calf fattening farm

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Pre-Feasibility Study

CALF FATTENING FARM

(FEEDLOT SYSTEM)

Small and Medium Enterprises Development Authority

Ministry of Industries & Production

Government of Pakistanwww.smeda.org.pk

HEAD OFFICE

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

Lahore

Tel: (92 42) 111 111 456, Fax: (92 42) [email protected]

REGIONAL OFFICEPUNJAB

REGIONAL OFFICESINDH

REGIONAL OFFICE

KPK REGIONAL OFFICE

BALOCHISTAN

3rd

Floor, Building No. 3,

Aiwan-e-Iqbal Complex,Egerton Road Lahore,

Tel: (042) 111-111-456Fax: (042) 36304926-7

[email protected]

5TH Floor, Bahria

Complex II, M.T. Khan Road,Karachi.

Tel: (021) 111-111-456Fax: (021) 5610572

[email protected]

Ground Floor

State Life BuildingThe Mall, Peshawar.

Tel: (091) 9213046-47Fax: (091) 286908

[email protected]

Bungalow No. 15-A

Chaman Housing SchemeAirport Road, Quetta.

Tel: (081) 831623, 831702Fax: (081) 831922

[email protected]

March 2009


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Pre-Feasibility Study Calf Fattening Farm (Feedlot System)

PREF-17/March, 2009/Rev 3

1

1 INTRODUCTION TO SMEDA..........................................................................................................4

2 PURPOSE OF THE DOCUMENT.....................................................................................................4

3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT..........................5

3.1 STRENGTHS.....................................................................................................................................53.2 WEAKNESSES ..................................................................................................................................5

3.3 OPPORTUNITIES...............................................................................................................................63.4 THREATS .........................................................................................................................................6

4 PROJECT PROFILE .........................................................................................................................7

4.1 OPPORTUNITY R ATIONALE ...............................................................................................................7

4.2 MARKET E NTRY TIMING ..................................................................................................................8

4.3 PROPOSED BUSINESS LEGAL STATUS................................................................................................8

4.4 PROPOSED CAPACITY ......................................................................................................................9

4.5 PROJECT I NVESTMENT .....................................................................................................................9

4.6 PROPOSED LOCATION ......................................................................................................................94.7 K EY SUCCESS FACTORS/PRACTICAL TIPS FOR SUCCESS ..................................................................10

5 SECTOR & INDUSTRY ANALYSIS ..............................................................................................11

5.1 MAJOR PLAYERS ...........................................................................................................................11

5.2 HUBS OF CALF FATTENING FARMING .............................................................................................11

6 MARKET INFORMATION.............................................................................................................11

6.1 SECTOR CHARACTERISTICS............................................................................................................11

6.2 MARKET POTENTIAL......................................................................................................................12

6.3 TARGET CUSTOMERS .....................................................................................................................13

7 FARM INPUTS.................................................................................................................................13

7.1 LAND............................................................................................................................................13

7.1.1 Land Requirement................................................................................................................13

7.1.2 Land Lease..........................................................................................................................14

7.1.3 Suitable Locations ...............................................................................................................147.1.4 Herd Mix.............................................................................................................................14

7.2 A NIMAL MARKETS ........................................................................................................................157.3 A NIMAL HOUSING .........................................................................................................................15

7.4 FARM MACHINERY ........................................................................................................................167.5 FEED.............................................................................................................................................17

7.5.1 Ration for Calf Fattening .....................................................................................................17

7.5.2 Green Fodder for Calves......................................................................................................17

7.5.3 Fodder Production Economics.............................................................................................18

7.5.4 Daily Fodder Requirement...................................................................................................19

7.5.5 Daily Total Mixed Ration Requirement.................................................................................19

7.5.6 Total Mixed Ration (TMR) Formula for calves:....................................................................19

7.5.7 Mineral Mixture...................................................................................................................19

7.5.8 Wheat Straw (Bhoosa or Turi)..............................................................................................207.6 VACCINATION & MEDICATION.......................................................................................................207.7 CALF QUARANTINE .......................................................................................................................207.8 LABOR R EQUIREMENT ...................................................................................................................20

8 FARM OUTPUT...............................................................................................................................21

8.1 FATTENING PERIOD .......................................................................................................................21

8.2 MEAT COMPOSITION......................................................................................................................218.3 I NCREASE IN WEIGHT GAINS ...........................................................................................................22


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8.4 SALE PRICE ...................................................................................................................................22

9 USEFUL TERMINOLOGY ............................................................................................................. 23

10FINAICIAL ANALYSIS...................................................................................................................24

10.1 PROJECTED I NCOME STATEMENT ...............................................................................................24

10.2........................................................................................................................................................2410.3........................................................................................................................................................2410.4 PROJECTED BALANCE SHEET .....................................................................................................25

10.5 PROJECTED CASH FLOW STATEMENT .........................................................................................26

11KEY ASSUMPTIONS ......................................................................................................................27

12ANNEXURE 1............. .............. .............. .............. .............. .............. ................ .............. .............. .... 28

13ANNEXURE 3............. .............. .............. .............. .............. .............. ................ .............. .............. .... 30

14ANNEXURE 4............. .............. .............. .............. .............. .............. ................ .............. .............. .... 31

14.1 DIFFERENT BREEDS OF BUFFALOES AND COWS ..........................................................................31


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DISCLAIMER

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 gathered 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. SMEDA does not assume any liability for any financial or

other loss resulting from this memorandum in consequence of undertaking this

activity. 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.

DOCUMENT CONTROLDocument No. PREF-24

Revision 3

Prepared by SMEDA-Punjab

Issue Date March 2002

Revised In March 2009

Issued by Library Officer


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1 INTRODUCTION TO SMEDA

The Small and Medium Enterprise Development Authority (SMEDA) was established

with the objective to provide fresh impetus to the economy through the launch of anaggressive SME support program.

Since its inception in October 1998, SMEDA had adopted a sectoral SME developmentapproach. A few priority sectors were selected on the criterion of SME presence. In depth

research was conducted and comprehensive development plans were formulated afteridentification of impediments and retardants. The all-encompassing sectoral development

strategy involved recommending changes in the regulatory environment by taking intoconsideration other important aspects including finance, marketing, technology and

human resource development.

SMEDA has so far successfully formulated strategies for sectors including, fruits and

vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear,textiles, surgical instruments, transport and dairy. Whereas the task of SME development

at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s

areas of operation.

Along with the sectoral focus a broad spectrum of business development services is alsooffered to the SMEs by SMEDA. These services include identification of viable business

opportunities for potential SME investors. In order to facilitate these investors, SMEDA provides business guidance through its help desk services as well as development of

project specific documents. These documents consist of information required to makewell-researched investment decisions. Pre-feasibility studies and business plan

development are some of the services provided to enhance the capacity of individualSMEs to exploit viable business opportunities in a better way.

This document is in the continuation of this effort to enable potential investors to make

well-informed investment decisions.

For more information on services offered by SMEDA, please contact our website:www.smeda.org.pk.

2 PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential entrepreneursto facilitate investment and provide an overview about dairy and livestock farming. The

project pre-feasibility may form the basis of an important investment decision and inorder to serve this objective, the document covers various aspects of dairy and livestock

concept development, start-up, production, finance and business management. Thedocument also provides sectoral information, brief on government policies and

international scenario, which have some bearing on the project itself.

This particular pre-feasibility is regarding “Calf Fattening Farm” which comes under

“Livestock and Agriculture” sector. Before studying the whole document one mustconsider following critical aspects, which form the basis of any investment decision.


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3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR

INVESTMENT

Calf fattening is all-inclusive activity, related to meet animal’s care, housing, medication,feeding and management. It is defined as all those aspects and activities relating to

raising of calves for meat purpose. Before making the decision, whether to invest in thelivestock farming or not, one should carefully analyze the associated risk factors. A

SWOT analysis can help in analyzing these factors, which can play important role inmaking the decision.

3.1 Strengths

Back bone and main stay of economy.

Provides raw material for food & Leather industry.

Concentrated production.

Favorable breeding backgrounds.

Relatively cheap farmland.

High domestic consumption Low cost living standard.

Full family involvement, devoted & hardworking Sector.

Major source of food, i.e. Meat.

Source of Farmyard Manure (FYM).

Sizeable foreign exchanges earning through exports.

Ample human resource employment sector.

Stationed, permanently located secured loaning sector.

3.2 Weaknesses

High production costs. Low levels of bulk feed production.

Poor management level in quite a few cases.

No or low application of research work and pedigree record keeping.

Animals are kept for social rather than commercial reasons.

There is no registered beef breed in Pakistan.

Low or lack of interaction with farmers. Poor information about each other. Lack ofextension services.

Lack of education and initiative in farmer, traditional approach due to lack of skillsand management.

Unorganized sector, unaware of basic farm management practices.

Remote area, lack of farm to market approach & transportation.

Non-availability of communication services.

Lack of farm/ market infra structures & marketing information.

Management of livestock farm is a challenging job.

Nutrition is still a problem hampering the livestock productivity in general and meat production in particular


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3.3 Opportunities

Govt. of Pakistan & Sate Bank of Pakistan priority sector.

Vast range of area of operation, more needs and scope of development.

Value added dairy products are in demand.

Meat and meat products needs are much higher than supply.

Commercially viable sector with great credit potential and absorption capacity.

Vast range of area of operation, more needs and scope of development.

Value added meat products are in demand. If the government lifts the price fixingtaboo, then there are bright chances for the flourishing of meat market. Customers

are ready to pay prices for the good quality meat.

Massive migration of labour to cities can be checked / stopped.

Corporate financing will become a niche in lending market.

Progressive meat retailing firms can promote the sale of processed and quality meatcuts to consumers, which is packed and labeled at a price, including the cost of

processing, packaging and quality.

Development of slaughtering and processing operations can help in obtainingmaximum value.

Improving the control of external parasites may enhance the value of hide or skin.

3.4 Threats

Rising trend of cost of production with higher rate of interest as compared to profit

ratio.

Implementation of WTO will result in open & competitive commodity pricing.

Due to fear of default, banker community has reluctance for lending loans.

High risks of diseases in live stock. Animals are subject to serious diseases that maylead to mortality.

The formal meat market not growing due to the government regulation of pricefixing as Municipal Corporation fixes the meat prices in the urban markets.

The fixed prices are not likely to be viable for selling the quality meat.

Butcher market not ready to pay the premium prices for the fattened animal.

Defective and unorganized markets.

Imbalance between prices of inputs & outputs.

Rising trend of cost of production with higher rate of interest as compared to profitratio.

Lack of media projection, non-recognition of problems and monopoly ofmultinationals.

Lack of community organizations and out dated farm practices. Lack of coordination towards common causes & goals.

Lack of awareness about economics, demand & supply in market.

Low saving, low holding capacity & increasing level of poverty.

Non-availability of subsidy & tax holidays.


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4 PROJECT PROFILE

4.1 Opportunity Rationale

Livestock production is an integral part of Pakistan's agriculture sector and plays a vital

role in national economy. At present, livestock is contributing about 52% to theagricultural sector and 10.9% to the GDP. Pakistan is geographically located close to theMiddle East and South-East Asia. Both of these regions are deficient in livestock

products and depend upon import from other countries. The livestock industry in most ofthe developed world is highly subsidized. With reduction of subsidies in the wake of

WTO, the local livestock sector should have better opportunities to compete . Livestockregistered a strong growth of 4.30% over the last year’s impressive growth of 7.5% due

to increase in the livestock and poultry products. The role of livestock in rural economymay be assessed by the fact that 30 to 35 million of the total rural population is engaged

in livestock farming, having 2 to 3 cattle/buffalo and 5 to 6 sheep/goats per familyderiving 30% to 40% of income from it. During year 2007-08, the total red meat

production was 1.55 and 0.58 million tons for beef and mutton, respectively. The percapita consumption indicates a growing demand of meat in the years to come. Calves for

fattening may come from the dairy herd.

Table 4-1: Population of livestock (million)1

Species 2005-06 2006-07 2007-08

Cattle 29.6 30.7 31.8

Buffalo 27.3 28.2 29.0

Sheep 26.5 26.8 27.1

Goats 53.8 55.2 56.7

Table 4-2: Production of Livestock Products2

Product 2005-06 2006-07 2007-08

Milk (million tones) 31.20 32.22 34.06

Beef (000,tones) 1,444 1,493 1,549

Mutton(000,tones) 554 565 578

Livestock production is growing rapidly as a result of the increasing demand for animal products. In a Food & Agriculture Organization (FAO) study: Livestock to 2020: The

Next Food Revolution, it is suggested that global meat production and consumption willrise from 233 million tones (2000) to 300 million tones (2020), and milk from 568 to 700

million tones over the same period. Egg production will also increase by 30%3. These

1 Economic Survey of Pakistan, 2007-082 Economic Survey of Pakistan, 2007-083 The Livestock to 2020 study used base figures for 1993 and these have been recalculated for the year 2000 based onFAO STAT data.


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predictions show a massive increase in animal protein demand, needed to satisfy thegrowth in the human population.

The overall growth in the live stock population can be seen from the following table:

Table 4-3 Livestock (Population Growth)4 (Numbers in Millions)

Fiscal Year Buffaloes Cattle Goats Sheep Poultry

2000-01 23.3 22.4 49.1 24.2 292.4

2001-02 24.0 22.8 50.9 24.4 330.0

2002-03 24.8 23.3 52.8 24.6 346.1

2003-04 25.5 23.8 54.7 24.7 352.6

2004-05 26.3 24.2 56.7 24.9 372.0

2005-06 27.3 29.6 53.8 26.5 433.8

2006-07 28.2 30.7 55.2 26.8 443.2

2007-08 29.0 31.8 56.7 27.1 510.1

Calf fattening enterprise is an agro-based project. The calves, preferably males, 8-9

months of age are fed on concentrated feed and fodder produced from the agriculturalland. Balanced feed is given to calves for a period of 120 days to get higher weight gain.

Live weight of these calves is between 80-90 kg. If these calves are fed properly on theformulated fattening feed, their weight can be raised up to 180-200 kg during the

fattening period. The daily weight gain of fattened calves varies between 600-800 gramsdepending on the quality of feed given to them. There is a shortage of beef in the country.

This shortage is being observed through meat-less days. If the calf fattening projects arecarried out in the country then the domestic demand of beef could be fulfilled. As the

fattened animals have higher meat contents (55%) as compared to grazing animals (48%).

4.2 Market Entry Timing

Since beef demand is increasing day by day, therefore, the demand of fattened calves isalso higher. The demand increases especially before occasions like Eid-ul-Fitr and Eid-

ul-Azha. That’s why the animals in such occasions are sold at a bit higher prices ascompared to other days. The proposed business can be started before these occasions or

any time through out the year. At the commencement of the proposed business, it isimportant that the entrepreneur must have good knowledge of the production and have

contacts with the livestock breeders and farmers. The ability to work with people/animals and efficient use of resources are important aspects in modern and commercial

calf fattening farm.

4.3 Proposed Business Legal Status

The proposed legal structure of the business entity is either sole proprietorship or partnership. Although selection totally depends upon the choice of the entrepreneur but

this financial feasibility is based on Sole Proprietorship.

4Pakistan Livestock Census, Statistics Division, Ministry of Economic Affairs & Statistics, GoP.


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4.4 Proposed Capacity

The pre-feasibility suggests producing 450 calves a year in 3 production cycles, each of 4

months. This size of a farm justifies the recurring costs of this project.

4.5 Project Investment

The total cost of the project is Rs.4, 933,113 out of which capital cost of the project is Rs.4,439,944 for purchasing the animals and constructing the building and the rest is used to

meet the working capital requirement.

Table 4-4 Project Costs

Description Amount (in Rs.)

Land 506,944

Building and Civil Works 2,374,000

Plant and Machinery 379,000

Furniture/ Fixture & Equipment 100,000Pre-operational Expenses 292,500

Vehicles 787,500

Total Fixed Cost 4,439,944

Working Capital 493,168

Total 4,933,112

The proposed pre-feasibility is based on the assumption of 50% debt and 50% equity.However this composition of debt and equity can be changed as per the requirement of

the investor.

Table 4-5 Project Financing

Debt 50% 2,466,556

Equity 50% 2,466,556

Total Project Investment 4,933,112

Table 4-6 Project Economics

Viability Project

IRR (%) 55.71%

NPV @20% (Rs) 27,540,982

Pay Back Period (year) 4.10

4.6 Proposed Location

The development of urban or peri-urban commercial calf fattening farms is somethingnew in livestock production. Metropolitan cities like Lahore, Karachi, Multan,

Faisalabad, Rawalpindi, etc are the major markets of meat. Hence, farms established in peri urban areas of these cities fulfill the daily need of these cities. The other locations


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may be around the bigger cities e.g. Sialkot, Jhang, Rahim Yar Khan, Bahawalnagar,Bahawalpur, Sahiwal, Okara etc.

4.7 Key Success Factors/Practical Tips for Success

The livestock production research institutes and universities have conducted many studies

to ascertain the beef production potential of indigenous livestock under the feedlotfattening regimes. Weight, growth and efficiency are major factors influencing the

economical meat production.

The carcass yield depends upon several factors such as breed, age, sex and degree of

finishing. The studies suggest substantial live weight gain and carcass yield from the buffalo and different indigenous breeds of cow calves. There are still some issues, which

hinder the development of beef production.

The thrust in calf fattening farm is on the increased use of capital and management.

Successful farming harnesses all available resources into productive and profitable unit.Calf fattening is highly complex as it includes farm management, feeding, housing,

disease control and hygienic production of milk on farm. The judicial use of means andresources to achieve clearly defined goals is the key success factor i.e. the art of

maximization and optimal utilization of resources and means for maximizing productivityand profits.

Feeding meat animals on nutritious compound feed along with green fodder can beadopted. Other farm management practices include comfortable and ventilated barns,

drinking water and feed according to the requirements. Timely vaccination againstRinderpest, Black Quarter and Foot & Mouth Disease. The prevention of internal and

external parasites will also improve the over all performance of herd. The absence of calfweaning program is a shortcoming to the development of beef industry. Too many young

male calves are slaughtered quite young due to high cost of milk required to feed them.

Those left are generally underfed and stunted thus unable to achieve the normal growth.A suitable plan could provide animals of 100-150 kgs of weight, which could be raised tothe desired market demand.

An efficient program aim at moving the calves from liquid to dry feed as quickly as possible if calf fattening is integrated with dairy farming. High quality calf starter feed

with digestibility, palatability and composition should be fed free of choice from the thirdday of birth. Quality of diet is the key to a successful early weaning system. Weaning

could be started once the consumption reaches 800 grams a day, which would providehealthy and thrifty calves. The changing of this system by small farmers and peri-urban

dairy farm entrepreneurs will be a long and difficult process to which some incentives areessential. Another option is to buy feeder calves from the cattle markets.

Attention must be given to the selection of animals. Once the calves are purchased and placed in pens, farmers would face many technical problems affecting the success of their

operation. It will be worthwhile to get technical assistance from the livestock professionals and experts. It is advisable to purchase fattening rations initially from the

public or private sector feed mills. Once the experience is gained and practices areestablished, feed processing equipment, such as the grinder-mixers can be installed as per

capacity of the farm.


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5 SECTOR & INDUSTRY ANALYSIS

5.1 Major Players

Though livestock production is fragmented and most units in Punjab are small with 10 percent holding around 10 to 20 buffalo cows, and only five percent over 20 heads each.

Such units are often run by capable and business-oriented farmers who are open tochange and eager to adopt improved production practices. They would respond positively

to incentives and workable production programs. In mid 90’s the US Feed Grain Councilintroduced commercial meat production. A number of farmers from Punjab and Sindh

participated in the program. They produced many ‘lots’ of fattened animals but feltdifficulty in selling the animals at proper price.

Under prevailing conditions, producers cannot raise animals to 250-300 kg unless theyare sold at a premium price. Efficient feeding/management can bring down the cost of

production, but not enough to compete with the meat coming from end of career or fromlight weight, poor quality animals. A positive measure could be to terminate the ceiling

price policy and create integrated production-distribution projects.

5.2 Hubs of Calf Fattening Farming

Karachi is a big market for good quality meat. The Karachi market is expanding, as dailyrequirement of meat is about 1,000 metric tons. Meat farming integrated with dairy

business if done on scientific basis is very profitable. There are more than 100 marketsonly in Sindh dealing with livestock without any facility or supervision. The major

markets are Tharparkar, Mirpurkhas, Sanghar, Dadu and Badin. All this will facilitatefarmers in rearing their livestock in a more healthy way.

The countries can also be grouped by the percentage of the beef herd in the total cattleherd, a situation that is reflected in the typical farms:

Milk Countries: with the beef herd as < 25 percent of the total are Poland, Pakistan,Hungary, Czech Republic and Germany.

Mix Countries: with a share between 25 and 75 percent of the beef herd of the total

are Austria, France, Ireland and Spain.

Beef Countries: with > 75 percent of the beef herd of the total are U.S., Brazil,Australia, Argentina and Uruguay.

6 MARKET INFORMATION

6.1 Sector CharacteristicsCurrently, meat sector in Pakistan is working on an informal basis from animal raising to

meat selling. Animal traders purchase animals from the rural areas and sell them to theanimal markets in the urban areas. Butchers purchase these animals from animal markets

and slaughter them in the slaughterhouses. Butchers act as meat traders and dominate themeat market both in rural and urban areas. The animals sold in these markets are

generally diseased and culled animals. Butchers/traders prefer to buy these cheapanimals.


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The current red meat production system is both traditional and inefficient. Beef mostlycomes from the end of career, or emergency slaughtered animals. A lot of baby buffaloes

and calves are slaughtered when these are only 1-2 weeks old. Few calves are raised to60-80kg but on extremely poor and unbalanced diets. Lack of commercial, on-farm

livestock feeding could be blamed for existing price ceiling, which is fixed too low to

recover the production cost. Traditional and unhygienic slaughtering techniques aremajor constraints, which are not acceptable to those who believe in health and hygiene.The livestock resources hold potential for increasing the production of meat. It is

estimated that about 6-7 million buffalo/cattle male calves if raised on balanced dietcould double the production. Sheep and goats can also be raised for quality meat

production.

The meat industry as a whole, from livestock farming to marketing of meat is in a poor

state at the moment. General crop farming has progressed from the 'subsistence levelfarming' to 'commercial farming', at least in major crops in the country because of

research, extension focus and 'market pull factors'. Whereas the livestock farming hasremained least commercialized and survives under subsistence farming conditions. Beef

yield has remained low due to the following constraints:

Despite immense potential, breeding has not been done for increasing productivity.

Feeding methods are primitive with hardly any feed management. Despite abundantfodder production, there is always a shortage between seasons. This shortage is met by "bhoosa" (wheat straw) which has very low nutritional value. Quality feed

concentrates from existing by-products is not being used efficiently.

Large-scale livestock farming has not been practiced due to the total manual procedures adopted in feeding and herd management. Reliability of manual labour is

severe especially in view of illiteracy and poor farmer education on the subject.

6.2 Market Potential

In Pakistan, the beef industry is an important segment of livestock production. Theincreasing population and the rising consumer buying power have together contributed to

an increase in demand resulting in relatively favorable prices for beef. Worldwideconsumption of meat during 1983 for developed world was 74 kg compared to 14 kg for

developing countries and 11 kg for Pakistan. The data for 1993 indicates 76kg, 21 kg and16kg for the three, respectively. The challenge for Pakistan now is to achieve 47 kg per

capita consumption by 2020. According to statistics there is a gap in demand and supplyof beef in the market. This gap is met through meatless days and through poultry meat.


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Figure 6-1: Market Value of Dairy & Livestock in Pakistan

(Source: Agricultural Statistics of Pakistan, 2003-04)

6.3 Target Customers

The pre-feasibility suggests selling the animals in the urban market. The buyers could be

the corporate buyers e.g. hotels and exporters. The animal mandies of big metropolitancities can also be considered for selling the animals in bulk. The animals will be sold on

live weight basis. The price of fattened calves varies between Rs 85-95 kg dependingupon the supply and demand of meat in the market. The feasibility has taken Rs 90 per kg

live body weight as the selling price. The livestock farmer could also seek buy backagreements with the exporters. Following are some of the target clients for a calf-

fattening farmer:

1. Local people

2. Butchers

3. Contractors4. Slaughter house owners

The cost of production per kg of meat should be lower than its sale price so that farmer

could feel it economical.

7 FARM INPUTS

7.1 Land

7.1.1 Land Requirement

Around 1 acre of land would be required which cost Rs.506,944 for a calf-fattening project of 450 animals in a period of one year. It is assumed that the Total Mixed Ration

(TMR) will be purchased from market @ Rs. 11 per Kg. Around 6,000 sq. ft. area would be used for building a shed for the animals to protect them from severity of the weather.


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Table 7-1: Land Requirements

Description Area (Sq. ft)

Shed for Calves 6,000

Open Paddock for Calves 9,000

Stores (Feed & machine) 120Servant Room, Wash room 120

Open land 20,760

Office block 500

Total Land Requirement Sq. ft 36,500

7.1.2 Land Lease

Lease is a better option for a new investor. Land on lease is available in rural areas for a period of 5-15 years. Advance rent for a few years will be charged initially. Good

agriculture land is available with an annual rent of Rs 8,000-10,000 per acre. But for this pre feasibility study it is assumed that the Total Mixed Ration (TMR) would be

purchased from the market.

7.1.3 Suitable Locations

Peri urban and rural areas in the neighboring areas of Lahore, Karachi, Islamabad,Faisalabad & Multan etc. where water, electricity is available to irrigate the crops are

suitable locations for establishing a calf-fattening farm.

7.1.4 Herd Mix

Some breeds of cattle are known as 'dual purpose' because they are suitable for producingmilk and beef. But modern farming divides cattle into either beef or dairy breeds aiming

at high productivity through specialization. British beef breeds include Hereford,Galloway, Beef Shorthorn, Aberdeen Angus and South Devon. A recent trend in the UK

has been the introduction of large Continental breeds such as Charolais, Limousin andSimmental. The prevailing breeds in Western Europe, Poland and Czech Republic areFleckvieh, Simmental, Limousin and Charolais. In Hungary, Ireland, the U.S. and the

Southern Hemisphere, breeds of British origin (mainly Hereford, Angus and theircrosses) dominate. Particular cases are Brazil (Nelore, coming from India) and Pakistan

where the local buffalo breed is used for both milk and beef production5.

The Calves of different breeds (7-8 months of age) can be used for fattening purpose at

an average body weight of 80-100 kgs for 90-120 days. These breeds may be fromSahiwal, Lohani, Dajal, Cholistan, Crossbred cattle, buffalo calves or non-descript

(belonging to none of particular breed). Experiments carried out on Livestock ProductionResearch Institute, Bahadurnagar, Okara shows that cost of meat production for

Cholistani and Crossbred calves is relatively cheaper than Sahiwal, Dajal, Non-descriptand buffalo calves fed on the same Total Mixed Ration (TMR).

5 (IFCN Beef Report 2007)


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7.2 Animal Markets

The feasibility suggests purchasing calves on live weight basis from the rural areas or

animal mandies. The animals are being traded across the country in animal mandiesround the year. Most of which operate on weekly basis. The other source of animals

could be through making an agreement with a supplier (middlemen/ beoparies).

Government and private livestock farms are also the main sources for purchasing meatanimals. Animal markets are situated in different places in Punjab, which includesSheikupura, Okara, Sahiwal, Arifwala, Muridke and Jhelum. These markets operate on

rotational basis in a week, or once a month. There are different contractors available inthe markets that would help in locating the proper animals. These contractors work on

commission basis for supplying calves on live weight basis. Commission rate chargedmay vary from some %age of the animal price.

7.3 Animal Housing

There is a general trend to keep the fattened calves in semi-confinement in order to

control waste production, where these calves are confined and housed over slatted floors.

All faeces and urine can be collected, thus eliminating the need for using beddingmaterial. At present most of the cattle in feedlots are still kept on concrete floors, or indry regions, on an unpaved area. More efficient growth rates will be achieved if shade is

provided. Solids from manure are either collected daily and stored, or allowed to dry inthe feedlot and removed periodically before spreading on fields. Collection of urine is

limited to feedlots with a slatted floor.

Sheds of the animals should be airy with protection of the animals from extreme

temperatures and strong winds. The animal housing should be facilitated with drinkingwater for animals. There should be proper drainage system to keep hygiene at the farm. It

consists of a built up animal shed, a brick soling paddock for animals, one room for

storing farm equipment and one for compound feed storage. But the pre-feasibility hastaken feeding manger, open paddock and water trough as the major housing requirementfor the calves.

Animal sheds should be located with long axis north to south, to get direct sunlight andyet face away from the direction of prevailing winds, whenever possible. Tree plantation

can be carried outside the sheds to provide natural shades and these trees will also act aswindbreakers.

Dimensions of water troughs will be the same as that of feeding mangers and water will be available round the clock. Generally all the animals feed at the same time in a shed,

but not all animals drink water simultaneously. The following figure shows the animalhousing layout for calf fattening farm.


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Figure 7-1 Animal Housing Layout

W a t e r T r o

u g h

W a t e r T r o u gh

Gate

Open paddock

Fodder

Manger

Open paddock

Gate

Table 7-2 Total Infrastructure Cost

Description Sq.ft Rate/Sq.ft Total Cost

Shed for Calves 6,000 300 1,800,000

Open Paddock for Calves 9,000 10 90,000

Stores (feed & machine) 120 300 36,000

Servant Room, Wash room 120 400 48,000

Office block 500 800 400,000

Total Infrastructure Cost 15,740 2,374,000

7.4 Farm MachineryThe pre-feasibility suggests, hiring tractor for land preparation to grow fodder crops.

Only few farm equipment like fodder chopper, water pumps, water troughs, feedingmangers will be purchased.

Table 7-3 Farm Equipment

Farm supplies Rate No. Rs.

Chopper 12,000 1 12,000

Water pump 10,000 1 10,000

Tube Well 300,000 1 300,000

Weighing Scale 50,000 1 50,000

Miscellaneous farm utensils 7,000 1 7,000

Total Machinery Cost 5 379,000


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7.5 Feed

7.5.1 Ration for Calf Fattening

The ration is allowance of nutritionally balanced Total Mixed Ration (TMR) in 24 hoursto increase animal productivity. Wheat straw6 is also used as dry roughage in TMR. The

cost of TMR will be lowered if feed ingredients are mixed on farm. The composition ofthe rations fed in the finishing operations depends largely on the types of feed produced

local availability and on weights and grades of calves to be fattened. Rations can rangefrom high-roughage low energy rations to high-energy rations composed almost entirely

of concentrates. Examples of ingredients in rations are:

Maize and maize silage with Soya bean meal and urea

Barley, maize silage, by-products feeding large feed lots (e.g. potato waste, sugarbeet by-products)

Maize, sorghum grain, alfalfa, straw, cottonseed hulls and molasses.

Some hormone-like growth stimulators, antibiotic feed additives and ionophores (rumen

altering factors) are legalized to be included in the feed and are very commonly used.

Table 7-4 Average Production Parameters and Ranges7

Reasonable Production Parameter Range Average

Starting weight (kg) 70-100 85

Daily gain (kg) 0.70 - 1.0 0.8

Feed Efficiency (kg growth per kg feed DM) 6 - 12 9

Fattening period (days) 90 - 150 120

Final weight (kg) 150-200 175

7.5.2 Green Fodder for Calves

Fodder is grown at the land, which is acquired on lease or owned by the entrepreneur.Due to increased demand, improved forage crops such as multi-cut oats, berseem,

lucerne, Sorghum- Sudan grass hybrids, mott grass, sorghum, maize and millet have beendeveloped. These have become very popular in irrigated areas such as Kasur,

Sheikhupura, Gujranwala, Faisalabad, Sargodha, and Renala Khurd (Punjab), Nowshera,Charsada, Mardan, and Peshawar (North West Frontier Province), and Hyderabad,

Sukkur, Larkana and Nawabshah in Sindh for peri-urban dairies. Details of foddercultivars released by Research Institutions in Pakistan are given in Annex 2. Average

forage yields in Pakistan are extremely low compared to yields obtained on researchinstitutes and from well-managed farms and fields. These are very low as compared to

their potential, with 22.8 tons per hectare a recent estimate8.

6 A byproduct of wheat harvesting used as dry roughage for livestock and dairy animals7 FAO Statistics8 FAO Statistical Databases


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Although improved varieties and technology are available, they have been slow to reachthe dairy farms. Recent medium scale on-farm work has indicated that yields can be

enhanced two to three fold by using available improved varieties and appropriateagronomic techniques. In an area where land and irrigation are the major limiting factors

to enhancing fodder production, intensification is the only way to meet the needs for

forage. Intensive and economical forage production per unit area per season would be the best choice. Also efforts should be made to produce and provide sufficient quantities ofseed of multicut forage varieties and hybrids like Mott grass to commercial dairy farms.

The fodder yield (except multi cut Mott Grass which yields 100-150 tones/ acre in 4 to 6cuttings per year) varies between 10 tons to 40 tons per acre depending upon the fertility

of land, quality of seed and application of fertilizer.

Table 7-5 Types of Dry & Green roughage9

Dry Roughage Green Roughage

Wheat Straw Summer Fodder Winter Fodder

Rice Straw Maize Barseem

Oat Straw Sorghum Alfalfa (Lucerne)

Maize/Sorghum Stubble Millet Oats

Sugarcane Baggass Mott Grass Rye Grass

Cotton Seed Hulls Sadabahar Sugarcane tops

Corn Cobs Guar

7.5.3 Fodder Production Economics

The comparative economic feasibility of various forage crops produced under various

farming systems is shown in Table 7-7.

Table 7-6 Economics of forage production under improved production system perhectare in Pakistan

10

Item Forage Crop

Maize Sorghum S. S hybrid Berseem Lucerne Oats

Land preparation 938 974 974 875 875 750

Seed & Sowing 1,200 688 2,000 1,250 1,250 1,250

Fertilizer 1,750 1,750 5,000 2,500 2,500 2,250

Irrigation 750 750 1000 1,100 750 500

Land Revenue 1,750 1,750 4,500 6,250 6,250 1,875

Harvesting / Transport 1,875 1,750 3,500 3,000 3,750 3,000Total expenditure 8,263 7,662 13,774 14,825 15,635 9,625

Yield (Kilos) 80,000 79,750 160,000 102,500 103,750 115,000

Price/kg (Rs) 1.00 1.00 1.00 1.50 1.50 1.25

9 Livestock & Dairy Development Department, Lahore & FAO Statistical Databases

10 FAO Statistical Databases


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7.5.4 Daily Fodder Requirement

There is no fixed fodder requirement for the animals but a rule of thumb says that an

animal needs daily fodder equal to 4.5% of live body weight on Dry Matter (DM) Basis.One third of this DM will come from green fodder and 2/3 rd will be supplemented by

TMR in fattening calves to get maximum daily weight gains. According to these

estimates, one calf of 80 Kgs body weight will consume 8-10 kgs fodder daily for 120days (preferred if fed free of choice i.e. ad libitum).

7.5.5 Daily Total Mixed Ration Requirement

Since an animal needs daily feed equal to 4.5% of its live body weight on Dry Matter(DM) Basis. The 2/3 rd of this DM will be supplemented by TMR. For an animal of 80

kgs body weight, it will be 8-10 kgs per day (Preferred if fed free of choice i.e. adlibitum)

7.5.6 Total Mixed Ration (TMR) Formula for calves:

Calves can also be fed on TMR in feed lot system. The Crude Protein (CP) value of thisration should be 12-13 % with 65-70 % Total Digestible Nutrients (TDN). These feedingredients when mixed according to feed formula will provide adequate energy

according to energy and protein requirements of animal.

Table 7-7 Details of Raw Material

Material Percentage Input

Cottonseed cake/ Maize grain 9%

Corn gluten meal (20%) 8%

Rice Polish 15%

Wheat bran 20%Wheat Straw 26%

Molasses 17%

Urea 1%

Salt 2%

DCP 2%

Total 100%

Crude Protein (CP) 12.7%

Total Digestible Nutrient (TDN) 65%

7.5.7 Mineral Mixture

This is used as a feed supplement. It includes a mix of minerals (magnesium, iron,

sodium and salts). Mineral mixtures are good source of energy and increase the animal productivity to produce more lean meat. Urea Molasses Blocks can also be used to

supplement the minerals.


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7.5.8 Wheat Straw (Bhoosa or Turi)

Wheat straw is a major, typical, and very popular feed, it is always chaffed, and is the

main or even only major dry roughage used on almost all the farms. Traditional threshingmethods break the straw into short pieces. Modern mechanical threshers have been

designed to break the straw. In places where it is produced, it is available at Rs.1.0 per

kilo. In recent years baling units have been installed in central Punjab; bales aretransported to major cities, even to Gilgit, Skardu, and Chitral.

Table 7-8 Daily Feed Requirements for One Fattened Calves in 120 Days

Fattening

Days

Body Weight (Kgs.) Feed Requirement/ Day Daily Feed Cost (Rs.)

1 100 4.5 50

30 123 5.5 61

60 147 6.6 73

90 171 7.7 85

120 195 8.8 97

Total Feed Cost 8,767

7.6 Vaccination & Medication

Vaccination & medication is required to prevent any disease out break in the animal herd.Each new animal will be vaccinated before putting into the farm. Anthelmantics are used

to treat the animals for internal parasites where as spraying and dipping with some disinfecting solution is used to eradicate external parasites. The total cost will be Rs.200 per

animal. Vaccines are produced at Veterinary Research Institute, Ghazi Road, Lahore. Thevaccines are provided to the Government Farms and Hospitals on payment. Farmers can

also obtain these vaccines on payment according to prescribed schedule from theInstitute. Technical guidance is also provided to the farmers. Farmers can have their

animals vaccinated from the field Veterinary Hospitals and Centres.

7.7 Calf Quarantine

A quarantine yard will be made for new animal handling, dipping, weighing, andvaccination etc. The newly purchased animals will be dewormed and medicated with

proper and necessary vaccinations in this yard. Only the disease free animals will proceedto the feedlot from the quarantine sheds. Quarantine arrangements will minimize the

chances of disease spread in the farm by ensuring that the new animals do not carry anydisease before they are taken to the main sheds. This seven-day period will also be

helpful in acclimatizing the new animals before they enter the main feedlot sheds. The behavior of the animal will be recorded during these seven days and then its requirement

of feed will be calculated accordingly before sending it to the main feedlot.

7.8 Labor Requirement

For a calf-fattening farm, manpower is required for performing different animalhusbandry practices at the farm e.g. housing, feeding, watering, medication and care of

animals etc. One person can handle 25 calves easily for feeding and other management.


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Five persons will be required to look after the fattening farm. The monthly salary of eachattendant is taken as Rs 6,500. A supervisor cum farm manager can be hired to supervise

all the farm activities. The supervisor with a B.Sc. (Honors) degree in Animal Husbandry(AH) may be hired as a farm manager so that he can handle the farm practices,

administration & account matters at the dairy farm.

Table 7-9 Labor Requirements

Description No. Salary/month/Person Annual Salary

Farm Supervisor 1 20,000 240,000

Attendant 5 6,500 390,000

Total Labor Cost 6 630,000

8 FARM OUTPUT

8.1 Fattening Period

The fattening period is the period during which the animal puts on weight. These animalsare called fattened animals. Generally the period is 90-120 days. Following are the

desirable size and thickness of fattened animals. Large frame size with no.1 thickness isdesirable.

Figure 8-1 Frame size and Thickness Grades of Fattened Animals

8.2 Meat Composition

Like all meat, beef is also very high in protein. It also contains significant quantities of 'B'

vitamins and minerals such as sodium, potassium and phosphorus. Offal, particularlyliver, is rich in Vitamin B12, A, C and D, folic acid, iron and riboflavin. The moisture

content of lean meat is 75-79 % where as the crude protein content is 18-22 %. There is a


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5-6.5 % mineral content in it. The percentage of lean meat, bone and other tissues ofcarcasses of different breeds is given as under;

Table 8-1 Meat Composition of Different Breeds11

Parameters Sahiwal Dajal Cholistani Non-

Descript

Cross

bred

Buffalo

Lean meat % 67.2 70.6 66.7 67.7 67.5 62.8

Bone % 16.3 15.2 16.8 17.3 16.3 17.6

Fat% 12.7 10.3 12.5 11.7 11.7 14.9

Other tissues % 3.4 3.7 3.7 4.1 4.3 4.6

Dressing % 55.5 58.0 56.5 53.6 54.4 51.6

8.3 Increase in weight gains

Average weight gains and feed efficiency values as such of different breeds of calves aregiven as under:

Table 8-2 Values of Different Parameters for Different Breeds

Parameters Sahiwal Dajal Cholistani Non-

descript

Cross

bred

Buffalo

Total weight

gain (kgs)

78.20 84.00 82.60 82.60 82.80 86.20

Daily weight

gain (kgs)

0.85 0.91 0.90 0.90 0.90 0.84

Feed efficiency

(as such basis)

8.48 8.69 8.34 8.60 9.40 7.63

8.4 Sale Price

Selling price is another limiting factor for the determination of the profitability of this business. In Pakistan, the beef business is controlled by the informal sector. There are no

organized markets for the beef sale and purchase. The meat business is in the hands of acommunity called butchers or Kassab.

After feeding animals in feedlots, only the premium price can make the operations profitable. In this pre feasibility study, the animals will be sold on farm at Rs. 90 per Kg

live body weight. Only fetching good price can justify the costs incurred on rearinganimal in feed lots. The selling price of fattened animal will be higher than the other

animals because of its higher meat recovery and good quality. To avoid the risk of pricefluctuations, certain buy back agreements with institutional buyers will be a good

approach for the success of this business. Linking the project with the live animal exportor beef exports will assure good returns on the business. Near the urban market and

especially around Eid-ul-Azha, the selling price of beef is Rs.130-140 per kg live bodyweight.

11 Livestock Production Research Institute, Bbahadurnagar, Okara


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9 USEFUL TERMINOLOGY

-Cake

Mass resulting from the processing of seeds, which is rich in protein and is used as asource of feed for livestock, e.g. cottonseed cake?

-Calf Young animal of dairy origin between seven and 120 days of age.

-Compound feedAny ground mixture of ingredients intended for feeding the animals. It includes a

concentrate mixture accordingly to formula.

-Dressing percent

Dressing percent is important because it reflects the amount of carcass in relation tothe animal’s live weight. Dressing percent is calculated by using the following

formula:Dressing % = Hot Carcass Wt. x 100

Live Animal Wt.

Dressing percent is affected by the fill, finish, muscling, sex, type, and if the animal is pregnant or not. Normal Range is 55-67% for young fattened calves.

-Fat Thickness

The primary estimate of fatness is fat thickness at the 12th rib. It is used to assess total

fat on the carcass. (Average: 0.5 inches)

-FeedstuffsAny substance of nutritive and biological value used in production of compound feed.

-Home Mixed FeedFeed prepared on farm of the owner.

-Live WeightCattle have a wider range of market weights than other species due to differences in

type and maturity.

-Ration

Amount of balance feed in 24 hours

-Weaning Calf

Young animal of between five and nine months coming from the cow-calf enterpriseand being reared by a suckling cow until weaning. The term is used to indicate a

difference of calves from dairy herds, referred to as ‘dairy calves’.


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10 FINAICIAL ANALYSIS

10.1 Projected Income Statement

Const Year Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Y

Sales 7,858,620 10,085,229 12,678,574 15,689,735 19,176,343 23,203,375 27,844,049 33,180,826 39,306,516 46

COST OF GOODS SOLD

Raw Material 7,635,348 8,662,865 9,774,046 10,974,688 12,270,959 13,669,420 15,177,049 16,801,269 18,549,967 20

Payroll (Production Staff) 390,000 409,500 429,975 451,474 474,047 497,750 522,637 548,769 576,208 Direct Electricity 14,308 15739 17313 19044 20949 23044 25348 27883 30671

Total 8,039,656 9,088,105 10,221,334 11,445,206 12,765,955 14,190,213 15,725,035 17,377,921 19,156,846 21

Gross Profit (181,036) 997,124 2,457,239 4,244,529 6,410,388 9,013,161 12,119,015 15,802,905 20,149,670 25

OPERATING EXPENSE

Payroll (Admin) 240,000 252,000 264,600 277,830 291,722 306,308 321,623 337,704 354,589

Administrative & Factory Overheads 15,717 20,170 25,357 31,379 38,353 46,407 55,688 66,362 78,613

Depreciation 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600

Mortality loss 36,000 44,100 52,920 62,512 72,930 84,235 96,487 109,754 124,106

Total 487,567 512,120 538,727 567,571 598,855 632,799 669,648 709,670 753,159

Operating Profit (668,604) 485,004 1,918,512 3,676,958 5,811,533 8,380,362 11,449,367 15,093,235 19,396,512 24

NON-OPERATING EXPENSE

Financial Charges on Running Finance 68,649 72,082 75,686 79,470 83,443 83,443 83,443 83,443 83,443

Land Lease 0 0 0 0 0 0 0 0 0

Building Rental 0 0 0 0 0 0 0 0 0

Total 68,649 72,082 75,686 79,470 83,443 83,443 83,443 83,443 83,443

PROFIT BEFORE TAX (737,253) 4 12,922 1,842,827 3,597,488 5,728,090 8,296,919 11,365,923 15 ,009,792 19,313,068 24

Tax 0 41,292 460,707 899,372 1,432,022 2,074,230 2,841,481 3,752,448 4,828,267 6

PROFIT AFTER TAX (737,253) 371,630 1,382,120 2,698,116 4,296,067 6,222,689 8,524,442 11,257,344 14,484,801 18

10.2

10.3


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10.4 Projected Balance Sheet

Const Year Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Y

Current Assets

Cash 0 (547,359) 14,075 1,585,908 4,473,645 8,959,240 15,371,362 24,085,142 35,531,725 50,205,666 68,

Stocks and Inventory 493,169 517,827 543,718 570,904 599,449 629,422 660,893 693,938 728,634 765,066

Total 493,169 (29,532) 557,793 2,156,812 5,073,095 9,588,662 16,032,255 24,779,079 36,260,359 50,970,732 68,

Gross Fixed Assets 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4

Less: Accumulated depreciation 0 166,600 333,200 499,800 666,400 833,000 999,600 1,166,200 1,332,800 1,499,400 1, Net Fixed Assets 4,147,444 3,980,844 3,814,244 3,647,644 3,481,044 3,314,444 3,147,844 2,981,244 2,814,644 2,648,044 2,Intangible Assets

Pre-operational Expenses 292,500 263,250 234,000 204,750 175,500 146,250 117,000 87,750 58,500 29,250

Total 292,500 263,250 234,000 204,750 175,500 146,250 117,000 87,750 58,500 29,250

Total Assets 4, 933, 113 4,214,562 4,606,038 6,009,207 8,729,639 13,049,357 19,2 97,1 00 27,848,074 39,133,503 53,6 48,0 26 71,

Current Liabilities

Running Finance 493,169 517,827 543,718 570,904 599,449 629,422 660,893 693,938 728,634 765,066

Total 493,169 517,827 543,718 570,904 599,449 629,422 660,893 693,938 728,634 765,066

Long-term liabilities

Long-term Loan 1,973,388 1,952,878 1 ,932,060 1 ,910,930 1 ,889,482 1,867,714 1,867,714 1,867,714 1,867,714 1,867,714 1,

Total 1,973,388 1,952,878 1,932,060 1,910,930 1,889,482 1,867,714 1,867,714 1,867,714 1,867,714 1,867,714 1,

Equity

Paid-up Capital 2,466,556 2,466,556 2 ,466,556 2 ,466,556 2 ,466,556 2 ,466,556 2 ,466,556 2 ,466,556 2 ,466,556 2 ,466,556 2 ,

Reta ined Earnings 0 (737,253) (365,622) 1,016,498 3 ,714,613 8 ,010,681 14,233,370 22,757,813 34,015,156 48,499,958 66,

Total 2,466,556 1,729,304 2,100,934 3,483,054 6,181,170 10,477,237 16,699,927 25,224,369 36,481,713 50,966,514 69,

Total Liabilities And Equity 4,933,113 4,214,562 4,606,038 6,009,207 8,729,639 13,049,357 19,297,100 27,848,074 39,133,503 53,648,026 71,


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10.5 Projected Cash flow Statement

Const Year Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Year

Operating activities

Net profit (737,253) 371,630 1,382,120 2,698,116 4,296,067 6,222,689 8,524,442 11,257,344 14,484,801 18,

Depreciation 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600

Stocks-RM (493,169) (24,658) (25,891) (27,186) (28,545) (29,972) (31,471) (33,045) (34,697) (36,432)

Cash provided by operations (493,169) (566,061) 541,589 1,550,784 2,865,421 4,461,945 6,387,068 8,687,248 11,418,497 14,644,220 19,

Financing activities

Long term debt principal repayment (20,510) (20,818) (21,130) (21,447) (21,769) 0 0 0 0

Addition to long term debt 1,973,388

Addition to running finance 493,169 24,658 25,891 27,186 28,545 29,972 31,471 33,045 34,697 36,432 (

Issuance of share 2,466,556

Cash provided by/ (used for) financing ac tivit ies 4,933,113 18,702 19,845 21,049 22,316 23,650 25,054 26,531 28,086 29,722 (

Total 4,439,944 (547,359) 561,434 1,571,833 2,887,737 4,485,595 6,412,122 8,713,779 11,446,583 14,673,941 18,

Investing activities

Capital expenditure (4,439,944) 0

Cash (used for)/ provided by investing activities (4,439,944)

Net Cash 0 (547,359) 561,434 1,571,833 2,887,737 4,485,595 6,412,122 8,713,779 11,446,583 14,673,941 18,


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11 KEY ASSUMPTIONS

Table 11-1: FFiinnaanncciiaall AAssssuummppttiioonnss

Project life (years) 10

Debt Equity ratio 50:50Interest rate on short term debt 14%

Interest rate on long term debt 18%

Debt tenure (years) 10

Debt payments per year 12

Table 11-2: RReevveennuuee AAssssuummppttiioonnss

Annual Production (calves) 450

Number of Calves per herd 150

Number of production herds per year 3

Capacity Utilization 100%

Live body weight at purchase time (kg) 100

Average daily weight gain 0.8

Feeding days 120

Selling price (Rs/ kg live body weight) 90

Table 11-3: EExxppeennssee AAssssuummppttiioonnss

Purchase price (Rs/kg live body weight) 80

Mortality Rate 1%

Vaccination/ Medication cost (per calf) 200

Open Space per animal (Sq. ft) 60

Total Mixed Ration requirement (% of live

bodyweight)

4.5

Price of Total Mixed Ration (Rs. Per Kg) 11

Table 11-4: EEccoonnoommyy--RReellaatteedd AAssssuummppttiioonnss

Electricity growth rate 10%

Wage growth rate 5%

Table 11-5: Cashflow Assumptions

Raw Material Inventory (Days) 30


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12 ANNEXURE 1

Table 12-1 Vital Statistics of Cattle & Buffaloes

Parameters

Rectal Temperature 101.5 degrees F (38.5 degree C)Heart Rate 60-70 beats/minute

Respiratory Rate 30 breaths/minute

Table 12-2 Common Diseases of Livestock

Infectious Diseases

Disease Symptoms Preventive measures Medication

Anthrax Fever, grinding of teeth,

release of blackish blood from

natural openings, which

doesn’t clot.

Vaccination in February.

Dead animal should be

buried in 6 feet deep pit

without any postmortem.

Antibiotic therapy

Foot and mouth

Disease

Excessive salivation, Pustules

on lips, tongue and between

the cleft of hooves, staggering

gait weakness due to inabilityof ingestion.

FMD vaccine after every

4 months especially

before the onset of rainy

season.

FMD Serum, cleaning

of pustules by

potassium

permanganate solution,cleaning of hooves by

phenyl solution

Non Contagious Diseases

Indigestion Loss of appetite, wateringfrom mouth, stiffening of

rumen, bloating, severe pain in

stomach

5 grams Stomach powder (mixed in feed

or dissolved in water)

twice a day

Bloating(air trapped in

stomach)

Difficult breathing due to airtrapped in stomach, animal

may die due to suffocation

Avoid grazing early inmorning especially on

fodder with dewdrops.

Mustard (Sarson) oil &turpentine oil mixed

with chloral hydrate

mixed in drinking

water.

Dysentery Diarrhea, smelling feces,

weakness

Avoid excessive intake of

milk especially in

newborn kids.

Avoid wheat straw or stiff

feed during dysentery

Calcium carbonate,

magnesium carbonate

and bismuth carbonate

dissolved in water OR

entox tablets ORnimkol with

sulfademadine (4-5 cc).

Offer rice groule to

affected animals

Internal Parasites

Liver flukes Weakness, off feed, jaundice

in severe cases, swelling on joints

No grazing around

stagnant water

Zanil or Carbon tetra

chloride OR nilzan plus, oraladministration


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Round Worms Weakness, diarrhea, anemia,

hair fall from body coat

Fecal samples should be

examined for

roundworms.

Systamax or rental, oral

administration

Ectoparasites

Flies/ ticks/

maggots

Irritation on body coat,

sometimes holes in skin, lossof hair from body coat

Cleanliness in sheds,

Spray of DDT in shed

Apply sulfur oil,

tetmasol or ecoflax onwounds and dipping of

whole herd with a 0.15

% solution of negavan.

Table 12-3 Vaccination Schedule

Name of Disease Name of

Vaccine

Qty

administered

(ml)

Time for

Vaccination

Duration

of

Immunity

Preventive

Measures

Foot & Mouth

Disease

(FMD)

Foot & Mouth

Vaccine

5 ml Start of spring 4 months Should be given 4

months prior to the

expected symptoms

of disease.

Anthrax Anthrax spore

vaccine

0.5 ml March-April

or monsoon

season

One year Every year

vaccination should

be done every year.

Rabies

(Bowla Pun)

Anti rabies

vaccine

10 ml According to

need

One year Vaccine should be

used right after

preparation.

Hemorrhagic

Septicemia (HS)

HS vaccine 5-10 ml Start of Spring 4 months Should be given 4

months prior to the

expected symptoms

of disease.

Table 12-4 List of vaccines and their prices at Veterinary Research Institute, GhaziRoad, Lahore.

Vaccines/Sera/Antigens Packing With Bottles Price

Haemorrhagic Septicaemia Bottle of 300 ml (60 doses) Rs.90.00

Black Quarter Vaccine Bottle of 300 ml (60 doses) Rs.80.00

Enterotoxaemia Bottle of 300 ml (100 doses) Rs.67.00

Foot and Mouth Vaccine Bottle of 320 ml (64 doses) Rs.484.00


Foot and Mouth Serum Bottle of 300 ml (6 doses) Rs.380.00


Anti Rinderpest Serum Bottle of 300 ml (20 doses) Rs.374.00

Anthrax Spore Vaccine Bottle of 50 ml (100 doses) Rs.70.00

Rinderpest Vaccine (TCRV/CTV) Ampoule of 100 doses Rs.21.00

Anti Rabies Vaccine 440 cc bottle for Cow/Horse Rs.840.00For further inquiry contact: Director General (Research), Veterinary Research Institute, Ghazi Road, Lahore.(Ph) 042-9220143


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30

13 ANNEXURE 3

Table 13-1 DDiissppoossaall of Death

Sr. no Calf No. Date of purchase Sex Mode Cost Remarks

1.

2.

Table 13-2 Details of Purchase / Sale of product/byproduct (Feed and fodder's,

medicines, ingredients, animal, etc.)

Sr.

no

Particulars Quantity Per unit rate Total cost Remarks

Table 13-3 Calf Disposal

Sr. no Wt. Of calf Disposal Date Remarks

Table 13-4 Herd Health Register

Date Animal Symptoms Diagnosis Treatment Detail of

vaccination/

medication

Cost of treatment

Table 13-5 Monthly Expenses & Income Report

Sr. no Particulars Quantity Rate (per unit) Total cost

--


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14 ANNEXURE 4

14.1 Different Breeds of Buffaloes and Cows

Kundi Nili Ravi

Lohani Red Sindhi Bull Sahiwal Cow

Rojhan Dajal Tharparker

calf fattening farm

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