LAGOS STATE UNIVERSITY, OJO

FACULTY OF MANAGEMENT SCIENCES

DEPARTMENT OF PUBLIC ADMINISTRATION

ASSIGNMENT:
FEASIBILITY STUDY ON POULTRY FARM

COURSE CODE:
MTE 208

COURSE TITLE:
INTRO TO PROJECT MANAGEMENT AND
EVALUATION

PREPARED BY:
HUNSA SEMAKO SAMUEL
22110832068

LECTURER IN CHARGE
MISS. PELUMI

AUGUST, 2024
TABLE OF CONTENTS
PAGE
CHAPTER ONE
1.1 Introduction … … … … … … … 3
1.2 Signification … … … … … … … 3

CHAPTER TWO
2.0 General Project Description … … … … … 3
2.1 Profitability and Economic Benefits…… … … … 4
2.2 Implementations … … … … … … … 4
2.3 The Target Market … … … … … … … 4
2.4 Proposed Pricing Policy … … … … … 4
2.5 Proposed Distribution System … … … … … 4
2.6 Plant Capacity/Poultry Houses … … … … … 5

CHAPTER THREE
3.0 Description of the Business… … … … … … 5
3.1 Literature Review … … … … … … … 5

CHAPTER FOUR
4.0 Market Consideration … … … … … … 6
4.1 Remuneration … … … … … … … 6

CHAPTER FIVE
5.0 Technical Specification … … … … … … 6
5.1 Production Viability… … … … … … … 7
5.2 Folding Up Poultry Farming… … … … … … 7
5.3 Intensive System of Poultry Farming … … … … 7
5.4 Semi-Intensive System … … … … … … 8

CHAPTER SIX
6.0 Marketing Plan … … … … … … … 8
6.1 Pricing Policy … … … … … … … 8
6.2 Marketing Policy … … … … … … … 8
6.3 Budget Sales Forecast … … … … … … 8

CHAPTER SEVEN
7.0 Critical Risk and Problem … … … … … 8
7.1 Disease … … … … … … … 8
7.2 Lack of Equipment … … … … … … 8
7.3 Feeding … … … … … … … … 9
7.4 Chicks … … … … … … … … 9
7.5 Grower … … … … … … … … 9
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CHAPTER EIGHT
8.0 Financial and Economic Plan … … … … … 10
8.1 Source of Finance … … … … … … … 10
8.2 Application of Fund … … … … … … 10
8.3 Adult Stock … … … … … … … 10
8.4 Projected Statement of Comprehensive Income … … 10
8.5 Projected Statement of Financial Position … … … 11
8.6 Projected Cash Flow Statement … … … … … 11
8.7 Profitability Ratio … … … … … … … 12
9.0 Conclusion … … … … … … … … 12

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CHAPTER ONE
1.1 INTRODUCTION
Entrepreneurship development programming was designed to stimulate the
drive toward employment rate and increase in food production through the use
of small loans to establish viable projects and work on their own as well as to
provide employment opportunities for others.
An entrepreneur going without prior planning is analogous to a warrior going to
fight without premeditated strategy.
Broiler Production is the raising of days-old chicks (Broilers) to attain a
market weight of 2.0-2.5kg between 0-12 weeks. The Broilers production when
reared and under good management gives higher returns over capital land and
labour costs.
There are aims and objectives of embarking on Broilers production in this
location include:
i. To make profits or higher turnover.
ii. To provide a source of human protein requirement.
iii. To promote the self-dependency and efficiency campaign.
iv. To provide employment for other people.
v. To meet the people's demand festival period.

1.2 SIGNIFICATION
i. Poultry production does not require a long period, it attains adultery
within 0-12 weeks.
ii. It requires less capital investment when compared with other types of
stocks.
iii. The poultry feed can be formulated from industry waste e.g. Brewer spent
gram, seek cake, palm kernel meal, etc.
iv. The requirement space for a large stock of birds is relatively small.
v. Incomes are realized from broiler production all through the years.

CHAPTER TWO
2.0 GENERAL PROJECT DESCRIPTION
Name of the Company: SAMMY POULTRY FARM
Address: NEW SITE, TOGA, BADAGRY, LAGOS STATE.
The total amount needed for the project for a start ‘N3,000,000’.
Requirements Amount (N)
Personal Saving 2,000,000
Loan 1,500,000
Family Support 500,000
Total N3,000,000

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2.1 PROFITABILITY AND ECONOMIC BENEFITS
Since poultry production is highly profitable. At the end of the year, the project
turnover will be around N750,000 based on his turnover level, the Gross Profit
will be N4,000,000 while the Net Profit could be about N50,000.

2.2 IMPLEMENTATIONS
SAMMY POULTRY FARM will closely adhere to the below stages in rare
stages:
1. The provision of necessary materials to be used within the poultry houses.
2. The preparation of vaccination of the birds at the initial stage and other
management practices to be done.
3. The construction of the poultry house.
4. The preparation of the land on which the poultry house will be constructed.

To start a poultry farm, it does not require a wide space at least one hectare of
land will be required to provide space for subsequent advancement.
The Broilers are found to be fast growing attaining market way of 1.0kg to 2kg
at the age of 24 weeks depending on the feed conservation and efficiency of
birds. The total number of the birds is 10,000 (200 birds each in five poultry
houses)

2.3 THE TARGET MARKET

It is pertinent that every product has an exit in a large market. These include
individuals, restaurants, bars, cool spots, and hotels. Some of the markets for the
product are De-love Hotel, Sycamore, and UAC Food Lagos. The hotel and
restaurant customers order the broilers in large quantities while the individual
store owners order in fairly large quantities.

There is a high market for broilers around the area, especially during the festive
period and the site claims a large area for it to produce enough that will be
beneficial to the people within the vicinity.

2.4 PROPOSED PRICING POLICY

The birds will be sold at a considerable price. Based on the objective of the
business is to make broilers’ meat available to low-income earners at affordable
prices and prevent overestimation of revenue.

2.5 PROPOSED DISTRIBUTION SYSTEM

This will by using the teaching method, individual contact, and mass media.

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2.6 PLANT CAPACITY/POULTRY HOUSES
Plant area one hectare of land N2.5M
Each poultry house will occupy – 12x24m2
Total spacing – 50+50m (10m2) other available space will be for the Director’s
office.
- Directors offices
- Manager’s office
- Secretary’s office

CHAPTER THREE
3.0 DESCRIPTION OF THE BUSINESS
The market for this product lies in the consumption pattern of the masses for
both home consumption and bakery uses, because of the general awareness that
eggs are more portentous than cow meat having high demand during festival
times like Christmas, and New Year celebrations and also for occasional
consumption.

However, the demand for fowl meat and eggs is greater than is supply. The
various are based on plumage colour, ear lobe, and types of a comb.

Some of the common terms used in poultry farming are shown below:
CATEGORIES CHICKENS DUCK TURKEYS
Adult Cock Drakes Cock
Castrated Capon - -
Young male Chick Duckling Chick
Adult female Hen Duck Hen
Matting Treading Treading Treading
Pregnant In lay In lay In lay
Parturition Laying Laying Laying
Group (adult) Flock Flight Flock

3.1 LITERATURE REVIEW

There are many different types of chickens that are raised by poultry farmers
most of these are foreign breeds which are more prolific than the local breeds.
The most popular types of chicken raised by poultry farmers are listed below:
1. Rhode Island Red (RIR)
2. Plymouth Rock
3. New Hemp hire

Rhode Island Red (RIR)

The Rhode Island is a native of America that originated from the island; the
plumage is rich dark red with some black feathers in the tail and part of the
wings. The RIP is a dual-purpose fowl that is bred for the egg and meets
production.
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Plymouth Rock
This is also an American Breed; the popular varieties are the white barred. They
are generally large with good flesh and mainly rose for meat production.

New Hampshire
This breed has its origin. It develops a new comb and good feathering and has
yellow skin. It is a dual-purpose breed.

CHAPTER FOUR
4.0 MARKET CONSIDERATION
This is a preliminary evaluation of the market's current and potential demand for
products in the market. The marketing of the firm’s product is a well-planned
strategy with effective utilization of the mix; the product, price, promotion, and
place.
1. The product will be of high quality and to be in accordance with the
customer desire so as to give them value for their money.
2. The price, on the other hand, will be very reasonable because of the fact
that it tends to gain its target market. In view of this, a penetration pricing
strategy will be used; charging the lowest possible price compared to the
price of competitor.
3. The place is the distributional method. It will be a situation where the
intending customer will come to the source of the provision of the
product.

4.1 REMUNERATION
Designation No Monthly Annual Salaries
Salaries
Managing Director 1 N20,000 N240,000
Accounting 1 N15,000 N180,000
Marketing Manager 1 N10,000 N120,000
Production Manager 1 N10,000 N120,000
Poultry Workers 3 N5,000 N60,000
Security 2 N5,000 N60,000
N65,000 N780,000

CHAPTER FIVE
5.0 TECHNICAL SPECIFICATION
A. MACHINERIES AND EQUIPMENT
i. Incubator N30,000
ii. Generator N45,000
iii. Other Equipment N15,000
Total N90,000

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B. VEHICLE
A motor would be required for moving eggs and poultry products outside the
poultry and in transporting feeds into the poultry, in this regard a second-hand
lattice bus would be at the cost of N120,000

LAND AND BUILDING

1. Office building N40,000
2. Poultry shed with eggs N150,000
3. Other necessary facilities N30,000
Total N220,000

PRELIMINARY EXPENSIVE
1. Cost of company formation N12,000
2. Cost of compiling feasibility N10,000
Total N22,000

WORKING CAPITAL PROVISION

1. Sales for two months N1,560,000
2. Feeds drugs and necessaries N25,000
3. Cash provision for initial infrastructure N30,000
Total N1,625,000

5.1 PRODUCTION VIABILITY

The viabilities required for the business are water, fuel for transportation and
general, electricity, good roads, etc.

However, all are available for the location; the site is located at New-site
Badagry with available infrastructure, such as good roads, electricity, adequate
water supply proximity to raw materials and markets.

5.2 FOLDING UP POULTRY FARMING

In a situation with no proper facilities, chickens are exposed to various natural
hazards weather conditions, hawks, and predatory mammals; the production of
eggs and fowl meat will be low, since the feeding and care are frequently
inadequate, leading to a high death rate. The obvious merit is that chickens feed
on natural vegetation which provides an adequate supply of vitamins and
minerals in their diet leading to resistance to diseases

5.3 INTENSIVE SYSTEM OF POULTRY FARMING

This is a modification of free-range systems where chickens are enclosed in a
moveable unit which are constructed of wire mesh and wood. This provides a
reasonable degree of protection. The units are moved and this helps to spread
nature and prevent a buildup of disease. Eggs are likely to be damaged during

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movement unless laying boxes are provided. It is advisable to locate the unit on
a flat land.

5.4 SEMI-INTENSIVE SYSTEM

This system is mid-way between the extensive and intensive system. Chicken
are housed in a fixed building but are allowed to move about during the day.
The building is generally made of wood and raised above the ground.

CHAPTER SIX
6.0 MARKETING PLAN
Having considered the marketing strategy, a fowl will cost N3,000 and a crate
of eggs will cost N1,500 from the firm. Discounts such as Trade Discount shall
be given to customers to encourage large purchases and cash discounts to
prompt payment of cash.

6.1 PRICING POLICY

The farm shall also adopt two pricing policies:
i. Profit-Oriented Objective: The Farm ensures maximization of profit
and seeks target investment.
ii. Sales Volume Objective: This will be used to achieve growth, maintain
share of the market, and also to increase market share to further
objectives of a 9% increase in sales annually.

6.2 MARKETING POLICY

The farm shall make use of distributors to market its products and also personal
selling. There shall be four distributors situated in different target locations in
the Lagos market e.g. Iyana-Iba Market, Badagry Market. Each of these markets
is expected to cater to its suburban areas.

Payments must be made in full within the months of sales and discounts are not
taken by the buyer’s payment must be made in full within 30 days sales shall be
increased at 95% per annum.

6.3 BUDGET SALES FORECAST

Product Quality Initial price Weekly Monthly price
Egg 250 (creates) 600 N150,000 N600,000
Fowl meat 300 (fowls) 1000 N300,000 N1,200,000

CHAPTER SEVEN
7.0 CRITICAL RISK AND PROBLEMS
7.1 DISEASE
A bird is said to be diseased when there is a change from the normal state of its
body process. This can cause risk and problems for the birds. As a result of this,

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the birds become ill and cannot give their highest performance a terms of work
execution.

7.2 LACK OF EQUIPMENT

This is one of the problems in the sense that there must be enough equipment
for the birds so that it can give them energy and sustain their lives. These
machines or equipment are used to get rid of worms and other parasites such as
lice, mites, and bucks.

7.3 FEEDING
There should be a consistent interval feeding so that they can produce their eggs
very well. They can be fed with grains, the mash obtained from maize, and
other remnants for the chickens. These types of feeding give them energy.

The floor is normally made of wire so that the dropping of eggs will fall to the
net from which they can be removed fairly easily. A space of one square meter
per chicken and 306 square meters per bird is allowed in the building. The runs
are fenced with wire which is not more than two meters high.

7.4 CHICKS
Chicks are reared on a small scale by broody lines but on a large-scale poultry
farm, they are first kept in a heated brooder house until they are completely
covered with feathers which insulate them from relatively cool temperatures
that occur during the night. Brooder houses are specially built houses
constructed with equipment that provide the optimum environmental conditions
needed by chicks to achieve the generic potential for development. These
environmental conditions include an adequate supply of appropriate
temperature, sufficient floor space, ventilation, and protection against diseases.
Temperature control is of major importance, in that, protects against heating,
poor feather development, and retardation of growth. Critical prepaid in the first
three weeks when mortality is most likely to be high.

The following temperature rates are regarded as being standard requirements for
the first week.
First week 23-35oc (90-96)
Second week 29-32oc (85-90)
Third week 27-29oc (80-85)

There can be a specific temperature range, as this will depend on the weather
conditions, the type of brooder equipment used, and the bread of the chick being
reared. Heat may be supplied from electric bulbs or kerosene lanterns relative
humidity should be 60-70%, this is another important factor, which should be
controlled if optimum development is to be achieved.

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7.5 GROWER
After remaining in the brooder for 8-12 weeks, the chicks are term growers and
efficiently managed on an intensive scale. They should be moved either to a
battery cage or a deep-liter house. Since the birds will by now develop adequate
plumage, no extra heating will be required.
CHAPTER EIGHT
8.0 FINANCIAL AND ECONOMIC PLAN
8.1 SOURCE OF FINANCE
The initial capital requirement will be sourced as follows:
S/No DESCRIPTION AMOUNT (N)
1 Personal savings 2,500,000
2 Family contribution 500,000
3 Bank loan 1,500,000

8.2 APPLICATION OF FUND

The summary of the application of the initial capital requirement is as follows;
S/NO DESCRIPTION COST (N)
1 Machines 300,000
2 Equipment 500,000
3 Land and building 506,000
4 Vehicle 250,000
5 Preliminary expenses 172,000
6 Working capital 1,500,000

8.3 ADULT STOCK

Adult birds are normally kept in battery cages or deep litter houses. Before a
new batch of birds is taken into the poultry house, it must be thoroughly cleaned
and disinfected. The routine management of adult birds is similar and
recommended for growers. After twelve months (laying period) they should be
examined and their laying record checked. Those with a declaiming laying
performance should be sold or culled.

This term is used to describe the removal of a batch of unthrifty birds. Birds
become ready for culling when their beats become “pelmet-like”, their vents
shrink, making them stiff and thick, and the abdomen also becomes contracted.

8.4 PROJECTED STATEMENT OF COMPREHENSIVE INCOME

Year/2024 Year/2025 Year/2026 Year/2027
N N N N
Sales 4,248,000 4,630,320 5,047,705 5,501,283
Less Operating Exp. 74,000 191,400 210,540 231,594
Salaries 100,000 200,000 350,000 500,000
Feeds & Drugs 180,000 198,000 217,800 239,580
General Expenses 90,000 100,000 150,000 200,000

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Advertisement 62,900 62,900 - -
Interest (17%) 31,750 31,750 31,750 31,750
Depreciation 6,500 - - -
Preliminary Exp. 22,000 - - -
Monitoring Exp. 250,000 250,000 250,000 250,000
(5,062,150) (5,664,370) (6,257,795) (6,954,207)
Insurance - - (1,308,165) 1,364,426)
1,772,387 2,292,520 2,492,450 2,533,933

ASSUMPTIONS EMPLOYMENT
1. Interest is charged at the rate of 17% per annum
2. Corporate tax is assumed to be 25%
3. Depreciation is charged as follows;
- Machine Equipment 10%
- Land & Building 5%
- Vehicle 10%
4. Salaries increase by 10% while general expenses are also 10%

8.5 PROJECTED STATEMENT OF FINANCIAL POSITION

Year/2024 Year/2025 Year/2026 Year/2027
N N N N
Capital 4,000,000 4,000,000 4,000,000 4,000,000
Profit after tax 4,500,085 3,900,085 7,500,612 8,697,064
Drawing (1,475,087) (800,000) (900,000) (900,000)
Term loan 1,500,000 2,967,612 4,497,062 6,130,995
Current liabilities 954,363 1,234,195 1,308,165 1,364,426
Taxation 2,799,450 4,571,807 5,805,227 7,492,421
Fixed assets 425,000 393,750 361,500 329,750
Depreciation (31,750) (31,750) (31,750) (31,750)
Current asset - - 329,750 298,000
Stock of birds 1,389,200 3,600,307 3,775,477 2,405,755

8.6 PROJECTED CASH FLOW STATEMENT

Year/2024 Year/2025 Year/2026 Year/2027
N N N N
Capital 4,000,000 4,000,000 4,000,000 4,000,000
Sales 4,248,000 4,630,320 5,047,705 5,507,283
4,821,500 4,630,32 5,507,283 5,507,283
Cash outflow 900,000 - 300,000 -
Purchase of birds 100,000 200,000 350,000 500,000
Purchase of food 300,000 450,000 500,000 700,000
Drug 180,000 198,000 217,800 239,580
General expenses 90,000 100,000 217,800 239,580

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Advertisement 62,900 62,900 70,000 90,000
Interest 6,500 - 210,540 -
Preliminary Exp. 22,000 - - -
Salaries 900,000 900,000 900,000 900,000
Monitoring Exp. 250,000 250,000 1,234,195 250,000
Insurance - - - -
Loan repayment 1,823,400 2,026,663 370,000 288,339
Net cash flow 2,998,100 2,603, 657 2,650,785 2,621,944
Working capital 142,000 3,140,100 5,734,757 7,608,927
Balance C/D 3,140,100 5,743,757 7,608,827 10,230,871

The average rate of return on investment be calculated using the first year of
operation as an example.

8.7 PROFITABILITY RATIO

Return on Assets/Earning Power
Net profit after tax = 1,772,386 x 100
Total assets/tangible = 2,799,450
= 63.3%

9.0 CONCLUSION
Based on the foregoing analysis of the first three (3) years' financial projections
concerning the projection made, I strongly believe that the business is very
profitable and feasible.

The financial obligation can be met safely from earnings while the balance sheet
analysis shows a decreased current ratio which indicates that the poultry farm is
feasible.

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