, particularly in remote areas of Tigray and Amhara regions,
women who can provide men with food like a chicken dish (Doro wot) are considered to be
contributing to a stable marriage. Serving Doro Wot is also a demonstration of respect to guests,
thus strengthening a social relationship which is especially important for poor households. For
the poor, poultry meat is the only special meal they can afford during religious festivities like
New Year, Christmas and Easter. Church leaders and attendants are also served with chicken
dishes. In general, socio-cultural roles are more important in areas with the poorest market access
particularly in the Tigray regional state (Aklilu, 2007).

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In contrast, the Afar, Somali, Gambela, Harari, Addis Ababa, Dire Dawa and SNNP
regional/adminstrative states collectively own 20% of the national poultry population. The
average number of chickens per household of these regional states ranges between 1.4 and 3.9,
all of which are lower than that of the national average, indicating that the role of village poultry
in the livelihoods of the rural community of these regional states is not as important as that of the
rural community of northern Ethiopia. In fact, there seems to be a decline in the role of poultry at
the household level in these parts of the country (CACC, 2003), despite the fact that the market
demand and price of live chickens and eggs experienced during the last 5 years (except at a time
of the outbreak) are high compared to the previous times. The demand for exotic fertile eggs,
chicks, pullets/cockerels and culled layers distributed from the breeding and rearing centers is
also very high (market survey and personal communication with managers of the breeding
centers and chicken traders). Unfortunately however, keeping village poultry in some areas
(example SNNPR) became untenable due to the periodical and recurrent outbreak of poultry
diseases, coupled with predation (Hoyle, 1992).
According to Hoyle (1992) eggs have never been among the top ten animal products consumed
at the household level in rural areas of SNNP Regional State. There are some case studies in
which farmers are asked to rank the importance of poultry against other categories of food
materials in the SNNP Regional State. The results indicated that both eggs and chickens have
never been among the top ten means of survival and income generation. For poor families,
poultry are often one of their few sources of petty cash and so the birds are kept for sale rather
than home consumption (Bush 2006). The yearly income ranges from ETB 50 to over ETB 300
and is largely under the control of women. This income is significant for poor families with ETB
300 a year representing 25% of the typical annual income of poor families in SNNPR (Bush
2006).
In a study conducted by Dessie, Tadelle and Ogle (1996) on poultry production systems in the
highlands of Ethiopia, it was observed that women look after the birds and the earnings from the
sale of eggs and chicken are often their only source of cash income. It is therefore, important to
actively involve women in the process of poultry improvement, which has actually been
neglected in the past.
Afar region has about 13.4% of the total national chicken population and contributes 11% of the
total annual national egg and poultry meat production.

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2.1 figure (chart) poultry population in Afar

poultry poullation in the Afar Region from

2008-2021
300,000
250,000
Axis Title

200,000
150,000
100,000
50,000
0
Category 1 Category 2 Category 3 Category 4 category 5

2.4. Poultry Value Chain Analysis

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2.4.1. Marketing chains for traditional poultry production

In the traditional poultry production sector, women are the primary owners and managers of
Chickens. Rural women raise poultry for income generation in order to purchase basic
commodities such as salt, cooking oil and sugar etc. The informal marketing of poultry and
poultry products at open markets is common throughout the country and both live birds and eggs
are sold on road sides. Almost every little shop or kiosk sells table eggs in Ethiopia. Most
indigenous birds are sold live and consumers take considerable care to ensure that they are
buying healthy birds. Farmers may sell directly to clients at weekly markets or farmers may sell
to traders who in turn sell the product to the consumer. Indigenous birds and eggs can be
transported over long distances to supply urban markets which results in a deterioration in
quality. Both eggs and live birds are transported either on foot or using public transportation
along with other bags, sacks of grains, bundles of fire wood etc. The farmers directly sell their
chickens to consumers and/or to small retail traders who take them to large urban centers. At all
the market areas, chicken buyers are made up of traders, direct consumers, restaurants, farmers
and small scale urban chicken keepers. In the primary markets, producers are the predominant
sellers, while in the secondary markets both producers and traders sell chickens. In the terminal
markets, small traders are the predominant sellers. Small traders operate on a very small scale
and the volume of trade ranges from 10-50 chickens. The current terminal market price of adult
live bird is about Birr 40-60 depending on the size of the bird and market location.
Despite the benefits of village poultry keeping to poor households in most parts of the country,
they face significant market constraints. The distance to the nearest market is a key factor; the
nearer the market, the shorter the marketing chain and the higher the price received for both live
birds and eggs. It is also clear that increased involvement of intermediaries leads to reduced
prices for the producer. A price reduction of 68% for birds and 25% for eggs was observed in
areas with poor market access in Tigray Regional State compared to those areas with better
market access. Transaction costs may be reduced through improving access to information,
infrastructure and organization of the poultry producers. However, the costs of transport, credit
and marketing risks should be carefully assessed (Aklilu, 2007). A further constraint to the
marketing of traditional household poultry and products is the fact that there is no packaging and
weight standardization of market eggs and those traditional storage methods can lead to
deterioration of the quality of table eggs.

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In rural Ethiopia, particularly in the Tigray Regional State, both men and women are involved in
the direct selling of poultry. Women make up the majority (40-58%) of the producers who sell at
local markets. Men‟s participation in marketing increases with better market access, and the
larger markets in towns are male-dominated. The participation of gender categories in secondary
poultry marketing shows a different picture. Men make up the major portion of secondary sellers,
particularly in northern Ethiopia. In a market survey conducted at 3 different locations in the
Tigray Regional State, it was found that the proportion of women and children in secondary
selling was relatively lower than in primary selling. The proportion of men involved in poultry
marketing tended to increase with greater market access indicating that men become involved
when the benefit becomes larger and access is better. The higher participation of men as
intermediaries can be associated with access to financial resources, ability to make risks and
access to market information.

2.4.2. Marketing chains of breeding and rearing centers

The marketing channel of the breeding and rearing centers consists of the distribution of fertile
eggs, baby chicks, pullets/cockerels and culled layers to the rural farming communities at a
highly subsidized price. For example, exotic pullets of 3 months of age are sold at Birr 35 from
the private commercial poultry farms, whereas exotic pullets of the same age are distributed at
Birr 18 from the government-owned poultry breeding and rearing centers, indicating a 50%
subsidy. In Ethiopia, the priority is given to women during the distribution of fertile eggs, chicks,
pullets/cockerels and culled layers from the breeding and rearing centers.

2.4.3. Marketing from large scale commercial operations

Formal marketing operations exist in the urban and per-urban areas where large scale
commercial poultry production takes place. The larger commercial poultry units have agreements
with clients such as Ethiopian Airlines and the larger hotels to supply poultry meat and eggs.
Most poultry meat is sold frozen. The majority of the products sold within the formal sector
come from the commercial industry but a small number of frozen indigenous chickens are
supplied through supermarkets in Addis Ababa. Dressed poultry carcasses and table eggs are
sold to residents and hotels either in supermarkets or small shops/kiosks. Most of the supply of
dressed poultry carcasses to Addis Ababa supermarkets comes from the Alema poultry farm, but
many unidentified sources also supply the supermarkets.

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2.5. Domestic Market

The price of live chicken varies depending on sex, color, size and market location and the
demand for both eggs and live birds is subject to seasonal variations. According to Hoyle (1992)
and Kenea et al (2003), late May to early June is the opening period of the “rainy season” which
coincides with outbreaks of poultry disease, with farmers selling all or almost all their flocks in
the SNNP Regional State and in Eastern Shewa Zone of the Oromia Regional State. In most
parts of the country, prices fall to their lowest annual level until the end of August. Prices rise for
the Ethiopian New Year (September 11) and for Meskel feast (September 27). The feast which
occurs in December and April also leads to price rises.

In summary, the largest off-take rates from flocks occur particularly during holidays and festivals
and during the onset of disease outbreaks. The latter is a measure to prevent or minimize
expected financial losses from high morbidity and mortality. In such circumstances, prices fall
dramatically since supply is higher than demand. According to Aklilu (2007) in northern
Ethiopia (particularly in Tigray) most strict Orthodox Christians households – especially in rural
areas – abstain from eating animal products during the Easter fasting period, pre-Christmas
fasting period and on Wednesday and Fridays. There are fluctuations across the months of the
year in sales as well as in consumption of both birds and eggs. The highest bird sales and
consumption overlap with the major social and religious festivals of the year. These are
Ethiopian New Year (September), Ethiopian Christmas (January), Ethiopian Epiphany (January),
Ethiopian Easter (April) and St. Mary‟s day (August). The periods of low bird sales and
consumption coincide with the pre-Easter fasting period which lasts about two months from
February through March. The other low sales and consumption period is during the pre-
Christmas fasting period.

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2.6. Export
The export market for poultry products is very limited due to international competition,
especially from frozen Brazilian broilers that are sold at very low prices. It may be worthwhile
studying consumer preferences in neighboring countries to determine if niche markets exist for
extensively raised indigenous birds and their eggs.

2.7. The Envisaged Project Target Market and Strategies

Regardless of the traditional and commercial production of chickens yet the supply and the
demand gap is not reconciled. Therefore, as any other poultry projects, the envisaged project will
produce different poultry products and distribute to the domestic market in the short run and to
the foreign market in the long run. The project has target to distribute its products to the
following target groups:
 The residents of the town of Dubti Wereda Administration, and surroundings.
 The different farmers in eastern and southern parts of Afar region
 The different super markets in the country which are not covered so far
 The government workers club
 Hotels and supermarkets

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 Small shops
 Other retailers and wholesalers
 Foreign market
 Breeders and etc.
Hence to reach customers different marketing vehicles will be used. Among the different
marketing strategies and tools for promotion and controlling the market of the Poultry farming
will use:
 Both printed and non-printed forms of advertising,
 Seasonal discount pricing
 Different marketing segmentation strategies and tactics.
 Electronic advertising through internet, faxes and other technologies.
 Provide transportation service for customers.

2.8. Poultry Feeds Availability

Processed poultry feed consisting mainly of cereal grains, cereal grain by-products and oilseed
cakes are available from feed mills that are largely concentrated in and around the capital, Addis
Ababa. None of the feed mills have pelleting facilities. This is a serious shortcoming especially
for efficient broiler production. The quality of mixed feed used is generally poor (Yami and
Dessie, 1997). Most formulations available do not have vitamin/mineral premixes. Ingredients
and processed feeds vary in nutritive value and there is no regular quality control mechanism in
the country. The lack of feed quality legislation and laboratory facilities for chemical analysis
also contributes greatly to the poor quality of processed feeds.

The price of raw materials varies according to source of supply, region and season. However,
the prices of formula feeds doubled in the last 5 years, which does not relate to the costs of the
raw materials. Transport costs add significantly to the cost of feed in areas distant from the
sources of supply.
The lack of regional feed mills and dependence on supplies of some ingredients from large cities
add to the overall cost of feed in many parts of the country. The absence of bulk deliveries and
storage facilities increases feed costs and in some cases wastage occurs due to weevil infestation.

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The envisage project at the beginning will purchase feed from different producers but as soon as
it starts to generate income it will produce its own feed mill.

2.9. The Production and the Sales Plan For Poultry Farm

Ostrich Products
The World Ostrich Association receives many requests asking about the demand for Ostrich
Meat and Export regulations. The following represents the Associations response to these
questions.

Meat Demand
Currently the demand for ostrich meat is far in excess of supply. Current world production of
Ostrich meat is only 12,000 to 15,000 metric tonnes as the industry has not yet made a full
transition from breeder markets to commercial production. Around 60% of this production is in
South Africa. The remainder of the production is fragmented. The percentage of the total of each
specie and shows very clearly the contribution of Pork and Poultry in this growth and the loss of
market share experienced by the red meats Beef, Veal, Lamb and Mutton over the period. Some
of this loss of market share can be attributed to the advice to eat low fat meats; some of the loss
of market share can be attributed to the lower feed efficiency of ruminants. Ostrich produce a
low fat, red meat and proven, where reared correctly to be the most feed efficient red meat
specie, with excellent feed conversion. This means that Ostrich can contribute to the increased
demand for meat whilst utilising fewer resources than competitive specie to produce that meat.

The ostrich is a particularly promising substitute for traditional red meat animals in that it
produces a fine-grained red meat with similar protein and iron levels to beef, but unlike beef and
lamb for example, fat deposits on the bird are restricted to sub-peritoneal and subcutaneous
layers. There is no visible intramuscular fat (Deeming, 1995), so it is very easy to separate the fat
during processing and produce a very lean red meat. In fact, the fat content of raw ostrich meat is
less than half that of raw chicken breast, at about 0.5 percent (Sales and Horbanczuk, 1998).
A claim often made for ostrich meat relative to beef and chicken is that it also has lower
cholesterol content. Cholesterol has a physiological role in the transport and digestion of fat, but
is synthesized in the liver and found in all the body tissues. The cholesterol content of the three
raw meats is in fact comparable at around 57mg per 100g (Sales et al, 1996). The nutritive value

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of ostrich meat undeniably makes it worthy of consideration by consumers looking for healthier
alternatives to traditional red meats. From the retail perspective meat quality is largely affected
by the rate of pH decline following slaughter and the final pH value. Ostrich meat shows a rapid
decline in pH following slaughter and reaches a high final pH value of around 6.0 within six
hours or less depending on the particular muscle. This high final pH value is thought to be due to
a depletion of glycogen reserves through stress prior to slaughter (Sales and Horbanczuk, 1998).
A high final pH leads to a risk of microbial growth and reduced storage life, and ostrich steaks
are normally vacuum-packed to increase shelf life. Despite this, refrigerated storage life is only
about two or three weeks, and so it is very important to get the meat to the consumer as soon as
possible after slaughter (Sales and Horbanczuk 1998). Sainsbury keep their ostrich meat on the
shelf for only nine days because they are concerned to be very conservative with regard to
possible health issues related to meat quality.

Hide
The hide of the ostrich is distinctive for the diamond-shaped „crown‟ containing the highly
valued quill pattern that extends along the back and down to the wing fold and stomach quill. For
grading purposes the crown is divided into four quarters, and for the existing market a grade 1
hide must have three quarters completely free of defects. One quarter may have a defect, often
caused during skinning or by feather pecking, not larger than 40*40mm. The exotic leather
industry utilizes the crown for its luxury goods and the remainder of the hide is discarded.

In South Africa birds have traditionally been reared extensively and slaughtered at 12-14 months
in order to achieve the requirement of the exotic leather goods industry in the Far East for a hide
of 14.5 sq. ft. It is known that the age of the hide is not crucial to achieving this market
requirement, so achieving slaughter weight at a younger age through improved nutrition would
not affect hide quality. However the level of fat on a slaughter bird does influence the success of
the tanning process. Hides from over-fat birds are more difficult to clean without damaging the
leather, and salting to preserve the hide before tanning may be less efficient, resulting in
microbial damage. The uptake of chrome in the tanning process is also affected, resulting in
greater color variation. All of these things will affect the value of a hide for the established
market.

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Feathers
After plucking the feathers have to be graded into many different categories for the requirements
of the feather market. This is a time-consuming and labor-intensive process, and is generally
only considered to be worthwhile in areas where cheap labor is plentiful. Under European
conditions the feathers are also frequently too contaminated by soil and dirt to be of much value.
For these reasons producers do not believe feather processing is a viable option, and any
contribution to the economic value of a slaughter bird should be discounted. However, some UK
producers do offer feathers for sale, and may charge £1.50 for a single plume for example It may
well be possible to develop new uses for ostrich feathers in addition to the traditional uses in the
fashion trade and as anti-static dusters in the automotive and electronics industries.

By-products
There is also potential for other value-added products from an ostrich enterprise. The fat can be
rendered to produce oil which is claimed to have therapeutic value in the treatment of skin
complaints. It is also possible to produce extremely attractive ornaments from intricately carved
and decorated ostrich egg shells. The project under discussion shall produce day old chickens,
poultry products, which include: eggs, packed chicken, and natural fertilizer. The products will
be distributed to the different customers in different parts of the country. Above all the project
will produce chickens of different types both for domestic market (80%) as well as international
market (20%).
Moreover a hen and other birds (duke and turkey) starts producing eggs at the age of 19 to 20
weeks, it reaches its sexual peak at the age of 8 weeks and it continues produce eggs for 52
weeks. The first phase ends at the age of 72 (20+ 52) weeks. In addition the expiration/ dying or
miscarriage during the period of rearing assumed to be 12% per annum or 1% per month. During
the first phase each hen assumed to produce 275 eggs per- phase. (Calculated on the generation
of birds at 5% production; this measurement is called Hen House).

The incubator will hatch 9 eggs at one time and it takes 42 days for ostrich egg to be hatched and
the production will not interrupted all the year and the company will produce for 365 days a year.
Moreover, an ostrich will be mature in three year. After three year the company will use its own
farming for egg. Again on average an ostrich will lay 60 eggs per year. Additionally, the

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probability of getting female ostrich is 50% and premature death is 1%. Moreover, after three
year the company will add another 2 additional incubate and thus its production capacity will
increase by two folds. Hence based on the above assumption the company under consideration
will have the following production scheme.

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2.9.1. Production plan

A. Chickens and other birds
The Revenue of the Project is assumed to be generated from the sales of the following:
1. Life Chickens sales ( day old)
2. Processed and Packed Chicken‟s meat
3. Eggs of chickens
4. Fertilizer‟s sales

Production Plan Chickens

No Description Year1 Year 2 Year 3 Year 4 Year 5

1 Life chicken (day old) 5,000 7,000 12,000 15,000 200,000

Duck 20,000 40,000 30,000 55,000 80,000
Turkey and others 20,000 40,000 30,000 55,000 80,000
Total 25,000 47,000 42,000 125,000 360,000
2 Eggs of chickens from 2000
hen and one hen can lay 270
egg per year
Total
Expiration of egg , Premature
death 1% per annum

Net total 25,000 47,000 42,000 125,000 360,000

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2 Processed and Packed

Chicken‟s meat

4 Fertilizer‟s Production from 32,000 64,000 96,000 128,000 160,000

waste materials

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S/No Description Qty Year 1 Year 2 Year 3 Year 4 Year 5 Year 6-10
1 Chickens no 77 77 231 236 241 246
2 Egg no 0 0 6930 7069 7210 7354
3 Hide kg 0 0 0 590 603 615
4 Feature kg 0 0 0 295 301 308
5 Others kg 0 0 0 1770 1808 1845
6 Meat kg 0 0 0 3245 3313 3382
B. Ostrich farm
Further assumptions
 The probability of egg to be break is 1%.
 the per annum increase in egg is 2% starting from year 4
 the per annum increase in Ostrich is 2% starting from year 4
 Starting from the 3rd year the company will export 50% of eggs
 starting from the 4th year the company will slaughter 25% of the ostriches
 On average an Ostrich weigh 5kg
 feather weigh 5% of an Chickens
 bone and others 30% of the total weight
 Hide about 10%

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2.9.2. Estimated Sales Plan (on Average)

A. other poultry
No Description Years 1 Unit price in birr Total price
1 Life Chickens 60,000 30 1800000
2 Eggs of birds 560,000 2.05 1148000
3 Processed and Packed Chicken‟s meat 0 0 0
4 Fertilizer‟s Production from waste materials 32,000 1 32000
Total sales 2980,000
No Description Years 2 Unit price in birr Total price
1 Life Chickens 120,000 30 246000
2 Eggs of birds 1,120,000 2.05 2296000
3 Processed and Packed Chicken‟s meat 5000kg 55 275000
4 Fertilizer‟s Production from waste materials 64,000 1 64,000
Total sales 2,881,000
No Description Years3 Unit price in birr Total price
1 Life Chickens 160,000 30 4800000
2 Eggs of birds 1,680,000 2.05 3444000
3 Processed and Packed Chicken‟s meat 10,000kg 55 550000
4 Fertilizer‟s Production from waste materials 96,000 1 96000
Total sales 8890000
No Description Years 4 Unit price in birr Total price
1 Life Chickens 220,000 30 6600000
2 Eggs of birds 2,240,000 2.05 4592000
3 Processed and Packed Chicken‟s meat 15,000kg 55 825000
4 Fertilizer‟s Production from waste materials 124,800 1 124800
Total sales 12141800
No Description Years 5-10 Unit price in birr Total price
1 Life Chickens 260,000 30 7800000
2 Eggs of birds 2,800,000 2.05 5740000
3 Processed and Packed Chicken‟s meat 20,000kg 55 1100000
4 Fertilizer‟s Production from waste materials 160,000 1 160000
Total Sales 14800000

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B. sales from ostrich products

s/n Description of the Qty Unit price Total Price

o product
1 Life ostrich 77 0 0
2 Egg 0 0 0
3 Meat 0 0 0
4 Feather 0 0 0
5 Hide 0 0 0
6 Other by products 0 0 0
Total Sales for year 1
Year 2
1 Life ostrich 77 0 0
2 Egg 0 0 0
3 Meat 0 0 0
4 Feather 0 0 0
5 Hide 0 0 0
6 Other by products 0 0 0
Total Sales year 2 0
Year 3
1 Life ostrich 231 70,000 16,170,000
2 Egg 6930 400 2,772,000
3 Meat 0 0 0
4 Feather 0 O 0
5 Hide 0 O 0
6 Other by products 0 O 0
Sales of year 3 18,942,000
Year 4
1 Life ostrich 236 70,000 16520000
2 Egg 7069 400 2827600
3 Meat 590 2000 1180000
4 Feather 295 30,000 8850000
5 Hide 1770 45,000 79650000
6 Other by products 3245 30,000 97350000
Total sales year 4 206377600
Year 5
1 Life ostrich 241 70,000 16870000
2 Egg 7210 400 2884000
3 Meat 603 2000 1206000
4 Feather 301 30,000 9030000

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5 Hide 1808 45,000 81360000

6 Other by products 3313 30,000 99390000
Total sales 210740000
Year 6-10
1 Life ostrich 246 70,000 17220000
2 Egg 7354 400 2941600
3 Meat 615 2000 1230000
4 Feather 308 30,000 9240000
5 Hide 1845 45,000 83025000
6 Other by products 3382 30,000 101460000
Total Sales 215116600

3. ORGANIZATIONAL STRUCTURE
The organizational structure of this poultry project is designed by including all the necessary
personnel under the right division. At the top of the organizational structure, there will be a
general manager with the responsibility of supervising the overall activity of the plant.
Depending up on the nature of the center and the amount of work to be performs; there will be
auxiliary units under the general manager. Employees under each unit will be supervised by the
unit head that is accountable for the general manager.

Managing Director

Advisor
(Consultant) General Manager

Production Marketing General

Department Department Administration
Department

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As clearly shown in the organizational structure, the integrated project center has Managing
Director, three Departments under the general manager, Advisor. These departments are the
Production Department, The Marketing Department, and The General Service Department.
Under each Department there are different sections which are undertaking different activities.
Hence the following section deals with the duties and responsibilities of each division.

3.1 The General Manager’s Duties and Responsibilities

 He will plan, organize, direct and control the overall activities of the integrated project
 He will devise policies and strategies that will enable the project to be profitable.
 He will incorporate modern technological innovation that will facilitate the service
delivery of the project center and increase customer‟s satisfaction.
 He will plan, organize, direct and control the human and non-human resources of the
plant so as to achieve the short and long run objectives of the organization.

3.2 General Administration and Finance Department

Is responsible for undertaking the following activities
 Will plan, organize direct and control the financial transaction of the project by using the
entire necessary document.
 Will develop sound financial control system by developing modern financial control
systems.
 Will prepare the annual financial statements and prepare condensed reports for both the
General Manager and other concerned government body.
 Will control the human and non-human resources of the Poultry Farm, which include:
effective handling of the different inventories of the Poultry Farm and devise strategies of
controlling against fraud and damage.

3.3 The Marketing Department

 Will handle the overall marketing activities of the organization which include
planning, organizing, directing, and controlling.
 Will develop the marketing strategies for future project center‟s development.
 Conduct both foreign and domestic market research for expanding the sales of the
company
 Will develop effective customer handling strategies

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3.4 The production Department

It is the core department of the project center and it encompasses sections like: Cutting
(slaughtering), Cleaning, Processing, Packing, Quality Control and Inspection. Thus it
undertakes the following activities:
 Producing life chicken in sufficient quantity so that the production process is facilitated.
 Produce eggs in sufficient quantity and make ready for distribution to customers.
 Produce products in different grams so that customers have diversified choices.
 Use modern production and processing technologies that will boast production and
productivities of the envisaged project.
 Produce quality product that will enable the center competent both in the domestic and
international market.
 Control on the quality of raw materials, quality of the product and also the overall
production process.
 Produce products in least cost so that the profitability of the center is guaranteed.
 Since producing good quality is based on using good input, the department will use
strategies and polices that will link the different sub sections i.e. the cutting, cleaning,
processing, packing, quality control and inspection.
 Moreover control over the quality of chicken meat and egg production

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4. FINANCIAL REQUIREMENT

The financial resource is a prime resource for undertaking any activities. Hence for undertaking
business. Hence for implementing this project a total of 81,374,304 Eth birr is required. From
this 30% or 24,412,291.2 birr will be covered by the promoter of the project while the rest 70%
or 56,962,012.8 birr will be covered by financial institutions. Therefore the said amount of
finance is needed for undertaking the following:

4.1. Fixed Investment

4.1.1 Building & Construction

No Description Total cost

1 Poultry rearing
1.1 Chicken Rearing 2,400,000
1.2 Duck and turkey Rearing 4,000,000
1.3 Ostrich Rearing 4,000,000
1.2 Eggs storage section 2,000,000
2 Store and Warehouse 2,400,000
2.1 Raw materials store 5000,000
2.2 Processed and packed meat store 5,000,000
3 Employees Residence 800,000
4 Offices 600,000
5 Shop 760,000
5 Parking , fence and green areas and buffer zone 600,000
Total 27,560,000

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4.1.2. Poultry Machines and Equipments

N0 Description Unit Qty Unit cost Total cost
1 Incubators No 5 1000,000 5,000,000
2 Dust Bath “ 10 265,875.2 2,658,752
3 Egg lying Equip. “ 2000 400 800,000

4 Poultry feeding Equip. “ 5000 80 400,000

5 Equipment for egg collection 2000 20 40,000
6 Container for egg 4000 100 400,000
7 Heat system “ 45 1500 67,500
8 lamps 200 25 5000
9 Refrigerator 10 100,000 1000,000
10 Different other equipment‟s for Lump sum 1500,000
slaughtering house
Total 11,871,252
Assumed to be imported or to be purchased from the local market

4. 1.3 Vehicles

No Description Qty Unit Price Total Price

1 Pick up 3 4,700,000 14,100,000
2 12 seat van 3 500,000 1,500,000
3 Generator 5 55,313.6 276,568
4 Insurance (10%) 185,000
Total 16,061,000

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4.1.4 Office Equipment’s

No Description Qty Unit cost Total cost
1 Managerial Tables and chairs 4 50,000 200,000
2 Secretarial chairs 4 5,000 20,000
3 Computer with its accessories 2 150,000 300,000

4 Shelf 4 50,000 200,000

5 Filing Cabinets 4 50,000 200,000
Total 920,000

4. 2 Expenses

4. 2.1 Raw Material Purchase

A. Purchase of poultry
The company will first import different types of birds like: chicken, duck, Turkey, ostriches and
others. Especially it will import hen of the following types which are disease resistant varieties
and initial cost or budget.
i. Leg horn
ii. Plymouth rock
iii. Rhodes Island
iv. Sussex
v. New Hampshire
vi. Isa brown and other domestic species

Hence initially it will import 3000 hens.

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B. Poultry feeds
Since the production of poultry is divided in phases the estimated consumption is rounded to
a year.
No Description No Qty/Annum Unit price Total Price Remark
1 Birds‟ feed 60,000 17280 quintal 400 birr 6,912,000 80g/hen
2 Some ingredients 500,000

Grand Total 7,412,000

C. Medication (estimated in year)

No Description of medication cost No Qty/Annum Unit cost Total Cost

1 Hens Vaccine and others 60,000 8 0.50 240,000

2 Miscellaneous Vaccinations 60,000 2 1 120,000
Grand Total 360,000

4.2.2 Salary Expense

No Position No Required Qualification Monthly Annual Salary
salary
In Birr
1 General manager 1 BA in mgt 30000 360,000
2 Purchase and store workers 2 Dip purch 10000 240,000
3 Egg collectors 270 Basic - 1,800,000
4 feed workers 6 10+1 500 36,000
5 Sales workers 2 10+1 500 12,000
6 Cleaners 6 Basic 300 21,600
7 Guard 10 Basic 1000 120,000
8 Accountants 1 BA in 10,000 120,000
Accounting
9 Cashers 1 10+2 4000 480,000
th
10 Drivers 1 8 grade 2000 24,000
11 Daily laborer 100 Unskilled 500 72,000
Total 400 3,285,600
Employee Benefits (20%) 657120

Total Salary 3,942,720

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4.2.3 Other Operating Expenses

No List of Items Qty Unit Unit cost Total annual cost
1 Computer paper 20 Pack 80 1600
2 Staples 10 pack 50 500
3 Pens, pencils, and others 20 Pack 70 1400
4 Detergents 15 Pcs 40 600
5 Uniforms 1000 Pcs 500 500,000
6 Water - - - 12000
7 Electricity - - - 15000
8 Fuel cost - - - 100,000
9 Telephone - - - 3500
10 Repair expense - - - 2500
11 Miscellaneous Costs - - - 200,000
Total 837,100

4.3. Pre -Service Expense

No Description Cost

1 Project proposal 10,000

2 Licensing fee and others 2000

Total 12,000

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4.4. Summary of Financial Requirement and Source of Fund

No Description Cost in birr
1 Fixed Investment
1.1 Building &Construction 27,560,000
1.2 Poultry Machines and Equipment‟s 11,871,252
1.3 Office Equipment 920,000
1.4 Vehicles 16,061,000
Total Fixed Investment Cost 56,412,252
2 Operating Expenses
2.1 Purchase 5,000,000
2.2 Poultry feed 7,412,000
2.3 Medication cost 360,000
2.4 Salary Expense 3,942,720
2.5 Other operating Expense 837,100
2.6 Total operating 17,551,820

2.6 Pre- Service Expense 12,000

Total cost 73,976,072
Contingency (10%) 7,397,607.2
Total Investment cost 81,373,679.2

Sources of Fund:
The project‟s investment cost will be covered from owner‟s equity and Bank loan. The total
planned investment cost of the project is estimated at 81,373,679.2 Birr million out of which
70% will be Development Bank of Ethiopia loan and the balance of 30% is equity contribution.
Source of fund to finance the project is planned to be from two sources. These are promoter‟s
equity and bank loan. The loan is expected to be obtained from one of the local lending
institutions. Since the project is expected to take some times to repay all its debts, the bank loan
is assumed to obtain on long term credit basis. Taking the financial position of the promoter into
account, equity contribution and bank loan to finance the total investment outlays of the project
are assumed to be 50% and 50%, respectively. Accordingly, the total financial requirement from
the two sources will be:

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Sources of Fund

No Description % share Amount(in birr)

1 Owners Share 30 24,412,103.76

2 Bank Loan 70 56,961,575.44
Total 100 81,373,679.2

4.5. Loan Repayment Schedule

Year principal Payment Interest (10%) Total Annual Remaining Balance

Payment

0 0 0 0 56,962,012.8

1 56,961,575.44 20343576 24412291.2 36618436.8

2 56,961,575.44 18309218.4 22377933.6 32549721.6

3 56,961,575.44 16274860.8 20343576 28481006.4

4 56,961,575.44 14240503.2 18309218.4 24412291.2

5 56,961,575.44 12206145.6 16274860.8 20343576

6 56,961,575.44 10171788 14240503.2 16274860.8

7 56,961,575.44 8137430.4 12206145.6 12206145.6

8 56,961,575.44 6103072.8 10171788 8137430.4

9 56,961,575.44 4068715.2 8137430.4 56,961,575.44

10 56,961,575.44 2034357.6 6103072.8 0

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4.6. FINANCIAL STATEMENT

1. BALANCE SHEET
Poultry Farm and Meat Processing
December 2024
Asset
Current Asset
Cash 22,642,052
Inventory of raw materials 0
Total Current Asset 22,642,052
Fixed Asset
Building &Construction 27,560,000
Poultry Machines and Equipment‟s 11,871,252
Office Equipment 920,000
Vehicles 16,061,000
Total fixed Asset 56,412,252
Total Asset 81,373,679.2
Liability
Account payable 56,961,575.44
Owners’ Equity
Capital 56,961,575.44
Total Liability & Owners’ Equity 81,373,679.2

2. Summary of sales revenue

Year 1 Year 1 Year2 Year 3 Year 4 Year 5-10

Other birds 2,980,000 6,235,000 8890000 12141800 14800000
Ostrich 0 0 18,942,000 206377600 425856600
Total 2,980,000 6,235,000 27,832,000 218519400 44,065,6600

Description Cost Rate Deprecation

Building &Construction 27,560,000 0.05 1,378,000
27,560,000
Poultry Machines and Equipment‟s 10 9,212,50
Office Equipment 11,871,252 20 10,700
Vehicles 920,000 10 2,035,00
Total 16,061,000 2,513,450
56,412,252

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3. INCOME LOSS STATEMENT

Poultry Farm and Meat Processing
Profit /loss statement, projected
Projected for 1-10
Revenue 1 2 3 4 5-10
Total sales 2,980,000 6,235,000 27,832,000 218,519,400 440,656,600
Expenses
Purchase 2500000 3000000 4000000 4500000 5,000,000
Poultry feed 7,412,000 8153200 8968520 9865372 10851909.2
Medication cost 180000 216000 288000 324000 360,000
Salary Expense 1971360 2365632 3154176 3548448 3,942,720
Other operating 418550 502260 669680 753390 837,100
Expense
Deprecation 2513450 2513450 2513450 2513450 2513450
Loan payment 24412291.2 22377933.6 20343576 18309218.4 11188966.8
Lease payment 50,000 50,000 50,000 50,000 50,000
Total Expense 39457651.2 39178475.6 39987402 39863878.4 34,744,146
Profit Before Tax -36,477,651 -32,943,476 -12,155,402 178,655,522 405,912,454
Tax(30% ) 0 0 0 53596656.48 121773736.2
Net Profit -36,477,651 -32,943,476 -12,155,402 125,058,865 284,138,718
The Purchasing, Poultry feed\, medication cost, salary expense and other operating costs are
50.60,70,80 and 100% in the 1st to 10th year respectively.

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4. Cash flow statement

Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5-10

Equity Capital 56,961,575.44
Loan principal 56,961,575.44
sales 2185194 56,961,575.
0 2,980,000 6,235,000 27,832,000
00 44
Total cash in flow 2185194 56,961,575.
81,373,679.2 2,980,000 6,235,000 27,832,000
00 44
cash payment 0
Purchase 0 2500000 3000000 4000000 4500000 5,000,000
Poultry feed 0 7,412,000 8153200 8968520 9865372 10851909.2
Medication cost 0 180000 216000 288000 324000 360,000
Salary Expense 0 1971360 2365632 3154176 3548448 3,942,720
the operating Expense 0 418550 502260 669680 753390 837,100
Investment 81,373,679.2 0 0 0 0 0
24412291. 1830921
loan repayment 0 22377933.6 20343576 11188966.8
2 8.4
Lease payment 0 50,000 50,000 50,000 50,000 50,000
5359665 121773736.
Tax payment 0 0 0 0
6.48 2
36944201. 9094708
Total payment 81,373,679.2 36665025.6 37473952 154,004,432
2 4.88
-
Cash surplus / Deficit 127,572,
0 33,964,20 -30,430,026 -9,641,952 286,652,168
315
1
33,964,20 53,536,1
Cumulative Balance 0 -64,394,227 -74,036,179 340,188,304
1 36

Assumptions
 Sales cost and expiration 10% of total cost.
 Feed and medication grow by 20% per annum starting from 5-10
 Salary expense starts to grow by 1% starting from 5-10.
 Operating cost increases by 1% 5-10
 Dep equip 20%
 Dep Building 5%
 Dep of poultry eq 20%

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Environmental and Social Impacts of the Project

Currently the issue of Environment and development has got a due emphasis and the government
has enshrined environmental policy within the constitution. In line with this environmental
policy the envisaged project deemed to mitigate the different impacts that may be caused by
actions of the project. For this, a detailed analysis of environmental impact of the project
together with their mitigation will be included within the EIA reports.

Project Implementation Plan

This project will be implemented upon taking the land required.
Activities Time plan
Land clearance March 2025
Building and Construction March 2025
Import of Machineries April 2025
Office structuring May –July 2025
Production November 2025

Future Development& Exit Strategies

Every business undertakings be it large or small should have to have future development plan. It
is a plain fact that business activities are undertook in a dynamic and turbulent environment.
Hence, to overcome or minimize the risks of uncertain future, businesses should devise effective
strategies that enable them to be successful in their operation. Likewise, Poultry Farm and
Processing center has devised strategies to overcome the future risk of operation. The first
strategy is diversification of its activities to different other business forms. The second future
development plan of the project is expanding its branches in many other parts of the region. The
third strategy of the center is making a joint venture with other similar business undertakings
either in the domestic country or from abroad. The final strategy of the center is selling to other
organization or individuals.

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Summary
As clearly the project income statement shows the promoter of the project has sufficient amount
of money that enable him pay the bank loan with in short period of time and invests in other
business of his interest. In general, the financial statement of the project shows that the project
under discussion will cover its entire investment costs with in short period of time. Hence the
promoter of the project has a long term plan engaging in other agro processing business
enterprises.

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