DEBAR UNIVERSITY

COLLEG OF NATURAL AND COMPUTAIONAL SIENCE

DEPARTMENT OF COMPUTER SIENCE

PREPARERD BY:- ID
1.BEREKET ELIYAS…………………..R/0126/2012E.C

1.MELESE BOGALE…………………..R/0126/2012E.C

3.DHABA BIRHANU…………………..R/0126/2012E.C

4.GETASEW ABEBAW…………………..R/0126/2012E.C

5.BETEHA TEJU…………………..R/0126/2012E.C
ETHIO-HOLLAND POULTRY FARM

Dessie, Ethiopia

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 Phone: +251912870476

Abadi Amare
Mobile +251912870476
August 26, 2014

Table of Contents page

Executive summary.....................................................................................................................................4
1. Description of the farm:......................................................................................................................5
2. Market Plan:........................................................................................................................................7
2.1. SWOT analysis:.............................................................................................................................8
2.2. Customer analysis:.......................................................................................................................9
2.3. Competitors Analysis:..................................................................................................................9
2.4. Marketing strategy:...................................................................................................................10
2.5. Pricing:.......................................................................................................................................11
2.6. Promotion:.................................................................................................................................11

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 2.7. Place (distribution channel):......................................................................................................11
3. Production Plan:................................................................................................................................13
4. Human Resource Plan:.......................................................................................................................16
5. Financial Analysis:..............................................................................................................................17
5.1 Investment cost...............................................................................................................................18
5.2 Income Statement...........................................................................................................................20
5.3. Cash Flow........................................................................................................................................22

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Executive summary

Poultry production is an emerging and important sector that has been contributing progressively
to our economy from the past decade. It is one of the fastest growing and most promising
industries with the brightest future in Ethiopia. This sector playing a very vital role in the
reduction of poverty, malnutrition and unemployment problem of our country.Decha Poultry
Farm business is privately owned starter farm which will be established in Bonga town south
wester district of Ethiopia. The project will specialize in the production and sale of eggs. The
project will essentially purchase ‘ready to lay’ pullets and raise them through their productive
cycle. The project owner identifies a suitable location for the project and has entered into
discussions in connection with leasing a farm. The farm will stocks pullets of Lohman Brown
breed chickens with raising capacity of 1200 heads of hens per annum in rented land with poultry
house and feed store. The purpose is to satisfy the customer by providing quality product (quality
eggs), maximize profitability. This farm will contribute on supplying quality product eggs to
meet the demand of the customers such as fast food restaurants, whole-sellers (local shops),
hotels, bakery and cafeterias, retailer (traders) and individual users. A market characteristic of
the poultry farm is not very much competitive in the area. The demand of the eggs and poultry
meat is very high but the supplier could not able to satisfy the demand of the customers and
consumers. With a total investment cost of € 24,523, this project earns a net profit of €2956,
€3546 and €4172 during first three years of production period respectively.

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1. Description of the farm:

Poultry is an emerging and important sector that has been contributing progressively to our
economy from the past decade. Poultry is one of the fastest growing and most promising
industries with the brightest future in Ethiopia. This sector playsa vital role in the reduction of
poverty, malnutrition and unemployment problem of our country.

Unity Poultry Farm is new starter of poultry business farmowned by the young candidate
veterinarians who will have degree in veterinary medicine in the next year and now we are doing
our DVM thesisin Kombolcha and dessie.The project will specialize in the production and sale
of eggs through the Dessie town and other town located closer to Dessie.

We have realized that there is great demand for eggs by hotels, bed and breakfast providers,
guest houses, whole sellers (local shops), Universities and other related entities. These entities
usually obtain their eggs from egg traders who collect eggs from far village markets and
customers are inconvenienced financially as well as time wise and their associated costs and
risks.

Unity Poultry Farm wishes to exploit the opportunities presented by engaging in the production
and sale of eggs. The project will begins by renting poultry house and purchasing equipments
and ‘ready to lay’ pullets and, which will be kept and nourished at the premises of the project
during the productive phase of their lifespan. The eggs produced will be collected, sorted and
thereafter sold and distributed to the target market of the project which primarily
encompasseswhole sellers (shops), fast food restaurants, hotels and bakery/pastry or burger
houses around Dessie town and also make an arrangement place of sell to individual
customers/consumers at the get of the farm. The purpose of this farm is to contribute on
supplying quality product eggs to meet the demand of the customers such as fast food
restaurants, whole-sellers (local shops), hotels, bakery and cafeterias, retailer (traders) and
individual users.

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Vision:
The vision of this farm is making U n i t y P o u l t r y F a r m the best supplier of q u a l i t y
p r o d u c t layer farm of the district by satisfying the customer by providing sufficient good
quality product eggs with affordable price.

Mission:
The mission of the project is to contribute towards promoting good healthy and safe food product
eggs for promoting a healthy well balanced eating nature within the society and maximize
profitability and ultimately adding value to the lives of the owner of the project.

Objectives:

Objective of the farm:

 To meet the demand of customer and built strong customer relationship.

 To create the employment opportunities for us and others.
 To contribute to the sustainable economic development of the country.
 Adding value to the lives of the ownerwith reasonable profitability.

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2. Market Plan:

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

from the villages into the towns for business and work as a result of rapid growth of
urbanization. There is also change of way of eating habit in the community like increasing use of
animal products like chicken eggs and meats, perhaps leaving fewer people in the main
agricultural production regions. Combined with the general growth in population, this situation
provides improved opportunities for livestock farming communities to grow and sell more of
their products, particularly in the cities or towns, earning more money and being able to raise
standards of living.

Since Dessie town is also the center of SouthWollo Zone, so many meeting and training
programs are carried out in this town and there are a lot of projects are starting (opening) and this
increase population in the town for working in the companies (projects) and for daily laborand
this give the opportunities for opening of many fast food restaurants, cafeterias, hotels and shops
(whole sellers). Thisin turn increase the demand of chicken and eggs verycomprehensivelyway
but there is insufficient suppliers are present in the area.

The marketing efforts will focus on identifying and understanding the ever changing needs and
preferences of the customers in order to satisfy them. The marketing mix will drive the customer
value proposition of the project. The following is an account on the product, price, promotion
and place (distribution) that will be applied to the selected market segment.

The main products of the project will be the eggs produced by the layer birds. The project will
produce good quality eggs and sold by providing the right nutrition and environment condition
for the layers. Other products to be sold by the farm will include the manure resulting from
chicken droppings. Manure is a desirable fertilizer that is highly wanted after by farmers and
piggery farms. Additionally, the project will sell hens (spent layers) that become unproductive
(around 72 weeks).
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 Marketing arrangements will be made with whole sellers (local shops), restaurants, cafeterias,
bakeries, local hotels, groceries,merchant and higher income families and regular users. This will
ensure regular orders for the eggs.

Whole sellers
End users

Rearer Retailers
Layer farm
Farm Restaurants, Hotels

Cafeterias, bakeries

Regular users

2.1. SWOT analysis:

Strength:
 High interest and motivation to the sector
 Skill of diseases control and prevention, vaccination ability
 Quality oriented
 Service oriented
 Seeking opportunities in change
 Convenience: this in terms of being in close proximity to the customers. Customers
usually purchase from suppliers in close proximity to their business in order to cut down
on transportation costs 
Weakness:
 Financial resource shortage
 Qualified labor shortage (specialized in poultry husbandry management)
 Biosecurity problems and lack of land for construction of the farm
Opportunities:
 Good infrastructure in the area (good road facility for transport goods and products,
24hours electricity supply, telecommunication…etc)

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  Financial support loan opportunities= Development Bank, Amhara Microfinance Office,
Investment Office and Commercial Bank of Ethiopia.
 Government is of the view that strengthening competitiveness and promotion of small
and medium-sized enterprises and cooperatives remain cornerstones for the growth of the
economy and the creation of well-mannered work opportunities.
 Great demand for eggs by bakeries/pastries and breakfast providers (fast food
restaurants), hotels, guest houses, whole sellers and other related entities.
Threats:
 Competition of other suppliers of eggs and birds
 The threat from suppliers – in the case of feed, there is a threat of rising feed costs
 Fluctuation in demand, especially the fasting periods bring down consumption radically
 Outbreak of Diseases
 Cold Weather conditions of the area

2.2. Customer analysis:

As we all know that, chicken and egg are very nutritious food items. People use them in the
preparation of products such as chicken burgers, fried egg, egg soup among, Ice Cream and
baked products – these add quality to the lifestyle of consumers. So, there is a great prospect to
being succeeded as being act as producer. The farm will distributed its products two times in a
week to whole sellers (shops) 20%, fast food restaurants25%, hotels10%, bakeries/pastries15%,
retailers 20% and household customers5% (high income families) etc and selling at the get of the
farm5%.

2.3. Competitors Analysis:

It is essential for every business organization to identify its existing competitorstheir skill,
strength and as well as weakness.Direct competition will emanate from small and emerging players in
the poultry industry that are in the project area and target a similar market as the project. There are one
large and three small scale layer poultry farms around Dessie town and they are operating egg
production as a second farming next to hatchery andgrowing pullets.
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Although there are many existing competitors in the area for marketing like many egg traders
which are collecting eggs from different village markets, there is fail to fulfill the customers
demand supplying with quality product in the perspective of service. Concerning the traders in
the area who are collecting the products (eggs) from different local village markets, since they
are collecting eggs distant from the town, eggs are not fresh and due to high temperature during
transportation and lack of cool room for storage, there is high tendency of incubation of eggs,
consumers preference buying from these traders is under question and inconvenienced
financially as well as time wise by transportation activities and their associated costs and risks.
So,it is not much difficult to compute for market for this farm by providing its product eggs in its
freshness, cleanness and good quality, cost wise as well as time wise to the customers and also
this is a good opportunity to handle these traders as one of the customer of the farm.

2.4. Marketing strategy:

 Distributing the products eggs and spent layers direct to the customers.
 Will ensure quality product with reasonable price.
 Always search for new quality factors related to the farm products thatcustomers wish to
see in the product.
 Provide training and awareness creation for the customers on the production strategies
which the farm using. This can help to promote farm product easily.
 Sell graded or classified eggs. Proper grading or classification can attract all types of
consumers. This would also enable the consumers to make purchasing decisions on the
egg quality (clean) and size at hand.

2.5. Pricing:

Pricing is the most important factor for this business to compete with competitors tosustain in the
market. Pricing method of the project is simple, only sale it’s product with a limited profit that
means the sale price includes cost plus limited profit. It alsoprovide price discount on a bulk
amount of product and also offer different types of price and product discount in different types
of festival.
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2.6. Promotion:

Advertising is essential for the success and growth of poultry businesses as it will help in order
to successfully identify and attract potential customers as well as build good relationship with
them. It is advisable for farmers to promote their products so that they will appear to be different
to others and appeal to as many people as possible. This project also has somepromotional
strategy of advertising through:
 Use of direct contact and call,
 Preparing a leaflet,
 Poster etc.
So that people can easily know about our business. This will increase the demand for our
products.

2.7. Place (distribution channel):

The farm will use personal salesrepresentative for selling theeggs. The sales representative will
communicate through direct contact and callingwith customers and collect the orders. As per
their order we will directly supplyeggs and chickens to the customers by our farm transportation
(this will be done by contract base agreement with available local transport service owners).

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3. Production Plan:

Poultry farming today is a huge business that issplit into several operations including hatcheries,
pullet (rearing) farms for egg laying, broiler farm forpoultry meat production andlayer farms
foregg production. This business plan focus on newly established layer farm raises Lohman
Brownbreed layers for table eggs production.

The farm plans to start by buying new stockof1000Lohman Brown breedspullets from
Kombolcha Poultry Breeding and Multiplication Center which is found in Kombolcha town. The
Lohmann Brown is an early maturing hybrid and we should be transferred at their 15 weeks of
age to the laying house early enough to avoid stressing the birds as they come into laying point.
The farmwillbe started buyingand stocking with pullets of 15 weeks of age4 weeks before their
laying point in house withdeep litter floor housing systemwith a flooring space of 4birds/m2 in
250 squ. meter room area. Ventilation controls or climate control will be through natural
ventilation system via wire mesh window and insulation system will be constructed from locally
available materials (bamboo tree) and shade trees to maintain optimum internal house
temperature through the year and four hours of extra lighting to the natural day light by artificial
lighting bulb per day will be used.

Teff straw, wheat straw or wood-shavings are available litter materials in the area. The litter
material in the layer house will be always kept loose, dry and turned every week. Any wet
litter/droppings etc. will be removed and replaced with fresh/clean dry litter.

Good quality concentrate poultry feed will also be purchased from Kombolcha Poultry Breeding
and Multiplication Center. In this case,a total of 28 round feeder of ∅45cm and the feeding space
will be 4cm per birds and feed will be given twice in a day and feed consumption per hen housed
is calculated as 116gm of well balanced feed per day. And also fresh, cool and clean drinking
water will be provided for the chickens from the town’s water supplying source where there is no
problem of water supply source in the area and water will be stored in tanks that are not exposed

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to hot sun especially in summer. Water will be always available at birds. The farm will use 9
plastic round drinkershaving a size of ∅of 35cm for adequate watering space per bird (1cm/bird).
The reason of using plastic drinker is that, they will not rust therefore they will last longer.
Provision of good quality water for the chickens is mandatory. This can be achieved by keeping
thedrinkers clean through hanging and cleaning it every day and adjusting the water level in it.

A total of 133 laying nest boxes will be provide and one compartment (30 cm wide, 30 cm deep
and 35 cm height) for every 7 birds. Nest boxes (shelves) willbe arranged at the middle length of
the house and placed about 50 cm lifted above the floor and fitted with a landing platform or
perch for the birds to land on before entering the nest. Curtain will be used as the shade to keep
dark nests for encouraging laying eggs in the nest to reduce floor egg number and clean straw or
wood shavings will be used as nest box litter. Also a total of about 180 meter length perches will
be arranged in 7 rows having 24 meter length in the layer house which is 15cm of perching space
per bird is used.

Regular inspection of the stock is always essential and particularly in the period after housing to
ensure that all birds make the transition from rearing farm to laying farm successfully without
any undue stress that will affect their production potential. The health of the flock will be
maintained through:
 Checking daily the health and welfare of stock.
 Practicing good management: using good quality feed, clean water and litter.
 Keeping personal and house hygiene
 Using a good vaccination program.
 Keeping the farm and poultry house limited to visitors
 Keeping poultry sheds and surrounding areas free of vermin and snakes.
 Using all-in-all-out methods of management.

After every batch of spent layers are removed off farm (after 58 weeks of stocking or age of 72
weeks in this case), the dirty litter materials and manure will be removed, walls and floors will
be cleaned and disinfected with available disinfectant and also use insecticide spray and the
house will be ready for receiving next batch. This will take 3 weeks.

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The production facilities will include layer house with egg store and equipment store,one
separate feed store and one extra guard tool shed. The farm will start onrent land with chicken
house area of 0.2 hectare and by buying equipments. The equipments are feeders,drinkers,
thermometers,laying nest box, perches, egg trays and boxes, catching screen, Sprayer, scoop for
feed, weighing balance and other cleaning and hygiene equipments etc.

The production plan indicates the occupation cycle of 52 weeks (2weeks pre laying period,
48weeks production period and 2weeks for cleaning and disinfection) every batch every year
round. Assumptions per year operation of the farmare 7% of cumulative mortality 1000 x 7%=
930 hens at the end, 110gram feed per day per bird and a total of 247 eggs are the production
capacity per hen housed a total of . From the total egg production 97% and 3% 1st class and 2nd
class eggs respectively.Through this, the total feed required during the production period is
23964 Kg and it costs €0.27= € 11,646 and selling price 1st class egg €0.11 x 296777= €
32,460 and 2nd class eggs € 0.09 x 8229 =€ 723 and €4.3 x 1116= € 4,799 spent layers.

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4. Human Resource Plan:

In business human resources is one of the most important factors and have a bigrole in a business
organization. The owner of the farm will work as a manager of the farm and as human resource
manager where financial and administrative activities will be done by him. For maintaining
technical work, chickens (layers take care), feeding, cleaning drinkers, cleaning working
environments, collecting eggs, recording and reporting andreached the product to the desired
customers, the project will have one full time professional worker(at least diploma holder in
animal production) and also one guard during night. They should be skillful on their own field. If
additional skill and efficiency needed, training program will be arranged through collaboration
with Agriculture and Rural Development Office experts.

MAN POWER REQUIREMENTS

P o s i t i o n 201 2017
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G e n e r a l M a n a g e r 1 1
Human Resource (this role shall be carried out by the General
Manager)
Operations Officer (marketing and distribution will be carried by 3 3
them)
Animal health officers 3 3
S e c u r i t y G u a r d 1 1
T o t a 8 8
l

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5. Financial Analysis:

The egg production financial projections is an outline of the project key assumptions, a budget of
all the project’s requirement, summary of profit and loss, cash-flow and breakeven. The key
assumptions of production could vary from project to project and project location. They include
the project size, production level, costs, prices and loan. The project would begin by buying of
pullets (layers) that are ready to produce eggs. Pullets of the age 15 weeks shall be purchased
from reputable suppliers. The project will purchase 1000 point of lay pullets which will be kept
as laying hens for a period of 52 weeks occupation cycle and then sold as spent layers. The
assumption of point of lay for the project is at their 20 weeks of age.

The financial analysis of this farm is based on the data presented in the previous chapters and the
following assumptions:-

Construction period 3 months

Source of finance loan from Commercial bank of Ethiopia
Loan repayment period 2 years
Bank interest 8 %
Repayment loan annually
The total investment cost of the project including working capital is estimated at ETB 350,000

Based on the projected profit and loss statement, the project will generate a profit throughout its
operation life. Annual net profit after tax will grow from same number of birdsfrom 2178 to
3297 Euro during the life of the project. And also the project can create employment for at least
3 persons on farm. In addition to supply of its product to customers/consumers needs, the project
will generate 2791 Euro in terms of tax revenue during these three years.

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5.1 Investment cost

B a n k S h e e t

m o n e y n e e d e d f o r :    
R e n t h o u s e + l a n d € 1,622
   
e q u i p m e n t   € 2,270

s h o r t t e r m m o n e y    
   
p u r c h a s e o f p u l l e t s € 4,692  
p u r c h a s e o f f e e d € 11,646  
Other paid costs (health care,elect., water, litter, etc) € 480  
Hygiene/biosecurity materials € 172  
L a b o r € 3,141  
Constant stock of the feed for emergency reasons € 300  
Constant amount of cash at hand € 200  
T o t a l € 20,630
     
T o t a l l o a n   € 24,523

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1 2 0 0 l a y e r u n i t

a n n u a l c o st s
r e n t h o u s e + l a n d r e n t € 1,406
M a i n t e n a n c e € 1 5 0
i n t e r e s t 8 . 5 % € 6 6
€ 1,622
e q u i p m e n t € 2 , 2 7 0
de p re c ia ti o n 3 years € 757
i n t e r e s t 8 . 5 % € 9 6
mainte nanc e 2 % € 4 5
€ 899
p u r c h a s e o f p u l l e t s € 3 . 9 1200 pullets € 4,692
F e e d € 0 . 2 7 43133 k g € 11,646
other paid costs (health care, water, litt,) € 0 . 4 0 1200 d o s e s € 480
Hygiene/biosecurity materials € 172
S a l a r y / l a b o u r c o s t € 3,141
Constant stock of the feed for emergency reasons € 300
Constant amount of cash at hand € 200
t o t a l € 20,630
costs of short term money
de p re c ia ti o n 3 years € 6,877
i n t e r e s t 8 . 5 % € 8 7 7
€ 7,754

s e l l i n g
selling of 1st class eggs € 0.11 97% 309601 € 33,258
selling of 2nd class eggs € 0.09 3 % 9 5 7 5 € 842
selling o f spent layers € 4.30 1 1 1 6 € 4,799
s e l l i n g m a n u r e € 78.00 € 7 8

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5.2 Income Statement

a n n u a l c o s t s   annual income  
       
F i x e d c o s t s      
H o u s e + l a n d r e n t € 1,622 selling of eggs € 34,099
    selling of spent layers 4 7 9 8 . 8
e q u i p m e n t € 899 m a n u r e € 7 8
       
V a r i a b l e c o s t s      
p u r c h a s e o f p u l l e t s € 4,692    
f e e d € 11,646    
other paid costs (health care, water, litt, ) € 480    
Hygiene/biosecurity materials € 172    
S a l a r y / l a b o r c o s t € 3,141    
Constant stock of the feed for emergency reasons € 300    
Constant amount of cash at hand € 200    
b a n k i n t e r e s t s h o r t € 877 t o t a l € 38,976
S e l l v a t % € 5,115    
t o t a l c o s t s € 26,622    
       
       
p r o fi t € 12,354    

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5.3. Cash Flow

Year 1 Year 2 Year 3

N u m b e r o f l a y e r s 1 2 0 0 1 2 0 0 1 2 0 0
S a l e
s e l l i n g o f e g g s 34099 36145 38314
s e l l i n g o f s p e n t l a y e r s 4 7 9 9 5 0 8 7 5 3 9 2
s e l l i n g m a n u r e 7 8 8 3 8 8
     
t o t a l s a l e 38976 41315 43794

F i x e d c o s t
l a n d + h o u s e 1 6 2 2 1 6 2 2 1 6 2 2
e q u i p m e n t 8 9 9 8 9 9 8 9 9
V a r i a b l e c o s t s
p u r c h a s e o f p u l l e t s 4 6 9 2 4 9 7 4 5 2 7 2
f e e d 11646 12345 13085
oth er pa id cost s (he alth care, wat er, litt , ) 4 8 0 5 0 9 5 3 9
S a l a r y / l a b o r c o s t 3 1 4 1 3 3 2 9 3 5 2 9
Hygiene/biosecurity materials 1 7 2 1 8 2 1 9 3
Constant stock of the feed for emergency reasons 3 0 0 3 1 8 3 3 7
Constant amount of cash at hand 2 0 0 2 1 2 2 2 5
Va ria b le cost s of in t e re s t 8 7 7 9 2 9 9 8 5
S e l l v a t % 5 1 1 5 5 4 2 2 5 7 4 7
     
t o t a l c o s t s 29143 3 0 8 9 2 3 2 7 4 5

G r o s s p r o fi t 9 8 3 3 10423 11049
L o a n r e p a y m e n t 6 8 7 7 6 8 7 7 6 8 7 7
N e t P r o fi t 2956 3546 4172

I n fl a ti o n r a t e 6 %
M o r t a l i t y r a t e ( c u m ) 7 %

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