SORSOGON STATE COLLEGE

BULAN CAMPUS

Bulan Sorsogon

Mackie’s Duck Farm

(A Feasibility Study to be submitted as partial requirements of the course in

Management Consultancy)

Submitted by:

Mark Liezl G. Artates

Submitted to:

Dr. Michael B. Bongalonta

Professor
I. INTRODUCTION

Livestock is an important industry in the Philippines. It greatly contributes to the

development and sustainability of our economy. By means of this livestock industry,

there will be more opportunities to come for agricultural aspects, more natural products to

be produced that are most needed by today’s economy. It provides not only livelihood

and employment opportunities but also food security to the country’s growing population.

It serves as a food source, may vary from raw to processed goods, which provides protein

for the body and helps refurnish damage muscles tissues.

Poultry is one of the livestock industry that began as a backyard enterprise but has

shifted to the formation of very large integrated contract farming operation. It is the

process of raising domesticated birds such as chickens, ducks, turkeys and geese for the

purpose of farming meat or eggs. As ducks rank second to chicken in terms of producing

eggs. There is a big demand for duck eggs in making “balut”, “penoy”, and salted egg

which are favorite foods of Filipinos.

This feasibility is primary focused on the production of duck eggs to processed

eggs. The proposed business, Mackie’s Duck Farm will engage in production of partially-

developed embryo eggs and salted eggs to support the high demand of “balut” and salted

egg in the market. The suppliers are very limited to support the demand of community in

the Municipality of Bulan.

II. MARKET STUDY
Brief Background of the Study

The proposed business name “Mackie’s Duck Farm,” which will be located at

Barangay G. Del Pilar Bulan, Sorsogon. The farm will be positioned near the river and

far from the residential houses of the said barangay. The business is a sole proprietorship

since this will be financed solely by the proponent. It will be engage in producing and

selling quality processed duck eggs in the market of Bulan. It will provide a free delivery

service to supply those wholesalers /retailer of “balut” and salted eggs.

Target Market

The target customer of the proposed business “Mackie’s Duck Farm” are those

wholesalers /retailer of “balut” and salted egg in the Municipality of Bulan. The product

will be classified as partially developed embryo egg and salted egg.

Supply Analysis

The researcher conducted a survey to selected store who are selling “balut” and

salted egg in the Municipality of Bulan to determine the present supply and demand.

At present there is no duck egg producer of partially developed embryo eggs that

supply those wholesalers /retailer of “balut”. And only one producer of salted eggs in the

Municipality of Bulan to supply those wholesalers/retailer of salted egg. This supplier

supplies 10 trays every week or 300 pieces of salted eggs in the market.
Demand Analysis

The demand for the processed duck eggs is high because of insufficient supply in

the Municipality of Bulan. Based on the survey conducted there are 65 trays or 1,950

pieces of eggs for the demand of “balut” and 57 trays or 1,710 pieces of eggs every week

for the demand of salted eggs. A total of 122 trays or 3,660 eggs is needed every week to

cater the needs of the customer.

Supply and Demand Gap Analysis

The graph below shows the Supply and Demand Analysis of Processed Duck Eggs.

8%

SUPPLY

GAP

92%

From the gap between the supply and demand, this clearly shows that the supply

of processed duck eggs is not enough to cover the demand in the market. A total of 112

trays or 3,360 pieces of duck eggs are unsatisfied demand. Specifically, a total of 65 trays

or 1,950 pieces of eggs for the partially developed embryo eggs and a total of 47 trays or

1,410 pieces of salted eggs are unsatisfied demand.

SWOT Analysis

In conducting the proposed business, SWOT Analysis must be considered. This

pertains to the strength, weakness, opportunities and threats of the study.

Strength

1. The proposed business will be the only supplier in the municipality of

Bulan.

2. The proposed business will provide a good facility and secure the proper

waste segregation in the production.

3. The proposed business will provide a free delivery service to supply a

processed duck eggs to the wholesaler/retailer of “balut” and salted eggs

in the Municipality of Bulan.

Weaknesses

1. Duck are susceptible to a number of bacterial infections.

2. Diseases like bird flu that easily spread from poultry farm to another farm.

Opportunities

1. The business will have the opportunity to expand the production of

processed duck eggs to supply those wholesaler and retailer of “balut” and

salted eggs other than in the Municipality of Bulan.

2. The increasing demand for duck eggs due to the continuous growth of

population.
 Threats

1. The existence of backyard duck farm in the Municipality of Bulan.

Market Position Strategy

Mackie’s Duck Farm will be supplying processed duck eggs to wholesaler/retailer

of “balut” and salted eggs at the most affordable price and providing a free delivery

service. The proposed business is going to operate from 7:30 am to 5:00 pm. Customers

can give orders to be delivered at the agreed time. The farm will provide quality products

to satisfy the needs of the customer and its safety for their health.

Promotion

The product will be promoted through banners posted in the Barangay G. Del

Pilar Bulan, Sorsogon containing information about the product, contact number, the

name of the business, its location and a notice of free delivery services. For advertisement

of the product, it will be air in local radios for its first month of operation.

Pricing Strategy

The proponent will use the competitors price in determining the bases for pricing.

The price will be lower compared to existing competitors to penetrate the market. The
prices of processed duck eggs will vary according to the forms of purchase made by the

customer. Prices might change due to some factors like feeds, condition, scarcity of

supply, etc.

Price of processed duck eggs (per egg)

Product Farm gate Wholesale price Retail price

Partially develop 10 10.50 11

Salted eggs 7 7.50 8

Distribution Channel

The distribution channel of Mackie’s Duck Farm will provide a supply of

processed duck eggs to wholesaler and retailer of “balut” and salted eggs in the

Municipality of Bulan. The wholesaler and retailer will then sell their product to final

consumer.

MACKIE’S DUCK FARM

WHOLESALER/RETAILER WHOLESALER/RETAILER

“Balut” Salted Eggs

CONSUMERS
Distribution Channel
III. TECHNICAL STUDY

Production Layout

Mackie’s Duck Farm will have an area of 50m 2 and located at Barangay G. Del

Pilar Bulan, Sorsogon. The house of 100 duck’s measures 4x4 meters and 3 meters high.

The farm is at least 100 meters away from residential house and near from the national

road.

RIVER RIVER

BARN BARN BARN

FEEDING AREA FEEDING AREA FEEDING AREA

ENTRY ENTRY ENTRY

ENTRY CLEANING AND SELECTION AREA OF EXIT

COLLECTED EGGS
FEEDS STORAGE FOR
STORAGE SALTED EGGS
AREA ADMINISTRATIVE AREA

STORAGE FOR
SALTED EGG PARTIALLY
INCUBATING
COMFORT PRODUCTION DEVELOPED
ROOM
AREA AREA EMBRYO EGG
Process Layout

The process involves the selection of egg laying ducks, male ducks, culling,

feeding and the process as partially developed embryo eggs and salted eggs.

a) Selecting Egg Laying Duck

In choosing the ducks for production there are several factors to consider. It must

consider good health condition and the vitality of ducks in order to produce more eggs,

which are of good quality eggs to be processed.

The native or Pateros duck, commonly called “itik”, will be chosen because it is

the most popularly raised locally. Although, it is smaller than imported breeds, they are

good layers and non-sitters. Their eggs are large. Its predominant colours are black and

gray. Some are barred, others are known to have white feathers mixed with black/green.

Males have coarser heads and heavier bodies than females. Males emit shrill high-

pitched sounds. They have curly feathers on top of their tails. Females emit low-pitched

quaking sounds. Their tail feathers lie flat or close to the bodies.

b) Culling

It is the removal of unhealthy ducks in the farm to prevent from spreading of

diseases and pest.

c) Feeding

The ducks will be feed at the feeding area inside their homes. Ducks will be feed

with mash feeds, palay and pellets together with vitamin-mineral supplements. The ducks

will be feed 4-5 times a day and the water is sufficient because the site is near the river
where the ducks can easily drink and swim. An estimated of 2 sacks of feeds per month

will be consumed.

d) Processing of Duck Eggs into Partially developed embryo eggs and Salted eggs

In selecting duck eggs for processing into partially developed embryo eggs and

salted eggs vary according to the thickness of its shell.

Only thick-shelled eggs are used for partially developed embryo eggs because

these can withstand stresses of egg placement and removal in cylindrical baskets called

“toong”. The proponent will use manual incubator for hatching duck eggs. During

incubation period, turn eggs at least 3 to 4 times a day to obtain better percentage of

hatchability.

Candling is the process of holding egg against the hole of a lighted box in a dark

room to separate infertile eggs from fertile one. Candling is done on the 17th day to

separate eggs with dead embryos (abnoy) and those that are ready to be sold as partially

embryo eggs to the “balut” seller. Eggs with weak embryos take 18 to 20 days to be

released in the incubator for storing and delivery. For storing the hatching eggs, clean rag

is used with slightly moist to prevent contamination of the other developing embryo eggs.

Eggs with thin shells but have no crack are made into salted red eggs. Dip eggs in

a mixture of salt, garden soil, and water. As a starter, put 3 can full of salt (using common

powdered milk can) to 1/2 pail of garden soil that have been strained. Add water

gradually. Stop adding water to soil when mixture sticks to your fingers when you dip

these in the salty muck. Coat the eggs with soil-salt mixture and store for 18 days. On the

19th day, wash and hard-boil the eggs. Finally, dip salted eggs in a solution or red dye.
The next batch of eggs can be processed using the previous mixture, but add one can full

of salt.

Production Schedule

The Mackie’s Duck Farm will start with 300 ducks that are ready to lay eggs

daily. Out of these only 240 ducks will lay eggs daily. Approximately 240 pieces will be

collected every day. An estimated of 120 eggs will be issued to incubator for the

production of partially developed embryo eggs and 120 eggs to the production of salted

eggs daily.

Ducks are expected to lay eggs for only 300 days a year so there will be an

estimated of seventy-two thousand (72,000) of eggs to be produce every year. In the

process of candling, the estimated number of partially developed eggs to be produced

might be reduced due to some infertile eggs. While the salted eggs will be the same.

Delivery will be twice a week for wholesaler/retailer of “balut and once a week

for salted eggs. An estimated of 2,600 pieces of eggs will be delivered every week, 1,200

for partially developed embryo eggs and 1,400 pieces for salted eggs.

Collection of Eggs

The collection of eggs be made daily because the ducks lay eggs every day. After

collecting the egg, it will go to the cleaning area to clean the dirty eggs and selecting of

eggs to be processed to partially developed embryo and salted eggs

Sanitary Operation
 The business will make a compost pit where the waste of the ducks will be placed

and be made to fertilizer. To maintained the cleanliness, the facility will be cleaned every

day after collecting the duck eggs in their homes. Employees will be wearing appropriate

uniform especially their boots when entering the house of the ducks. Unhealthy ducks are

segregated to prevent the diseases to spread in the farm.

Machinery and Equipment

The proposed business will be using incubator for hatching of eggs and motor

vehicle for the delivery service that the proponent will provide.

Incubator

Manual incubator will be used to incubate the eggs to become partially developed

embryo.

Delivery Service Vehicle

To be able to deliver the processed duck eggs the proponent will purchase a

tricycle. The delivery will be made once a week, a total of 28 trays per week to be

delivered.

Quality Control

Mackie’s Duck Farm will ensure that only those meet the standards of high

quality reach the consumer. The first step in the quality control process is the segregation

of eggs with obvious defects like crack shell. The major technique used in subsequent
quality tests in the rest of the eggs is candling. In this process except for salted egg, all

eggs are passed over a bright light which shows up internal defects and previously

undetected crack.

Eggs which do not conform to the requirements for first quality or second quality

eggs are not fit for human consumption. Example of such egg are rotten eggs which are

segregated from quality eggs.

IV. FINANCIAL STUDY

Financial Assumption

a. The production expects to have an output of 86,400 eggs a year or 7,200 eggs per

month. The business assumed to sell all of the output for the first year of

operation because of insufficient supply in the Municipality of Bulan.

b. Yearly depreciation of PPE will be computed using straight line method.

c. One hundred percent of sales are collected in cash due to high demand of duck

eggs.

d. Estimated useful life of the building will be 10 years; materials and equipment

will be 5 years and delivery equipment 8 years.

e. Price will increase 5% annually.

f. Supplies and utilities expense increase 10% annually.

Capital Requirements

The proposed capital of the business is P500,000 will come from the owner of the

proponent. A vacant land worth 60,000 will be invested by the owner.

Financial Breakdown
 Capital invested P 500,000

Expenditures:

Purchase of 300 ducks P 72,000

Purchase of tricycle 120,000

Purchase of medicines and vitamins 36,000

Purchase of trays 36,000

Purchase of feeds 60,000

Purchase of materials 20,000

Purchase of storage box 15,000

Construction of building 100,000

2 Wall fan 6,000

2 Monoblock chairs 500

Utilities supplies 25,000 490,500

Excess: 9,500

Preparation of complete set of financial statement

Mackie’s duck farm

Income Statement

Year 1 Year 2 Year 3 Year 4 Year 5

Sales 820,800 861,840 904,93 950,179 997,687

Less:
Depreciation of building 10,000 10,000 10,000 10,000 10,000

Depreciation of delivery equipment 15,000 15,000 15,000 15,000 15,000

Depreciation of matrls and equip. 6,300 6,300 6,300 6,300 6,300

Supplies expense 92,000 101,200 111,32 122,452 134,697

Utilities expense 40,000 44,000 48,400 53,240 58,564

License and legal expense 3,000 3,000 3,000 3,000 3,000

Repair and maintenance expense 60,000 60,000 60,000 60,000 60,000

Salaries expense 273,000 273,000 273,00 273,000 273,000

Other expenses 10,000 10,000 10,000 10,000 10,000

Advertising expense 10,000 10,000 10,000 10,000 10,000

Total expenses 519,300 532,500 547,02 562,992 580,561

PROFIT BEFORE TAXES 301,500 329,340 357,91 387,007 417,126

Computation of Annual Sales

Sales of salted egg:

Number of eggs sold monthly 3,600
*12
Number of eggs sold annually 43,200
Price 8
Annual sales of salted egg 345,600
Sales of “Balut”:
Number of eggs sold monthly 3,600
 *12
Number of eggs sold annually 43,200
Price 11
Annual sales of salted egg 475,200
Annual sales:
Sales of salted egg 345,600
Sales of “Balut” 475,600
Total annual sales 820,800

Schedule of depreciation

Asset Cost Useful life Annual depreciation

Building 100,000 10 10,000

Delivery equipment 120,000 8 15,000

Material and other 31,500 5 6,300

equipment

Supplies

Monthly Tray supplies 3,000

*12
Annual supplies of tray 36,000
Medicines and vitamins supplies 3,000
*12
Annual medicines and vitamins 36,000
Utilities supplies 25,000
Feeds 60,000
Total supplies 157,000
Total annual supplies be increase annually by 10%

Schedule of ending balance of supply

Year 1 Year 2 Year 3 Year 4 Year 5

Beginning 65,000 63,800 52,480 30,028

Purchases 157,000 100,000 100,000 100,000 110,000

Supplies expense (92,000) (101,200) (111,320) (122,452) (134,697)

Ending supplies 65,000 63,800 52,480 30,028 5,331

Salaries expense

Position No. of personnel Monthly compensation Bonus Annual salary

Manager 1 6,000 6,000 78,000

Delivery man 1 3,000 3,000 39,000

Helpers 3 12,000 4,000 156,000

Total annual salary 273,000

Mackie’s duck farm

Statement of changes and equity

Year 1 Year 2 Year 3 Year 4 Year 5

Beginning equity 791,500 1,050,840 1,338,752 1,655,759

Investments 560,000

Profit 301,500 329,340 357,912 387,007 412,126

Withdrawals (70,000) (70,000) (70,000) (70,000) (70,000)

Ending equity 791,500 1,050,840 1,338,752 1,655,759 1,997,885

Mackie’s duck farm

Statement of financial position

Year 1 Year 2 Year 3 Year 4 Year 5

Cash 374,300 666,140 996,672 1,367,431 1,765,554

Supplies 65,000 63,800 52,480 30,028 5,331

Livestock 72,000 72,000 72,000 72,000 72,000

Land 60,000 60,000 60,000 60,000 60,000

Building 100,000 100,000 100,000 100,000 100,000

Accumulated Dep. -Building 10,000 20,000 30,000 40,000 50,000

Delivery equipment 120,000 120,000 120,000 120,000 120,000

Accumulated Dep. -Delivery 15,000 30,000 45,000 60,000 75,000

Materials and equipment 31,500 31,500 31,500 31,500 31,500

Accumulated Dep.-Materials 6,300 12,600 18,900 25,200 31,500

Total Assets 791,500 1,050,840 1,338,75 1,655,759 1,997,885

 2

Liabilities

Owner’s equity 1,338,75

791,500 1,050,840 2 1,655,759 1,997,885

Total liabilities & owner’s equity 1,338,75

791,500 1,050,840 2 1,655,759 1,997,885

Return on investment (ROI) – A method of appraising capital investments where the

average annual profits from a project are divided into the average investment cost, also

known as the accounting rate of return and return on capital employed.

Year 1 Year 2 Year 3 Year 4 Year 5

Profit 301,500 329,340 357,912 387,007 412,126

Investment 560,000 560,000 560,000 560,000 560,000

ROI 0.538 0.588 0.639 0.691 0.735

V. LEGAL AND MANAGEMENT STUDY

Nature of the Business

The proposed business is a sole proprietorship since this will be financed solely

by the proponent. It will be engage in producing and selling quality processed duck eggs

in the market of Bulan. It will provide a free delivery service to supply those

wholesalers /retailer of “balut” and salted eggs. The proposed location of the business is

near the river which will be convenient in raising ducks.

Organizational Structure

The figure below shows the organizational structure of the Mackie’s Duck Farm.
Job Specification and Responsibility of Personnel

Manager Owner of the proposed project.

Responsible for investing in the firm.

Direct and supervise the overall operation of the business.

Responsible for implementing policies and regulation in the firm.

Helpers Assist in raising the ducks.

Helps in the production of duck eggs.

Responsible for preparing the product in the market.

 Responsible for the cleanliness of the production and raising area.

Responsible for the farm, including the feeding and insuring that the ducks

are in good conditions.

Delivery man In charge of delivering the products to the wholesaler and retailer.

Responsible for maintaining the operating condition of the delivery

equipment.

Responsible for the storage of the product.

Responsible for the purchasing of raw materials that will be used in the

production.

Socio-Economic and Environmental Aspect

This part deals with the effects of the proposed business to the development of

socio-economic aspect of the municipal government and elevates the way of living in the

place. The following are the benefits of the society from the Mackie’s Duck Farm.

Proponent. To uplift the standard of living of the proponent and personnel

concerned. Provide an adequate rate of return of investment to the owner.

Target market. Mackie’s duck farm will provide quality products to the

consumer and to serve customers efficiently and effectively.

Community. To reduce the unemployed problem in the society.

 Government. To help the government in the reduction of poverty. Also a benefits

to the government through taxes and license fee and permits.