Pre-Feasibility Study
CALF FATTENING FARM
(FEEDLOT SYSTEM)
Small and Medium Enterprise Development Authority
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
6th Floor LDA Plaza Egerton Road, Lahore
Tel 111 111 456, Fax 6304926-7 Website www.smeda.org.pk
REGIONAL OFFICE
PUNJAB
REGIONAL OFFICE
SINDH
REGIONAL OFFICE
NWFP
8 th Floor, LDA Plaza,
Lahore,
Tel: (042) 111-111-456
Fax: (042)6304926-7
helpdesk@smeda.org.pk
5TH Floor, Bahria
Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 5610572
helpdesk-khi@smeda.org.pk
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 9213046-47
Fax: (091) 286908
helpdesk-pew@smeda.org.pk
March, 2009
REGIONAL OFFICE
BALOCHISTAN
Bungalow No. 15-A
Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 831623, 831702
Fax: (081) 831922
helpdesk-qta@smeda.org.pk
Pre-Feasibility Study
Calf Fattening Farm (Feedlot System)
1 INTRODUCTION TO SMEDA..........................................................................................................4
2 PURPOSE OF THE DOCUMENT.....................................................................................................4
3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT ..........................5
3.1
3.2
3.3
3.4
STRENGTHS .....................................................................................................................................5
WEAKNESSES ..................................................................................................................................5
OPPORTUNITIES ...............................................................................................................................6
THREATS .........................................................................................................................................6
4 PROJECT PROFILE .........................................................................................................................7
4.1
4.2
4.3
4.4
4.5
4.6
4.7
OPPORTUNITY RATIONALE ...............................................................................................................7
MARKET ENTRY TIMING ..................................................................................................................8
PROPOSED BUSINESS LEGAL STATUS................................................................................................8
PROPOSED CAPACITY ......................................................................................................................9
PROJECT INVESTMENT .....................................................................................................................9
PROPOSED LOCATION ......................................................................................................................9
KEY SUCCESS FACTORS/PRACTICAL TIPS FOR SUCCESS ..................................................................10
5 SECTOR & INDUSTRY ANALYSIS .............................................................................................. 11
5.1
5.2
MAJOR PLAYERS ...........................................................................................................................11
HUBS OF CALF FATTENING FARMING .............................................................................................11
6 MARKET INFORMATION............................................................................................................. 11
6.1
6.2
6.3
SECTOR CHARACTERISTICS ............................................................................................................11
MARKET POTENTIAL......................................................................................................................12
TARGET CUSTOMERS .....................................................................................................................13
7 FARM INPUTS................................................................................................................................. 13
7.1 LAND ............................................................................................................................................13
7.1.1
Land Requirement................................................................................................................13
7.1.2
Land Lease ..........................................................................................................................14
7.1.3
Suitable Locations ...............................................................................................................14
7.1.4
Herd Mix .............................................................................................................................14
7.2 ANIMAL MARKETS ........................................................................................................................15
7.3 ANIMAL HOUSING .........................................................................................................................15
7.4 FARM MACHINERY ........................................................................................................................16
7.5 FEED .............................................................................................................................................17
7.5.1
Ration for Calf Fattening .....................................................................................................17
7.5.2
Green Fodder for Calves......................................................................................................17
7.5.3
Fodder Production Economics .............................................................................................18
7.5.4
Daily Fodder Requirement...................................................................................................19
7.5.5
Daily Total Mixed Ration Requirement.................................................................................19
7.5.6
Total Mixed Ration (TMR) Formula for calves:....................................................................19
7.5.7
Mineral Mixture...................................................................................................................19
7.5.8
Wheat Straw (Bhoosa or Turi)..............................................................................................20
7.6 VACCINATION & MEDICATION .......................................................................................................20
7.7 CALF QUARANTINE .......................................................................................................................20
7.8 LABOR REQUIREMENT ...................................................................................................................20
8 FARM OUTPUT............................................................................................................................... 21
8.1
8.2
8.3
FATTENING PERIOD .......................................................................................................................21
MEAT COMPOSITION ......................................................................................................................21
INCREASE IN WEIGHT GAINS ...........................................................................................................22
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8.4
Calf Fattening Farm (Feedlot System)
SALE PRICE ...................................................................................................................................22
9 USEFUL TERMINOLOGY ............................................................................................................. 23
10FINAICIAL ANALYSIS................................................................................................................... 24
10.1
PROJECTED INCOME STATEMENT ...............................................................................................24
10.2 ........................................................................................................................................................24
10.3 ........................................................................................................................................................24
10.4
PROJECTED BALANCE SHEET .....................................................................................................25
10.5
PROJECTED CASH FLOW STATEMENT .........................................................................................26
11KEY ASSUMPTIONS ...................................................................................................................... 27
12ANNEXURE 1................................................................................................................................... 28
13ANNEXURE 3................................................................................................................................... 30
14ANNEXURE 4................................................................................................................................... 31
14.1
DIFFERENT BREEDS OF BUFFALOES AND COWS ..........................................................................31
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DISCLAIMER
The purpose and scope of this information memorandum is to introduce the subject
matter and provide a general idea and information on the said area. All the material
included in this document is based on data/information gathered from various sources
and is based on certain assumptions. 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 does not assume any liability for any financial or
other loss resulting from this memorandum in consequence of undertaking this
activity. The prospective user of this memorandum is encouraged to carry out
additional diligence and gather any information he/she feels necessary for making an
informed decision.
DOCUMENT CONTROL
Document No.
PREF-24
Revision
3
Prepared by
SMEDA-Punjab
Issue Date
March 2002
Revised In
March 2009
Issued by
Library Officer
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Calf Fattening Farm (Feedlot System)
INTRODUCTION TO SMEDA
The Small and Medium Enterprise Development Authority (SMEDA) was established
with the objective to provide fresh impetus to the economy through the launch of an
aggressive SME support program.
Since its inception in October 1998, SMEDA had adopted a sectoral SME development
approach. A few priority sectors were selected on the criterion of SME presence. In depth
research was conducted and comprehensive development plans were formulated after
identification of impediments and retardants. The all-encompassing sectoral development
strategy involved recommending changes in the regulatory environment by taking into
consideration other important aspects including finance, marketing, technology and
human resource development.
SMEDA has so far successfully formulated strategies for sectors including, fruits and
vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear,
textiles, surgical instruments, transport and dairy. Whereas the task of SME development
at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s
areas of operation.
Along with the sectoral focus a broad spectrum of business development services is also
offered to the SMEs by SMEDA. These services include identification of viable business
opportunities for potential SME investors. In order to facilitate these investors, SMEDA
provides business guidance through its help desk services as well as development of
project specific documents. These documents consist of information required to make
well-researched investment decisions. Pre-feasibility studies and business plan
development are some of the services provided to enhance the capacity of individual
SMEs to exploit viable business opportunities in a better way.
This document is in the continuation of this effort to enable potential investors to make
well-informed investment decisions.
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
to facilitate investment and provide an overview about dairy and livestock farming. The
project pre-feasibility may form the basis of an important investment decision and in
order to serve this objective, the document covers various aspects of dairy and livestock
concept development, start-up, production, finance and business management. The
document also provides sectoral information, brief on government policies and
international scenario, which have some bearing on the project itself.
This particular pre-feasibility is regarding “Calf Fattening Farm” which comes under
“Livestock and Agriculture” sector. Before studying the whole document one must
consider following critical aspects, which form the basis of any investment decision.
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Calf Fattening Farm (Feedlot System)
CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR
INVESTMENT
Calf fattening is all-inclusive activity, related to meet animal’s care, housing, medication,
feeding and management. It is defined as all those aspects and activities relating to
raising of calves for meat purpose. Before making the decision, whether to invest in the
livestock farming or not, one should carefully analyze the associated risk factors. A
SWOT analysis can help in analyzing these factors, which can play important role in
making the decision.
3.1
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3.2
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Strengths
Back bone and main stay of economy.
Provides raw material for food & Leather industry.
Concentrated production.
Favorable breeding backgrounds.
Relatively cheap farmland.
High domestic consumption
Low cost living standard.
Full family involvement, devoted & hardworking Sector.
Major source of food, i.e. Meat.
Source of Farmyard Manure (FYM).
Sizeable foreign exchanges earning through exports.
Ample human resource employment sector.
Stationed, permanently located secured loaning sector.
Weaknesses
High production costs.
Low levels of bulk feed production.
Poor management level in quite a few cases.
No or low application of research work and pedigree record keeping.
Animals are kept for social rather than commercial reasons.
There is no registered beef breed in Pakistan.
Low or lack of interaction with farmers. Poor information about each other. Lack of
extension services.
Lack of education and initiative in farmer, traditional approach due to lack of skills
and management.
Unorganized sector, unaware of basic farm management practices.
Remote area, lack of farm to market approach & transportation.
Non-availability of communication services.
Lack of farm/ market infra structures & marketing information.
Management of livestock farm is a challenging job.
Nutrition is still a problem hampering the livestock productivity in general and meat
production in particular
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3.3
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3.4
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Calf Fattening Farm (Feedlot System)
Opportunities
Govt. of Pakistan & Sate Bank of Pakistan priority sector.
Vast range of area of operation, more needs and scope of development.
Value added dairy products are in demand.
Meat and meat products needs are much higher than supply.
Commercially viable sector with great credit potential and absorption capacity.
Vast range of area of operation, more needs and scope of development.
Value added meat products are in demand. If the government lifts the price fixing
taboo, then there are bright chances for the flourishing of meat market. Customers
are ready to pay prices for the good quality meat.
Massive migration of labour to cities can be checked / stopped.
Corporate financing will become a niche in lending market.
Progressive meat retailing firms can promote the sale of processed and quality meat
cuts to consumers, which is packed and labeled at a price, including the cost of
processing, packaging and quality.
Development of slaughtering and processing operations can help in obtaining
maximum value.
Improving the control of external parasites may enhance the value of hide or skin.
Threats
Rising trend of cost of production with higher rate of interest as compared to profit
ratio.
Implementation of WTO will result in open & competitive commodity pricing.
Due to fear of default, banker community has reluctance for lending loans.
High risks of diseases in live stock. Animals are subject to serious diseases that may
lead to mortality.
The formal meat market not growing due to the government regulation of price
fixing as Municipal Corporation fixes the meat prices in the urban markets.
The fixed prices are not likely to be viable for selling the quality meat.
Butcher market not ready to pay the premium prices for the fattened animal.
Defective and unorganized markets.
Imbalance between prices of inputs & outputs.
Rising trend of cost of production with higher rate of interest as compared to profit
ratio.
Lack of media projection, non-recognition of problems and monopoly of
multinationals.
Lack of community organizations and out dated farm practices.
Lack of coordination towards common causes & goals.
Lack of awareness about economics, demand & supply in market.
Low saving, low holding capacity & increasing level of poverty.
Non-availability of subsidy & tax holidays.
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Calf Fattening Farm (Feedlot System)
PROJECT PROFILE
4.1
Opportunity Rationale
Livestock production is an integral part of Pakistan's agriculture sector and plays a vital
role in national economy. At present, livestock is contributing about 52% to the
agricultural sector and 10.9% to the GDP. Pakistan is geographically located close to the
Middle East and South-East Asia. Both of these regions are deficient in livestock
products and depend upon import from other countries. The livestock industry in most of
the developed world is highly subsidized. With reduction of subsidies in the wake of
WTO, the local livestock sector should have better opportunities to compete. Livestock
registered a strong growth of 4.30% over the last year’s impressive growth of 7.5% due
to increase in the livestock and poultry products. The role of livestock in rural economy
may be assessed by the fact that 30 to 35 million of the total rural population is engaged
in livestock farming, having 2 to 3 cattle/buffalo and 5 to 6 sheep/goats per family
deriving 30% to 40% of income from it. During year 2007-08, the total red meat
production was 1.55 and 0.58 million tons for beef and mutton, respectively. The per
capita consumption indicates a growing demand of meat in the years to come. Calves for
fattening may come from the dairy herd.
Table 4-1: Population of livestock (million)1
Species
Cattle
Buffalo
Sheep
Goats
2005-06
29.6
27.3
2006-07
30.7
28.2
2007-08
26.5
53.8
26.8
55.2
27.1
56.7
2006-07
32.22
1,493
565
2007-08
34.06
1,549
578
31.8
29.0
Table 4-2: Production of Livestock Products2
Product
Milk (million tones)
Beef (000,tones)
Mutton(000,tones)
2005-06
31.20
1,444
554
Livestock production is growing rapidly as a result of the increasing demand for animal
products. In a Food & Agriculture Organization (FAO) study: Livestock to 2020: The
Next Food Revolution, it is suggested that global meat production and consumption will
rise from 233 million tones (2000) to 300 million tones (2020), and milk from 568 to 700
million tones over the same period. Egg production will also increase by 30% 3. These
1 Economic Survey of Pakistan, 2007-08
2
Economic Survey of Pakistan, 2007-08
3
The Livestock to 2020 study used base figures for 1993 and these have been recalculated for the year 2000 based on
FAO STAT data.
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Calf Fattening Farm (Feedlot System)
predictions show a massive increase in animal protein demand, needed to satisfy the
growth in the human population.
The overall growth in the live stock population can be seen from the following table:
Table 4-3 Livestock (Population Growth) 4
Fiscal Year
2000-01
2001-02
2002-03
(Numbers in Millions)
Buffaloes
23.3
24.0
24.8
Cattle
22.4
22.8
23.3
Goats
49.1
50.9
52.8
Sheep
24.2
24.4
24.6
Poultry
292.4
330.0
346.1
2003-04
2004-05
25.5
26.3
23.8
24.2
54.7
56.7
24.7
24.9
352.6
372.0
2005-06
2006-07
27.3
28.2
29.6
30.7
53.8
55.2
26.5
26.8
433.8
443.2
2007-08
29.0
31.8
56.7
27.1
510.1
Calf fattening enterprise is an agro-based project. The calves, preferably males, 8-9
months of age are fed on concentrated feed and fodder produced from the agricultural
land. Balanced feed is given to calves for a period of 120 days to get higher weight gain.
Live weight of these calves is between 80-90 kg. If these calves are fed properly on the
formulated fattening feed, their weight can be raised up to 180-200 kg during the
fattening period. The daily weight gain of fattened calves varies between 600-800 grams
depending on the quality of feed given to them. There is a shortage of beef in the country.
This shortage is being observed through meat-less days. If the calf fattening projects are
carried out in the country then the domestic demand of beef could be fulfilled. As the
fattened animals have higher meat contents (55%) as compared to grazing animals (48%).
4.2
Market Entry Timing
Since beef demand is increasing day by day, therefore, the demand of fattened calves is
also higher. The demand increases especially before occasions like Eid-ul-Fitr and Eidul-Azha. That’s why the animals in such occasions are sold at a bit higher prices as
compared to other days. The proposed business can be started before these occasions or
any time through out the year. At the commencement of the proposed business, it is
important that the entrepreneur must have good knowledge of the production and have
contacts with the livestock breeders and farmers. The ability to work with people/
animals and efficient use of resources are important aspects in modern and commercial
calf fattening farm.
4.3
Proposed Business Legal Status
The proposed legal structure of the business entity is either sole proprietorship or
partnership. Although selection totally depends upon the choice of the entrepreneur but
this financial feasibility is based on Sole Proprietorship.
4
Pakistan Livestock Census, Statistics Division, Ministry of Economic Affairs & Statistics, GoP.
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4.4
Calf Fattening Farm (Feedlot System)
Proposed Capacity
The pre-feasibility suggests producing 450 calves a year in 3 production cycles, each of 4
months. This size of a farm justifies the recurring costs of this project.
4.5
Project Investment
The total cost of the project is Rs.4, 933,113 out of which capital cost of the project is Rs.
4,439,944 for purchasing the animals and constructing the building and the rest is used to
meet the working capital requirement.
Table 4-4 Project Costs
Description
Land
Building and Civil Works
Plant and Machinery
Furniture/ Fixture & Equipment
Pre-operational Expenses
Vehicles
Total Fixed Cost
Working Capital
Total
Amount (in Rs.)
506,944
2,374,000
379,000
100,000
292,500
787,500
4,439,944
493,168
4,933,112
The proposed pre-feasibility is based on the assumption of 50% debt and 50% equity.
However this composition of debt and equity can be changed as per the requirement of
the investor.
Table 4-5 Project Financing
Debt
Equity
Total Project Investment
50%
50%
2,466,556
2,466,556
4,933,112
Table 4-6 Project Economics
Viability
IRR (%)
NPV @20% (Rs)
Pay Back Period (year)
4.6
Project
55.71%
27,540,982
4.10
Proposed Location
The development of urban or peri-urban commercial calf fattening farms is something
new in livestock production. Metropolitan cities like Lahore, Karachi, Multan,
Faisalabad, Rawalpindi, etc are the major markets of meat. Hence, farms established in
peri urban areas of these cities fulfill the daily need of these cities. The other locations
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Calf Fattening Farm (Feedlot System)
may be around the bigger cities e.g. Sialkot, Jhang, Rahim Yar Khan, Bahawalnagar,
Bahawalpur, Sahiwal, Okara etc.
4.7
Key Success Factors/Practical Tips for Success
The livestock production research institutes and universities have conducted many studies
to ascertain the beef production potential of indigenous livestock under the feedlot
fattening regimes. Weight, growth and efficiency are major factors influencing the
economical meat production.
The carcass yield depends upon several factors such as breed, age, sex and degree of
finishing. The studies suggest substantial live weight gain and carcass yield from the
buffalo and different indigenous breeds of cow calves. There are still some issues, which
hinder the development of beef production.
The thrust in calf fattening farm is on the increased use of capital and management.
Successful farming harnesses all available resources into productive and profitable unit.
Calf fattening is highly complex as it includes farm management, feeding, housing,
disease control and hygienic production of milk on farm. The judicial use of means and
resources to achieve clearly defined goals is the key success factor i.e. the art of
maximization and optimal utilization of resources and means for maximizing productivity
and profits.
Feeding meat animals on nutritious compound feed along with green fodder can be
adopted. Other farm management practices include comfortable and ventilated barns,
drinking water and feed according to the requirements. Timely vaccination against
Rinderpest, Black Quarter and Foot & Mouth Disease. The prevention of internal and
external parasites will also improve the over all performance of herd. The absence of calf
weaning program is a shortcoming to the development of beef industry. Too many young
male calves are slaughtered quite young due to high cost of milk required to feed them.
Those left are generally underfed and stunted thus unable to achieve the normal growth.
A suitable plan could provide animals of 100-150 kgs of weight, which could be raised to
the desired market demand.
An efficient program aim at moving the calves from liquid to dry feed as quickly as
possible if calf fattening is integrated with dairy farming. High quality calf starter feed
with digestibility, palatability and composition should be fed free of choice from the third
day of birth. Quality of diet is the key to a successful early weaning system. Weaning
could be started once the consumption reaches 800 grams a day, which would provide
healthy and thrifty calves. The changing of this system by small farmers and peri-urban
dairy farm entrepreneurs will be a long and difficult process to which some incentives are
essential. Another option is to buy feeder calves from the cattle markets.
Attention must be given to the selection of animals. Once the calves are purchased and
placed in pens, farmers would face many technical problems affecting the success of their
operation. It will be worthwhile to get technical assistance from the livestock
professionals and experts. It is advisable to purchase fattening rations initially from the
public or private sector feed mills. Once the experience is gained and practices are
established, feed processing equipment, such as the grinder-mixers can be installed as per
capacity of the farm.
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5
5.1
Calf Fattening Farm (Feedlot System)
SECTOR & INDUSTRY ANALYSIS
Major Players
Though livestock production is fragmented and most units in Punjab are small with 10
percent holding around 10 to 20 buffalo cows, and only five percent over 20 heads each.
Such units are often run by capable and business-oriented farmers who are open to
change and eager to adopt improved production practices. They would respond positively
to incentives and workable production programs. In mid 90’s the US Feed Grain Council
introduced commercial meat production. A number of farmers from Punjab and Sindh
participated in the program. They produced many ‘lots’ of fattened animals but felt
difficulty in selling the animals at proper price.
Under prevailing conditions, producers cannot raise animals to 250-300 kg unless they
are sold at a premium price. Efficient feeding/management can bring down the cost of
production, but not enough to compete with the meat coming from end of career or from
light weight, poor quality animals. A positive measure could be to terminate the ceiling
price policy and create integrated production-distribution projects.
5.2
Hubs of Calf Fattening Farming
Karachi is a big market for good quality meat. The Karachi market is expanding, as daily
requirement of meat is about 1,000 metric tons. Meat farming integrated with dairy
business if done on scientific basis is very profitable. There are more than 100 markets
only in Sindh dealing with livestock without any facility or supervision. The major
markets are Tharparkar, Mirpurkhas, Sanghar, Dadu and Badin. All this will facilitate
farmers in rearing their livestock in a more healthy way.
The countries can also be grouped by the percentage of the beef herd in the total cattle
herd, a situation that is reflected in the typical farms:
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6
6.1
Milk Countries: with the beef herd as < 25 percent of the total are Poland, Pakistan,
Hungary, Czech Republic and Germany.
Mix Countries: with a share between 25 and 75 percent of the beef herd of the total
are Austria, France, Ireland and Spain.
Beef Countries: with > 75 percent of the beef herd of the total are U.S., Brazil,
Australia, Argentina and Uruguay.
MARKET INFORMATION
Sector Characteristics
Currently, meat sector in Pakistan is working on an informal basis from animal raising to
meat selling. Animal traders purchase animals from the rural areas and sell them to the
animal markets in the urban areas. Butchers purchase these animals from animal markets
and slaughter them in the slaughterhouses. Butchers act as meat traders and dominate the
meat market both in rural and urban areas. The animals sold in these markets are
generally diseased and culled animals. Butchers/traders prefer to buy these cheap
animals.
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The current red meat production system is both traditional and inefficient. Beef mostly
comes from the end of career, or emergency slaughtered animals. A lot of baby buffaloes
and calves are slaughtered when these are only 1-2 weeks old. Few calves are raised to
60-80kg but on extremely poor and unbalanced diets. Lack of commercial, on-farm
livestock feeding could be blamed for existing price ceiling, which is fixed too low to
recover the production cost. Traditional and unhygienic slaughtering techniques are
major constraints, which are not acceptable to those who believe in health and hygiene.
The livestock resources hold potential for increasing the production of meat. It is
estimated that about 6-7 million buffalo/cattle male calves if raised on balanced diet
could double the production. Sheep and goats can also be raised for quality meat
production.
The meat industry as a whole, from livestock farming to marketing of meat is in a poor
state at the moment. General crop farming has progressed from the 'subsistence level
farming' to 'commercial farming', at least in major crops in the country because of
research, extension focus and 'market pull factors'. Whereas the livestock farming has
remained least commercialized and survives under subsistence farming conditions. Beef
yield has remained low due to the following constraints:
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6.2
Despite immense potential, breeding has not been done for increasing productivity.
Feeding methods are primitive with hardly any feed management. Despite abundant
fodder production, there is always a shortage between seasons. This shortage is met
by "bhoosa" (wheat straw) which has very low nutritional value. Quality feed
concentrates from existing by-products is not being used efficiently.
Large-scale livestock farming has not been practiced due to the total manual
procedures adopted in feeding and herd management. Reliability of manual labour is
severe especially in view of illiteracy and poor farmer education on the subject.
Market Potential
In Pakistan, the beef industry is an important segment of livestock production. The
increasing population and the rising consumer buying power have together contributed to
an increase in demand resulting in relatively favorable prices for beef. Worldwide
consumption of meat during 1983 for developed world was 74 kg compared to 14 kg for
developing countries and 11 kg for Pakistan. The data for 1993 indicates 76kg, 21 kg and
16kg for the three, respectively. The challenge for Pakistan now is to achieve 47 kg per
capita consumption by 2020. According to statistics there is a gap in demand and supply
of beef in the market. This gap is met through meatless days and through poultry meat.
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Calf Fattening Farm (Feedlot System)
Figure 6-1: Market Value of Dairy & Livestock in Pakistan
(Source: Agricultural Statistics of Pakistan, 2003-04)
6.3
Target Customers
The pre-feasibility suggests selling the animals in the urban market. The buyers could be
the corporate buyers e.g. hotels and exporters. The animal mandies of big metropolitan
cities can also be considered for selling the animals in bulk. The animals will be sold on
live weight basis. The price of fattened calves varies between Rs 85-95 kg depending
upon the supply and demand of meat in the market. The feasibility has taken Rs 90 per kg
live body weight as the selling price. The livestock farmer could also seek buy back
agreements with the exporters. Following are some of the target clients for a calffattening farmer:
1.
2.
3.
4.
Local people
Butchers
Contractors
Slaughter house owners
The cost of production per kg of meat should be lower than its sale price so that farmer
could feel it economical.
7
FARM INPUTS
7.1
7.1.1
Land
Land Requirement
Around 1 acre of land would be required which cost Rs.506,944 for a calf-fattening
project of 450 animals in a period of one year. It is assumed that the Total Mixed Ration
(TMR) will be purchased from market @ Rs. 11 per Kg. Around 6,000 sq. ft. area would
be used for building a shed for the animals to protect them from severity of the weather.
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Calf Fattening Farm (Feedlot System)
Table 7-1: Land Requirements
Description
Shed for Calves
Open Paddock for Calves
Stores (Feed & machine)
Servant Room, Wash room
Open land
Office block
Total Land Requirement
7.1.2
Area (Sq. ft)
Sq. ft
6,000
9,000
120
120
20,760
500
36,500
Land Lease
Lease is a better option for a new investor. Land on lease is available in rural areas for a
period of 5-15 years. Advance rent for a few years will be charged initially. Good
agriculture land is available with an annual rent of Rs 8,000-10,000 per acre. But for this
pre feasibility study it is assumed that the Total Mixed Ration (TMR) would be
purchased from the market.
7.1.3
Suitable Locations
Peri urban and rural areas in the neighboring areas of Lahore, Karachi, Islamabad,
Faisalabad & Multan etc. where water, electricity is available to irrigate the crops are
suitable locations for establishing a calf-fattening farm.
7.1.4
Herd Mix
Some breeds of cattle are known as 'dual purpose' because they are suitable for producing
milk and beef. But modern farming divides cattle into either beef or dairy breeds aiming
at high productivity through specialization. British beef breeds include Hereford,
Galloway, Beef Shorthorn, Aberdeen Angus and South Devon. A recent trend in the UK
has been the introduction of large Continental breeds such as Charolais, Limousin and
Simmental. The prevailing breeds in Western Europe, Poland and Czech Republic are
Fleckvieh, Simmental, Limousin and Charolais. In Hungary, Ireland, the U.S. and the
Southern Hemisphere, breeds of British origin (mainly Hereford, Angus and their
crosses) dominate. Particular cases are Brazil (Nelore, coming from India) and Pakistan
where the local buffalo breed is used for both milk and beef production5.
The Calves of different breeds (7-8 months of age) can be used for fattening purpose at
an average body weight of 80-100 kgs for 90-120 days. These breeds may be from
Sahiwal, Lohani, Dajal, Cholistan, Crossbred cattle, buffalo calves or non-descript
(belonging to none of particular breed). Experiments carried out on Livestock Production
Research Institute, Bahadurnagar, Okara shows that cost of meat production for
Cholistani and Crossbred calves is relatively cheaper than Sahiwal, Dajal, Non-descript
and buffalo calves fed on the same Total Mixed Ration (TMR).
5
(IFCN Beef Report 2007)
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Pre-Feasibility Study
7.2
Calf Fattening Farm (Feedlot System)
Animal Markets
The feasibility suggests purchasing calves on live weight basis from the rural areas or
animal mandies. The animals are being traded across the country in animal mandies
round the year. Most of which operate on weekly basis. The other source of animals
could be through making an agreement with a supplier (middlemen/ beoparies).
Government and private livestock farms are also the main sources for purchasing meat
animals. Animal markets are situated in different places in Punjab, which includes
Sheikupura, Okara, Sahiwal, Arifwala, Muridke and Jhelum. These markets operate on
rotational basis in a week, or once a month. There are different contractors available in
the markets that would help in locating the proper animals. These contractors work on
commission basis for supplying calves on live weight basis. Commission rate charged
may vary from some %age of the animal price.
7.3
Animal Housing
There is a general trend to keep the fattened calves in semi-confinement in order to
control waste production, where these calves are confined and housed over slatted floors.
All faeces and urine can be collected, thus eliminating the need for using bedding
material. At present most of the cattle in feedlots are still kept on concrete floors, or in
dry regions, on an unpaved area. More efficient growth rates will be achieved if shade is
provided. Solids from manure are either collected daily and stored, or allowed to dry in
the feedlot and removed periodically before spreading on fields. Collection of urine is
limited to feedlots with a slatted floor.
Sheds of the animals should be airy with protection of the animals from extreme
temperatures and strong winds. The animal housing should be facilitated with drinking
water for animals. There should be proper drainage system to keep hygiene at the farm. It
consists of a built up animal shed, a brick soling paddock for animals, one room for
storing farm equipment and one for compound feed storage. But the pre-feasibility has
taken feeding manger, open paddock and water trough as the major housing requirement
for the calves.
Animal sheds should be located with long axis north to south, to get direct sunlight and
yet face away from the direction of prevailing winds, whenever possible. Tree plantation
can be carried outside the sheds to provide natural shades and these trees will also act as
windbreakers.
Dimensions of water troughs will be the same as that of feeding mangers and water will
be available round the clock. Generally all the animals feed at the same time in a shed,
but not all animals drink water simultaneously. The following figure shows the animal
housing layout for calf fattening farm.
15
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Pre-Feasibility Study
Calf Fattening Farm (Feedlot System)
Open paddock
Open paddock
Water Trough
Water Trough
Figure 7-1 Animal Housing Layout
Fodder
Manger
Gate
Gate
Table 7-2
Total Infrastructure Cost
Description
Shed for Calves
Open Paddock for Calves
Stores (feed & machine)
Servant Room, Wash room
Office block
Total Infrastructure Cost
7.4
Sq.ft
6,000
9,000
120
120
500
15,740
Rate/Sq.ft
300
10
300
400
800
Total Cost
1,800,000
90,000
36,000
48,000
400,000
2,374,000
Farm Machinery
The pre-feasibility suggests, hiring tractor for land preparation to grow fodder crops.
Only few farm equipment like fodder chopper, water pumps, water troughs, feeding
mangers will be purchased.
Table 7-3
Farm Equipment
Farm supplies
Chopper
Water pump
Tube Well
Weighing Scale
Miscellaneous farm utensils
Total Machinery Cost
Rate
12,000
10,000
300,000
50,000
7,000
16
PREF-24/March, 2009/Rev 3
No.
1
1
1
1
1
5
Rs.
12,000
10,000
300,000
50,000
7,000
379,000
Pre-Feasibility Study
7.5
Calf Fattening Farm (Feedlot System)
Feed
7.5.1
Ration for Calf Fattening
The ration is allowance of nutritionally balanced Total Mixed Ration (TMR) in 24 hours
to increase animal productivity. Wheat straw6 is also used as dry roughage in TMR. The
cost of TMR will be lowered if feed ingredients are mixed on farm. The composition of
the rations fed in the finishing operations depends largely on the types of feed produced
local availability and on weights and grades of calves to be fattened. Rations can range
from high-roughage low energy rations to high-energy rations composed almost entirely
of concentrates. Examples of ingredients in rations are:



Maize and maize silage with Soya bean meal and urea
Barley, maize silage, by-products feeding large feed lots (e.g. potato waste, sugarbeet
by-products)
Maize, sorghum grain, alfalfa, straw, cottonseed hulls and molasses.
Some hormone-like growth stimulators, antibiotic feed additives and ionophores (rumen
altering factors) are legalized to be included in the feed and are very commonly used.
Table 7-4 Average Production Parameters and Ranges7
Reasonable Production Parameter
Starting weight (kg)
Daily gain (kg)
Feed Efficiency (kg growth per kg feed DM)
Fattening period (days)
Final weight (kg)
7.5.2
Range
70-100
0.70 - 1.0
6 - 12
90 - 150
150-200
Average
85
0.8
9
120
175
Green Fodder for Calves
Fodder is grown at the land, which is acquired on lease or owned by the entrepreneur.
Due to increased demand, improved forage crops such as multi-cut oats, berseem,
lucerne, Sorghum- Sudan grass hybrids, mott grass, sorghum, maize and millet have been
developed. These have become very popular in irrigated areas such as Kasur,
Sheikhupura, Gujranwala, Faisalabad, Sargodha, and Renala Khurd (Punjab), Nowshera,
Charsada, Mardan, and Peshawar (North West Frontier Province), and Hyderabad,
Sukkur, Larkana and Nawabshah in Sindh for peri-urban dairies. Details of fodder
cultivars released by Research Institutions in Pakistan are given in Annex 2. Average
forage yields in Pakistan are extremely low compared to yields obtained on research
institutes and from well-managed farms and fields. These are very low as compared to
their potential, with 22.8 tons per hectare a recent estimate 8.
6
A byproduct of wheat harvesting used as dry roughage for livestock and dairy animals
FAO Statistics
8
FAO Statistical Databases
7
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Calf Fattening Farm (Feedlot System)
Although improved varieties and technology are available, they have been slow to reach
the dairy farms. Recent medium scale on-farm work has indicated that yields can be
enhanced two to three fold by using available improved varieties and appropriate
agronomic techniques. In an area where land and irrigation are the major limiting factors
to enhancing fodder production, intensification is the only way to meet the needs for
forage. Intensive and economical forage production per unit area per season would be the
best choice. Also efforts should be made to produce and provide sufficient quantities of
seed of multicut forage varieties and hybrids like Mott grass to commercial dairy farms.
The fodder yield (except multi cut Mott Grass which yields 100-150 tones/ acre in 4 to 6
cuttings per year) varies between 10 tons to 40 tons per acre depending upon the fertility
of land, quality of seed and application of fertilizer.
Table 7-5 Types of Dry & Green roughage9
Dry Roughage
Wheat Straw
Rice Straw
Oat Straw
Maize/Sorghum Stubble
Sugarcane Baggass
Cotton Seed Hulls
Corn Cobs
7.5.3
Green Roughage
Summer Fodder
Winter Fodder
Maize
Barseem
Sorghum
Alfalfa (Lucerne)
Millet
Oats
Mott Grass
Rye Grass
Sadabahar
Sugarcane tops
Guar
Fodder Production Economics
The comparative economic feasibility of various forage crops produced under various
farming systems is shown in Table 7-7.
Table 7-6 Economics of forage production under improved production system per
hectare in Pakistan10
Item
Maize
Sorghum
Land preparation
938
974
Seed & Sowing
1,200
688
Fertilizer
1,750
1,750
Irrigation
750
750
Land Revenue
1,750
1,750
Harvesting / Transport
1,875
1,750
Total expenditure
Yield (Kilos)
Price/kg (Rs)
9
10
8,263
80,000
1.00
7,662
79,750
1.00
Forage Crop
S. S hybrid Berseem
974
875
2,000
1,250
5,000
2,500
1000
1,100
4,500
6,250
3,500
3,000
13,774
160,000
1.00
Livestock & Dairy Development Department, Lahore & FAO Statistical Databases
FAO Statistical Databases
18
PREF-24/March, 2009/Rev 3
14,825
102,500
1.50
Lucerne
875
1,250
2,500
750
6,250
3,750
Oats
750
1,250
2,250
500
1,875
3,000
15,635
103,750
1.50
9,625
115,000
1.25
Pre-Feasibility Study
7.5.4
Calf Fattening Farm (Feedlot System)
Daily Fodder Requirement
There is no fixed fodder requirement for the animals but a rule of thumb says that an
animal needs daily fodder equal to 4.5% of live body weight on Dry Matter (DM) Basis.
One third of this DM will come from green fodder and 2/3 rd will be supplemented by
TMR in fattening calves to get maximum daily weight gains. According to these
estimates, one calf of 80 Kgs body weight will consume 8-10 kgs fodder daily for 120
days (preferred if fed free of choice i.e. ad libitum).
7.5.5
Daily Total Mixed Ration Requirement
Since an animal needs daily feed equal to 4.5% of its live body weight on Dry Matter
(DM) Basis. The 2/3 rd of this DM will be supplemented by TMR. For an animal of 80
kgs body weight, it will be 8-10 kgs per day (Preferred if fed free of choice i.e. ad
libitum)
7.5.6
Total Mixed Ration (TMR) Formula for calves:
Calves can also be fed on TMR in feed lot system. The Crude Protein (CP) value of this
ration should be 12-13 % with 65-70 % Total Digestible Nutrients (TDN). These feed
ingredients when mixed according to feed formula will provide adequate energy
according to energy and protein requirements of animal.
Table 7-7 Details of Raw Material
Material
Percentage Input
Cottonseed cake/ Maize grain
Corn gluten meal (20%)
Rice Polish
Wheat bran
Wheat Straw
Molasses
Urea
Salt
DCP
Total
Crude Protein (CP)
Total Digestible Nutrient (TDN)
7.5.7
9%
8%
15%
20%
26%
17%
1%
2%
2%
100%
12.7%
65%
Mineral Mixture
This is used as a feed supplement. It includes a mix of minerals (magnesium, iron,
sodium and salts). Mineral mixtures are good source of energy and increase the animal
productivity to produce more lean meat. Urea Molasses Blocks can also be used to
supplement the minerals.
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7.5.8
Calf Fattening Farm (Feedlot System)
Wheat Straw (Bhoosa or Turi)
Wheat straw is a major, typical, and very popular feed, it is always chaffed, and is the
main or even only major dry roughage used on almost all the farms. Traditional threshing
methods break the straw into short pieces. Modern mechanical threshers have been
designed to break the straw. In places where it is produced, it is available at Rs.1.0 per
kilo. In recent years baling units have been installed in central Punjab; bales are
transported to major cities, even to Gilgit, Skardu, and Chitral.
Table 7-8 Daily Feed Requirements for One Fattened Calves in 120 Days
Fattening
Days
1
Body Weight (Kgs.) Feed Requirement/ Day Daily Feed Cost (Rs.)
30
60
90
120
Total Feed Cost
7.6
100
4.5
50
123
147
171
195
5.5
6.6
7.7
8.8
61
73
85
97
8,767
Vaccination & Medication
Vaccination & medication is required to prevent any disease out break in the animal herd.
Each new animal will be vaccinated before putting into the farm. Anthelmantics are used
to treat the animals for internal parasites where as spraying and dipping with some dis
infecting solution is used to eradicate external parasites. The total cost will be Rs.200 per
animal. Vaccines are produced at Veterinary Research Institute, Ghazi Road, Lahore. The
vaccines are provided to the Government Farms and Hospitals on payment. Farmers can
also obtain these vaccines on payment according to prescribed schedule from the
Institute. Technical guidance is also provided to the farmers. Farmers can have their
animals vaccinated from the field Veterinary Hospitals and Centres.
7.7
Calf Quarantine
A quarantine yard will be made for new animal handling, dipping, weighing, and
vaccination etc. The newly purchased animals will be dewormed and medicated with
proper and necessary vaccinations in this yard. Only the disease free animals will proceed
to the feedlot from the quarantine sheds. Quarantine arrangements will minimize the
chances of disease spread in the farm by ensuring that the new animals do not carry any
disease before they are taken to the main sheds. This seven-day period will also be
helpful in acclimatizing the new animals before they enter the main feedlot sheds. The
behavior of the animal will be recorded during these seven days and then its requirement
of feed will be calculated accordingly before sending it to the main feedlot.
7.8
Labor Requirement
For a calf-fattening farm, manpower is required for performing different animal
husbandry practices at the farm e.g. housing, feeding, watering, medication and care of
animals etc. One person can handle 25 calves easily for feeding and other management.
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Pre-Feasibility Study
Calf Fattening Farm (Feedlot System)
Five persons will be required to look after the fattening farm. The monthly salary of each
attendant is taken as Rs 6,500. A supervisor cum farm manager can be hired to supervise
all the farm activities. The supervisor with a B.Sc. (Honors) degree in Animal Husbandry
(AH) may be hired as a farm manager so that he can handle the farm practices,
administration & account matters at the dairy farm.
Table 7-9 Labor Requirements
Description
Farm Supervisor
Attendant
No.
1
5
Total Labor Cost
6
8
8.1
Salary/month/Person
20,000
6,500
Annual Salary
240,000
390,000
630,000
FARM OUTPUT
Fattening Period
The fattening period is the period during which the animal puts on weight. These animals
are called fattened animals. Generally the period is 90-120 days. Following are the
desirable size and thickness of fattened animals. Large frame size with no.1 thickness is
desirable.
Figure 8-1
8.2
Frame size and Thickness Grades of Fattened Animals
Meat Composition
Like all meat, beef is also very high in protein. It also contains significant quantities of 'B'
vitamins and minerals such as sodium, potassium and phosphorus. Offal, particularly
liver, is rich in Vitamin B12, A, C and D, folic acid, iron and riboflavin. The moisture
content of lean meat is 75-79 % where as the crude protein content is 18-22 %. There is a
21
PREF-24/March, 2009/Rev 3
Pre-Feasibility Study
Calf Fattening Farm (Feedlot System)
5-6.5 % mineral content in it. The percentage of lean meat, bone and other tissues of
carcasses of different breeds is given as under;
Table 8-1 Meat Composition of Different Breeds11
Parameters
Sahiwal
Dajal
67.2
16.3
12.7
3.4
55.5
70.6
15.2
10.3
3.7
58.0
Lean meat %
Bone %
Fat%
Other tissues %
Dressing %
8.3
Cholistani
66.7
16.8
12.5
3.7
56.5
NonDescript
67.7
17.3
11.7
4.1
53.6
Cross
Buffalo
bred
67.5
62.8
16.3
17.6
11.7
14.9
4.3
4.6
54.4
51.6
Increase in weight gains
Average weight gains and feed efficiency values as such of different breeds of calves are
given as under:
Table 8-2 Values of Different Parameters for Different Breeds
Parameters
Sahiwal
Dajal
78.20
84.00
0.85
0.91
0.90
0.90
0.90
0.84
8.48
8.69
8.34
8.60
9.40
7.63
Total weight
gain (kgs)
Daily weight
gain (kgs)
Feed efficiency
(as such basis)
8.4
Cholistani
Nondescript
82.60
82.60
Cross
bred
82.80
Buffalo
86.20
Sale Price
Selling price is another limiting factor for the determination of the profitability of this
business. In Pakistan, the beef business is controlled by the informal sector. There are no
organized markets for the beef sale and purchase. The meat business is in the hands of a
community called butchers or Kassab.
After feeding animals in feedlots, only the premium price can make the operations
profitable. In this pre feasibility study, the animals will be sold on farm at Rs. 90 per Kg
live body weight. Only fetching good price can justify the costs incurred on rearing
animal in feed lots. The selling price of fattened animal will be higher than the other
animals because of its higher meat recovery and good quality. To avoid the risk of price
fluctuations, certain buy back agreements with institutional buyers will be a good
approach for the success of this business. Linking the project with the live animal export
or beef exports will assure good returns on the business. Near the urban market and
especially around Eid-ul-Azha, the selling price of beef is Rs.130-140 per kg live body
weight.
11
Livestock Production Research Institute, Bbahadurnagar, Okara
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Pre-Feasibility Study
9
Calf Fattening Farm (Feedlot System)
USEFUL TERMINOLOGY
-Cake
Mass resulting from the processing of seeds, which is rich in protein and is used as a
source of feed for livestock, e.g. cottonseed cake?
-Calf
Young animal of dairy origin between seven and 120 days of age.
-Compound feed
Any ground mixture of ingredients intended for feeding the animals. It includes a
concentrate mixture accordingly to formula.
-Dressing percent
Dressing percent is important because it reflects the amount of carcass in relation to
the animal’s live weight. Dressing percent is calculated by using the following
formula:
Dressing % =
Hot Carcass Wt. x 100
Live Animal Wt.
Dressing percent is affected by the fill, finish, muscling, sex, type, and if the animal is
pregnant or not. Normal Range is 55-67% for young fattened calves.
-Fat Thickness
The primary estimate of fatness is fat thickness at the 12th rib. It is used to assess total
fat on the carcass. (Average: 0.5 inches)
-Feedstuffs
Any substance of nutritive and biological value used in production of compound feed.
-Home Mixed Feed
Feed prepared on farm of the owner.
-Live Weight
Cattle have a wider range of market weights than other species due to differences in
type and maturity.
-Ration
Amount of balance feed in 24 hours
-Weaning Calf
Young animal of between five and nine months coming from the cow-calf enterprise
and being reared by a suckling cow until weaning. The term is used to indicate a
difference of calves from dairy herds, referred to as ‘dairy calves’.
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Calf Fattening Farm (Feedlot System)
10 FINAICIAL ANALYSIS
10.1
Projected Income Statement
Const Year
Sales
COST OF GOODS SOLD
Raw Material
Payroll (Production Staff)
Direct Electricity
Total
Gross Profit
OPERATING EXPENSE
Payroll (Admin)
Administrative & Factory Overheads
Depreciation
Mortality loss
Total
Operating Profit
Year-1
7,858,620
Year-2
10,085,229
Year-3
12,678,574
Year-4
15,689,735
Year-5
19,176,343
Year-6
23,203,375
Year-7
27,844,049
Year-8
33,180,826
Year-9
39,306,516
Year-10
46,325,537
9,774,046
429,975
17313
10,221,334
2,457,239
10,974,688
451,474
19044
11,445,206
4,244,529
12,270,959
474,047
20949
12,765,955
6,410,388
13,669,420
497,750
23044
14,190,213
9,013,161
15,177,049
522,637
25348
15,725,035
12,119,015
16,801,269
548,769
27883
17,377,921
15,802,905
18,549,967
576,208
30671
19,156,846
20,149,670
20,431,532
605,018
33738
21,070,289
25,255,248
7,635,348
390,000
14,308
8,039,656
(181,036)
8,662,865
409,500
15739
9,088,105
997,124
240,000
15,717
166,600
36,000
487,567
252,000
20,170
166,600
44,100
512,120
264,600
25,357
166,600
52,920
538,727
277,830
31,379
166,600
62,512
567,571
291,722
38,353
166,600
72,930
598,855
306,308
46,407
166,600
84,235
632,799
321,623
55,688
166,600
96,487
669,648
337,704
66,362
166,600
109,754
709,670
354,589
78,613
166,600
124,106
753,159
372,319
92,651
166,600
139,620
800,439
(668,604)
485,004
1,918,512
3,676,958
5,811,533
8,380,362
11,449,367
15,093,235
19,396,512
24,454,809
68,649
0
0
68,649
(737,253)
0
(737,253)
72,082
0
0
72,082
412,922
41,292
371,630
75,686
0
0
75,686
1,842,827
460,707
1,382,120
79,470
0
0
79,470
3,597,488
899,372
2,698,116
83,443
0
0
83,443
5,728,090
1,432,022
4,296,067
83,443
0
0
83,443
8,296,919
2,074,230
6,222,689
83,443
0
0
83,443
11,365,923
2,841,481
8,524,442
83,443
0
0
83,443
15,009,792
3,752,448
11,257,344
83,443
0
0
83,443
19,313,068
4,828,267
14,484,801
83,443
0
0
83,443
24,371,366
6,092,841
18,278,524
NON-OPERATING EXPENSE
Financial Charges on Running Finance
Land Lease
Building Rental
Total
PROFIT BEFORE TAX
Tax
PROFIT AFTER TAX
10.2
10.3
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PREF-24/March, 2009/Rev 3
Pre-Feasibility Study
10.4
Calf Fattening Farm (Feedlot System)
Projected Balance Sheet
Const Year
Current Assets
Cash
Stocks and Inventory
Total
Gross Fixed Assets
Less: Accumulated depreciation
Net Fixed Assets
Intangible Assets
Pre-operational Expenses
Total
Total Assets
Current Liabilities
Running Finance
Total
Long-term liabilities
Long-term Loan
Total
Equity
Paid-up Capital
Retained Earnings
Total
Total Liabilities And Equity
Year-1
Year-2
Year-3
Year-4
Year-5
Year-6
Year-7
Year-8
Year-9
Year-10
0
493,169
493,169
4,147,444
0
4,147,444
(547,359)
517,827
(29,532)
4,147,444
166,600
3,980,844
14,075
543,718
557,793
4,147,444
333,200
3,814,244
1,585,908
570,904
2,156,812
4,147,444
499,800
3,647,644
4,473,645
599,449
5,073,095
4,147,444
666,400
3,481,044
8,959,240
629,422
9,588,662
4,147,444
833,000
3,314,444
15,371,362
660,893
16,032,255
4,147,444
999,600
3,147,844
24,085,142
693,938
24,779,079
4,147,444
1,166,200
2,981,244
35,531,725
728,634
36,260,359
4,147,444
1,332,800
2,814,644
50,205,666
765,066
50,970,732
4,147,444
1,499,400
2,648,044
68,673,229
0
68,673,229
4,147,444
1,666,000
2,481,444
292,500
292,500
4,933,113
263,250
263,250
4,214,562
234,000
234,000
4,606,038
204,750
204,750
6,009,207
175,500
175,500
8,729,639
146,250
146,250
13,049,357
117,000
117,000
19,297,100
87,750
87,750
27,848,074
58,500
58,500
39,133,503
29,250
29,250
53,648,026
0
0
71,154,674
493,169
493,169
517,827
517,827
543,718
543,718
570,904
570,904
599,449
599,449
629,422
629,422
660,893
660,893
693,938
693,938
728,634
728,634
765,066
765,066
0
0
1,973,388
1,973,388
1,952,878
1,952,878
1,932,060
1,932,060
1,910,930
1,910,930
1,889,482
1,889,482
1,867,714
1,867,714
1,867,714
1,867,714
1,867,714
1,867,714
1,867,714
1,867,714
1,867,714
1,867,714
1,867,714
1,867,714
2,466,556
0
2,466,556
4,933,113
2,466,556
(737,253)
1,729,304
4,214,562
2,466,556
(365,622)
2,100,934
4,606,038
2,466,556
1,016,498
3,483,054
6,009,207
2,466,556
3,714,613
6,181,170
8,729,639
2,466,556
8,010,681
10,477,237
13,049,357
2,466,556
14,233,370
16,699,927
19,297,100
2,466,556
22,757,813
25,224,369
27,848,074
2,466,556
34,015,156
36,481,713
39,133,503
2,466,556
48,499,958
50,966,514
53,648,026
2,466,556
66,778,482
69,245,039
71,154,674
25
PREF-24/March, 2009/Rev 3
Pre-Feasibility Study
10.5
Calf Fattening Farm (Feedlot System)
Projected Cash flow Statement
Const Year
Operating activities
Net profit
Depreciation
Stocks-RM
Cash provided by operations
Financing activities
Long term debt principal repayment
Addition to long term debt
Addition to running finance
Issuance of share
Cash provided by/ (used for) financing activities
1,973,388
493,169
2,466,556
4,933,113
Total
4,439,944
(493,169)
(493,169)
Investing activities
Capital expenditure
(4,439,944)
Cash (used for)/ provided by investing activities
Net Cash
(4,439,944)
0
Year-1
Year-2
Year-3
Year-5
(737,253)
166,600
(24,658)
(566,061)
371,630
166,600
(25,891)
541,589
1,382,120
166,600
(27,186)
1,550,784
2,698,116
166,600
(28,545)
2,865,421
4,296,067
166,600
(29,972)
4,461,945
(20,510)
(20,818)
(21,130)
(21,447)
(21,769)
24,658
25,891
27,186
28,545
18,702
19,845
21,049
(547,359)
561,434
561,434
Year-6
Year-7
6,222,689
166,600
(31,471)
6,387,068
Year-8
Year-9
Year-10
8,524,442 11,257,344 14,484,801 18,278,524
166,600
166,600
166,600
166,600
(33,045)
(34,697)
(36,432)
765,066
8,687,248 11,418,497 14,644,220 19,239,441
0
0
0
0
29,972
31,471
33,045
34,697
36,432
(765,066)
22,316
23,650
25,054
26,531
28,086
29,722
(771,877)
1,571,833
2,887,737
4,485,595
6,412,122
8,713,779
11,446,583
14,673,941
18,467,563
0
1,571,833
2,887,737
4,485,595
6,412,122
8,713,779
11,446,583
14,673,941
18,467,563
0
(547,359)
26
PREF-24/March, 2009/Rev 3
Year-4
Pre-Feasibility Study
Calf Fattening Farm (Feedlot System)
11 KEY ASSUMPTIONS
Table 11-1: Financial Assumptions
Project life (years)
Debt Equity ratio
Interest rate on short term debt
Interest rate on long term debt
Debt tenure (years)
Debt payments per year
10
50:50
14%
18%
10
12
Table 11-2: Revenue Assumptions
Annual Production (calves)
Number of Calves per herd
Number of production herds per year
450
150
3
Capacity Utilization
100%
Live body weight at purchase time (kg)
100
Average daily weight gain
0.8
Feeding days
120
Selling price (Rs/ kg live body weight)
90
Table 11-3: Expense Assumptions
Purchase price (Rs/kg live body weight)
Mortality Rate
Vaccination/ Medication cost (per calf)
Open Space per animal (Sq. ft)
Total Mixed Ration requirement (% of live
bodyweight)
Price of Total Mixed Ration (Rs. Per Kg)
80
1%
200
60
4.5
11
Table 11-4: Economy-Related Assumptions
Electricity growth rate
Wage growth rate
10%
5%
Table 11-5: Cashflow Assumptions
Raw Material Inventory (Days)
30
27
PREF-24/March, 2009/Rev 3
Pre-Feasibility Study
Calf Fattening Farm (Feedlot System)
12 ANNEXURE 1
Table 12-1 Vital Statistics of Cattle & Buffaloes
Parameters
Rectal Temperature
Heart Rate
Respiratory Rate
101.5 degrees F (38.5 degree C)
60-70 beats/minute
30 breaths/minute
Table 12-2 Common Diseases of Livestock
Infectious Diseases
Disease
Symptoms
Preventive measures
Medication
Anthrax
Fever, grinding of teeth,
release of blackish blood from
natural openings, which
doesn’t clot.
Excessive salivation, Pustules
on lips, tongue and between
the cleft of hooves, staggering
gait weakness due to inability
of ingestion.
Vaccination in February.
Dead animal should be
buried in 6 feet deep pit
without any postmortem.
FMD vaccine after every
4 months especially
before the onset of rainy
season.
Antibiotic therapy
Foot and mouth
Disease
FMD Serum, cleaning
of pustules by
potassium
permanganate solution,
cleaning of hooves by
phenyl solution
Non Contagious Diseases
Indigestion
Loss of appetite, watering
from mouth, stiffening of
rumen, bloating, severe pain in
stomach
Bloating
(air trapped in
stomach)
Difficult breathing due to air
trapped in stomach, animal
may die due to suffocation
Avoid grazing early in
morning especially on
fodder with dewdrops.
Dysentery
Diarrhea,
weakness
Avoid excessive intake of
milk
especially
in
newborn kids.
Avoid wheat straw or stiff
feed during dysentery
smelling
5
grams
Stomach
powder (mixed in feed
or dissolved in water)
twice a day
feces,
Mustard (Sarson) oil &
turpentine oil mixed
with chloral hydrate
mixed
in
drinking
water.
Calcium
carbonate,
magnesium carbonate
and bismuth carbonate
dissolved in water OR
entox
tablets
OR
nimkol
with
sulfademadine (4-5 cc).
Offer rice groule to
affected animals
Internal Parasites
Liver flukes
Weakness, off feed, jaundice
in severe cases, swelling on
joints
No
grazing
stagnant water
28
PREF-24/March, 2009/Rev 3
around
Zanil or Carbon tetra
chloride OR nilzan
plus,
oral
administration
Pre-Feasibility Study
Round Worms
Calf Fattening Farm (Feedlot System)
Weakness, diarrhea, anemia,
hair fall from body coat
Fecal samples should be
examined
for
roundworms.
Systamax or rental, oral
administration
Irritation on body coat,
sometimes holes in skin, loss
of hair from body coat
Cleanliness in sheds,
Spray of DDT in shed
Apply
sulfur
oil,
tetmasol or ecoflax on
wounds and dipping of
whole herd with a 0.15
% solution of negavan.
Ectoparasites
Flies/
maggots
ticks/
Table 12-3 Vaccination Schedule
Name of Disease
Name of
Vaccine
Qty
administered
(ml)
5 ml
Foot & Mouth
Disease
(FMD)
Foot & Mouth
Vaccine
Anthrax
Anthrax spore
vaccine
0.5 ml
Rabies
(Bowla Pun)
Anti rabies
vaccine
10 ml
Hemorrhagic
Septicemia (HS)
HS vaccine
5-10 ml
Time for
Vaccination
Start of spring
Duration
of
Immunity
4 months
March-April
or monsoon
season
According to
need
One year
Start of Spring
4 months
One year
Preventive
Measures
Should be given 4
months prior to the
expected symptoms
of disease.
Every year
vaccination should
be done every year.
Vaccine should be
used right after
preparation.
Should be given 4
months prior to the
expected symptoms
of disease.
Table 12-4 List of vaccines and their prices at Veterinary Research Institute, Ghazi
Road, Lahore.
Vaccines/Sera/Antigens
Packing With Bottles
Haemorrhagic Septicaemia
Black Quarter Vaccine
Enterotoxaemia
Foot and Mouth Vaccine
Foot and Mouth Vaccine
Foot and Mouth Serum
Foot and Mouth Vaccine
Anti Rinderpest Serum
Anthrax Spore Vaccine
Rinderpest Vaccine (TCRV/CTV)
Anti Rabies Vaccine
Bottle of 300 ml (60 doses)
Bottle of 300 ml (60 doses)
Bottle of 300 ml (100 doses)
Bottle of 320 ml (64 doses)
Bottle of 300 ml (60 doses)
Bottle of 300 ml (6 doses)
Bottle of 100 ml (20 doses)
Bottle of 300 ml (20 doses)
Bottle of 50 ml (100 doses)
Ampoule of 100 doses
440 cc bottle for Cow/Horse
For further inquiry contact:
Director General (Research), Veterinary Research Institute, Ghazi Road, Lahore.
(Ph) 042-9220143
29
PREF-24/March, 2009/Rev 3
Price
Rs.90.00
Rs.80.00
Rs.67.00
Rs.484.00
Rs.454.00
Rs.380.00
Rs.165.00
Rs.374.00
Rs.70.00
Rs.21.00
Rs.840.00
Pre-Feasibility Study
Calf Fattening Farm (Feedlot System)
13 ANNEXURE 3
Table 13-1 Disposal of Death
Sr. no Calf No.
1.
2.
Date of purchase
Sex
Mode
Cost
Remarks
Table 13-2 Details of Purchase / Sale of product/byproduct (Feed and fodder's,
medicines, ingredients, animal, etc.)
Sr.
no
Particulars
Quantity
Per unit rate
Total cost
Remarks
Table 13-3 Calf Disposal
Sr. no
Wt. Of calf
Disposal Date
Remarks
Table 13-4 Herd Health Register
Date
Animal Symptoms Diagnosis
Treatment
Detail of
vaccination/
medication
Cost of treatment
Table 13-5 Monthly Expenses & Income Report
Sr. no
Particulars
Quantity
--
30
PREF-24/March, 2009/Rev 3
Rate (per unit)
Total cost
Pre-Feasibility Study
Calf Fattening Farm (Feedlot System)
14 ANNEXURE 4
14.1
Different Breeds of Buffaloes and Cows
Kundi
Lohani
Rojhan
Nili Ravi
Red Sindhi Bull
Dajal
Tharparker
31
PREF-24/March, 2009/Rev 3
Sahiwal Cow