A FEASIBILITY STUDY ON BROILER PRODUCTION

By:

DELA TORRE, BRYAN

A feasibility study presented to the College of Business and Accountancy in partial fulfillment of
the requirement of the course BSBA-MM: FEASIBILITY STUDY
 BACKGOUND OF THE STUDY

Broiler Production is the name of the proposed project which will be situated in Barangay
Anonang, Midsayap, North Cotabato. The water supply, electricity and transportation are all
conveniently located near the poultry farm. The company specializes in raising broilers and
manufacturing chicken meat. This broiler production has five owners which will constitute a
manufacturing-corporation form of organization. With its exceptional taste and quality, it will
concentrate on offering the best dressed chicken and its by-products. Midsayap is a fast improving
first class municipality and is the center of commerce, transportation and education in the first
district of Cotabato, thus, tagged as the prime number of the Cotabato Province, Midsayap boasts
of its fast-growing economy, established network system, efficient telecommunication systems for
both land line and mobile phones, water and power supplies and Internet access. It is for the above
stated condition that many people are encouraged to live in Midsayap thus, resulting to increase in
the demand for food consumption. With this, the study aims to produce broiler products and by-
products to contribute to the existing demand in the market and to make sure that this broiler
production attains profitability, social desirability and is viable and sustainable with possible
prospect of expansion for the long run.

Summary of Major Assumptions of the Feasibility Study

The following information composes the summary of major assumptions in relation to the
Feasibility Study that will have an impact in the preparation of its financial aspect/financial
assumptions. These will serve as the foundation for estimating future expenditures, expenses and
revenues of the project as accurate as possible for it includes detailed forecasted sales volumes,
costs of sales and other information that would be collected to develop financial and business plans
to help make critical decisions based on its gathered data. These key assumptions will be the basis
to determine whether or not the proposed business is feasible or sustainable.
Demand and Market Aspect

Demand for poultry meat and eggs is expected to continue increasing due to population
growth and rising individual consumption. Meat and eggs are not the only important poultry
products. A significant by-product is manure, which has robust economic value, whether sold or
directly applied to crops by farmers. Down and feathers can also be sold. In mixed farming
systems, other products such as egg shells can be fed to other farm animals. In preparation for its
financial statements including income statements and balance sheet, the production gives great
consideration to its annual sales revenue to be of best use in accumulating the proposed project’s
market aspect. For the year, there will be an estimated sales revenue of Php 3,671, 500.42 and a
cost of good sold amounting to Php 2,623,215. Broiler Production’s target market will be the
business establishments around Midsayap area such as K-marts, Meat shops, Saver Smart and
many more. There will also be a distribution in public markets through delivery that will garner a
total cost of Php 2,000 per harvest. The buyer of the product will be the people of Midsayap.

Furthermore, to promote the business, there will be a use of online platforms such as
facebook to advertise its products. This will be utilized to build trust towards valued customers.
To see to it that the products will be market accordingly and to promote good and high quality
affordable priced dressed chicken. In order to ensure its effectiveness to the demand of the market,
there are some strategies and approaches that would be followed. Booking a processing date early
in advance ensures that the dressed chicken will be processed at its best. Early reservations are
advised before delivering the load to make sure that the dresses chicken will be delivered in
schedule and in good condition. If delivery cannot be made as promised, there will be an immediate
call with the customers to arrange a new schedule.

Technical Aspect

The proposed project site will be at Jemina Lot Farm, Barangay Anonang, Midsayap, North
Cotabato. There will be six (6) conventional broiler buildings to be built each with capacity of 400
broiler heads with dimensions of (20 feet sqf.) with estimated cost of Php 200,000. A 10 feet by
10 feet (100 sqf.) dressing area will also be constructed with an estimated costs of Php 80,000.
There will be a total monthly estimated costs of Php 170,000 to accumulate the supplies and
equipment needed that includes: net, feeder, drinker, bucket, basin, water tank, power spray,
industrial fan, plucker blood drainer and other dressing equipment. For its monthly costing basis,
there will be a total of Php 450,000 to be consumed for the building cost and equipment cost. 2,400
broiler heads will be composed of the day-old chick feeds, vitamins, medicines, brooding material,
fly control, labor utilities (water and electricity), ice blocks for dressing and delivery cost to be
used to transport dressed chicken to its consumers. 400 birds will be raised per building and at an
interval of 1 week.

The monthly cost per harvest will be Php 214,140. The utilities expense such as light,
power and water will be incurred with a total cost of Php 3,000 and Php 30,000, respectively.
Monthly labor costs for 3 flock men will also be garnering a total of Php 19,500, each of the labor
will be receiving Php 250 per day and will be working 26 days per month. The monthly cost of
miscellaneous expense will be Php 10,360. Based on the above data, the total expenses including
the cost per harvest incurred by the production will garner a total cost of Php 250,000. The total
initial investment cost for the operation of the 2,400 broiler heads with 6 conventional buildings
and dressing area will be at Php 750,000. Estimated mortality is at 5% thus estimated recovery is
at 95% or 380 broiler heads per harvest.

Management

For an effective operation, the management structure must be carefully chosen. Broiler
Production is a manufacturing corporation. The company which specializes in raising broilers and
manufacturing chicken meat are owned by Marvin Gador, Jedd Leynard Jalandoni, Bryan Dela
Torre, Christian Pila and Elizar Jemina. With its exceptional taste and quality, it will concentrate
on offering the best dressed chicken and its by-products.

The proposed organizational structure for the Broiler Farm Production will be headed by
the owners. The owners will be assigned with the different responsibilities that are essential to the
operation of the business. Mr. Marvin Gador is responsible for finance; he will manage the money
in a way that is productive. He will take a close look at the financial situation and evaluate the
earning and spending habits. Mr. Elizar Jemina is primarily responsible for flock management; he
will oversee the raising of chickens to ensure that they can produce fresh meat. Mr. Christian Pila
is responsible for flock dressing; he will assist the utility man or butcher to make sure that the
chickens are well dressed and clean. Mr. Bryan Dela Torre is responsible for sales and marketing;
he will manage to track market developments, create strategies, set up sales plans, and maintain
customer relations. Mr. Jedd Leynard Jalandoni is responsible for logistics; he will manage the
supply chain management and the order supply.

Manpower

Manpower is another term for human resources. It basically involves the people who make
the workforce in an organization. There will be three labors that will help in the operation of the
business. There are two flock men or butcher required in flock raising and one utility man or
butcher is required in dressing. The two flock men will take good care of the chickens to maintain
its health and welfare. While the utility man or butcher will be responsible in dressing the chickens
appropriately and orderly. The monthly cost for the three labors will be incurred at 250 per day,
26 working days per month amounting to Php 19,500. So, the annual cost of the three labors is
amounting to Php 234,000.