SETTING UP A POULTRY PROCESSING PLANT

Introduction
This project idea is based on the need to add value by processing chicken to reduce on the rudimentary form that is dangerous to human consumption. An estimated fixed cost of 32,120US$ and operating costs of 568,250US$, when utilized can generate a total revenue of 100US$ from the sale of 101,400 birds of one and a half kilograms and above in weight in the first year of operation.
Production Capacity, Technology and Process

The production process is very simple only that it has to be automated. The process involves collecting the chicken birds, and then cleans them up, pass them to the automated head remover machine where the head is cut, speciallised conveyers them transfer the killed birds to the automated picking machine which picks and plucks the feathers off the birds and this limits also incidences of product bruising. After plucking and picking is done, the birds is passed to the eviscerating equipment where the birds are “gutted”ie the birds body opened and the internal organs removed except for the kidney. The kidney can be manually removed and then the birds are packed and stored in a chilling machine ready for distribution.
Investment Scale, Capital Requirement and Equipment
The investment scale required is somehow large especially in acquisition of the equipment but some modern automated equipments at relatively small scale production can be acquired and these may include those as tabled bellow
Capital Investment Requirements

Item

Units

Qt
y

Unit
cost

Amo
unt

Head Remover

No

7

260

1,820

ZD60-80 Un hair machine

No.

1

5,000

5,000

Claw removing machine

No.

1

1,700

1,700

Eviscerating machine

No.

1

3,600

3,600

Chilling machine

No.

2

2,500

5,000

Convey belts

No.

1

2,750

2,750

Delivery van (Refrigerator)

No.

1

10,000

10,000

Other tools

No.

-

-

2,250

Total

32,120




Production and Operating Costs
(a)Direct materials, Supplies and Costs

Cost Item

Units

Uni
cost

Qty
/day

Pdn
Cost
/day

Pdn
Cost
/mth

Pdn
Cost
/yr

Chicken birds

Kgs

4.25

325

1,381

35,913

430,950

Water

liters

0.01

3,205

32

833

10,000

Packaging
materials

Pieces

0.13

2,000

260

6,760

81,120

1) Production costs assumed 312 days per year with daily capacity of processing 325 birds.
2) Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
3) Direct costs include materials, supplies and other costs that directly go into production of the product.
4) Total monthly days assumed are 26-days.
5) The valuation currency used is United States Dollars.
Market Analysis
Chicken is widely consumed in many households in the country especially in urban centers where packed chicken is the more consumed than the buying of live birds to be prepared at home locally. Ugachic is the major key player in this industry.
Project product costs and price Structure

Item

Qty
/day

Qty
/yr

Unit
Cost

Pdn
/yr

Unit
price

T/rev

Processed
Chicken

325

101,400

5.60

568,250

6.5

659,100

Profitability Analysis Table

Profitability Item

Per Day

Per
Month

Per
Year

 

Revenue

2,112.50

54,925

659,100

 

Less: Production &Operating Costs

1,821

47,354

568,250

 

Profit

291.19

7,570.87

90,850

Sub-total

5,530

1,673

43,506

522,070

 

 

 

 

 

General Costs(Overheads)

 

 

 

 

 

 

 

 

 

Labour costs

1,200

14,400

 

 

 

 

 

 

 

Utilities

1,000

12,000

 

 

 

 

 

 

 

Administration expenses

292

3,500

 

 

 

 

 

 

 

Selling & distribution

167

2,000

 

 

 

 

 

 

 

Fuel

200

2,400

 

 

 

 

 

 

 

Miscellaneous expenses

125

1,500

 

 

 

 

 

 

 

Cleaning and toiletries

196

2,350

 

 

 

 

 

 

 

Depreciation

669

8,030

 

 

 

 

 

 

 

Sub-total

3,848

46,180

 

 

 

 

 

 

 

Total Operating Costs

47,354

568,250

 

 

 

Incentives
The Government has put aside an Agricultural fund and there is an European Investment Fund targeting such areas of investment.