cad egg farm business proposal

CAD Egg Farm

Pampanga State Agricultural UniversityMagalang Pampanga

Department of Agricultural Business, Economics and Entrepreneurship

Business Proposal

Submitted by:Castro, Hazel R.Aldana, Paulene M.Dizon, Carmina Jane L.

Submitted To:Prof. Fernando Pangilinan

Documentation

BUSINESS PROPOSAL CONTENT

I. IntroductionII. Organization PlanIII. Production / Technical Plan IV. Marketing PlanV. Financial PlanVI. Profitability Test/ Indicators

I. Introduction

I. Introduction• Chicken broiler and egg production are the most progressive animal

enterprises in the Philippines today. The poultry industry in fact began as the backyard enterprise but has shifted to the formation of very large integrated contract farming operations.

• The growth of poultry industry in the Philippines has been impressive but its problems include inefficient management and the prevalence of many destructive poultry diseases and parasites cannot be ignored.

• The chicken is the most exploited species of poultry, which is utilized for food production in the whole world. Scientific researchers have been done on this species for past centuries and it is still the focus of the present and future experimentation. In the Philippines chicken rank first, while ducks rank second in economic importance as source of meat and eggs.

• The egg layer class is characterized by their comparatively small size. They lay large white shelled eggs, very active and nervous in temperament. They are non-sitters. The earlier selection of geneticist for this class showed record of early maturity that may not necessarily be true with the modern breeds under this class. Examples: Leghorn, Minorcas, Anconas, Mikawa.

Copyright © 2012 Bureau of Agricultural Researchhttp://www.bar.gov.ph/agfishtech-home/livestock-poultry/216-poultry/1334-chicken-production

http://www.bar.gov.ph/

• As of January 1, 2015, total chicken population was 176.47 million birds or 5.25 percent higher than last year's total stocks of 167.67 million birds. The inventory of broilers and native/improved chicken also went up by 8.18 percent and 3.31 percent, respectively. Layer chicken inventory likewise grew by 4.16 percent.

• Total chicken production in 2014 went up by 1.07 percent compared with last year's volume. On the other hand, chicken egg production for 2014 went down by 2.81 percent from the 2013 level.

• Along with the slight increase in chicken production, the gross value at current prices for 2014 also went up by 1.07 percent or Php. 143,045.42 millions compared with its value last year.

• The value of chicken egg production at current prices in 2014 increased by 3.96 percent despite the decrease in production.

http://agstat.psa.gov.ph/?ids=chickensituation

CAD Egg Farm Objectives

• To gain proper knowledge on how to raise an egg farm

• To know all the advantages and risks in venturing this kind of business

• To prepare ourselves in handling our own business

II. Organizational Plan

FORM OF THE BUSINESS ORGANIZATION

PartnershipA business organization in which two or more individual manage and operate the business. Both owners are equally and personally liable for the debts.

Organizational ChartOwner/Farm

Manager

Flock men

Veterinarian Bookkeeper

Security GuardDriver

Job QualificationsPOSITION QUALIFICATIONS

Bookkeeper- must know how to compute, audit and

must be computer literate.- must be graduated in any accounting-

related course.

Veterinarian-must be a licensed veterinarian

and has a specialty in layer production.

Flock men-must have a knowledge in layering -must be reliable, hardworking, and

willing to be trained.

Driver

-must have a professional driver’s license

-must have a knowledge about proceeding into different

locations.

Security guard -must be brave and came from a reliable agency.

Job DescriptionPOSITION DUTIES & RESPONSIBILITIES

Owner/ Farm manager

-Manage all the operations in the farm

-Finance the farm’s cost of production- They make plans and decisions and

take calculated risk.

Veterinarian

- Visits the farm twice a month or when needed to monitor the health

of the flock.-Gives medication and vaccination

program to the flock.

Bookkeeper-In charge in keeping records of

everyday production, laying efficiency of the flock, mortality, and other

matters concerning to stocks.

Flock men

-They ensure that the birds get proper vaccination and supplementation.

- In charge in the everyday activities in the farm such as feeding, watering, cleaning

houses, collecting manure, collecting and weighing eggs and other.

Driver -Deliver the collected eggs to the target market.

Security guard -Secure the peace and order situation in the farm.

Compensation and BenefitsPOSITION QUANTITY MONTHLY SALARY BENEFITS

Veterinarian 1 P2,500.00 per visit (on call)

Bookkeeper 1 P9,000.00 13 month pay ,SSS, Phil Health

Flock men 4 P7,000.0013 month pay, SSS,

Phil Health

Driver 1 P5,000.0013 month pay, SSS,

Phil Health

Security guard 2 P6,000.0013 month pay, SSS,

Phil Health

III. Production/Technical Plan

Proposed Location

• The farm will be located at NHA Purok 9, Telapayong, Arayat, Pampanga.

• The farm will be 1km. away from residential area.

• Farm to market road is accessible.

Pandacaqui Rd.

Mag

alan

g-Ar

ayat

Rd.

Mag

alan

g-Co

ncep

cion

Rd

Magalang-Angeles Rd.

San Vicente Rd.

Buensuceso Rd.

Municipality of Magalang

Telapayong Elementary School

Telapayong Covered Court

Telapayong Church

Proposed Name of the Business

• The “CAD Egg Farm” will be derived from the first letters of the surnames of the owners.

C- Castro, Hazel R.A-Aldana, Paulene M.D-Dizon, Carmina Jane L.

Farm Layout

200m

100m 80m

40m 20m

60m

15m

15m

10m

10m

2m

2m

N

W E

S

6m

6m

Production Flowchart

• The chicks will be in growing houses at 1-16 weeks old and will be vaccine fowl pox at the

age of 10-12 weeks. After

they reach 16-17 weeks, they are transferred

to laying house.

• Chickens will begin to lay

eggs at 20-22 weeks.

Generally, layers reach

maximum egg production

when they are between 30-36

weeks old, after which egg

production tends to

decline and the chickens will be

culled.

• Eggs will be collected daily

and will be grade based on

their weight. The graded egg

will be delivered to the target market.

Source Of Stocks And Other Supply

• The breed that will be Raised by the Farm is Lohmann Brown chickens, because of its low mortality rate and high laying Efficiency.

• The stocks will be bought from Rubina Farm in Bulacan and sometimes from Heritage farm.

Time FrameDescription April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb Mar

Preparation of the business plan

Preparation of the land

Construction of the farm

Applying for the business permit

Buying of chicks

Feeding the chicks with starter mash

Feeding the chicks with developer mash

Feeding the chicks with laying mash

Collection of eggs

Collection of manure

Tools and EquipmentEquipment Quantity Price per Unit Total costEgg grading

machine 1 P35,000 P35,000

Generator 1 200,000 200,000

Pail 6 50 300

Truck 1 350,000 350,000

Jetmatic 2 8,000 16,000

Shovel 3 650 1,950

Water host 130ft 25/ft 3,250

Broom stick 3 16 48

Feeder container 500 20 10,000

Tray 500 4 2000

Dust pan 3 20 60

Push Cart 3 1500 4500

Pantabas 2 450 900

Power Sprayer 2 5500 11,000

Total P653,008

IV. Marketing Plan

Marketing Mix (4’s)

ProductPrice PlacePromotion

Products

Prices

SIZES PRICE /PIECE

Small P4

Medium P4.33

Large P4.83

Extra Large P5.33

Cracked P3

Place

The CAD Egg farm will be located at NHA Purok 9 Telapayong, Arayat, Pampanga with an area of 2 hectares.

30%

25%20%

15% 10%

Magalang Public MarketAngeles Public MarketArayat Public MarketMabalacat Public MarketPick up buyers

Channel of Distribution

Promotions Word of mouth T-shirt

CAD Egg Farm

V. Financial Plan

Capital Requirement

The capital requirement is P 7,000,000 which will be loan from the BDO with 12% interest per annum.

Two of the owners will be providing P3,000,000 and one of the owners will contribute P1,000,000 and the 2 hectare land that they will use.

Loan amortization schedule

Loan Payment Interest Total Payment of Loan

1st year P7,000,000 P1,400,000 P7,000,000 x 12% P840,000 P2,240,000

2nd year P5,600,000 P1,400,000 P5,600,000 x 12% P672, 000 P2,072,000

3rd year P4, 200,000 P1,400,000 P4, 200,000 x 12% P504,000 P1,904,000

4th year P2,800,000 P1,400,000 P2,800,000 x 12% P336,000 P1,736,000

5th year P1,400,000 P1,400,000 P1,400,000 x 12% P168,000 P1,568,000

Cost Analysis

Farm ConstructionDescription Quantity Price/unit Total

Laying House 2 600,000 1,200,000

Brooder House 2 350,000 700,000

Laborers House 1 250,000 250,000

Storage houseFor Eggs 1 200,000 200,000

Office 1 100,000 100,000

Guard House 1 50,000 50,000

Tools and Equipment house 1 150,000 150,000

Total P2,650,000

Feeds

Feeds Age of Chick No. of Sack Price Total

Starter Mash 1-6 weeks 130 P1,000 P130,000

Developer Mash 6-20 weeks 295 P1,000 P295,000

Laying Mash

20-80 weeks 1260 P1,050 P1,323,000

Total P1,748,000

SSS Contribution

Names Salary Quantity

Monthly ContributionTotal

contribution in SSS

Employer Yearly

contribution

Employer Employee

Bookkeeper P9,000.00 1 P 636.00 P 300.00 P 936.00 P 7,632Flockmen P7,ooo.oo 4 1,978.8 933.2 2,912 23, 754Driver P5,000.00 1 353.30 166.70 520 4239.6Security guard

P6,000.00 2 848 400.00 1,24810, 176

Total P 3, 815 P 1,799.9 P 5,616 P45,801.6

Phil. Health Contribution

Names Salary Quantity

Monthly ContributionTotal

contribution in Phil Health

Employer Yearly

contributionEmployer Employee

Bookkeeper P9,000.00 1 P 112.50 P 112.50 P 225 P 1,350

Flockmen P7,000.00 4 350 350 700 4,200

Driver P5,000.00 1 62.50 62.50 125 750

Security guard P6,000.00 2 150 150 300 1,800

Total P 675 P 8,100

Overhead ExpensesDescription Quantity Monthly Yearly

Electricity (power and water supply)

1 month P18,000 P216,000

Salary of the employees 9 P56,500 P678,000

Permits-BIR-DTI

-Mayor’s Permit

111

P3,000P500

P2,000

Gasoline P4,500 P54,000

Bonuses P56,000

SSS P3, 815 P45,801.6

Phil Health P 675 P 8,100

Advertising expense 100 P20,000

Total P1,083,401.6

Layer ExpenseDescription Quantity Price/unit Total Cost

Lohmann Bird 10,000 P37.00 P370,000

Medication and Vaccination 10,000 P 70, 000/year P70,000

Total P440,000

Total Cost of Production

Cost of Production Total

Farm construction P2,650,000

Layer Expense P440,000

Tools and Equipments P653,008

Feeds P1,748,000

Overhead Expenses P1,083,401.6

TOTAL COST OF PRODUCTION P6,574,409.6

Production of Eggs for the 1st

yearMONTHS NO.OF DAYS NO.OF

LAYERS EGGS/DAY Laying Efficiency

EGGS/Month

September 30 10,000 0

October 31 9,990 0

November 30 9,960 0

December 31 9,950 0

January 31 9,945 6700 67% 207,700 February 28 9,860 6800 69% 190,400

March 31 9,802 6900 70% 213,900 April 30 9,716 7100 73% 213,000 May 31 9,693 7200 74% 223,200 June 30 9,608 7900 82% 237,000 July 31 9,564 6700 70% 207,700

August 31 9,500 6800 72% 210,800 Total 1,703,700

Assortments of Eggs in 1st Year

Size Price % of production Quantity Total

Small P4 15% 255,555 P1,022,220

Medium P4.33 25% 425,925 P1,844,255

Large P4.83 30% 511,110 P2,468,661

Extra large P5.33 25% 425,925 P2,270,180

Cracked/Reject P3 5% 85,185 P255,555

Manure P10 800 sacks P8,000

Total Gross Income P7,868,871.80

Production of Eggs for 2nd YearMONTHS NO.OF DAYS NO.OF

LAYERS EGGS/DAY Laying Efficiency

EGGS/Month

September 30 9,490 6,700 71% 201,000 October 31 9,485 6,695 71% 207,545

November 30 9,480 6,690 71% 200,700

December 31 9,480 6,685 71% 207,235

January 31 9, 479 6,680 70% 207,080

February 28 9, 477 5,675 60% 158,900

March 31 9, 470 5,670 60% 175,770

April 30 9, 469 5,665 60% 169,950

May Cleaning and Maintenance of the layer houses

June 30 9, 995 6,800 68% 204,000

July 31 9, 990 6,850 69% 212,350

August 31 9, 985 6,900 69% 213,900

Total P2,158,430

Chickens will be Culled in approximately 1 year and 8

monthsPrice of the eggs will increase 2%

per annum

Assortment of Eggs in 2nd Year


Small P4.08 10% 215,843 P880,639

Medium P4.42 30% 647,529 P2,862,078

Large P4.93 25% 539,608 P2,660,265

Extra large P5.44 25% 539,608 P2,935,465

Cracked/Reject P3.06 10% 215,843 P660,480

Manure P10 800 sacks P8,000

Total Gross Income

P10,006,927

MONTHS NO.OF DAYS NO.OF LAYERS EGGS/DAY Laying Efficiency EGGS/Month

September 30 9,980 6,560 66% 196,800

October 31 9,977 7,695 77% 238,545

November 30 9,970 7,290 73% 218,700

December 31 9,965 7,185 72% 222,735

January 31 9,962 7,990 80% 247,690

February 28 9,959 7,875 79% 220,500

March 31 9,955 6,670 67% 206,770

April 30 9,953 6,675 67% 200,250

May 31 9,950 6,670 67% 206,770

June 30 9,948 6,600 66% 198,000

July 31 9,943 6,550 66% 203,050

August 31 9,941 6,400 64% 198,400

Total 2,558,210

Production of Eggs for 3rd Year

Assortment of Eggs in 3rd Year


Small P4.16 9% 230,239 P957,794

Medium P4.50 32% 818,627 P3,683,822

Large P5.03 26% 665,135 P3,345,627

Extra large P5.55 25% 639,553 P3,549,516


Manure P10.00 800 sacks P8,000

Total Gross Income

P12,183,289

Production of Eggs for 4th YearMONTHS NO.OF DAYS NO.OF LAYERS EGGS/DAY Laying

Efficiency EGGS/Month

September 30 9,850 6,580 67% 197,400October 31 9,760 6, 330 65% 196,230

November 30 9,690 6,260 65% 187,800December 31 9,570 6,140 64% 190,340

January 31 9,430 6,820 72% 211,420February Cleaning and Maintenance of the layer houses

March 31 9,955 7,850 79% 243,350

April 30 9,953 7,840 79% 235,200

May 31 9,950 7,760 78% 240,560

June 30 9,948 7,650 77% 229,500

July 31 9,943 7,640 77% 236,840

August 31 9,941 7,590 76% 235,290

Total 2,403,930

Assortment of Eggs in 4th Year


Small P4.24 8% 192,314 P815,413

Medium P4.60 35% 841,376 P3,870,327

Large P5.13 27% 649,061 P3,329,683

Extra large P5.66 23% 552,904 P3,129,436


Manure P10.00 800 sacks P8,000

Total Gross Income P11,687,975

Production of Eggs for 5th YearMONTHS NO.OF DAYS NO.OF LAYERS EGGS/DAY % of

Production EGGS/Month

September 30 9,939 7,560 76% 226,800

October 31 9,935 7,660 77% 237,460

November 30 9,927 8,790 89% 263,700

December 31 9,919 8,790 89% 272,490

January 31 9,908 7,780 79% 241,180

February 28 9,897 7,770 79% 217,560

March 31 9, 889 6,750 68% 209,250

April 30 9,870 6,780 69% 203,400

May 31 9,864 6,760 69% 209,560

June 30 9, 857 6,740 68% 202,200

July 31 9, 848 6,720 68% 208,320

August 31 9, 832 6,630 67% 205,530

Total 2,697,450

Assortment of Eggs in 5th Year


Small P4.33 8% 215,796 934,397

Medium P4.69 35% 944,108 4,427,864

Large P5.23 27% 728,312 3,809,069

Extra large P5.77 23% 620,414 3,579,786

Cracked/Reject P3.25 7% 188,822 613,670

Manure P10.00 800 sacks P8,000 Total Gross

Income P13,372,786

COST OF GOODS WILL INCREASE 3%

PER ANNUM

Cost of Farm Construction 1st year

Description Quantity Price/unit Total

Farm Land 2 hectares P1,000,000 P2,000,000

Laying House 2 600,000 1,200,000

Brooder House 2 350,000 700,000

Laborers House 1 250,000 250,000

Storage houseFor Eggs 1 200,000 200,000

Office 1 150,000 150,000

Tools and Equipment house 1 150,000 150,000

Total P2,650,000

Summary of Cost for Equipments for 5

years

Equipments Cost Analysis 1st year

Cost Analysis 2nd year

Cost Analysis 3rd year

Cost Analysis 4th year

Cost Analysis 5th year

Egg grading machine P35,000

Generator 200,000

Pail 300 309 318.27 327.8181 337.6526

Truck 350,000

Jetmatic 16,000

Shovel 1,950

Water host 3,250

Broom stick 48 49 50.47 51.9841 53.54362Feeder

container 10,000 10,300 10609 10927.27 11255.09

Tray 2000 2,060 2121.8 2185.454 2251.018

Dust pan 60 62 63.86 65.7758 67.74907

Push Cart 4500 4,635 4774.05 4917.272 5064.79

Pantabas 900 927 954.81 983.4543 1012.958

Power sprayer 11,000 11,330 11669.9 12020 12380.6

Total P653,008 P29,672 P30,562.16 P31,479.02 P32,423.4

Summary of Layer Expense for

5 Years

Description Cost Analysis 1st year

Cost Analysis 2nd Year

Cost Analysis 3rd Year

Cost Analysis 4th Year


Lohmann Bird P370, 000 P381,100 - P392,533 P404,309

Medication and

Vaccination P70,000 P 72,100 P74,263 P76,490 P78,785

Starter Mash P130,000 P133,900 P137,917 P142,055 P146,317

Developer Mash P295,000 P303,850 P312,966 P322,355 P332,026

Laying Mash P1,323,000 P1,362,690 P1,403,571 P1,445,678 P1,489,048

Total P2,188,000 P2,253,640 P1,928,716 P2,379,111 P2,450,485

Summary Of Overhead Expenses

For 5 Years

Description Cost Analysis 1st Year

Cost Analysis 2nd Year

Cost Analysis 3rd Year



Electricity (power and

water supply) P216,000222,480 229,154 236,029 243,110

Salary of the employees P678,000 698,340 719,290 740,869 763,095

Permits-BIR-DTI

-Mayor’s Permit

P3,000P500

P2,000

3,090515

2,060

3,183530

2,122

3,278546

2,186

3,376562

2,252

Gasoline P54,000 55,620 57,289 59,008 60,778

Bonuses P56,000 57,680 59,410 61,192 63,028

SSS P45,801.6 47,175.6 48,590.9 50,048.6 51,550.05

Phil Health P 8,100 8,343 8,593.3 8,851.1 9,116.6

Advertising P20,000 20,600 21,218 21,854.54 22,510.18

Total P 1,083,401.6 P 1,115,903.6 P1,149,380 P1,183,862 P1,219,378

Cost and Return Analysis for Five

Years

COST AND RETURN ANALYSIS FOR 1ST YEAR


Farm construction P2,650,000

Layer Expenses P2,118,000

Equipments P653,008

Overhead Expenses P 1,083,401.6

TOTAL COST OF PRODUCTION P6,574,409.6

Return Total

Total Gross Income P7,868,871.80

Total Cost of Production P6, 574,409.6

Loan Payable P2,240,000

TOTAL NET INCOME P-945,537.80

COST AND RETURN ANALYSIS FOR 2nd YEAR



Equipments P29,672

Overhead Expense P 1,115,903.6

TOTAL COST OF PRODUCTION P3, 327,115.6

Return Total




TOTAL NET INCOME P4,607,811

COST AND RETURN ANALYSIS FOR 3rd YEAR



Equipments P30,562.16

Overhead Expense P1,149,380


Return Total




TOTAL NET INCOME P6,852,361

COST AND RETURN ANALYSIS FOR 4th YEAR




Overhead Expense P1,183,862


Return Total




TOTAL NET INCOME P6,422,236.98

COST AND RETURN ANALYSIS FOR 5th YEAR


Layer Expenses 2,383,829


Overhead Expense 1,219,378

TOTAL COST OF PRODUCTION P 3,635,630.4

Return Total


Total Cost of Production P 3, 635,630.4


TOTAL NET INCOME P8,169,155.6

1st Year 2nd Year 3rd Year 4th Year 5th Year

Total Gross Income

P7,868,871.80 P10,006,927 P12,183,289 P11,687,975 P13,372,786

Total Cost of Production

P6,574,409.6 P3, 327,115.6 P3, 426,928.16 P3,529,738.02 P3,635,630.4

Loans Payable P2,240,000 P2,072,000 P1,904,000 P1,736,000 P1,568,000

Total Net Income P-945,537.80 P4,607,811 P6,852,361 P6,422,236.98 P8,169,155.6

Summary Of Cost And Return Analysis For 5 Years

VI. Profitability Indicators

Return on InvestmentROI = Total Net Income x 100

Total Cost Production1st year 4th yearP-945,537.80 x 100% P6,422,236.98 x100%P6,574,409.6 P3,529,738.02=-14.38% =181.95%

2nd year 5th yearP4,607,811 x100% P8,169,155.6 x100%P3,327,115.6 P3,635,630.4=138.49% =224.70%

3rd yearP6,852,361 x 100%P3,426,928.16=199.96%

Price Per UnitPPU = Total Selling Price

No. of Products1st year 4th year4+4.33+4.83+5.33+3 4.24+4.60+5.13+5.66+3.18

5 5= 4.29/egg =4.56/egg

2nd year 5th year4.08+4.42+4.93+5.44+3.06 4.33+4.69+5.23+5.77+3.25

5 5=4.39/egg = 4.65/egg

3rd year4.16+4.50+5.03+5.55+3.12

5=4.47/egg

Break Even PointBEP= Total Cost of Production

Price per Unit1st year 4th yearP6,574,409.6 P3,529,738.02

4.29 4.56=1,532,496 eggs =774,065 eggs

2nd 5th yearP3, 327,115.6 P3,635,630.4

4.39 4.65=757,885 eggs =781,856 eggs

3rd yearP3,426,928.16 4.47=766,662 eggs

Cost Per UnitCPU= Total Cost of Production

Volume of Production1st year 4th yearP6,574,409.6 P3,529,738.022,159,700 3,199,930=3.04 cost to produced egg =1.10

2nd year 5th yearP3, 327,115.6 P3,635,630.42,915,430 3,550,450 =1.14 =1.02

3rd yearP3,426,928.16 3,259,210 =1.05

Summary Table1ST YEAR 2ND YEAR 3RD YEAR 4TH YEAR 5TH YEAR

TGI P7,868,871.80 P10,006,927 P12,183,289 P11,687,975 P13,372,786

TCP P6,574,409.6 P3, 327,115.6 P3, 426,928.16 P3,529,738.02 P3,635,630.4

TNI P-945,537.80 P4,607,811 P6,852,361 P6,422,236.98 P8,169,155.6

ROI 17.62% 243.66% 297.25% 291.23% 342.70%

CPU 3.04 1.14 1.05 1.1 1.02

PPU 4.29/eggs 4.39/eggs 4.47/eggs 4.56/eggs 4.65/eggs

BEP 1,532,496 eggs

757,885 eggs

766,662 eggs

774,065 eggs

781,856 eggs

VOP 2,159,700 2,915,430 3,259,210 3,199,930 3,550,450

Thank You!!!