PROPOSAL

Farmergiant Nigeria Limited

PARENT STOCK
HATCHERY
BROILERS
POINT OF LAY BIRDS
FARMS

BY: FARMERGIANT NIGERIA

LIMITED
4th April, 2014

FARMERGIANT NIGERIA LIMITED:

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 The Plan.

EXECUTIVE SUMARY

The plan is the establishments of an integrated poultry plant that stock Parent
stock at an initial phase of 30,000 capacity. Day old chicks (DOC) would be
produced from fertile eggs and sold to poultry farmers to be raised as broilers and
layers. As part of integration, 5000 broiler DOC would be retained weekly to be
raised to table size; similarly, 5000 pullet DOC will be retained to be raised to
Point of Lay (POL) and upon expansion to layers to produce table eggs. By
maturation of first phase, the enterprise will be producing on the average 105,000
DOC weekly, 10 ton of broiler meat weekly and 5000 POL weekly. Projected
revenue from DOC is N40 million monthly and N520 million annually and from
broiler, N20.5million monthly and N266 million yearly. And from sales of Point of
lay, the expected monthly income is N17 million and annually, N204 million.
Total revenue per annum is in the average of N0.990 billion to N1.24 billion. Of
this, gross profit from DOC sales is about N200 million, N52million from
processed broiler and N30 million from sales of POL. The total expected gross
profit would be approximately N342 million. Net profit before tax is projected
would be N239.4 million yearly.
To achieve the above fund to the expected capital investment in the first phase is
N265, 000,000 (Two hundred and sixty five million naira). The business should
break even at the end of the second year. This farm shall serve as sources of DOC
and POL to the teaming farmers in the state and beyond, creating wealth,
employments and training for others.

1.0 PROJECT PROFILE

The project essentially is to set up a breeder farm, produce fertile eggs, hatch them
into broilers and layer chicks and market them. Management and finance required
as well as profits accruable are discussed in the work.

1.1 BUSINESS BRIEF

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 The breeder farm houses the parent stock. These are acquired by importation of
parent stock eggs - Aviagen, Netherlands and Cobbs, South Africa. The Day Old
Chicks (DOC) of the parent stocks are reared to laying. The eggs are set in the
hatchery for 21 days to hatch into chicks. Setting will be done weekly hence a
300,000 capacity hatchery should be utilized. The breeders can lay for 50 weeks
and the spent bird sold out for meat and replaced.
DOC are sold weekly for revenue, excess is taken back to the farm to be raised as
broilers or pullets (for Point Of Lay) respectively. The broilers are processed after
seven (7) weeks/ batch and the processed meat is sold out to marketers or end
users. The pullet angles are sold out as from fourteen (14) weeks in each batch as
Point Of Lay (POL) to poultry farmers raising layers.

2.0 OPPORTUNITY
Nigeria is rarely meeting her poultry demand in poultry meat and eggs. Seventy
percent (70%) of our consumed poultry products particularly meat, are smuggled
product. The demand for ready to eat eggs alone far outweighs the supply and yet
countries like Niger, Chad and Northern Cameroon essentially depend on our
meager supply. Companies such as KFC, Sweet Sensation and Mr. Biggs more or
less scramble for little supply available and some have refused to introduce some
recipes because of non availability of poultry meat. Essentially, our egg supply can
only attempt to meet our edible demand hence the industrial need is completely left
out.
The Eastern parts of Nigeria as well as the Southern part particularly depend on the
Ibadan axis for supply of DOC, eggs and poultry meet. This is basically because a
few Lebanese, Israeli and Indian companies have a cluster in Ibadan. The chicks
have to suffer the rigor of being transported from this region by road to the eastern
and south-south parts of the country thereby affecting viability and quality. The
opportunity hence exists.
Market reports also indicate that most oil companies and eateries in the region in
question completely depend on the Ibadan cluster to get meat and egg products,
this is a large market. Our opportunity is to strategically position ourselves in Abia
State and meet this large demand.
The environmental ambience and climatic condition of Abia State is greatly an
advantage. We should also know that the purchasing power of our state and its

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environs is greater than most other parts of Nigeria and demand for poultry product
is increasing yearly. Poultry products is also of health advantage, haven recently
been classified to be of health advantage rather than risk.

4.0 TIME MARKETING

Broiler demand fluctuates predictably throughout the year. The demand and hence
the price increases dramatically in periods preceding festivity such as Christmas,
Easter and Sallah. Broiler chicks at these times sell nearly 50% higher. During the
down periods, farmers buy chicks targeting to dress for cold rooms.
Pullet chicks are of high demand from November to June. Cockerels are of low
demand whenever broilers are of high demand due to competition for brooding
houses. Normally the demands for cockerels are higher four (4) months to the end
of the year as farmers target the end of the year festivities.

5.0 Proposed Business Legal Status

The business intends to integrate investment from four angles:
1. Business Promoters: Farmergiant Nigeria Limited. harness all the essential
coordinates and integrate the partners
2. Technical Partners: These include local and foreign expatriates.
Safe Poultry from India will provide all the processing equipment as
well as training of staff.
Aviagen-Denmark will provide the parent stock, facility for
insemination and trainings on breeding and incubation.
Kutlusan-Turkey will provide cages, manure management equipment
and training.
Locally, Farmergiant Nigeria Limited will provide support services in
terms of training, marketing advice, coordination of the foreign
parties, procurement of essential machines and consultation.
3. Financial Partners: We propose to obtain money from financial institution
(bank). The agricultural loans available in some banks should be harnessed to
achieve this project with some equity contribution coming from promotions
with government support.
4. Guarantors: The government of Abia State is sought to come in as a partner.
Other interested individuals are also expected to join forces as partners. Our
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 demand from the government is to guarantee the necessary loans from the
banks. We also request for grants from the government to achieve this
objectives and in the process grant them partnership right in the laudable
enterprise.
5.1 PROPOSED CAPACITY
Table 1:The integrated farm should have the following capacity at different stages

INITIAL EXPANSION FIVE YEARS TEN YEARS

PHASE PHASE OPTION OPTION
(2 YEARS)

BROILER
BREEDERS 10,000 20,000 50,000 200,000
LAYER
BREEDERS 20,000 50,000 100,000 300,000
HATCHERY
CAPACITY 300,000 700,000 1,500,000 5,000,000
BROILER
CAPACITY 30,000 60,000 100,000 6,000,000

REARING
CAPACITY 50,000 125,000 250,000 750,000
LAYING
CAPACITY NIL 100,000 500,000 2,000.000

5.2 INVESTMENT PROJECTION

Equity contribution from the promoters shall be in excess of 10%. With the state's
assistance as guarantor, this study shall focus majorly on the initial phase with
emphasis on capital injection in one year. Projection into the three phase expansion
of year two, year five and year ten shall be in the detailed second feasibility.(see
detail on cash flow projection on excel attached)

TABLE 2: Projected cost of capital investment.

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 Automated breeder Automatic egg
Breeder cage
cages with 20 years 57,000,000 collector and
ITEMS DESCRIPTION COST REMARK
guarantee from Manure collector
Housing 30,000 parent 22,800,000 Construction at
Breeder Building turkey
stock To power cages and 6,000,000 inception in 3
Generator power
incubators plus building (12 X 70m)
Imported incubated and 14,000,000 Hatch with company
Parent Stock Egg alternatives
hatched
Broiler building and 6 pens X 5,000 24,000,000 incubator
Automatic feeder
Feeding of parent 35000 X 900 31,500,000 Cost till lay
Equipment birds each and drinker
stock to lay
Rearing Birds Building 5 pens X 10,000 22,000,000 Rearing POL
Estimated cost of 3 3,000,000 This could be less
Land birds each
hectares
Broiler Processing Plant
defeathering Capacity
and 2 todefeathering
hold 5,600,000
1,200,000 For a good birds
Cleaning bargain
Incubator
cleaning 300,000 eggs each time
machines 2,000,000 from partners
for market.
processing line Automatic Initial to be

processing and expanded

packaging
Hatchery Building To house the 3,600,000

incubators and

process chick

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Transport crates Transport birds for sale 2,333,333

at POL or broiler for

processing.
Transport truck Transport feeds, birds 2,000,000 Truck

or equipment
Distribution van Distributes chicks as at 1,200,000 Fairly used

and when due

Cold van Truck with cold room 2,800,000 Used

facility
Cold Room Storage of processed 3,700,000 Locally built

broiler meat
Residential For offices and housing 4,300,000

of some staff
Feeding Broiler Cost of feeding first 18,000,000 Feed return

batch each batch

Feeding pullets till POL Feeding chicks to POL 22,000,000
Running cost till break Salaries, fuel, insurance 7,2000,000

even and contingency

TOTAL 256,233,333

6.0 EQUITY AND LOAN

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Loans and equity contributed to the project can be recovered in 26
months and could possibly reinvested for a first expansion

6.1Requirements
Access road
Water through private borehole
Electricity (grid cum private)
Land (water logged free)
Security from human sabotage

7.0 CONTRIBUTION TO THE ECONOMY

Poultry contribute about 25% of the agricultural GDP in Nigeria and about 4% of
the national GDP. One of the major employers of labour is the agricultural sector.
This present project will employ within the first phase 42 permanent workers and
10 casual staff at each point in time. It shall also generate wealth for the partners,
suppliers, distributors, banks and workers. It will automatically add value to the
immediate community where it is situated as transporters, land owners, workers
and marketers of finished products will directly and indirectly induce improvement
on the immediate economy.
Taxes also shall accrue to the state government, profit to partners and tariff on
corporate taxes to the federal government.
The facility should also be a source of training ground to the youth who want to go
into poultry. Foreign experts from outside the country through the agreed
partnership shall contribute knowledge and transfer skill to our youth.

8.0 BUSINESS OVERVIEW

Breeder farming is the most technical of all aspect of poultry production. Egg
production is the most popular form of poultry farming because egg consumption
cut across wide divide; hence the demand for DOC is a continuum for replacement
stock. Similarly, demand for broiler DOC is on the increase.

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 Poultry production come in different forms ranging from parent stock breeder,
meat (broiler/production), egg production, Quail production, turkey production,
ostrich farming, duck farming, Geese farming and ornamental bird rearing among
others. The business could also come in specialization such as brooding, Point of
Lay production, liquid egg packaging, egg trading, cold room marketing, day old
chicks, feed milling, birds transportation or egg deport business. Because of the
vastness of this industry, entrepreneurs focus will be on an aspect and with time
add other aspect either for vertical or horizontal integration in Nigeria, this industry
is still grossly untapped and any part of the industrial possess great potential.
Specialisation and continuous improvement on skills is always paramount.
Poultry industry is a multi-billion naira industry: The major hindrances to the
growth of the industry in Nigeria ranges from absence of credit, high interest rate,
and high cost of maize, unavailable electricity which is important for incubation,
cold rooms, and operation of automated cages. Because of the fallow nature of the
industry in Nigeria, the prospect is high. Right now the demand for eggs, broiler
meat, day old chicks, day old poults etc remain overwhelmingly high.

8.1 Critical Success factors of the business

A. Finance: Fund must be available as when needed according to plan to avoid
creating stress factors which would cost so much in revenue loss

B. Expertise: The poultry industry is knowledge based home employment of

expertise is imperative. Consultancy is paramount. Training and retraining of staff
is sacrosanct no matter how small the level and acquisition of knowledge of
modern trend is a factor to growth.

C. Housing: Proper ventilation and spacing is a critical success factor. Position

your house to give the birds maximum ventilation and reduce heat.

D. Biosecurity: Disease entrance and spread are as a result of any form of breach
in biosecurity. There is use of foot bath, car bath and prohibition of unauthorized
persons etc.

E. Watering and water source is of great importance. Foul water source or water
getting contaminated in poultry house signifies that the farm will fail. Water
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 should be managed to ensure that clear and clean water is available for bird ad
libitum.

F. Nutrient: Most farm fail because they wanted to reduce cost of feed by
compounding farms should only venture into self-compounding on ground with
available experiment. All nutrients must be readily available in the market to
prevent malnutrition.

G. Sales: Egg produced must be sold. Proper marketing with vigorous

advertisement will ensure the product is made available to the target market.

H. Management: Pilfering shrinkages, indulgence, misappropriation are few of the

several epidemic that constantly plaque poultry in Nigeria. Workers steal eggs,
birds, feed, money and even drugs if they are not properly monitored. Sales agents
and drivers could sell at different prices and report differently.
Effective management of this ends are critical factor.

I. I. Administration: At full capacity, Management is separated from

administration, when the owner is not directly involved in day to day
management. Absentee farming is hazardous. Someone with stake in the venture
should give quality time to it to survive.

8.2 MODUS OPERANDI

Broiler chicks and pullet chicks are produced from fertilized parent stocks which
are also referred to as parent stock Breeder Stock. Parent stocks are special birds
produced from Grand Parent Stocks which are products of careful genetic mix.
The eggs produced from parent stock are set in the incubators and in 21 days will
be hatched into chicks. In the case of broiler, all the chicks are equal, be it male or
female but the chicks produced from the pullet parent stocks are sorted into male
(cockerel) and female (layers).
The layers are priced higher, for instance it could go for N 170/ chick while the
corresponding male (cockerel) could go for N 20/ chick.
Most pullet chicken varieties are auto sexed meaning that the cockerels come out
with a distinguishing color or physical features that differentiates them from the
females. The hatched chicks, when in the processing room are also vaccinated with
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various vaccine stipulated for DOC. They are then counted into carton packs of
50+1 chicks. Malformed, wet or dead chicks are removed. The chicks are then
ready for pick up by farmers, suppliers or agents who must have prepared for them.
Farmergiant Nigeria Limited farms plan to horizontally integrate this process
further by budgeting to reserve 10% of the chicks always for further activity. The
incubation period for chicken eggs is 21 days. Plan to set 150,000 eggs per week.
The intention hence, is to have 30,000 breeder hens, 10,000 of which will be
broilers. At 72% lay, we shall obtain 151,200 eggs to set. The projection is 70%
hatchability which is 105,840 chicks per week of which broiler would be 35,000
chicks and layers, 35,000 and cockerel, 35,000 chicks. Revenue from chicks on
weekly basis would be about N10 million, N40 million per month and about N520
million per annum. Fourteen percent (14 %) of the broilers is positioned for raising
in the broiler section to table size (5,000 chicks) and similarly 14% of the layer
chicks (5,000) to be raised in the layer section to POL.
To this effect, 6 broiler pens of 30,000 capacities should be constructed to 5,000
each. The mode is all-in-all-out. Every week, 5,000 chicks go in every week,
5,000 birds come out (allowance shall be made to 5% mortality). Revenue from
this section hence will be N5.1 million weekly and N20.5 million monthly and
N266.5 million per annum.
The projection for producing POL is similar in as much as time lag is 14 weeks per
batch. Weekly average of POL output is targeted at 5,000 with projected revenue at
N4 million weekly, N17 million monthly and N204 million yearly. Other means of
income could be from sales of manure which is projected at N135 thousand per
annum.
Total revenue per annum is in the average of N0.990 billion to N1.24 billion. Of
this, gross profit from DOC sales is about N200 million, N52million from
processed broiler and N30 million from sales of POL.
The total expected gross profit would be approximately N342 million. Net profit
before tax is projected would be N239.4 million. From every indication, the
project has the capacity of breaking even by the end of the second year.
Note that feed is one of the major costs of production. It is above 60%.
Technical skill is of optimum importance to the success of such integrated poultry,
as this; hence all parties shall be surely involved to success in the first phase.
Thereafter, the capacity shall be doubled by the second year. In five years, it is
projected that Farmergiant Nigeria Limited farm would be expected to expand to

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five times the size of the first phase with annual revenue leaping to about N7
billion especially with the further integration to egg production of about 500,000
capacity. Annual net profit at this stage would come to about 1.5 billion naira
before tax.
By ten years, Farmergiant Nigeria Limited integrated farm is projected to be a
formidable player in the poultry industry with efficiency in day old chick
production, meat production and egg production.
Note: Unlike normal layers, breeders often start lay at 7 months of age and lay for
10 to 12 months.
Breeders can be raised on deep litters but for cleaner eggs, ease of management
and accessibility to insemination, specialized caging is paramount.
Control lightening (photoperiod) aid laying, ventilation, temperature and feed
intake is also closely monitored for effective production.
Packaging of fertile eggs and storage are professionally handled to enhance higher
percentage of hatchability.
Advantages of cage system in breeder farm also include cleaner eggs, maximum
space, disease prevention and control of which all increase hatchability.

9.0 HARZARDOUS POINTS

Identifiable risks in the project include;
1. Disease outbreak: Diseases such as Newcastle disease, Gumboro and
Mareks are still endemic in Nigeria. Most viral diseases of poultry are
prevented by vaccination hence strict vaccination protocol shall be put in
place for all birds from the breeders, broilers and pullets. The chicks shall
also receive routine vaccine before leaving the hatchery to ensure immunity
in the client's farm.
2. Bacterial diseases are often product of contaminated water source. To
prevent diseases such as salmonelloses, water treatment and continuous
monitoring of water quality shall be a practice to ensure good flock health.
3. Fungal infection could result from moldy. Training of staff to identify such
hazards shall eliminate or minimize the outbreak of fungal disease.
4. Reportable poultry diseases such as Avian Influenza could result in
eradication of the whole farm even if the outbreak is not registered in the
farm but a nearby farm. The only possible control point is in insurance.
5. Natural disasters such as wind, flood and community crises could also be
covered by insurance
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 6. Fire, burglary and other hazards shall by insured policies attract 2.5% of the
total cost of the birds

9.1 OTHER RISKS

9.1.1GLOT
An ill managed marketing system could result in excessive unsold products such as
chicks, meat and eggs despite an existing surplus demand. This should be
recognized as possible risk and rigorous marketing put in place to ensure that at
each point in time, demand exceeds products availability.
9.1.2FINANCIAL REDNESSNESS
Revenue in poultry is real 'vanity' because it is really large but 70% of that income
goes to feed hence the profit margin is relatively low. Clear picture of the financial
status should always be known to avoid over spending resulting in recklessness.
9.1.3 SABOTAGE Burglary, shrinkages, malpractices from farm workers and
other parties could result in failure of the project.

10.0BIOSECURITY
Biosecurity measures are all measures necessary to prevent disease agents
(instruments, vehicles and clothing) personnel, other animal handlers, veterinarians
or vectors from the stock into the farm resulting in health breach. Details of
biosecurity handled in that section.

11.0MARKETING ANALYSIS

Products to be marketed in this project include;

1. Day Old Chicks (DOC)
a) Broiler DOC
b) Layer DOC
c) Cockerel DOC
2. Birds
a) Dressed broilers
b) Live broiler
c) POL birds
d) Spent layers
e) Spent breeders
3. Eggs
a) Table eggs
b) Fertile eggs
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 4. Manure and dead birds
11.1 Channels for DOC include;
I. Breeder farms
II. Broiler farms
III. Layer farms
IV. Commissioned DOC agents
V. Poultry shops
VI. Online marketing
11.2 Channels for birds include;
I. Agents selling spent or POL
II. Poultry farms stocking POL
III. Cold room buying dressed birds
IV. Eateries
V. Distributors of dressed birds/broiler
VI. Bird sellers (housing them in cage and then dressing)
11.3 Channels for eggs include:
I. Fertile eggs are targeted towards hatcheries
II. Marketers of DOC also buy fertile eggs
III. Egg depots
IV. Egg distributors
V. Shops and malls
VI. Eateries and hotels
11.4 Channels for manure and dead birds
I. Manure is for vegetable farms
II. Dead bids is for dog food producers

12.0 MARKETING ON INTERNET

This formidable force shall be employed not only to advertise the farm product but
the farm's website as well as other popular websites which is employed to
showcase and widen the reach and directly market products from the farm.

13.0 TRANSPORTATION
Live birds are transported in crates by night utilizing open truck for proper
ventilation and management
Dressed birds are transported in cold van under good hygienic condition
Marketing strategy shall be further discussed.

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14.0 KEY ASSUMPTIONS TO FINANCE
Initial phase in the first year would consume N280 million to start
To effectively start at optimum capacity in the second year, N720 million
shall be needed
Government partnership or bank guarantor is envisaged to obtain this loan
from the bank. Alternatively, Government financing is expected

14.1 ASSUMPTION RELATING TO PARENT STOCK

Hens will be reared for 28 weeks and lay for about 50 weeks before
replacement
Spent breeder are sold, money utilized for replacement
Flock size shall be 30,000 initially then 70,000 in the second year with
continual plan for expansion.
Mortality of up to 9% is provided for
Housing shall be via automated cage system.
Parent stock eggs shall be obtained from specialized companies overseas.

14.2 HATCHERY ASSUMPTIONS

Durable incubators shall be imported from reputable firms in Hong
Kong
Total capacity of the hatchery in the first phase is 300.000 eggs
14% of the chicks produced shall be reared into meat or POL.
Alternative power supply shall be made available for incubators and
cold room

14.3 BROILER SECTION ASSUMPTIONS

Initially 5,000 broiler DOC shall be retained weekly, raising
population to 30,000
Weekly 5,000 broilers processed
Cold room shall be provided
Processing plant shall be put in place

14.4 POINT OF LAY ASSUMPTIONS

In the first year, chick shall be raised to POL on litter system
5,000 chicks shall be retained weekly
POL shall be sold out at 14 weeks of age
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14.5 GENERAL ASSUMPTIONS
Exports shall be employed
Specialized foreign companies shall be engaged
Consultancy utilized throughout to ensure success
Insurance shall be put in place too
Financial management shall be professional.

15.0 CONCLUSION
Poultry product is one source of protein widely accepted across cultures and
religion. It is the most affordable and most recommended protein source health
wise in the livestock industry. Nigeria is yet to meet up to 30% of her demand
especially with reference to meat production.
Farmergiant Nigeria Limited is employing most of the available recent innovation
to ensure that the wholesome product is available in our market. Consultations
have been sought far and wide to minimize setbacks. Employment shall be created,
wealth maximized and value inputted to our society with the acceptance and
promotion on this great idea.
We crave for support because every index concur that this idea is very realistic.
Necessary support is all it needs. We thank you as you birth yet another great idea.

PRAYERS:
We pray you sir for the following:
I. That you embrace and birth this project for us with your support.
II. That you create fund for the implementation of this project in form
of partnership or grant
III. Or provide us with state guarantee to secure an agricultural loan
from the banks.

Thank you for your overwhelming support.

Signed
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Dr Paul Adoyi
Promoter, Farmergiant Nigeria Limited
08099515923
Farmergiant@gmail,com

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