New Business Idea Starting AN ANIMAL FEED Company Production and Marketing with Costs in USD

 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.