1.
0 INTRODUCTION
With the increasing demand for poultry products such as turkey and other related birds in the market,
many suppliers of the product for some years now have been experiencing pressure on the need for
them to beef up resources and increase production.
For some years before the discovery of oil, the agricultural industry was the maint stay of Nigeria's
economy. The oil boom led to the general substitution of exportation of agric products in Nigeria for
importation due to the inability of our farmers to meet the demand in the local market. To a large
extent, such practises have affected our Gross domestic Product considering the negative effect of
importation on our economy and to a large extent there was an increase in unemployment because 85%
of Nigerians were thought to be involved in agriculture initially.
Global demand for poultry product is in the excess of 39million tonnes. It was estimated that by year
2000, poultry was the most widely consumed meat in the world. Of the approximately 170M tons of
meat currently produced annually around the world, 40% is pork, 29% beef and 22% poultry (FAO,
2001). As a result of this, commercial poultry production in Nigeria needs to be broadened. Aside
ensuring that Nigeria would stop being a dumping ground for all categories of such products that may be
harmful to people's health, expanding the poultry business would create job for our teaming youths and
in the long run have a positive effect on our Nation's gross domestic product whilst increasing our
national reserves as a result of the generation of foreign exchange.
Presently, there is need for the government to invest heavily in agriculture in order to encourage more
participation through the introduction of subsidies and credits. Provision of research laboratories
including introduction of technology to ensure increased production and improved yield, is necessary.
Aside the beauty of the poultry industry experienced if the business is running fine on a good note
without any challenges, the industry in recent time have also being faced with so many unanticipated
challenges like the outbreak of the avian influenza viruses that made many poultry farmers record great
losses. Market challenges can be very tasking too. Before the birds are matured, a market survey ought
to have been done but due to inadequacy of labour and funds many farmers hardly undergo such
measure and this may lead to loss of funds through unprofitable sales processes. The management of
the poultry is also a big challenge because without a manger with the knowledge of the enterprise,
there may be total shut down of the business. Theft is also a big problem and also
attack by other predators on the farm. Though, with good management practices
and commitment, many of these problems can be curtailed.
1.1 BOLDAN FARMS INTEREST IN THE PROJECT
This proposal aims at establishing a poultry farm at Brgy.5 Local Government area of Capul. Precisely,
the farm is located within Bagacay farm. Our farm is a Sacre land area in which about Zacre out of it has
been designated for the purpose of raising the poultry birds.
We have proposed to start with 500 day old broilers which will be ran three times within a year for three
years after which the establishment can be expanded further across the acreage. After the first three
years of practice, we hope to increase the number of birds to about three thousand per year depending
on the feasibility of the present research.
Presently, we are focusing on the production of 1,500 broiler chicken within a year in three cycles. The
various investment finances needed for this project has been explained further in the subsequent pages
bothering on the cost implication of the project, the estimated accrued revenue and profit after which
the project feasibility is determined through calculation of the Net Present Value of the project, the
benefit/cost ratio of the project and the internal rate of return of the project.
1.2 EXECUTIVE SUMMARY
The objective of this study is to continuously produced market sized broiler chickens of 1,500 within a
year without much loss whilst reducing costs yearly and maintaining stable revenue for subsequent
years within the constraints of our budget.
The approach to be embraced is a stringent method of record keeping and management staff discipline
through responsive adherence to our objective. The cost incurred aside the already existing farm land
and office space that serves as a direct sales outlet is about N1,540,000.00(One million five hundred and
forty thousand) in the first year with an accrued revenue of N3,383,000(Three million, three hundred
and eighty three thousand), Profit of about N 1,843,000(One million eight hundred and forty three
thousand) in the first year. Subsequent year also recorded an improved revenue and cost.
The discounted factor is the present bank lending rate in Philippines as approved by the CBN in January
2016. Since the Net Present Value of this project is positive, according to the condition put in place for
every Agricultural project, this poultry project is therefore worth embarking on. The benefit cost ratio on
the other hand must be greater than one for such an agricultural project to be worth embarking on. The
Benefit/cost ratio Discounted Revenue/Discounted Cost B/C RATIO- 7,124,598/2953,745.7-2.41.
The project is expected to span through three years after which further expansion is embarked upon.
Most risk involvement in the project could be theft in the farm and nonchalant attitude towards
embracing proper management practices.
2.0 PRODUCTION PROCESS AND ASSESSMENT
Production is structured in an all-in-all out method. Three cycles of production will be embarked upon in
a year, each cycle taking 15weeks (12weeks of production and 3weeks downtime period each).
Production is to be started on a small scale with 500 day old chicks (DOC) which will be run in three
cycles within a year. Within the first 2years of small broiler production, the farm will be expanded to
medium scale production. In after 3years, production is structured to be in large scale.
2.1 MARKET AND MARKETING ASSESSMENT
Target markets are eateries such as Mr Biggs & Tantalizer, Hotels and open. marker. Market approach
would be done by informing stakeholders of the target markets on regular basis as well as distribution of
fliers and posters. Direct sales could also be achieved through refrigeration and sales through scaling in
our office at 1, Brgy.2, By Santa Felomina Street, Behind the Church. Our online market platform would
also be an advantage to projecting and boosting our sales.
2.2 FINANCIAL ASSESSMENT
2.21 PROJECT COST & FINANCING
1" year Feasibility Study
Cost of Fixed Assets
Land: 5acre of farm Land and survey registration N750,000.00 (achieved)
Building & Structure (Poultry House) N500,000.00
Total cost of fixed assets Cost of Farm Implements N1,250,000.00
Feeders, 20pieces @N200/feeder
N4,000.00
Drinkers 20pieces @N200/drinker Heater 10heaters @ N1500 each
N4,000.00 N15,000.00
Thermometers 2pieces@ N1,000 each
N2,000.00
Buckets 4pieces@ N500/bucket Total
N2,000.00
N27,000.00
WORKING CAPITAL
5:41 PM
1. 4G
29 H/s
59
Dec 11, 2023
03:54 PM
Cost of birds
Cost of Birds (DOC)/cycle: 500 birds@ N120/birdsx3 cycle N180,000.00
4.
Cost of feeds/cycle
Starter Feeds 30bags@ N2,000/bag x3
N60,000.00
Finishers Feeds 30bags@#1500/bag x3
N45,000.00
Total
N105,000.00
Cost of wood shaving N500/bag @5bagsx3cycle
N 7,500.00
Cost of utilities
Power/Electricity one 6.5kva Generator@
Water for Farm Activities by Local well digging
1.5 horse power submersible pump
N65,000.00
N20,000.00
N35.000.00
2 Surface Tank @25,000 each
N50,000.00
Laying of pipes and taps.
N20,000.00
Plumbing works charges
N10,000.00 N360,000.00
Cost of 2 field labour@15,000 each per year
Selling and distribution expenses
Total
Cost of Fliers 1,000fliers@N10/flier
200 posters@#100/poster Miscellaneous and phone calls
Total
Administrative expenses
Papers for record keeping Troll@
Small size printer
Repair and maintenance
Total Medication and vaccination
Antibiotics x3cycles.
N50,000/annum
N80,000.00
N1,200.00 (achieved)
N8,000.00 (achieved)
N50,000.00/year.
N59,200.00
N565,000.00
N10,000.00
N20,000.00
N6,000.00
Vaccines( Newscastle and Infection bursal disease) x3cycles
Dewormer
Disinfectants Total
N9,000.00
N3.600.00
N3.600.00
N22,200.00
GRAND TOTAL COST
Cost of fixed Assets
Cost of farm implements.
Cost of working capital
Selling and Distribution cost
Medication and Vaccination
N1,250,000.00
N 27,000.00
N852,000.00
N80,000.00
N22,200.00
5:42 PM
Dec 11, 2023
03:54 PM
1. 4G
23 H/s
59
Administrative Expenses
Medication and Vaccination.
Grand Total
N59,200.00
N22.200.00
N2,290,000.00
ted from the total cost, An office sales outlet already exists for direct sales marketing. And if the already
5
acquired cost of farm land an
we would have incurred N1,
SALES REALIZATION AND PROFIT
Assume 10% mortality rate of birds at each cycle. 10% of 500birds/cycle 150 birds.
No of live birds for sale 1.350 birds.
Sales of 1,350birds@ N2,500/birds-
Sales of 60 used feed sack@ #50 each
Sales of poultry waste as manure
Gross Total
Profit Total revenue- total cost
3,383,000-1,540,400 N1,843,000.00
N3,375,000./annum
N3,000
N5,000
N3,383,000.00
2.22 SECOND YEAR PROJECT COST & FINANCING
2 nd year Feasibility Study
Cost of Fixed Assets
There will be no cost implication this year
Cost of Farm Implements
There will be no cost implication this year
Cost of birds
WORKING CAPITAL
Cost of Birds (DOC)/cycle: 500 birds@ N120/birdsx3 cycle N180,000.00
Cost of feeds/cycle
Starter Feeds 30bags@ N2,000/bag x3
Finishers Feeds 30bags@ #1500/bag x3
Cost of wood shaving
Total
N500/bag @5bagsx3 cycle
Cost of utilities
Cost of 2 field labour@20,000 each per year
Selling and distribution expenses
Cost of Fliers 1,000fliers@N10/flier
200 posters @ #100/poster
Miscellaneous and phone calls Total
N60,000.00
N45,000.00
N105,000.00
N 7,500.00
N360,000.00
N10,000.00
N20.000.00
N50,000/annum
N80,000.00
Administrative expenses
Papers for record keeping troll@
Repair and maintenance
Total
Medication and vaccination.
Antibiotics x3cycle
N1,200.00 (achieved)
N50,000.00/year,
N59,200.00
N6,000.00
Vaccinesi Newscastle and Infection bursal disease) x3cycles
Dewormer
Disinfectants Total
N9,000.00
N3,600.00
N3.600.00
N22.200.00
GRAND TOTAL COST
Cost of fixed Assets
Cost of farm implements.
Cost of working capital
Selling and Distribution cost
Medication and Vaccination
Administrative Expenses
Medication and Vaccination
Grand Total
N847.000.00
N80,000.00 N22,200.00
N59,200.00
N22,200.00
N805,900.00
SALES REALIZATION AND PROFIT
Assume 10% mortality rate of birds at each cycle. 10% of 500birds/cycle 150
birds.
No of live birds for sale 1,350 hinds Sales of 1,350birds@ N2,500/birds-
Sales of 60 used feed sack #50 each
Sales of poultry waste as manure
Gross Total
N3,375,000/annum
N3,000
N5,000
N3,383,000.00
Profit Total revenue-total cost
3,383,000-805,900 N2,577,100.00
2.23 THIRD YEAR PROJECT COST & FINANCING
3 rd year Feasibility Study Cost of Fixed Assets
There will be no cost implication this year
Cost of Farm Implements Replacements Feeders 20pieces @N200/feeder
N4,000.00
Drinkers 20pieces @ N200/drinker
Heater 10heaters @ N1500 each
Thermometers 2pieces@ N1,000 each. Buckets 4pieces N500/bucket
Total
Cost of birds.
N4,000.00
N15,000.00
N2,000.00
N2,000.00
000.00
Cost of Birds (DOC)/cycle: 500 bird@ N120/birdoc3 cycle
N180,000.00
Cost of feeds/cycle
Starter Feeds 30bags N2,000/bag x3
N60,000.00 N45,000.00
Finishers Feeds 30bags #1500/bag x3
Total
N105,000.00
Cost of wood shaving N500/bag @5bagss3 cycle
Cost of utilities
Selling and distribution expenses. Cost of Fliers 1,000 fliers@N10/flier
200 posters #100/poster
N 7,500.00
Cost of 2 field labour@20,000 each per year
N360,000.00
N10,000.00
N20,000.00
N50,000/annum N80,000.00
Miscellaneous and phone calls Total
Administrative expenses.
Papers for record keeping Iroll@
Repair and maintenance
N1,200.00
N50,000.00/year
Total
N59,200.00
Medication and vaccination.
Antibiotics x3cycles
N6,000.00
Vaccines( Newscastle and Infection bursal disease) xJcycles N9,000.00
Dewormer
N3,600.00
Disinfectants Total
N3.600.00
N22,200.00
GRAND TOTAL COST
Cost of fixed Assets Cost of farm implements
N27,000.00
Cost of working capital
N652,500.00
Selling and Distribution cost Medication and Vaccination
N80,000.00
N22,200.00
Administrative Expenses
N59,200.00
Grand Total
N840,900.00
SALES REALIZATION AND PROFIT
Assume 10% mortality rate of birds at each cycle. 10% of 500birds/cycle 150 birds.
No of live birds for sale 1,350 birds
Sales of 1,350birds@ N2,500/birds
Sales of 60 used feed sack #50 each Sales of poultry waste as manure
Gross Total
N3,375,000/annum
N3,000 N5,000
N3,383,000.00
Profit Total revenue- total cost
3,383,000-840,900
N2.542.100.00
3.0 EVALUATION OF THE PROJECT
Expected costs and returns for a 1,500 Poultry birds in a year
3.1 TABLE-1
Year
Cost(N)
Revenue(N)
Profit(N)
2,290,000.00
3,383,000.00
1,843,000.00
805,900.00 840,900.00
3,383,000.00 3,383,000.00
2,577,100.00 2,522,100.00
Estimated Discount cash flow and Analysis for the Poultry Farm
3.2 TABLE-2
Year
Incremental Benefit9N)
Discount.
Net Present Discounted
Discounted
Factor@20%
Value@20% Cost
Revenue
1,843,000.00
0.8330
1,535,833.33
1,907,570
2,818,039
12
2,577,100.00 0.6940
1,789,652.78 1,459,548.61
559,294.6 486,881.1
2,347,802 1,958,757
2,522,100.00 0.5790
2,953,745.7
7,124,598
The discounted factor is the present bank lending rate in Nigeria as approved by the CBN in January
2016.
Since the Net Present Value of this project is positive, according to the condition put in place for every
Agricultural project, this poultry project is therefore worth embarking on. The benefit cost ratio on the
other hand must be greater than one for such an agricultural project to be worth embarking on.
The Benefit/cost ratio Discounted Revenue/Discounted Cost
B/C RATIO-7.124.598/2953,745.7-2.41.
9.
Estimating the Internal Rate of Return for the Poultry Farm
Net Present
Value@30% 1,229,281
3.3 TABLE-3
year
Discounted
Factor@20% 0.833
Net Present Value @20%
Discounted factor @50%
1,535,219.0
0.667
0.694 0.579
1,788,507.4 1,460,295.9
0.444 0,296
1,144,232.4
746,541.6
4,784,022.3
3,120,055
8.
IRR- Lower Discount Rate (Difference between the two Discount rate) x (NPV @lower discount
rate/Absolute Difference Between the two NPV)
IRR-20-50-20X(4,784,022.3/7,904,077.3)
20-30x(0.605)- 30.26%
IRR-30.26%
Since the present interest rate in banks is 20% and this project has an internal. rate of return of 30.26%,
it means the project or business is profitable. It means for every NI invested, the investor will receive
N1.30k after paying 20k to the lender, he will be better off by 10k
The project evaluated thus far, is therefore good enough to be embarked upon. considering its positive
response to the present value, its favourable benefit cost. ratio of 2.41 greater than one and its internal
rate of return of 30.26% after an interest on funds loan to the project was 20%.
