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Project Title: LIVESTOCK POULTRY FARMING

By

Name of Student: ABHIJEET VERMA

Roll No: NA13001

Project Mentor & Faculty Guide: Prof. PRABAL K SEN

Submitted in partial fulfillment of the requirements of the Post Graduate Programme for Certificate in

Entrepreneurship Management (PGP-CEM) of XLRI-Jamshedpur

ENTREPRENEURSHIP DEVELOPMENT CENTRE

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Acknowledgement

I owe many thanks to many people who helped and supported me while preparing this report.

My deep sense of gratitude to Prof. Prabal K. Sen, Chairperson Entrepreneurship Development Center

(EDC) XLRI Jamshedpur for his valuable input and guidance wherever sought for. He has taken pain to

guide throughout the project and suggest necessary correction wherever required.

I would also thank my institute and my faculty members without whom this project would have been a

distant reality.

Last but not least I would thank my EDC friends for helping me to transfer my simple idea into a viable

business project within these 6 months.

By thanking all the people who helped me, I believe I thanked God because of whom everything

happened.

ABHIJEET VERMA

[NA13001]

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Table of Contents Livestock Poultry Farming (Broiler Chicken) ...............................................................................................................4

Description of Business: .............................................................................................................................................4

Market Scenario: World .............................................................................................................................................4

Market Scenario: India ...............................................................................................................................................5

DEMAND & SUPPLY FIGURES .............................................................................................................................8

Poultry Figures in Business Location .......................................................................................................... 10

Market Analysis & Summary of above data and basis for business feasibility: Jharkhand ........................ 11

INVESTMENT OPPORTUNITY IN POULTRY: OVERALL.............................................................................. 12

MARKET ................................................................................................................................................................ 12

Marketing Plan ........................................................................................................................................................ 14

Marketing Activities ................................................................................................................................... 14

The Importance of Marketing ..................................................................................................................... 15

Poultry as a Product .................................................................................................................................... 15

The Poultry Market ..................................................................................................................................... 16

Final Marketing Plan .................................................................................................................................. 17

OPERATIONS ........................................................................................................................................................ 18

Location:Hazaribagh .................................................................................................................................. 18

Selecting Breeds: ...................................................................................................................................... 19

Broilers ....................................................................................................................................................... 19

Housing/Cage:............................................................................................................................................ 19

Feeding: ..................................................................................................................................................... 20

Care & Management: ................................................................................................................................. 21

PRODUCTION ....................................................................................................................................................... 22

Initial Production ....................................................................................................................................... 22

ECONOMIC PARAMETERS: ............................................................................................................................... 22

EXPENDITURE...................................................................................................................................................... 23

FINANCIALS: ........................................................................................................................................................ 24

BREAKEVEN ANALYSIS .................................................................................................................................... 27

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Livestock Poultry Farming (Broiler Chicken)

Description of Business:

This business is about farming of Broiler Chicken. The business type is a startup and sole proprietorship.

The product to start with is the production of Broiler chicken for consumption of meat. The customers

initially will be the local market i.e. firstly, to cater the demand of Hazaribagh and Ranchi. Secondly, to

scale up to cater for the market demand of major districts of Jharkhand and then get into exports of various

meat products of Chicken by setting up of Poultry Processing Unit & Waste Rendering Plant with capacity

ranging from 500 – 2000 birds per hour.

Market Scenario: World

Poultry production is big business throughout the world. It has become a standard form of cheap protein.

It is also a highly competitive industry and feed suppliers, producers, processors, manufacturers of

equipment etc. have all appreciated the economies of scale and gone on to develop bigger and more

automated systems of operation than ever before to supply an insatiable market.

The production of poultry on a small scale is very important in less developed countries, particularly in

places some way from the main commercial and industrial centres. There continues to be a need for small

scale processing facilities.

Slaughter of poultry in suitable surroundings by hygienic methods is essential for the production of

wholesome meat, extension of the shelf life of the product, reduction of post-harvest losses and protection

of public health.

As poultry production is a prime example of a vertically integrated agricultural industry, with intensive

rearing systems of birds of efficient feed conversion ratios and products of handy size and ready

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marketability, it is not surprising that it is currently showing the strongest growth in output of any category

of meat. World-wide, it is a huge industry. Estimates of poultry populations are detailed later in this

Detailed Project Report (DPR).

Market Scenario: India

Chicken is the most widely accepted meat in India. Unlike beef or pork, it does not have a religious taboo.

The prices of chicken meat are lower than those of mutton or goat meat. Many Indian families, especially

the educated people in urban areas, have begun to accept eggs as a regular supplemental part of their

vegetarian diet .The forecast surveys indicate that as the present younger generation goes to the adulthood,

the acceptability and demand for eggs and chicken meat in next 2-3 decades is likely to increase many-

folds very rapidly.

India ranks first in having the largest livestock population in the world. Livestock plays an important role

in the national economy as well as in the socio economic development by augmenting family incomes and

generating gainful employment in the rural areas, particularly for the landless, small and marginal farmers

and women. With its 1.2 billion population and 8% GDP growth rate, India is rapidly emerging as one of

the biggest markets in the world. Livestock sector contributes approximately 4% to GDP and 27% to

agriculture GDP. Poultry and dairy sectors are the major sectors contributing to economic development.

The poultry sector has undergone a paradigm shift in structure and operation during the last two decades.

It has transformed itself from a mere backyard activity into a major commercial activity with participation

by big players as also successful implementation of contract poultry farming on a large scale. India is

emerging as the world`s 2nd largest poultry market with an annual growth of more than 14%, producing

61 million tonnes or 3.6 percent of global egg production. The annual growth rate of egg production is 5-

8%. Apart from this, India ranks 6th in broiler production (125 billion Rupees) with an annual output of

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2.39 million tonnes of broiler meat, as per the estimates of the Ministry of Agriculture, Govt. of India.

The total poultry industry is valued at about 350 billion rupees. The per capita consumption per year is

approx. 2.4 kg, which is much lower than the National Institute of Nutrition`s recommendations of 11 kg.

In dairying, India ranks as the world`s largest milk producer with an annual output of 116 million tonnes

approx. With an annual growth rate of 4%, India`s milk production accounts for 16% of the total global

output. India has 52% of cattle population and 15% of buffalo population. It ranks third in sheep

population and second in goat population in the world. The Union Agriculture Ministry`s Department of

Animal Husbandry, Dairying & Fisheries is focusing on increasing the animal population and productivity

as a thrust area, offering financial assistance to the organizations. On the other hand, Ministry of Food

Processing Industries has its own programs to increase dairy processing and value added products to target

export markets. This would facilitate India to achieve its potential of becoming a “Food Factory of the

World”.

Besides the Ministry of Agriculture and the Ministry of Food Processing Industries, the list of

organizations playing a major role in the development of poultry and livestock industry is quite long.

Prominent among them are: APEDA, National Meat & Poultry Processing Board (NMPPB), Poultry

Federation of India (PFD), National Dairy Research Institute (NDRI), Progressive Dairy Farmers

Association, National Dairy Development Board (NDDB), All India Poultry Breeders Association

(AIPMA), India Poultry Equipment Manufacturers Association (IPEMA), Karnal Poultry Farmers

Associations, Kerala Livestock Development Board, National Egg Coordination Committee (NECC),

Compound Livestock Feed Manufacturers Association (CLFMA), National Institute of Nutrition (NIN)

India Poultry Journalists` Association (IPJA), Andhra Pradesh Poultry Federation (APPF) and Poultry

Breeders Association (A.P.) etc.

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All these facts and figures vouch for India`s big potential to increase consumption of meat & meat products

in domestic markets and target for exports. Despite all of these achievements, lack of advanced

technology, inadequate cold storage facilities and processing equipment, particularly at the farm level, act

as a major constraint in enabling this sector to take a quantum jump in production and productivity. What

is needed is a strong platform for all stakeholders to share knowledge and technology.

The growth in production of poultry industry are reflected in relatively lower price increases in poultry

meat over last five years compared to other meat products - Poultry WPI (wholesale price index) has

grown at 12 per cent year-on- year over 2008-2013 as against 21 per cent for overall meat products basket

- providing an affordable alternative for meeting protein requirements in Indian diet.

The domestic poultry meat production is estimated to have increased from less than one million tonne in

2000 to 3.4 million tonnes in 2012 with per capita consumption increasing from 0.8 kg to 2.8 kg annually

during same period, it said.

Table egg production is estimated to have increased from 30 billion eggs in 2000 to 66 billion eggs in

2012 with per capita egg consumption increasing from 28 to 55 eggs during that period.

The healthy growth in poultry output over last decade makes India one of the fastest growing major world

market in the segment, said ICRA in the report.

In 2012 calendar year, the second half was a tough year for the industry due to an increase in production

costs with feed ingredients touching record highs and realizations suffering on back of oversupply in

industry.

However, the efforts of key integrators in poultry industry to control supply through measures like

'hatching holidays' initiated towards fag end of 2012, resulted in improved realizations in 2013, and the

industry is expected to register much better profitability compared to last year.

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DEMAND & SUPPLY FIGURES

Selected Country-wise Consumption of Poultry Meat Including India

(1981, 1986, 1991, 1996 and 2001)

('000 MT)

Countries 1981 1986 1991 1996 2001

Annual Compound Growth Rates

1981- 1981- 1992-

2001 1991 2001

Developing (Total) 8804 11503 16990 27011 36968 8.23 6.69 7.8

Bangladesh 56 65 83 118 115 4.36 3.99 2.89

Brazil 1224 1430 2378 3569 5058 8.64 6.98 8.62

China 1749 2357 4611 9209 13283 12.54 10.38 10.84

India 141 209 389 665 1251 11.33 10.84 10.25

Sri Lanka 19 16 25 57 84 8.46 2.29 8.88

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Meat Production from Recognized Sector in Jharkhand - Part III

(2010-2011)

State

Poultry

No. of Animals Slaughtered Average Yield Rate Per Animal Meat Production

(In ' 000 Nos.) (In Kg.) (In ' 000 Tonne)

Jharkhand 6801 0.6 4

India 1816848 1.207 2193

State-wise Meat Production from Recognized Sector in India - Part III

(2009-2010)

States/UTs

Poultry

Total Meat

Production

(In 000 Tonne)

No. of Animals

Slaughtered

Average Yield Rate

Per Animal

Meat

Production

Total

Excl.

Poultry (In 000 Nos.) (In Kg.)

(In 000

Tonne)

Jharkhand 5332 0.63 3 47 43

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Poultry Figures in Business Location

District-wise Number of Poultry in Jharkhand

-2003

District

Total

Cocks

Total

Hen

Total

Chickens

Total

Fowls

Total

Duck

Etc. Total Poultry

Hazaribagh 164881 251179 485471 901531 17199 918730

Demand Projections of Livestock Products in India

(1993, 2000, 2010 & 2020)

Product 1993 2000 2010 2020

Per cent Annual

Growth Rate (1999-2000)

Milk 46.18 60.77 94.3 147.21 4.77

Mutton and goat meat 0.83 1.36 3.81 12.72 13.25

Beef and buffalo meat 0.49 0.61 0.84 1.15 3.39

Chicken 0.25 0.33 0.52 0.81 4.67

Eggs 9.62 13.88 24.9 44.06 6.02

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District/Location-wise Poultry Population in Jharkhand - Part I

-2003

District Location

Poultry

Fowls

Desi Improved

Total

Fowls

(Chicken below 5 months) (Chicken below 5 months)

For

Egg

For

Meat Total

For

Egg

For

Meat Total

Hazaribagh

Rural 125380 168261 293641 7106 179762 186868 881758

Urban 1997 1949 3946 64 952 1016 19773

Total 127377 170210 297587 7170 180714 187884 901531

Market Analysis & Summary of above data and basis for business feasibility: Jharkhand

A detailed Market study commissioned by PRADAN in collaboration with the poultry industry in 2002

showed that the whole Jharkhand is a huge deficit market for broiler birds. The daily sales of live bird was

estimated to be around 80 Metric tonnes with major consumption centers located in big and smaller towns

in the industrial and mining areas. As against the demand, the average daily production in Jharkhand did

not exceed more than 12 Metric Tonnes. The huge gap between the demand and supply was met through

supply from nearby states like West Bengal, Orissa and Chattisgarh and also from far off Madhya Pradesh.

The annual growth of poultry market in Jharkhand was estimated to be around 20% in real terms.

Also, market study by Peter Rebero and Nishant Kurup, interns from Goa Institute of Management in May

2002 showed that the whole Jharkhand particularly Ranchi is a huge deficit market. The daily sell in

Ranchi is 20 tons of live bird but the average daily production in and around Ranchi is only 5 tons. 15 tons

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of live poultry birds are being purchased from nearby states. The annual growth of poultry market is

estimated to be 20%.

Poultry keeping is an important allied activity providing supplementary income, employment opportunity

and a source of animal protein. In spite of favorable climate condition for poultry rearing and good

demand, most of the state requirement is being met from neighboring state. Keeping this in mind the state

contemplates to enhance the production of poultry and its product by providing large no. of chicks to the

poultry farmers in subsidized rates. The state run two poultry farms situated at Ranchi and Bokaro are

being developed as breeding unit of parent stock where one lakh chicks will be produced during 2010-11

by each farmer.

As per the Budgetary Allocation for 2012-13 For Animal Husbandry in Jharkhand, there’s a target to

develop 800 poultry units against the current 400 units approximately. The problem lies here is that the

Broiler market is highly unorganized which affects the economies of scale in this business. This also

creates a huge opportunity for entrepreneurs to tap the market with strong financial assistance from

government and other institutions.

INVESTMENT OPPORTUNITY IN POULTRY: OVERALL

MARKET

Poultry meat is the fastest growing component of global meat production, consumption and trade, with

developing economies playing a leading role in the expansion. In addition to providing opportunities to

increase poultry exports, rising poultry production spurs growth in global import demand for feeds and

other inputs and in investment opportunities in these sectors. India, the world’s second largest developing

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economy, has a large and rapidly expanding poultry sector. Expansion in India is being driven by rising

incomes and a shift in industry structure toward integrated ownership and coordination of the input,

production and marketing operations involved in poultry production (vertical integration). These factors,

in addition to government policies affecting feed supply levels, will help shape future growth in the poultry

industry in India, as well as in emerging trade and investment opportunities.

Consumer demand for poultry is rising, driven by both income growth and change in prices of poultry

meat in relation to other goods. Secondly, the structure of India’s poultry market is changing. In particular,

the introduction of vertical integration in poultry production and marketing has lowered costs of

production, marketing margins and consumer prices of poultry meat. The future pace of vertical

integration in the industry is likely to affect the speed at which consumers shift from a preference for live

birds to processed (chilled or frozen) products, a shift that will enable poultry integrators to expand their

market reach and scale of operations. Finally, feed availability and prices play a central role in determining

the costs of production and consumer prices.

Income growth is a principle force in the expansion of India’s poultry industry. Poultry demand is highly

price sensitive among low and middle-income consumers. Policies that protect the domestic poultry

market may also slow growth in consumption and production.

The process of poultry integration helps reduce poultry production costs by increasing technical efficiency

and eliminating the margins on feed. The impact of integration includes significantly faster expansion of

production and consumption of poultry foods along with smaller increase in real costs and prices.

Elimination of all tariff and quota restrictions on Indian corn imports would potentially reduce feed prices

for poultry and egg producers by allowing corn to be imported freely at the global price. Lower corn prices

associated with free trade can lead to a relatively large reduction in poultry production costs. Perhaps the

major impact of corn free trade will be that, with corn readily available at the global price, egg production

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costs and retail prices can be kept in check. Thus, egg production and consumption can be higher than

when trade restrictions are in place.

Although domestic corn production increases in response to higher domestic prices, real corn prices are

sharply higher than in the income growth scenario. For the poultry sector, the effect of higher corn prices

on costs and prices is more than offset by the efficiency gains associated with integration. The egg

industry, however, experiences higher costs and reduced production and consumption, when the poultry

meat sector becomes more efficient.

Income growth, integration and corn free trade – each have significant effects on India’s poultry sector

growth, and jointly their impact is even more powerful. Economic growth, industry restructuring in the

form of vertical integration and trade policy on key inputs can combine to dent domestic supply, demand

and prices in India’s poultry industry. Economic growth is an important driver for the expansion of the

poultry industry. But the pace and extent of vertical integration and the cost and availability of key inputs

are also as important

Marketing Plan

As per the various measures of the market explained above i.e. the sales volumes, sales values, growth

rate, and the level of competitiveness, a conceptual framework of marketing which highlights the principal

decisions of Entrepreneurs make in configuring their offerings to customer needs has to be implemented

as per the developed marketing plan.

Marketing Activities

The activities involved in marketing include the collection, evaluation and dissemination of marketing

information; planning and scheduling of production; forming contracts between buyers and sellers;

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constant improvement of all post-harvest activities; and coordinating inputs, including transport,

processing, storage, credit, health care etc.

The Importance of Marketing

Marketing is important because of changing demographic patterns. Populations generally move from the

villages into the towns, perhaps leaving fewer people in the main agricultural production regions.

Combined with the general growth in population, this situation provides improved opportunities for rural

communities to grow and sell more of their products, particularly in the towns, earning more money and

being able to raise standards of living. The urban folk are able to make their contribution to society without

the need to consider constant agricultural activity. Growing more food may be easier for those with

land/facilities/cash but the farmer with a smallholding may find it difficult to take advantage of a larger

market, particularly where there is competition from a larger producer. An improved marketing strategy,

however, may enable him to reduce certain costs, perhaps by joining with others, leaving him with better

profits.

Poultry as a Product

Before a poultry marketing strategy can be developed, it is well to understand and list the characteristics

of the product. The following are examples. They may vary from one region to another:

Poultry consumption offends no religious sentiment.

Its production is dependent on a wide variety of inputs e.g.

Chick hatcheries

Feed producers

Veterinary services & Processing facilities

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Transport

Efficient cold chain

Its production and consumption is generally non-seasonal.

It is a perishable product which most usually needs refrigeration and considerable post-harvest

care.

It may be sold whole or in a wide variety of different parts. A different value can be placed on

each part.

It is eaten as a central part of the meal.

Each part may be prepared for consumption in different ways according to a different recipe. It is

invariably cooked and eaten with other food products and additives e.g. vegetables, spices.

It is a basic food commodity inasmuch that it is a supplier of proteins and essential food nutrients

to the human diet.

It is not the only supplier of proteins and essential food nutrients to the human diet. It is in

competition with other meats and protein sources including fish, eggs and dairy products.

Its consumption level is dependent on price, income of buyer and the price and availability of

competing alternatives.

The Poultry Market

Having understood the product, it may be as well to understand and list the characteristics of the market.

Once again, the following are examples:

Poultry should be supplied from an accredited supplier.

There are many contacts to be made in the marketing structure. For example, producers, buyers,

sellers and customers. All have information indicating the product which the customer demands.

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Customers expect poultry to be a constant product, not changing with season, time of day, severity

of rains etc.

The customers expect a constant throughput, not expecting serious shortfalls or gluts. Production

schedules need full control.

The product may be subject to the laws of supply and demand. An oversupply will lead to a fall in

price and profitability. An undersupply may cause a rise in price but the customer may purchase

other products to the detriment of later sales.

Markets can be supplied under contract. For example, a particular buyer may want a constant order

filled each week to a particular products specification for which he will pay a premium.

There is a standard of quality which the market demands. Customers will not return to buy more

if the product is unwholesome. At point of purchase, quality relates to presentation as much as

anything else. Assessment of quality by the customer may be fairly subjective if not almost

unreasonable. Customers may look at the color of the meat. They may also look at the color of the

wrapper.

The market may respond to advertising.

Test marketing the product may or may not indicate the results of implementation of a full

marketing strategy.

Final Marketing Plan

Taking into account of above all the variables which majorly explains from produce to consumption chain

which while starting up my business is not required but should definitely be taken into account for making

future plans. Below are the marketing plans taken into consideration after doing depth research and

analysis of market which has been already mentioned above:

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Instead of concentrating all marketing efforts in the big urban centers, it is necessary to improve

infrastructure and develop rural markets where there is a good demand.

Efforts are necessary to improve consumer education on use of eggs and poultry products in human

diet.

A campaign to introduce chicken in “ the mid-day meal programme ‘ of school children will be

useful

In India, consumer preference is increasing for “clean”, “safe”, “hygienic” “nutritious” and

“properly packed, labeled and presentable” food items including eggs and poultry meat.

Introduction of modern state art technology in processing, packaging, labeling, preservation of

eggs and poultry meat and meat products is required to improve “quality" for domestic and export

markets. With economic liberalization and free trade under WTO, the domestic products have to

maintain "quality" to face the stiff competition from imported foreign poultry foods.

The Bureau of Indian Standards (BIS) has prepared standards for safety certification of foods. It

has recently launched a scheme for HACCP (Hazard analysis and critical control point) for food

industry to obtain IS 15000 certification .Soon, this certification may become mandatory for all

major food processing plants which taken into account at the initial startup stage will be helpful.

OPERATIONS

Location:Hazaribagh

The main and most important thing for poultry farming in India is selecting a suitable land. And it is the

most expensive part of this business. For setting up commercial poultry production, it would be better if

you have the land of your own. The area of the land depends on the number of birds you want to raise.

Considering the above Hazaribagh is considered as the hub for broiler chicken production in Jharkhand.

Following are the aspects while choosing land for commercial poultry farming business in Hazaribagh:

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It’s a small town with Urban population of around 3 lakhs as against the total population of 17 lakhs

approx. (Census: 2011 data). Rural areas are slightly far from the town which acts as a perfect

destination for poultry farming because land and labor are relatively cheaper in rural areas.

It also satisfies the chaos and noise free, calm and quiet place required for the poultry farming.

The area of the land depends on the number of birds and farming system: There’s no free land

constrains as compared to other towns and cities of state.

The area has fresh and pollution free environment.

Land is easily available for lease and purchase. Also, there are poultry sheds available on rent.

After doing the survey there are lands, with great source of sufficient amount of fresh and clean water.

Shortlisted sites are be free from all types of harmful animals and predators.

Suitable transportation system available.

Selecting Breeds:

Broilers: The poultry breed is suitable for commercial meat production and is known as broiler poultry.

They are like meat producing machines. They consume foods and convert them to meat quickly. They

grow fast and become suitable for slaughter purpose within very short time.

Housing/Cage:

Making a suitable poultry housing is another important factor for commercial production. But it is not too

expensive like buying land. There are numerous ways for making a good house for the poultry birds.

Always be sure that, the house or cage is sufficient and spacious enough to accommodate the birds with

necessary space and facilities. In free range farming system, ensure sufficient amount of space for running

and moving. The design of the house depends on the breeds and production type. However, while making

a poultry house, consider the followings.

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Make a proper ventilation system in the house. Because, good ventilation system ensures good health

and proper growth of the birds. So, the house must have to be well ventilated.

Ensure flow of sufficient amount of fresh air and light inside the house.

Try to make south faced house. This will help to entrance sufficient amount of clean and fresh air.

If you go for large scale commercial production and make numerous house, then the distance from

one house to another house will be at least 40 feet.

Always keep the house clean and fresh. And clean it perfectly before bringing the chicks into the

farm.

Prevent all types of harmful animals and predators.

Make good facilities so that rain water and cold wind can’t enter inside the house.

Try to build the house in a calm and quiet place.

Make a suitable drainage system inside the house. It will help you to clean the house easily.

Keep all equipment in proper distance inside the house. And always clean the house and equipment

in a regular basis.

Feeding:

Feeding good quality and nutritious food keeps the poultry birds healthy and productive. So, good and

high quality nutritious food is a must for commercial poultry production. There are numerous poultry feed

producing companies available in India. They produce feeds for all types of poultry birds. You can easily

use those food for your birds. If you want to prepare the feed at your home, then you must have to know

the necessary nutrient elements in their food. And you also have to buy all those elements separately from

the market and mix it in proper ratio. Along with providing fresh and nutritious food, always try to serve

them sufficient amount of fresh and clean water according to their daily demands.

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Care & Management:

Always try to take good care of your birds. And good management ensure proper growth and production.

The main threat of poultry farming in India is diseases. Thousands of farmer face huge loss due to various

types of poultry diseases. So, always take good care of your birds and provide them nutritious food and

clean water. Never try to mix contaminated or polluted food with their regular food. Vaccinate them timely

and make a storage of some common and necessary medicines.

Above are the standards mentioned which will be taken care of. In production part above points will

detailed explicitly

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PRODUCTION

Initial Production

ECONOMIC PARAMETERS:

1. No. of birds per week 500

2. No. of batches per cycle 8

3. No. of batches in the 1st year 40

4. No. of batches from 2nd year onwards 52

5. Cost of construction of shed Rs 10/sq.ft

6. Cost of equipment Rs 12/bird

7. Cost of day old chicks Rs 20

8. Feed required per bird 4 kgs

9. Average cost of feed Rs. 20/kg

10. Wt. on selling 2 Kg

11. Selling price of birds Rs 90/Kg (2012-13)

12. Mortality rate 5%

13. No. of birds sold in each batch 475

14. Income from manure Rs. 1/bird

15. Interest rate 12%

16. Deprecation on sheds & equip. 10%

17. Average value of closing stock Rs 95

18. No. of batches not sold after 6 years 7

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EXPENDITURE

Expenditure on purchase of chicks, insurance, feed, cost of sheds and equipment is admissible.

Expenditure on cost of land or other buildings is not admissible.

NON RECURRING EXPENDITURE:

1. Cost of sheds (8 sheds of 500 sq.ft each) @ Rs 150/ sq.ft 4000 x 150 600000

2. Cost of store room, 200 sq ft @ Rs175/ sq ft 35000

3. Labor quarters, 150 sq ft, @ Rs200/sq ft 30000

4. Expenditure on water supply (overhead tank, bore and motor) 75000

5. Installation of electricity 50000

6. Cost of equipment (feeders, waterers, brooders etc.) @ Rs12/bird 100000

TOTAL 890000

RECURRING EXPENDITURE FOR 1ST 8 BATCHES:

1. Cost of chicks 4000 @ Rs 20/per chick 80000

2. Insurance @ 4% 3200

3. Cost of feed, 4kgs/bird, Rs 20/kg for 4080 birds 326400

4. Cost of medicines, vaccines etc. @ Rs.5/bird 20000

5. Labor cost for 1 year @ Rs 5000/ month 60000

Total 444600

TOTAL COST OF THE PROJECT 890000+474600 = 1379600

BENEFICIARY’S CONTRIBUTION 40,00000

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FINANCIALS:

Economic Parameters

1 No. of birds per week 500

2 No. of batches per cycle 8

3 No. of batches in the 1st year 40

4 No. of batches from 2nd year onwards 52

5 Cost of construction of shed Rs 10/sq.ft

6 Cost of equipment Rs 12/bird

7 Cost of day old chicks Rs 20

8 Feed required per bird 4 kgs

9 Average cost of feed Rs. 20/kg

10 Wt. on selling 2 Kg

11 Selling price of birds Rs 90/Kg (2012-13)

12 Mortality rate 5%

13 No. of birds sold in each batch 475

14 Income from manure Rs. 1/bird

15 Interest rate 12%

16 Deprecation on sheds & equip. 10%

17 Average value of closing stock Rs 95

18 No. of batches not sold after 6 years 7

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NON RECURRING EXPENDITURE:

1 Cost of sheds (8 sheds of 500 sq.ft each) @ Rs 150/ sq.ft 4000 x 150 600000

2 Cost of store room, 200 sq ft @ Rs175/ sq ft 35000

3 Labor quarters, 150 sq ft, @ Rs200/sq ft 30000

4 Expenditure on water supply (overhead tank, bore and motor) 75000

5 Installation of electricity 50000

6 Cost of equipment (feeders, waterers, brooders etc) @ Rs12/bird 100000

TOTAL 890000

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RECURRING EXPENDITURE FOR 1ST 8 BATCHES:

1. Cost of chicks @ Rs 20/per chick

2. Insurance @ 4%

3. Cost of feed, 4kgs/bird, Rs 20/kg for 4080 birds

4. Cost of medicines, vaccines etc @ Rs.5/bird

5. Labor cost for 1 year @ Rs 5000/ month

TOTAL

TOTAL COST OF THE PROJECT: 890000+489600 = 1379600

Sources of Fund

Owners Contribution 4000000

Start-up 1st Year

2nd

Year 3rd Year 4th Year 5th Year

80000 400000 520000 520000 520000 520000

3200 16000 20800 20800 20800 20800

326400 1632000 2121600 2121600 2121600 2121600

20000 100000 130000 130000 130000 130000

60000 300000 390000 390000 390000 390000

489600 2448000 3182400 3182400 3182400 3182400

27 | P a g e

BREAKEVEN ANALYSIS

Year Introduced sold price per batch Total price

1 40 33 45000 1485000

2 52 52 50000 2600000

3 52 52 55000 2860000

4 52 52 60000 3120000

5 52 52 65000 3380000

WASTE@ Rs.1/Bird

Year Units sold Price Total

1 40 500 20000

2 52 500 26000

3 52 500 26000

4 52 500 26000

5 52 500 26000

Year 1 Year 2 Year 3 Year 4 Year 5

Total revenue 1505000 2626000 2886000 3146000 3406000

Total cost 3827600 3182400 3182400 3182400 3182400

Profit /Loss -2322600 -556400 -296400 -36400 223600

28 | P a g e

Year 1 Year 2 Year 3 Year 4 Year 5

Total revenue 1505000 2626000 2886000 3146000 3406000

Total cost 3827600 3182400 3182400 3182400 3182400

Profit /Loss -2322600 -556400 -296400 -36400 223600

-3000000

-2000000

-1000000

0

1000000

2000000

3000000

4000000

5000000

BREAK EVEN CHART

Total revenue Total cost Profit /Loss

29 | P a g e

THANK YOU

BY: ABHIJEET VERMA

ROLL NO. NA13001

PGP-CEM, EDC XLRI