A BUSINESS PLAN/MANUAL on: Profitable Commercial Poultry Egg Production Under A Semi-Automatic Layer Cage System
Are you just starting a poultry business or commencing on expansion plans? and you need a business loan or seeking funding from investors? Our team of professional analysts have made ready a comprehensive and investor-ready Business Plan with full financial projections and latest market updates in the poultry industry on commercial egg production. This was written based on our over 5 years of entrepreneurship experience and research so far in the industry.
TABLE OF CONTENTS
1. INTRODUCTION TO THE COMPANY…………………………………………………………………….4
1.1 Vision and Mission statement
1.2 Business Objectives
1.3 Value Proposition
2. ORGANIZATION AND MANAGEMENT PLAN…………..………………………………………..……5
2.1 Promoter of the business
2.2 The management team
2.3 Key Management Staff
2.4 Record control process
2.5 Record keeping documents
3. BUSINESS AND PRODUCT DESCRIPTION….………………………………………………………….6
3.1 Issues Of The Nigerian Poultry Industry
3.2 Location And Site
3.3 Poultry Houses and Battery Cages:
3.4 Feed And Feeding Requirements
3.5 Management Practices
3.6 Vaccination and Disease Control
4. MARKET ANALYSIS…………………………………………………..……………………………………….17
4.1 Market potential
4.2 Contribution to Local and National Economy
5. MARKETING PLAN……………………………………………………………………..……………………..18
5.1 Marketing arrangements
5. 2 Competitors
5.3 Competitive Advantage
6. FINANCIAL ANALYSIS………………………………………………………………………………………..20
I. Capital Expenditure
II. Recurrent Expenditure
III. Total Expenditure
IV. Income statement
V. Net Income and Profit
7. S.W.O.T Analysis………………………………………………………………………………………….……..26
THE NIGERIAN POULTRY INDUSTRY
The poultry industry in Nigeria has had it shares of ups and downs since 1961.
• Going by the Federal Office of Statistics report that reveals 70% shortage in supply of poultry products including egg, there is a wide market for poultry products i.e. eggs, chickens, etc.
• Presently, the industry is at a cross road with technological and veterinary advancement which reduce the risk involved in the industry. This is also encouraging and puts the mind of the investors at rest.
Looking at the above statistics, it is obvious that there is need to develop the poultry industry in Nigeria without fear since there is already short supply compared to the demand. This calls for a great private participation in the Nigerian poultry industry.
3.0 BUSINESS AND PRODUCT DESCRIPTION
3.1 Issues Of The Nigerian Poultry Industry
The poultry industry in Nigeria has had it shares of ups and downs the highest point between 1967 to 1970s i.e. the oil boom period when the poultry population attained about 110million in 1975 (Federal Office of Statistics annual abstract of statistics 1981) but in 1978/79 and particularly in the 1980’s the industry experienced a down turn. At present the industry is operating at about 17-30% capacity of its 1975 peak.
Today, Nigeria is rarely meeting her poultry demand in poultry meat and eggs. Seventy percent (70%) of our consumed poultry products especially meat, are smuggled product. The demand for ready to eat eggs alone far outweighs the supply yet, countries like Niger, Chad and Northern Cameroon essentially depend on our little supply. Big Restaurants such as KFC, Sweet Sensation and Mr. Biggs compete for the available little supply, thereby, hindering the introduction of some recipes because of non-availability of poultry meat. Essentially, our egg supply can only attempt to meet our edible demand hence, the industrial need is completely left out. This calls for a great private participation in the Nigerian poultry industry. Also, most of the commercial gas being sold around are not environmentally and economically friendly, thereby, posing a major threat on the lives of the populace and their income.
Thus, this has deemed it fit for us to be among the corporate investors to embark on a 1000 BIRDS CAPACITY SEMI-AUTOMATIC LAYER BATTERY CAGE SYSTEM and COMMERCIAL BIOGAS PLANT that will produce at least 20,000kg of biogas monthly in (City, State).
3.2 Location And Site
- This farm will be located at (city, State), which will be built on a permanently acquired/leased land that is suitable for this purpose. (City, State), climate and terrain is suitable for poultry farming and at large for agricultural purposes. More so, This location is an approved agricultural land mass by the government which will enhance the sustainability of this agricultural enterprise as land documents such as deed of ownership and certificate of ownership will be directly authenticated by the relevant government agency.
- This farm proposed location enjoys direct link to other state capital axis through an accessible and well tarred road that makes it easy for consumers of poultry products to reach without much ado.
- The proposed site of the poultry farm is a government approved agricultural land with planned security network that also makes it’s a safe haven for business coupled with hospitable nature of the inhabitants of this area.
- Considering the agrarian nature of the proposed site, labour is readily available and affordable.
- Sustainability of this poultry farm is greatly enhanced because agro-related activities is dominant at the proposed location. This includes large expanse of arable land that could be leased in future to grow maize which is a major component for poultry feed production. Hence, making the venture highly profitable as cost could be reduced as much as twenty percent through direct milling of feed.
- Added to the above listed suitability factors of the proposed poultry site is the privilege offered for expansion in/and other agribusinesses and coordinated support from other farms around.
- The poultry site will be planned from the outset with the infrastructures well placed and spaced out.
3.3 Poultry Houses and Battery Cages:
Layer production could be from Day-old-chicks (DOC), or stock as Point-of-Lay (POL) birds. Layers can be reared on Deep litter system or Battery Cage system.
BATTERY CAGE SYSTEM
Here hens are kept throughout their productive life time in cages. As such, they are strictly commendable for use by commercial egg producers. Caged birds are capital intensive but the merits include; ease of management, cleaner eggs, safety from breakages, minimal feed wastage, reduced water contamination and maximized space.
DEEP LITTER SYSTEM
Starters with limited resources could start with deep litter system. It is affordable, litter materials are readily available. The major requirements are conducive housing and more intense management of the water, feed and litters. The roof in all cases should be heat repealing, made from asbestos, thatch etc. Vent, created to let out heat, wall should be less than two feet high, ‘curtain’ from sacks or tarpaulin provided to prevent entrance of rain water to prevent incidences of coccidiosis and other enteric diseases. Here hens are confined in a house with floor space of 8 to 10 birds/m2 to ensure free movement. The floor should be covered with a 5cm to 10cm deep litter of grain husks (maize or rice), straw, wood shavings or a similarly absorbent (but non-toxic) materials. Wood shavings are highly recommended for use since birds cannot eat them. Litter provide from the droppings. It also helps to prevent damage to the birds’ legs due to slippery surfaces. Usually old litter is renewed when replacement stock arrives. It is advisable not to re-use old litter. After old litter has been removed out of the house, the floor should be cleaned and disinfected.
It is advisable that starters should minimise the cost of poultry house construction and utilise local materials as equipment so that the limited resources could be channel into productive running cost such as DOC or POL and feed.
Starters could start with POL, these are birds in their fourteen to twenty weeks of Age, (birds often start dropping their first egg from 22weeks to 24weeks of age). Advantage of acquiring Point Of Lay birds is the reduced risk in rearing birds from chicks. Prices of POL ranges: 17weeks (N1200) and 19 weeks (N1400).
We have 2 types of poultry houses: Brooder/Rearing houses and laying houses
The house is constructed with a solid base wall of about 3 – 4 layer of concrete block coaches of 6 inches while the sides are open-sided covered with ¼ inch wire mesh with controllable curtains and the height is about 3 – 4m.
TABLE 1: Floor/Space Requirement For Growing Birds.
Age in weeks Square feet per bird Square meter per bird
0-6 0.13-0.54 0.0123-0.05
6-12 0.54-0.86 0.05-0.08
Point of lay 1.08-3.2 0.05-1.10
Thus, number of birds /meter square 9-13
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– Available in editable word document format
– full financial projections
– A brief financial projection on how you can incorporate biogas plant into your farm
– the latest market updates and prices as at June, 2019
– Poultry record keeping
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• Agriculture is vital to the economic development of Nigeria but farmers do not have adequate information about health, management, production, marketing, processing and storage and extension services amongst others, to enable them achieve sustainable productivity and maximum returns.
• In a 2013 lecture delivered in Lagos, by Dr. Akinwunmi Adesina, Nigeria’s minister of Agriculture and Rural Development, he said “Nigeria has huge agricultural potential. It has 84 million hectares of arable land of which only 40 per cent is cultivated. It has 279 billion cubic meters of water. By 2020, it is projected there will be close to 110 million youth in the labour market”.
• The agricultural sector will absorb half of the Nigerian youths if revived.
• Gross Domestic Product (GDP) growth in agriculture has been shown to be at least twice as effective in reducing poverty as growth originating in other sectors (World Bank, World Development Report 2008).
• Also, World Bank report, “Growing Africa: Unlocking the potential of agribusiness”, says that, Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 if they can expand their access to more capital, electricity and better technology.
• The face of agriculture has changed in Nigeria. Agriculture is no longer a development programme but now a business. The government has embraced the full value chain approach, from the farm to the table. As we grow agriculture, non-farm income and employment opportunities will develop, through multiplier effects in the local economy.
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The farming principles
Returning farmers to the centre of policy decisions is fundamental to sustainable development. Governments, businesses, scientists and civil society groups must focus attention on the source of our food security. All these groups must work together to enable the many millions of farm families, especially smallholders, to grow more crops sustainably through effective markets, more collaborative research and committed knowledge sharing.
A broad-based, knowledge-centred approach to agricultural development is needed. The approach starts with focusing on farmers and the tools and information they need to steward land, grow crops, bring in their harvest and then get it to market. While modern agricultural technologies and management approaches have doubled the production of world food calories over the past half century, many smallholder farmers struggle to achieve even the most basic level of subsistence.
New investments, incentives and innovations are needed to achieve greater social and environmental sustainability, while delivering increased agricultural production. These benefits must be made available to all farmers and agricultural workers, recognizing their role as guardians of our shared environment, biodiversity, and ecosystems. There is a need for a radical shift in thinking which places the farmer at the centre of sound and sustainable agricultural practices.
This approach – delivering productivity and sustainability – must also lead to more equitable and efficient production and distribution systems. Combined with better functioning markets and sustainable local and regional infrastructure, an enhanced farming system will contribute to improved economic development, providing food security, decent work, fair prices and improved land management.
To succeed, any new approach must be based on a stable policy environment within which farmers can work and invest. This, in turn, requires us to establish stable, long-term policy and regulatory frameworks for the development of agriculture; to enhance national financial allocations; to direct international development assistance towards the agricultural sector in developing countries; and to undertake comprehensive stakeholder consultation processes in the design and implementation of agricultural programme.
Unlocking Wealth for Nigerian Farmers
By Dr. Akinwumi Adesina
Nigeria has huge agricultural potential. It has 84 million hectares of arable land of which only 40 per cent is cultivated. It has 279 billion cubic meters of water. By 2020, it is projected there will be close to 110 million youth in the labour market. With low wage rates, this is a massive pool for the intensification of agriculture. With a population of 167 million people, Nigeria is the largest market in Africa.
In spite of this huge agricultural potential, Nigeria, which used to be the major player in agriculture in the world, has lost its place in the global agricultural market. In the 1960s we had glory. That glory was visible for all to see. Nigeria accounted for 42 per cent of the world’s exports of shelled groundnuts. Our total export volume was 502, 000 metric tons, MT. This declined to zero by 2008. The major problem we had was aflatoxin, which we did not bother to fix.
Nigeria lost her leadership position and was overtaken by USA, China and Argentina. Nigeria was also the largest exporter of palm oil in the world and accounted for 27 per cent of the global export volume for palm oil. Total export volume for palm oil by Nigeria was 167,000 MT in 1961. This declined to 25,000 MT by 2008. As the global export volume rose from 629,000 MT in 1961 to over 33 million MT in 2008, Malaysia and Indonesia took over using the oil palm seeding obtained from Nigeria! Today, Malaysia earns $18 billion from export of palm oil alone, and Nigeria imports crude palm oil from Malaysia.
Let us take a look at the case of cocoa. The entire Western Region built its economy on cocoa in the 1960s, Nigeria accounted for 18 per cent of the global export volume for cocoa in 1961. While Nigeria’s cocoa sector stagnated, the global market for cocoa rose from 1.8 million metric tons in 1961 to 2.7 million metric tons by 2008. Nigeria’s share of the global market for export declined from 18 per cent in 1961 to eight per cent by 2008. Cote d’Ivoire, Ghana and Indonesia overtook Nigeria. The story is the same for Cotton. Nigeria, which was the largest exporter of cotton in West Africa, has lost this position to Mali and Burkina Faso.
The neglect of the agricultural sector, as Nigeria became dependent on oil, has been a disaster for the country. For if Nigeria had held to its market share in palm oil, cocoa, groundnut and cotton, it would be earning today at least $10 billion per year from these commodities. Nigeria is now the largest food importer in the world. It spent over N1.3 trillion per year on imports of wheat, rice, sugar, and fish. In 2010 alone, Nigeria spent N635 billion on import of wheat, N356 billion on import of rice, N217 billion on sugar imports, and with all its marine resources, rivers, lakes and creeks, Nigeria spent N97 billion importing fish.
This is not fiscally, economically or politically sustainable. Nigeria is eating beyond its means. While we all smile as we eat rice every day, Nigerian rice farmers cry because the import of rice undermines domestic production. Our farmers sow in hope but reap in tears, as cheap food imports dash their hopes of better prices and incomes.
Our taste for imported food items has contributed to high levels of unemployment for our youths. Our imports provide jobs for the youth of the countries we import from, while our youth wander about our cities and towns looking for jobs. This is unacceptable. We must use the power of our population to our advantage by buying local foods. We must produce what we eat and eat what we produce.
We must work differently. We must recognise and harness the power of the private sector. The government needs to get out of certain aspects of agriculture and turn this over to the private sector in order to improve efficiency. We need to focus on agricultural value chains and not just on increasing production. What will happen to the increase if there are no markets and no agro processing firms that will help mop up the increased yields?
Nigerian agriculture has potential, but no one can eat potential. Potential must be transformed into food supply to deliver nutritious food and wealth to our growing population. To reverse this trend, we have articulated a clear vision to make Nigeria into an agriculturally industrialised economy, to create wealth, jobs and markets for farmers, and revive the rural economy. We plan to grow the size of the agricultural sector from the present level of $99 billion per year today to about $300 billion per year by 2030. We envision a Nigeria without oil. For nobody drinks oil and nobody smokes gas.
Nigeria has no business being a food importing country. With vast water resources, abundant land and cheap labour, we should be feeding the world. But we are not, because we have romanticised with industrialisation, while forgetting that agricultural industrialisation is the key for economic recovery and prosperity for the continent. Our vast lands should be turned into prairies, water should be well managed to produce more grains per drop, our labour enhanced with mechanisation, and everything produced should be processed. Nothing should be lost, for the labour of our farmers must be turned into wealth. Nigeria should not manage poverty in agriculture. Nigeria must create wealth from agriculture.
Creating that wealth is what is at the heart of a major revolution underway in agriculture in Nigeria. To achieve this, government launched in 2011 the Agricultural Transformation Agenda, ATA. The goal is to add 20 million MT of food to the domestic food supply by 2015 and stimulate the creation of 3.5 million jobs.
We made some fundamental paradigm shifts. We ended the approach of treating agriculture as a development programme. We now treat agriculture as a business. We have also ended the era of government crowding out the private sector. The role of government is to provide the needed enabling environment, policies and incentives for a private sector led agricultural transformation to unlock the potential of Nigeria’s agriculture. Our approach is for the government to enable the private sector to grow the agriculture sector, noting that farmers are the largest private sector participants.
Achieving the transformation of the agricultural sector also requires a structural change in the labour composition of the sector. The farming population is ageing rapidly and unable to meet the increasingly complex challenges of markets and technology. To feed our rising population well into the future, we will need young commercial farmers. We also need to create jobs for our many unemployed youth and the agricultural sector holds the greatest potential to create millions of jobs. In the past two years, two million jobs have been created in the agricultural sector.
My Ministry will soon launch a presidential initiative on Youth in Agribusiness to attract the youth into agriculture. The new initiative will target the creation of about 700,000 new young commercial farmers in the agricultural sector. These will be the farmers of the future, under mechanised agriculture who will make Nigeria’s agriculture competitive for decades into the future. To achieve this, the Federal Government will work with partnerships with state governments to put in place technical training facilities, business skills acquisition centres and entrepreneurship development centres. They will be complemented by access to land, finance and mechanised service centres.
Already we have some of them. Take the case of Mosunmola Umoru, who left a profitable career in banking to become a commercial farmer. Today she runs her own 20 ha farm and makes a lot more than when she was in banking. Take the case of Kofo Adegoke, who sold his car and moved from Abuja to his village in Kwara state to start a cassava farm. In less than one year, he has already a 20ha farm and has joined our exporters of cassava chips to China. These young people found the secret: agriculture in Nigeria is changing rapidly into a business and only those that get into it will reap the benefits.
As we support farmers, we must recognise that the majority of farmers are women. Without women farmers, Africa cannot unlock its agricultural potential. Empowering women farmers will change the nutritional status of children in rural households, as women spend a greater share of their incomes on household nutrition. I was inspired, two weeks ago, meeting Ladi Maladi, a woman rice farmer in Bakolori irrigation perimeter in northern Nigeria. With her one hectare-rich farm, which she double crops, she takes care of 30 orphans. Her labour gives hope and a future for the next generation. But we must address her challenges.
Women farmers need greater access to affordable credit, secure access to land, and labour saving technologies for planning, weeding, harvesting their farms and processing food. They need labour saving technologies to save them hours of back bending work. There can be no future for African agriculture, unless we create a future for Africa’s women farmers. This is why I am pleased to inform you today that my ministry will be supporting the creation of a Nigerian Women in Agricultural Research Award programme, NIWARD that will reward top performing women scientists and link them to women farmers, to help them unlock wealth.
The Agricultural Transformation Agenda is a journey. On this journey, we have arrived at the place now where the best performing companies on the Nigerian Stock Exchange are the agricultural companies. Agriculture is now the new source of wealth. The tide has turned. While a lot of progress has been made in the past two years since we started, with some bumps along the way, there is still much ahead to do to get to our desired destination.
As one nation, indivisible, we must continue to pursue rapid agricultural productivity growth, policy and institutional reforms that will make agriculture a viable business – one that is more productive, efficient and competitive. For only through this can the power of agriculture be unlocked, to secure Nigeria’s food supply and create robust wealth that touches millions today, and well into the future.
As a government, we will continue to work hard to create new opportunities for our farmers, to remove the shackles that hold them down and the oppression of decades. Then our barns shall be filled with plenty and a new song shall be heard across our villages. Then you will hear the voices of the children of our farmers as they sing a new song: “better at last, better at last, thank God Almighty our lives are better at last”!
(Excerpts from a lecture delivered in Lagos, by Dr. Adesina, Nigeria’s former minister of Agriculture and Rural Development, at the Reverend Wilson Badejo Foundation Annual lecture series)
A BUSINESS PLAN on: Profitable Commercial Poultry Egg Production Under A Semi-Automatic Layer Cage System
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