EXECUTIVE SUMMARY

Poultry is an emerging sector that has been contributing progressively to Ethiopia's economy. It
is one of the fastest growing and most promising industries (sector) with a bright future in our
country. Poultry sector is playing a very vital role in the reduction of poverty, malnutrition and
unemployment problems of the nation.

This profile envisages the establishment of a plant for the production of poultry and feed milling
with an annual average capacity of 3.5 million eggs and 1,500 tons feed per annum. As poultry
feed holds the lion's share in the cost buildup of a poultry farm has decided to produce it for cost
competitiveness and business sustainability reasons. The range of products out of this project
includes chickens, eggs and broilers. These products are to be distributed by the firm to

customers.

Poultry feed is a kind of balanced livestock stuff which aids proper development of chicks and
pullets and hence used for feeding the domesticated birds such as chickens, turkeys, ducks,
geese, etc. The demand for the poultry feed is projected to reach at 34,453 tons and 41,889 tons
by the year 2019 and year 2023, respectively.

The principal raw materials required for poultry feed production are oil cake, wheat bran,
molasses, cereals, limestone, bone - meal (blood - meal), vitamins, minerals and salt. All the raw
materials are locally available, except vitamins which have be imported.

Market studies show that the demand of hens and eggs is very high but the supply could not be
able to satisfy the demand of customers/consumers. This business plan aims to fill this gap in the
demand of restaurants, super markets, hotels, community centers, bakeries and catering houses.
B. Administration and Finance Department

Is responsible for undertaking the following activities

 Will plan, organize direct and control the financial transaction of the project by using the
entire necessary document.
 Will develop sound financial control system by developing modern financial control
systems.
 Will prepare the annual financial statements and prepare condensed reports for both the
General Manager and other concerned government body.
 Will control the human and non-human resources of the Poultry Farm, which include:
effective handling of the different inventories of the Poultry Farm and devise strategies of
controlling against fraud and damage.

C. Sales and Marketing Department

 Will handle the overall marketing activities of the organization which include planning,
organizing, directing, and controlling.
 Will develop the marketing strategies for future project center's development.
 Conduct both foreign and domestic market research for expanding the sales of the
company
 Will develop effective customer handling strategies

D. Production and Operation Department

It is the core department of the project center and it encompasses sections like: Cutting
(slaughtering), Cleaning, Processing, Packing, Quality Control and Inspection. Thus it under
takes the following activities:

 Producing life chicken in sufficient quantity so that the production process is facilitated.
 Produce eggs in sufficient quantity and make ready for distribution to customers.
 Produce products in different packs so that customers have diversified choices.
 Use modern production and processing technologies that will boast production and
productivities of the envisaged project.
  Produce quality product that will enable the center competent both in the domestic and
international market.

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Control on the quality of raw materials, quality of the product and also the overall production
process and Poultry Feed service.

Produce products in least cost so that the profitability of the center is guaranteed. Since
producing good quality is based on using good input, the department will use strategies and
polices that will link the different sub sections i.e. the cutting, cleaning, processing, packing,
quality control and inspection.

Moreover control over the quality of chicken meat and egg production
5.1.3 Human power and qualification needed to run the project.

Table 10: Human Resource requirement

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5.2 Risks and Mitigation Strategies

Every business undertaking is it large or small needs to have a future development plan. It is a
plain fact that business activities take place in a dynamic and turbulent environment. Hence, to
overcome or minimize the risks of uncertainties, it is important to devise effective strategies to
mitigate risks.

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4.5 Implementation Schedule

The implementation schedule of poultry and feed production include the type of activities and
timeframe work schedule done by promoter.

Table 9: Implementation Schedule.

Sr. No Description Schedule

1 Preparation of business plan August 2019/2020
 Submitting business plan to bank Sepetember 2019/20

5. ORGANIZATION AND MANAGEMENT ANALYSIS

Poultry Farm and Processing's organization structure is designed in a way that the farm is set to
achieve its objectives as well as the satisfaction of its clients is ensured. Hence, care is taken
such that the structure and human resource deployment enables the achievement of business
results.

5.1 The project organization and human resource analysis

5.1.1 Organization Structure

The organizational structure of this poultry project is designed by including all the necessary
personnel under the right division. At the top of the organizational structure, there will be a
general manager with the responsibility of supervising the overall activity of the plant.
Depending up on the nature of the center and the amount of work to be performs; there will be
auxiliary units under the general manager. Employees under each unit will be supervised by the
unit head that is accountable for the general manager.

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Figure 1: Organization Chart of Poultry Farm and Processing
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5.1.2 Duties and Responsibilities of Departments

These departments are the Production Department, The Marketing Department, and The General
Service Department. Under each Department there are different sections which undertake
different activities. Hence the following section deals with the duties and responsibilities of each
division.
A. Farm Manager
He will plan, organize, direct and control the overall activities of the integrated project He will
devise policies and strategies that will enable the project to be profitable.
He will incorporate modern technological innovation that will facilitate the service delivery of
the project center and increase customer's satisfaction.
He will plan, organize, direct and control the human and non-human resources of the plant so as
to achieve the short and long run objectives of the organization.

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Likewise, the Poultry Farm and Feed Processing has devised strategies to
overcome the future risk of operation. Accordingly:
 The first strategy is diversification of its activities to different other business
forms.
 The second strategy of the farm is making a joint venture with other similar
business undertakings to compete either in the domestic or foreign markets.
In general, the financial projection made shows that the project under discussion
will cover its entire investment costs within a maximum 8 years period of time.
5.3 Environmental and social impacts
Currently the issue of Environment and development has got due emphasis and the
government has enshrined environmental policy within the constitution. In line
with this environmental policy, the envisaged project is compliant and deemed to
mitigate the different impacts that may be caused by actions of the project.
In this connection, a detailed analysis of environmental impact of the project
together with their mitigation will be included within the Environmental Impact
Assessment reports.
Table 11. Fixed Asset Requirement

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………………….

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Change in expected revenue or an increase in costs will affect the profitability of any business.
Based on this the sensitivity of the profitability of the business is evaluated by increasing and
decreasing expense and income respectively.
Accordingly, 10% increase in expense and 10% decrease in income, 5% increase in expense and
5% decrease in income shows the financial position of the business under different financial
shocks.
7.2. Financial Viability
This business is profit making during the life of plan year starting in 2019/20. For the first year
operations return on capital (return on investment) is positive 19% and return on asset also
positive 8%. Therefore, the business is financially feasible. The business will have a promising
future financial prospect and will be a good opportunity to enter in the financial market. The
business has also strong social responsibility to assist or contribute to the total economic
development of the country.
The percentage of return on capital (return on investment) is greater than the bank's rate on long-
term deposits, including allowances for the country's inflation rate during the same period, and
then the project appears to be financially viable.
7.3. PROFITABILITY (Feasible)
According to the projected income statement, the project will start generating profit in the first
year of operation. Important ratios such as profit to total sales, net profit to equity (Return on
equity) and net profit plus interest on total investment (return on total investment) will show an
increasing trend during the life-time of the project. The income statement and the other indicators
of profitability show that the project is viable.
8.CONCLUSION
The main reason why the demand for poultry products is increasing from time to time is mainly
due to the ongoing economic boost of our country and the subsequent free market investment
policy coupled with wide range of expansion and construction of new and big hotels including
many restaurants and bakeries etc.
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In relation to the growth of local consumers and the foreigners who come to the country for
different purposes, this growing demand for poultry output is believed to continue even at an
accelerated rate further driven by an anticipated rise in consumers' purchasing power. All
preconditions including the experience of the promoter in the sector therefore indicate this
expansion project is profitable and feasible justifying creditworthiness.
Creditworthiness is also ensured with respect to the financial analyses. It is accordingly called
upon for the project and requested loan to be approved.

Business Health Check Analysis

SWOT Analysis
Strengths
•
Qualified and experienced management, supervisor and man power
Company has dependable fixed asset
Weaknesses
Shortage of working capital
• Training support by ministry of Agriculture
•
Integrated farming offers cost saving on inputs
Opportunities
• The location is near to waliso,Sebeta finfine.
• Availability of manpower/labor
Growth of the hotel industry
Business and trade policies /environments favoring export
Establishment of regulatory offices to ensure quality and safety of animal feeds
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Business potential not fully exploited (business result seen as

expectation)
less than
company not promoted adequately
Not using government's policy support optimally
Threats
 Shortage/interruption of electric power
 Competition from new entrants
 Price of feed/inputs, diseases, market,
 Nonexistence of protective trade policy
 exposing businesses to pricing out by foreign producers.
 Inadequate drug supplies and quality vaccines
 Seasonal demand fluctuations (due to fasting) leading to variations in
chicken meat and egg supply and processing;
 Attitudinal/behavioral challenges towards producing and consuming eggs
and meat from hybrid and exotic breeds.

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Assumptions:

⚫ Purpose of Lion is purchase of Vehicles Isuzu

Projection is based on the experience of the promoter for over five years. Interest
rate will remain constant at _%.
• Operating expense it to grow 10% on average.
Sales are to increase at an average of 38% per annum.
Annual Production volume increases at an average annual rate of 27%. Annual
production cost increases at an average of 10% per annum.

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