Professional Documents
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A Feasibility Study On The Prospects of Establishing A Piggery Farm in Enugu-Ezike
A Feasibility Study On The Prospects of Establishing A Piggery Farm in Enugu-Ezike
OGBU, Cosmas C.
PG/MBA/93/18063
Title
Business Administration
Department
Management
September, 1998
Date
Nwamaka, C = NG, O =
s u c c e s s f u l l y completed t h e r e q u i r e m e n t s f o r t h e c o u r s e and
h a s n o t b e s n s u b m i t t e d i n p a r t o r f u l l f o r any o t h e r Diploma o r
Q e g r e e o f t h i s o r any o t h e r u n i v e r s i t y .
( Head o a ~ e ~ a r t r n e n t ) (Supervisor)
DEDICATION
Equity (ROE) is 4 3 per cent in the first year, alrd 160 per cent by the fititl year.
Return on investment (ROI) is also estimated a t 2 4 per cent by the first year,
rising t o 88.3 per cent by the fifth; while the current ratio is 72 per cent in the
first year, before irlakirlg a quai-rtun~leap t o 93.1 per cerlt by the fifth. -I'he pay-
back period is projected t o be at 2.04 years, and the break-eve11 point as a rate
o f utilisation of production capacity is 19.14 per cent.
Final;y, the study establishes tha.t pig production enter,pr-ise in a typical Nigeria
rural :mviror~rnentis not only feasible but very profitable.
ACKNOWLEDGEMENTS
No srucly of \his narurc is \he wIc el'fort only of irs author. 1 owe m ~ t c hto Professor E.U. I ~ n a p ,
~ l entire stages ol' this work.
who s u p e r v i ~the
'J'.lBI.E OF CONTENTS
TITLE PAGE
CERTIFICATION
DED!CA'TION
ACKNOWLEDGEMENTS
AB S'L'R ACT
TABL,E OF CONTIINTS
I a a d v e n t e n t l y : government a p p r o p r i a t e d more r e s p o n s i b i l i t y t h a n i t
cod1.d .?f
f'iciently discharge. Everybody l o o k e d up t o i t ; -for the ,:conon~ic,
p o l i t l c : t l l , s o c i a l , i n d u s - t r i a l and t e c h n o l o g i c a l e m a n c i p a t i o n of Lhe
1) :!) .
'1'11:counLry g n i n c d the lr:verag(: L o colic: L t ~ r c ~ u ~ ~ i i rii:;cvv( i',y ui
i.k~;:
e n t e r p r i s e s , i n t e r m s o f a c c e s s t o r e s o u r c e s and m a r k e t s . Nigerians
meat which i s t h e m a j o r h ~ ; o u r c e . . o fp r o t e i n i n t h e c o u n t r y h a s
This r e s e a r c h e r b e l i e v e s t h a t through a w e l l - a r t i c u l a t e d
t h ? group o f d o m e s t i c a t e d a n i m a l s , g e n e r a l l y c a l l e d m o n o g a s t r i c o r
t a m c r o p s , w a s t e p r o d u c t s t o o f f a l s o f l i v e s t u c k and p o u l t r y . These
f o o d s a r e e f f e c t i v e l y c o n v e r t e d i n t o p o r k , which y i e l d s e d i b l e p r o t e i n
and food! o f h i g h c e l o r i f i c v a l u e .
But p i g p r o d u c t i o n i n N i g e r i a , e x c e p t f o r a few i s o l a t e d c a s e s
a r e s t i l l l a r g e l y i n t h e hands of t h e n a t i v e s u b s i s r e n c e f a r m e r s .
T h e r e f o r e improvement h a s b e e n q u i t e s l o w , a s t h e a n i m a l s a r e c s a d i t i c j -
n a l l y l e f t t o scavenge f o r f o o d s w i t h l i t t l e o r no a t t e n t i o n s p a i d
and low p r o d u c t i v i t y .
The i n t e r e s t f o r t h i s s t u d y t h e r e f o r e a r i s e s f r o m t h e b e l i e f that
by e : ; t a b l i s h i n g r a t i o n a l e and t h e r e q u i r e m e n t s i n e s t a b l i s h i n g a modern
piggi:ry farm i n a r u r a l s e t t i n g l t k e Enugu-Ezike, t h e r e s e a r c h e r may
have c o n t r i b u t e d t o t h e q u e s t f o r a b e t t e r i u ~ k ~ o v epdo r k p r o d u c t i o n
progrannes i n the country.
I-I; h a s been e s t & l i s k l e d I h - t p r o t e i n i n h k e i n N i g e r i a h a s reds-iced
and n ~ l L r - i t i o n : ~survey-
l conducLcd by Lkic 1;cderal. O f f i c e oi' SLal;isl.ic:; i n
c e n t r ~ : s h a v e h i g h p r o p o r t i o n o f m a l n o u r i s h e d p o p u l a t i o n w h i l e o v e r 20
rnent .
blany N i g e r i a n s h a v e g a v e i n t o f i s h e r y , c s t t l e r e a r i n g , g o a t r y , p o u l t r ;
T h j - s s t c d y i s i r k e n d e d t o make a v a i l a b l e e o m p r e h e n s i ~ e
in2ormat:'-on on t h e p r e l i m i n a r y p r o j e c t d e s i g n a n d ezonomic
d
a n a l y s i s re<uire/b:! entrepreneurs i n t h e decision-making
p r o c e s s i n cornmittins s c a r c e r e s o u r c e s t o a p i g p r o d u c t i o n
venture. T h e r e s e a r c h p r o b l e m h ~ bs e e n i d e n t i f i e d as t h e
t h e rur.-al a r e a s a s a means t o a r r e s t i n g p r o t e i n d e f i c i e n c y
among t h e n a t i o n s c i t i z e n r y .
F i g e r i a i s a c o u n t r y w i t h h i g h p o p u l a t i o n gro7.nkh r a t e ,
b u t low a g r i c u l t u r a l p r o d u c t i v i t y . T h i s makes i t i m p e r a t i v e
f o r t h e n a t i o r , t o show m o r e i n t e r e s t i n a g r i c u l t u r a l b u s s i n e s s ,
The p u r p o s e o f s t u d y i s t h e r e f o r e t o e x p l o r e t h e p o t e n -
t i a l s o f a p i g g e r y f a r m as a way a n d m e a n s o f e c o a o m i c d i v e x s i f
i c a t i t > n , b o o s t i n q p r o t e i n i n t a k e ainonq t h e p o g u l a e e , a n d
g e n e r a t i n g n e a n i n q f u l employment f o r t h e p e o p l e .
Thic, i . n v e s t i g a t i o n i s s i g n i f i c a n t i n a v a r i e t y iiL ways. Ir: tile
s i n i l a r s t u d i e s i n t h e i r ow11 g e o g r a p h i c a l a r e a s . Secondly, t h e s t u d y
mar b e b e n e f i c i a l t o o t h e r r e s e a r c h e r s on s p e c i f i c A s p e c t s o f p i g g e r y
f a r m i n g , as i t may s e r v e a s a u s e f u l s p r i n g b o a r f i . F i n a l l y , t h e general.
p r s d u c t i o n and t h e r e b y change t h e i r c o n s e r v a t i v r . b e l i e f s a b o u t p i g s b e i ~
d i r t y , and i n f e s i - c d w i ~ hd l s e ; ~ s e s .
OIIC u~,i.!ctt l;trtl.on ul. tlil:; s ~ u c l yi:, i t : ; i ~ ~ c t l . t i . - t .c
.I.lil~l l ~ 1.1: l . i ~ l i i r - w
j turc.
f i e l d s of s t u d y . T h e r e f o r e , r e l i a b i l i t y of t h e d a t a i s ~s t h e e x t e n t
of a u t h o r s c i t e d o r persons interviewed. A s a r e ~ u l t ,t h e r e s e a r c h e r d i d
p o i n t e d o u t were most s u i t e d f o r t h e e ~ w i r o n m e n tG S t h e a r e a u n i l ~ rs t u d y .
records.
CONCEPTUAL --
FOUNDXl'IONS
F e a s i b i l i t y and V i a b i l i t y A p p r a i s a l s :
?re-f e a s i b i l i t y l f e a s i b i l i t y t o d e s i g n t r a n s f e r s i x g e i s econonlical..ly
a c q u i s i t i o n s a r e by p o l i c y proceeded by t h o r o u g h f e a s i b i l i t y s t u d i e s
p r o p e r l y s t u d i e d because they a r e p i v o t a l t o t h e s u c c e s s f u l o p e r a t i o n a f
i d e a i s e x p l o r e d f o r f i n a n c i a l and t e c h n i c a l f e a s i b i l i t y i n t h e f e a s i b i l r
o r prefeasibility stage. I t i s t h e r e s u l t of t h e i n v e s t i g a t i o n of t h i s
c r u c i a l s t a g e t h a t d e t e r m i n e s w h e t h e r t o go i n t o o t h e r a s p e c t s which
a t t h i s s t a g e t h a t t h e f i n a l l $ o / n o go" d e c i s i o n i s t a k e n .
Any venturewhose f e a s i b i l i t y i n v e s t i g a t i o n i n d i c a t e s n e g a t i v e r e t u r n s
on Lnvestment ( K O I ) i s u s u a l l y n o t u n d e r t a k e n , e x c e p t o f c o u r s e t h e
i s not p r o f i t b u t s o c i a l b e n e f i t s .
F e a s i b i l i t y and V i a b i l i t y I n d i c a t o r s
I n o r d e r t o understclnd t h e i s s u e s i n t h e assessment of t h e f e a s i b i -
l i t y a n d v i a b i l i t y o f a p r o j e c t , i t i s n e c e s s a r y t h a t we l o o k a t t h e
study. S c h o l a r s w r i t i n g on t h i s s u b j e c t h a v e d i f f e r e n t names f o r t h e s e
a s p e c t s , s u c h a s c r i t e r i a , components, i n d i c a t o r s o r g u i d e l i n e s , b u t t h i s
d i f f e r e n c e l i e s o n l y i n nomenclature, a s t h e b a s i c e l e m e n t s of p r o j e c t
f e a s i b i l i t y remain t h e c e n t r a l i s s u e .
N. I k e d i a n y a ( 1 9 7 5 ) :;ees f e a s i b i l i t y a p p r a i s a l a s a d e p e n d e n t v a r i a b l e
i n c l u d i n g t h e p11ysi c a l , t e c h n o l o g i c : ~ l , l e g a l , f i n a n c i a l , ecnnomic , m a r k e t
and m e r c h a n d i s i n g , p r o f i t a b i l i t y , v i a b i l i t y , s o c i a l , p o l i t i c a l and o t h e r
strategic constraints,
i s s u e s r e l a t i n g t o s o c i o - p o l i t i c a l c o n s t r a i n t s under economic a n a l y s i s .
m a r k e t , p h y s i c a l a n d f i . n ~ n c i a fl a c t o r s a s t h e most germane t o d e t e r m i n i n g
p i ~ y is c a 1 a s p e c t s ant1 s k i pl)ed t e c h n i c a l a s p e c t .
t e c h n o l o g i c a l , p l ~ y s i c a - I ,s o c i o - p o l i t i c a l , l e g a l , economic and f i n a n c i a l
indicators..
F o r 1:he p u r p o s e c ~ f t h i s s t u d y , h o w e v e r , we h a v e f o u n d I m a g a ' s a s p e c t
o r undersupplied.
T h i s a s p e c t of t h e s t u d y a l s o o u g h t t o u n d e r t a k e market segnientatioxi
and p r o d u c t d i f f e r e n t i a l a n a l y s i s , i n o r d c r t o d i v i d e t h e t o t a l m a r k e t
e x i s t i n g c m p e t i t i o n t o g u i d e i n t h e p r o d u c t development ( L u s k e t alld
T e c h n i c a l Aspect
p r o j e c t , w h e t h e r i t i s v i a b l e from t e c h n i c a l and e n g i n e e r i n g p o i n t s of
view. T h i s t e c h n i c a l a p p r a i s a l i n v o l v e s t h e a n a l y s i s of t h e teclillology/
p r o d u c t i o n p r o c a s s , p l a n t c a p a c i t y , machinery and e o u i p ~ n e n t ~ n l c l t c r i a l s
c h c + r t s and l a y o u t (Imaga, 1 9 9 5 , p. 6 0 7 ) .
T h i s a s p e c t .-tQnwt.rs t h e q u e s t i o n w h e t h e r t h e p r o j e c t i s r e a l i s a b l e
when o t h e r a s p e c t s a r e p o s i t i v e .
Financial Aspect
I
This aspect of the .study determines whetlier. a prsject is financially
are equity and debt. These sources are critically anal-ysed under this I
aspect and a proper mix determined.
income stetements and then the breakeven point, as well as, internal rate
of return. The format used for this analysis vary from analysts to
Economic A S D ~ C ~
to determine the past trend, :he current position and the future direction
of the national economy. Here, the analyst looks at the economic environ-
project, he now considers how the economy will affect the growth and
f i n a n c i a l a s p e c t s a s economic f e a s i b i l i t y s t u d y .
Management Aspect
Management a n a l y s i s i s o f t e n n e g l e c t e d i n . f e a s i b i l i t y s t u d i e s of
managers a r e n o t i n charge.
I t i s important a t t h e f e a s i b i l i t y s t a g e t h a t t h e a ~ a i l ~ l b i l i tofy
a r e a s c e r t a i n e d and c o n s i d e r e d a l o n g o t h e r f a c t o r s i n d e t e r m i n i n g t h e
f e a s i b i l i t y and v i a b i l i t y of a p r o j e c t .
T h i s m a n a g e r i a l a s p e c t i s n e c e s s a r y because i t i s t h e managers t h a t
d e t e r m i n e how t h e r e s o u r c e s a r e a l l o c a t e d and t r a n s i c r m e d i n t o t h e
of t h e o v c r a 1 1 o b j e c t i v e s of t h e p r e j e c t . I n soi!ie complex p r o j c c t s l i k e
is
A j 61c,kutd St,ecl Complex, ii~~inagement '1 critics'. s u c c e s s L a c t o r whLch
The Yorkshire (large white), the world's most popular breed, originated
in Britain at the time. Both Japan and the Soviet Uniun too were in the
late 20th Century trying to breed leaner hogs with the help of iru~~ortant
States in the experiment with Maize in which two inbred strains were
efforts towards breeds of pigs. The experiment was copied with pigs by
the inbred. lines Tamwarth and Landrace to produce minnesota and China
No. 2 line (Canadian Yorkshire $Poland China) and these breeds have
t o t r o p i c a l e n v i r o n m e n t o r by c r o s s - m a t i n g the l o c a l v a r i e t i e s with
by g r a d l n g u p , t o s u c h a n e x t e n t t h a t p e r h a r p s t h e n a t i v e p i g s 'lie no
p o i n t e d o u t t h a t u p g r a d i n g p i g s w i t h h i g h l y p r o d u c t Lve e x o t i c : hrc-ecis r e . + u l t s
native pdrents.
T h e l o c a l b r e e d s however e n j o y p r e f e r e n c e i n roany t r o p i c a l . c o u n t r i e s
b c c a u s c t h e y a r c c h e a p e r t h a n t h e e x o t i c b r e e d s and a r e more ~ V , I IL ; i L l e
s i z e v h l c h concluiee mo-rc t o ~ ~ 1 1 3 1s c
1 ale e x t c n s i v c ? t y p e of pi.g rc;~r:lng
t h a t a r e p r e p o n d e r a n t i n A f r i c a a n d most t h i r d w o r l d c o u n t r i e s . In
t a n t t o t h e t r o p i c a l d i s e a s e s 2nd c l i m a t e
;o be u n i v e r s a l words of abuse.
p r o t e i n , p o i n t i n g o u t t h a t w h i l e t h e demand f o r q e a t p r o d u c t s l i k e
c o u n t r y , t h a t of p i g showed no s i g n i f i c a n t changes. T h i s he a t t r i -
Less t h a n t e n p e r c e n t of t h e p r o d u c t i o n i s u n d e r t a k e n i n commercial
P. 8 ) .
The p r e d i c a m e n t of t h e N i g e r i a n p i g g e r y i n d u s t r y was made more
m a n i f e s t by a s t u d y on t h e p r o d u c t i o n s y s t e m s and t y p e s of p r o d u c e r s
p r i a t c f o r modern p i g g e r y e n t e r p r i s e s .
Tllis s t u d y t l ~ c r e f o r ca t t e m p t s t o i n v e s t i g a t e f c a s i b i l . i t y a ~ ~ d
p r o d u c t i o n and p o o r p r o d u c t i o n s y s t e m s .
CHAPTER THREE
RESEARCH
-- METHODOLOGY
The s u b j e c t of t h i s r e s e a r c h i s t o i n v e s t i g a t e t h e f e a s i -
The s t u d y tht.:r~?fou?involvesan e x t e n s i v e i n v e s t i g a t i o n of t h e
t r z . t i o n of q u e s t i o n a i r e s . Questionaires a r e designed f o r
s c a f f of M i n i s t r y of A g r i c u l t u r c Enugu, s t a f f of F e d e r a l Live-
v i x t i n a x y d r u g s i n Enugu s t a t e , t o a s c e r t a i n r e l e v a n t p r i c e s .
Methods of I n v e s t i g a t i o i - L
To g r a p p l e w i t h t h i s problem, we have t o i n v e s t i g a t e t h e
determinants of t h e f e a s i b i l i t y of a p r o j e c t . The n a r k e t w i l l
people who live in the communities: Umnuozzi, Umuitodo, Essodo, and Ezeoc
The researcher also intends to probe into the production and :...
management of pigs, the cost factors of the civil engineering and other
(Pig Unit), Olcpuje in Nsukka T,ocal Government Area and the Intergrated
Feed Breeders farm, Isi Uja also in Nsukka Local Government Area. These
are pig farms managed in modern ways, and have helped the researcher see
as people who individually have the potency of earning money and who
can affect and or effect purchase decisions on the foods they eat.
of the sample size decisions are obvious: if the sample is too large,
time and efforts are wasted; if the sample is toc small, inadequate
The pilot study has been conducted by administering three (%) question-
Ezeodo who were sampled were not williqg to buy. On the whole, we
percentage of consumers who would buy the product was put at 50%.
the study and that the sample size is small in comparison with the
thus :
n = 50 (50) (1 .96)2 = 9604 = 96
1o2 100
This implies that if a random sample of 96 consumers are conducted,
shown that there are just a few of them, who could conveniently b e
communities.
C.HAPTER FOUR
100% retrieval rates from the consumers and pork sellers respec-
tively.
Consumption of Pork
4.1:
Table-
-
i
~:ommunity No. of Respondents Percent
Umuozzi 37 46.25
Umuitodo 18 22.50
l!!ssorlc8 18-75
12.50
-. -
The table indicateathata significant proportion of the p x k
and Ezeodo are inhabited by 22.5, 18.75 and 12.5% of pork consuming
respondents respectively.
Characteristics of Consumers
Table 4.2
Table 4.3
Christian 45 51.25
Muslim 3 03.75
Traditional 35 43.75
Others 1 01.25
80 100
Table 4.4
-.
65% of pork consumers are males and 35% are females. It also indicai
rhe trend shows that the meat is gaining in popularity, the table
Muslims 3.75, traditional 35% and others one percent. This findin?
in the area. This means that those who see eating of pork as tabu
i:; a meat f o r t h e p o o r .
S o u r c e s of P o r k Consumed
Do you e a t p o r k meat?
T a b l e 4.7
Table 4.8
----
---
No of Consumers Percent
Religion 5 26.32
I i i r t y Habbits 6 31.57
Fatness 4 21 .05
Diseases 4 21 .05
-
19 100
Table 4.9
- lo of Consumers - Percent
Everyday 12 15 .OO
Once a s e e k 15 18.75
Regularly 18 22.50
Once a month 10 12.50
Occasionally 25 31.25
100
-
Where do you buy t h e pork from?
Table 4.10
it--
- ------
Native market
Meat shops
Producers
No of Consumers
65
Percent
81.25
1.25
17.50
100
Most consumers i n t e r v i e w e d (76.25%) p a t r o n i s e p o r k , w h i l e 22%
w i t h a v a i l a b i l i t y t o p p i n g t h e l i s t w i t h 32.78% ( s e e t a b l e 7 ) .
Table 4.11
.
- Less
- expensive --
i- More expensive
- 1
06.25
-
Table 4.13
Table 4.15
Male
Female 12.5
Table 4.16
No of Sellers
3Oyrs or less 1 t .3 1
3lyrs - 40yrs
41yss - 50yrs
2
8
i 12.5
50
i
I
i
5lyrs - 60yrs i 3 18.7 (
-- .-
Religion No o f S e l l e r s Percent
Christianity 6 37.5
1:;lamism 0 0
Traditionalism 10 62.5
Others 0 0
16 100
Table 4.19
Do you engage i n o t h e r j o b s ?
Table 4.20
I f yes, specify
No of s e l l e r s Percent
Farming 4 I 40
Wine t a p p i n g 5 50
Trading 1 10
1
1
Table 4.21
No of sellerss Persent
I
I
No of seilers Percent
Households 8 50
Butchers 0 0
Hotels
Middlemen
6
2 1 37.5
12.5
No 6f sellers Percent
Porkers 4 25
Boars 1 06.3
S~WS 3 18.7
Combination 8 50
16 100 -.
What are the determination of the selling prices?
Table 4.24
I No of sellers Percent,,
- Quality of meat 4 25
Quantity of meat 10 62.5
Weight of meat 2 10
16 100
Table 4.25
No of sellers Percent
By boiling frying 6 37.5
By freezing 0 0
No left over 10 62.5
NO of sellers Percent
--
Leck of storage facilities 31.25
18.75
Disease infection 3
Poor image of pork 5
16
No. of s e l l e r s Percent.
2 12.50
3 18.75
8 50
1 6.25
1 6.25
1 6.25
Table 4.29:
--
--
PI No of sellers Percent -
Lcss t h a n 2000
2000 - 3000
5000 - 4000
About 5000
Abov? 5000
--
I
How much do you gain from selling a pork?
- --
-W.- No. of sellers
-.--
Percent. -
About ,500 8 50.00
I,l)ou t 1000 '15 . O O
:\bout 2000 12.50
About 3000 1.2.50
About 4000 -
-S o u r c e s o f P i g S l a u g h t e r e d .
~ I S S C Sof
C ~-
- P i g s S l a u g h t e r e d and T h c i r R--
espective Prices:
I i e s u l t s show t h a t 37.5% of s e l l e r s bought p l g s v a l u e d betwecn
W2000 - 3000, 35X b o u g l l ~ f o r betwecn W3000 - 4000, lU.7SZ bought £01
P r e s e r v a t i o n oL u n s o l d P o r k and Problems E n c o u n t e r e d by t h e S e l i e r s
t h e r e f o r e e x p e r i e n c e no l e f t o v e r , w h i l e 37.5X t h a t a d m i t t e d t o t h e
problem of l e f t o v e r s a i d t h e y p r e s e r v e i t by b o i l i n g o r f r y i n g o r
both. None of then1 made u s e of f r e e z i n g a s t h e i r i e s p o n s e s show.
The ~ > r o b l e m sof t h e p o r k s e l l e r s v a r i e d frora I.ack of s t o r a g e
f a c i l i t i e s , c a p i t a l , image of p o r k , and t h e b e l i e f among many t h a t
i t i s u s u a l l y i n f e c t e d by d i s e a s e s .
MARKET :\NU .PLANT CAPACITY
P o r k i s consumed around t h e w o r l d , b u t b e c a u s e i t i s r e g a r d e d
and A u s t r i a i t is a v e r y c h e r i s h e d d e l i c a c y .
i n t h e c u i s i n e s of t h e p e o p l e . The r e p u t a t i o n of p o r k a s b e i n g d i r t y ,
LO t h e t i m e 01 sonic t r a d i t i o n a l f e s t i v a l s .
But t o d a y , t h e u s e of p o r k i s E a s t l y g a i n i n g in a c c e p t a n c e . Morc
a c c o r d e d s i m i l a r r e g a r d s and r e c o g n i t i o n a s o t h e r meat t y p e s , s u c h
c h a i n s t o r e s i n u r b a n c e n t r e s i n t h e c o u n t r y w t e r e p o r k e n j o y prominer
a s thc? demand f o r p o r k h a s c o n t i n u e d t o s o a r .
number of p i g s s l a u g h t e r e d . F i g u r e s o b t a i n e d frorll r e g u l a r p o r k s e l l e l
This estimate will put the demand for pork at 150,000 kilograrnmes
Future demand
- -
Table 5.1 Demand Projection fox Pork (1995 -2000;
- 7
---
1
Year Quantity (kg) Kevenue at current of 120 per kg@mJ
1995 1800000 216.0
!% -.--..--
1980000 ,.,-
237.6
1997 2178000 -261.4
1988 2396000 287.5
1999 2636000 316.3
2000 2900000 348.0
The p r o j e c t i o n shows t h a t t h e dcn~aud f o r p o r k i n t h e a r e a w i l l
H348 m i l l i o n &t t h a t y e a r .
Market Study
i n tKe p 2 o d u c t i o n ahd s a l e of f i n e b r e d a n i m a l s , e s p e c i a l l y f o r
w e l l - d e v e l o ~ e d u d d e r , h a v i n g two rows of t e a t s w i t h a t l e a s t s i x t e a t :
d i s p o s i t i o n , and a b i l i t y t o s i r e s t r o n g r i g o r w ~ sp i g s . So t h e s e
e n t r e p r e n e u r s s e e t h e i r m i s s i o n i n b u s i n e s s a s t h e p r o d u c t i o n of p i g s
t h a t m a n i f e s t t h e s e q u a l i t i e s and which t h e y s e l l t o o t h e r f a r m e r s
a s i n - p i g s s g i l t s , b o a r s , sows o r f e e d e r s .
The second t y p e of t h e p i g s p r o d u c t i o n e n t . , ~ - r p r i s e sa r e i n t e r e s t e c
i n t h e b r e e d i n g of q u a l i t y p o r k e r s t o be s l a u g h t e r e d and s o l d as pork.
a p p r o a c h e s , a g r e a t d e a l of them s p e c i n l i s e i n one.
Thc m i s s i o n oL t h i s b u s i n e s s i s t o p r o v i d c meat t o t h e p e o p l e
Producer
I
I
Butcher
(RZitailer) .
1 > Consumer < I
F i g 1: M a r k e t i n g Channels f o r pork.
The c u r r e n t w h o l e s a l e p r i c e s f o r q u a l i t a t i v e p o r k meat i n t h e
30X p e r kilogramme h i g h e r t h a n t h e w h o l e s a l e p r i c e .
t h r o u g h l o w - p r i c i n g t e c h n i q u e , e s p e c i a l l y i n t h e p r h l r y a r e a of
Afte:: c a x e f u l c o n s i d e r a t i o n of t h e c ~ s of
t p r o d u c t i o n , t h e Grr
w i t l i a n e x p e c t e d mat b margin
I I ~ OF a t l e a s t 15X. T h i s w i l l rnske 1
p r i c e s v e r y t t t r a c t i v e i n r e l a t i o n t o o t h c c meat t y p c ~l i k e b e e f :
m u t t o n , c h i c k e n e t c whose p r i c e s r a n g e o v e r W180/Kg.
Although t h e r e i s o n l y s c a n t y s t a t i s t i c s i n a d e q u a t e t o e s t a b l i s h
p u r k s i s h i n g e d on s u c h r e a s o n s z s d i r t i n e s s and d i s e a s e i n f e c t i o n
how t h e s e n e t h o d s e x c u l p a t e t h e b l e m i s h e s t h a t r e p e l them. T h i s w i l l
be b e t t e r a c h i e v e d i f a p u r p o s e f u l and i n t e n s i v e m a r k e t i n g e f f o r t i s
c a r r i e d o u t on t h e consumers. It i s p r o j e c t e d b a s e d on t h e f i n d i n g s
p o r k e r s p e r annum.
l u o r d e r t o e f f e c t i v e l y s e l l t h e p r o d u c t , j g g r e s s i v e and '
a r t a c u l a t e d m a r k e t i n g s t r a t e g i e s have t o be a d o p t e d t o p l a c e n p o r k a t a
i n our society.
qua1 i t i 1 t i v c p r o d u c t . T h c g e n e r a l a s s u m p t i o n I n o u r s a c i c t y i s rh'lt
p o r k i s a n i n f e r i o r meat which do n o t e n j o y t h e p a t r o n a g e o f d . i c c n t m m e n
e n t e r p r i s e i s e x p e c t e d t o employ modern p r o d u c t i o n t e c h n i q u e s t o
d e s i r a b l e p o r k i:; g r e y i s h i n c o l o u r , f i r m and f i n e g r a i n e d , w e l l
It s h a l l a l s o be n e c e s s a r y t o engage i n a s y s t e m a t i c , a g g r e s s i v e
town where t h e i r s a l e s p e r s o n s w i l l be s t a t i o n e d t o s e l l t h e p r o d u c t
c u s torners.
i s expected t o a l s o engage t h e s e r v i c e of l o c a l a d v e r t i s e r s , e s p e c i a l l y
t h e c o n s m e r s on t h e h i g h p o i n t s 01 t h e p r o d u c t . The)' a r e t o c m v a s
t h e modern p r o d u c t i o n system l i k e t h e p r o j e c t i n c a s e .
I n a d d i t i o n , h a n d b i l l s may be d i s t r i b u t e d w!iere p r o p e r e x p l a n a t i o n
, ~ r e a ,p o i n t i n g o u t t h e h e a l t h and d c i t a r y advantages i l l h e r e n t i n
t l fmn!s
~ produced pork.
i f t h e r e i s an i n f i n i t e c a p a c i t y , a v a i l a b l e t o cne p r o j e c t , i t cou
bur t h e e n t e r p r i s e s marketing a c t i v i t i e s s h a l l s t r e t c h t o o t h v r a r
t o c o n c e n t r a t e on t h e s e t a r g e t e d markets.
Sales Forecast
p r o j e c t i s a s shown i n t a b l e 5.2
--
----?
Year of
- P o r k e r s ( a t 70lcg each)
S a l e s a t W120/kg
.-
of C n p a c i t j
Revenue £row s a l e s t o t h e p r o j e c t a t t h e c u r r e n t p r i c e s h a l l
expected t o i n c r e a s e t o W5.04 m i l l i o n by t h e f i f t h y e a r of o p e r a t i o :
a t f h l l production u t i l i z a t i o n .
P l a n t Capacity
i n i t i a l s t o c k ; funds f o r i n i t i a l c a p i t a l i n v e s t m e n t , and t h e r e q u i r e -
r e a r i n g which t a k e s minimal c o s t .
of pure b r e e d animals a s f o u n d a t i o n s t o c k . To a c q u i r e s t r a i n s t h a t
t h e second y e a r b e f o r e a t t a i n i n g t h e f u l l c a p a c i t y l e v e l i n t h e
t h i r d year.
The b a s i s f o r a n n u a l c a p a c i t y u t i l i S A t i 6 f i - i s :
iii t h a t t h e animals t h a t p o s s e s s t h e d e s i r e d q u a l i t i e s a r e b r e d t
sows and b o a r s t o i n c r e a s e t h e b r e e d i n g s t o c k a t a r a t e t h a t
would y i e l d t h e 600 p o r k e r s a-year p r o d u c t i o n .
Table 5.3
MATERIALS- INPUT
-- . -2
M a t e r i a l a and I n p u t
An e s t i m a t e d y e a r l y m a t e r i a l s c o s t f o r t h e p r o j e c t e d f i v e y e z
o p e r a t i o n a t 1995 c o s t c o n s t a n t p r i c e s h a s been p u t a s f o l l o w s :
Year 1
Year 2
Year 3
Year 4
sows i n c h e i r r e q u i r e d p r o p o r t i o n s a c c o r d i n g t o t.he s i z e of t h e f
guided by t h e d e s i r 6 d q u a l i t i e s i n t h e s e l e c t i o n of t h e b r e e d i n g
s i n c e i t i s paramount t o t h e f u t u r e performance of t h e farm. In
f e e d u t i l i z a t i o n e f f i c i e n c y , s i m i l a r i t y of c o l o u r , markings and
of p i g s ; while t h e boar i s a p p r e c i a t e d i f i t h a s q u a l i t y , m a s c u l i n i t
B r i t a n n i c a , 1970 e d , p 107).
10 f a c i l i t a t e t h e p r o g r e s s of t h e f a r q a s l e s s time i s s p e n t i n
r e as Follows:
~ ~ 1 p . 1 : i t i . ea ~ 20 i n - p i g s 2nd -one b o a r f o r t h e beginning
is attained.
Ta3le 5.4
--
No of In-pigs - No of -Boars
Required Required
Cost p e r
In-pig ypl) Boar (H) 1
Cost p e r I ~ r Tot
.
c o s t of y o d u c t i o n s i n c e f e e d s a r c very c o s t l y , i t i s recommende
d i e t s b u i l t on hay, s p e n t g r a i n s , palm k e r n e l c i l , f i s h w a s t e ,
o n l y economical b u t r i c h i n n u t r i e n t and a r e 6 f f i c i e n t l y i n u s e
many modern p i g g e r y e n t e r p r i s e s v i s i t e d i n c o u r s e of o u r i n v e s t i
t i o n r a t e of 200 kilogrammes of f e e d s p e r p o r k e r a r e e s t i m a t ~ d :L
shown i3 t a b l e 5.5
591,600
The t o t a l c o s t of primary m a t e r i a l s ( p i g s ) i n y e a r one i s
t o t a l m a t e r i a l c o s t s f o r t h e p r o d u c t i o n of 320 p o r k e r s a r e e s t i m a t e
t o produce a t t h e f u l l c a p a c i t y of 600 p o r k e r s p e r y e a r , e i g h t
change i s e f f e c t e d on t h e farm c a p a c i t y .
Packaging Cost
I n o f d e r t o enhance t h e decency of t h e p r o d u c t , p o r k i s u s u a l l :
(quantity price).
U t i l i t y Costs
(a) Electricity
To produce p o r k e r s , t h e e l e c t r i c i t y usage i s l i m i t e d t o what
(,b) kerosine O i l
e s t i m a t e d a t W8.50 p e r l i t r e = W1700.
(cj Water
Water c o s ~ sa r e e s t i m a t e d a t W52,000 f o r t h e f i r s t y e a r of
a r e t a b u l a t e d i n t a b l e 5.7.
Table 5.7 Annual Utilitv Costs
I. Kerosine .. Water .
i
I
Electricity
Charges (N)
I
Charges(W) Charges(8)
Toral Utility cha
(%>
Supply Programme
The breeding stock of in-pigs which are the primary material £01
Area, Enugu State, which is just 30 kilometres away from the locatios
qualitative breeds that would sire offsprings that will meet the '
generation interval and the degree of lean meat or fat stored by the
animal etc, the search for these initial stock may involve going to
and a boar in the first year, ten (10) in-pigs fcr year two, and
eight in year three to make for the required number 38. These
animals (38 in-pigs and a boar) are expected to yield not less than
standby lamps and stoves are easily procured in the many filling
to and from the project location. The availability c.f these utili-
of the project.
people into the area. The movement trend in the town is towards
the headquarters where these amenities exist, and thus will make
Our findings also indicate that while a plot of land (50 X 50sqm)
here could be procured with W25,OOO. The site is quite serene and
environmental threat.
Environment Impact
On the contrary, the pig dungs when collected and dried are sold as
manure which will help to enrich the environment with healthy plants.
PROJECT ENGINEERING
eastern part of the farm, with a minimiurn of six feet gap to enable
air to circulate freely in and around the houses. At the Southwest end
of tte farm will be an office block, with three rooms attached for
attendants.
J u s t c l o s e b y t h e farm h o u s e s , towards t h e s o u t h e a s t w i l l be Located
c o n d i t i o n . f o r t h e onward t r a n s m i s s i o n t o t h e s e l l i n g p o i n t s . This
a r r n n g e m e n t i s e x p e c r e d t o e n a b l e t h e f a r m a t t e n d a n t s t o have s l e e p i n g
c l o s e n e s s of t h e f e e d s s t o r e t o t h e p i g h o u s e s w i l l a l s o e n a b l e t h e
a n d o t h e r e s s e n t i a l b u i l d i n g s w i t h i n t h e farm i s e s t i m a t e d a r n o t
Te'chnology
- and Dquipir!r.rlt
-
a. --Technology
The p i g p r o d u c t i o n p r o c e s s i n t h i s p r o j e c t w i l l be a d a p t e d t o
t h e l o c a l . t e c h n o l o g y , e s p e c i a l l y i n f e e d i n g of t h e a u i m a l s . Uut i n
The S t a g e s i n P i g P r o d u c t i o n
The g i l t s a r e u s u a l l y b r e d a t 8 t o 81 months o f a g e , t o f a r r o w
t o 20 oi 30 so\,.; a t t h e
111ay be b r e d a t e i g h t months 01 a g e and ~n~ltccl
nated with the boar on the second or third day. If not pregnant,
the sow a a e s on heat every three weeks. After the mating, the gilt
too fat.
the sow to make nest. The sow is usually scrubbed with warm water,
soap and disinfectant and put in the crate. Providing pens with
guard rai1.s (Creep) helps prevent sows from crushing their young.
=he mother cannot enter the creep area and this restricts contact
with the piglets in the pen. The sow is usually removed from the
crate three days after farrowing. The use of the electric pig brood
:he first two weeks of life when most losses usually occur. The
weaned from their mothers at six to ten weeks of age. The sow is
usually taken away from the piglets. This is done to reduce suEkling
-
Fat:tening of the Pigs
Pigs should be well fed and cared for during the growing and
Processing of Pork
Table 5.8
Schedule of Day - to - Day Operations in a
Modern Piggery Farm
Periodic Operations
Weighing of the stock
Cutting needle teeth of piglets
Castration and vaccination
Identification of ba6y pigs by ear-notchin
Sale of ready for market stock.
Periodic Operations
Deworming the animals
Treatment of sick pigs
B
Checking n u r s i n g sows and g i l t s i n t h e f a
Periodic Operations
1 Weaning of p i g l e t s
2 weekly s c r u b b i n g of t h e f e e d and w a t e r trc
3 Attending t o farm p u r c h a s e s -
(b) Equipment:
p i g producers a r c i n c r e a s i n g l y s u b s t i t u t i n g more c a p i t a l f o r l a b o u r
in u s e f o r t h e e x e c u t i o n of t h e b u s i n e s s .
c o n s t r u c t i o n of r o a d , d r a i n a g e s and supply of u t i l i t i e s . It i s
e s t i m a t e d t h a t 1000 s q metre of l a n d w i l l be r e q u i r e d f o r t h e t h r e e
development.
t1
I
Cost of l a n d
C l e a r i n g and l e v e l l i n g 1
Rate ( W )
100
30
Area
1000m2
I 1000n12
c o s t i.n ( W ) .
100,000
30,000
\
i Drainage
1 Roads 1 2500 1 120m 30,000
1 : l e c t r i c i t y supply(connec I I
1:iun tc main l i n e ) 5000 5 poles :!5,000
/ I1encc and g a t e I I lOU,OOO ,
t A_-_
I
(ontigencies I 10,000
--
--
1 I 310,000
B u i l d i n g and S t r u c t u r e s
Far-n House
P i g housing, i n a d d i t i o n t o t h e primary o b j e c t i v e of p r o v i d i n g
p r o t e c t i o n t o t h e p i g s a g a i n s t h a r s h weather c o n d i t i o n s , s a v e s l a b o u
ccrncrete, and it slopes gently to one end of each row of the pens.
The sloping is to facilitate the run off of urine and water when
the lower half and the other half closed only with galvanised wire
guaze.
These pig houses are normally demarcated into pens, with each
accommodates a sow and its litter, the weaners and fattening pens
block with three rooms attached for attendants. This will cost an
Particulars -- in (W)
Cost
3 Farm Houses (W350,OOO each) l,O5O,OOO
Office B1oc.k (with rooms attached) 250,000
Store House 55,000
Abattoir 25,000
Total 1,380,000
Plant Organisation
The farm is to be organised in such a way that functions are
dcpartmented into two-production and administrationlsales. These
two departments shall be manned by two staffers of supervisors rank,
wto are to be answerable to the farm manager, who is the head of the
farm administration and is responsible for the success of the enterpr:
He is only answerable to the Director (the owner) of the farm from
whom he needs to seek endorsement for policy matters.
The two supervisors are entrusted with specific functions.
The production supervisor ensures that all opera'cional details are
carried out by the farm attendants. The administrative/sales super-
visor oversees the work of administrative and sales staff to ensure
that they are working to targets. The manager on the other hand is
the chief executive of the farm and co-ordinates both production and
administrative/sales department.
Fig 5.1
Director
I
I
Farm Manager
I
s i_=J
AdrninISales Supervisor
17=-Tpl
Salesmen ecurity Typists Driver
Farm Supervisor
p-ajtendants/
' h b costs of training, technical assistance is cclpitalised and cha
farm equipment has been put at .5% of the total equipment costs fc
Interest Expenses
-- .-
Interest on :Interest on
short-term loan 3 long-term loan
I
Production
-----
The production department also requires 6 professional
work with the four pig attendants to ensure that the animals are
properly managed.
Administrative/Sales
security men, and sales force. A sales force of five sales persons
for the picking van. Two security men will be required to ensure the
Personnel Costs
--
The progressive increase in the capacity utilization of the
Add 50% Fringe Benefits and allowance for Salary increases 240,001
PROJECT IMPLEMENTATION
measures wh,.c:re n x e s s a r y .
02 t h e i n - p i g s . A t t h i s s t a g e t h e s a l e s f o r c e i s r e c m i t e d , and
s t o c k of pork.
inception.
be s e t up t o t a k e r e s p o n s : i 3 i l i t y f o r over a l l p r o j e c t implementatil
t r a i n i n g of t h e p e r s o n n e l , e s p e c i a l l y t h e farm a t t e n d a n t s . The
s h o u l d b e used a s r e s o u r c e p e r s o n s f o r t h e t r a h i n g of t h e j u n i o r
staff.
FINANCIAL AND ECONOMIC EVALUATION
Pre-operating Expenses
It has been estimated that the over all investment cost for
Equity:
account for about 55% of the long term funds required for it,
through t h e a g r i c u l t u r a l f i n a n c i n g i n s t i t u t i o n s i n t h e c o u n t r y a t
back w i t h i n f i v e y e a r s - i n f i v e i n s t a l m e n t s .
Short-term Loan
c a n t 30% of t h e t o t a l c o s t o u t l a y of t h e p i g p r o d u c t i o n p r o j e c t i s
t o b e f o r a p e r i o d of t h r e e y e a r s a t a n i n t e r e s t r a t e of 2.1 p e r annum.
T h i s f i n a n c i n g p r o p o s a l i s expected t o y i e l d a d e b t / e q u i t y
p r i n c i p a l repayment s c h e d u l e f o r t h e p r o j e c t .
Year
Total Principal '
Outstanding
Principal
Payable
I,
Interest Total I Payable
( w (W (W
roduction Costs
The expected p r o d u c t i o n c o s t s f o r t h e p r o j e c t f o r a y e a r i s
based on y e a r 1 f i g u r e s .
Direct Material
D i r e c t Labour
I n d i r e c t Wages
Indirect materials
Rent
Depr.. of f a c t o r y p l a n t and
Equipment ,
For t h e subsquent y e a r s , a l l t h e p r o d u c t i o n f a c t o r s a r e
expected t o be c o n s t a n t , e x c e p t f o r v a r i a t i o n s i n d i r e c t all11 i n d i r e
p r o d u c t i o n c o s t s f o r t h e s e y e a r s up t o t h e f i f t h , we have s p p r o x i
t o t a l s a s follows:
Year 2 , W1,754,000; y e a r 3, W1,850,000; y e a r 4, W1,955,400 and
y e a r 5, F2,077,100.
Commercial P r o f i t a b i l i t y
--
Year 1 year 2 year 3 fear 4 Year 5
(HI (W (W -
(W - (W
Sales 2,688,000 4,032,000 5,049,000 5,043,000 5,040,(
Cost of s a l e s (1523567) (1823567) (2012368) (2012368) (20123(
Gross p r o f i t 1164433 2208433 3027632 3027632 302763:
Admin expenses (48600) (30,000) (20,500) (2G,500) (20,501
I n t e r e s t Expen. (314,850) (224,300) (133,800) (43,200) (21,601
Operating p r o f i t 800983 1954133 2873332 2963932 298553:
Other income - - - - -
P r o f i t before
tax 800983 1954133 2873332 2963932 298553
Tax ( a t 35%) (280,347) (683947) (1005666) (1037376) (LO449
Profit after
Tax 520,639 1,270,186 1,867,666 1,926,556 1,940,
Appropriat;iOn
Dividend (I,l2O6OO: (1155934) (11643
Retained p r o f i t 747066 770622 7762
P r o i e c t e d Balance Sheet f o r End of Year 1 - vear 5
Fixed A s s e t s
Current A--
ssets
Stock a c end:
Particulars
i\ -INFLOW
-
L e a r 1 (W) Year2 (W) y e a r 3 (W)
Sales 5,040,000
zquity
l n v e s trnent -
Long-term
Loans -
Short-term
Loans
--
-
OUTF1,CW
--.-
Fixed A s s e t s
Investment 2,393,640
Materials
lnpu t 750,000
Salaries 723,Or)O
Adrnin/General
Service 119,280
Debt S e r v i c e 859,150
C o r p o r a t e rdx 52G,G39
--
-- -
:ash S u r p l u s 600,291 51,374 463,38t 823 ,A94 H31 , O
--a t i o s
A n a l y s i s of S e l e c t e d F i n a n c i a l R
I n o r d e r t o measure t h e performance of t h e b u s i n e s s a g a i n s t
c e r t a i n i n d i c e s and g u i d e l i n e s , some f i n a n c i a l r a t i o s a r e p r e s e n t e d t
Current Assets
Current Liabilities
= T o t a l Investment
Average P r o f i t a f t e r t a x + Depr
The p r o j e c t c o s t i s p r o j e c t e d t o be W3,378,000, w h i l e t h e
Break Even A n a l y s i s
The Break-even a n a l y s i s i n d i c a t e s a l e v e l of o p e r a t i o n a t wl
t h e e n t e r p r i s e w i l l make n e i t h e r p r o f i t nor l o s s .
T h i s post--tax p r o f i t a b i l i t y i s expected t o grow subsquent:Ly up t o
W1.94m i n t h e f i f t h y e a r .
margin of s a f e t y i n c a s e of u n f o r e s e e n o p e r a t i o n a l h i t c h e s . What a l l
investment. a p p r a i s a l .
T h i s s t u d y h a s been a b l e t o a f f i r m t h a t p i g p r o d u c t i o n e n t e r p r i s e
l a r g e market f ~ pork.
r I n a d d i t i o n , t h e v i a b i l i t y of t h e p r o j e c t i s
underscored by i i S h i g h p r o f i t a b i l i t y .
T h i s r e s e a r c h e r t h e r e f o r e adjudges t h e p r o j e c t a s a sound i n v e s t -
,
S cheaf f erantizl Richard, e t a1
3rd ed. Massachussets:
. . Elementary Survey Samplixg
Pitman Publishing I n c , 1970.
.
Taiwo, Zeb. Problems of Commercial Pig Production i n Kigeria.
Paper presented a t a Seminar on Economics of P i g P r o d u c t i m i i
Nigeria, University of Ibadan, April 12, 1986.
r e l a t i o n t o t h e study of t h e p r o s p e c t s o f a p i g * p r o d u c t i o n
e n t e r p r i s e i n dnugu-Ezike, P l e a s e as much a s ~ o s s i b l eg i v e
a c c u r a t e answers t o t h e s e q u e s t i c n s , a s y o u r r e s p o n s e s s h a l l
h e l p t o d e t e r m i n e t h e r)bize o f p o t e n t i a l p o r k consumers i n t
-
Please t i c k / V / a g a i n s t y o u r c h o i c e o f ;tn:;u.rer, v:here
a3plicable.
1, h ~ m cof c o m u n i t y -
2. Sex: Elale Female -/I
3. Marbtal s t h t u s : Single /7M a r r i e d /-'7
I;. : 30 y e a r s o r l e s s 1-7
years -- 50 y e a r s
51 y e a r s -- 60 y e a r c /-
Above 60 pears L3
5. Religion: Christainity 1 - 1 Islamism -I/
Trsditional /
-/ others 1
-
6. To which income g r o u p do you b e l o n g ?
More t h a n i435,000 / /
6. (a) 00 y o u e a t p o r k ? Yes /- No /-.-7
(b) I f y e s , why - -
(c I I F NU, dhy -
, How o f t e n do you e a t p o r k ?
I rr ,-1
10. HOVI is t h e p i c e o f p o r k in r e l a t i o n t o o t k r
sive /7
11. i i ~what p r i c e 2 e r hilcpamme do you h i y p o r k ?
53. How do y o u u s e p o r k ?