Honduras and any other nation in the world, needs to ensure the food of its inhabitants and export food to other nations to satisfy a basic nationally necessary need of Hondurans and thus provide the basis for sustainable social (human) and economic development, since this It can only be achieved by implementing effective social policies by the state and promoting conditions such that scarce resources are used efficiently to achieve competitive advantages in the agricultural sector, with a timely and predominant participation of private initiative.
The investment initiative in a farm to fatten chickens arose due to the need of the population of Honduras and specifically of Choluteca to have access to a component of the basic basket such as chicken meat, since it is more accessible to the population of all social levels due to the quality of the product and the lower price that this meat has in relation to the others, so that demand grows, as the population grows and it is known beforehand that currently we Hondurans are not self-sufficient to produce the all of the food and meat that we require, for the imports of this and other products and that we Hondurans do to satisfy food needs; Given the above, investing in broiler chicken farms is very attractive.
This evaluation, according to the market, technical and economic analyzes, shows the following results and conclusions that allow developers to make a convenient and considered decision.
analysis-evaluation-project-sale-of-chicken- MARKET STUDY:
- Project Strategy: The company will follow a focus strategy in the sense of participating in serving a percentage of the total demand for chicken meat sold in parts of a pound in all the grocery stores in the city of Choluteca, offering a competitive price product. and quality. Results of the instrument applied: The total number of grocery stores in Choluteca is 350; according to the applied instrument, 80% of them sell chicken meat and 20% do not sell; The weekly chicken meat sale at these grocery stores is 43 pounds. So:
Weekly Present Demand = 43 lbs. X 350 grocery stores x 0.8 = 12,040 Lbs. / Week
Annual Present Demand = 12,040 lbs. / Weeks X 52 weeks / year
= 626,080 lbs / year
- ANAVIH information : According to information on meat demand provided by ANAVIH (National Association of Poultry Farmers of Honduras), the demand for 2004 was 9, 123,840 lbs in the city of Choluteca, so the corresponding demand for grocery stores is approximately 7%.
- Demand to be satisfied: The project aims to produce such that it can meet 28% of the annual demand of the grocery stores, taking this percentage and the investment capacity of the promoters into account, Avícola La Unión must produce 3,500 lbs per week corresponding to a production Annual weight of 48,000 chickens with an average weight of 3.5 lbs / chicken, for an annual total weight of 168,000 lbs / year. Distribution Channel: The way to get the product to the final consumer will follow the following channel: Producer - Retailer - Consumer, where the retailer is the grocery store.
- TECHNICAL STUDY
Below are the main points of the technical study:
- Location: As for the optimal location of the farm, of the places proposed by the promoters, the village of La Galera was selected, as it was the one that fulfilled the most favorable factors for chicken fattening.
- Land: The land for the plant and farm requires an area of approximately 0.69 blocks, where 3 sheds of 200 meters will be installed. 2 service each, the packing plant with its respective cold room. Raw Material: Regarding raw material, in principle it will be the ALCON Group who will sell chickens of an average weight of 44 grams a day of birth and also the concentrate respective, the company will have to make efforts in the future to manufacture its own concentrate to reduce costs and improve productivity.
- Manpower: In the Galera area there is the necessary labor, which is not specialized, it will only require training and training, 5 production workers are needed, a farm watchman, a salesman, an assistant, a accountant and a manager, for a total of 10 employees
- Fattening Cycle: The duration of fattening of the chicken is 6 weeks (42 days), in the seventh week they will be slaughtered and marketed.
- Installed Capacity: The installed capacity of the farm is 1000 chickens / week, for a total of 48,000 per year.
- Key Equipment Availability: The key equipment such as cold room, pole breeder, scalder, plucker, are available for sale in the national market.
- Maintenance: The maintenance of the key equipment will be carried out by personnel external to the company. Minor maintenance will be done by production operators.
- ECONOMIC STUDY
The following describes the operating and financial costs, the amount of the project investment, acquisition of loans, Cash Flows, Balance Point, Minimum Acceptable Rate of Return:
- Project costs
| Product | Year 1 | Year2 | Year3 | Year4 | Year5 |
| Production cost | 1,936,231.63 | 2,113,861.96 | 2,265,325.73 | 2,431,935.87 | 2,580,947.08 |
| Administration cost | 261,592.65 | 287,751.92 | 316,527.11 | 348,179.82 | 382,997.80 |
| Costs of sale | 192,000.00 | 205,200.00 | 219,720.00 | 235,692.00 | 253,261.20 |
| Financial expenses | 115,997.30 | 92,797.84 | 69,598.38 | 46,398.92 | 23,199.46 |
| Total | 2,505,821.58 | 2,699,611.72 | 2,871,171.21 | 3,062,206.61 | 3,240,405.54 |
- Investments: TMRA
- Net Cash Flow
| DESCRIPTION | YEAR 0 | YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 |
| Net Cash Flow |
- 915,768.15 |
574,642.15 | 604,616.61 | 672,275.67 | 748,440.60 |
1,619,042 |
- Balance Point (Minimum Quantity to Produce)
| Product | Year 1 | Year2 | Year3 | Year4 | Year5 |
| Fixed costs | 592,429.61 | 595,778.15 | 601,781.49 | 610,705.11 | 622,841.04 |
| Variable costs | 1,913,391.97 | 2,103,833.57 | 2,269,389.72 | 2,451,501.50 | 2,651,824.45 |
| Variable cost per pound | 11.39 | 12.52 | 13.51 | 14.59 | 15.78 |
| Total unit cost | 14.92 | 16.07 | 17.09 | 18.23 | 19.49 |
| Unit selling price | 15.00 | 16.50 | 18.15 | 19.97 | 21.96 |
| Balance Point (Lbs) | 164,073.29 | 149,799.10 | 129,646.01 | 113,667.58 | 100,835.05 |
- Economic evaluation:
| NET PRESENT VALUE | ||
| The Net Present Value (VAN.) 5 years Lps. | 904,567.07 | |
| INTERNAL RATE OF RETURN | ||
| Internal Rate of Return (IRR) 5 years% | 67.79% | |
INTRODUCTION
The evaluation of this project analyzes the feasibility to install a chicken fattening farm and to be able to commercialize the meat for parts of a pound focused its commercialization specifically to the grocery stores of the city of Choluteca, for which the respective studies will be carried out, from the Market, Technical, Economic and Economic Profitability point of view.
The project evaluation begins with the Market study, where the demand is analyzed, investigating the unmet need in the market for excellent quality broilers, it includes the analysis of the offer where it will be announced that other companies in the southern area They are dedicated to the activity of fattening and selling chickens and the analysis of the commercialization thereof, determining which will be the means used to deliver our products to our customers.
After the market study, the technical analysis of the poultry company is carried out, which includes: The optimal location of the design, determining the optimal size of the facilities (sheds and other facilities) which will respond to the unsatisfied demand determined in the market study, type of production cycles (adequate age of sale of the chickens expressed in days), quantity and type of each of the machines necessary to maintain favorable conditions in the proper growth of the chickens, determine the number of sheds, the suitable distribution and dimensions of the sheds and the installation of machinery therein, distribution of electrical energy and water facilities, drainage systems, raw material storage areas, among others,thus obtaining an adequate administration of areas or spaces on the land where the company is installed.
GENERAL PROJECT INFORMATION
PROJECT IDEA: Honduras is a country with an agricultural and forestry vocation, but it has not managed to reach such a productive level as to obtain a competitive advantage in these areas in relation to the rest of Central America, since we have been and are importing basic grains, and other foods having the necessary resources to be competitive in the area, which places us at a disadvantage to face regional competitors and the need to be self-sufficient to produce the basic foods of our population.
The southern zone of Honduras and specifically Choluteca is one of the most productive regions in the agro-industrial sector, having difficulties in subsistence agriculture, so it is seen that investing in a chicken fattening project in this area would be attractive, because resources are becoming scarcer and the need to feed the population is at high risk, but even so, there are resources that have not been exploited to satisfy the food needs of human beings. With this, steps are being taken towards private initiative to contribute to the social and economic development of the southern zone.
NAME OF THE COMPANY: Avícola “La Unión” is the company name that was chosen well among many other options that came out of a brainstorm on the part of the project promoters, given the need to join efforts to achieve the realization of this project.
NATURE OF THE COMPANY: The company is of the agro-industrial production type because in addition to producing the chicken, it is processed to make the meat available to the market following a technological process of significant investment.
LOCATION: The geographical location will be in the department of Choluteca but the specific location will depend on the technical study.
EXECUTING UNIT: The investors of the project will be those who carry out this study.
IDENTIFICATION OF THE BUSINESS OPPORTUNITY: Chicken meat is one of the products consumed in almost all the world, being a nationally necessary product for Hondurans, since it is essential in the diet due to its low carbohydrate content in relation red meats, it has a high degree of preference for those people who are disciplined in their health care, for its flavor and its protein content necessary for a good diet.
In Honduras and especially in the southern zone, 70 - 80% of the population consumes chicken meat, limiting consumption at least two or three times a week . 1; So there are favorable expectations for investment in broilers in this area. Avícola “La Unión” will fatten chickens of the Ross genetic line, which is a brand that sells to many of the poultry farmers in Honduras the ALCON Group (multinational company of food and concentrates) and has given them excellent results. The fattening will be carried out with concentrates available in the local and national market, using the best nutrition and production techniques through the quality systems implemented by the company and by external consultants (experts).
OVERALL OBJECTIVE:
Produce quality chicken through good nutrition and proper management by Avícola “La Unión” competing in a market niche made up of grocery stores in the city of Choluteca through a producer-retailer type marketing channel.
SPECIFIC OBJECTIVES:
- Achieve profitability for investors during the project projection period. Establish lasting commitments with our suppliers Contribute to the agroindustrial development of the southern zone
PROJECT STRATEGY: The company will follow a focus strategy in the sense of participating in serving a percentage of the total demand for chicken meat sold by parts in all the grocery stores in the city of Choluteca offering a highly competitive product in price and quality.
PRODUCT NAME: The product is identical with the name of “Pollo Galán”, whose selection process was similar to that used for the company name, alluding to the quality and size of the chicken produced in Avícola “La Unión”
SWOT
Strengths
- Favorable climate for chicken farming Favorable basic infrastructure availability Provider provides specialized technical assistance Chicken genetic line according to climate
Weakness
- Lack of business experience Failure to manufacture concentrate for fattening in principle
Opportunity
- Explosive population growth Unsatisfied market demand
Threats
- There is no effective support in government financing for the industry Importation of chicken from other countries in the area at low prices Economic and social instability in the country
MARKET STUDY
PRODUCT DEFINITION: The project initially aims to demonstrate the feasibility of fattening chickens from the ROSS genetic line, one day old at an average weight of 44 grams, with a breeding duration of 6 weeks. The market study aims to determine the demand for the sale of chicken in pounds (leg, thigh and breast), selling the entrails (kidneys, liver, legs and stone) as a by-product. The chicks will be purchased from the ALCON group with whom the Avícola “La Unión” company will establish a strategic alliance where both companies will benefit, since ALCON will periodically provide us with technical assistance in the process of raising chickens in exchange for Avícola “La Unión” will buy all the supplies (chicks, concentrated feed for fattening, vaccines, etc.) and equipment such as drinking fountains, feeders,and gas brooder for the first two weeks of aging, among others.
ROSS chicken fattened with concentrated feed will have a standing weight of 3.9 to 4.2 pounds, corresponding to an effective weight in meat for the market of 3.4 to 3.6 pounds, considering a 16% waste. Within this waste are the viscera that will be sold as a by-product.
In the process, another by-product is obtained in addition to the viscera consisting of excreta that will be sold in bags to farmers and ranchers for concentrates and fertilizers. (Market price Lps.9.0 / bag)
SUBSTITUTE PRODUCTS: Among the products that compete with chicken meat are bovine meat, sausages, pork, turkey.
DEMAND ANALYSIS: To quantify demand, 2 sources of information will be used:
- Secondary sources that were taken into account for the investigation were ANAVIH, ALCON statistical data, Statistics of the Tax Registry of the Municipality of Choluteca, Internet
- The Primary Sources that were taken into account for the research were the Interviews with experts, Interview / surveys with grocery and market owners, Supermarket Family Pantry (Uses cost leadership strategy)
ANALYSIS OF PRIMARY SOURCE DATA (Survey Application)
Together with the project promoters, they have considered a confidence level of 95% with an error of 5% in the results of the surveys; The determination of the variance, which is fundamental for the calculation of the sample size, was applied to a pilot sample of 30 surveys, directly asking the owners of grocery stores what is the weekly consumption of chicken meat per pound sold per piece (at retail). The survey was applied to grocery stores that are selling chicken meat. The result obtained was that the average of this consumption is 43 pounds of chicken with a standard deviation of 34.- Based on the Student's T distribution and given that the population size is relatively small (350 pulperías), it was used a random sample of 30 that is representative of the population.- The survey aims to determine the total amount in pounds of chicken consumed at retail in the grocery stores weekly, which brand they prefer and why, and if there is a disposition to sell the product of Avícola la Unión in case of selling it at a lower, higher or similar price. quality than that of the largest competitor resulting from the survey.
Survey applied to grocery stores to quantify the consumption of chicken meat.
- Do you sell chicken meat?
Answers: Yes __, No___
If your answer to question 1 is negative, please answer the following question
- Would you like to sell chicken meat?
Answers: Yes __, No___.
If the answer to question 1 is yes, please answer the following questions
- How many pounds a week do you sell for each brand of chicken?
King Chicken Northern Chicken Chicken Nutrimas
None _____ None_____ None_____
1 - 10 _____ 1 - 10 _____ 1 - 10 _____
11-20 _____ 11-20 _____ 11-20 _____
21 -30 _____ 21 -30 ______ 21 -30 ______
31 -50 _____ 31 -50 ______ 31 -50 ______
More than 50 ____ More than 50____ More than 50____
Cacique chicken Other brands
None _____ None_____
1 - 10 _____ 1 - 10 _____
11-20 _____ 11-20 _____
21 -30 _____ 21 -30 ______
31 -50 _____ 31 -50 ______
More than 50____ More than 50____
- How many pounds of giblets (viscera) they sell weekly.
None _____
1 - 10 _____
11-20 _____
More than 20 ____
- I would be willing to sell another brand of chicken.
Answers: __ Yes, __ No
If the answer above is positive, answer the following question.
- What qualities would drive him to decide to sell another brand of chicken.
Price_____, Size _____, Presentation _____, Taste____.
ANALYSIS OF DEMAND
The total of grocery stores in Choluteca is 350; according to the applied instrument, 80% of them sell chicken and 20% do not, therefore the demand in pounds of chicken per week is calculated by multiplying the average consumption per week per grocery store by the total number of groceries registered in the municipality of Choluteca by 80%, as detailed below.
Average weekly sale in Choluteca grocery stores by parts (pounds): 43 lbs.
Weekly demand in the Choluteca grocery stores is:
D = 43Lbs X 350 grocery stores X 0.8 = 12,040 Lb./week.
Annual demand = 12040 lbs / week X 52 weeks / year = 626,080 lbs / year of chicken.
The giblets (viscera) are considered waste from the process of killing chickens, which are sub. Zero cost products, which instead of being thrown away are sold to obtain an additional income to that generated by chicken meat, which is the turn of the La Unión poultry company, according to research carried out in the field on average weekly sales Often per grocery store is 15 pounds so the weekly demand for this by-product is as follows:
D = 15 lbs X 350 grocery stores X 0.8 = 4200 lbs / week.
D Annual = 4200 lbs / year X 52 weeks / year = 218,400 lbs / year of giblets
HISTORICAL DEMAND FOR CHICKEN MEAT IN THE CITY OF CHOLUTECA DURING THE PAST FIVE YEARS
| YEARS | HISTORICAL DEMAND (LBS) |
| 2000 | 6,726,240 |
| 2001 | 7,089,768 |
| 2002 | 7,325,640 |
| 2003 | 7,611,814 |
| 2004 | 9,123,840 |
Data provided by ANAVIH and corroborated by ALCON / CADECA and other national producers
DEMAND DURING THE YEAR 2004 OF THE CHOLUTECA MARKET
FUTURE DEMAND
To calculate future demand, the least squares method was used as a way to project the most recent historical data; considering that the demand in the grocery stores is approximately 7% of the total demand, as calculated below:
Annual Present Demand in Pulperías = 12,040 lbs. / Weeks X 52 weeks / year
= 626,080 lbs / year
According to information on meat demand provided by ANAVIH (National Association of Poultry Farmers of Honduras), the demand for the year 2004 was 9, 123,840 lbs in the city of Choluteca, and when making the ratio of 626,080 lbs / year between the demand for 2004 results in grocery stores consuming approximately 7% of the demand for chicken meat in the city of Choluteca.
PROJECTED DEMAND FOR CHICKEN MEAT IN THE CITY OF CHOLUTECA FOR FIVE YEARS
|
YEARS |
TOTAL ANNUAL DEMAND IN CHOLUTECA
(LBS) |
ANNUAL DEMAND IN PULPERIAS (LBS) |
| 2005 | 9,170,635 | 641,944 |
| 2006 | 9,702,360 | 679,165 |
| 2007 | 10,234,085 | 716,385 |
| 2008 | 10,765,810 | 753,606 |
| 2009 | 11,297,535 | 790,827 |
SUPPLY ANALYSIS
For the purposes of this project, the data obtained from each of the main bidders in the city of Choluteca and information from ANAVIH, the historical offer was recorded in the following table:
HISTORICAL OFFER OF THE CITY OF CHOLUTECA
| Poultry Company | Market share | Weekly chicken units | Average Weight in Pounds | Total pounds in the year |
| Cadeca | 80% | 25,000 | 3 | 3,600,000 |
| Pronorsa | 10% | 10,000 | 3 | 1,440,000 |
|
Farmhouse |
5% |
5,000 |
3 |
720,000 |
| Others | 5% | 5,000 | 3 | 720,000 |
| Total | 100% | 40,000 | 6,480,000 |
HISTORICAL OFFER OF CHICKEN MEAT IN THE CITY OF CHOLUTECA
|
YEARS |
ANNUAL AMOUNT OFFERED
(LBS) |
| 2000 | 6,480,000 |
| 2001 | 6,804,000 |
| 2002 | 6,885,000 |
| 2003 | 7,298,000 |
| 2004 | 8,640,000 |
OFFER OF THE YEAR 2004 OF CHICKEN MEAT IN THE CITY OF CHOLUTECA
| Poultry Company | Market share | Weekly chicken units | Average Weight in Pounds | Total
of pounds per week |
Total pounds in the year |
| Cadeca | 70% | 30,000 | 3 | 90,000 | 4,320,000 |
| Pronorsa | fifteen% | 15,000 | 3 | 45,000 | 2,160,000 |
| Poultry
Santa Fe |
10% |
10,000 |
3 |
30,000 |
1,440,000 |
| Independent Producers |
5% |
5,000 |
3 |
15,000 |
720,000 |
| Total | 100% | 60,000 | 180,000 | 8,640,000 |
FUTURE OFFER OF CHICKEN MEAT IN THE CITY OF CHOLUTECA DURING THE NEXT FIVE YEARS
| Years | Total Annual Offer in Choluteca (lbs) | Annual supply in grocery stores (lbs) |
| 2005 | 8,685,600 | 607,992 |
| 2006 | 9,147,000 | 640,290 |
| 2007 | 9,628,400 | 673,988 |
| 2008 | 10,109,800 | 707,686 |
| 2009 | 10,591,200 | 741,384 |
UNSATISFIED DEMAND
The project has the opportunity to enter the chicken meat production market, as shown in the following table.
| Year | Demand Pulperías | Offer to Pulperías | Unsatisfied demand |
| 2005 | 641,944 | 607,992 | 33,952 |
| 2006 | 679,165 | 640,290 | 38,875 |
| 2007 | 716,385 | 673,988 | 42,397 |
| 2008 | 753,606 | 707,686 | 45,920 |
| 2009 | 790,827 | 741,384 | 49,443 |
The project aims at such a production to be able to meet 28% of the annual demand of the grocery stores taking into account this percentage, the project corresponds to a weekly production of 3,500 pounds.
COMMERCIALIZATION
The project will commercialize 4000 chickens per month in batches of 1000 chickens per week, which will be slaughtered from Monday to Saturday, ready to be sold in the different grocery stores in Choluteca with an average weight of 3.50 per chicken. - The target market will be the grocery stores which they have a 7% market share projection.- The distribution channel is as follows: Producer - Distributor - Consumer.- The strategy is to compete with an excellent quality product at a competitive price in the market since There is no intermediary between the producer and the retail distributor (grocery stores), and considering that they have a 20% profit at an average final consumer price of 16.95 lempiras / pound.
CONCLUSIONS
After having processed the data obtained during the investigation and having analyzed them, it has been concluded that the project is commercially feasible based on the assurance that in the period of the project duration, sales will have sustained growth due to the annual growth in demand for this project. nationally necessary product.
From the analysis of supply and demand, an unsatisfied demand was found, part of which must be met, since the company's strategy is to participate in 28% of the total demand for grocery stores, which is the segment in which it has focused. the study, because investors believe they can cope financially with what is required in the project for this demand.
TECHNICAL STUDY
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