A PROJECT FEASIBILITY STUDY OF HONEY DUCK “ITIK” EGG

PRODUCTION AND PROCESSING

In partial fulfillment of the requirement

for AE 28 MANAGEMENT CONSULTANCY

Presented to:

MR. ELEUTERIO BLASCO, JR

Proponents:

JURIE MAE P. BALANDACA

APRIL LYN L. LIMSAN
LYKA MAE L. TERO
ANGEL P. VICENTE
BSA-4
ACKNOWLEDGEMENT

1
A. Business Name

The business name is “HONEY DUCK” which is derive from

the name of our beloved friend named HONEY FEARL.

B. Project Title

The project is entitled “HONEY DUCK (Itik) Egg

Production and Processing“. The proponents chose to

pursue this project due to a variety of relevant

reasons. To begin with, duck production in the

Philippines is a profitable enterprise because of its

various processing opportunities such as “balut”

(boiled incubated duck's egg) and penoy (unfertilized

duck egg without yolk). Duck is the second most

important source of eggs and meat after chicken. The

gross value of duck egg production in 2021 was

estimated to be Php 5.44 billion (Philippine Statistics

Authority, 2021). Another reason is duck production can

start-off with a minimal start-up capital and requires

less expensive facilities compared to other poultry

animals. In terms of feeds, ducks do not need a 100

percent of commercial feeds which reduces feed cost.

Most importantly, duck is regarded as the most

adaptable species of bird because it can survive in a

variety of climatic and dietary conditions (Lambio

2
 2002). Therefore, the researchers endeavor to study the

feasibility of putting up this project into a

partnership.

C. Project Location

Ducks can be raised in areas near bodies of water

or areas where there are rice fields to feed on after

harvest and use the rice hulls (tipasi) as a laying

material. As a rural city, the researchers have chosen

Oroquieta, Misamis Occidental specifically in the

barangay of Mobod to be the main location of the

proposed project. The lot which will house the farm has

an area of 300 sqm. The farm is relatively far from

residential areas about 230 meters, as required by

Department of Environment and Natural Resources (DENR).

The owner of the lot has provided us the cost of

the lot where the fowl is situated, which range from

1200 to 1500 per square meter. Since the farm occupies

300 square meters, the lot will cost Php 450,000.

D. Statement of the Objectives

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 This study entitled “A Feasibility Study on Itik

Egg Production and Processing” aims to explore the

possibility of venturing into Itik Egg Production and

Processing in Oroquieta City, Misamis Occidental.

Specifically, the study seeks to:

Present sufficient information and analyses

regarding the market, technical, financial, management

and organization and socio-economic implications.

In order to determine the feasibility of the

proposed project, the following questions shall be

answered:

A. Market Aspect

1. What benefits can be derived from the proposed

project?

2. What are the products to be produced?

3. Are the products competitive as to other goods

in the market?

4. Is the production capacity of the project

adequate for the market?

5. Are the products produced acceptable by the

prospective market?

4
B. Technical Aspect

1. Is there ready and adequate location for the

proposed project?

2. Is the location accessible for transportation?

3. Are there available resources of equipment and

other technical requirements like raw materials

needed for the proposed project?

4. Are there qualified technical personnel who can

provide service for the installation and

maintenance of the equipment?

5. Are there qualified people to look into the

physical preparation of the proposed project?

6. Are there enough utilities – electricity, fuel

and water for the operation of the proposed

project?

7. Is the proposed project environmentally-

friendly?

8. Are there available methods of waste material

disposal?

C. Financial Aspect

5
 1. What is the total financial requirement of the

proposed project?

2. How will the proposed project be financed?

3. Is the proposed project financially viable?

4. What kind of taxes and licenses will the

proposed project pay?

D. Organizational Aspect

1. What form of organizational structure will the

proposed project adapt?

2. Are the enough qualified people to manage the

proposed project?

3. Do we have some assistance from the government

regarding organization and development of the

association that can best manage this type of

project?

E. Socio-economic Aspect

1. Will the project affect the lifestyle of the

farmers in Solana, Cagayan?

2. Will it generate employment?

3. Will it earn additional investment in the

community?

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 4. Will it improve the economic condition of

Oroquieta City, Misamis Occidental?

5. Will it add income to the government?  

I. MARKET ASPECT

1. The Need of the Project

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 This study aims to ascertain the feasibility of

putting up a business on Itik Egg Production and

Processing in Mobod, Oroquieta City, Misamis

Occidental. The need for the project could be viewed

from the effects it could generate to enterprise

citizens and to the researchers in particular, who are

exploring viable investment projects where they could

channel their resources. The study will provide

comprehensive vital background information on all

aspects of the business. It encompasses five major

aspects, namely: market aspect, technical aspect,

financial aspect, management and organization aspect,

and socio-economic aspect. In as much as the setting of

the study represents a typical town, the findings of

the study may be applicable to other similar rural

communities where ducks could be grown and raised.

Hence, potential entrepreneurs may find this study

useful and applicable.

The project could be implemented by any prospective

investor who can generate the necessary resources to

start the business. Once the project is implemented,

8
the owner and the community as a whole will enjoy

several economic and social benefits:

a. It will generate income to the owner and other

people who will be directly or indirectly

employed in its operations like the farmers,

vendors, and other retailers.

b. It will channel idle resources of investors to

fruitful undertakings.

c. It will generate employment to certain

residents of the community and hence contribute

to the massive livelihood program now being

launched by the government.

d. The City of Oroquieta would receive income from

permits, fees, licenses and taxes to be paid by

the investor.

e. The nutritional level of the consumers of the

“balut” will be improved since the product is a

good source of protein supply and hence, the

product would be readily available and sold at

a reasonable price.

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 2. Market Description

The proponents seek to penetrate the market as

producers of duck egg. The eggs will be distributed

retailers and then subsequently sold to consumers.

Details of the marketing will be discussed thoroughly

in the Marketing Program (page _). As producers, the

eggs will be used as an input to the production of

balut and penoy.

Duck egg production and processing is s profitable

enterprise; even the so-called ‘low’ quality eggs, such

as those that have thin and cracked shells can still be

sold in the market and used as table egg. The most

popular egg products are balut and penoy.

Apart from its importance as an integral part of the

food culture in this country, duck eggs were also

reported as a good source of protein and other

nutrients and are regarded as a food with high

nutritional quality (Al-Obaidi and Al-Shadeedi, 2016;

Ahmad et al., 2017). People eat duck eggs for their

high nutritional value because of the optimal

composition of essential amino acid and the

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considerable composition of fatty acid with a high

percentage of polyunsaturated fatty acids and a

favourable ratio of omega 6-to omega 3-fatty acid (Al -

Obaidi and Al-Shadeedi, 2016). In addition, it is

economical as well as quick and easy to prepare and

serve.

3. Demand

3.1 Present Demand

At present, marketing of duck eggs is not a problem

since demand is high. In fact, supply is still unable

to meet the demand for balut and other egg products.

In the Philippines, about 90 percent of total duck

egg production is used for processing (BASSRTC 1998).

87 percent of which is processed into balut and another

7 percent is processed into salted eggs. The remaining

6 percent consists of salted eggs and penoy (Dagaas and

Chang, 2004). This means that balut accounts for about

80 percent of total egg production. This emphasis on

balut production is a unique feature of the Philippine

duck industry. Although unfamiliar to most foreigners,

balut and penoy are delicacies in the Philippines for

their unique taste and nutritional content. Cooked

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 balut is sold as snacks in the evenings by street

vendors, either peddling on the street or stationing on

the sidewalk.

3.2 Projected Demand

The table shows the projection of the demand of the

product for the first three years.

Table 1.A table showing the Projected Demand of Duck

Egg for 3 years

Year Projected Average Consumption Projected

Population Consumption per Demand
head(pcs)
1 72,300 40% 3 86,760
2 72,667 42% 3 91,560
3 73,043 45% 3 98,608

Source: population city website

Interpretation: Based on the recent data given in the

website, there is a population growth rate of 0.52% per year

(2010-2015).

4. Supply

4.1 Present Supply

As mentioned previously, supply is still unable to

meet the demand for balut and other egg products.

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 4.2 Projected Supply

The table shows the projection of the supply of

the product for the first three years.

Table 2. Projected Supply of Duck Eggs

Year Projected Supply

(per annum)
1 214,200
2 218,056
3 221,981

Interpretation:

Based on PSA (Philippine Statistic Authority) data in 2021,

there was an increase of 1.8% total egg production higher

than the previous year. So we use the 1.8% as our based

percentage increase per annum.

In addition, there are 280 eggs per ducks laid every year

and the estimated ducks that will survive and lay eggs are

765.

5. Proposed Marketing Program

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 The duck egg will be sold to the market at 7.00 per

piece. There are four marketing channels used in marketing

duck eggs. The flow of marketing duck eggs is shown below.

1. Producer -> assembler-wholesaler -> retailer ->

consumer

In this type of marketing channel, the assembling of

duck eggs and it by products: balut, and penoy is in

the producer’s area and the eggs are later sold to

retailers in the market.

2. Producer -> assembler-wholesaler ->balut operator ->

retailer(vendor) -> consumer

The producer sells the duck egg to the assembler-

wholesaler. The assembler-wholesaler will then sell the

egg to the balut operator and the balut is retailed by

the vendor to the consumer.

3. Producer ->balut operator -> retailer(vendor) ->

consumer

In this instance, the balut operator directly gets duck

eggs from the producer and sells to the retailer/

vendor then ultimately to the consumer.

4. Producer -> assembler-wholesaler (salted eggs)->

wholesaler/retailer -> retailer -> consumer

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 The producer sells the duck egg to the assembler-

retailer for processing. The assembler-wholesaler

engages in century and salted egg production and sells

them to the wholesaler/retailer then to the consumer.

6. Price Study

6.1 Present Selling Price

At present, the selling price of duck eggs in the market is

pegged at 7.00 per piece. The cost of production has an

estimated cost of 3.00 per egg piece.

Table 3. Selling Price

Unit
Description Price
(php)
Egg 7
Balut 14
Penoy 10
Culls 280

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 II. TECHNICAL FEASIBILITY ASPECT

1. The Products

This project will have 1000 heads of laying duck for

duck eggs production. The production is every day and will

be delivered to the traders in Oroquieta City and street

vendors in Oroquieta City public places.

Table 4:

Products Description

Duck egg Egg of a duck (not processed)

Balut Balut is a popular food

commonly sold by street

vendors in the Philippines

and Vietnam. It consists of a

fertilized duck that has been

incubated for approximately

18 days. And also it is

boiled and eaten from the

shell.

Penoy It is a duck egg that remains

unfertilized after undergoing

the incubation period.

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Culls A duck that cannot produce

egg.

2. Manufacturing Process

The processes involved in the manufacturing the eggs

begins with the breeding, feeding, proper housing and

handling of the ducks until the ducks are ready to lay eggs.

The breeding the ducks, several stages are involved;

selection of stocks, sex ratio and mating system, management

of replacement breeder stocks, proper care and handling of

hatching eggs, incubation and hatchery management, candling

and fertility determination, handling of ducklings, hatchery

waste disposal and utilization and culling.

3. Plant Size and Production Schedule

3.1 Plant Size

The lot which is about 300 square meters will

accommodate the farm where the ducks will be grown and

nurtured and a small office space, with an area of 50 square

meters.

3.2 Production Schedule

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 The ducks has an estimated mortality rate of 10% in a

year. Simply stated, in every 1000 ducks to be nurtured, 90%

or 900 ducks will live and be utilized for egg production.

The 10% will be accounted as cost of the business

enterprise.

The 900 ducks which survived has an estimated egg

production of 85%. Simply put, 85% of 900 surviving ducks is

765 ducks. These 765 duck are capable of producing egg.

4. Plant/Project Location

The farm shall be located in Mobod, Oroquieta City, Misamis

Occidental.

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 5. Plant Layout

Figure 1: Mobod,

Oroquieta City Map

The scope of this feasibility study falls under the

jurisdiction of barangay Mobod, Oroquieta City. The proposed

duck farm will be located to where there is a rice field and

near bodies of water.

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 6. Building,Vehicles and Facilities

The building which will house the office of the

management and housing of ducks has an area of 300 square

meters. The housing and office will be constructed with an

estimated cost of php 96,375. One of the owners has its own

vehicle for delivery and transportation of the products.

6.1 Cost of Construction Materials

Table 6:

Quantity Description Unit Unit Cost Total Cost

100 Plastic Meters 120/m p12,000.00

Screen
10 Trapal Pieces 520/pcs p5,200.00
(8x10 ft)
15 Amakan Pligo 220/pligo p3,300.00

500 Nipa hut Piesces 10/pcs p5,000.00

5 Nails Kg 75/kg p375.00

5 Varnish Bottles 60/bottle p300.00

3 Bulb Item 99/pcs p297.00

4 Florescent Item 199/pcs p796.00

3 Solar Item 1,369/pcs p4,107.00

60 lumber Pieces 250/bundle P5,000

Total cost of construction materials p36,375.00

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 7. Production Cost

Table 5:

Quantity Description Unit Unit Cost Total Cost

200 Drakes pieces 200 P40,000.00
1000 Ready to lay 250 P250,000.00
Ducks
20 Duck Feeds Sack 1,900 P38,000.00
(Pilmico-
Duck Layex)
10 Vetracin Kg 190 p1,900.00
(supplement)
2 Pot Item 3,700 p7,400.00

Total production cost P354,400.00

8. EQUIPMENT, SUPPLIES AND FURNITURE AND FIXTURES

8.1 Equipment
Equipment

Qantity Description Unit Unit Estimate Total

Cost d Cost
Useful
Life
Operating equipment

3 Knives Item P100.00 3 P300.00

2 Weighing Item P600.00 3 P1,200.00
Scale
25 Waterers Pieces P45.00 3 P1,125.00
1 Water hose Item p379.00 10 P379.00
2 Shovel Item P200.00 3 P400.00
1 Wheel Borrow Item P2,000.0 5 P2,000.00

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 0
10 Tub/Basin Item P103.00 5 P1,030.00
1 Generator Item P14,000. 10 P14,000.0
00 0
2 Incubator Item P10,000 5 p20,000.0
0
Total operating equipment P40,434
Office equipment
3 Calculator Item P300.00 5 P300.00
2 Stapler Item P40.00 5 P80.00
Total office equipment P380.00
Total cost of equipment P40,814.0
0

8.2 Supplies

Supplies
QUANTITY Descriptions UNIT UNIT TOTAL COST
COST
20 Folder Pieces P5.00 P100.00
5 Record Book 70.00 350.00
Item
10 Ballpen Item 5.00 50.00
50 Receipts Item 25.00 1,250.00
2 Correction Item 25.00 50.00
Fluid
Total office supplies P1,800.00
1 Garbage Bag item 110.00 110.00
(Large)
600 Egg Tray pieces 24.00 14,400.00
Total operating supplies p14,150
3 Waste can Item 180.00 540.00
5 Broom Item 25.00 125.00
5 Dustpan Item 50.00 250.00
Total cleaning supplies P915.00
Total Supplies P16,865.00

8.3 Furniture & Fixtures

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 Furnitures & fixtures
Quantity Description Unit Cost Estimated Total Cost
Useful
Life
5 Monoblock P250.00 3 P1,250.00
Chair
1 Wooden 2,299.00 4 2,299.00
Table
4 Folding 1,638 4 6,552.00
Tables
Total P10,101.00

9. Utilities

Description Cost per month

Electricity p2,000.00

Water p1,000.00

Internet plan P999.00

Total cost of utilities p3,999.00

10. Waste Disposal

In a duck hatchery or balutan, the primary product is

balut and day-old ducklings. Infertile eggs and penoy are,

likewise, used as food. The fully or partially developed

embryos that was either partly hatched or not hatched are

processed and utilized by pigs for feeds.

11. Labor Requirements

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Table 7:

Type/Position Number of Wage Rate per Total

Workers day
Direct Labor 2 400 800
Operational 2 370 740
staff &
cashier
Delivery Boy 1 380 380
Manager/owner 2 400 800
Total 7 1,550 2,720

Projected Operating Salary

Position No. of Year 1 Year 2 Year 3

Workers
Direct Labor 2 120,000 126,000 132,000
Indirect Labor 5 499,200 499,200 499,200
Total 7 619,200 625,200 631,200

Projected Overhead Cost

Overhead Year 1 Year 2 Year 3

Cost
Electricity 24,000 24,720 25,461
Water 12,000 12,360 12,731
Internet 11,988 11,988 11,988
plan
Total 47,988 49,068 50,180

11. FISCAL AND LEGAL REGULATIONS

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The business, in order to start needs several permits such
as DTI permit and Mayor’s permit. These permits are
renewable annually.

Amount
Annual Registration (BIR) P 530.00
DTI 500.00
Mayor’s Permit 1,500.00
Business Clearance to Operate 100.00
Police Clearance 155.00
Cedula 16.00
Barangay Clearance 100.00
Fire Clearance 649.00
Sanitary Permit 35.00
Environmental Compliance 1,126.00
Certificate (DENR)
TOTAL P4,711

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 III. ORGANIZATION AND MANAGEMENT ASPECT

1.1 Form of Organization

The business venture shall adopt a centralized form of

organization. The following figure shows the organizational chart
of our partnership.

Angel Vicente Lyka Mae Tero April Lyn Limsan Jurie Mae Balandaca
Co-Owner/ Co-Owner Co-Owner Co-Owner/Cashier
Operational staff

1.2 People involved Before and During the Operation

The operation of the business shall be governed by the

co-owners. The manager shall be the overseer of the main

operation in the farm namely, the breeding, raising, care

26
 and handling of the ducks, and production of duck eggs. The

helpers will man the growth of the ducks. They will be

directly involved in all the processes of pasturing the

ducks until it is ready to lay eggs. Upon the laying of the

eggs, proper care and handling of the hatching eggs will be

their next task. The distribution of the eggs that are ready

to be sold in the market will also be their function.

1.3 Qualifications and Number of Labour Required

Position No. of Educational Qualification Age Experience

Labor
Manager/ 4 *At least 2 years in 25-35 2 years of
operational college with units in years experience
staff agriculture or old in
agribusiness managerial
*Knowledgeable in proper position
breeding, raising, feeding
and handling of ducks and
duck eggs
Helper/ 3 *must know how to read and 20 At least 1
Farmer/ write years year of
Delivery Boy *must be knowledgeable in of experience
proper breeding, raising, age in poultry
feeding and handling of or raising
ducks and duck eggs older
*must know how to drive
*must have a driver’s
license
*has no derogatory record

27
 1.4 Implementing Strategy

1.4.1 Work Schedule

IDENTIFICATION ACTIVITY DESCRIPTION TIME/DURATION

OF ACTIVITY (Month)
A Feasibility Study 3 months
Preparation
B Preparation of other 45 days
Supporting Documents
C Plan, Design and 2 months
Specification preparation
D Site assessment and 1 month
appraisal
E Purchase and Delivery of 45 days
Equipment
F Construction and 2 months
installation of
facilities, equipment,
furniture and fixtures
G Hiring of Personnel 15-20 days
H Advertising Campaign 1 Month

2. COMPENSATION PACKAGE

The business will give the following compensation package

for its employees.

Position Monthly SSS Phil Net Pay Net

Wages health per Month Annual
Salary
Owner/Manager P14,400.00 P1,872 P504.00 P12,024.00 P144,2
88
Caretaker/ 10,500.00 1,365 367.5 8,767.5 105,21

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Maintenance 0
Operational Staff 10,950.00 1,423.5 383.25 9,143.25 109,71
9
Operational 10,950.00 1,423.5 383.25 9,143.25 109,71
Staff/Driver 9
TOTAL P46,800.00 P6,084 P1,638 P39,078.00 P468,9
36.00

IV. FINANCIAL FEASIBILITY ASPECT

1. Total Project Cost

Pre-Operating Cost
Pre-Operating Salaries 619,200
Pre-Operating Activity 10,000.00
Fixed Assets
Land/Land Improvement 450,000
Installation of the duck 96,375
housing
Working Capital
Labor
Direct
Indirect
Total
TOTAL PROJECT COST

2. Sources of Financing the Project

The capital of the business venture will be derived

from the cumulative investments of the owners of the

29
 business. Each partner will invest 100,000 as an initial

capital of the enterprise. Other fund source will be derived

from loans to bank amounting to 500,000.

3. Preparation of Projected Financial Statement

3.1 Income Statement

Table shows the cost and return of producing eggs from ready

to lay ducks, 308-head module (Year 1).

Year 1 2 3

Sales

Sale of eggs 2,270,520 2,311,394 2,352,999

Sale of culls 37,800 38,920 39,200
Total Sales 2,308,320 2,350,314 2,392,199
Less: Cost of Sales
Drakes/Ducks 290,000 - -
Feeds 456,000 570,000 684,000
Medicines and Supplements 22,800 45,700 68,400
Gross Profit 1,539,520 1,656,614
Less: Operating Expenses
Salaries 619,200 625,200 631,200
Transportation 20,000 25,000 30,000
Light and Water 36,000 37,080 38,192
Repair and Maintenance 10,000 12,000 14,000
Internet Plan Bill 11,988 11,988 11,988
Taxes and Licences 4,711
Miscellaneous 5,000
Total Operating Expenses 706,899

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Income from Operation 832,621
Less: Income Tax 249,786.3
Net Income 582,834.7

3.2 Cash Flow Statement

Year 1 2 3

Cash Receipts

Cash Beginning 1,680,000 1,680,000 1,680,000

Sales
Proceed of Loan
Intial Capital
Less: Cash Disbursement

Operating Expenses
Purchase of Fix Assets
Farm Construction
Purchases
Payment of Taxes
Total Cash Disbursement
Cash Ending

3.3 Balance Sheet

Year 1 2 3

ASSETS

Current Assets 1,680,000 1,680,000 1,680,000

Cash
Inventory on Hand
Total Current Assets
Fixed Assets
Machinery and Equipment
Land
Building
Less: Accumulated Depreciation
Furniture and Fixtures
Total Fixed Assets
31
Other Assets
Total Assets
LIABILITIES AND PARTNERS’EQUITY
Liabilities
Tax Payable
Total Liabilities
Partners’ Equity
Capital
Net Income
Total Partners’ Equity
Total Liabilities and Partners’
Equity
Net Worth

4. Financial Analyses

4.1 Test of Liquidity

4.2 Test of Profitability

I. SOCIO-ECONOMIC ASPECT

a. Socio-economic Contribution

b. Employment Opportunity

II. SUMMARY OF FINDINGS

1. Management Feasibility

2. Market Feasibility

3. Technical Feasibility

4. Financial Feasibility

5. Socio-Economic Feasibility

CONCLUSIONS

1. Management Feasibility

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 2. Market Feasibility

3. Technical Feasibility

4. Financial Feasibility

5. Socio-Economic Feasibility

RECOMMENDATIONS

Based on the findings and conclusions made, the

researchers strongly recommend the project for funding and

immediate implementation.

33