Muhammad Anis 15
Shakir Rashid 27
Hafiz Zahid Mahmood 45
[Link] (Finance)
4th Semester
Session 2008-10
Department of Commerce
OUTLINE
Introduction to industry
Market Analysis
Technical Analysis
Personal Analysis
Financial Analysis
SWOT Analysis
Recommendation & Conclusion
Introduction
The economy of Pakistan is the 27th largest economy in the world in
terms of purchasing power, and the 45th largest in absolute dollar
terms. Pakistan has a semi-industrialized economy, which mainly
encompasses textiles, chemicals, food processing, agriculture and other
industries. Pakistan has an agriculture base of more then 79.6 Mn
Hectares of total area with 22 Mn Hectares land under cultivation. 18
Mn Hectares of land is under cultivation through irrigation system
while 4 Mn Hectares of land relies its cultivation exclusively on rain.
Strong Potential
Contribution to Economy
Fisheries & Livestock Production
Investment Opportunities
Fiscal Incentives for Agriculture Sector
Agriculture contribution to economy
Contributes 26% to GDP
Employs 44% of labor force
70% of exports are Agricultural & Agri processed products
Fisheries & Livestock production
Fisheries potential (annual catch) 7.5 Mn Tons
Buffaloes (Number) 23 Mn
Cattle (Number) 22 Mn
Sheep & Goats (Number) 75 Mn
Poultry (Number) 530 Mn
Fiscal Incentives for Agriculture Sector
0% customs duty on import of agricultural machinery, equipment and
implements
Exemption of duty on transfer of land for CAF
Tax relief; Initial depreciation allowance @ 50% of machinery cost.
Dividends from corporate agriculture farms not subject to tax
Farm income given more favorable treatment
Agriculture
Major Crops Minor Crops Livestock Fisheries Forestry
Dairy Farming Poultry Industry
History of Poultry Industry
Poultry in Pakistan was kept as a backyard business
for household needs
Prior to 1963 the native breed “Desi” was mainly rose
which produce a maximum of 73 eggs per year under
local conditions
In early 60’s; Pakistan International Airline in
collaboration with shaver poultry Breeding Farms
started the first Commercial Hatchery in Karachi
1st commercial Feed Mill was started by Lever
Brothers in Rahim Yar Khan
Phase 1: The Introductory Period 1965-1970
Directorate of poultry production at Karachi
The Income tax exemption
Liberal import of parent and grand parent stocks
Machinery and equipment
Free export of Poultry and its products
Phase 2: Institutional Development 1971-
1975
The Federal Poultry Board established
Research services were introduced
A dramatic increase in poultry production resulted due to
diverted investments from the nationalization of industries
in other sectors
At the same time the clustering of production units led to
large disease outbreaks and the lack of marketing facilities
due to ban on export of poultry products limited industry
growth
This phase is characterized by both the greatest success of
the poultry industry and its greatest failure
Phase 3: The Production Boom 1976-1980
A policy to attract investment in poultry farming by
offering estate land under 10 year leases
Commercial egg production and broiler production
increased this period
Serious financial set backs to poultry farming in
Pakistan
Formation the Pakistan poultry association in 1979 on
the advice of the federal poultry board
Phase 4: Depression and Adjustment 1981-1990
Disease problems possessed a serious threat to the sound
development and consolidation of the industry
The large Karachi poultry estates began to close in 1984 and a
number of poultry farms closed in other areas of Sindh
Production showed a decreased growth or even depression early
1980 particularly of increases in the Punjab, Baluchistan and
NWFP
Faced with disease problem, lower productivity and numerous
environmental and climatic difficulties, some of most successful
farmers decided to produce under more modernized conditions
and to establish their poultry farms in cooler, less polluted area of
the country
1991 to Know
1990-- Hydro pericardium syndrome
1991-- Gumboro attacked to the Chicks of Broiler, layer and parent flock that resulted
in great mortality
1992-- At National level Institutes done efforts to reduce these diseases
1995-- Avian Influenza appeared and mortality in parent flock rose up to 80%
1996-- Parent flock increased in number due to absence of planning
1997-- Ban on serving of dinner in marriage parties that reduce the demand of poultry
products in the market up to 40%
1998-- It started improving and by increase in price of Chick the companies got a great
profit
1999-- Again a syndrome like Influenza broke that cause great loss in some areas
while some areas were safe
2006-- Bird flu broke out again due to which 40% of the industry were destroyed
2010-- In Pakistan poultry industry is at 2nd place after Textile industry
Nature of Poultry Farm
1. Backyard Farms
2. Semi Commercial / Conventional Farms
3. Commercial / Environmental Control Farms
Backyard Farms
Brick/wood/net built
During day chickens roam freely, at night
kept in the house
Level of Bio Security: Very low
Semi Commercial / Conventional Farms
Chickens kept in a large area fenced with
Net/multistoried pen/separate room in a house
Feed/water given inside
Level of bio-security: Low
Commercial / Environmental Control Farms
Entry and exit are highly restricted
Separate techniques used for feed and water
Punctual medication
Controlled temperature
Level of bio-security: moderate high
Environmental Controlled Shed
The modern trend of environment control houses (ECH) in poultry
production has brought a great revolution in poultry industry of
Pakistan in the recent years. This has solved a great hurdle of heat
stress in the way economical commercial poultry production. The ECH
with evaporative cooling system, providing tunnel ventilation, giving
the wind chill effect has markedly improved the broiler production
system.
Improved feed conversion ratio
Better quality bird meat
Increased productivity and health of the chicken
Reduced mortality
Fully system controlled with no manual controls
Muhammad Anis
Roll No. 15
Market Analysis
Fixed investment in poultry sector is over Rs. 200 Billions
Present turnover of Pakistan Poultry Industry is about Rs.
300 Billions
There are about 25,000 Poultry farms in the country
Poultry sector generates employment and income for about
fifteen hundred thousands people
Poultry sector is one of the most organized branches of the
agro based sector of Pakistan. Its growth rate is 10-12%
annually
At present over 50 Billions’ of agriculture produce and bio
products of agriculture are being used in poultry feeds
40% of the total meat consumption is being
produced from poultry products
In Pakistan 7,830 million table eggs produced
annually
13,936 Metric Tons chicken meat annually
In Pakistan per capita consumption of meat is only
7 Kg and 60-65 eggs annually, whereas developed
word is consuming 41 Kg meat and over 300 eggs
per capita per year
Number of Hatcheries 400
Number of Feed mills 150
Number of People /dependent 1.5 Millions
Population of Chicken
Broiler Breeder 8.5 Million Birds
Layer Breeder 0.428 Million Birds
Commercial Broiler “ 8.6 x 105 = 900 Million Birds
Layer Birds 29 Million Birds
Feed consumption 5.51 M.M.T
Exports
In 1978 export of poultry products started
1978-80 increased by 102%
Started declining in the following years due to sever
competition from the countries having big home markets
2008-09 exports declined to $ 4,55,000 from $ 16,01,000
(71.58%)
Reasons for decrease in exports
Global competition
Disease attacks
Lack of refrigerated Cargo
Non-Availability of space for Day-Old-Chick
High Air freight charges
Lack of subsidy for exports
Technical Analysis
There are four major points involved in technical analysis
Land for Project
Machinery for Project
Labor for Project
Raw Material
Land: 1 Acre @ 1,500,000 /Acre
Chak 34BC, Dera Bakkah, Hasilpur Road, B.W.P
Charges :
Cost of Registration 1%
Cost of Transfer 1%
Cost of Stamp duty 2%
Legal & Brokerage charges 4%
Machinery
Raw Material
Labor for Project (Personnel Analysis)
[Link]. Types of Staff Required Salary/Month Salaries/Year
1 General Manager 1 10,000 112,000
2 Accountant 1 8,000 96,000
3 Supervisor 1 11,000 132,000
4 Doctor 1 20,000 240,000
5 Workers 6 7,000 504,000
6 Electrician 1 9,000 108,000
7 Cook 1 7,000 84,000
8 Sweeper 2 4,000 96,000
9 Security Guard 1 6,000 72,000
Total 15 1,440,000
Process Flow Chart
Distribution Channel
FARM DEALERS
CONSUMERS RETAILERS
Financial Analysis
Ratios 2011 2012 2013
Gross Margin 27.4% 29.2% 30.6%
Operating Margin 25.6% 27.5% 29.0%
Net Margin 19.5% 20.8% 22.8%
Current Ratio 1.97 2.45 2.97
Cash Ratio 1.60 2.06 2.57
Debt/Equity Ratio 36% 20% 10%
IRR 39%
Pay Back Period 2 Years Approximately
Hafiz Zahid Mehmood
Roll No. 45
Strengths
Improved feed conversion ratio
Better quality bird meat
Increased productivity and health of the chicken
Reduced mortality
Fully system controlled with no manual controls
Less chances of diseases
Maintain temperature
Weakness
Adoption of new vaccines
High cost
Not availability of space
Diseases
Unhygienic condition
Processing plant
Poor management
Lack of trained worker
Opportunities
Scope for frozen company
Economic beneficial
Advantage for small business person
Scope for restaurant
Continuous increase in demand of meat in market
Sales price are reasonable & internal rate of return
is also high
Production on large scale can maximize profit
Threats
Effect of change in the government regulation
Bird Flu
Heavy duty charge on incubator
Present crisis
Continuously too much variation in sales prices
Energy crises
Variation in chicks prices
Conclusion & Recommendations
Broiler meat is the cheapest source of animal protein
available in the country. The time required for raising
broiler birds is lesser than that for big animals. The
consumption of meat is increasing due to growing health
consciousness in the masses. According to the
Agriculture Statistics of Pakistan the per capita
consumption of poultry meat is increasing at a rate of
4% per annum.
We conclude that on the basis of field work and survey of
control shed that the meat is necessary product so its
demand increases day by day. There is no chance to
decrease the demand of meat. Availability of raw material
is very easy. So, conclusion is that the control shed is a
profit motive business because no chance of decrease of
demand.
Our recommendation to new investors is that they must
invest in control shed because from the last 5-6 year there
is a great change or entrance of new control shed in
Pakistan. So, they step forward to come and invest or to
start this business, and also contribute in the economic as
well as industrial growth of Pakistan.
ANY
QUESTION?
