1.0 Project Title : Broiler Contract Growing 2.0 Category : Income Generating 3.0 Type : Broiler Production 4.

.0Proponent : 4.1 Type(s) : Private Sector Group 4.2 Name/Organization : Rowil G. Batan 4.3 Address : Barangay Belen, Leyte-leyte 5.0Coverage : 5.1 Main project activities is located at Sitio Marag-ing, Brgy. Belen, LeyteLeyte. 5.2 Intended market : meat shops, wet markets, Grocery stores, Talipapa, 5.3 Type/kind of agricultural/fishery product/s commodity/ or support service the Project shall be involve with: Contract growing of Broilers 6.0 Duration : 6.1 Pre implementation 12 months 6.2 Implementation - 10 years 7.0 Funding Requirements : 7.1 ACEF Loan : P10,303,603.27 7.2 Equity : P4,422,725.83 (Counter part of the proponent) 7.3 Total : P 14,726,331.10 TheP roj ect

8.1 Justification
8.1.1 A brief description of the current state of development of the Agricultural product/commodity and/or support services subsector which the proposed project intends to support. Tacloban City is located at the eastern side of the island of Leyte. It is the center of trade and commerce of the whole island. Its socio- economic development is mainly supported by trading, banking, and commerce. The city is very dependent on its food supply of agricultural products from nearby municipalities including fish. The prices of pork in the market is expensive because of the very high cost of handling and transport of hogs from Mindanao to Region VIII, not to mention the series of middle men distributors and dealers who pass on the cost to the consumers. Hog raisers and dealers from Mindanao are earning more than 10 million a month just for Tacloban City alone.

The people of Tacloban City have been trying to find ways to substitute pork meat with other meat specially the average and low income families. The demand for chicken has risen steadily for the past fifteen years. Chicken meat has always been the cheaper alternative to pork and the people have been more and more conscious about this fact. With the increasing population of the city
and the series of positive economic development. The demand for chicken is very high and there are several companies who are looking for investors who are very willing to be partners in the business . With the introduction of Contract Growing Business by these companies, there is now a present solution to the problem of the supply of chickens in the region which this project intends to support.

8.1.2The potential for the development of sub-sectors involved in the project area, including the level and kind of demand for agricultural products/commodities and/or services involved which the projects intend to meet or create. The potentials for the development of sub-sectors in the project area is vast. The need for breeder farms, hatchery, dressing plants, feed mills, meat shops, and meat dealers will be very vital for the sustainability of the project. 8.1.3 Existing efforts/interventions of government and private sector groups to develop the sub-sectors involved. Currently the private companies are holding trainings and seminars to investors to upgrade various technologies in meat processing, dressing plant operation, hatchery operations, and breeder operations. The Government sector particularly the Department of Agriculture is training farmers to meet the demand for yellow corn which is seventy percent of the feed component for Broiler feeds, and trainings and seminars on the use of organic fertilizer using chicken dung. 8.1.4 The proposed projects consistency with the policy and priority thrusts of the DA Plans and Programs and its support to, and/or complementation with, the regularly funded activities of DA.

The proposed project is consistent with the Department of Agriculture food security programs and to make region VIII sustainable and to create more job opportunities for the people. The project will continue to provide job opportunity for the community and food security after project financing has been completed. Strategies to make the project sustainable after project completion includes regular personnel training and updates in Broiler Production Technology, strict bio-security, and supervision. 8.1.5 The perceived problems and/or constraints, which the project intends to address, including the cause and evidences of these problems/constraints. The project aims to achieved maximum bird capacity and attain not less than six grow outs in one year. This can be achieved by proper forecasting and good management with hands on technical supervision. Mortality of birds must not exceed the average rate of 3 percent. This can be prevented by implementation of effective medication and vaccination program with regular monitoring, clinical evaluation and examination of healthy and sick birds. To address the negative impact of the project to the environment, the proponent has seek the help of the DENR to help established a very effective waste management system based on the sound advise of environmental engineers and advisers. 8.1.6 Relevant information on how the intended beneficiaries will directly or indirectly benefit from the project, including the direct and indirect benefits which the projects may have on the proponent as well The project will enable the people in the community in which the project is located to have job opportunity. The farmers in the project area will benefit from the abundant supply of chicken dung form the project. Which could help cut down the cost of their production and farm inputs. Production of Broilers shall increase activities from the upward and downward linkages that provide more jobs and businesses to others The proponent itself will be able to gain profit and can in the future expand its capacity adding more job and business opportunity to the community.

9.0 Project Description : The project is Broiler Production in which the proponent will enter into a contract with a private company to grow chickens until they are ready to be marketed. The company will provide the chicks, feeds, medicines, and the marketing of the birds. While the proponent will provide the housing of chickens, water, electricity, labor and other vital

role in the production. The private company will pay the proponent a corresponding fee for the growing of the birds after all the expenses on their part is deducted. 9.3 Objectives : 9.3.1Development Objective The project aims to increase supply of good quality chickens to the region through Contract Growing scheme with a private company who supplies all the necessary inputs and technological assistance. 9.3.1Immediate Objective a. To supply the demand for chicken meat in Leyte thru Contract Growing Scheme. b. To help farmers have access to cheap source of organic fertilizer using chicken dung. c. To provide job opportunity to the community and businesses to other downward linkages. 9.4 Beneficiaries : 9.4.1Primary a. The proponent and company partner that provides the inputs for the production. b. The employees to be hired by the project. c. The farmers who will have access to cheap source of organic fertilizer. 9.4.2Secondary a. Indirect jobs and their multiplier effects that the project may create such as breeder farms, hatcheries, feed mills, and meatshops and meat dealers. b. The government for helping reduce unemployment and alleviate poverty. 9.5 Location : The project shall be located at Sitio Marag-ing, Barangay Belen, Leyte-Leyte. The facilities will have a maximum capacity of one hundred thousand birds and will cover approximately five hectares of land. 9.6 Scope : 9.6.1Components Monitor Type Broiler Building : Eight (08) units of 12 X 42 square meters monitor type broiler house with a maximum capacity of ten thousand birds (10,000). Automatic Water Drinkers :An equipment that provides automated and easy access of water for the birds. Automatic Feeders :An equipment that provides and automated system of feed distribution and feeding of birds. Infra red Lamps :An equipment that provides artificial heating and brooding of chicks or young birds. 9.6.2Strategies Building Facilities :Eight units of Broiler houses will be constructed with a capacity of ten thousand birds (10,000) having an area of 12 X 42 square meters with a total capacity of eighty thousand (80,000) birds. The building facility including all its equipments shall be made available for the birds to be supplied by the Contract company. An agreement between the proponent and the company shall be made to assure the use of the facilities for the growing of birds until they are ready to be harvested. Production and Harvest :The proponent shall assure the Contract company

that it will provide all the necessary inputs such as labor, water and electricity for the grow outs of the birds. The proponent will also help the company in the harvesting of the birds. Management :The proponent and the contract company will have a dual role in the production. The proponent will implement all the programs forwarded by the company such as the feeding , medication , and vaccination programs. The company will evaluate and oversee the production thru constant monitoring and evaluation and provide all the technical support.

distribution and feeding of birds. Infra red Lamps :An equipment that provides artificial heating and brooding of chicks or young birds. 9.6.2Strategies Building Facilities :Eight units of Broiler houses will be constructed with a capacity of ten thousand birds (10,000) having an area of 12 X 42 square meters with a total capacity of eighty thousand (80,000) birds. The building facility including all its equipments shall be made available for the birds to be supplied by the Contract company. An agreement between the proponent and the company shall be made to assure the use of the facilities for the growing of birds until they are ready to be harvested. Production and Harvest :The proponent shall assure the Contract company that it will provide all the necessary inputs such as labor, water and electricity for the grow outs of the birds. The proponent will also help the company in the harvesting of the birds. Management :The proponent and the contract company will have a dual role in the production. The proponent will implement all the programs forwarded by the company such as the feeding , medication , and vaccination programs. The

company will evaluate and oversee the production thru constant monitoring and evaluation and provide all the technical support. 9.7 Budgetary Requirements :
PROJECT NAME: BROILER PRODUCTION (80,000 Birds - Capacity) LOCATION:

Sitio Marag-ing, Brgy. Belen, Leyte - Leyte

PROJECT INVESTMENT CAPITAL:

FIXED INVESTMENT: QTY. Unit PARTICULARS UNIT COST ACEF LOAN EQUITY TOTAL COST 2 has. Land Acquisition/Development 1,000,000.0 0 2,000,000.0 0 2,000,000.00 1 LS Perimeter Fencing 222,500.0 0 222,500.0 0 222,500.00 2 units Broiler House (12 x 42 sq.m.) 4,079,212.8 5 8,158,425.7 0 8,158,425.70 1 unit 1.5HP Motor Centrifugal Pump 33,585.0 0 33,585.0 0 33,585.00 1 unit Deepwell with Elevated StainlessWater Tank (2000 lit. cap) 154,790.0 0 154,790.0 0 154,790.00 1 unit Refrigerator (4 cu.ft. cap.) 7,500.0 0 7,500.0 0 7,500.00 714

pcs. Feeders 158.0 0 112,812.0 0 112,812.00 250 units Waterers (Bell drinkers) 853.0 0 213,250.0 0 213,250.00 2000 units Galloners 78.9 0 157,800.0 0 157,800.00 50 units Infrared Lamps w/ pipes & Accessories 4,950.0 0 247,500.0 0 247,500.00 16 units LPG Tank (50 kgs. Cap.) 4,500.0 0 72,000.0 0 72,000.00 10 units Shovel 497.0 0 4,970.0 0 4,970.00 2 units Wheel Borrow 1,450.0 0 2,900.0 0 2,900.00 2 units Push cart 1,680.0 0 3,360.0 0 3,360.00 16 pcs. Plastic Drum (200 liters cap.) 1,195.0 0 19,120.0 0 19,120.00 SUB-TOTAL 9,410,512.7 0 2,000,000.0 0 11,410,512.7

9.9 Project Analysis 9.9.1 Competitiveness aspect The proponent shall be supplying live broiler birds to the Contract Growing Company. The Company will sell the birds as live or dressed to its respective dealers. 9.9.2 Market Aspect The Contract Growing Company that will provide all the farm inputs shall be the immediate client. 9.9.3 Technical Aspect Broiler birds Day old broiler chicks will be delivered to the farm. The day old birds will stay in the brooding area for two weeks until it is ready to be move out to the entire pen. The growing period will be 35 days or until the birds achieved the desired market weight. Total population of birds is 80,000 and averages of eight (08) grow outs per year. Equipment and facility The contract Growing Company shall check the construction and installation of all the feeders, waterers , infrared lamps in accordance with the instruction of the manufacturer and standard requirements for Broiler bird production practice as suggested by the Technical consultants. 9.9.4 Financial Aspect The financial statement and its financial analysis (attached Projected IS/CS/BS) were conducted with the following basic information assumptions: Project Duration : Ten (10) years Broiler Contract Growing Operation : Volume of production per cropping : 80,000 birds Annual production : 8 croppings No. of days production period : 35 days Mortality Rate : 5% Equipment and Facilities : Broiler House Floor Area : 504 square meters No. of Buildings : 8 units Capacity : - 10,000 birds per building 8 croppings per year Operating Expenses :
PARTICULARS AMOUNT (PhP) Salaries & Wages: 1,224,00 0.00 Farm Supervisor 10,00 0.00 120,000. 00 Animal Caretakers 4,50 0.00

864,000. 00 Security Personnel 10,00 0.00 240,000. 00 Electricity 5,85 0.00 70,20 0.00 Water Utilities 2,75 0.00 33,00 0.00 LPG (50 kgs.) 2,12 0.00 610,56 0.00 Laminated plastic sheet 5 7.50 103,50 0.00 Building Maintenance Cost (10% of Building cost) 838,09 2.57 Licenses and Permit Fees 55,00 0.00 Miscellaneous Expenses (13% of the above items) 381,46 5.83 TOTAL 3,315,81 8.40

Revenue: Projected Production/Sales

Operating Expenses :
PARTICULARS AMOUNT (PhP) Salaries & Wages: 1,224,00 0.00 Farm Supervisor 10,00 0.00 120,000. 00 Animal Caretakers 4,50 0.00 864,000. 00 Security Personnel 10,00 0.00 240,000. 00 Electricity 5,85 0.00 70,20 0.00 Water Utilities 2,75 0.00 33,00 0.00 LPG (50 kgs.) 2,12 0.00 610,56 0.00 Laminated plastic sheet 5 7.50 103,50 0.00 Building Maintenance Cost (10% of Building cost) 838,09 2.57 Licenses and Permit Fees 55,00 0.00 Miscellaneous Expenses (13% of the above items) 381,46 5.83 TOTAL 3,315,81 8.40

Revenue: Projected Financial Assumptions:

1. The growers fee is assumed to increase 5% annually. 2. Salaries and wages of workers is 5% increase annually. 3. Power and water utilities will increase at 5% per annum. 4. Building maintenance cost (10% of building cost), miscellaneous expenses (13% of operating cost), licensing and other operating cost (e.g.LPG, plastic sheets) will be 5 % increase per annum. Financial Analysis: The projected financial statement for contract growing of broiler production using a 16 percent discounting factor for a period of 10 years resulted a Net Present Value (NPV) of PhP 5,692,254.39 with a Benefit Cost Ratio (BCR) of 1.17 at 16 percent and an Internal Rate of Return (IRR) of 26.05%. It also reveals that the project would have a payback period of 3.05 years with a Return of Investment (ROI) of about 32.80 %. Sensitivity Analysis: Financial sensitivity (Table 1) indicates that increasing the cost of production from 5% to 10% showed that the NPV is PhP 4,658,057.80 pesos and PhP 3,623,861.22 pesos, with a BCR of 1.14 and 1.10 at 24.30% and 22.53% IRR, respectively. However, decreasing the net benefits from 5% to 10% the NPV is PhP 3,738,689.43 pesos and PhP 1,785,124.48 pesos, with a BCR of 1.11 and 1.05 at 22.74% and 19.30%, respectively. This indicates that the proposed project is financially viable and could repay its financial obligation.
Sensitivity Analysis Summary

9.9.5 Socio-economic Aspect The proposed project could generate employment and provide opportunities to increase the income of the neighboring farmers through the utilization of the chicken manure as organic fertilizer to agricultural crops and likewise it stabilize the supply and consumer price of poultry meat products in the locality. 9.9.6 Organization/Management Aspect

ORGANIZATIONAL STRUCTURE

Duties and Responsibilities: 1. The Farm Supervisor, shall: a) Manage the day-to-day business operation; b) Take charge of the property and equipment of the company; c) Exercise general supervision and direction of the broiler production operation; d) Prepare the Annual Plan and Budget of the operation and submit the same to the proprietor/owner for review and approval; and e)

Formulate policies of all production operation activities such as organizing, scheduling and supervision of animal caretakers and supply and distribution of input requirements and etc.; f) Perform such other functions delegated to him/her by the proprietor/owner. 2. The Animal Caretakers, shall a) Undertakes periodic vaccination and other preventive measures for proper poultry husbandry; b) Conduct periodic cleaning of the project vicinity and proper waste disposal (chicken manure) to provide sound and suitable environment. 3. The Security personnel, shall a) Provide safekeeping of all properties and other business interest in the project area; b) Report to the management of any untoward incidence that may occur in the project operation.

Vicinity Map
Broiler Production Sitio Marag-ing, Brgy. Belen, Leyte-Leyte

BROILER CONTRACT GROWING PROJECT

So. Marag-ing, Brgy. Belen, Leyte-Leyte

Mr. Rowil G. Batan

Proponent

AGRICULTURAL COMPETITIVENESS ENHANCEMENT FUND (ACEF) Department of Agriculture