Presentation of Dr. Ed Arcinue on Poultry farming. This was at the COTIFA workshop held last Aug.25, 2012

1. Industrial-Scale, Contract Growing of Chickens
with San Miguel Corporation in the Philippines.
SUAL GLOBAL INDUSTRIES, INC.
Edgardo L.Arcinue M.D, ’66, Pediatric Intensivist
Lucenia A.Arcinue M.D, ’66, Anesthesiologist
Pasadena, California USA
& Sual,Pangasinan PHL

2. OUR VISION POST RETIREMENT
TO DO GOOD: INVEST, CREATE JOBS
TO DO FINE: FINANCIALLY

3. Research Phase
5 full years
FRUIT INDUSTRY
Avocado: Temecula, California
Banana: Davao
Mango: Pangasinan
Lanzones: Dipolog City
Pineapples: Maui, Hawaii

4. Research Phase II
Livestock industry
Goats: Maui, Hawaii
Pigs: Dipolog City
Chickens: Pangasinan

5. BROILER CHICKEN INDUSTRY
POSITIVE FACTORS
Density: 40,000 Birds in 1 Chicken Tunnel House
Frequency: Harvest every 50 Days
One Harvest, One Harvest Payment; Not a Retail Business
Demand: 105,000,000 Filipinos to Feed
Chicken is the Primary Meat Choice
Price: Stable All Year Long

6. Contract Growing
San Miguel Food Industries Sual Global Industries Inc.
Provides Provides
1. Day Old Chicks 1. Land
2. Feeds 2. Poultry House and Facilities
3. Technical Support 3. Power and Water Systems
4. Delivery and Hauling 4. Manpower
5. Security
6. Farm Equipments
7. Farm Management
8. Permits
9. Medicines, vaccines, disinfect

7. CHICKEN INDUSTRY
NEGATIVE FACTORS
 Government Inefficiencies: Permits
 Land Title Difficulties
 Bank Loan Application Difficulties
 Labor Force Difficulties
 SMFI Difficulties
 BIR

8. Phil. Global Competitiveness
Institute for Management & Development, 2011
 1. Global Competitiveness 41/59
 2. Government Efficiency 37/59
 3. International Investments 57/59
 4. Business Legislation 51/59
 5. Basic Infrastructure 57/59
 6. Scientific Infrastructure 58/59
 7. Education 57/59
 8. Prices 12/59
 9. Labor Market 5/59
 PHL last among 13 Asia-Pacific Nations

9. Global Population
2011 ~ 7 billion
2030 ~ 8 billion
2045 ~ 9 billion
 Will require 3 planet earths to feed 9 billion
MALTHUS LAW (1798): Population grows
faster than food production. War, Disease, &
Famine: Equalizers.
 Malthus’s Caveat: Necessity leads to human ingenuity.

10. 1800-2000
Human Ingenuities
1. Corn, Potato, Chemical Fertilizers.
2. Sewers, Chlorinated Water.
3. Vaccines
4. WWII- Penicillin, DDT vs malaria, Antibiotics
5. Fertility Decline
Congenital Optimist (Human Ingenuities)
Have Defied So Far The
Population Pessimists (Apocalypse)

11. SMFI: Investment in a Chicken Farm
PURCHASE OF LAND 1,500,000
SITE DEVELOPMENT 700,000
TUNNEL VENTILATED HOUSE 10,000,000
COOLING PADS AND BLOWERS 4,000,000
FLOOR PLASTIC SLATS 1,000,000
BACK UP GENERATORS 1,500,000
WATER DELIVERY SYSTEMS 1,000,000
INSULATION OF ATTIC 300,000
CONNECTION FROM POWER GRID TO FARM 300,000
POWER HOUSE BUILDING 100,000
BARRACKS AND CONTROL ROOM 200,000
HARVEST ROAD 200,000
FENCE 200,000
INVESTMENT COST 21,000,000
INVESTMENT PER CHICKEN (40,000 BIRDS) 525

12. CONSTRUCTION OF CHICKEN FARM

13. COOLING AND VENTILATION SYSTEM

14. HIGH TECHNOLOGY FARM

15. OUTSIDE MY “MEDICINE” BOX

16. Four Investment Areas in the Chicken Agribusiness
BREEDERS HATCHERS LAYERS GROWERS

17. HARVEST

18. PHILOSOPHY :
TO DO GOOD
 Invested $$$$$ in 3 Years-2009 to 2012
 Purchased $$$$ on Materials and Equipments from Philippine
Vendors

19. SGI’s Broiler Performance Index
350
300
250
200
150
100
50
0

20. EXPENSES
Labor & Wages
Repairs & Maintenance
Legal, Acct. & Prof. Fees
Communication
Meds., Vaccines and Detergents
Electricity
Insurance Expense
Food allowance
LPG Gas & Gasoline
Miscellaneous Expense
Taxes, License & Other Fees
Security & Maintenance

21. Gross Expense & Incomes per 1st 2nd 3rd
Grow House House House
21.25 per bird with 120,000 birds 40,000 40,000 40,000
Labor & Wages, Fringe Benefits 4.33 2.51 2.51
Repairs & Maintenance 1.02 1.61 1.48
Legal, Acct. & Prof. Fees 0.89 1.38 1.10
Communication 0.47 0.36 0.51
Meds., Vaccines & Detergents 1.3 1.3 1.3
Electricity 1.3 1.3 1.3
Insurance Expense 0.16 0.08 0.08
Food allowance 0.64 0.64 0.64
LPG Gas & Gasoline 1.4 1.4 1.4
Miscellaneous Expenses 0.14 0.11 0.13
Taxes, License & Other Fees 0.50 0.50 0.50
Security & Maintenance 0.69 0.34 0.34
Gross Expenses per grow 12.84 11.63 11.29
Net Income per grow 8.41 (40%) 9.62 (45%) 9.96 (47%)

22. OUR VISION POST RETIREMENT
TO DO GOOD: CREATED JOBS IN THE PHL
THAT IS SUSTAINABLE & LONG TERM
OPERATIONS SALARIES IN 2010,2011,2012
Php 4,250,000
CONSTRUCTION OF 2 TUNNEL HOUSES”
LABOR COST ALONE: Php 5,200,000

23. Actuarial Projection of Wealth Actuarial Projection of Wealth
without Investment with Investment

24. Meet Challenge of the Philippine
Population Explosion in 2050
 Beyond poultries’ “live chickens” are opportunities
 Food processing
 Feedmills
 Greenhouses for fruits and vegetables
 Export corn and soya from the U.S.
 Export equipments from U.S.
 Waste management systems-manure to fertilizers
 Water conservation systems
 Fast food franchises

25. THANK YOU FOR YOUR
ATTENTION !!!