PROJECT REPORT

Of

CATTLE FEED

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Cattle feed Unit.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : [email protected]
Contact : +91 7526000333, 444, 555
Indian Feed Sector.

India is one of the largest and fastest growing compound feed markets in the world. Feed
manufacturing on a commercial and scientific basis started around 1965 in India with the setting
up of medium‐sized feed plants in northern and western India.

Feed was produced mainly to cater to the needs of dairy cattle. The poultry sector was not
developed at that time and was restricted to backyard production, with the desi (or native
bird) kept mainly for the production of eggs. The Indian feed industry is undergoing a very
exciting phase of growth for the next decade.
Indian feed industry is presently growing at a CAGR of 8 percent. Poultry, aqua and dairy
industry occupies the major share in overall feed demand. While the potential feed
requirement is huge and stands at around 96 million tonnes, only 20.3 million tonnes was
produced during 2012‐13.

There is a huge scope for the growth in the sector, with industry becoming more organized.
With this growth rate India will soon become the largest feed market in the coming
years. The feed industry requirements that are met with the compound feed are only 11
percent for cattle, 14 percent for aqua feed and 55 percent for poultry feed.

Animal Feed
Market

Poultry Cattle Aqua Others

The poultry industry has grown at an annual growth rate of percent from 2002 to around
2013. The seafood sector is also witnessing a growth of 6 percent annually in production
of aquaculture. Simultaneously, Indian dairy sector has also been growing at a rate of 4
percent annually. Growth in these sectors has pushed up the demand for compound feed
by 50 percent. India’s demand for compound feed is expected to rise 28 million tonnes by
2017‐18

However, majority of the feed production is highly fragmented, composed mostly of home and
custom mixers. The table below provides a detailed breakup of animal feed industry into
various segments – Poultry (broiler and layer), cattle and aqua in India.
 Sector Feed Potential Feed Volume Estimated Future Annual
Consumption Requirements (2017‐ Feed Consumption Growth
(million 18) rate (%)
tonnes)
Broiler 9.4 10. 8
Layer 2‐3 11. 5‐6
Cattle 7.5 67 6
Aqua 1 7 9

Cattle Feed Industry

Dairy Feeding System in India

Feeding systems in India is prevalent small dairying primarily based on grazing of native
pastures of low nutritive value. Cattle and buffalo are usually fed on wheat, paddy, millet,
sugarcane tops and other straws and stovers. These are supplemented with small quantity of
grass available from grazing. Very limited amount of concentrate is fed to the animals.

According to National Dairy Development Board (NDDB), the livestock feeding systems in India
is categorized into six major types:

1. Dry Fodder + Compound Feed + Concentrate Feed

2. Dry Fodder + Green Fodder + Compound Feed + Concentrate Feed

3. Dry Fodder + Homemade Concentrate Mix + Grazing

4. Green Fodder + Compound Feed + Concentrate Feed

5. Silage + Dry Fodder + Concentrate Feed

6. Silage + Compound Feed + Concentrate Feed

The table below depicts the projected demand and availability of feed/fodder by 2020 in India.
 Projected demand and availability of fodder in India

Demand Projections Availability Shortfa

(2020) Projections ll
(million MT) (2020)
(%age)
Dry Fodder 46 41 11
Green Fodder 21 13 35
Concentrate 81 44 45

Source: CLFMA Annual Survey 2013‐14, NDRI.

B.I.S SPECIFICATION

Bureau o f Indian S t a n d a r d h a s d e v e l o p e d s t a n d a r d specification for cattle

feed. It is given by:‐

IS: 2052‐ 1975: ‐ Compounded feeds for cattle.

IS: 1664‐ 1981: ‐ Mineral mixture for supplementing c a t t l e feed.

 MANUFACTURING PROCESS.

Cattle feed is precisely obtained by blending the concerned raw material in desired quantity to
get the particular cattle feed.

The raw material are ground first individually and is latter feed into mixer to obtain
homogenous mixing , where after it is transported to the pulverizer, where it is pulverized to
the required mesh size.

The product is t h e n screened to obtain the required particle size. There after it is mixed with
molasses.

According to the given formulation take a requisite quantity of raw material. These raw
materials are pulverized to their required mesh size. After pulverization the mass is fed to the
mixing section, where it is intimately mixed with minerals, vitamins and other
ingredients, when the ingredients are well mixed then the whole mass is fed to pelletizing
machine to get cattle feed in pellets form. Now, the pellets are tested in laboratory to confirm the
analytical value.
Reception:‐

The raw materials usually arrive at the factory in sacks, which can be either man handled or
conveyed mechanically into the ware house. Since quality control is an important part of feed
compounding, checks should be made on the weight & condition of the incoming raw
materials & samples should be taken for laboratory analysis where possible.

Storage of Raw Materials:‐

In coming raw materials should be stored conditions which ensure that they are kept dry & free
from insect & rodent pests. If they are to be stored in bags. They should be kept in a produce
w a r e house constructed to an appropriates standard. The ware house should have a concrete
floor but the roof & walls need only be lightly constructed, provided of course that they are
pest & water roof. As a rough guide to the space requirements 6 Sq. ft. ton of stored materials
regd.

The amount stored will vary firm time to time since storage can be used to even out
fluctuations in the supply of individual ingredients a n d allows advantage to be taken of
price fluctuations.

Raw materials may also be bulk stored either in silos constructed from concrete or steel
or in bins formed with partitions in conventional stores. In general bulk storage entails a
great, i n v e s t m e n t in capital, e q u i p m e n t b u t lower operating c o s t s working
capital which would be tied up in the bags used to contain the raw materials is also
released.
 The particular method chosen for low materials storage will depend on the local
circumstances but in areas where labour is cheap & plentiful & capital funds scarce, it is
likely the storage in bags will be preferable.

Grinding:‐

Some material including cereals & oil seed cakes, need grinding to prepare then for blending
and or mixing. In same units materials are first blended then ground before mixing in
other, they are ground first then blended mixed of time the grinder can be kept supplied with
material.

Blending:‐

Blending involves the assembling & measuring out of the required quantities of raw
material. The raw materials are brought manually from the ware house & weighed out in
batches. Those which need grinding are tipped into the foot of the elevator which feeds the
grinder less, the other material are into the base of the mixer.

In some units blending is semi mechanical material used in large quantities are elevated into
one of the four bulk bins. An operator determines which bin is filled by means of a four‐
way switch.

The material flows out of the bins under gravity into one of the two batch weighs the flow
being controlled by an operator. Who opens & closes a flow in response to readings from a
dial which registers the amount of material in the weigher. The weight of each raw material in
any batch & the no of batches in each formulation is predetermined.

In all cases, the raw materials, blended or single, are fed into an elevator which feeds a grinder
bin. The out let of these bin incorporate a magnetic tray & a oslesating feed which regulator
the flow of material into the grinder so that the load on the grinder motor is kept at the
optimum level.

All the grinders are hammer mills, also known as unijact grinders. These are the most suitable
type available at present for use in feed compounding. The other common types disc
grinders & roller grinders, have their own applications but are not usual in feed mills. Both
have a higher capital cost than however, mills of similar capacity & produce products with
qualities that hammer mills cannot achieve.

The material enters a chamber in which set of beaters revolve driven by and an electric
motor. The beaters throw the material against the projections on the inner surface of the
chamber, which breaks up the material & against a perforated screen. Through which the
ground material passes. Wear on the beaters, projections & screen is slight but they can be
dawaged by foreign bodies such as stores, glass or metal objects entering the grinder chamber.
After the material has passed through the screen, it is blow through a pipe into a cyclone
which collects the ground material.

Certain mixtures of air & dust, created by the grinders are explosive, esp. when, as in a grinder,
these is a risk of sparks.

Because of the dangers of explosion, the grinders are contained in special structures either
above or below ground.

The size & capacity of the grinder required depends on the amount of materials to be ground
the finesses of grind required & the amount when a batch is complete, it is elevated to the
grinder bin & ground.
 PROJECT AT GLANCE

NAME OF FIRM : XXXX

CONSTITUTION : XXXX

NAME OF PROPRIETOR : XXXX

NATURE OF ACTIVITY : Manufacturing of Animal Feed(Cattle/Pig)

UNIT ADDRESS : XXXX

PRODUCTS : Product Capacity

Animal Feed 300 Kg/Hr

FINANCIAL ASSITANCE REQUIRED : Term Loan 10.29 Lacs

Working Capital Loan 10.00 Lacs

COST OF PROJECT

PARTICULARS TOTAL COST

Civil Work 5.39
Plant & Machinery 5.19
Office Furniture 0.25
Working Capital required 10.50

Total 21.33

MEANS OF FINANCE

PARTICULARS TOTAL COST

Own Contribution(5% of Project Cost) 1.07
Term Loan 10.29
Working capial From Bank 10.00
Total 21.33

Subsidy from Government 35 % of Rs 21.33 (Rs. 746550)

PROJECTED BALANCE SHEET STATEMENT

Particulars YEAR1 YEAR2 YEAR3 YEAR4 YEAR5

SOURCES OF FUND

Opening Capital - 6.90 14.67 22.19 28.10

Addition in Capital 1.07 - - - -
Add:- Profits 6.34 9.76 10.52 9.91 11.00
Less:- Drawings 0.50 2.00 3.00 4.00 5.00
Closing Capital 6.90 14.67 22.19 28.10 34.10
-
Subsidy Reserve 7.47 7.47 7.47 7.47 7.47

Term Loan From Bank 9.89 9.09 8.29 - -

Working Capital Loan 10.00 10.00 10.00 10.00 10.00
Sundry Creditors 4.17 4.63 4.93 5.27 5.57
Other Current libilities & Provisions 2.00 4.00 5.00 6.00 7.00

TOTAL : 40.43 49.86 57.88 56.84 64.14

APPLICATION OF FUND

Fixed Assets
Gross Block 11.77 11.77 11.77 11.77 11.77
Depreciation 0.44 1.83 3.05 4.11 5.03
Net Block 11.33 9.94 8.72 7.66 6.73

Fixed Deposit of Subsidy 7.47 7.47 7.47 - -

Current Assets
Sundry Debtors 14.76 11.33 12.07 12.87 13.10
Inventory 5.00 10.00 15.00 20.00 25.00
Cash and Bank 1.87 11.12 14.62 16.31 19.30

TOTAL : 40.43 49.86 57.88 56.83 64.14

- - - - -
STATEMENT OF COST OF PRODUCTION AND PROFITABILITY

Particulars YEAR1 YEAR2 YEAR3 YEAR4 YEAR5

%Capacity 65% 75% 80% 85% 90%

Gross Sale 147.55 170.00 181.00 193.00 204.00

NET SALES 147.55 170.00 181.00 193.00 204.00

COST OF PRODUCTION
Raw Material & Consumable 125.00 139.00 148.00 158.00 167.00
Power Expense 1.48 1.70 1.81 1.93 2.04
Repair & Maintenance 0.74 0.85 0.91 0.97 1.02
Wages & Salary 7.98 8.38 8.80 9.24 9.70
Factory Expenses 1.77 2.04 2.17 2.32 2.45

COST OF PRODUCTION 136.96 151.97 161.68 172.45 182.21

Add :Op. Fin. Goods - 5.00 10.00 15.00 20.00

Less : Cl. Fin. Goods 5.00 10.00 15.00 20.00 25.00

TOTAL (B) 131.96 146.97 156.68 167.45 177.21

GROSS PROFIT (A-B) 15.59 23.03 24.32 25.55 26.79

G.P Ratio 10.56% 13.55% 13.43% 13.24% 13.13%

Salary to Staff 4.20 4.62 5.08 5.59 6.15

Selling & Adminsitrative Expenses 2.95 5.10 5.43 5.79 6.12
Interest on Term Loan 0.56 1.05 0.97 0.87 -
Interest on Working Capital Loan 1.10 1.10 1.10 1.10 1.10
Depreciation 0.44 1.39 1.22 1.06 0.93

TOTAL (D) 9.25 13.27 13.79 14.41 14.30

NET PROFIT (C-D) 6.34 9.76 10.52 11.14 12.50

LESS : TAXES - - - 1.23 1.50

PROFIT AFTER TAX 6.34 9.76 10.52 9.91 11.00

4.30% 5.74% 5.81% 5.14% 5.39%
ADD : DEPRECIATION 0.44 1.39 1.22 1.06 0.93

CASH ACCRUALS 6.77 11.16 11.74 10.98 11.92

PROJECTED FUND FLOW STATEMENT

Particulars YEAR1 YEAR2 YEAR3 YEAR4 YEAR5

A. SOURCES OF FUND

Capital 1.07 - - -
Term Loan from Bank 10.29 - - - -
Working Capital Loan 10.00 - - - -
Net Profit 6.34 9.76 10.52 11.14 12.50
Subsidy reserve 7.47 - -
Depreciation & Exp. W/off 0.44 1.39 1.22 1.06 0.93
Increase in Sundry Crediotrs 4.17 0.47 0.30 0.33 0.30
Increase Other Current libilities & Prov 2.00 2.00 1.00 1.00 1.00

TOTAL (A) 41.77 13.62 13.04 13.54 14.72

B.
APPLICATION OF FUND

Capital Expenditure 11.77 - - - -

Repayment of Term Loan 0.40 0.80 0.80 8.29 -
Increase in FD 7.47 - - (7.47) -
Tax Paid - - - 1.23 1.50
Increase in Finished Goods 5.00 5.00 5.00 5.00 5.00
Increase in Sundry Debtors 14.76 (3.42) 0.73 0.80 0.23
Drawings 0.50 2.00 3.00 4.00 5.00

TOTAL (B) 39.89 4.38 9.53 11.85 11.73

Opening Balance - 1.87 11.12 14.62 16.31

Add/Less Surplus 1.87 9.24 3.50 1.69 2.99
Closing Balance 1.87 11.12 14.62 16.31 19.30
Assumptions of the Project

Product Manufactured : Animal feed (Cattle Feed and Pig Feed)

Plant Capacity : 500-1000 kg/hr(as per Quotation)

Operating Capacity : 300 kg/hr

Raw Material Requirement

The Raw Material for Animal feed are as follows:

Cattle Feed Pig Feed

1. Wheat Bran 1. Maize

2. Ground nut extraction 2. Rice Polish
3. Rice bran 3. Soya DOC
4. Maize 4. Ground nut extraction
5. Mustard Cake 5. Milk powder
6. Molasses 6. MBM
7. Calcium carbonate 7. Salt
8. Mineral mixture & Vitamin mix 8. Fish meal
9. Soya DOC 9. Toxin binder
10. Yeast

Calculation of Production

Capacity : 300 kg/hr

No. of Shifts per day : 1 shift of 10 hours
No. of workkng Days in a year : 300 days

Total Production per annum : 900,000.00 Kg/annum

Selling Price of Finished Goods : 1300 per 50 kg bag
600 per 25 kg bag

No. of Bags to be manufactured

50 kg bag (60% of Total production) : 10800

25 kg bag (40 % of total production) : 14400
COMPUTATION OF WORKING CAPITAL

Turnover Method

(i) Projected Sales(2019-20) 147.55

(ii) Working Capital Requirement 36.89

25% of Projected Sales

(iii) Margin 7.38

5% of Projected Sales

(iv) MPBF 29.51

Working Capital Limit Required 10.00

BREAK UP OF SALARY (ADMINISTRATIVE STAFF)

Particulars Salary No of Total

Per Month Employees Salary

Accounts & Clerical Staff 15,000.00 1 15,000.00

Marketing Staff 10,000.00 2 20,000.00

Total Salary Per Month 35,000.00

35,000.00

Annual Salary (Rs in Lacs) 4.20

Y1 4.20
Y2 4.62
Y3 5.08
Y4 5.59
Y5 6.15

BREAK UP OF LABOUR & WAGES (WORKERS)

Particulars Wages No of Total

Per Month Labours Salary
-
Skilled Worker 10,000.00 4 40,000.00
Unskilled Worker 8,000.00 3 24,000.00
Casual Labour 2,500.00 1 2,500.00

Total Wages Per Month 66,500.00

Annual Salary (Rs in Lacs) 7.98

Y1 7.98
Y2 8.38
Y3 8.80
Y4 9.24
Y5 9.70
SCHEDULE OF DEPRECIATION

Particulars Building Plant Furniture Total

10% 15.00% 10.00%

Addition - 5.39 5.19 0.25 10.83

Intt. Capitalised - 0.47 0.45 0.02 0.94
Less : Depreciation - - 0.42 0.01 0.44
WDV at end of Year - 5.86 5.22 0.26 11.33
Additions During The Year - - - - -
Less : Depreciation - 0.59 0.78 0.03 1.39
WDV at end of Year - 5.27 4.43 0.23 9.94
Additions During The Year - - - - -

Less : Depreciation - 0.53 0.67 0.02 1.22

WDV at end of Year - 4.74 3.77 0.21 8.72
Additions During The Year - - - - -
- 4.74 3.77 0.21 8.51
Less : Depreciation - 0.47 0.57 0.02 1.06
WDV at end of Year - 4.27 3.20 0.19 7.66
Additions During The Year - - - - -
- 4.27 3.20 0.19 7.47
Less : Depreciation - 0.43 0.48 0.02 0.93
WDV at end of Year - 3.84 2.72 0.17 6.73
REPAYMENT SCHEDULE OF TERM LOAN Intt. Rate 11.00%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

YEAR1 Opening Balance
Ist Quarter - 10.29 10.29 0.09 10.29
IInd Quarter 10.29 - 10.29 0.28 - 10.29
IIIrd Quarter 10.29 - 10.29 0.28 0.20 10.09
Ivth Quarter 10.09 - 10.09 0.28 0.20 9.89
0.94 0.40
YEAR2 Opening Balance
Ist Quarter 9.89 - 9.89 0.27 0.20 9.69
Iind Quarter 9.69 - 9.69 0.27 0.20 9.49
IIIrd Quarter 9.49 - 9.49 0.26 0.20 9.29
Ivth Quarter 9.29 9.29 0.26 0.20 9.09
1.05 0.80
YEAR3 Opening Balance
Ist Quarter 9.09 - 9.09 0.25 0.20 8.89
Iind Quarter 8.89 - 8.89 0.24 0.20 8.69
IIIrd Quarter 8.69 - 8.69 0.24 0.20 8.49
8.49 8.49 0.23 0.20 8.29
0.97 0.80
YEAR4 Opening Balance
Ist Quarter 8.29 - 8.29 0.23 0.27 8.02
Iind Quarter 8.02 - 8.02 0.22 0.27 7.75
IIIrd Quarter 7.75 - 7.75 0.21 0.28 7.47
Ivth Quarter (Subsidy Adjusted) 7.47 7.47 0.21 7.47 (0.00)
0.87 8.29

Subsidy Will be Adjusted 2022-23 After Three Years

Deducted From Principle 7.47 Lacs
CALCLUATION OF D.S.C.R.

Particulars YEAR2 YEAR3 YEAR4

CASH ACCRUALS 11.16 11.74 18.66

ADD : INTEREST ON TERM LOAN 1.05 0.97 0.87

Total 12.21 12.70 19.52

LESS : REPAYMENT

INTEREST ON TERM LOAN 1.05 0.97 0.87

INSTALMENT OF TERM LOAN 0.80 0.80 8.29

1.85 1.77 9.16

D.S.C.R. 6.58 7.19 2.13

AVERAGE D.S.C.R. 3.48

 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN assume no
financial liability to anyone using the content for any purpose. All the materials and content
contained in Project report is for educational purpose and reflect the views of the industry
which are drawn from various research material sources from internet, experts, suppliers and
various other sources. The actual cost of the project or industry will have to be taken on case
to case basis considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is intended for
general guidance only and must not be considered a substitute for a competent legal advice
provided by a licensed industry professional. SAMADHAN hereby disclaims any and all
liability to any party for any direct, indirect, implied, punitive, special, incidental or other
consequential damages arising directly or indirectly from any use of the Project Report
Content, which is provided as is, and without warranties.