EXECUTIVE SUMMARY

Olam’s poultry farm will specialize in the rearing and sales of broilers and manure. The proposed
target market for the poultry business are caterers, households, restaurants, hotels, students, and party
planners. The mission of this business is raising the standard of available poultry products while
keeping products affordable and readily available for customer satisfaction.

The business is projected to make a sales turnover of about 600,000 Naira gross profit of about
400,000 Naira from the first two (2) years of operation.

This business has the potential of positively impacting the economy through labour employment,
revenue generation to the government in the form of taxation as well as contributing to ensuring
food security in the country.

With the current economic reality of high youth unemployment in Nigeria, this business will take
some people off the labour market and have them positively contributing to the economy of the
country, while they secure their personal income.
 TABLE 2. List of Equipment Required

S/N Equipment Description/ Importance

1 Stand-by Generator Due to the epileptic power supply in Nigeria, an alternative

source of power is required to successfully run a poultry
business

2 Feeders These are device used to feed the poultry birds, mostly
made of plastic

3 Lighting gadgets Bulbs and rechargeable lamps for illuminating the poultry

4 Drinker This are device used to hold water for the birds to drink
from.

5 Waste bin This type of business generates a lot of waste that needs to
be properly disposed

6 Tables and chairs The tables and chairs are for sales representative and
customers

7 Shovel Shovels will be required to tidy up poultry trash

8 Face masks These are very vital especially when cleaning the poultry

9 Gloves These are also very essential in the poultry farm business,
most importantly when cleaning the poultry

Page 1 of 11
 PRODUCTION TECHNIQUE

Production technique in this line of business refers to the processes and procedures applied at each
stage of raising chickens from the day-old chick up to when they are ready to be sold in the market.

A day-old broiler requires about eight to nine weeks to reach maturity and in the all-in all-out
technique which will be applied, day-old hybrid broiler chicks can be purchased in one batch to be
raised till maturity and then sold in a single batch in the market. This is an extremely popular technic
and one of its merits is that it allows the farmer to thoroughly clean up and disinfect the poultry, prior
to taking in a fresh batch of broilers. This helps to reduce the chances of having a disease infested
poultry.

PHASE 1: In this phase, day-old chicks are purchased from reputable sellers and then raised for about
four weeks in the brooding facility, before being transferred broilers cub.

PHASE 2: Here, four weeks old chicks are raised for another four to five weeks, before being sent to
the market for sale.
POULTRY PRODUCTION CAPACITY

The intended production capacity of the poultry is about one thousand broilers at the beginning.
Broiled take about nine weeks to attain maturity and so the numbers of broilers will be increased
during festive periods to meet increased demand during these periods. We are projecting raising an
initial amount of about four thousand, four hundred (1000) broilers in the first year.

TABLE 3. List of Essentials

Materials Description

Feeds Feeds for poultry birds

Water Water from drilled borehole

Vaccine Vaccination for the birds

Saw dust These will be used on the floor of the poultry house

Day old chick These are day-old chicks to be raised for about 8 to 9 weeks

Page 2 of 11
 FINANCIAL PLAN

TABLE 3. Estimated start-up capital requirement

Items Cost

Pre-operating Expenses ₦50,000

Opening Stock ₦27,900.00

Total Operating Expenses for 3months ₦300,000

Total Estimated Start-up Capital ₦377,000

SOURCE OF FUNDS

This business will be funded from personally by the business owner from personal savings sources.

TABLE 4. Source of Funds

SOURCES OF FUNDS AMOUNT Percentage

Personal equity ₦500,000 100%

Page 3 of 11
PRE-OPERATION EXPENSES

The pre-operation expenses include the cost of land, land preparation cost, electricals, cost of
equipment, cost of preparing the brooding room for day old chicks and cost of business
registration the business. All of these precede the commencement of daily poultry business
activities

TABLE 5. Pre-operation expenses

Pre-Operating Activities Amount

(₦)

Land acquisition -

Land preparation/Building 700,000

Electrical/Plumbing 15,000

Purchase of equipment 360,000

Preparing of brooding room 10,000

Business registration/local gov tax 30,000

OPERATING EXPENSES

Operating expenses are the projected amount required to keep a business running for a specified period.
In this projection, a period represents three (3) months, comprising of ninety (90) days on average.

Page 4 of 11
 TABLE 6. Operating Expense Projection for Two Years

  Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8  

Time Frame Apr - Jun July - Sept Oct - Dec Jan - Mar Apr - Jun July - Sept Oct - Dec Jan - Mar Total

Salary 342,000.00 342,000.00 342,000.00 342,000.00 342,000.00 342,000.00 342,000.00 342,000.00 2,736,000.00

Repairs 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 24,000.00
Feeding Cost 689,472.00 574,589.00 574,589.00 689,472.00 689,472.00 574,589.00 574,589.00 689,472.00 5,056,244.00
Vaccine and   10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00 70,000.00
Medication
Purchase of Broilers 360,000.00 360,000.00 360,000.00 360,000.00 360,000.00 360,000.00 360,000.00 360,000.00 2,880,000.00
Insurance on 18,000.00 15,000.00 15,000.00 18,000.00 18,000.00 15,000.00 15,000.00 18,000.00 132,000.00
Broilers
Total Expense 1,412,472.00 1,304,589.00 1,304,589.00 1,422,472.00 1,422,472.00 1,304,589.00 1,304,589.00 1,422,472.00 10,898,244.00

Page 5 of 11
 TABLE 7. Opening Stock

Stock/Item Quantity Unit Cost (N) Total (₦)

Vaccination 10000

Cleaning materials 3 100 300

Face mask 3 200 600

Total 10,900

TABLE 8. Proposed Price List

S/N Products Description /details Proposed market

price (₦)

1 Broiler 1 Broiler 3000

2 Manure 1 Bag of manure 200

FINANCIAL ASSUMPTIONS

For this financial analysis, the following assumptions were made: Inflation rate is assumed at 5%,
Interest rate is assumed at 9%, tax rate at 5%, insurance assumed at 5%, the straight-line method is
assumed for depreciation and salary increment assumed at 5%.

Page 6 of 11
 ORGANIZATIONAL STRUCTURE

Manager

Marketer

Labours
OWNERSHIP

Olam’s poultry farm is a sole proprietorship business. This ownership structure was chosen because it is
easy to manage, and because it gives the owner total control over business activities. The poultry is
initially maintaining a relatively small workforce, with the intention of expanding as time goes on. A
sole proprietorship gives the manager the ability to control the daily affairs of the business.

Business hours are from 9am to 5pm Mondays to Fridays, and 10 am to 5pm on Saturdays.
STAFF ROLES AND RESPONSIBILITIES

The key staff roles of poultry are the manager, the marketer, and the labour. The table below highlights
the roles and responsibilities associated with each position.

TABLE 9. Key Management Team

S/N Position Primary roles and responsibilities

Managing, supervising, overview of business, payroll, running
1 Manager
cost financing
2 Marketer Marketing the Poultry products to increase customer base
Feeding the birds, cleaning the poultry house, change the water
3 Labourers
and cleaning the drinkers
DETAILS OF SALARY SCHEDULE

Here, the salary salary structure for each of the employee of Olam’s poultry will be analysed, bearing in
mind the recently approved ₦30,000 minimum wage in Nigeria.

TABLE 10. Staff Salary Schedule

Annual
S/N Position Monthly Salary
Salary
1 Manager ₦45,000 ₦540,000
2 Marketer ₦39,000 ₦468,000
3 Labour ₦30,000 ₦360,000
  Total ₦114,000 ₦1,368,000

Page 7 of 11
MARKET RESEARCH AND ANALYSIS

According to Sanni (2017), broiler production can be profitable with a mean profit of about ₦912 per
broiler, with an average return of about ₦1.98. He also concluded that for every ₦1 invested in broiler
production in Kwara state Nigeria, the mean profit efficiency is 74%, with a range of 98%.

Baba, Dabai, Sanchi, Yakubu and Manga (2016), came to the conclusion that the average total cost of
producing a broiler is about ₦1, 085.00 per bird, with an average total revenue of about ₦1, 590.00 per
bird and a net poultry income of about ₦505.00 per bird. This clearly shows that the broiler production
business can be very profitable.

According to Omolayo (2018), the total cost of producing a broiler from a day-old chick to maturity, is
about ₦1509.80, with a fixed cost of ₦274.20 and a variable cost of ₦1235.60. The study showed that
the gross revenue per broiler was about ₦2169.99 and net profit of about ₦660.11 per bird. It was
indicated that a ₦1.00 investment in broiler production would yield a return of about 44kobo. This study
concluded that the broiler poultry farm business is profitable in Lagos Nigeria.

For Ike and Ugwumba (2011) the total cost of raising a day-old broiler to maturity was about ₦942.14,
with ₦30.40 as fixed cost and ₦911.74 as variable cost. According to this study, the gross revenue per
bird is about ₦1334.00, with net revenue at ₦391.86. This showed that for every ₦1.00 invested into
the broiler poultry business all things being equal, there would be a return of ₦0.42.

From various researches on broiler production in Nigeria, it is clear that the business is very profitable
but when compared the developed countries of the world, productivity is relatively low. The Nigerian
government have tried to address this issue by imposing an outright ban on the importation of poultry
products, whether dead or alive.

This has created a level playing field and Olam’s poultry can grow to become a major player in the
poultry farm business in Nigeria.
PESTLE ANALYSIS OF THE NIGERIAN POULTRY FARM MARKET

POLITICAL FACTORS: Nigeria practices a democratic system of government. The country is rich in
agriculture but continues to suffer largely due to poor leadership and corruption. According to the 2018
Corruption Perceptions Index as reported by Transparency International, Nigeria ranks as the 144 th least
corrupt country out of the 175 countries listed.

The political climate in Nigeria gradually stabilised in recent months and the current presidency has
intensified its efforts to counter corruption and terrorism, which have greatly impacted the level of
economic development in the country. The government has also adopted some favourable agricultural
policies to encourage farming in the country. Some of these policies include an outright ban on the
importation of some agricultural products, tax exception for the agricultural processing industry, and
making export incentives available for manufactures in the agricultural sector (Heise et al 2015).

Poultry farming in Nigeria is characterized by low productivity, and the major reason for this is little or
no availability of finances for acquiring the basic materials needed for production. Many poultry
farmers are unable expand their poultries from small to medium scale because they do not have access
to the necessary credit facilities (Adeyemo & Onikoyi. 2012, 388 - 389).

Page 8 of 11
ECONOMIC FACTORS: The recent collapse in oil price have drastically affected the Nigerian economy.
According to the World Bank, between 2000 and 2014, the gross domestic product (GDP) of Nigeria
increased at an average of 7% per year. But following a fall in oil price between 2014-2016, the
country’s gross domestic product (GDP) growth toppled to 2.7% in the year 2015, forcing a recession in
the year 2016. The Nigerian economy saw a contraction of 1.6%, with a growth average of 1.9%
recorded in 2018 and 2% in the first half of 2019. Looking at those numbers before considering the
effects of the pandemic, it is clear that the rate of economic growth in Nigeria is too slow for its large
population. The need to look at diversifying the economy with emphasis of agriculture could not be
clearer and poultry farms have a large role to play in the diversification effort.

SOCIAL FACTORS: Nigeria is the most populous black nation, with a population of over 200 million
people, with more than 250 ethnic groups. With such diversity, it is only expected that friction will
occur between various ethnicities. The level of friction has been exacerbated in recent years by the high
level of unemployment, and poor socio-economic condition of the populace. The emergence of the
terrorist organisation known as Boko-Haram has negatively affected the rate at which business activities
are carried out in North-Eastern Nigeria, and this has had a negative effect on agricultural activities in
the nation at large.

TECHNOLOGICAL FACTORS: The systems of poultry production in Nigeria can be generally classified into
Subsistent and Commercial systems. A commercial system of poultry farming can expand from small
scale to medium and large scale when coupled with modern technology. But most of the poultry farms
in Nigeria fall under the subsistence system which require little veterinary inputs (Adeyemo & Onikoyi
2012, 388 - 389.). Commercial poultries are industrialized and usually require modern hybrids of
poultry birds. They are relatively capital intensive, which is why most poultry farmers in Nigeria have
not been able to commercialise their poultries. Technology in poultry farming allows for better disease
control measures, development of better chick breeds, efficient storage, better feeds, and a modern
approach to sales and marketing (Mamun 2019,6).

LEGAL FACTORS: The Nigerian government is gradually adopting agriculture friendly policies to
encourage more people to go into agriculture. Some of these measures include placing a ban on the
importation of poultry birds, tax breaks for agricultural businesses, provision of fertilizers etc.

ENVIRONMENTAL FACTORS: The Nigerian climate is typically dry or hot, known as the rainy and dry
seasons. Throughout the year, the temperature is mostly hot, staying above 30 degrees Celsius. The
amount of rainfall varies from one part of the country to the other, with the southern and eastern parts of
the country seeing more rainfall. In an effort by the government to tackle the shortage of rainfall in the
northern part of the country, there have been large investments in irrigation farming in recent years.

Page 9 of 11
 TABLE 11. SWOTS Analysis

STRENGTH WEAKNESS
Agricultural policy High start-up capital
Population growth Disease outbreak
Low cost of machinery importation Mortality rate
Profitability Market price
High cost of feed
Available market
Innovation
OPPORTUNITY THREAT
Tax breaks Existing competition
Low cost of labour High cost of energy
Availability of land Corruption
Health/Disease outbreak
Favourable climatic condition
Poor infrastructure: road, water, vaccination etc.

The table above shows the Strengths, Weaknesses, Opportunities and Threats associated with the
poultry business in Nigeria.
TARGET MARKET

The proposed poultry farm targets households, restaurants, hotels, students, and event planner.

TABLE 12. Marketing strategies

Advertisement/promotional Budget per Details on Frequency and

Strategies annum justification of budget
Social network 5000 To put increase business audience
Bulk short message sender 5,000 To remind our customer of our existence
Complimentary card 2,000 Once in 2 years
Banners and signage 5,000 Once
Total 17,000  

DISTRIBUTION

There is an already existing chain of distributors around our location and we intend to fully exploit their
sales force to ensure that our products are properly distributed. We will implement a system whereby;
buck purchase attracts a reward of a small discount or free delivery. We will create an ease of doing
business environment by allowing for online and cash payments. We will also use various social media
platforms to expand our audience and increase our market reach.
CONCLUSIONS

The time to take agriculture seriously again has come for us as a nation especially during a global
pandemic. Olam’s poultry farm intends to increase food production through poultry farming and the
financial aspect of this proposal clearly shows that there is an opportunity to exploit in poultry farming.
It has also been shown in this proposal that with adequate funding, this business will be highly
profitable especially when the poultry is commercialised and meets international standards.

Page 10 of 11