Contains detailed project report regarding the rearing of country Chicken in India

1. 2018
Dr. Vishnu Vardhan Reddy Pulimi
Dr. Srikala Devarapalli
Pre-feasibility report for
establishment of poultry farming
unit with 2,000 country chicken
per cycle in deep litter system

2. DISCLAIMER
This Pre-Feasibility has been prepared by “Dr. Vishnu Vardhan Reddy Pulimi” and is for
information purposes only. This report does not constitute an offer, invitation or inducement to
invest in any sector or industry. Neither the information contained in this Pre-Feasibility nor any
further information made available with the subject matter contained herein will form the basis of
any contract. Any recommendations contained in this document must not be relied upon as
investment advice based on the recipient's personal circumstances. In the event that further
clarification is required on the words or phrases used in this material, the recipient is strongly
recommended to seek independent legal or financial advice.
The material in this Pre-Feasibility is general information intended for recipients who
understand the risks and opportunities associated with making investment in India specifically in
poultry sector.
It does not take account of whether an investment, course of action, or associated risks are suitable
for the recipient. This report does not purport to be comprehensive or to contain all the information
on which a prospective investor can make an investment decision. The information contained herein
is based on publicly available information and sources, which we believe to be reliable, but we do
not represent it as accurate or complete. The recipient of this report must make his own investigation
and assessment of the information presented herein.
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Signature

3. PRE-FEASIBILITY REPORT FOR ESTABLISHMENT OF POULTRY
FARMING UNIT WITH 2,000 COUNTRY CHICKEN PER CYCLE IN
DEEP LITTER SYSTEM
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 country chicken Farming. The project
prefeasibility may form the basis of an important investment decision and in order to serve this
objective, the document covers various aspects of country chicken farming concept development,
startup, production, finance and business management.
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 collected 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. 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.

4. CHAPTER – I
Highlights of the project report
A: About the promoter
Name of the Entrepreneur : .......................................................
Address : .......................................................
.......................................................
.......................................................
Contact No. : .......................................................
Date of Birth : .......................................................
Educational Qualification : .......................................................
Experience : .......................................................
B: Project profile
1. Name of the Establishment : ............................. Poultry Farms
2. Project Location : .......................................................
.......................................................
3. Types of Birds : Poultry (Country chicken)
4. Unit Size : 2000 Birds
5. Product : Birds, Manure etc.
6. Cost of the Project : Rs 16, 05, 800/-
7. Bank Loan : Rs 8, 83, 190/-
8. Margin Money : Rs 7, 22, 610/-
9. Financial Indicators
BCR at 15% DF : 4.17
NPV at 15% DF (Rs) : Rs 47, 51, 680/-
IRR (%) : 105%
DSCR : 6.87
10. Interest Rate : 14%
11. Repayment : Rs 13, 59, 072/- in six years

5. CHAPTER - II
INTRODUCTION
Poultry meat and eggs are important sources of high quality proteins, minerals and vitamins
to balance the human diet. Specially developed varieties of chicken (broilers) are now available with
the traits of quick growth and high feed conversion efficiency but, the demand for the Country
chicken meat and eggs is growing enormously. Depending on the farm size, Country chicken
farming can be a main source of family income or can provide subsidiary income and gainful
employment to farmers throughout the year. The manure from Country birds provides a good source
of organic matter for improving soil fertility and crop yields. Since agriculture is mostly seasonal,
there is possibility of finding employment throughout the year for many persons through poultry
farming. With the adequate infrastructural facilities especially for Country chicken and egg
production has become increasingly popular in and around. The present demand in the area is more.
It is increasing day by day and present strength of the flock in the area is not in a position to meet the
growing demand.
OBJECTIVE
To meet the growing demand of Country chicken, I intended to establish a poultry farm with
Country chicken initially for meat production which will be reared on deep litter system.
LOCATION
The proposed unit will be located on a piece of land which is almost leveled and is well
connected to approach road, Electricity is available near the farm site. A tube well with electric
motor pump set already exists in this land and this water will be used for proposed poultry farm and
adequate water of good quality is available in this tube well.
PROPOSED CAPACITY / FARM SIZE
Initially I want to start with 2,000 Country chicken per batch, with an idea of increase in farm
size further in future.
HOUSING
Birds can be grown in deep litter system. Provision has been made for the construction of a
brooder cum grower house measuring at a rate of 1 square feet per bird, besides it, farm will have a
small store room form feed and medicines and a small staff room will be constructed for regular
office works. Construction of house will be pucka with asbestos / galvalume roofing. The laying of
pipeline for supply of adequate water supply is also be done.
EQUIPMENT
Standard equipments like feeders, waterers and flame gun are available from various
equipment manufacturers located in the nearby cities.
CHICKS
One day old commercial Country chicks are available from the hatcheries / local breeders. In
order to cover transportation, supplier is supplying 3% extra chicks. Chicks will be vaccinated
against Ranikhet disease and Marek’s at supplier level. Chicks will be purchased in lots at regular
intervals.
FEED
Feed required for the chicks will be procured from the local feed suppliers on contract basis.

6. MEDICINE AND VETERINARY AID
As I am a veterinary doctor myself I am good with the use of medicines, and I will take care
of sick birds. In case of need, the sick birds will be taken to the disease investigation laboratory
located in town. For operations like vaccination etc. a poultry specialist visits the area at regular
intervals.
PRODUCTION PARAMETERS
S. No Production parameter Value
1 Average age at slaughter 8-10 weeks
2 Average live body weight 1.9 ± 0.01 kg
3 Average carcass weight 1.20 ± 0.04 kg
4 Average dressing percentage 65 ± 1 %
MARKET POTENTIAL
The demand meat of country chicken is growing at the rate of 15 – 18% on back of factors
like rising purchasing power, changing food habits and increasing health cautiousness. Overall
domestic poultry market size is estimated at Rs. 47000 crore. Today India is the fifth largest
producer of broiler meat in the world with an annual production of 2.47 million MT. Despite this
achievement, the per capita availability of poultry meat in India is only 2.96 kg which is way below
the ICMR recommendation of 11 kg meat per capita per annum.
The growth of the poultry sector is mainly attributed to the interventions of the corporate
sector with an enabling policy environment provided by the Government of India / State
Governments from time to time. The activity provides huge employment opportunities for the rural
poor either under Backyard poultry production system or under small scale commercial broiler
farming units. Over 5 million people are engaged in the poultry sector either directly or indirectly.
Owing to the considerable growth in broiler industry, high quality chicks, equipment,
vaccines and medicines, technically and professionally competent guidance are available to the
farmers. The management practices have improved and disease and mortality incidences are reduced
to a great extent. In these circumstances country chicken farming has been given considerable
importance now days due to increase in the purchase capacity of the people, increased health
cautiousness and changed food habits. Further, in view of the contribution of country chicken in the
total meat production is significantly less and, increasing demand for country chicken meat central /
state government institutions and poultry corporations are attracting the new entrepreneurs into
country chicken farming by introducing new varieties of country chicken breeds create with
augmented production parameters and increasing the assistance in farming activities. So, there is
good scope for further development of country chicken farming in India in the years to come.
MARKETING CHANNELS
The demand for meat of country chicken comes from individuals, hoteliers, and wholesalers
who send the birds to distance markets where the demand is hot. The birds are sold as wholesale or
in retail. Generally, the poultry farmers need not cart them to market themselves but in most cases
they are sold at the farm gate. The wholesaler collects bird in large numbers from the large farms.
The retailers either buy from the farm or the birds are reached to them in small lots from the
relatively smaller farms. Therefore, the link is Producers – wholesalers – retailers – consumers. The
functionaries who are involved in marketing are dressers and packagers at the farm level.

7. CHAPTER – III
SWOT ANALYSIS
STRENGTHS
1. Poultry has the potential to meet the protein requirements of a nation where malnutrition is
rampant, since both eggs/broilers are a good source of protein.
2. Helps to augment the income of the rural masses. Thus improve the socio-economic status of
rural population.
3. Poultry is one of the most efficient converters of plant products / waste in to edible food that
can in some measure tackle the problem of malnutrition especially in a country like India.
4. Unlike other meat (beef, pork) which have religious taboos, chicken is widely accepted in
India and is cheaper than goat / sheep meat.
5. Litter has high manure value and can be used in agriculture activities.
6. As country chicken are disease resistant, mortality % and cost on medicines will be less.
7. It has tremendous potential to create non-farm employment and check migration from rural
to urban areas.
8. Generates relatively quick returns with low investment requirements.
WEAKNESS
1. Poultry farming is labor intensive.
2. A peculiar feature of the poultry industry is that it is highly fragmented.
3. Country chicken growth rate is slow when compared with commercial broilers coupled, this
lowered growth rate coupled with the cost of making investments in the infrastructure such as
sheds, feeders, breeders, waterers, heating and cooling systems may decrease the farmers
income.
OPPORTUNITIES
1. Present per capita meat consumption in India is increasing day by day, therefore there is large
scope for poultry farming.
2. Due to changed socio-economical conditions in India there is an increase in the demand for
the country chicken meat.
3. The increasing awareness of the need for the balanced nutrition has led to changes in the
eating habits this, may build great potential market for country chicken in India.
THREATS
1. Natural calamities.
2. If adequate death precautions are not taken infectious / contagious diseases can be spread.
The recent avian flu has spread a wave of panic across the globe. The other aspects that have
dragged the poultry industry are the recent SARS and Ebola.
3. Shortage in major feed ingredient i.e., maize, which constitutes more than 50% of feed
rations. Therefore even a small increase in costs can wipe out the profits.

8. ANNEXURE - I
ECONOMICS IN COUNTRY CHICKEN FARMING - TECHNO ECONOMIC
NORMS
S.
No
Parameter Value
1 No. of birds per batch 2000
2 Rearing period (weeks) 8
3 No. of batches per year 5
4 No. of batches sold per year 5
5 Space requirement per bird (sft) 1
6 Cost of construction of shed Rs.250/sft
7 Cost of construction of Store room Rs.300/sft
8 Cost of construction of Labor quarters Rs.250/sft
9 Cost of electrification 4 % of civil cost
10 Equipment cost Rs 25/bird
11 Cost of Day Old Chicks Rs 50/chick; Including transport
12 Mortality in 8 weeks 4%
13 Supply for free chicks 3%
14 Feed requirement 4 kg/bird
15 Feed cost Rs 40/kg feed; Including transportation
16 Expenditure on labor Rs 10,000 / person / month
17 Cost of medicines, vaccine etc Rs 3/bird
18 Cost of litter Rs 2/bird
19 Average body weight of birds 1.8 kg/bird
20 Sale price of bird Rs 400/bird
21 Income from Manure Rs 1/bird
22 No. of gunny bags 20 gunny bags per ton of feed
23 Income from gunny bags Rs. 10/bag
24 Depreciation on sheds 5%
25 Depreciation on equipment 10%
26 Margin Money 45%
27 Interest rate 14%
28 Repayment period 6 years
29 Grace period years 0.5 years
30 Construction period 3 months
31 Rest and cleaning period for sheds 10 – 15 days

9. ANNEXURE - II
ECONOMICS OF COUNTRY CHICKEN FARMING – INVESTMENT COST
S.
No
Particulars Specifications Units Unit cost Rs Total cost Rs
1 Sheds and other structures
a) Broiler Shed 1sft per bird
3,000 sft
(Including
working area)
200 6,00,000
b) Store Room 1000 sft 250 2,50,000
c) Labor quarter 600 sft 200 1,20,000
2 Water supply system
a) Digging of Tube well Existing
b) Water tanks 1 No 10,000 ltrs 20,000 20,000
c) Electric motor pump set 25,000
d) Electrical installations/
equipment
4% of civil
costs
38,800
3 Equipments
a) Feeders and Waterers Cost per bird 2,000 25 50,000
b) Foggers 50 50 2,500
c) Sprinklers 20 100 2,000
d) Brooders 20 1,500 30,000
4
Capitalization of recurring
expenses for one batch
a) Chick cost 2,000 / batch 50 per bird 1,00,000
b) Feed cost 8,000 / batch 40 per kg 3,20,000
c) Medicine, vaccine etc 2,000 / batch
5 Rs. Per
bird
10,000
d) Litter 1 Ton / batch 2,500 2,500
e) Labor cost per batch
10,000
/month/person
1 30,000
f) Power charges 5,000 / batch 5,000
5 Total Financial Outlay (TFO) 16,05,800
6
Margin Money @ 45% of
TFO
7,22,610
7 Bank loan @ 55% of TFO 8,83,190
ANNEXURE - III
ECONOMICS OF COUNTRY CHICKEN – FLOCK PROJECTION CHART
Year No. of batches introduced No. of batches sold
I 5 5
II 5 5
III 5 5
IV 5 5
V 5 5
VI 5 5

10. ANNEXURE - IV
ECONOMICS OF COUNTRY CHICKEN – CASH FLOW ANALYSIS
S. No Particulars I Year II to V Years VI Year
I COSTS
A Capital Cost 11,38,300 0 0
B Recurring costs
a Cost of chicks 5,00,000 5,00,000 5,00,000
b Cost of Feed 16,00,000 16,00,000 16,00,000
c Misc expenses 80,000 80,000 80,000
d Litter 12,500 12,500 12,500
e Labor charges 1,20,000 1,20,000 1,20,000
f Power bill 15,000 15,000 15,000
II BENEFITS
A Sale of birds 38,00,000 38,00,000 38,00,000
B Sale of Manure 10,000 10,000 10,000
C Sale of gunny bags 8,000 8,000 8,000
D Depreciation value of
a Sheds 48,500 48,500 48,500
b Equipment including water pump 17,350 17,350 17,350
E TOTAL Benefits 38,83,850 38,45,860 38,45,860
NET Benefits 15,56,350 15,56,350 15,56,350
III ECONOMICAL VIABILITY OF THE PROJECT
A Cost 1,51,03,300 1,51,03,300
B Benefits 2,33,03,100 2,33,03,100
C Net Present Worth (NPW) 47,51,680 47,51,680
D Benefit Cost Ratio (BCR) 4.17 4.17
E Internal rate of Return (IRR) 105% 105%
ANNEXURE - V
ECONOMICS OF COUNTRY CHICKEN – REPAYMENT SCHEDULE
Year
Loan
outstanding
Gross
surplus
Interest @14% Principal
Total
Repayment
Surplus
I 8,83,190 15,56,350 1,23,647 1,00,000 2,23,647 13,32,703
II 7,83,190 15,56,350 1,09,647 1,20,000 2,29,647 13,26,703
III 6,63,190 15,56,350 92,847 1,40,000 2,32,847 13,23,503
IV 5,23,190 15,56,350 73,247 1,50,000 2,23,247 13,33,103
V 3,73,190 15,56,350 52,247 2,00,000 2,52,247 13,04,103
VI 1,73,190 15,56,350 24,247 1,73,190 1,97,437 13,58,913
TOTAL 4,75,882 8,83,190 13,59,072 79,79,028