Introduction
Animal feed plant is a place where their feeds are made. The need for balanced animal feeds forms an essential part of the intensive diary development programme. What is proposed here, is the setting up of an animal feed manufacturing plant using local products like maize, millet and wheat. The business idea aims at the production of 93,600 kgs of animal feeds per year. The revenue potential is estimated at US$ 121,680 annually, while the initial capital investment required is US$7,150. The payback pay period for this project is approximately 6 months with a net profit margin of 50%.
Plant Capacity
The plant in this profile has a minimum capacity of 300 kgs of animal feed per day thus 93,600 kgs per annum.
Production Process
The process involves blending of various ingredients by using a disintegrator to reduce to the size of the required mesh size, which is uniformly mixed with vitamins, minerals by a ribbon blender. Molasses are added and then the mix is extruded to get pallets of the finished product, which are packed in gunny bags for marketing.
Scale of Investment
Capital Requirements in US$
| Capital Item | Units | Qty | @ | Amount |
| Ribbon blender | No | 1 | 3,150 | 3,150 |
| Gyratory shifter | No | 1 | 1,800 | 1,800 |
| weighing machine | No | 1 | 500 | 500 |
| Gunny bag sealing machine | No | 1 | 1,300 | 1,300 |
| Disintegrator | No | 1 | 400 | 400 |
| Total | 7,150 |
Production and Operation Costs in US$
| Cost Item | Units | @ | Qty/ day | Pdn Cost/day | Pdn cost/ month | Pdn Cost/ Year1 |
|---|---|---|---|---|---|---|
| Direct costs3: | ||||||
| Maize | Kgs | 0.15 | 100 | 15 | 390 | 4,680 |
| Wheat brand | Kgs | 0.15 | 100 | 15 | 390 | 4,680 |
| Oiled rice brand | Kgs | 0.16 | 50 | 8 | 208 | 2,496 |
| Molasses | Kgs | 0.75 | 50 | 37.5 | 975 | 11,700 |
| Groundnut cake | kgs | 0.2 | 50 | 10 | 260 | 3,120 |
| Mineral mixture | Kgs | 2 | 20 | 40 | 1,040 | 12,480 |
| Gunny bags | No | 0.1 | 200 | 20 | 520 | 6,240 |
| Subtotal | 3,783 | 45,396 |
General Costs (Overheads)
| Labour | 300 | 3,600 |
|---|---|---|
| Utilities | 300 | 3,600 |
| Selling and Distribution | 100 | 1,200 |
| Administrative expenses | 150 | 1,800 |
| Shelter | 300 | 3,600 |
| Depreciation (Asset write off) Expenses | 149 | 1,788 |
| Sub-total | 1,299 | 15,588 |
| Total Operating Costs | 5,082 | 60,984 |
- Production is assumed for 312 days per year.
- Depreciation assumes 4 year life of assets written off at 25% per year for all assets.
- A production Month is assumed to have 26 days.
Project Product Costs and Price Structure
| Item | Qty /day | Qty/yr | Unit /Cost | Pdn/yr | UPx | T/rev |
| Animal feed | 300 | 93,600 | 0.65 | 60,984 | 1.3 | 121,680 |
| TOTAL | 93,600 | 60,984 | 121,680 |
Profitability Analysis Table
| Profitability Item | Per day | Per /Month | Per Year |
|---|---|---|---|
| Revenue | 390 | 10,140 | 121,680 |
| Less: Production &Operating Costs | 195.5 | 5,082 | 60,984 |
| Profit | 194.5 | 5,058 | 60,696 |
Market Analysis
With agricultural modernization and diversification, there is a good future and solid potential for growth. Thus, market for animal feeds is guaranteed except the need for sensitization of the local population on the benefits of using animal feed visa vie natural grass and plants. The market cuts across farmers with different sizes of herds of animals.
