7 Week Enterprise Learning at Kesla Poultry Society Maryadit, Sukhtawa, Kesla, Itarsi, Hoshangabad, Madhya Pradesh, by Vikram Vijayant Rana, PDM Participants, Development Management Institute, Patna, DMI Patna

1. E L
Flying in a Flock
A STUDY OF SOCIO-ECONOMIC
ENTERPRISE AT KESLA
POULTRY SOCIETY
Sushant Kumar
Vikram Vijayant Rana
DMI, Patna
12 July 2017

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Contents
About KPS
Membership
Product & Services
Sales & Marketing
Human Resource
Financial Analysis
Impact Assessment
12-Jul-17

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ABOUT
Kesla Poultry Society
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Introduction
 Registered in 2001, under M.P. Government Mutually
Aided Cooperative Societies Act, 1999
 Started Operations in 2002 with 200 members
 Spread Over 47 Villages with 1130 members (2017)
 Producing approx. 2.2 lakh broiler birds per month
 Sales Turnover – 34 Crore (2016)
 Model Replicated over 22 Places over India
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Genesis
12-Jul-17
Phase 1 –
1986-1992;
Experimental
Phase
Phase 2 –
1992-1997;
Pilot Testing
and
Demonstration
Phase 3 –
1997-2002;
Scaling Up
Phase 4 –
2002-Present;
Replication and
Sustainability
 PRADAN
intervened for
upliftment of tribal
people

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Mission & Vision
 "Kesla Poultry Sahkarita Maryadit" seeks to provide
its owners - poor tribal/Dalit women with a
minimum additional annual income of ₹15,000 from
broiler farming.
 Capture 35 % market share of the Bhopal Broiler
Cluster & become the largest vertically integrated
poultry production house in Madhya Pradesh
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Business Model
 This model is called Smallholder Poultry Model
 Women from ST/SC families are promoted as poultry
producers
 Collective of 500-1,000 producers, registered as cooperative
society/PC
 Cooperative provides day-old chicks, poultry feed and other
inputs to producers
 Cooperative provides Professional Assistance
 Cooperative also provides marketing arrangement for
slaughter age birds- lifting from producers doorstep
 Producer are being paid according to Production Efficiency,
irrespective of market price of ready birds
 Direct contact of management and BoD to members regularly
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Organisational Structure
12-Jul-17
General Body
Chief Executive Officer
Account and Admin.
Staff
Marketing Staff Management
Executive
Centre
Supervisors
Supervisors
Members
Board of Directors

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Federal Structure
NSPDT
MPWPCL
10 Producer
Organisations
JWSPFL
10 Producer
Organisations
2-Producer
Organisations,
Assam
1-Producer
Organisation,
West Bengal
1-Producer
Organisation,
Odisha
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1010
MEMBERSHIP
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Membership Criteria
 A female candidate, & resident of the working area
 Adult and having sufficient land in backyard for shed
construction
 Can purchase one share & deposit membership fee
 Not penalized in any crime & declared bankrupt
 Must be a SC/ST candidate or BPL other backward casts
 Low land holding (1-2 acre)
 Belongs from economically and socially weaker section (per
day income < ₹150-200 and work days<150 p.a)
 Must be a member of SHG and Narmada Mahila Sangh (5
year old membership)
 Inclination towards poultry rearing
 Poultry rearing must be permitted by family members
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Village Selection
 Within radius of 25 km from Co-operative office, Kesla
 All weather road for transportation
 Sufficient availability of source of drinking water
 Minimum 50 SC/ST family in that village
 Availability of flat surface in the backyard of most of
the house for shed construction
 Willingness towards cleanliness and poultry rearing
 No interference of anti-social element within that
village
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GOVERNANCE STRUCTURE
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Governance
 BoD is selected on five year period under the supervision of
district Registrar
 Villages are divided into clusters for BoD representative
 KPS have 11 BoD, each director represents 3-4 villages
 For assisting BoD 6 to 7 representative are also selected
 BoD meeting is held on 10th of every month
 Each BoD member participate in weekly cluster meeting before
BoD meeting
 After BoD Meeting, team of representative and BoD, organise
cluster meeting
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Cont’d..
 Each members share their issues directly or indirectly in
BoD meeting
 BoD discussion topics are brought by members,
management team, Supervisors and Village cluster
meetings
 President of the Cooperative represents BoD of federation
(MPWPCL)
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PRODUCTION &
OPERATIONS
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1712-Jul-17
Product
 Slaughter age chicken
 Breed - Cobb 430
 Standard FCR - 1.65
 Mortality – 3.5%
 Withstand @42oC
Summer
 Suitable for Natural
Ventilation Rearing

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Production Cycle
Shed
Preparing
DOC
Placement
7-Days Old
Chicks
42 Days
Old Chicken
Disinfection
1
15
2257
60
Rearing
Sales in market

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Production Cost
-₹ 20
₹ 0
₹ 20
₹ 40
₹ 60
₹ 80
₹ 100
Apr
May
Jun
Jul
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
2015 2016 2017
Average of Total Exp.( Per Kg) Average of Sales ( Per Kg.)
Average of Net Surplus ( Per Kg.)
 Main component of total expense is Day-old Chicks and Feed

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Operations
 Major Product; Broiler Birds
 Provides Day-Old Chicks, Equipment’s Supply, Feed
& Medicine
 Training & Supervision
 Centralise Marketing at cooperative and federation
level
 Professional Assistance to Producer Member

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KPS Cooperative Competitors
Location Scattered in villages due to which less
vulnerable of disease,
continuous production,
low investment.
Cycle of chicks are Produced in one
shed,
Heavy investment ,
Legal formality
Capacity Clustered shed of small capacity,
Good farming with less capacity,
Members own business
High capacity of one Shed, Labour
oriented, Huge Infrastructural
investment
Technology Updated production technology, flow of
information quickly, Cobb 430 breed
Big markets giants have integrated
production technology,
Ross breed
Lay out Small Holder Poultry Model with natural
ventilation
Mass production with tunnel
ventilation
Competitive Advantage

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Backward Linkage
 Feed Factory (Managed by Cooperative)
 Centralised 15% Feed Concentrate Plant (Managed
by Federation)
 Parent farm and hatchery (Managed by Federation)
 Central purchasing (Managed by Federation)
 Pallet Feed Plant (Under Construction) (Managed by
Federation)

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Forward Linkage
 Central Marketing Cell (Managed by Federation)
 Organisation owned Retail Shop (Managed by
Federation)
 Franchised Retail Shop (Managed by Federation)
 Target small Rural Market (Managed by
Cooperative)

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Member’s Payment
𝐸𝐼 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑊𝑒𝑖𝑔ℎ𝑡 × 𝐿𝑖𝑣𝑎𝑏𝑖𝑖𝑙𝑖𝑡𝑦%
𝑁𝑜 𝑜𝑓𝐷𝑎𝑦𝑠 × 𝐹𝑒𝑒𝑑 𝐶𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑅𝑎𝑡𝑖𝑜
× 100
Payment for 180*/210 points
B.W Range ₹/Kg.
Up to 1000 g 4.30
1001-1100 4.00
1101-1200 4.00
1201-1300 4.00
1301-1400 3.95
1401-1600 3.95
1601-1800 3.90
1801-2000 3.85
2001-2300 3.80
2301-2500 3.75
2501-2700 3.70
2701-2900 3.50
2901-3000 3.25
3000+ 3.00
Payment for extra points in EI
210-300 301-330 330+
1p/point/Kg 1.5p/point/Kg 2p/point/Kg
• Payment within 15 days of lifting
• Share Premium, Bonus on the basis of
decision taken by board in General
meeting
• Incentive on the basis of Low Mortality
and Maximum EI in the batch
• Payment- 4 to 8 thousand per cycle (500
shed capacity)*For the Chicks placed during the month of April to June

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Supervisor’s Payment
 Supervision Limit – 20,000
Birds
 Not a Salaried Employee
 Supervisor paid on the basis
of per birds and efficiency
index of the shed
 Earning – 10 to 20 thousand
per cycle
Efficiency
Index
Commission per
Chicks
April to
June
Rest of the
Year
180-210 0.20
211-240 0.25 0.25
241-270 0.45 0.45
271-300 0.80 0.80
301-350 1.00 1.00
351-400 1.25 1.25

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Supply Chain
12-Jul-17
Chicks
Supplier
Feed Factory
Medicine
Supplier
Members
Training And
Supervision by
KPS
Facilitated
by KPS
Wholesale Buyer
Wholesale Buyer
Wholesale Buyer
Arranged by
KPS/MPWPCL
Prepared Feed Ready Birds
KPS

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Value Chain
12-Jul-17
Parent Layer
Day-Old Chicks
Hatchery
-MPWPCL
-Venky’s
-Rajdhani
Cobb-430
Producer Member
-Brooding and
Rearing up to 42
days
-Spread Over 47
Village
KPS Feed
Factory
Medicine
Company
Outbound
Logistic
-Retailer
-Distributor
-Wholesaler
Local
Chicken
Shop
Consumer
All Support Activities are Facilitated by KPS and MPWPCL
Image Source: Creative Common Licence
KPS
KPS

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2828
SALES &
MARKETING
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India’s Scenario
 Production of 3 million tonne of broiler per year,
worth about INR 90,000 Crore (Abroader, 2015)
 Per capita consumption 2.8 kg per annum (World
avg. 32 kg per annum)
 Madhya Pradesh demand for poultry meat is
Approx. 110.6 thousand metric tonnes per year
 KPS produced 5,023.8 tonne of poultry bird during
the 2016-17 (4.5% of the total market demand)
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MARKET
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• Commoditised Poultry
Product
• Under the Brand
Sukhtawa/Swayam
Product
• Demand Driven
• Brand promotion at
retail outlet
Promotion
• Demand-Supply Gap
determine price
• KPS - Price-taker
Price
• Conventional marketing
channel (99%)
• Sukhtawa brand Outlet
(1%)
Place
Marketing
Mix

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Porters’ Five Forces
Rivalry among
existing firms
• Using price
competition
12-Jul-17
Threat of New
Entrants
• Economies of Scale
• Capital Requirements
• Vulnerability towards
disease
Threat of Substitute
Products
• Tradeoffs relative to
alternative products
Bargaining Power of
Suppliers
• Many Small and big
Player in market
Bargaining Power of
Buyers
• Products are
undifferentiated
• Few switching costs
Moderate
Moderate
Low
Moderate
High

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Demand Vs Supply
12-Jul-17
0.0 Kg
100.0 Kg
200.0 Kg
300.0 Kg
400.0 Kg
500.0 Kg
600.0 Kg
700.0 Kg
Thousands
Supply Demand
• Demands have Festival and Seasonality effect

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HUMAN
RESOURCE
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Human Resource Management
 KPS management is
professionally supported by
professionals of MPWPCL
 MPWPCL facilitate the hiring
procedure of professionals
with support of NSPDT
 Planning is based on vacant
post and upcoming
requirement
 Promotion on the basis of
Seniority and performance
12-Jul-17
Chief Executive Officer
Account
Staff
Marketing
Staff
Production
In-Charge
Veterinar
y Doctor
Centre
Supervisors
Supervisor
s
35
1
6 2 21
3
Other
Supporting Staff
8

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Training and Development Activities
 Professionals
– Probation Period is one year for each new comer
– Additional Inhouse training is provided in Quarterly or half yearly review
meeting
 Accountant Review Meeting – Half Yearly
 Cooperative performance Review Meeting – Quarterly
– New trainee can be manager after 3 years of joining
 Supervisors
– New supervisors are being provided on job Training of one batch cycle
– Weekly meetings and training by production manager
– Supervisors are Guided by Centre supervisors
– On good performance they are being promoted as centre supervisor
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Employee Welfare Measures
Particulars Details
Medical Expense ₹500/Month
Medical Insurance ₹1 Lakh/Family
Child Education ₹300/Child, for boarding school
₹1500/Child
National Pension Scheme ₹1000/Year
Incentives @ Diwali Based upon Performance
Leave Encashment To be Settled Annually
Gratuity To be Settled 5-Yearly
Local Conveyance ₹3/Km
Telephone Convince for (Call) ₹200/month
Telephone Convince for (Call and
Internet)
₹350/month
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FINANCIAL
ANALYSIS
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Financial Performance
12-Jul-17
* Net Surplus on Secondary axis
₹ 0.0
₹ 0.5
₹ 1.0
₹ 1.5
₹ 2.0
₹ 2.5
₹ 3.0
-
50
100
150
200
250
300
350
400
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Millions
Millions
Net Surplus Sales Turnover Paid to Members
 Sales is continuously increasing

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Capital Structure
12-Jul-17
₹ 0
₹ 20
₹ 40
₹ 60
₹ 80
₹ 100
₹ 120
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
MILLIONS
Share Capital Fund Reserves & Surplus
 In 2012-13 4 crore Share Capital is transferred to Reserve & Surplus

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Sales, Expenditure and Surplus
12-Jul-17
₹ 0.0
₹ 0.5
₹ 1.0
₹ 1.5
₹ 2.0
₹ 2.5
₹ 3.0
₹ 0
₹ 50
₹ 100
₹ 150
₹ 200
₹ 250
₹ 300
₹ 350
₹ 400
Millions
Millions
Expenditure Sales Net Surplus
• Net Surplus on Secondary Axis

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Average Rate per Kg.
12-Jul-17
₹ 50.0
₹ 55.0
₹ 60.0
₹ 65.0
₹ 70.0
₹ 75.0
₹ 80.0
₹ 85.0
₹ 90.0
₹ 95.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2014
2015
2016
 June have highest rate due to low availability and high mortality in
poultry birds

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Financial Ratios
12-Jul-17
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Asset Turnover 3.35 3.24 3.09 3.41 3.31 2.80 2.62
Return on Equity 54% 50% 67% 69% 51% 52% 43%
Current Ratio 0.15 0.72 0.61 0.47 0.17 0.82 5.22
Return on
Capital
Employed 54% 50% 67% 69% 51% 52% 43%
Gross profit
Margin( Including
Grower charges) 15% 13% 16% 15% 11% 16% 17%

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Expenditure of sales revenue
12-Jul-17
INCOME 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Goods Sold
Material Cost 77.3% 73.5% 85.7% 82.4% 83.7% 87.6% 81.9% 81.8%
Other
Production
Cost 1.3% 1.1% 1.5% 1.1% 0.7% 0.6% 1.2% 0.6%
Birds rearing
charges to
Poultry
Producers 13.5% 12.4% 10.6% 13.9% 12.6% 9.0% 13.3% 14%
Total
Operating
Expenses 97.1% 97.0% 97.9% 97.4% 97.5% 97.6% 96.9% 97.4%
Administrati
ve Expenses 1.1% 1.2% 0.9% 1.0% 0.7% 0.6% 1.0% 1.0%

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Surplus and Expense percentage of
turnover
12-Jul-17
2008-
09
2009-
10
2010-
11
2011-
12
2012-
13
2013-
14
2014-
15
2015-
16
Expense 81.0% 76.8% 88.9% 85.4% 86.4% 90.2% 85.8% 85.0%
Surplus 19.0% 23.2% 11.1% 14.6% 13.6% 9.8% 14.2% 15.0%

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IMPACT ASSESSMENT
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Key Parameters Aabadipura
Number of HHs 40
Total Population 250
Communities Gond
Dominating
Community
Gond
Total Area of
Village (Acre)
80 (Approx.)
 A most backward tribal
village
 Located in Kala Aakhar
village Panchayat
 Situated 11 Km west of
National Highway 46
–Followed by dirt road
(2 Km)
 14 Km away from KPS
12-Jul-17
Villages Introduction
Source: PRA, SI, FGD, Survey & Secondary Sources

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Infrastructural
Facility
Aabadipura
(Availability)
Primary School Yes
Middle School No
High School No
Post office No
Primary Health Center No
Drinking Water Supply Yes (4 Handpump)
Concrete Road No
Bank No
Railway Station No
Bus Stand No
Market No
 Development
Intervention
–By Government
 Anganwadi
 MGNREGA
 PRIs
 Sarv Shiksha Abhiyan
–By KPS & PRADAN
 SHG
 Backyard Poultry
12-Jul-17
Infrastructure Facility
Source: PRA & Survey

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Methodology
 PRA, Semi-Structured Interview, FGD
 Quota Sampling Methods followed by Stratified
random sampling procedure
 Collected the complete information
– Demographic characteristics
– Crop and livestock production
– Household income
– Household expenditure
– Natural Resource Utilisation
– Land holding pattern and
– Land used
 100% Households survey
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Economical Impact
Average Annual Income (₹)
S. No
Shed
Capacity Poultry Total family
1 300 19,500 59,000
2 400 25,000 68,000
3 800 58,000 75,000
12-Jul-17
*Non Members annual family income is about Rs. 40,000/ from wage
and Migration

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Comparative Impact Assessment of Members
and Non Members Members Non Members
Average Family Size 6 4
Educated Girls percentage 100% 100%
Educated Boys Percentage 82% 33%
Average Savings in SHG ₹17,500 ₹3,000
Loan from SHG & KPS 100% 20%
Loan from Money Lenders 0% 60%
Agriculture Income Contribution 22% 14%
Forest Product Income Contribution 7% 19%
Poultry Contribution in Family
Income 61% 0%
Income from Wage Labour/
Migration 19% 67%
Migration percentage 30% 70%
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Impact Result Analysis
 Poultry became secure source of income
 Family Level Income Rs.175-300/day for 200 days
or Rs.35,000-60,000 p.a. as per shed capacity
 Participation in local Governance and social issues
 Social empowerment and infrastructural
improvement
 Decrease in income inequality
 Increase in health condition and nutrition
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Learning  Key finding for this successful
enterprise
–A team of Dedicated Professional
–Quality Management System in
organisation is useful tool for
business
–Incredible effort of Producer
Member’s with participation
–Loyal buyer and Rural Marketing
strategy
–De-linking production and marketing
makes the members continuous
earning
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Learning
from
 Introduction and interaction with
Professionally Managed Dairy
organisation and their different
activities
 Importance of time management,
which helps the entire organization to
handle highly perishable product
 Effective utilization of Regenerator (a
type of heat exchanger)
 Recycling & proper utilization of waste
materials
 How to maximise our efficiency by
utilising resources within the
organisation
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