Pre-Feasibility Study: (Calf Fattening Farm)

Pre-Feasibility Study
(Calf Fattening Farm)
Small and Medium Enterprises Development Authority

Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
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Lahore
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Punjab Sindh Khyber Pakhtunkhwa Balochistan
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Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
May, 2014
Pre-Feasibility Study Calf Fattening Farm (Rs.1.54 Million)
Table of Contents
1. DISCLAIMER .......................................................................................................................................... 2
2. PURPOSE OF THE DOCUMENT ......................................................................................................... 3
3. INTRODUCTION TO SMEDA .............................................................................................................. 3
4. INTRODUCTION TO SCHEME ........................................................................................................... 4
5. EXECUTIVE SUMMARY ...................................................................................................................... 4
6. BRIEF DESCRITION OF PROJECT & PRODUCT ........................................................................... 4
7. CRITICAL FACTORS ............................................................................................................................ 5
8. INSTALLED AND OPERATIONAL CAPACITIES ........................................................................... 5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ..................................................................... 5
10. POTENTIAL TARGET MARKET / CITIES..................................................................................... 5
11. CALF FATTENING PROCESS .......................................................................................................... 6
12. PROJECT COST SUMMARY............................................................................................................. 7
12.1 PROJECT ECONOMICS .............................................................................................................................. 7
12.2 PROJECT FINANCING ............................................................................................................................. 8
12.3 PROJECT COST ...................................................................................................................................... 8
12.4 SPACE REQUIREMENT ........................................................................................................................... 8
12.5 MACHINERY, EQUIPMENT AND FURNITURE .......................................................................................... 9
12.6 RAW MATERIAL REQUIREMENTS .......................................................................................................... 9
12.7 HUMAN RESOURCE REQUIREMENT ..................................................................................................... 10
12.8 REVENUE GENERATION ...................................................................................................................... 10
12.9 OTHER COSTS ..................................................................................................................................... 10
13. CONTACTS OF SUPPLIERS AND CONSULTANTS ................................................................... 11
14. ANNEXURE ......................................................................................................................................... 12
1.1 INCOME STATEMENT ................................................................................................................... 12
14.2 BALANCE SHEET ............................................................................................................................ 13
14.3 CASH FLOW STATEMENT............................................................................................................. 14
14.4 USEFUL PROJECT MANAGEMENT TIPS..................................................................................... 15
14.5 USEFUL LINKS .................................................................................................................................... 16
15. KEY ASSUMPTIONS ......................................................................................................................... 17
SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST - 1
1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a
general idea and information on the subject. Although, the material included in
this document is based on data / information gathered from various reliable
sources; however, it is based upon certain assumptions which may differ from
case to case. The information has been provided on ‘as is where is’ basis without
any warranties or assertions as to the correctness or soundness thereof.
Although, due care and diligence has been taken to compile this document, the
contained information may vary due to any change in any of the concerned
factors, and the actual results may differ substantially from the presented
information. SMEDA, its employees or agents do not assume any liability for any
financial or other loss resulting from this memorandum in consequence of
undertaking this activity. The contained information does not preclude any further
professional advice. The prospective user of this memorandum is encouraged to
carry out additional diligence and gather any information which is necessary for
making an informed decision; including taking professional advice from a
qualified consultant / technical expert before taking any decision to act upon the
information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk
2. PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential
entrepreneurs in project identification for investment. The project pre-feasibility
may form the basis of an important investment decision and in order to serve this
objective, the document / study covers various aspects of project concept
development, start-up, production, marketing, finance and business
management.
The purpose of this document is to facilitate potential investors in Calf Fattening
Farm by providing them with a general understanding of the business with the
intention of supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes
such reports reveal certain thumb rules; best practices developed by existing
enterprises by trial and error, and certain industrial norms that become a guiding
source regarding various aspects of business set-up and it’s successful
management.
Apart from carefully studying the whole document, one must consider critical
aspects provided later on, which form the basis of investment decisions.
3. INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was
established in October 1998 with an objective to provide fresh impetus to the
economy through development of Small and Medium Enterprises (SMEs).
With a mission “to assist in employment generation and value addition to the
national income, through development of the SME sector, by helping increase
the number, scale and competitiveness of SMEs", SMEDA has carried out
sectoral research to identify policy, access to finance, business development
services, strategic initiatives and institutional collaboration and networking
initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment
has been a hallmark of SME facilitation by SMEDA.
Concurrent to the pre-feasibility studies, a broad spectrum of business
development services is also offered to SMEs by SMEDA. These services
include identification of experts and consultants and delivery of need based
capacity building programs of different types in addition to business guidance
through help desk services.
4. INTRODUCTION TO SCHEME
‘Prime Minister’s Youth Business Loans’ program, for young entrepreneurs, with
an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide
subsidised financing at 8% mark-up per annum for one hundred thousand
(100,000) beneficiaries, through designated financial institutions, initially by the
National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).
Loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years inclusive of
1 year grace period, and a debt : equity of 90 : 10 will be disbursed to SME
beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwa,
Balochistan, GilgitBaltistan, Azad Jammu & Kashmir and Federally Administered
Tribal Areas (FATA).
5. EXECUTIVE SUMMARY
In calf fattening business, calves are raised on nutritionally balanced feed to get
targeted weight gain in a specified time. These calves are grown in groups and
each batch stays on farm for a period of 120 days. The expected live body weight
gain ranges between 700 - 850 grams / day. Higher yields are achievable with
better farm management, and by selecting better quality breeds.
Calves are raised in rural and semi-urban areas and sold in urban markets
normally in livestock markets (Mandies). A farm of 120 calves raised in 3 batches
per annum, 40 calves per batch, is suggested in this pre-feasibility study which
will start its operations at 100% production capacity from first year. An estimated
investment of Rs 1.54 million is required, out of which capital investment is Rs.
0.19 million and working capital is Rs. 1.36 million.The Internal Rate of Return
(IRR), Net Present Value (NPV) & payback period of the project are 43%, Rs.
5.91 million and 3.46 years, respectively. The project is proposed to operate as a
sole-proprietorship.
6. BRIEF DESCRITION OF PROJECT & PRODUCT
Calf fattening venture suggested in this study is based on raising 120 calves per
year at the farm premises. The calves, preferably males, between 9-12 months of
age, are fed on nutritionally balanced concentrate ration or Total Mixed Ration
(TMR) as major source of energy and protein for a period of 120 days to get
higher body weight gain. Live weight of these calves is around 100 kg. If these
calves are fed properly on formulated fattening feed, an additional weight up to
96-100 kg can be achieved. The daily weight gain varies between 700 to 850
grams depending on the quality of feed given to them. The subject business can
be set-up at any appropriate location with easy availability of fodder and water.
There is a year-round market, however, the demand increases before occasions
like Eid-ul-Fitr and Eid-ul-Azha. On these occasions, well fed animals are sold at
a premium price higher than usual weight based price. The proposed legal
structure of the business entity is sole proprietorship.
7. CRITICAL FACTORS
• Background knowledge and related experience of the entrepreneur in calf
fattening farm operations.
• Application of good husbandry practices such as timely feeding, watering
and vaccination to ensure animal’s health and disease-free environment.
• Awareness about the supply and demand of calves in the market both for
beef purpose and sacrificial purpose.
• Efficient marketing of the project and bulk supply to wholesalers.
8. INSTALLED AND OPERATIONAL CAPACITIES
In this pre-feasibility study, 120 young calves of 9 to 12 months of age are raised
per annum in 3 production batches; each having 40 calves, raised for 120 days
on ‘Feed Lot Fattening’ system. The mortality is assumed to be 1-3% per annum.
The project will operate at 100% of its installed capacity from the first year of
production, hence 120 calves in 3 batches; each having 40 calves would be
raised every year.
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT
Metropolitan cities like Lahore, Multan, Bahawalpur, Faisalabad, Rawalpindi,
Karachi, Hyderabad, Quetta, Ziarat, Peshawar, D.I. Khan etc. are major markets
of meat. The rural and peri-urban areas around these and other major cities
across the country with abundant water and availability of fodder make a better
choice for such farming; provided access to livestock mandies and veterinary
services is ensured.
10. POTENTIAL TARGET MARKET / CITIES
Apart from Sialkot, Jhang, Rahim Yar Khan, Bahawalnagar, Bahawalpur, Sahiwal
in Punjab, livestock markets in peri-urban locations of all cities of other provinces
such as Karachi, Hyderabad, Nawabshah, Larkana, Dadu, Qilasaifullah, Panjgur,
Pishin, Quetta, Bannu, LakiMarwat, Kohat, Peshawar are primary markets, in
addition to specially arranged locations for larger cities during Eid festival in the
urban markets. Normally animals are sold on ‘Live Body Weight’ basis; the price
of fattened calves varies according to animals’ health and market conditions.
Following are some of the target clients for farmers;
• Livestock traders
• Butchers
• Contractors
• Slaughter house owners

11. CALF FATTENING PROCESS
• Selection of animals based on breed and age: There is no beef breed
developed in country. It is recommended that calves (preferably male) of local
cattle breeds such as Sahiwal, Cholistani and Red Sindhi may be selected,
however, calves of Tharparkar, Rojhan, Dhanni, Lohani, Bhagnari may also
be considered for fattening purpose. For sacrificial purpose, the cross bred
calves of Brahaman, Angus and Charolais etc. are also considered. The
Sahiwal and Cholistani male calves are raised for good meat production and
dressing percentage i.e. 55%. After fattening, the fat to muscle composition is
also acceptable. The carcass weight is desirable by meat traders and
exporters.
• Selection of animals with excellent body score and health conditions: initial
live body weight should be around 100 kgs at 9-12 months of age. Little
emaciated animals may also be accepted for fattening as research shows that
these animals respond efficiently in terms of feed efficiency.
• Housing: A good housing leads to good management practices and ultimately
optimum production. Generally, housing should be:
 Less expensive
 Well ventilated, comfortable and dry with hygienic environment
 Easy drainage and removal of dung, urine and waste material
 Protective from extreme environmental conditions
 Maximum sun exposure: axis of length to be east to west
 Availability of feed and water for 24 hours
 Planned so that future expansion may be possible when required
• Feeding: Adequate weight gain through the use of balanced feed purchased
from well reputed companies or formulated accordingly. Animal should be fed
Total Mixed Ration (TMR) @ 3-3.5 % of live body weight. Additionally, urea
molasses blocks and salt blocks can help in better daily weight gains. Green
fodder is offered at 5% of body weight (wet basis) to every animal.
• Watering: Daily supply of clean drinking water in clean troughs i.e. 15 to 20
liters of water consumption / animal / day maintains the production capacity of
the animal. Due to TMR and salt offered, animal tends to consume more
water.
• Disease management: De-worming for endo-parasitic infestations is
necessary in each batch shortly after arrival at farm. Timely vaccination
against infectious diseases should be done as a prophylactic measure. At a
well-managed farm, mortality should not exceed 2-3 % per annum in the
fattened animals. Following is a tentative vaccination schedule;
Table 1: Tentative Vaccination Schedule
Disease Vaccine Time for vaccination Dose/ Administration

Foot & Mouth FMD (VRI) February/March and 5 ml sub cut.
Disease (FMD) September/October
Black Quarter BQ March/April 5 ml sub cut.
Haemorrhagic HS (VRI) May/June & 5 ml / 300 kg body wt

Septicemia (HS) November/December sub cut.
Anthrax Anthrax August 1 ml sub cut.
(VRI: Veterinary Research Institute, Lahore)
• Record keeping for each batch: The animals should be ear-tagged on arrival
at the farm. The information to be recorded includes breed of animal, initial
live weight of animal, age of animals, date of purchase etc. The records for
regular weight gain, medication and de-worming etc. are also important.
• Culling: Selection of good productive animals and regular culling of
uneconomical animal.
• Regular technical assistance from the livestock professionals and experts.
12. PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial
viability of ‘Calf Fattening Farm’ under the ‘Prime Minister’s Youth Business
Loan’. Various cost and revenue related assumptions along with results of the
analysis are outlined in this section.
12.1 Project Economics
Following table shows Internal Rate of Return, Net Present Value and Payback
Period;
Table 2: Project Economics
Description Details
Internal Rate of Return (IRR) 43%
Payback Period (yrs) 3.46
Net Present Value (NPV) 5,910,634
12.2 Project Financing

Following table provides details of the equity required and variables related to
bank loan;
Table 3: Project Financing
Description Details
Total Equity (10%) Rs.154,432
Bank Loan (90%) Rs. 1,389,890
Markup to the Borrower (%age/annum) 8%
Tenure of the Loan (Years) 8
Grace Period (Year) 1
12.3 Project Cost
Following table provides details of investment requirement;
Table 4: Project Investment
Capital Investment Amount (Rs.)
Machinery & Equipment 149,500
Furniture & Fixtures 5,000
Pre-operating costs 32,192
Total Capital Costs 186,692
Raw Material Inventory (Incl. cost of calves) 1,137,298
Upfront Farm Rent (4 months) 53,500
Equipment Spare parts Inventory 3,305
Cash 163,527
Total Working Capital 1,357,630
Total Investment 1,544,322
12.4 Space Requirement
Following table shows calculations for project space requirement;
Table 5: Space Requirement
Description Space Requirements (Sq.ft)
Management building 100
Shed for animals 1,000
Store (feed, medicines etc.) 150
Attendant’s room 100
Open paddock 2,000
Dipping bath 50
Total Infrastructure 3,400
The shed would be acquired on monthly rent of approximately Rs. 13,000 per
month.
12.5 Machinery, Equipment and Furniture
Following table provides list of machinery, equipment and furniture required for
the proposed calf fattening farm;
Table 6: Machinery, Equipment& Furniture
Rate per unit
Description No. Amount (Rs.)
(Rs.)
Chopper 1 30,000 30,000
Water Pump with Tank 1 30,000 30,000
Movable weighing scale (4’x6’
platform with the capacity of 1 50,000 50,000
1500 Kg)
Feeding Mangers 4 5,000 20,000
Tubs 3 1,500 4,500
Hand Carts 2 5,000 10,000
Lump
Miscellaneous Farm Utensils 5,000 5,000
sum
Lump
Furniture 5,000 5,000
sum
Total 154,500
12.6 Raw Material Requirements

Following table shows raw material requirements in first year of production;
Table 7:Cost of Material
Description Unit Rate (Rs.) No. Total Rs.
Cost of calves Per calf 14,500 120 1,740,000
Feed (Total Mixed Ration)
Per calf 11,925.5 120 1,431,065
per Calf
Green Fodder per Calf Per calf 1,807 120 216,828
Vaccination / Medication Per calf 200 120 24,000
Total Cost 3,411,893
Note: Figures have been rounded off to the nearest decimal place.
12.7 Human Resource Requirement

Two semi-skilled persons (including owner of the project) are required for
performing routine farm operation and husbandry practices;
Table8: Human Resource Requirement
Description No. Monthly Salary Annual salary

(Rs.) (Rs.)
Farm Supervisor/ owner 1 12,000 144,000
Farm labour 1 10,000 120,000
Total 2 264,000
Note: One trained person can easily handle 35-40 calves.
12.8 Revenue Generation

The revenues generated in first year of production are given in following table;
Table 9: Revenue Generation

Sale Price First Year
Revenue in
Description Unit per Unit Production
Year 1 (Rs.)
(Rs.) (Units)
Sale of Fattened
Per calf 35,350 119* 4,206,650
calves
Total Revenue 4,206,650
*Total 120 calves divided in three batches, each having 40 in first year of production with mortality lossof 1
calf @ 3%per annum
Figures have been rounded off to the nearest decimal place
12.9 Other Costs

An essential cost to be borne by the farm is vaccination and medication cost
which is Rs. 200 per calf. Electricity expense is assumed to be Rs. 300 per calf
which is Rs. 35,700 per annum.
The transportation cost for bringing the calves to farm is Rs. 20,000 per herd,
hence, Rs. 60,000 per annum. The communication expense is assumed to be
Rs. 6000 per annum.
13. CONTACTS OF SUPPLIERS AND CONSULTANTS

Table 10: Contacts of Suppliers and Consultants
Feed Suppliers Consultants
Hi-Tech Feeds (Pvt.) Ltd. Dr. M. Sarwar
1-A, Shadman Chowk Jail Road, Lahore Dean, Faculty of Animal Husbandry
Phone : +92-42-37564503 Uni. Of Agriculture, Faisalabad
Ph: 041-9920161-70
ICI Pakistan Cattle Feed Prof. Dr. Muhammad Younas
63-Mozang Road Lahore Faculty of Animal Husbandry, University
Ph: 042-36370042 of Agriculture, Faisalabad, Pakistan
Ph: 041-9200161-170
National Feeds Ltd. Dr. Shaukat Ali Bhatti
171 Shadman – II Lahore. Institute of Animal Nutrition and Feed
Ph: 042 37551405-8 Technology,
Uni. Of Agriculture, Faisalabad.
Ph: 041-9920161-70
Alhalal Wanda Prof. Dr. Abdul RaziqKakar
Al-Halal Livestock Concern Company Lasbela University of Agriculture, Water
Super High Way, Jahanian and Marine Sciences, Uthal, Lasbela,
Ph: 065-2002373 Balochistan.
Ph: 0853-610921
Big Feed (PVT) Ltd. Dr. Tanveer Ahmad
2-A, Ahmad Block, New Garden Town, Pir Mehr Ali Shah Arid Agriculture
Lahore University, Rawalpindi.
Ph: 042-35835374-35835373 Ph: 051-9290115
Anmol Vanda Livestock and Dairy Development
c/o Livestock and Dairy Development Department, Govt. of Punjab,
Department, Govt. of Punjab, 16-Cooper 16-Cooper Road, Lahore.
Road, Lahore Toll free: 0800-78685, 0800-78686
Free Landline: 0800-78685, 0800-78686
Livestock Mandies
The animals may be procured from local calf breeders and livestock mandies
scheduled in different districts such as Pattoki, Okara, Bahawalnagar, Lodhran,
Vehari, Khanewal, Arifwala, Pakpattan etc. as per scheduled by Livestock and Dairy
Development Department, Govt. of The Punjab Lahore. Free Landline: 0800-78685,
0800-78686
Meat Contractors/ Processors
Mr. Muhammad YounusQureshi Punjab Agriculture and Meat Company
Chairman (PAMCO)
Red Cow Meat Products of Pakistan 5/8 Shaheen Complex, Egerton Road
125/ 13-B-1, Township, Lahore Lahore
Ph: 042-35112603 Ph: 042-36370661
14. ANNEXURE
1.1 INCOME STATEMENT
Statement Summaries SMEDA

Income Statement
Rs. in actuals
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 4,206,650 4,627,315 5,090,047 5,599,051 6,158,956 6,774,852 7,452,337 8,197,571 9,017,328 9,919,061
Cost of Goods Sold
Feed & Vaccination Cost 1,671,893 1,755,487 1,843,322 1,935,482 2,032,304 2,133,895 2,240,614 2,352,591 2,470,208 2,593,743
Cost of Calves 1,740,000 1,827,000 1,918,350 2,014,268 2,114,981 2,220,730 2,331,766 2,448,355 2,570,772 2,699,311
Direct Labor 264,000 290,400 319,440 351,384 386,522 425,175 467,692 514,461 565,907 622,498
Repair & Maintenance 9,917 10,413 10,933 11,480 12,054 12,656 13,289 13,954 14,651 15,384
Utilities 35,700 39,270 43,197 47,517 52,268 57,495 63,245 69,569 76,526 84,179
Total Cost of Sales 3,781,509 3,985,570 4,201,392 4,429,587 4,671,060 4,926,528 5,197,012 5,483,356 5,786,713 6,108,194
Gross Profit 425,141 641,745 888,655 1,169,464 1,487,896 1,848,324 2,255,325 2,714,215 3,230,615 3,810,866
General administration & selling expenses

Administration expense - - - - - - - - - -
Rental expense 160,500 176,550 194,205 213,626 234,988 258,487 284,336 312,769 344,046 378,451
Utilities expense - - - - - - - - - -
Travelling & Comm. expense (phone, fax, etc.) 6,000 6,300 6,615 6,946 7,293 7,658 8,041 8,443 8,865 9,308
Depreciation expense 15,450 15,450 15,450 15,450 15,450 15,450 15,450 15,450 15,450 15,450
Amortization expense 6,438 6,438 6,438 6,438 6,438 - - - - -
Subtotal 188,388 204,738 222,708 242,460 264,170 281,595 307,826 336,662 368,361 403,209
Operating Income 236,752 437,007 665,946 927,004 1,223,727 1,566,729 1,947,499 2,377,553 2,862,254 3,407,658
Other income - - - - - - - - - -
Gain / (loss) on sale of assets - - - - - - - - - -
Earnings Before Interest & Taxes 236,752 437,007 665,946 927,004 1,223,727 1,566,729 1,947,499 2,377,553 2,862,254 3,407,658
Interest expense 114,964 106,121 93,344 79,509 64,530 48,313 30,753 11,742 - -
Earnings Before Tax 121,788 330,885 572,602 847,495 1,159,196 1,518,416 1,916,745 2,365,812 2,862,254 3,407,658
Tax - - 17,260 49,624 96,379 151,183 230,849 320,662 438,063 574,414

NET PROFIT/(LOSS) AFTER TAX 121,788 330,885 555,342 797,871 1,062,817 1,367,233 1,685,897 2,045,150 2,424,191 2,833,244
Balance brought forward 121,788 452,673 1,008,015 1,805,886 2,868,703 4,235,936 5,921,833 7,966,982 10,391,173
Total profit available for appropriation 121,788 452,673 1,008,015 1,805,886 2,868,703 4,235,936 5,921,833 7,966,982 10,391,173 13,224,417
Dividend - - - - - - - - - -
Balance carried forward 121,788 452,673 1,008,015 1,805,886 2,868,703 4,235,936 5,921,833 7,966,982 10,391,173 13,224,417
14.2 BALANCE SHEET

Balance Sheet
Rs. in actuals
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Assets
Current assets
Cash & Bank 163,527 377,243 453,064 727,683 1,216,726 1,940,043 2,927,743 4,197,430 5,786,203 7,979,538 13,597,004
Equipment spare part inventory 3,306 3,644 4,018 4,430 4,884 5,384 5,936 6,545 7,216 7,955 -
Raw material inventory 1,137,298 1,253,871 1,382,414 1,524,110 1,680,350 1,852,576 2,042,476 2,251,804 2,482,608 2,737,088 -
Total Current Assets 1,357,630 1,693,607 1,904,231 2,327,430 2,980,290 3,884,165 5,070,933 6,560,035 8,390,709 10,850,731 13,597,004
Fixed assets
Land - - - - - - - - - - -
Building/Infrastructure - - - - - - - - - - -
Machinery & equipment 149,500 134,550 119,600 104,650 89,700 74,750 59,800 44,850 29,900 14,950 -
Furniture & fixtures 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 -
Total Fixed Assets 154,500 139,050 123,600 108,150 92,700 77,250 61,800 46,350 30,900 15,450 -
Intangible assets
Pre-operation costs 32,192 25,754 19,315 12,877 6,438 - - - - - -
Total Intangible Assets 32,192 25,754 19,315 12,877 6,438 - - - - - -
TOTAL ASSETS 1,544,323 1,858,411 2,047,147 2,448,457 3,079,428 3,961,415 5,132,733 6,606,385 8,421,609 10,866,181 13,597,004
Liabilities & Shareholders' Equity

Current liabilities
Accounts payable - 192,301 204,630 217,855 232,046 247,286 263,659 281,261 300,194 320,576 218,155
Total Current Liabilities - 192,301 204,630 217,855 232,046 247,286 263,659 281,261 300,194 320,576 218,155
Other liabilities
Long term debt 1,389,890 1,389,890 1,235,411 1,068,155 887,064 690,994 478,706 248,859 - - -
Total Long Term Liabilities 1,389,890 1,389,890 1,235,411 1,068,155 887,064 690,994 478,706 248,859 - - -
Shareholders' equity
Paid-up capital 154,432 154,432 154,432 154,432 154,432 154,432 154,432 154,432 154,432 154,432 154,432
Retained earnings - 121,788 452,673 1,008,015 1,805,886 2,868,703 4,235,936 5,921,833 7,966,982 10,391,173 13,224,417
Total Equity 154,432 276,220 607,105 1,162,447 1,960,318 3,023,135 4,390,368 6,076,265 8,121,415 10,545,606 13,378,849
TOTAL CAPITAL AND LIABILITI 1,544,323 1,858,411 2,047,147 2,448,457 3,079,428 3,961,415 5,132,733 6,606,385 8,421,609 10,866,181 13,597,004
Note: Total assets value will differ from project cost due to first installment of leases paid at the start of year 0
- - - - - - - - - - -
14.3 CASH FLOW STATEMENT
- - - - - - - - - - -

Cash Flow Statement
Rs. in actuals
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating activities
Net profit - 121,788 330,885 555,342 797,871 1,062,817 1,367,233 1,685,897 2,045,150 2,424,191 2,833,244
Add: depreciation expense - 15,450 15,450 15,450 15,450 15,450 15,450 15,450 15,450 15,450 15,450
amortization expense - 6,438 6,438 6,438 6,438 6,438 - - - - -
Deferred income tax - - - - - - - - - - -
Equipment inventory (3,306) (339) (374) (412) (454) (501) (552) (608) (671) (740) 7,955
Raw material inventory (1,137,298) (116,573) (128,544) (141,695) (156,241) (172,226) (189,900) (209,328) (230,804) (254,480) 2,737,088
Accounts payable - 192,301 12,329 13,225 14,191 15,240 16,372 17,602 18,933 20,382 (102,421)
Other liabilities - - - - - - - - - - -
Cash provided by operations (1,194,103) 213,716 230,300 441,875 670,135 919,386 1,199,988 1,499,534 1,837,632 2,193,335 5,617,466
Financing activities
Change in long term debt 1,389,890 - (154,479) (167,257) (181,091) (196,070) (212,288) (229,847) (248,859) - -
Issuance of shares 154,432 - - - - - - - - - -
Purchase of (treasury) shares - - - - - - - - - - -
Cash provided by / (used for) financ 1,544,323 - (154,479) (167,257) (181,091) (196,070) (212,288) (229,847) (248,859) - -
Investing activities
Capital expenditure (186,692) - - - - - - - - - -
Acquisitions - - - - - - - - - - -
Cash (used for) / provided by invest (186,692) - - - - - - - - - -
NET CASH 163,527 213,716 75,821 274,619 489,044 723,316 987,700 1,269,687 1,588,773 2,193,335 5,617,466
Cash balance brought forward 163,527 377,243 453,064 727,683 1,216,726 1,940,043 2,927,743 4,197,430 5,786,203 7,979,538
Cash available for appropriation 163,527 377,243 453,064 727,683 1,216,726 1,940,043 2,927,743 4,197,430 5,786,203 7,979,538 13,597,004
Dividend - - - - - - - - - - -
Cash carried forward 163,527 377,243 453,064 727,683 1,216,726 1,940,043 2,927,743 4,197,430 5,786,203 7,979,538 13,597,004
14.4 USEFUL PROJECT MANAGEMENT TIPS

Technology
• Animal Selection: Selection of disease free animals with good breed
characteristics, body conditions and health.
• Feed, Vaccination and Medication: Should be procured from reputed and reliable
sources.
• Energy Requirement: Should not be overestimated or installed in excess and alternate
source of energy for critical operations be arranged in advance.
• Machinery Suppliers: Should be asked for after sales services under the contract with
the machinery suppliers.
• Quality Assurance & Standards: Whatever means required for animal production
quality standards need to be defined on the ear tags and a system of record keeping to
check them to improve credibility.
Marketing
• Product Development: Expert's help may be engaged for marketing of each
batch of animal.
• Ads & P.O.S. Promotion: Business promotion and dissemination through banners
and launch events is highly recommended. Product brochures from good quality service
providers.
• Sales & Distribution Network: Expert's advice and distribution agreements are
required.
• Price - Bulk Discounts, Cost plus Introductory Discounts: Price should never be
allowed to compromise quality. Price during introductory phase may be lower and used
as promotional tool. Product cost estimates should be carefully documented before
price setting. Government controlled prices shall be displayed.
Human Resources
• Adequacy & Competencies: Skilled and experienced staff should be
considered an investment even to the extent of offering share in business profit.
• Performance Based Remuneration: Attempt to manage human resource cost
should be focused through performance measurement and performance based
compensation.
• Training & Skill Development: Encouraging training and skill of self & employees
through experts and exposure of best practices is route to success. Least cost options
for Training and Skill Development (T&SD) may be linked with compensation benefits
and awards.
14.5 Useful Links
• Prime Minister’s Office, www.pmo.gov.pk
• Government of Pakistan, www.pakistan.gov.pk
• Ministry of Industries & Production, www.moip.gov.pk
• Small & Medium Enterprises Development Authority, www.smeda.org.pk
• National Bank of Pakistan (NBP), www.nbp.com.pk
• First Women Bank Limited (FWBL), www.fwbl.com.pk
• Ministry of National Food Security & Research, www.mnfsr.gov.pk
• Government of Punjab, www.punjab.gov.pk
• Government of Sindh, www.sindh.gov.pk
• Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk
• Government of Balochistan, www.balochistan.gov.pk
• Government of GilgitBaltistan, www.gilgitbaltistan.gov.pk
• Government of Azad Jammu & Kashmir, www.ajk.gov.pk
• Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk
• Securities & Exchange Commission of Pakistan (SECP), www.secp.gov.pk
• Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
• Punjab Board of Investment & Trade (PBIT), 23-Aikman Road, GOR-I, Lahore
Tel. 042-99205201, www.pbit.gop.pk
• Sindh Board of Investment (SBI), 1st Floor, Tower B, Finance & Trade Center, Shahra-e-
Faisal, Karachi, Tel. 021-99207512-4, www.sbi.gos.pk
• All Pakistan Meat Exporters and Processors Association, Lahore, www.apmepa.com
• Punjab Agriculture and Meat Company (PAMCO), Lahore, www.pamco.bz
• Pakistan Agricultural Research Council (PARC), Islamabad, Tel. 051-9203966
www.parc.gov.pk
• National Agricultural Research Centre (NARC), Islamabad, Tel. 051-9255061,
www.parc.gov.pk
• National Veterinary Laboratory, NARC, Islamabad, Tel. 051-9255108
• Balochistan Agricultural Research Centre (BARC), Quetta, Tel: 081-9213286-7,
www.parc.gov.pk
• Southern-zone Agricultural Research Centre (SARC), Karachi, Tel: 021-99261661,
99261561, www.parc.gov.pk
• Arid Zone Research Institute (AZRI), Bahawalpur, Tel: 0622-876833, www.parc.gov.pk
• Punjab Livestock & Dairy Development Board (PLDDB), 11- Shami Road, Lahore Cantt.
Tel. 042-36676821, www.plddb.pk
• University of Agriculture, Faisalabad, www.uaf.edu.pk
• Lasbela University of Agriculture, Water & Marine Sciences, Lasbela, www.luawms.edu.pk
• Sindh Agriculture University, Tondojam, www.sau.edu.pk
• Gomal College of Veterinary Sciences, Dera Ismail Khan, www.gu.edu.pk
• KPK Agricultural University, Peshawar, www.aup.edu.pk

• Pir Mehr Ali Shah Arid Agricultural University, Rawalpindi, www.uaar.edu.pk
• University College of Veterinary & Animal Sciences, Islamia University Bahawalpur (IUB),
www.iub.edu.pk
• University of Veterinary & Animal Sciences (UVAS), Out Fall Road, Lahore,
www.uvas.edu.pk
• Bahauddin Zakariya University (BZU), Multan, www.bzu.edu.pk
• Animal Husbandry In-Service Training Institute (AHITI), Peshawar, Tel. 091-2960109,
9210309
• Veterinary Research Institute (VRI), Ghazi Road, Lahore Cantt., Tel. 042-99220140
• Agribusiness Support Fund (ASF), Lahore, www.asf.org.pk
• Directorate of Livestock Farms, L&DD, Lahore, Tel: 042-99201126-7
• Livestock Experiment Station (LES), DeraChahl Lahore, L&DD, Punjab, Tel: 042-99239818,
99239819
• Directorate of Livestock Training Centre (LSTC), Bahadurnagar, Okara, Tel: 044-2661393
• Livestock & Fisheries Department, Government of Sindh, www.sindh.gov.pk
• Agriculture & Livestock Department, Government of KPK, www.khyberpakhtunkhwa.gov.pk
• Livestock & Dairy Development, Government of Balochistan, www.balochistan.gov.pk
15. KEY ASSUMPTIONS

Table11: Production and Revenue Assumptions
Annual installed capacity (Calves) 120
Capacity utilization (%) 100
Annual production (calves) in first year 120
Number of calves fattened per production cycle 40
Number of production cycles per year 3
Fattening days 120
Daily weight gain (grams per day) 850
Table 12: Expense Assumptions
Calf Mortality in number (@ 1-3 % per annum ) 1
Vaccination / Medication cost (Rs. per calf) 200
Open Space per animal (Sq. ft) 50
Total Mixed Ration (TMR) requirement (% of live 3.0-3.5
bodyweight)
Price of TMR (Rs. per kg) 22
Green Fodder (Rs. per Kg) 2

Pre-Feasibility Study: (Calf Fattening Farm)

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Pre-Feasibility Study

(Calf Fattening Farm)

Small and Medium Enterprises Development Authority

2. PURPOSE OF THE DOCUMENT

• Slaughter house owners

Table 1: Tentative Vaccination Schedule

Disease Vaccine Time for vaccination Dose/ Administration

Haemorrhagic HS (VRI) May/June & 5 ml / 300 kg body wt

12.2 Project Financing

12.6 Raw Material Requirements

12.7 Human Resource Requirement

Description No. Monthly Salary Annual salary

12.8 Revenue Generation

Table 9: Revenue Generation

12.9 Other Costs

13. CONTACTS OF SUPPLIERS AND CONSULTANTS

Statement Summaries SMEDA

General administration & selling expenses

Tax - - 17,260 49,624 96,379 151,183 230,849 320,662 438,063 574,414

14.2 BALANCE SHEET

Statement Summaries SMEDA

Liabilities & Shareholders' Equity

14.3 CASH FLOW STATEMENT

Statement Summaries SMEDA

14.4 USEFUL PROJECT MANAGEMENT TIPS

• KPK Agricultural University, Peshawar, www.aup.edu.pk

15. KEY ASSUMPTIONS

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