Investment in poultry farming in Uganda
Do you want to do business in Uganda by investing in poultry farming and "Mavi ya kuku"?
Initially, I do not use people like Ugandan Kahinda Otafire and his, I can call it a "famous euphemism" including the "Mavi ya Kuku" statement. "Mavi ya kuku" is a Swahili word that refers to chicken wastes, and if you are dealing with a chicken cage you have to literally put your feet in the depth of the chicken (literally), but I'll tell you these. later the money makers. I will present my investment analysis for the Ugandan poultry subsector.
FIRST CONS (course)
1. Too many so-called "chicken experts"
The beauty of chicken farming is that almost every Ugandan knows something about it; Oh, anyway, almost every "Kampala person" who went to Christmas in the village was probably given a chicken gift, and likewise those who "men of tradition" know that in your home you are the only one is entitled to eat " nkoko nkulu ". "Nkoko Nkulu" is the chicken bladder and is traditionally the leader of the house or, in many cases, a special visitor (usually male) with respect and a special greeting in the household.
Ugandans know this because chicken is an integral part of Uganda's DNA. Despite the fact that almost everyone knows some form of chicken farming can be the worst enemy of a potential investor especially if you want to do so on a commercial basis. You see that all "Tom, Dick and Oryem" claim that they have experience in chicken farming, but mostly deal with indigenous chicken farming, which is not the same as commercial farming, the purpose of this article
Local Ugandan Chicken For example, they produce only 40 eggs per month (more than 1 egg a month) than exotic chickens (such as the brown shavings of the shaver) that produce 300 eggs a year (almost one egg per day!).
does not get the right person and decides that all "Tom, Dick and Amer" are listening, then you know that the entire file was broken by coccidiosis
. Market and Distribution bottlenecks
Uganda is still a very "localized retail" sector for the chicken / poultry sector. For example, you may sell your egg store in a store or in neighboring cities as there are not many "super market" or "full-sale buyers" who are ready to absorb the product and may therefore need to get away from intermediaries. This in itself is causing loss to these intermediaries. These bottlenecks are due to the fact that there has not been a formalized large-scale distribution distribution network from the poultry farming areas (mainly North and East Uganda) to the key market (mainly Central Uganda) from its products. Furthermore, our transport network is not well developed due to the road conditions. That's why you have to identify your market and distribution logistics early on, as this can affect your profit
. Feed Cost
Chicken meat is perhaps one of the most important aspects of ensuring the profitability of the poultry industry. It is estimated that between 60% and 70% of total production costs are counted. You have to make sure you get the best quality of feed, of course it means that you will be healthy chicken (and good quality eggs).
The great nutrition situation in serious Uganda and the latest news (August and October) a number of Uganda poultry farmers are being thrown out of business and, before investing, you should carefully consider. This high feed price is driven by an increase in the price of maize bran. Maize bran composition is 52% of chicken meat. Parallel to the prices of high maize bran, the fact that fish stocks in Uganda are quickly depleted (10-20% of the fish composition of the chicken meat). Illness
I was touched briefly when I mentioned coccidiosis earlier. There are other chicken diseases, such as New Castle disease, which can break the entire poultry stock. Nevertheless, I did not evaluate this risk at the top of the CONS because any serious investor would hire a competent and well-experienced farm manager to prevent the threats of illness and gain access to a good veterinarian / doctor and would further reduce that risk [19659002] 5. Capital Cost
Sustainable chicken stock requires fair capital, especially since the layers are used approximately 17 weeks before the eggs begin, so there is no income during this period. The investor should therefore be able to generate current assets for approximately 4 months before earning it. This working capital includes the most important chicken meat costs.
From my estimates (and later to visit) Shs 26m is a starting capital for a 1000 chicken breasts (shaving brunette breed). I will deal in detail in the following section.
AND NOW THE PROS
1. Chicken is here to stay
Chicken is a long time and in the developed world chicken is cheaper than beef. The reverse is true in Uganda and chicken is usually reserved for separate days (for example, when I went to my P.7 PLE exams and entered my first choice of school). In Uganda, however, this will change, especially when our population grows and more people are coming out of poverty. Recent studies show that egg consumption increased by 28% and chicken consumption by 60% between 2000 and 2006.
Uganda girls love chicken (and chips)! Furthermore, it may be expected that the demand for eggs and chicken will continue to be sustained by the ongoing East African community and the pursuit of regional integration
. Excellent Profitability Returns
Despite the fact that the industry is ruined despite articles about the costs of covering up chicken meat, I believe that this industry continues to offer the best return on investment. Based on the following estimates, the rate of return is 1.09 years! I will describe the following estimates. The estimates are based on the sustainable investment of 1000 shaving browns. All the numbers in Uganda are shaded. The November 2011 exchange rate is approximately I USD = Shs 2,700
Summary 1: Start-up capital
A: Fixed costs (one-time)
1. Chicken Sand and Related Items: Shs 3,450,000
2. Electricity and Water (Connection): Shs 1,000,000
3. Legal and other start-up costs: 700,000
4. Training: Shs 42,000
Total: Sh 192 000 000
B: The first 4 months (week 1-17)
1. Day chicks (out of 1000): Shs 4,500,000
2. Chicken (starter): 13,043,836
3. Other additional costs: 220.000
Total: Shs 17,763,836
C: Workplace (week 1-17)
1. Farm inspector: 800,000 HUF (200,000 monthly)
2. Farm Director: HUF 1,200,000 (300,000 monthly)
3. Farm hands: Shs 720,000 (Estimated with three hands, 60k revenue per month)
4. Vet Office Shs 90,000 for 3 visits.
Total: 2,810,000
D: Emergency (10%): 2,576,584
TOTAL HOMEPAGE: 28,342,419
2. Summary: Profitability and Return on Investment
REVENUE (8 months)
Revenue is estimated at 1000 hens, a 7% mortality rate, so it is net for 930 hens. It is estimated that each egg places 292 eggs per year. This is an 8-month period that includes the first financial period (as the chickens mature for four months). In Uganda, eggs are sold in 30 plates. In August 2011, it is estimated that each egg spends on Shs 300, meaning that a tray has a value of $ 9,000
Based on the above, income over the period:
1000 hens less 7% mortality: 930 hens * 292 egg = 271.560 eggs = 9.052 trays
Each tray is 9,000 pieces, including 9,052 * 9,000 = 81,468,000 YES (or 292 days during the annual period on which the hen is lying)
Pro's 8-month Pro annual income is 54,864,231
COSTS (Monthly 8 Months)
1. Chicken Meat: 24,261,534. It counts about a 37 kg chicken.
In August 2011, the layer of fodder (which thanks to the 17-week increase in chicken meat) was paid for 75 kg / 70 kg bag. Based on the above, the chicken consumes a daily diet of 108.7.
Within 8 months, the total cost of the Shs. 24.261.534 [19659002] 2. Traffic to the Market: 5,400,000 Shs (Estimated 15,000 ShS Daily)
3. Labor force (on the same basis as labor costs for the first 4 months, but for 8 months): Sh. 10 940 000
4. Utilities (water and electricity): 720,000
5. Other: 1.800.000
Total: Shs43,121,534
Operating Profit: Shs 11,712,697
Other Revenues:
1. Sales of chicken (after the end of the production cycle): 6.510.000. I assume that every chicken is sold to Shs 7,000 in the market price in August 2011.
2nd Less: Market Costs: 200,000
3. Chicken waste: 8,035,510
(estimated 11479 kg of the resulting feces is 1/3 of feed intake). Every kg at Shs 700.
NET profit (with other revenues): Shs 26.058.207
Return on equity: 1.09 years
As you can see above, you can expect it to cost over 1 year! I do not think we have anything else to say about this industry, but about those who are there and there is a third reason for that.
4th Social Responsibility Benefits
Charitable organizations and other non-government organizations recognize that poultry farming has an impact on rural communities, especially women, and a number of studies have shown that this is the next social revolution.
CALCULATION AND CLOSE WORD
19659002] Based on my analysis:
* Capital investment (A): Shs 28,342,419
* Annual revenue (including other revenue): Shs 69,179,741
* Annual Profit (including WIFI) and no cost (B) Shs 26 058 207
* Return on equity (leveraged or A / B over the past years) 1.09 years
Now you have to get funds before investing. As I said in the beginning, It maintains this business for 4 months without making any income at all, so it must provide the necessary funds, especially for chicken. It should not jeopardize the quality of feedingstuffs or quantities if there is a shortage of money as this ultimately affects the quality of eggs and chicken.
* Supporting and training agriculture. This is a sector that the government, the NGOS, and the donors have put in a substantial amount of money, so there is no objection to the use of non-funding tools from NAADS to district support projects, to non-governmental organizations supported by courses
* Market / distribution network. There are significant bottlenecks in Uganda and it is good and good to develop the capacity for 1,000 birds, but if you can not get them to the market, it's waste. It is therefore important that wherever you find your economy, you think how to get to the market.
* Land. You will now realize that I did not take into account the cost of land in this analysis. The reasons are multifaceted. When I have examined this business and my research, an investor can get "free" land, for example local people, rural relatives, and the like.
So I did not think it was an important question. In addition, chickens usually do not require much land and, if necessary, rent this land at a lower cost in Uganda's rural areas. Of course, you must not enter the Mabira Forest or perhaps a wetland ground, because then your "friend" Col. Otafire can ask you if you are a frog?
As I said, this sector is not going anywhere and there will still be demand for agricultural products. Furthermore, the developed world is increasingly willing to pay for "organic" products, Uganda poultry continues to appreciate.
I promised to mention "Mavi ya Kuku" in detail and you will notice that my input is an analysis that does not really make any money because, as the agricultural sector continues to grow and fertilizers will continue to be expensive, farmers are looking for alternatives . Chicken waste can be the future, so yes, "Mavi ya Kuku" and "Nkoko Nkulu" are our future!
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