calf fattening.pdf

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Pre-Feasibility Study

Prime Ministers Small Business Loan

Scheme

(Calf Fattening Farm)

Small and Medium Enterprises Development Authority

Ministry of Industries & Production

Government of Pakistan

www.smeda.org.pk

HEAD OFFICE

4th Floor, Building No. 3, Aiwan e Iqbal, Egerton Road,

Lahore

Tel 92 42 111 111 456, Fax 92 42 36304926-7

[email protected]

REGIONAL OFFICEPUNJAB

REGIONAL OFFICESINDH

REGIONAL OFFICEKPK

REGIONAL OFFICEBALOCHISTAN

3rd Floor, Building No. 3,Aiwan e Iqbal, Egerton Road

Lahore,

Tel: (042) 111-111-456

Fax: (042)[email protected]

5TH Floor, Bahria

Complex II, M.T. Khan Road,

Karachi.Tel: (021) 111-111-456

Fax: (021) [email protected]

Ground Floor

State Life Building

The Mall, Peshawar.Tel: (091) 9213046-47


Bungalow No. 15-A

Chaman Housing Scheme

Airport Road, Quetta.Tel: (081) 831623, 831702


September 2013
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Pre-Feasibility Study Calf Fattening Farm

Table of Contents

1.DISCLAIMER ........................................................................................................................................... 32.PURPOSE OF THE DOCUMENT......................................................................................................... 43.INTRODUCTION TO SMEDA ............................................................................................................... 44.INTRODUCTION TO SCHEME............................................................................................................. 55.EXECUTIVE SUMMARY........................................................................................................................ 56.BRIEF DESCRITION OF PROJECT & PRODUCT ........................................................................... 57.CRITICAL FACTORS ............................................................................................................................. 68.INSTALLED AND OPERATIONAL CAPACITIES............................................................................. 69.GEOGRAPHICAL POTENTIAL FOR INVESTMENT........................................................................ 610.POTENTIAL TARGET MARKET / CITIES......................................................................................... 611.PROJECT COST SUMMARY .............................................................................................................. 711.1 PROJECT ECONOMICS ........................................................................................................................ 711.2 PROJECT FINANCING ......................................................................................................................... 711.3 PROJECT COST .................................................................................................................................. 711.4 SPACE REQUIREMENT ....................................................................................................................... 811.5 MACHINERY AND EQUIPMENT .......................................................................................................... 811.6 OFFICE EQUIPMENT .......................................................................................................................... 911.7 RAW MATERIAL REQUIREMENTS...................................................................................................... 911.8 HUMAN RESOURCE REQUIREMENT................................................................................................... 911.9 REVENUE GENERATION .................................................................................................................... 911.10OTHERCOSTS ..................................................................................................................................1012. CONTACT DETAILS OF EXPERTS AND CONSULTANTS ................................................ 1013.

ANNEXURE .................................................................................................................................. 11

13.1 PROFIT & LOSS STATEMENT................................................................................................. 1113.2 BALANCE SHEET....................................................................................................................... 1213.4 USEFUL PROJECT MANAGEMENT TIPS............................................................................. 1413.5 : USEFUL LINKS .............................................................................................................................. 1514. KEY ASSUMPTIONS .................................................................................................................. 16

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1. DISCLAIMER

This information memorandum is to introduce the subject matter and provide a

general idea and information on the said matter. Although, the material included

in this document is based on data/information gathered from various reliable

sources; however, it is based upon certain assumptions which may differ fromcase to case. The information has been provided on as is where is basis without

any warranties or assertions as to the correctness or soundness thereof.

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. SMEDA, its employees or agents do not assume any liability for any

financial or other loss resulting from this memorandum in consequence of

undertaking this activity. The contained information does not preclude any further

professional advice. The prospective user of this memorandum is encouraged to

carry out additional diligence and gather any information which is necessary for

making an informed decision, including taking professional advice from a

qualified consultant/technical expert before taking any decision to act upon the

information.

For more information on services offered by SMEDA, please contact our website:

www.smeda.org.pk

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2. PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential

entrepreneurs in project identification for investment. The project pre-feasibility

may form the basis of an important investment decision and in order to serve this

objective, the document/study covers various aspects of project conceptdevelopment, start-up, and production, marketing, finance and business

management.

The purpose of this document is to facilitate potential investors in Calf Fattening

Farm by providing them with a general understanding of the business with the

intention of supporting potential investors in crucial investment decisions.

The need to come up with pre-feasibility reports for undocumented or minimally

documented sectors attains greater imminence as the research that precedes

such reports reveal certain thumb rules; best practices developed by existing

enterprises by trial and error, and certain industrial norms that become a guidingsource regarding various aspects of business set-up and its successful

management.

Apart from carefully studying the whole document one must consider critical

aspects provided later on, which form basis of any Investment Decision.

3. INTRODUCTION TO SMEDA

The Small and Medium Enterprises Development Authority (SMEDA) was

established in October 1998 with an objective to provide fresh impetus to the

economy through development of Small and Medium Enterprises (SMEs).

With a mission "to assist in employment generation and value addition to the

national income, through development of the SME sector, by helping increase

the number, scale and competitiveness of SMEs" , SMEDA has carried out

sectoral research to identify policy, access to finance, business development

services, strategic initiatives and institutional collaboration and networking

initiatives.

Preparation and dissemination of prefeasibility studies in key areas of investment

has been a successful hallmark of SME facilitation by SMEDA.

Concurrent to the prefeasibility studies, a broad spectrum of business

development services is also offered to the SMEs by SMEDA. These services

include identification of experts and consultants and delivery of need based

capacity building programs of different types in addition to business guidance

through help desk services.

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4. INTRODUCTION TO SCHEME

Prime Ministers Small Business Loans Scheme, for young entrepreneurs, with

an allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide

subsidised financing at 8% mark-up per annum for one hundred thousand

(100,000) beneficiaries, through designated financial institutions, initially throughNational Bank of Pakistan (NBP) and First Women Bank Ltd. (FWBL).

Small business loans with tenure upto 7 years, and a debt : equity of 90 : 10 will

be disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh,

Khyber Pakhtunkhwah, Balochistan, Gilgit Baltistan, Azad Jammu & Kashmir and

Federally Administered Tribal Areas (FATA).

5. EXECUTIVE SUMMARY

In Calf fattening business, calves are raised on balanced feed to get targeted

weight gain of greater value. These calve are grown in groups and each batchstays on farm for a period of 120 days. The expected weight gain ranges

between 700 - 850 grams/day. Higher yields are achievable with better farm

management or better quality breeds, specifically meant for meat production.

Calves are raised in rural and semi-urban areas and sold in urban markets

normally in livestock markets (Mundis). A farm of 101 calves per annum is

suggested in this pre-feasibility study as a viable economic size to enter this

business. Total estimated investment of Rs 1.12 million is required. This project

is proposed to be started on 90% debt and 10% equity basis. IRR, NPV &

payback period of the project is 32 %, Rs.1.47 million and 4.04 yearsrespectively. The proposed project is a sole-proprietorship.

6. BRIEF DESCRITION OF PROJECT & PRODUCT

Calf fattening venture suggested in this study is based on raising 101 calves /

year at the farm premises. The calves, preferably males, 8-9 months of age are

fed on concentrated feed ration and fodder. Balanced feed is given to calves for

a period of 120 days to get higher body weight gain. Live weight of these calves

is around 100 kg. If these calves are fed properly on the formulated fattening

feed, an additional weight up to 90 kg can be achieved. The daily weight gain

varies between 700 to 850 grams depending on the quality of feed given to them.The subject business can be set-up at any appropriate location preferably with

availability of fodder and water. There is year around market, however the

demand increases especially before occasions like Eid-ul-Fitr and Eid-ul-Azha,

well fed animals are sold at a price higher than usual weight based price. The

proposed legal structure of the business entity is sole proprietorship.

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7. CRITICAL FACTORS

Adequate weight gain through the use of balanced feed purchased fromwell reputed companies or formulated accordingly.

Proper selection of animal based on breed, age and health condition.

Recommended breeds include Brahaman, Angus or local Tharparkar,Rojhaan and Lohani.

Appropriate farm management practices (feeding, housing, diseasecontrol, comfortable & ventilated barns and drinking water etc)

Timely vaccination against infectious diseases such as Rinderpest, BlackQuarter and Foot & Mouth Disease and timely medication forendoparasitic infestations.

Regular technical assistance from the livestock professionals and experts.

8. INSTALLED AND OPERATIONAL CAPACITIES

In this pre-feasibility study 101 young calves of 8 to 9 months of age are raised /year in 3 production cycles of 35 calves each, raised for 4 months on Feed LotFattening system. The project is operating at 45% of its capacity in its 1

styear of

operations.

9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Metropolitan cities like Lahore, Karachi, Multan, Faisalabad, Rawalpindi, etc arethe major markets of meat. However, farm lands and a rural areas with abundantwater good soil for fodder make better choice for farming provided access tomundis and veterinary services are not an issue.

10. POTENTIAL TARGET MARKET / CITIES

Apart from Sialkot, Jhang, Rahim Yar Khan, Bahawalnagar, Bahawalpur,Sahiwal, Okara etc in the Punjab, livestock markets in all the cities and peri urban locations are the primary market in addition to specially arranged locationsfor larger cities during Eid festival in the urban markets. Normally animals aresold on Live Body Weight basis. The price of fattened calves varies according toanimals health and market conditions. In this feasibility Rs. 160 per kg of livebody weight is assumed as a selling price. Following are some of the targetclients for a calf-fattening farmer:

Local farmers

Livestock traders

Butchers

Contractors

Slaughter house owners

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11. PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercialviability of Calf Fattening Farming project under the Prime Ministers SmallBusiness Loan Scheme. Various cost and revenue related assumptions along

with results of the analysis are outlined in this section.11.1 Project Economics

The pre-feasibility suggests fattening of 101 calves per year in 3 groups. Eachgroup of 35 calves stays on farm premises for 120 days at rented purpose builtfarm building. The total cost of the project is Rs.1.12 million, out of which capitalinvestment is Rs. 0.22 millions and working capital requirement is Rs. 0.90millions.

The following table shows internal rates of return and payback period.

Table 1 - Project Economics

Description DetailsInternal Rate of Return (IRR) 32%

Payback Period (yrs) 4.04

Net Present Value (NPV) 1,463,581

11.2 Project Financing

Following table provides details of the equity required and variables related tobank loan;

Table 2: Project FinancingDescription Details

Total Equity (10%) Rs. 111,718Bank Loan (90%.) Rs. 1,005,458

Markup to the Borrower (%age/annum) 8%

Tenure of the Loan (Years) 7

11.3 Project Cost

The proposed pre-feasibility is based on the assumption of 90% debt and 10%equity.

Table 3: Capital Investment for the Project

Capital Investment Amount (Rs.)Machinery & equipment 105,000

Furniture & fixtures 10,000

Pre-operating costs 100,639

Total Capital Costs 215,639

Equipment spare part inventory 15,188

Raw material inventory (incl. calves) 733,648

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Upfront building rent 72,700

Cash 80,000

Total Working Capital 901,536

Total Investment 1,117,175

11.4 Space Requirement

The area has been calculated on the basis of very basic and simple spacerequirement for sheds for breeding animals, calves and open paddock, labourersroom, kitchen, washrooms and store. Following table shows calculations forproject space requirement.

Table 4: Space Requirement

Space Requirement Space (Sq.Ft)

Management building 144

Shed for Animals 3,750

Store 240Attendants Room 136

Open Paddock 7,500

Total Infrastructure 11,770

It is assumed that the calves would require above mentioned space in farm.Furthermore, shed space may be increased as the number of animals increase inthe herd. It is assumed that the shed would be acquired on monthly rent of Rs.18,175 per month.

11.5 Machinery and Equipment

Following table provides list of machinery and equipment required for theproposed camel farm.

Table 5: List of Machinery and Equipment

Farm supplies Rate per unit No. Amount (Rs.)

Chopper 15,000 1 15,000

Water pump 25,000 1 25,000

Weighing Scale 50,000 1 50,000

Miscellaneous farm utensils 15,000 1 15,000

Furniture 10,000 1 10,000

Total Machinery Cost 5 115,000

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For the calf fattening farm, the basic equipments are feeding mangers, watertroughs etc. additionally.

11.6 Office Equipment

There is no requirement of Vehicles required for this project.

11.7 Raw Material Requirements

Table 6: Cost of Material

Unit Rate (Rs.) Qty Total Rs.

Cost of calves Calves 15,000 101 1,181,250

Feed Stuff per calf Per calf 12,749 101 1,003,944

Vaccination/ Medication for

herd

Per calf 200 101 15,750

Total Cost 2,200,944

11.8 Human Resource Requirement

Table7: Human Resource Requirement

Description No.Monthly Salary

(Rs.)Annual salary

(Rs.)

Farm Helper 1 10,000 120,000

Total 1 10,000 120,000

The table above provides, the details of human resource required to run projectof calf fattening farm. One person can handle 35-40 calves easily during thefattening period of 120 days.

11.9 Revenue Generation

Table 8: Revenue GenerationDescription Unit Sale Price

Rs./UnitFirst Year

ProductionRevenuein First

Year (Rs.)

Fattened calves sold Animal 29,440 101 2,980,800

Total Revenue 2,980,800

** Calves are divided in three groups, one of 33 and balance two of 34 each

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11.10 Other Costs

An essential cost to be borne by the farm is electricity expense which is assumedto be Rs. 850 per animal. The repair and maintenance cost is estimated at Rs.450 per animal.

12. CONTACT DETAILS OF EXPERTS AND CONSULTANTS

Feed Suppliers Consultants

Hi-Tech Feeds (Pvt.) Ltd.

1-A, Shadman Chowk Jail Road,

Lahore Phone : +92-42-37564503

Fax : +92-42-37564508

Prof. Dr. Muhammad YunasDepartment of Livestock Management,Faculty of Animal Husbandry, Universityof Agriculture, Faisalabad, PakistanPh: +92-41-9200161-170

National Feeds Ltd.

171 Shadman II Lahore.

Phone: +92-42 37551405-8Fax: +92-42- 37573045

Prof. Dr. Raziq KakarDean, Lasbella University of Agriculture,Water and Marine Sciences,Balochistan/ President, Society of Animal,Veterinary and Environmental Scientists(SAVES)Email: [email protected]: +92-0853-610921

Doctor's Dairies & Feeds (Pvt) LtdPlot no. 203/7 UC-3,Cattle Colony BinQasim Town, KarachiTel. 021-35081923-24-27

Dr. Tanveer

University of Arid Agriculture,

Rawalpindi

ICI Pakistan Cattle Feed63-Mozang Road LahoreTel. 042-36370042

Dr. M. SarwarDean, Faculty of Animal Husbandry

Uni. Of Agriculture, Faisalabad

Ph: +92-41-9920161-70

Big Feed (PVT) Ltd.2-A, Ahmad Block, New Garden Town,LahoreTel. 042-35835374-35835373

Alhalal WandaAl-Halal Livestock Concern Company

Super High Way JahaniaTel. 065-2002373, 0300 6881293

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mailto:[email protected]:[email protected]


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13. ANNEXURE

13.1 PROFIT & LOSS STATEMENT

Statement Summaries SMEDA

Income St atement

Rs. in actuals

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Revenue 2,980,800 3,338,496 3,724,510 4,140,778 4,589,363 5,072,453 5,592,380 6,151,618 6,752,799 7,398,719

# Cost of Goods Sold

Feed & Vaccination Cost 1,019,694 1,121,664 1,233,830 1,357,213 1,492,935 1,642,228 1,806,451 1,987,096 2,185,805 2,404,386Cost of Calves 1,181,250 1,299,375 1,429,313 1,572,244 1,729,468 1,902,415 2,092,656 2,301,922 2,532,114 2,785,326

Direct Labor 120,000 132,000 145,200 159,720 175,692 193,261 212,587 233,846 257,231 282,954

Repair & Maintenance 45,563 51,030 56,930 63,293 70,150 77,534 85,481 94,029 103,219 113,092

Utilities 86,063 100,980 118,020 137,459 159,605 184,806 213,451 245,977 282,873 324,689

Total Cost of Sales 2,452,569 2,705,049 2,983,293 3,289,929 3,627,850 4,000,244 4,410,627 4,862,870 5,361,242 5,910,447

Gross Profit 528,231 633,447 741,216 850,849 961,513 1,072,209 1,181,753 1,288,748 1,391,556 1,488,272

General administration & selling expenses

Administration expense - - - - - - - - - -

Travelling & Comm. expense (phone, fax, etc.) - - - - - - - - - -

Office vehicles running expense - - - - - - - - - -

Office expenses (stationary, etc.) - - - - - - - - - -

Depreciation expense 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000

Amortization expense 20,128 20,128 20,128 20,128 20,128 - - - - -

Property tax expense - - - - - - - - - -

Miscellaneous expense 14,904 16,692 18,623 20,704 22,947 25,362 27,962 30,758 33,764 36,994

Subtotal 264,132 287,730 313,651 342,123 373,395 387,614 425,339 466,773 512,281 562,262

Operating Income 264,099 345,717 427,565 508,726 588,118 684,595 756,414 821,974 879,276 926,010

Other income - - - - - - - - - -

Gain / (loss) on sale of assets - - - - - - - - - -

Earnings Before Interest & Taxes 264,099 345,717 427,565 508,726 588,118 684,595 756,414 821,974 879,276 926,010

Interest expense 77,137 67,917 57,937 47,134 35,441 22,784 9,084 - - -Earnings Before Tax 186,962 277,800 369,628 461,592 552,677 661,810 747,330 821,974 879,276 926,010

Tax - - - - - - - - - -

NET PROFIT/(LOSS) AFTER TAX 186,962 277,800 369,628 461,592 552,677 661,810 747,330 821,974 879,276 926,010

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13.2 BALANCE SHEET

Statement Summaries SMEDA

Balance SheetRs. in actuals

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Assets

Current assets

Cash & Bank 134,525 129,735 191,118 305,144 477,163 701,902 972,277 1,279,096 1,799,707 2,330,661 2,952,099

Accounts receivable - 163,332 173,131 193,507 215,487 239,182 264,707 292,187 321,753 353,546 387,713

Finished goods inventory - - - - - - - - - - -

Equipment spare part inventory 15,188 17,861 20,922 24,423 28,423 32,985 38,184 44,103 50,834 58,481 -

Raw material inventory 733,648 847,364 978,705 1,130,404 1,305,617 1,507,987 1,741,726 2,011,693 2,323,505 2,683,649 -Total Current Assets 901,536 1,178,284 1,385,868 1,677,669 2,053,300 2,511,328 3,049,092 3,662,497 4,534,759 5,469,192 3,339,812

Fixed assets

Land - - - - - - - - - - -

Building/Infrastructure - - - - - - - - - - -

Machinery & equipment 105,000 94,500 84,000 73,500 63,000 52,500 42,000 31,500 21,000 10,500 -

Furniture & fixtures 10,000 9,500 9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000

Office vehicles - - - - - - - - - - -

Office equipment - - - - - - - - - - -

Total Fixed Assets 115,000 104,000 93,000 82,000 71,000 60,000 49,000 38,000 27,000 16,000 5,000

Intangible assets

Pre-operation costs 100,639 80,512 60,384 40,256 20,128 - - - - - -

Legal, licensing, & training costs - - - - - - - - - - -

Total Intangible Assets 100,639 80,512 60,384 40,256 20,128 - - - - - -

TOTAL ASSETS 1,117,175 1,362,795 1,539,252 1,799,925 2,144,428 2,571,328 3,098,092 3,700,497 4,561,759 5,485,192 3,344,812

Liabilities & Shareholders' Equity

Current liabilities

Accounts payable - 170,506 190,230 212,323 237,084 264,851 296,005 330,980 370,268 414,426 290,565

Total Current Liabilities - 170,506 190,230 212,323 237,084 264,851 296,005 330,980 370,268 414,426 290,565

Other liabilities

Long term debt 1,005,458 893,610 772,542 641,494 499,644 346,101 179,900 - - - -

Total Long Term Liabilities 1,005,458 893,610 772,542 641,494 499,644 346,101 179,900 - - - -

Shareholders' equity

Paid-up capital 111,718 111,718 111,718 111,718 111,718 111,718 111,718 111,718 111,718 111,718 111,718

Retained earnings - 186,962 464,762 834,390 1,295,982 1,848,659 2,510,470 3,257,799 4,079,774 4,959,049 2,942,530

Total Equity 111,718 298,680 576,480 946,108 1,407,700 1,960,377 2,622,187 3,369,517 4,191,491 5,070,767 3,054,247

TOTAL CAPITAL AND LIABILITIES 1,117,175 1,362,795 1,539,252 1,799,925 2,144,428 2,571,328 3,098,092 3,700,497 4,561,759 5,485,192 3,344,812

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13.3 CASH FLOW STATEMENT

SMEDA SMEDA

Cash Flow StatementRs. in actuals

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Operating activities

Net profit - 186,962 277,800 369,628 461,592 552,677 661,810 747,330 821,974 879,276 926,010

Add: depreciation expense - 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000

amortization expense - 20,128 20,128 20,128 20,128 20,128 - - - - -

Deferred income tax - - - - - - - - - - -

Accounts receivable - (163,332) (9,800) (20,376) (21,980) (23,695) (25,525) (27,480) (29,566) (31,792) (34,167)

Finished good inventory - - - - - - - - - - -

Equipment inventory (15,188) (2,673) (3,061) (3,501) (3,999) (4,563) (5,199) (5,919) (6,731) (7,647) 58,481

Raw material inventory (733,648) (113,715) (131,341) (151,699) (175,213) (202,371) (233,738) (269,967) (311,812) (360,143) 2,683,649

Accounts payable - 170,506 19,724 22,093 24,761 27,766 31,154 34,975 39,288 44,158 (123,861)

Other liabilities - - - - - - - - - - -

Cash provided by operations (767,011) 107,058 182,450 245,074 313,870 378,282 436,575 486,719 520,611 530,955 3,563,967

Financing activities

Change in long term debt 1,005,458 (111,848) (121,068) (131,048) (141,850) (153,543) (166,200) (179,900) - - -

Issuance of shares 111,718 - - - - - - - - - -

Purchase of (treasury) shares - - - - - - - - - - -

Cash provided by / (used for) financing act 1,117,175 (111,848) (121,068) (131,048) (141,850) (153,543) (166,200) (179,900) - - -

Investing a ctivities

Capital expenditure (215,639) - - - - - - - - - -

Acquisitions - - - - - - - - - - -

Cash (used for) / provided by investing act (215,639) - - - - - - - - - -

NET CASH 134,525 (4,790) 61,382 114,026 172,019 224,739 270,375 306,819 520,611 530,955 3,563,967

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Calf Fattening Farm

13.4 USEFUL PROJECT MANAGEMENT TIPS

Technology

List of Machinery & Equipment

Required spare parts & consumables: Suppliers credit agreements and availability

as per schedule of maintenance be ensured before start of operations

Energy Requirement: Should not be overestimated or installed in excess and alternate

source of energy for critical operations be arranged in advance

Machinery Suppliers: Should be asked for training and after sales services under the

contract with the machinery suppliers

Quality Assurance Equipment & Standards: Whatever means required products

quality standards need to be defined on the packaging and a system to check them

instituted, this improves credibility

Marketing

Product Development & Packaging: Expert's help may be engaged for

product/service and packaging design & development

Ads & P.O.S. Promot ion: Business promotion and dissemination through banners

and launch events is highly recommended. Product broachers from good quality service

providers

Sales & Distribution Network: Expert's advise and distribution agreements are

required with.

Price - Bulk Discounts, Cost plus Introductory Discounts: Price should never be

allowed to compromise quality. Price during introductory phase may be lower and used

as promotional tool. Product cost estimates should be carefully documented before

price setting. Government controlled prices shall be displayed.

Human Resources

List of Human Resource

Adequacy & Competencies: Skilled and experienced staff should be

considered an investment even to the extent of offering share in business profit.

Performance Based Remuneration: Attempt to manage human resource cost

should be focused through performance measurement and performance based

compensation.

Training & Skill Development: Encouraging training and skill of self & employees

through experts and exposure of best practices is route to success. Least cost options

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Calf Fattening Farm

for Training and Skill Development (T&SD) may be linked with compensation benefits

and awards.

13.5 : USEFUL LINKS

Prime Ministers Office,www.pmo.gov.pk

Small and Medium Enterprise Development Authority,www.smeda.org.pk

National Bank of Pakistan (NBP),www.nbp.com.pk

First Women Bank Limited (FWBL),www.fwbl.com.pk

Government of Pakistan, www.pakistan.gov.pk

Ministry of Industries & Production, www.moip.gov.pk

Ministry of Education, Training & Standards in Higher Education,

http://moptt.gov.pkGovernment of Punjab, www.punjab.gov.pk

Government of Sindh, www.sindh.gov.pk

Government of Khyber Pakhtoonkhwa, www.khyberpakhtunkhwa.gov.pk

Government of Balochistan, www.balochistan.gov.pk

Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk

Government of Azad Jamu Kashmir, www.ajk.gov.pk

Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk

Security Commission of Pakistan (SECP), www.secp.gov.pk

Federation of Pakistan Chambers of Commerce and Industry (FPCCI)

www.fpcci.com.pk

State Bank of Pakistan (SBP), www.sbp.org.pk

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http://www.pmo.gov.pk/http://www.pmo.gov.pk/http://www.pmo.gov.pk/http://www.smeda.org.pk/http://www.smeda.org.pk/http://www.smeda.org.pk/http://www.nbp.com.pk/http://www.nbp.com.pk/http://www.nbp.com.pk/http://www.fwbl.com.pk/http://www.fwbl.com.pk/http://www.fwbl.com.pk/http://www.fwbl.com.pk/http://www.nbp.com.pk/http://www.smeda.org.pk/http://www.pmo.gov.pk/


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Calf Fattening Farm

14. KEY ASSUMPTIONS

Table A: Financial Assumptions

Project life (years) 10

Debt Equity ratio 90:10

Interest rate on short term debt 8%

Interest rate on long term debt 8%

Debt tenure (years) 7

Debt payments per year 12

Table B: Product ion and Revenue Assumptions

Annual Installed capacity (Calves) 225

Capacity Utilization (%) 45

Maximum Capacity % 90

Capacity Utilization Growth per year % 3

Annual Production (calves) in first year 101

Number of Calves fattened per production cycle 33-34

Number of production ycles per year 3

Fattening days 120

Selling price (Rs/ kg live body weight) 160

Live body weight at purchase time (Kgs) 100

Average daily weight gain (grams) 700

Live Body Weight at selling time (Kgs) 183

Table C: Expense Assumptions

Purchase price (Rs/kg live body weight) 150

Mortality Rate 0%

Vaccination/ Medication cost (Rs. per calf) 200

Open Space per animal (Sq. ft) 50

Total Mixed Ration requirement (% of livebodyweight)

3

Price of Total Mixed Ration (Rs. Per Kg) 25

Table D: Cash flow Assumpt ions

Raw Material Inventory (Months) 4

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