Animal Feed Production - Rec

ANIMAL FEED PRODUCTION BUSINESS PLAN

September 2009

Table of Content 1.

Introduction

2.

The Company 2.1 2.2 2.3 2.4

3.

General background Current business activities SWOT analyses New Business idea

The Management team 3.1 Qualities 3.2 Motivation

4.

The Market 4.1 4.2 4.3 4.4 4.5 4.6 4.7

5.

Clients/Target group Business concept Products Competitors External factors Suppliers Market research

Marketing 5.1.

Marketing mix 5.1.1 Place/Location 5.1.2 Product 5.1.3 Price 5.1.4 Personnel 5.2. Marketing plan

6.

Personnel and Organisation 6.1. 6.2. 6.3. 6.4.

7.

8. 9.

Personnel and budget Administration and bookkeeping Insurance Taxes and subsidies

Investment budget/proposal 7.1. Summary investmentplan 7.2. Own Capital 7.3. Liabilities 7.4. Start Balance Operational budget 8.1. Turn Over – Plan duration logic Financing plan

Introduction Private sector led economic growth and development has been significantly recognised by the Government of the Republic of Uganda as the way to go to complement Government efforts to achieve holistic development. Recognising the Private Sector as an engine for growth and development has fundamentally enabled micro, small, medium

and big entrepreneurs to play an active part in the economic development of the country. The Government Development Plan emphasizes various innovative schemes that are intended to increase value through value addition, supporting the linkages between enterprises, and improving skills, with a focus on micro, small and medium enterprises (MSMEs), including reaching out to those in rural areas.1 The Project proposed in this Business Plan is a response to complementing these efforts. This business plan is developed to lay out modalities and guiding principles for setting up an Animal Feed Processing Plant as an innovative project of ……. It is a twenty-four months (two years) premeditated plan for the animal feed processing project to allow for an efficient, effective and guided implementation of the project. This project is a recent add up to the already existing projects of ……… The plan captures the need to start up an animal feed processing plant that is intended to provide affordable and reliable feed in-puts and complement services to livestock farmers in Kanungu and Rukungiri districts and a wider farming community beyond the two districts. It shows how the plant will be operated, its target beneficiaries, targeted market, expected benefits and market trends in the business. The feed processing plant will be operated by ………………….. aimed at improving the well being of the rural poor in Kanungu District and will be in line with Government’s need for investment in agro-processing which will thus give value to locally produced inputs. The plant will produce mainly: • Poultry feeds • Cattle feeds and • Feeds for pigs It shall be located within Muhokya trading centre, Kambuga Sub-county, Kanungu District. 2. 2.1

The Company General

Name of the Company Postal address Telephone E-mail Type of organisation Core Business

2.2

Background of the company

1 Private Sector Foundation Uganda – Private Sector Competitive Project II

2.3

Current business activities

2.4

SWOT – analysis

2.5 New business idea Animal feed production is the most recent innovation of ......................, driven by the structural demands of the farming communities in the areas our company intends to serve. This new innovation is similarly within the general framework of Government’s plan for poverty alleviation through increased production, productivity and market opportunity through value addition. The driving vision & mission Our vision is “eased accessibility, affordability, and reliability of agro-inputs in Kanungu and neighbouring districts to propel improved quality of life of all the rural and urban poor" Our mission is to be the leading producers of high quality animal feeds in Kanungu and neighbouring districts to improve animal production and productivity”. 2.6

Licensing & Quality Assurance Mechanism

The feed processing plant will be registered according to the governing laws of Uganda. The key bodies to register with include; • Uganda National Bureau of Standards • Kanungu District Local Government for - trading license • Any other relevant regulatory agency in the country These institutions are regulatory agencies and this will no doubt ensure as well as enhance the sustaned quality of the products. 3.

THE MANAGEMENT TEAM

3.1

Project Management

The project will conviniently be centred within the general management structures of ............ apart from the Project Management Team (PMT) which will comprise of the basic project staff, there will be a Project Supervisory Team (PST). For the first twelve months, the company will solicit for a competent consultant for technical backstopping. The consultant will periodically appraise the project to ensure it is on track and render appropriate advisory services to both the PMT and PST.

4.

The Market – Statement of the need

Kanungu District is among the least developed districts in Uganda and is comprised of what is popularly referred to as Kinkiizi County. More than 99% of the population are predominantly dependant on agriculture as the main source of income. Agriculture is virtually a way of life. However, the quality and quantity of animal products is still low because feeds and other improved in-puts are not readily accessible or affordable. Those who access the feeds do so at prohibitive costs. These factors in a major way have inhibited community engagement in some livestock enterprises. Given that Kanungu District is strategically located at the boarder with Democratic Republic of Congo, it has historically made demand for animal products high. The district is also one of the four Districts that form Kigezi region which is one of the most densely populated regions in Uganda. This presents two clear consequences; (i) reduced production resources such as land which requires improved farm inputs for improved production per production area, (ii) increased demand for animal and other agricultural products Increased livestock production therefore becomes handy to serve the ready market existent within the district, region and beyond the region and the national border. 4.1.

Clients / Target group

The feed processing plant will mainly target farmers individually and at group level. A number of initiatives have been undertaken by Government and non-government agencies through various community development programs. For example, most farmers are presently organized in groups under NAADS. These groups as well as individuals not in groups shall be targeted as the primary market clientele. The target farmers will mainly be from the whole of Kigezi region since the nearest source of animal feeds currently is Kampala, which is a distance of about 450Kms. The project will also target the institutional market provided by government and non-government organizations. 4.2.

Commercial concept

Our commercial concept will be mainly on quality products and services and with technical advice from qualified personnel. . 4.3.

Products and services

The feed processing plant will mainly produce:  Poultry feeds o Chick and duck mash o Growers mash o Layers mash o Broiler starter and broiler finisher  Catle feeds and calf pellets  Sow and weaner mash for pigs

. 4.4.

Competitors

Currently there are no feed processing plants in Kanungu District and Kigezi Region as a whole. The only source of animal feeds is from agents of producers based in Kampala the capital city of Uganda, a distance of about 450 Kms. These agents are based in Rukungiri Town Council and Kabale Municipality located approximately 53 Kms and about 100Kms respectively from Kanungu District. These agents provide limited services in terms of advice and products available. The distance also makes these products expensive due to transport costs incured up to the final consumer or user of the product. All these gaps sufficiently provide a niche to local feeds production. 4.5.

External factors

Kanungu District is mainly dependant on agriculture with about 99% of its population directly involved in farming and using it as their main source of income and livelihood. (Could rely on some known statistics) The district is endowed with good soils and receives a bimodal rainfall, factors that enhance farming as an activity but which have not yet been fully utilised to realise the full potential of this area. Farming has been boosted with the intervention of the PMA and NAADS programmes at Government level and organisations like CARE and Bwindi and Mgahinga Conservation Trust. This has led to the coming up of farmers who have taken up farming both as a business and a way of life. Government Policy: Uganda’s poverty eradication action Plan – currently under review to transform into the National Development Plan as the overarching poverty alleviation policy framework stresses the quest to ultimately improve the welfare of households. This should be through improving their incomes and increasing their productivity as individual citizens. The focus is to work on the improvement of citizen’s wellbeing and related aspects of their standard of living and general livelihood. It also emphasizes the need not to neglect public investments that contribute to the improvement of infrastructure that supports individuals in areas like roads, water, energy, health, and processing of agricultural outputs among others. The policy also recognizes private-sector led growth and this initiative is undertaken to contribute to this growth. Competition: Currently, animal feeds are obtained from Kampala – well over 450 kms from Kanungu District. Moreover, these feeds are accessed through business agents and this consequently places the cost of the feeds on the high. There is no local production for animal feeds in neither the district nor the entire region at present.

Strategic location: Availability of local raw materials: 4.6

Suppliers

Inputs will mainly be locally procured especially the bran (Maize and Rice Bran). On the source of proteins Kanungu is strategically located near Kasese which is endowed with fish products from lake George and Edward. This in a way will ensure market access for farmers produce while at the same time helping the plant get affordable and easy to reach inputs leading to reduced production costs hence products and affordable prices. (Also stress the fact that establishment of such an initiative will boost production of relevant supply enterprises both as a deliberate programme of the project and a ntural drive for the farmers)

5.1.

Marketing mix

5.1.1. Place / Location of the business The project will be located in Kambuga Sub-county, Kanungu District. This is by far the busiest hub within the district and therefore provides an already local market for some of the products. 5.1.2

Price

The prices will be according to prevailing prices on the wholesale market and taxes of the day. We shall though try to put prices that are favourable to our farmers while at the same time helping to sustain the operations. 5.1.4

Personnel

The overall management will be by a qualified Project Management Specialist with background training in Veterinary medicine while the daily operations will be by Diploma holders in Veterinary and Agriculture from National Agricultural Schools. This team of formally trained staff shall be backed up by support staff with adequate ability for on the job training. 5.1.5. Promotion 6. 6.1.

Personnel and Organisation Personnel

Personnel and budget Function

Number

Supervisor Machine Operators Casual Labourers Marketing officer Secretary Finance Officer Total

1 2 2 1 1 1

6.2.

Monthly salary 600,000 400,000 200,000 500,000 200,000 500,000

Year salary 7,200,000 9,600,000 4,800,000 6,000,000 2,400,000 6,000,000 36,000,000

Administration and bookkeeping

The secretary are expected to make daily records of sales and any purchases made while the finance officer will be responsible for proper book keeping.

6.3.

Insurance

6.4.

Taxes and subsidies

7.

Investment budget/proposal

7.1.

Summary of the investment plan and financing plan

Investmentplan Description Land and buildings Inventory Machines/equipment Transport facilities Start up costs Working capital Unexpected TOTAL

Tabel 5. Balance

Amount(Ushs)

Total Assets

Amount(Ushs) Liabilities Equity

Fixed Assets Current Assets Total Assets

8. 8.1.

Operational budget Turn over

and Amount(Ushs)