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A Project on:

CROWN POULTRY FARM

Submitted To:

MR LUFTI ALI HASSAN

Submitted By:

Evans Aming’ah
Broadcare Kenya
 PROPOSAL FOR THE EXPANSION OF CROWN
POULTRY LTD CUM FEED PROCESSING MILL AT
KIKAMBALA
R Preface
According to the prioritization after the preliminary market appraisal performed in the
project area( herein referring to Coast Province), unavailability of quality feeds and
day-old chicks was raised as the single most important factor hindering poultry
development in the coastal region. Considering the fact that the region has a sizeable
number of established feed manufacturers, new entrants have to adopt a tailor made
entry strategy. The enormous growth in demand for poultry and poultry as a product
has led to the present hatcheries to operate at their maximum and still don’t meet the
demand. This is partly due to the change in the consumption patterns lately whereby
the lower income segment of the citizens have adopted the broiler in their open air
roasteries thereby creating increased and sustained demand for a section of poultry
that had been hitherto a recipe for the rich only. This has led to arbitrary rise in the
price of the day-old chicks that in turn translates to a higher price of the dressed
capons at the outlets. Unfortunately, this same factor has led to other
counterproductive reactions from the complementary players in the industry: the feed
millers erroneously reading the price increase of the end product have increased the
price of feeds, farmers have failed to plan their flocks as they rush to get chicks when
available. The later has led to false gluts in the market destabilizing the farm gate
prices.
R
In developing countries, it is quite common to find poultry production areas a great
distance from areas of heavy demand for poultry products. While there is
overproduction in some parts of the country due to lack of outlets, various processing
plants work at only 20% of their capacity due to uneconomical collection distances.
The cost of live bird collection represents approximately 30 percent of the processing
cost of packaged poultry products. The traditional demand in this country is for fresh
poultry products in the cities and indigenous poultry in the countryside.
Governments generally consider poultry products as a basic commodity and consumer
prices are strictly controlled. Besides the market for local poultry products, there is
 also a market for hitherto poultry products, which, in order of importance, parent
stocks, breeding eggs and frozen capon parts such as drumsticks, wings, giblets e.t.c..
As a result, the problem in the developing countries is that while the small poultry
products’ producer has no regular outlet for his products, consumers pay high prices
for imported poultry products.

There is therefore for investment at various levels of the poultry production value
chain so as to beat the rising prices of eggs and broilers due to increased prices of
feeds.

Executive Summary

As previously pointed out, as indicated earlier, many factories and processors have
either had to dig deep in their pockets to fund such a project and soon find themselves
out of the business. In these areas the feasibility has indicated the potential for
collection of substantial quantities of poultry of varied sizes. This is due to the
diversity of the types of animals that are kept for broiler production are hybrids from
different hatcheries. Poultry products that will be produced include

 Organic halal Kuroiler chicken products

 Branded Crown Fresh chilled chickens
 Branded Crown Frozen capon
 Branded Crown Frozen capon portions such as drumsticks, wings, giblets
 Branded Crown pre-cooked chicken ham
 Breading of chicken products

 Filleted breasts fillets and drumsticks ,Branded Crown Fresh farm eggs
 Branded Crown feeds
This project will start with 3000 layers and later diversify into the broiler and feed
making sector gradually

Chicken nuggets
Company Profile
i Address of Company

ii Location of Project

Mtwapa
iii Product Range Mix
Poultry and Animal feeds, Farm fresh eggs, culled capons and Branded
Crown chicken Products for Crown Fast Foods
iv Installed Capacity
The farm currently produces 500 broilers per week but this proposal has a markrting
plan that will achieve 3000 broiler per day in five years.

Estimated Cost of Project

a. Fixed Cost 7 Milliom
b. Initial Working Capital 3 Million
c. Means of Finance Equity and Debt

Names of Financiers Mr Lufti A Hassan, Crown Poultry Farm

PROPOSED IMPLEMENTATION SCHEDULE

ORGANISATION AND OPERATION OF THE POULTRY CUM FEED MILL
ENTERPRISE
GOITLNS GNOTRYYUPP YRTLUOP
The holding company for the poultry meat business will revolve around a slaughter
house business as well as a hatchery as part of Branded Crown chicken production
and processing business.
The plant will run a slaughter line from the Dutch manufacturer Stork, handling about
1000 birds per day. The plant will be divided into three
 A cutting room

 A packaging plant

 A separate plant for the further processed and coated products.

The line will have a computer generated but manual grading system that sends the
carcasses for cutting and packing according to the quality and the weight.
 About half the birds will be send out whole while the rest will be cut up producing
wings, drumsticks e.t.c. the plant will employ 20 employees for the hatchery, feedmill
and the processing plant and will have a contractual arrangement with 200 farmers.

 stunning: the operation that produces a carcass with a constant value through
partial, manual stunning.

 Cutting: manual cutting will be done halal way after the automatic stunner has
been used.

 Defeathering: motorised feather plucking vats will be used and the personnel
will only attend to the removal of the finer feathers that will have been left out by
the plucked mostly due to the proximity of the fingers..

 Evisceration An evisceration machine will be used in this section..

 Water and air chilling systems. After evisceration there is need to drastically
reduce the temperatures so as to reduce the build up of the bacterial count.

 Weigh lines: These lines will be able to sort out the capons according to the
requirement of the customers for which they will be packed..

 Cut up and deboning systems will only be used in cases where portions and
further processing for a special niche of the customers will be envisiaged.
EQUIPMENTS.
This proposal is equipped with a variety of poultry processing equipment (see
Appendix) whose use will be dictated by several factors: how many live birds will be
collected, how far and how scattered are the producers and what product is to be
produced.

[A] FOR CHICKEN COLLECTION:

 Plastic poultry processing pails as an improvement of those used.
 Small aluminium vats of varied capacities.
 Collapsible crates.
 A pick up vehicle for collections.

[B] FOR PROCESSING:

 Stunning
 Cutting
 Defeathering
 Water and air chilling systems
 Weigh lines
 Cut up and deboning systems
[C] LABORATORY EQUIPMENT:
Check the bacterial load or the level of contamination in the finished products.
 [D] FOR MARKETING:
Initially large special cool boxes that will fit the pick-up will be used to transport the
finished products to the various destinations of the customers. Later on it is proposed
that a special pick-up with cold-room facilities will be procured for the purposes of
distribution of the finished products.
[E] PACKAGING CONSUMABLES:
 Assorted printed polybags for the dressed broiler chickens for display under
frozen conditions in various outlets.
 Plastic containers for the packaging of portions
 Assorted cleaning supplies.

ORGANISATION AND OPERATION OF THE POULTRY PROCESSING

PLANT:

[I] BIRD COLLECTION.

As a village based project, groups of poultry producers living within the project area
will be actively involved. The majority of the producers will deliver their own poultry
in the morning direct to the plant. Enterprises will be generated on the transportation
of the rest of the poultry with a variety of means.

The projects pick up vehicle will be concerned with producers or groups further away
from the unit. The poultry collector will test the ante mortem condition of the birds on
collection.

The unit’s notebook will contain the poultry quantity of the producer. Payments for
the poultry will be made twice a month. The unit or the producers may either pay the
person responsible for the poultry collection themselves.

[II] BIRD RECEPTION.

Bulk deliveries will undergo ante mortem tests, before stunning.

[III] CUTTING.
Manual cutting will be done halal way after the automatic stunner has been used.
 [IV] DEFEATHERING.
Motorised feather plucking vats will be used and the personnel will only attend to
the removal of the finer feathers that will have been left out by the plucker mostly due
to the proximity of the fingers

[V] EVISCERATION
An evisceration machine will be used in this section

[VI] WATER AND AIR CHILLING SYSTEMS.After evisceration there is

need to drastically reduce the temperatures so as to reduce the build up of the
bacterial count.

[VII] WEIGH LINES: These lines will be able to sort out the capons according to
the requirement of the customers for which they will be packed..

[VIII] CUT UP AND DEBONING SYSTEMS will only be used in cases where
portions and further processing for a special niche of the customers will be envisaged.

ORGANISATIONAL PLAN
The layout and design of units will be planned in such a way as to allow those
responsible for processing operations to work under the comfortable safe and hygienic
conditions. It is proposed that initially the factory should be able to process 1000
chickens in a day.

LAYOUT OF THE UNIT

The poultry unit has been proposed to provide a rational layout to allow those
responsible for processing operations to work efficiently. The cost for the
architectural drawings and bill of quantities is shown in the cost of this project at the
end of this proposal. The plant is expected to handle 1000 live chickens per day of
which 500 chickens will be for farm fresh chilled capons for the local market while
500 chickens will be for the portions and the further processing segment of the
market. The plan include the following rooms:
 Generator room
 Open area/ holding area for antemortem
 Dressing rooms/washrooms
 Stunning area
 Laboratory
 Storage tanks for water
 Cooling tank for de-feathered capons
 Water and air chilling systems
 Weigh lines
 Cut up and deboning systems
 Portions machine packaging area
 Offices
 Blast freezer
 Cold room

I Building the 3000 capacity layer house

II Setting up the feed milling line

III Starting the broiler line now that feeds can be formulated on the farm and some
sold to neighbouring farmer and the market.

I Building the 3000 capacity layer house

See the drawing in the appendix.

The Bill of quantities for the drawing to house 3000 layers as follows:

POULTRY HOUSE: TAKING OFF SHEET for 1000 layer Units

PIER FOUNDATION-Nominal mix 1:3:6
a. Cement: 6 bags
b. Sand: 1 ton
c. Gravel 2 tons
THE FLOOR: Timber/gum posts and off cuts
a. Timber 4 x 4 inches OR gum posts 100 mm dia for the framework:
17 pcs each 4m long
b. Off cuts 6 x 1 inch
162 pcs each 4m long, 15 cm wide
c. Nails-110 6-inch nails (framework), 650 3-inch nails (off cuts fixing)
WALLS AND PARTITIONS
a. Vertical posts
16 gum posts of dia 100mm OR 15 x 15 mm timber, each 2 m long
Angle plates b.
32 right angled plates with 2 holes in each flap with their bolts
c. Railings
35 gum posts dia 100mm OR 2 x 2 inch timber, each 4 m long
d. Off cuts
74 off cuts, each 4m long and 15mm wide
 e. Chicken wire
50m long 1m wide band of chicken wire
f. Nails
150 6-inch nails for railings
300 3-inch nails for wall off cuts
3 kg of staples for chicken wire
ROOF
a. Trusses

10 gum poles dia 100mm OR 4 x 2 timbers, each 6 m long

10 gum poles dia 100mm OR 4 x 2 timbers, each 4m long
100 6-inch nails
b. Purling
48 gum poles dia 100mm OR 2 x 2 inch timber, each 4m long
200 6-inch nails
c. Roofing sheets
64 roofing sheets, each 3m long
64 roofing sheets, each 2.5m long
9 kg of roofing nails
DOORS
a. ONE standard door and TWO doors fabricated from timber & off cuts remains
PRESERVATIVE:
a. 5 liters of wood preservative

GUIDELINES TO RAISING THE LAYER CHICKENS

MANAGEMENT OF THE LAYER FARM

The success of the egg-production business greatly depends on successful

management of the layer farm. Each factor discussed below contributes to the success
of your egg production business.

Housing and bedding

Poultry housing and equipment can be as simple as a shed roof with chicken wire
fencing, nests, water fountains and hand-filled feeders to an environmentally
controlled fully automated cage layer house. Make sure that the birds are given
adequate floor space. A maximum of three birds per square meter is recommended.
Provide birds with up to 100% (depending on severity of conditions) more floor space
than is recommended for temperate climates.

In the laying house, supply at least 1 nest per 4 females or at least provide one 10″ x
10″ nest for every 5 hens in your flock. Place nests 24″ above the floor and away from
the roosts. Keep the nesting material clean and dry.

Lighting, heating and ventilation

Heat stress is one of the major risk factors that one must consider in layer farm
management. The ideal temperature for laying hens is between 18 degrees and 29
degrees Celsius.
Air movement around birds at floor level has a beneficial cooling effect. In shade
houses, take full advantage of natural breezes using paddles or circulating fans in
periods of still weather and particularly during the heat of the day. In controlled
environment houses, use inlets with moveable louvers which can direct moving air
directly on to the birds at floor level.

In shade houses, natural daylight must be supplemented with artificial lighting in

order to obtain desirable lighting patterns which are necessary to adequately control
sexual maturity. A constant or decreasing lighting pattern during rearing is essential to
prevent too early sexual maturity. An increasing or constant light pattern is necessary
after 22-24 weeks of age.

Brooding equipment
Poultry housing should provide clean, dry, comfortable quarters for birds throughout
the year.

To brood chicks, you need adequate heat and space. The house and equipment should
be clean and in good repair.

Set up and warm the brooding area before the chicks arrive. Chicks will need a warm,
draft-free location with proper ventilation and access to clean water, appropriate feed
and protection.

The normal brooding period, when heat is required, is from the time chicks hatch until
they are about six weeks old. Chicks may be brooded many places on the farm. The
main requirements are adequate space, a reliable source of heat and proper ventilation.

A brooder house measuring should allow for a half square feet per chick to eight
weeks of age. The chick guard ring is 12 inches high arranged in a circle 6 feet in
diameter around the brooder stove. The feeders are placed in a spoke like arrangement
radiating outward from underneath the outer portion of the brooder canopy. This
provides chicks access to feed and allows them to move freely in and out from the
heat source.
Feeding equipment
The mechanics of feeding are nearly as important as the feed itself. Supply enough
feeder space so that all the birds can eat at the same time. When space is limited,
some birds don’t get enough to eat. Keep feed available for the birds constantly. Meal
feeding (giving a limited amount of feed several times each day) can reduce
productivity if not managed carefully.

Place feeders so the trough is at the level of the birds’ backs. This practice reduces
feed spillage, which encourages rodents, wastes feed, and costs money.

Watering equipment
The distribution of waterers should be such as to minimize the distance any bird has
to move in order to drink; ideally, both feed and water should be distributed so that no
bird has to move more than 1 1/2 meters to get its requirements.
Whenever possible, use a water supply such as well which provides cool water. Bury
or insulate water pipes to maintain the original coolness. Additionally, supply troughs
in which breeders may dip their combs and wattles so that evaporation of water cools
the blood supply in the combs and wattles. In extremely hot weather, do not place
drugs or other substances in the water which might decrease its palatability.

Miscellaneous equipment
For large scale farms, a feed mill is usually used to automate the distribution of feeds.
Feeds are distributed using an auger system. Egg transporting mechanisms are also
used to minimize the occurrence of human egg handling. These automatic egg
collectors are also used to place the eggs into plastic trays that will carry the eggs into
the processing and sorting facility via a large overhead belt.

Dead bird disposal

Disposal of dead birds on the farm continues to be a challenge from the standpoints of
cost, environmental safety, biosecurity and practicality. While we, hopefully, have to
deal with only a relatively small amount each day, disposal or preservation must also
occur daily in order to meet the above challenges.

Burial has been the method of choice for years because of its low cost and
convenience. A deep pit with inside framing and a tight-fitting cover can be
constructed, or an open trench prepared by a backhoe can be progressively filled.
Incineration is probably the most biologically safe method of disposal. It creates only
a small amount of benign waste that can be easily disposed of and does not attract
pests. It is also a serviceable option where a high water table or soil type precludes
excavation.

Biosecurity
As a bird owner, keeping your birds healthy is a top priority. Your birds can become
sick or die from exposure to just a few unseen bacteria, viruses, or parasites. In a
single day, these germs can multiply and infect all your birds. However, by practicing
biosecurity, you can keep your birds healthy.

Restrict access to your property and your birds. Consider fencing off the area where
your birds are to form a barrier between “clean” and “dirty” areas. The clean area is
the immediate area surrounding your birds, and the dirty or buffer area must be
considered to be infected with germs, even if the birds appear healthy and disease
free. Allow only people who take care of your birds to come into contact with them.

Scrubbing your shoes with a long handled scrub brush and disinfectant will remove
droppings, mud, or debris. Clothes should be washed in a washing machine with
laundry detergent. Wash your hands thoroughly with soap, water, and a disinfectant
before entering your bird area.

Keep cages, food, and water clean on a daily basis. Clean and disinfect equipment that
comes in contact with your birds or their droppings. That includes tools such as feed
scoops, shovels, rakes, and brooms. All manure must be removed before disinfectant
can work, so clean surfaces with soap and water first. Properly dispose of dead birds
by burial or incineration or take them to a landfill.

FLOCK CARE AND MANAGEMENT

Chick quality
Healthy flocks start from healthy stocks. So from the start, choose only healthy chicks
for the farm. Do not acquire chicks that have wet vents and dull eyes. Characteristics
of healthy chicks are dry, fluffy feathers, bright eyes and alert and active appearance.

Brooding
Sufficient heat should be provided to keep day-old chicks warm during the day or
night. Abrupt changes in brooder temperature should be avoided during the first two
weeks.

Provide adequate space for chicks as they grow. Overcrowding is one of the factors
affecting poor growth. Also provide a good light source, as a well-lighted brooder
encourages chicks to start feeding. Also prove good ventilation for chicks to avoid
future respiratory diseases. Egg-type chicks should be transferred from the brooding
house to the grower pens at six to eight weeks old. They are then transferred to the
laying house when they reach the age 16 to 18 weeks old or three weeks before they
lay eggs.

Make sure to provide anti-stress drugs, vitamins and minerals to the birds two to five
days before and after their transfer. Also make sure the bird houses are thoroughly
cleaned before the birds are transferred.

Commercial layer strains in use today yield high numbers of productive pullets when
reared under recommended breeder guidelines to be at target body weights at the
desired time of reaching sexual maturity. The only selection in most instances is to
remove deformed, unhealthy, and grossly underdeveloped birds when the move is
made from the growing to the laying house.

The head should be moderately long and well-filled in forward to the eyes to avoid a
crow-headed appearance. The face should be clean-cut, smooth and free from
wrinkles. The comb should be large and bright red in color. The eyes should be large,
bright, and prominent.
The pullet should be fully feathered with plumage of good quality. Shanks should
show a good healthy color, but place no emphasis on color intensity with birds of this
age. Feet and toes should be completely normal and the bird should be well balanced
on her legs.

The body should be deep, broad, and well developed, with a heart girth of ample
circumference. The keel should be of good length and the back should be relatively
long, broad, and flat.

Sexual maturity should be expressed by size and development of the comb and
wattles. Early sexual maturity should not be encouraged and size of development
should be preferable to sexual maturity.

Layer hens may start laying eggs at age 20 to 22 weeks. They will reach maximum
egg production at age 30 weeks to 36 weeks. Egg production of pullets older than 36
weeks may decline then level off. It is also during the first year that layer hens
undergo the process of molting. Poor layers will molt early, and late molters are
generally the good layers. Layer may produce 10% to 20% less eggs during the
second year of production. However, they will also produce larger eggs.

Nutrition and formulating feed for the layer flock

Nutrition and feed are very important factors in ensuring the good performance of
hens. Make sure you provide the flock with proper feeds and nutrients to get quality
eggs during harvest.

Feed requirement
Feed newly hatched chicks a starter diet until they are about six weeks old. Starter
diets are formulated to give proper nutrition to fast growing baby chickens. These
feeds usually contain between 18% and 20% protein.

It is not necessary to feed “meat bird starter” to young layer chickens. Diets
formulated for starting meat chickens are higher in protein (22% to maximize growth,
which is not necessary or desirable for egg laying chickens and is higher in cost. Once
the birds reach about six weeks of age, substitute a grower feed for the starter. Grower
feeds are about 15% or 16% protein and are formulated to sustain good growth to
maturity.

After about 14 weeks of age, you can substitute the grower feed with developer feeds
if they are available. These feeds are lower in protein than grower feeds (14% to 15%)
and are formulated to prepare young chickens for egg production. Remember, these
two feed types are virtually interchangeable; either one can be fed to chickens
between six weeks of age and the beginning of egg production.

Once your chickens begin laying eggs, you can choose between layer and breeder
feeds. Your choice of feed at this stage depends on how the eggs will be used.

Layer feeds are formulated for chickens that are laying table eggs (those used for
food). Layer feeds contain about 16% protein and extra calcium so the chickens will
lay eggs with strong shells. Start feeding layer feeds at about 20 weeks of age or when
the first egg is laid, whichever occurs first.
Breeder feeds are formulated for chickens that are producing eggs for hatching. These
feeds basically are layer feeds containing slightly more protein and fortified with extra
vitamins for proper chick development and hatching. However, use of breeder feeds is
somewhat questionable for the small flock producer, since the increased cost may not
be justified by the potentially slight increase in hatchability.

Nutrient requirements
What we feed our chickens is very important. Chickens use feed for two main
purposes: as an energy source to maintain body temperature and to carry on activities
such as breathing, walking, eating and digesting the feed and as building material for
the development of bone, flesh, feathers and eggs. The feed that chickens eat is made
up of water, carbohydrates, fats, proteins, minerals and vitamins. Each nutrient serves
a special need.

Carbohydrates make up the biggest share of the poultry diet. In the form of starches or
simple sugars, that are needed for body maintenance and energy. Important sources of
carbohydrates in poultry feeds are maize and various other grains.

Proteins are complex compounds made up of amino acids. Feed proteins are broken
down into amino acids by digestion and converted into boy proteins. Body proteins
are used in the construction of body tissue. Tissues that mainly consist of protein are
muscles, nerves, cartilage, skin, feathers and beak. The albumin (white) of the egg is
also high in protein.

The mineral portion of the feed is inorganic matter. Minerals, especially calcium and
phosphorus, help build bones and make them strong and rigid. Laying hens also
require minerals for eggshell formation.

Grains are low in minerals, so supplements are necessary. Calcium, phosphorus and
salt are needed in the greatest amounts. Bone meal and defluorinated and dicalcium
phosphates supply additional calcium and phosphorus. Ground limestone and oyster
shell are good calcium sources. Trace levels of iodine, iron, manganese and zinc are
also included in mineral supplements.

Vitamins occur in feeds in small amounts, but they are absolutely necessary for
growth, reproduction and the maintenance of health. They occur in feedstuffs in
varying quantities and in different combinations Vitamin A is necessary for the health
and proper functioning of the skin and lining of the digestive, reproductive and
respiratory tracts. Vitamin D plays an important role in bone formation and the
metabolism of calcium and phosphorus. The B vitamins are involved in energy
metabolism and in many other metabolic functions.

SUMMARY: FEED REQUIREMENTS PER BIRD

TYPE OF FEED PERIOD QUANTITY IN KG
Chick and Duck 0 to 8 weeks 3.8
Growers mash 9 to 20 weeks 7.5
Layers mash Laying period Allow 130 grams per day

The table above can be used as a near accurate estimate of the budget you would want
to adopt on the farm.
Feeding 6 to 20 weeks

Between 6 and 2.0 weeks, feed your layers with Chick Grower Mash 15 % protein.
For 100 layers, you need this much mash:

(weeks) Feed for light breeds(kq) Feed for heavy breeds(kq)

6 4,0 4,5
7 4,0 4,5
8 4,0 4,8
9 4,5 5,0
IO 4,5 5,2
11 5,0 5,4
12 5,O 5,7
13 5,4 5,9
14 5,4 6,1
15 6,0 6,4
16 6,0 6,6
17 6,4 6,8
18 6,4 7,0
19 6,8 7,3
20 6,8 7,5

SWOT ANALYSIS
Strengths
 Investment in the Animal and Poultry sector is increasing day by day and
quality feed is a pre-requisite in profitable dairy and livestock farming.
 Feed Processing Unit establishing according to modern techniques with
proper utilization of locally available cheaper feedstuffs leads to success in
dairy and livestock farming hence for feed business too.

Weaknesses
 Limited availability of protein sources of standard quality due to low or
limited production, processing technology, variable composition and
adulteration- Kenya is a net importer from Tanzania and Uganda
 Comparatively poor nutrient composition of home-grown feed ingredients
due to differences in varieties and use of improper soil fertilizers.
 Improper use of pesticides, the residues of which result in poor feed
utilization.
 Lack of proper storage facility. Due to this fact various agricultural products
when produced under quite high moisture content, thus liable to be affected
 with insect damage, auto-oxidation and fungal contamination. Crown Poultry
will have an advantage.
 Lack of nutritional data of indigenous feed ingredients particularly for amino
acids, energy, vitamins, minerals and by pass protein value especially in high
producing cattle. Crown Poultry already has nutritional analysis capabilities
developed in other ventures.
 Improper storage, transfer, grading, feed milling and mixing of feed
ingredients may also affect the quality of feed.

Opportunities
 The annual growth rate in livestock population of Kenya was 3.8 percent
(Economic Survey of MoLD, 2007-08) due to which there is demand for
compound feed. The increased productivity would require better feed
utilization and increase in overall feed availability both from fodder crops and
formulated compound feed.
 The agro industrial by products can be better utilized in formulated compound
feed.
 In order to meet the rapidly increasing demand for the various kinds of
livestock products (Milk & meats), the better rations with improved feed
formula are needed to get more meat and milk, for the same feed supplies. By
increasing livestock numbers, rather than their average weight, the feed
requirements are much larger as the EAC opens newer opportunities for
exports.

Threats
 Implementation of WTO. Open and competitive commodity pricing
 There is no feed ingredient quality control program as improper storage,
transfer, grading, feed milling and mixing of feed ingredients may also affect
the quality of feed.
 The prices of different feedstuffs vary throughout the year. Improper storage
of raw material can affect its nutritional value.
  There is limited availability of protein sources of standard quality due to low
or static production, processing technology, variable composition and
adulteration.
 Lack of awareness among dairy and livestock farmers to use compound feed
for the high production of their animals is a constant threat for feed mill
business as well.

MARKET STRATEGY
Through making animal feeds, accessibility to farmers at reasonable costs, the
proposed project will lead to increased higher incomes in the region due to reduced
cost of inputs. The project will also directly or indirectly create employment in the
region. Directly the project will engage labour from the region in realizing its
objectives. Indirectly the project will purchase inputs and other requirements from the
region and its neighbors,increasing cross border trade. The approach will engage the
community thus engaging farmers in their production in a Community development
model, similar to the model that established the successful First Community Bank Ltd
. Livestock keeping and poultry farming are to be made more affordable in the region
when the project is implemented, with the aim that the pooled resources will enable
exports to the Middle East and Southern Africa.

With the Meeting and Marketing approach and the establishment of a community run
Branded Crown Poultry and Feeds franchise, this enterprise will not be in competition
with other established brands as Kuku Mfalme, Golden Chick etc but will create an
innovative niche through on farm feed formulation approach, making the mentioned
brands customers instead.

TECHNICAL ANALYSIS
Farmers in Coastal Kenya and in the neighborhood areas will provide the bulk of the
market for the processed animal feeds. The rapid growth in population in town has
increased the demand the demand for food and especially animal and poultry
products. This will act as an incentive for farmers to purchase feeds to produce quality
poultry and animal products for the ever-expanding markets. The existence of a cash
crop in the area and the pronderance of off farm activities in the region, make the
farmers in the area reasonable target as they have the ability to purchase inputs. It is
estimated that even though the demand for various types of animal feeds stand at 6000
tonnes per year for Mtwapa only, all of which is only available from other regions,
representing about 42%. ( Economic survey, 1996). The farm currently produces 500
broilers per week but this proposal has a marketing plan that will achieve 3000 broiler
per day in five years.
The proposed project also targets to start producing 1526 tones of animal and poultry
feeds in the first year. This is to expand to about 2000 tones in second year and to
about 15000 tones at the end of the project years (10)
PRODUCT MANUFACTURING PROCESS
The compound feed preparation process requires.
a) High accuracy and precision of weighing
b) feed ingredient handling and processing
c) Mixing
d) Packing
e) Labeling

A liquid storage and a direct-weight system for adding fat, molasses, and water is
required.
Grain processing is done through hammer mill grinding. Mixed feed is delivered in
bags or bulk load out to livestock farms.

FEED MILLING PROCESSES AT CROWN FEEDS LTD.

The mortality rate of industrial enterprises in this country is alarming. This is due to
the high cost of production, lack of an entrepreneurial culture, lack of adequate
infrastructure, lack of access to markets, finances and business development services
(BDS).
Feed manufacturing and the associated quality control programme are keys to
successful farming. Unless the farmer understands and specifies the activities of the
feed mill it will be futile for a farm enterprise to engage itself in the processing
portion of the investiment.

It is also not advisable to engage in the milling endavour unless there is a comparative
advantage in the availability of certain raw ingredients. At Crown farm, the venture
has been recommended on the precinct that maizegerm and wheat cereal by-products
such as pollard, broken wheat and wheat bran , ricebran etc are abundantly available
in the area. The other advantage is the location being ideal in that other feed types as
dairymeal and pig feeds will be easily sold to surrounding farmers in Mtwapa.

Dry feeds may be ground, sifted, screened, mixed, compressed, expanded, texturized,
coloured and even flavoured. These practices will be embraced slowly as the
appropriate machinery are acquired. Recommendations herein should be considered
as guidelines and summaries of important processes in feed milling and are similar
across board as far as various classes of livestock are concerned.

INITIAL FEEDMILL PRODUCTS

TYPES OF MASHES
1. Chick mash : These are the mash which are given to chicks from day one (1) to
their eight (8) weeks of age depending on the choice of the farm it is very high in
protein and energy
2. Growers mash: These are the mash given to the birds from their eight (8) weeks
to sixteen (16) weeks of age. The energy and protein level is reduced while the fibre
content is increased.
3. Pre-layers mash : Pre layers mash are the feed given to the pullet from their
seventeen (17) weeks to their twenty (20) weeks of age. Energy and protein level
will be increased a bit
4. Layers mash:These are the mash given to the layer from their 20 weeks of age
and above. The protein and energy level will be increased while the fibre level will
be reduced.
5. Broiler starter mash: It is the mash given to the broiler from their day one (1) to
their four (4) weeks of age
6. Broiler finishers mash: these is the mash given to the broilers from their fourth
(4) weeks of age and above

The above products can be made into pellets as per the customer’s requirements.

GRINDING
Hammermills

Hammermills are mostly impact grinders with swinging or stationary steel bars
forcing ingredients against a circular screen or solid serrated section designated as a
striking plate (Figure 1). Material is held in the grinding chamber until it is reduced to
the size of the openings in the screen. The number of hammers on a rotating shaft,
their size, arrangement, sharpness, the speed of rotation, wear patterns, and clearance
at the tip relative to the screen or striking plate are important variables in grinding
capacity and the appearance of the product. Heat imparted to the material, due to the
work of grinding, is related to the time it is held within the chamber and the air flow
characteristics. Impact grinding is most efficient with dry, low-fat ingredients,
although many other materials may be reduced in size by proper screen selection and
regulated intake.

Most hammermills have a horizontal drive shaft which suspends vertical hammers but
for some ingredients, such as dried animal byproducts, a "vertical" hammermill is
more efficient. In this mill, the drive shaft is positioned vertically and screens and
hammers are positioned horizontally. Material successfully reduced in size to the
diameter of screen holes or smaller, are carried by gravity outside the mill and thence
by air or conveyor to storage in "make-up" bins. Over-size particles, not easily
broken, drop through the mill and may be re-cycled or discarded. Thus foreign
materials, such as metal and stones, are discharged before they are forced through the
screen causing damage.

MIXING
The objective of feed mixing is to start with a certain assortment of ingredients called
a "formula", totalling some definite weight. This is processed so that each small unit
of the whole, either a mouthful or a day's feeding, is the same proportion as the
original formula. Mixing is recognized as an empirical unit operation, which means
that it is more of an art than a science and must be learned by experience.

Feed mixing may include all possible combinations of solids and liquids. Within each
ingredient are differences in physical properties. For solids there are differences in
particle size, shape, density, electostatic charge, coefficient of friction as represented
by the angle of repose, elasticity or resilience and, of course, colour, odour, and taste.
For liquids there are differences in viscosity and density.
The term "mixed" can mean either blended, implying uniformity, or made up of
dissimilar parts, implying scattering. As applied to formula feeds, the objective of
mixing combines each of these definitions; i.e., the scattering of dissimilar parts into a
blend. However, it is improbable that uniformity is attained with particles within a,
sample arranged in some order of position or concentration. That is only a quality
control; goal. It has been suggested that a proper title for a discussion of mixing
should be "mixing and unmixing", for during the operation there is a constant
tendency of particles which have been mixed to become separated. Three mechanisms
are involved in the mixing process:

(a) The transfer of groups of adjacent particles from one location in the mass to
another,

(b) Diffusion distribution of particles over a freshly developed surface,

(c) Shear slipping of particles between others in the mass.

In theory, the position of particles within a container is determined by chance, and the
effects of chance accumulate until they outweigh the direct effects of mixing action.
In the mixing of liquids, chance movement of components creates order or uniformity.
With dry solids, chance distribution creates disorder. When disorder is at a more or
less stable maximum, it may be called "random". Many factors in dry solids cause
particles to avoid a chance or random arrangement. In fact, the result of mixing feed
ingredients may be a definite pattern of particle segregation or non-random
arrangement.

Particle segregation is due to differences in the physical properties of ingredients and

the shape and surface characteristics of the mixer. Particle size may be the most
important factor in causing segregation. An improvement in mixing which approaches
random distribution of solids by decreasing particle size can be measured
quantitatively by statistical methods. In general, the smaller and the more uniformally
sized the ingredients are prepared, the more nearly they will approach random
distribution during mixing.

In many formulae, a decrease in particle size is necessary to attain a sufficient number

of particles of an essential additive (vitamin, mineral, medication) for dispersion in
each daily feed unit. This may require the particle size to be the diameter of dust, 10
to 50 microns. Certain ingredients are unstable in finely divided form and likely to
acquire an electrostatic charge. Concentration of particles on a charged surface,
roughness of the mixed and stickiness of oily and wet ingredients are factors in
causing segregation when very small particles are mixed and when these are much
smaller than the bulk of other ingredients.

Mixing may be either a batch or a continuous process. Batch mixing can be done on
an open flat surface with shovels or in containers shaped as cylinders, half-cylinders,
cones or twin-cones with fixed baffles or moving augers, spirals, or paddles.
Continuous mixing proportions by weight or volume, is a technique best suited for
formula feeds with few ingredients and minimal changes.
Vertical mixers may consist of a cylinder, cone, or hopper-shaped container, with a
single or double screw (auger) located vertically through the centre (Figure 3). The
screw operates at speeds of 100 to 200 rpm and vertically conveys incoming materials
from the bottom (generally the intake) end, like a screw conveyor, to the top where
they are scattered and fall by gravity. This sequence is repeated several times until a
blend is attained (usually from 10 to 12 minutes). These mixers may also be loaded
from the top. Results show that vertical mixers are not efficient for uniform mixing of
solids and liquids or for materials of quite different particle size or density. This unit
is difficult to clean and there may be inter-batch contamination.

This is the model recommended for mixing feeds on-farm and enquiries can be
directed to Naku Poly Enterprises tel. 0726283222 attention Mr Mbugua or CAMCO
Enterprises opposite City Stadium Nairobi, 0702829281/0702829268/0719594630 or
email camcokenya@163.com

Mixing Operation and Evaluation

Accurate mixing requires the addition of ingredients in a tested sequence from batch
to batch. The usual practice is to add large-volume ingredients first, then those of
smaller amount. Unless already premixed, liquids should be added after all dry
ingredients have been mixed. Total mixing time is critical and is influenced by the
composition of the formula. All mixers should be calibrated by laboratory recovery of
known additives (physically or chemically) so that under and over mixing does not
occur. Uniformly sized salt, graphite, or iron particles coated with water soluble dyes
are often used as "tracers". Each mixer should be calibrated for its mixing time and
capacity by volume for best results.
PELLETING
The transformation of a soft, often dusty feed into a hard pellet is accomplished by
compression, extrusion, and adhesion. The general process involves passing a feed
mixture through a conditioning chamber where 4 to 6 percent water (usually as steam)
may be added. Moisture provides lubrication for compression and extrusion and in the
presence of heat causes some gelatinization of raw starch present on the surface of
vegetative ingredients, resulting in adhesion. Within 20 seconds of entering the pellet
mill, feed goes from an air-dry (about 10-12 percent moisture) condition at ambient
temperature, to 15-16 percent moisture at 80-90°C. During subsequent compression
and extrusion through holes in a ring' die, friction further increases feed temperature
to nearly 92°C. Pellets discharged onto a screen belt of a horizontal tunnel drier or
into a vertical screened hopper are air-cooled within 10 minutes to slightly above
ambient temperatures and dried to below 13 percent moisture.

Contrary to early belief, finished pellets contain practically all the nutrients found in
feedstuffs and additives as compounded. The loss of thermolabile vitamins used in
additives, which may be slight or extensive in the case of vitamin C, may be
compensated for by extra supplementation of these in the vitamin premix to comply
with formula requirements. Diastatic enzymes (alpha and beta amylase) present in
whole grains and cereal byproducts are still active after processing by grinding and
pelleting, although powdered enzymes added as an ingredient are inactivated.

Application

Mechanically, the process of pelleting involves forcing soft feed through holes in a
metal ring-type die. These holes may be round or square, tapered or non-tapered.
Single or double rolls mounted inside the die ring on a cam or eccentric, turn on a
rotating shaft as friction develops (due to the presence of feed between roll and die).
Feed is forced through the die holes in increments so that dissection of a finished
pellet shows tight layers of feed mixture. The die is driven by a motor and the rolls
turn only as feed between rolls and die develops friction.

To make dry feed particles pliable for close compression and to decrease friction and
absorb mechanical heat, water is often added to the feed, either as the formula is
mixed or in the conditioning chamber of the pellet mill. Water may be provided as
liquid and/or vapour. If water is provided in the form of steam, two objectives are
accomplished:

(a) a high volume of water vapour condenses on the surface of feed particles, wetting
and softening them for better compression, and

(b) the high temperatures of this steam cause some gelatinization of raw starch present
in all vegetative ingredients, providing the necessary adhesion for firm pellets.

If sufficient moisture cannot be added as steam, pretreatment with water may be used
to gain the desired lubricating effect.
It is not absolutely necessary to add steam to a soft feed in order to compress it into a
pellet. Materials such as rice bran, ground cottonseeds, and palm kernel cake may be
pelleted with no added moisture. The resulting pellets are often slightly charred from
high temperature and the electrical energy consumption is much more than would be
needed if moisture were added. The high fat content of these materials provides
lubrication, but this does not soften the fibre sufficiently to avoid excessive heating
caused by friction. The ring die and rolls of a pellet mill exposed to high temperatures
show metal fatigue and must be replaced often. The proper conditioning of
dehydrated alfalfa meal will permit the manufacture of over 2 000 tons of pellets
during the life of a standard die of 40 mm thickness.

Overall, the texture of a soft feed mixture is changed from a meal-like material with
bulk density approximately 0.4 g/cc, to a pellet with bulk density of 0.5 - 0.6 g/cc.
Within the ring die, pressures of 75-600 kg/cm2 are attained. Feed mixtures containing
large amounts of fibrous ingredients often result in pellets too hard for gastric
breakdown and digestion in fish. On the other hand, high-fat feeds and an excess of
moisture cause poor quality pellets. Pellet quality may be defined as a certain
hardness or water stability which assures efficient use without loss in handling on
land or in water.

Feed formulation and operation of the pellet mill may be balanced to supply fish with
a feed that is acceptable, available, and easily digested. The inter-dependent variables
present in ingredient selection are subjects for research in each area of fish culture and
for each fish species. Variables resulting from mechanical operation of the equipment
may be listed here:

(a) Pellet die thickness as related to diameter of hole is a factor in pellet quality.

(b) Speed of rotation should also be considered for each die thickness/hole diameter
combination.

(c) The speed at which feed is introduced into the feed-conditioning chamber affects
the moisture/temperature relationship which in turn relates to pellet quality.

(d) The amount of steam added to a given volume of feed should be in balance such
that the drive motor on the pellet mill is operating at its maximum amperage. The
opening of the steam valve at the pellet mill has a direct relation to the amount of
water entering the feed as steam at any given steam pressure.

(e) Atmospheric conditions in the factory, especially relative humidity, which pre-
condition the ingredients before processing, will affect die selection and operational
settings.

All of the above items must be examined for each feed formula, which shows that
pelleting is more of an art than a science. It should be emphasized again that the pellet
mill operates most efficiently when the motor amperage use is optimum for the
voltage available. It is important to watch the ammeter gauge frequently during
pelleting. At the start of a pelleting operation, a small amount of soft dry feed enters
the pellet chamber for compression and the gauge will respond to the load with less
than optimum results. The addition of steam results in a lowered reading, showing the
lubricating effect. More dry feed may now enter the conditioning chamber and, as it
reaches the die, the ammeter will move to a higher reading. Additional steam will
lower this. By adjusting the dry feed intake and the steam valve opening, a stable
condition will result where the motor is operating at its maximum rated amperage and
pellet production will be at maximum capacity. The diagrams shown in this proposal
are a cut-out diagram of a large-capacity (200 hp) pellet mill. Although power
transmission by means of a V-belt drive is shown (1), gear drive coupling of motor to
the main shaft (2) is also possible. Feed from a surge bin (3) is metered into the steam
conditioning chamber by a variable speed screw feeder (4). Paddles shown in the
steam conditioning chamber (5) agitate the feed to ensure even blending of feed and
steam. The conditioned feed is then fed by means of a distributor auger (6) into the
pelletizing chamber (7) where it is extruded through the die (8). As the die rotates,
feed is pressed against its inner wall by a set of 3 rollers (9). Due to its high rotational
speed and heavy load, the die has to be securely harnessed to the shaft. This is
achieved by means of a two-piece die cover assembly (10) and 12 strong bolts (11).
The rollers usually have a hardened shell with indentations on the surface to provide
traction and to reduce slippage of feed. Feed within the pelletizing chamber is
continuously redistributed by adjustable feed ploughs (12). Extruded pellets of
appropriate lengths are cut off by an assembly of knives (not shown) mounted on the
inside of the die casing.

Flat Die Pellet Press

My recommendation is that you can explore the possibilities of acquiring the mill
specified below from China for a start before we think of a turnkey operation. With
the fast development of feeding animals industry and biomass energy saving project,
this kind of Flat Die Pellet Press machine is very popular. Since it not only can
process the feedstuff for animals, such as feed for fish, chicken, etc, but also can
process the waste biomass material to wood pellet. This machine has history for more
than 10 years. ( See Appendix)

Raw Materials

The raw materials for the projects which are mainly agricultural products are all
available in the region. These include maize, millet and sorghum. Rice bran is
available from the threshing in the vast rice belt in the Tana region, and it is a major
product from the rice belts of the Coastal Region. Sardines from fish traders,
especially sardine bran from shiftings in the cleaning process is increasingly
becoming a low cost rich nutrient ingredients including cotton seed cake, wheat bran
and salt are also found in the region.
The other raw materials, water and electricity are already installed in the town
reducing their cost per tonne of feed produced when the project is implemented
BROILER STARTER MASH
MAIZE GERM 175 20 3500
SALINOMYCIN(ROBENIDING) 0.5 350 175
WHEAT BRAN 44 14 616
LYSIN 0.5 500 250
SOYA 128 89 11392
SUNFLOWER 106 25 2650
MAGADI 4 5 20
LIMESTONE 28 9 252
POLLARD 132 19 2508
OMENA 194 80 15520
BONE MEAL 22 50 1100
YEAST CULTURE 1 500 500
CHICK PREMIX 2 285 570
D.C.P 4 55 220
TOXTIN 0.5 350 175
MAIZE GRAIN 140 30 4200 milling total
981.5 43648 3924 47572
48.50 per Kg

BROILER FINISHER
MAIZE GERM 280 20 5600
MAIZE GRAIN 156 30 4680
WHEAT BRAN 66 14 924
POLLARD 140 19 2660
SOYA 94 89 8366
SUNFLOWER 92 25 2300
 OMENA 106 80 8480
BONE MEAL 26 50 1300
LIMESTONE 28 9 252
MAGADI 4 5 20
D.C.P 4.5 55 247.5
LYSIN 0.5 500 250
SALINOMYCIN 0.4 350 140
TOXTIN 0.5 350 175
BROILER PREMIX 2 265 530
YEAST CULTURE 1 500 500 gllllim
1000.9 36424.5 3923 40347.5
41 per
Kg

The Hammer mill

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 PRODUCTION AND PACKAGING

The production process would involve fine processing and mixing materials to meet
the Kenya animal feed standards as specified in the Kenya bureau of Standard
manual. The main equipment in the production will be a feed mixer machine., to fine
grade and mix the ingredient. This will be installed at Ciku’s farm which will serve as
an outlet to the produce. The produce will be packed in 70kg bags. All weights and
quality standards will be strictly adhered to.

Environment Concern

Neither the raw materials nor the products of the proposed projects are environmental
or health hazards. The project is therefore environmentally friendly. The promoter is
keen to see high standards of hygiene and environment in this venture. An
Environmental Impact Assesment or EMP may suffice.

Legislation, Licensing and Management

The enterprise, because of the capital involved will be a private registered enterprise.
The enterprise will however remain a small enterprise and registered under the
Federation of Small Scale Enterprises of Kenya ( FSEK). the enterprise will be a
licensed enterprise and subject to the relevant company act Kenya ( Cap 58)
The enterprise will be solely managed by the promoter with support of staff to be
recruited. The day to day affairs of the project will be handled by an administrator
who will be answerable to the manager. Staff to be recruited include a machine
operator, input delivery and product evacuation staff and security guard. Besides, it
will be necessary to hire an animal feed nutritionist to be in charge of the production.

Equipment and Installation expenses

As mentioned earlier, the processing of animal feeds will require use of equipment,
namely a feed mixer, feed hauler and weighing machine. Besides a pick up vehicle
and a computer will be necessary for the day to day running of the enterprise. It is
proposed that the mixer and the haulier be purchased as new while the weighing
machine and the vehicle be purchased as second hand. The table I below summarizes
the investment costs for equipment and installation.

Table I- Investment Costs in kshs. ( Equipment and Installation)

Description Quantity Costs Life span Depreciation

Rate
OiRtRiiRtdaRIwstimmR 1 066,666 06
Ctmrstrma rate
R irltmmROiRtRiiRtda 0 066,666 16
UirRaR
 Feed Hammer mill 2 432,000 10 10%

Feed mixer 1 225000 10 10%

IlwtROlaR allatlaam 1 000666 16

allatRRsiillimR R1 R 06,666 R
R swnliat
RaiRhwmRRtlsdlimR R0 R 06666 R
R gwsdliaR
Vehicle ( Pick up) 2 - 5 20%

Weighing machine 1 50000 10 10%

Electricity 200000
Installation
Telephone 15000
Installation
Computer 1 - 10 20%

Total 2,686,000

Recurrent Annual Costs

As costs in the first year, rental charges, input costs, labour costs, electricity and
transport costs will be the most important.

i. Rental Costs

The average rental cost in Mtwapa town for an average 150 m3 space is about Kshs
4000 per year may be negotiated with caveats on construction arrangements. This cost
will be waived because the promoter of the project will be on his own farm. This was
found cheaper than constructing own premises for the project. It is assumed that the
rental charges will remain the same or vary slightly in the 10 years.

ii. Input costs

Cotton seed cakes, wheat and sorghum bran, rice and maize germ will be used in the
production of the animal feeds. Besides sardines from Lake victoria and salt will be
utilized in the process. The raw materials are all locally available. Most of these
materials are locally available. The total input cost will be determined by the per unit
 value of the inputs that go into a particular feed mix. Appendix table 6 summarizes
the per unit price

The prices of the maize germ, rice germ, wheat bran and salt are likely to remain the
same over the project life with slight fluctuations . Prices of sardines fluctuate a great
deal with seasons but will generally be around Kshs 20 per kg because of use of
sardine bran which is cheaper.

iii. Labour Costs

For the day to day running of the enterprise, 8 personnel ( excluding the promoter)
will be required. These will include the 1 technician ( Nutritionist). 4 machine
operators, 2 drivers and 1 security guard. The salary of the Technician will be Kshs
9000 per month while the machine operators and the drivers will earn Kshs 5000 per
month. The guard will draw a salary of Kshs 2500 per month. The wages for the said
employees will be assumed to go up by 10% after the fifth year.
iv. Selling and Transport costs

This mainly constitute fuel and other expenses incurred in distributing the produce
and in the sourcing of the raw materials for production. It is assumed that the daily
requirements for transport is Kshs 450/= per day and Kshs 12,000 per month per
vehicle. It is also assumed that the expenses will remain the same for the entire project
life. This is because farmers groups under the project should collect the concentrate
using their own transport means

v. Electricity and telephone Charges.

Electricity and telephone charges will be assumed to be Kshs 18,000 and Kshs 1,000
respectively per month. These could however be higher or lower depending on the use
and changes in tariff. However it will be assumed that the rates will remain the same
for the entire project life. Table 2 below summarizes the initial recurrent costs for thee
project

Table 2. Initial recurrent Costs

Cost description Amount in Kshs.

Rent NA
Input costs 1530730
Labour costs 41500 (PROVIDED)
Selling and Transport costs 24000
Electricity 18000
Telephone 1000
Insurance 2900
Total Initial recurrent expenses

Enterprise expected Output, Prices and revenue

Three main products will be produced in the project, namely dairy meal, chicken
feeds and pig feeds. 1500 tonnes of animal feed are expected to be produced in the
first year. This is top be expanded to 2000 tones in the second year. The monthly and
annual breakdown of output prices and revenues are summarized in Appendix Table I.
The prices are determined on a per unit basis with reasonable profit margin. It is
assumed that the product prices will remain the same at least for the first five project
years.

Enterprise Costs
The prices per unit out put for the products is presented in Appendix Table 6 while the
initial investment recurrent costs for the project was presented in table 2. The cost for
the first project year and for the preceding 4 years are now presented in Appendix
table 2.

Summary of the project Expenses and Returns ( Profits)

The total revenue and the Total cost of the projects have been summarized in
Appendix Table 1 and 2 respectively. The profit status of the proposed project is now
presented in Appendix Table 3. Given that the enterprise will be a small scale
enterprise with less than 5 employees and based in a rural center( near Mtwapa), there
will be a tax rebate of up to 5 years. However, a negligible registration fee will be
paid every year. Depreciation rates used for the calculations are as shown in table I
above.

Cash flow analysis

The project cash flow situation is depicted in Appendix Table 4.. this depicts the
project sources and uses of finance for the first project year and succeeding 4 years.

Credit payment

The credit will be secured from a Bank, where the promoter of the project is a
member. The loan is to be paid back in 72 months and will attract an interest rate of
12% per annum. There is no grace [period attached to this. As collateral to the loan,
the promoter will use his land and the conditions that regulate Strategic invester . The
credit repayment plan is diplayed in Table 4 below.

Table 4: Credit repayment plan

Year Amount at the End year principal End of year interest

beginning of the paid paid
Year
1 2000000 66667 20333
2 133328 66667 12333
3 66672 66667 4332
Total 200000 36998
 Appendix table 6.
Feed composition showing possible combination of ingredients
Inputs % Dairy Amounts % Pig Amount % Chicken Amount Totals
meal feeds s feed s
Maize 40 100000 40000 45 65000 29250 40 35000 14000 83250
Cotton 10 100000 10000 5 65000 3250 10 35000 3500 16750
Hay 20 100000 20000 25 65000 16250 10 35000 3500 36250
Wheat 10 100000 10000 5 65000 3250 1 35000 3500 16750
Sorghum 5 100000 5000 5 65000 3250 10 35000 3500 11750
Rice bran 5 100000 5000 5 65000 3250 10 35000 3500 11750
Sardine 5 100000 5000 5 65000 3250 10 35000 3500 11750
Premix 5 100000 5000 5 65000 3250 5 35000 1750 10000
Soya bean 5 35000 1750 1750
Total 100 100000 100 65000 100 35000 200000

B] Out put prices , input price and per unit price determination per kg
 Inputs Dairy concentrate Pig concentrate Chicken feed
Price %in kg Cost/kg % in kg Cost/k % in kg Cost/kg
per feed g
kg
Maize germ 5 0,4 2 0,45 2,25 0,4 2
Hay 0,25 0,2 0,05 0,25 0,625 0,1 0
Soya bean 5 0 - 0 0,1 0,5
Cotton seed 6 0,1 0,6 0,05 0,3 0,15 0,6
Wheat bran 4 0,1 0,4 0,05 0,2 0,1 0,6
Sorghum 2 0,05 0,1 0,05 0,1 0

Sardines 10 0,05 0,5 0,05 0,05 0,1 1

Rice bran 4 0,05 0,2 0,05 0,2 0,1 0,4
Premix 4 0,05 0,2 0,05 0,2 0,05 0,2

Total 1 4,05 1 3,3625 1 5,3

Appendix Table 1 Turnover for the First and subsequent Project
Years

Months

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 3 5
Item description

1. Dairy
Concentrate
Amount 22728 22728 22728 22728 22728 22728 22728 22728 22728 22728 22728 22728 22728 22728 22728 22728
Price 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8
Revenue 181824 181824 181824 181824 181824 181824 181824 181824 181824 181824 181824 181824 181824 181824 181824 181824

2. Pig feed
Amount 14773 14773 14773 14773 14773 14773 14773 14773 14773 14773 14773 14773 14773 14773 14773 14773
Price 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6
Revenue 88638 88638 88638 88638 88638 88638 88638 88638 88638 88638 88638 88638 88638 88638 88638 88638

3. Chicken
feed
Amount 7955 7955 7955 7955 7955 7955 7955 7955 7955 7955 7955 7955 7955 7955 7955 7955
Price 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10
Revenue 71595 71595 71595 71595 71595 71595 71595 71595 71595 71595 71595 71595 71595 71595 71595 71595

Total 342057 342057 342057 342057 342057 342057 342057 342057 342057 342057 342057 342057 342057 342057 34205 342057
 Appendix table 2: recurrent Costs in the first and subsequent project Years
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5
Cost
description

Inputs 153073 153073 153073 153073 153073 153073 153073 153073 153073 153073 153073 153073 153073 153073 153073 153073 153073
Salaries 41500 41500 41500 41500 41500 41500 41500 41500 41500 41500 41500 41500 41500 41500 41500 41500 41500
Rent 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400 400
Electricity 48000 48000 48000 48000 48000 48000 48000 48000 48000 48000 48000 48000 48000 48000 48000 48000 48000
Transport 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000 24000
Telephone 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000 16000
Interest on 2000 1944 1889 1833 1778 1722 1667 1611 1556 1500 1444 1389 20333 12333 4332
credit
Insurance 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000
Loan 5556 5556 5556 5556 5556 5556 5556 5556 5556 5556 5556 5556 5556 5556 5556 5556 5556
repayment

Total costs 26129 251073 251018 250962 250907 250851 250796 250740 250685 250629 250573 250518 2997881 3195505 3187504 316500 3116500

a) Initially, installation costs contribute to the high figure in this column

 Appendix table 3: profit in the first and Subsequent project years
Months Years
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5
Revenue 0 34205 342057 34205 342057 342057 342057 342057 342057 342057 342057 342057 342057 342057 342057 342057 342057
7 7
Costs 296129 25107 251018 25096 250907 250851 250796 250740 250685 250629 250573 250518 2910881 3267505 3259504 3188500 3188500
3 2
Depreciation 22958 22958 22958 22958 22958 22958 22958 22958 22958 22958 22958 22958 22958 22958 22958 22958 22958
Int. on credit 200 1944 1889 1833 1778 1722 1667 1611 1556 1500 1444 1389 20333 12333 4332
Gross profit -321087 66082 66192 66304 66414 66526 66636 66748 6858 66970 67082 67192 555786 1227712 1281109 1387220 1412614
Tax(approx)
Net profit -321087 66082 66192 66304 66414 66526 66636 66748 6858 66970 67082 67192 555786 1227712 1281109 1387220 1412614

Months Years
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5
Revenue 0 136820 136820 136820 136820 13682 136820 136820 136820 136820 136820 136820 136820 136820 136820 136820 136820
0
Costs 296129 251073 251018 250962 250907 25085 250796 250740 250685 250629 250573 250518 2910881 3267505 3259504 3188500 3188500
1
Salary 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000

Profits -306129 -124253 -124198 -124142 -124087 - -123976 -123920 -123865 -123809 -123753 -123698 -1525881 -1492505 -1484504 -1413500 -1413500
124031

Acc. Profit -13287 -122807 -112807 -102807 -92807 -82807 -72807 -62807 -52807 -42807 -32807 -22807 -97193 -217193 -337193 -457193 577193
Future expansion 41 ton per day mixer
FEED FORMULATION SECTION

Examples of formulations for broilers based on broken wheat, maize and

ricebran.

With feed based on these formulas you will be able to obtain excellent results.
However, they are not least cost formulas. Your cost prices and availability of raw
materials will be different. Updating your formulas on a regular basis is one of the
services Kiatra Consultants can offer you.

Starter Grower/Finisher
0-3 weeks 3 weeks-slaughter
Raw Material (%)
Wheat/maize 45.25 42.26
Ricebran 10 10
Soybeanmeal/ sunflower 44/7 25.60 28.00
Meat/bonemeal 56/6 5.00 5.00
Fishmeal 2.50 -
Pollard 9.00 12.00
Phosphate 17.5 % .20 .10
Limestone .255 0.500
Na-bicarbonate 0.15 0.15
Salt 0.10 0.10
Methionine .24 0.23
Lysine HCl 0.20 0.17
Threonine 0.015
Wheat Enzymes 0.10 0.10
Broiler Premix
Choline Chloride 0.09 0.09
Premix AntiCocc. 0.05 0.05
Premix Feed Saver 0.05 0.05
Nutrients (%)
Crude Protein (min) 22.0 21.0
Crude Fat (min) 7.0 8.5
Crude Fibre (max) 3.5 3.5
Ash Content (max) 6.5 6.5
Calcium (Ca) 1.0 1.0
Phosphorus (P) 0.78 0.72
Lysine 1.33 1.23
Methionine 0.60 0.56
ME Poultry (Kcal/kg) 3064 3125

FORMULAS FOR PULLETS AND LAYING HENS

 Examples of formulations for pullets and laying hens based on wheat and maize.

With feed based on these formulas you will be able to obtain excellent results.
However, they are not least cost formulas. Your cost prices and availability of raw
materials will be different. Updating your formulas on a regular basis is one of the
services Kiaxtra Consultants 0728851836 can offer you.

Pullets Pullets Laying Hens Laying Hens

Untill 8 weeks 8-17 weeks
Raw Material (%)
Wheat 26.00 30.80 46.20 9.50
Maize 36.00 25.00 - 44.50
Wheat bran 12.50 20.00 11.20 4.00
Soybeanmeal 44/7 17.20 12.50 16.00 18.70
Fishmeal 4.00 4.00
Meat/bonemeal 56/6 5.00 5.00 5.00 5.00
Vipro Magic 2.50
Chick & Duck Prremix 4.50 4.50 9.00 6.00
Phosphate 17.5 % 1.10 1.00 0.80 1.00
Limestone 0.390 0.515 7.020 6.620
Na-bicarbonate 0.100
Salt 0.150 0.250 0.100 0.100
Methionine 0.135 0.075 0.130 0.130
Wheat Enzymes 0.100 0.100 0.100
Layer booster 0.100 0.100 0.100 0.100
Poultry booster 0.100 0.100 0.100 0.100
Choline Chloride 0.075 0.060 0.100 0.100
Premix AntiCocc. 0.050
Nutrients (%)
Crude Protein (min) 20.0 17.5 17.0 17.0
Crude Fat (min) 4.9 4.8 7.2 6.4
Crude Fibre (max) 4.0 4.5 4.5 4.5
Ash Content (max) 6.5 6.5 12.5 12.5
Calcium (Ca) 1.0 1.0 3.4 3.4
Phosphorus (P) 0.84 0.82 0.70 0.70
Lysine 1.02 0.80 0.85 0.85
Methionine 0.47 0.35 0.40 0.40
ME Poultry (Kcal/kg) 2820 2770 2725 2725
 Ratio

Gross profit Margin 40% 48% 50%

Operating Profit Margin 36% 44% 47%
Net Profit Margin 18% 25% 27%

Assumption

OPERATING ASSUMPTIONS
Working days in a year 301
Shifts Operational 1
Hours per shift 8
Initial year Capacity utilization 60%
Production Capacity (Tons per
( Ton per day) 4
Anum) 1 ton= 28 man
Annual Production Capacity (Tons) 1526 1man= 40kg
One bag contain kg 70 1 bg 70kg
Maximum Capacity utilization 90%
Accounts receivable 10% of sale

COST OF SALES ASSUMPTIONS

Raw Material Cost growth rate 5%
Wastage 2%
Packing cost growth rate 3% 2011 2012 2013
Packing Cost (Kshss./Bag) 25 25 25.75 26.5225
Electricity Growth rate 8%
Salaries Growth rate 10%
Repair and Maintenance (as percentage of machinery) 5%
Repair and Maintenace Growth Rate 5%
Depreciation on Plant and Machinery 10%
Depreciation on Land and Building 5%
Depreciation on Furniture and Fixture 10%
Depreciation on Office Equipment 10%
Ending inventory 10%
other munfaturig expenses
erection and installation chages of machinery 10%
Depreciation on Motor Vehicle (Straight Line method) 20%
Operating Assumptions
Telephone and Telex (per month) Kshs.
4500
3,000 )
Administrative Expense growth rate 10% 10%
Printing and Stationery (per month) Kshs. 2,000 2,500
1000
Legal & professional charges (annual) Kshs. 10,000
0
6000
Traveling & conveyance (per month) Kshs. 5,000
0
 8000
Marketing and Promotional Expenditures Kshs. 5,000
0
Amortization of pre-operating expenses yrs. 5 15%
Tax rate 35% 35%
Account payable 10% of rawmaterial
Dividend of profit 40%
retained earning 60%
Accured Expense 5% of sale
Account Receiveable 10% of sale
Assumption of Revenue
Sale price per kg kg RS 20
Sale price per bag(37 kg) 700
Means of Finance
Debt 60% 7,000,000
Equity 40% 2,800,000
9,800,000

Initial working capital

Current Assets KSHS
Cash
Account Recivable
Raw material
inventory
Advances and
Deposits
Total

Current liabilities
Account Payable
Notes Payable
Total

Initial Working
Capital -----------
 Cost of the project

Cost of The project local Foreign Total

Land and it
development ----------- ------------------
Building and civil
Contractor -------------- ----------------
local Machinery ------------- ------------------
Foreign Machinery ---------- --------------
Marine insurance,import licence fee 3% ----------- ------------
Clearance and internal
fees frieght 20% ----------- ---------------
Import and Ipra
Surcharge 1% ------------- ----
Furniture and Fixture -------------- -------------
Vehicles ----------------- ----------------
Pre-production
Expense -------------- -------------
Engineering and
Technical Fee ---------------- --------------
Office Equipment ----------------- ---------------
Others contingencies ----------- -------------
Interest during ----------
Construction ----------- ---------------
--------
Erecting and installation --------- ------------

Total fixed Cost 6,000,000

initial working capital 2,686,000
Total cost of the
project 8,686,000