Muhammad Anis 15

Shakir Rashid 27
Hafiz Zahid Mahmood 45

M.Com (Finance)
4th Semester
Session 2008-10
Department of Commerce
 OUTLINE

 Introduction to industry
 Market Analysis
 Technical Analysis
 Personal Analysis
 Financial Analysis
 SWOT Analysis
 Recommendation & Conclusion
Introduction
The economy of Pakistan is the 27th largest economy in the world in
terms of purchasing power, and the 45th largest in absolute dollar
terms. Pakistan has a semi-industrialized economy, which mainly
encompasses textiles, chemicals, food processing, agriculture and other
industries. Pakistan has an agriculture base of more then 79.6 Mn
Hectares of total area with 22 Mn Hectares land under cultivation. 18
Mn Hectares of land is under cultivation through irrigation system
while 4 Mn Hectares of land relies its cultivation exclusively on rain.

 Strong Potential
 Contribution to Economy
 Fisheries & Livestock Production
 Investment Opportunities
 Fiscal Incentives for Agriculture Sector
Agriculture contribution to economy
 Contributes 26% to GDP
 Employs 44% of labor force
 70% of exports are Agricultural & Agri processed products

Fisheries & Livestock production

Fisheries potential (annual catch) 7.5 Mn Tons
Buffaloes (Number) 23 Mn
Cattle (Number) 22 Mn
Sheep & Goats (Number) 75 Mn
Poultry (Number) 530 Mn
Fiscal Incentives for Agriculture Sector
 0% customs duty on import of agricultural machinery, equipment and
implements
 Exemption of duty on transfer of land for CAF
 Tax relief; Initial depreciation allowance @ 50% of machinery cost.
 Dividends from corporate agriculture farms not subject to tax
 Farm income given more favorable treatment
 Agriculture

Major Crops Minor Crops Livestock Fisheries Forestry

Dairy Farming Poultry Industry

History of Poultry Industry
 Poultry in Pakistan was kept as a backyard business
for household needs
 Prior to 1963 the native breed “Desi” was mainly rose
which produce a maximum of 73 eggs per year under
local conditions
 In early 60’s; Pakistan International Airline in
collaboration with shaver poultry Breeding Farms
started the first Commercial Hatchery in Karachi
 1st commercial Feed Mill was started by Lever
Brothers in Rahim Yar Khan
Phase 1: The Introductory Period 1965-1970
 Directorate of poultry production at Karachi
 The Income tax exemption
 Liberal import of parent and grand parent stocks
 Machinery and equipment
 Free export of Poultry and its products
Phase 2: Institutional Development 1971-
1975
 The Federal Poultry Board established
 Research services were introduced
 A dramatic increase in poultry production resulted due to
diverted investments from the nationalization of industries
in other sectors
 At the same time the clustering of production units led to
large disease outbreaks and the lack of marketing facilities
due to ban on export of poultry products limited industry
growth

This phase is characterized by both the greatest success of

the poultry industry and its greatest failure
Phase 3: The Production Boom 1976-1980
 A policy to attract investment in poultry farming by
offering estate land under 10 year leases
 Commercial egg production and broiler production
increased this period
 Serious financial set backs to poultry farming in
Pakistan
 Formation the Pakistan poultry association in 1979 on
the advice of the federal poultry board
Phase 4: Depression and Adjustment 1981-1990
 Disease problems possessed a serious threat to the sound
development and consolidation of the industry
 The large Karachi poultry estates began to close in 1984 and a
number of poultry farms closed in other areas of Sindh
 Production showed a decreased growth or even depression early
1980 particularly of increases in the Punjab, Baluchistan and
NWFP
 Faced with disease problem, lower productivity and numerous
environmental and climatic difficulties, some of most successful
farmers decided to produce under more modernized conditions
and to establish their poultry farms in cooler, less polluted area of
the country
1991 to Know
1990-- Hydro pericardium syndrome

1991-- Gumboro attacked to the Chicks of Broiler, layer and parent flock that resulted
in great mortality
1992-- At National level Institutes done efforts to reduce these diseases

1995-- Avian Influenza appeared and mortality in parent flock rose up to 80%

1996-- Parent flock increased in number due to absence of planning

1997-- Ban on serving of dinner in marriage parties that reduce the demand of poultry
products in the market up to 40%
1998-- It started improving and by increase in price of Chick the companies got a great
profit
1999-- Again a syndrome like Influenza broke that cause great loss in some areas
while some areas were safe

2006-- Bird flu broke out again due to which 40% of the industry were destroyed

2010-- In Pakistan poultry industry is at 2nd place after Textile industry

Nature of Poultry Farm
1. Backyard Farms
2. Semi Commercial / Conventional Farms
3. Commercial / Environmental Control Farms
Backyard Farms
 Brick/wood/net built
 During day chickens roam freely, at night
kept in the house
 Level of Bio Security: Very low
Semi Commercial / Conventional Farms
 Chickens kept in a large area fenced with
 Net/multistoried pen/separate room in a house
 Feed/water given inside
 Level of bio-security: Low
Commercial / Environmental Control Farms
 Entry and exit are highly restricted
 Separate techniques used for feed and water
 Punctual medication
 Controlled temperature
 Level of bio-security: moderate high
Environmental Controlled Shed
The modern trend of environment control houses (ECH) in poultry
production has brought a great revolution in poultry industry of
Pakistan in the recent years. This has solved a great hurdle of heat
stress in the way economical commercial poultry production. The ECH
with evaporative cooling system, providing tunnel ventilation, giving
the wind chill effect has markedly improved the broiler production
system.

 Improved feed conversion ratio

 Better quality bird meat
 Increased productivity and health of the chicken
 Reduced mortality
 Fully system controlled with no manual controls
Muhammad Anis
Roll No. 15
Market Analysis
 Fixed investment in poultry sector is over Rs. 200 Billions
 Present turnover of Pakistan Poultry Industry is about Rs.
300 Billions
 There are about 25,000 Poultry farms in the country
 Poultry sector generates employment and income for about
fifteen hundred thousands people
 Poultry sector is one of the most organized branches of the
agro based sector of Pakistan. Its growth rate is 10-12%
annually
 At present over 50 Billions’ of agriculture produce and bio
products of agriculture are being used in poultry feeds
 40% of the total meat consumption is being
produced from poultry products
 In Pakistan 7,830 million table eggs produced
annually
 13,936 Metric Tons chicken meat annually
 In Pakistan per capita consumption of meat is only
7 Kg and 60-65 eggs annually, whereas developed
word is consuming 41 Kg meat and over 300 eggs
per capita per year
 Number of Hatcheries 400
 Number of Feed mills 150
 Number of People /dependent 1.5 Millions
Population of Chicken
 Broiler Breeder 8.5 Million Birds
 Layer Breeder 0.428 Million Birds
 Commercial Broiler “ 8.6 x 105 = 900 Million Birds
 Layer Birds 29 Million Birds
 Feed consumption 5.51 M.M.T
Exports
 In 1978 export of poultry products started
 1978-80 increased by 102%
 Started declining in the following years due to sever
competition from the countries having big home markets
 2008-09 exports declined to $ 4,55,000 from $ 16,01,000
(71.58%)
Reasons for decrease in exports
 Global competition
 Disease attacks
 Lack of refrigerated Cargo
 Non-Availability of space for Day-Old-Chick
 High Air freight charges
 Lack of subsidy for exports
Technical Analysis
There are four major points involved in technical analysis
 Land for Project
 Machinery for Project
 Labor for Project
 Raw Material
 Land: 1 Acre @ 1,500,000 /Acre
Chak 34BC, Dera Bakkah, Hasilpur Road, B.W.P

Charges :
Cost of Registration 1%
Cost of Transfer 1%
Cost of Stamp duty 2%
Legal & Brokerage charges 4%
Machinery
Raw Material
Labor for Project (Personnel Analysis)
S.No. Types of Staff Required Salary/Month Salaries/Year
1 General Manager 1 10,000 112,000
2 Accountant 1 8,000 96,000
3 Supervisor 1 11,000 132,000
4 Doctor 1 20,000 240,000
5 Workers 6 7,000 504,000
6 Electrician 1 9,000 108,000
7 Cook 1 7,000 84,000
8 Sweeper 2 4,000 96,000
9 Security Guard 1 6,000 72,000
Total 15 1,440,000
Process Flow Chart
Distribution Channel

FARM DEALERS

CONSUMERS RETAILERS
Financial Analysis
Ratios 2011 2012 2013
Gross Margin 27.4% 29.2% 30.6%
Operating Margin 25.6% 27.5% 29.0%
Net Margin 19.5% 20.8% 22.8%
Current Ratio 1.97 2.45 2.97
Cash Ratio 1.60 2.06 2.57
Debt/Equity Ratio 36% 20% 10%
IRR 39%
Pay Back Period 2 Years Approximately
Hafiz Zahid Mehmood
Roll No. 45
Strengths
 Improved feed conversion ratio
 Better quality bird meat
 Increased productivity and health of the chicken
 Reduced mortality
 Fully system controlled with no manual controls
 Less chances of diseases
 Maintain temperature
Weakness
 Adoption of new vaccines
 High cost
 Not availability of space
 Diseases
 Unhygienic condition
 Processing plant
 Poor management
 Lack of trained worker
Opportunities
 Scope for frozen company
 Economic beneficial
 Advantage for small business person
 Scope for restaurant
 Continuous increase in demand of meat in market
 Sales price are reasonable & internal rate of return
is also high
 Production on large scale can maximize profit
Threats
 Effect of change in the government regulation
 Bird Flu
 Heavy duty charge on incubator
 Present crisis
 Continuously too much variation in sales prices
 Energy crises
 Variation in chicks prices
Conclusion & Recommendations
Broiler meat is the cheapest source of animal protein
available in the country. The time required for raising
broiler birds is lesser than that for big animals. The
consumption of meat is increasing due to growing health
consciousness in the masses. According to the
Agriculture Statistics of Pakistan the per capita
consumption of poultry meat is increasing at a rate of
4% per annum.
We conclude that on the basis of field work and survey of
control shed that the meat is necessary product so its
demand increases day by day. There is no chance to
decrease the demand of meat. Availability of raw material
is very easy. So, conclusion is that the control shed is a
profit motive business because no chance of decrease of
demand.

Our recommendation to new investors is that they must

invest in control shed because from the last 5-6 year there
is a great change or entrance of new control shed in
Pakistan. So, they step forward to come and invest or to
start this business, and also contribute in the economic as
well as industrial growth of Pakistan.
 ANY
QUESTION?