Dykal
Holdings
Lorelee Friesen
Kim Kotylak
Kelly Volk
Amanda Ziegler
Purpose of the Project


To determine the feasibility of a new chicken
processing plant in Saskatchewan
To determine demand for Halal poultry
products in the Prairie Provinces
Overview of the Company




Chicken Processing Plant
Halal and non-Halal chicken
Frozen and fresh products
Selling throughout Western Canada
Mission Statement
“Dykal Holdings, a Saskatchewan based company,
will strive to meet the needs of all customers by
providing competitive prices and a premium,
value-added product while providing a pleasant
working environment for all employees.”
Goals of the company


Short Term Objective – Achieve a 20% pre-tax
profit on gross sales of $4.54 million in the first
year of operations
Long Term Objective – Grow net sales to $9.39
million within the first ten years of operations
Operations Plan
Building
Process Flow
a. Receive Live Birds
b. Hand Slaughter
c. Stunning and
Slaughter
d. Scalding and
Defeathering
e. Head Puller/ Hock
Cutter
f. Evisceration
g. Giblets
h. Cooling
i. Cutting
i. Cutting
k. Packing and Grading
l. Refrigeration
n. Distribution
j. Blast Tunnel
k. Packing and Grading
m. Freezer
n. Distribution
Supplies


Raw Materials
Packaging
Supplier
 Different packaging for Halal and non-Halal
products

Limitations to Operation


Sufficient water supply
Adequate method of waste disposal
Water
 Product Waste

Human Resources
Human Resources


Number of Employees
Training Programs



Safety, First Aid and CPR
Benefits
Job Descriptions and Criteria





Plant Manager
Secretary/Accountant
Maintenance
Plant Workers
HACCP and CFIA
Employee Flow Chart
CEO
Plant Manager
Office Staff
Secretary
Kill
Receiver
(2)
Evisceration
Hanger
Packaging
Cutter (2)
Killing
Gutters (3)
Cropper (3)
Offal
Preparers (2)
Custodian
Sanitizer (2)
Cutter
Accountant
Other
Packer
Maintenance
Shipper
CFIA Inspector
(1.5)
HACCP
Coordinator
Employee Salary Summary
Direct Labour Costs
Permanent Labourers
Overhead Salary Workers
HACCP Inspector
CFIA Inspector
Maintenance Supervisor
Total
Admin Salary Workers
Plant Manager
Receptionist/Accounting Clerk I
Total
Total Salaries and Benefits
2004
2006
2008
2010
2012
499,200
527,155
555,110
583,066
611,021
40,000
90,000
47,877
177,877
42,240
95,040
50,558
187,838
44,480
100,080
53,239
197,799
46,720
105,120
55,920
207,760
48,960
110,160
58,601
217,721
100,000
51,352
151,352
828,429
105,600
54,228
159,828
874,821
111,200
57,103
168,303
921,213
116,800
59,979
176,779
967,605
122,400
62,855
185,255
1,013,997
Marketing Plan
Marketing Plan


Product
 Name
 Types
 Qualities
Place
 Islamic Centres
 IGA


Price
 Market Rate
 Payments
 Halal Credit Policy
Promotion
 Stickers
 Sales pitches
 Magazines/news letters
 Trade shows
 Webpage
Marketing Plan Con’t
Advertising Budget
2004
Advertising
Magazine ads
Newsletters
Total Advertising
Promotion & Development
Web page
Maintance
Travel expenses
Trade shows
Total Promotion
Total Marketing Expenses
2006
2008
2010
2012
36,000
20,400
56,400
38,016
21,542
59,558
40,032
22,685
62,717
42,048
23,827
65,875
44,064
24,970
69,034
18,000
2,000
28,000
2,000
50,000
106,400
2,112
29,568
2,112
33,792
93,350
2,224
31,136
2,224
35,584
98,301
2,336
32,704
2,336
37,376
103,251
2,448
34,272
2,448
39,168
108,202
Marketing Plan Con’t
SWOT
Strengths
Constant supply of raw
material
Accommodate a 50%
increase
Two markets, one line
Air chilled
Vegetable fed
Federally Inspected

Weaknesses
High
start up costs
High shipping costs
Market Plan Con’t
Opportunities
Only
Threats
one other processor Lilydale
in Saskatchewan
Processing losses in past
Growing Halal market
Strict Halal processing
Halal products are
requirements
becoming more popular
 Large pool of workers
Healthy meat alternative
Market Plan Con’t

Market Analysis
Past Performances
 Muslim population


Competition
Lilydale
 Maple Leaf
 Small Halal processors

Financial Plan
Financial Plan



All prices, expenses and wages are gown by
inflation of 2.5% per year.
A total of $2,219,111, at a rate of 7.2% will be
amortized over a 25 year period.
The remaining $739,704 will be invested by the
single equity holder.
Long Term Debt
Owner's Equity
Total
75%
25%
2004
2,219,111
739,704
2,958,815
Financial Plan Con’t

Capital Budget
2004
Land
Building
Equipment:
Arrival department
Defeathering department
Evisceration department
Chilling department
Weighing department
Offal department
Miscellaneous
Spare parts
Office Supplies
Electrical
Installation
Piping
Air Conditioning
Total Capital Costs
1
1,099,999
20,691
284,130
182,805
290,000
141,224
67,933
136,030
82,432
50,000
20,000
250,000
22,000
30,000
2,677,244
Cash
Accounts Receivable
Inventories
Accounts Payable
Total Net Working Capital
2004
200,000
340,461
16,143
275,032
281,571
Financial Plan Con’t
Base Case Results
2004
Selling Prices (per kg)
Non-Halal Poultry
Halal Poultry
Average Selling Price
Gross Margin
Net Income (Loss)
Net Cash Flow from Operations
Cash end of year
2.798
2.850
2.824
-65,941
-510,777
-392,624
54,857
Net Present Value of Equity Investment
2006
2.955
3.009
2.982
2008
3.111
3.169
3.140
2010
3.268
3.328
3.298
2012
3.425
3.488
3.456
745,112
849,933
914,983
945,249
308,403
336,041
319,928
333,498
557,372
555,702
497,030
484,194
503,893 1,510,825 2,311,756 3,068,886
264,330
Internal Rate of Return on Equity Investment
27%
External Rate of Return on Equity Investment
14%
Financial Plan Con’t
COGM
Kg's of Poultry Manufactured
Total Cost per Kg




2004
4,623,441
1,622,400
2.850
2006
7,176,718
2,678,650
2.679
2008
7,489,528
2,678,650
2.796
2010
7,844,989
2,678,650
2.929
2012
8,235,236
2,678,650
3.074
2,496,000kg’s will be processed in year 1.
By 2006, 4,121,000kg’s of product will be processed
Running at 25% capacity
The addition of more chickens per hour will further
lower the cost to produce one kilogram of saleable
meat.
Financial Plan Con’t
Key Variables
Base Case
Selling Price Non-Halal $2.798/Kg
Raw Materials
$1.289/Kg
Frieght Non-Halal
$0.04/Kg
Direct Labour Employees
20


IRR=0
$2.680/Kg
$1.358/Kg
$0.16/Kg
29
Allowable % Change
4.20%
5.10%
75%
31%
If any of the above Variables change by more
then the specified amount all profits will be
eliminated
Very risky project
Dykal
Holdings




Feasible enterprise
Rural Development
27% IRR
Sensitive to input costs and selling prices
ANY QUESTIONS OR
COMMENTS?