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PRODUCT CODE QUALITY AND STANDARDS : 024001007 : As per customers specifications. However, the Bureau of Indian Standards has laid down specifications for basic requirements for day-old chicks (layer/broiler) under IS 9800:1981. : Quantity : 2 Lakhs day old chicks (per annum) Value : Rs. 28,72,500 : March, 2003 : Branch Small Industries Service Institute, Chandpur Industrial Estate, Varanasi06 Phone No. (0542)-2370621

PRODUCTION CAPACITY MONTH AND YEAR OF PREPARATION PREPARED BY

INTRODUCTION
India is a densely populated country having predominantly agricultural economy. Almost every part of our country is suitable for poultry farming. During the past few years poultry industry have gained enor mous potential particularly in and around major cities and towns. The Government of India through State Directorates of Animal Husbandry and Veterinary Services have been giving thrust on and incentives for the development of poultry industry. Development of poultry industries may further be accelerated, if improved varieties of layers/broilers are made available to the poultry farmers which could ensure fast growth, maximum feed to meat/egg conversion and low mortality among the poultry birds. Therefore, it is essential that hatcheries are set up in different areas having potential on decentralised basis,

so that poultry farmers may get high yielding varieties of chick which in turn may give good returns to the farmers. This will not only reduce the pressure of unemployment in rural and sub-urban areas but also help in increasing per capita consumption of poultry meat and eggs and thus strengthen the economy of our country. In the modern nomenclature of poultry industry, the term hatchery covers the sector which is engaged in production and supply of one-day old chicks by artificial incubation. A hatchery can be a part of a breeding farm or it can be a franchiser or sub-franchiser for producing parent and dayold chicks of broilers or layers. The term hatchery can be extended to an organisation which does not maintain any breed stock (mating stocks) but only procures hatching eggs for producing (supplying) day old chicks. The organisations producing day old chicks only for replenishing their

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own requirements of birds are not covered under the term hatchery.

MARKET POTENTIAL
Fast urbanisation, changes in life style and food habits of consumers, improvement in standards of living etc. have resulted into increase in per capita consumption of egg and poultry meats but per capita consumption of these commodities in our country is still far below that of developed countries showing enormous potential/scope for poultry development. Increasing number of poultry farms in different areas has emphasised that hatcheries should be set up in potential areas. Exorbitantly increasing transportation cost and mortality during transportation of day old chicks have also emphasised that hatcheries should be set up on decentralised basis hereby.

In India, the hatcheries in private sector had their emergence in early sixties in collaboration with some famous main hatcheries based in Canada and America. Such collaborations are still continuing involving many more foreign based hatcheries. However, some old hatcheries have taken up their own Poultry Breeding Programmes. In public sector too, significant contribution has been made by the Central Poultry Breeding Farms, Ministry of Agriculture and the ICAR in developing high yielding commercial chicks. But due to tremendous increase in poultry farms in different areas, it could be said that these hatcheries set up so far are not adequate to meet the increased demand of one day old chicks of broilers or layer poultry birds which shows good scope for hatcheries.

B ASIS AND PRESUMPTIONS

The project profile has been prepared based upon the following presumptions: (i) (ii) (iii) (iv) (v) (vi) Working hours/shift No. of shift/day Working days Total number of working hrs. Working efficiency Time period for achieving maximum capacity utilisation (vii) Labour charge (viii) (ix) (x) (xi) (xii) Margin Money Rate of interest on working capital Rate of interest on fixed capital Operative period of the project Value of machinery and equipment : : : : : : : : : : : : 8 hrs. 1 300 2400 hrs. 75% 3 years As per the minimum Wages Act of State Govt. 25% of capital investment. 15% P.A. 15% P.A. 10 years Taken on the basis of a particular supplier of machinery & equipments

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(xiii) Value of raw material, packing materials and others (xiv) Construction charges (xv) Break - even point (xvi) Pay-back period

: : : :

ruling at the time of the preparation of the project. As per the local market rates on whole sale basis. Rs. 75/- per sq. ft. Calculated on full capacity utilisation basis. 4 years

IMPLEMENTATION SCHEDULE
The project may be implemented in 6 months after the sanction of the loan. The implementation schedule has been worked out as follows: (i) Project preparation 0-1 month (ii) Site selection, acquisition of land and development etc. 1-2 months (iii) Sanction of loan 1-3 months (iv) Construction of poultry sheds 3-4 months (v) Sanction of electric power and telephone connection 3-4 months (vi) Procurement of parent stock chicks 4-5 months (vii) Construction of hatchery building and other civil works 3-5 months (viii) Procurement of machinery and equipments 4-6 months (ix) Electrification & installation of Machinery 6-7 months (x) Recruitment of Staff and labour 7-8 months (xi) Trial Run 8-9 months (xii) Commercial production 9-10 months The project may yield result by the 11th month.

TECHNICAL ASPECTS
Process of Manufacture One day old parent stock chicks of improved species of broiler or layers are procured from the reliable parent stock suppliers. Procured chicks are transferred to poultry sheds. These poultry birds are given balanced nutrition like poultry feed, feed mixes, medicines, etc., depending upon their age and variety upto laying stage. The layed eggs are collected and transferred to hatchery section. The eggs are cleaned thoroughly to get rid of foreign

matters and checked for their suitability for hatching, eggs having cracked shells and unfertile eggs are segregated and disposed off by selling at subsidised rates. Thoroughly cleaned eggs are stored in air conditioned room in order to bring down normal to suitable temperature. The conditioned eggs are transferred to setter incubators and incubated for 18 days. A temperature of 99.9F and relative humidity of 82% is maintained in the setter incubators. At the end of 18th day, eggs are transferred to holder incubators maintained at a temp. of 98.9F and

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relative humidity of 87% and incubated for 3 days. At the end of 21 days, chicks come out after breaking egg shells. Egg shell and membranes are removed and each chick is checked for its sex and separated out. Each and every chick is vaccinated by Marex-D vaccine and packed in chick baskets and are sold to the poultry farms. In order to produce healthy day-old chicks of high potentiality in the most economical manner, proper planning of hatchery is needed which involves application of sound scientific and business principles. Quality Control and Standards Day old chicks are produced keeping in view the customers requirements. The Bureau of Indian Standards has laid down specifications for day old chicks (layer/broiler) under the following ISI Specification: IS: 9800:1981: Basic requirements for day old chicks (layer/broiler) Entrepreneurs interested in getting ISI mark shall have to abide by the specifications laid down. However, it is optional to get ISI mark but the hatchery must maintain the quality of chicks to compete in the present day cut-throat competition. Production Capacity (per annum) a) Quantity : 2 lakhs day old chicks b) Value : Rs 28,72, 500 Motive Power Pollution Control If hatchery is run on scientific lines, no significant pollution is created. However, hatchery unit must take care 15 K.W.

in maintaining proper hygienic and sanitary conditions, in and around hatchery and poultry sheds. Proper disposal facility should be made available for dumping refuse and discharge of water from the hatchery. Litter should be replaced at frequent intervals and disposed off early. Dead poultry birds, diseased birds, spoiled eggs and other refuse and rejects should be dumped in disposal pit without any delay. Entrepreneur should get No Objection Certificate from State Pollution Control Board. Energy Conservation Main energy source in a hatchery is electricity and to some extent diesel to run generator in emergency. Electric bulbs of only required wattage should be fitted in poultry sheds where these are required otherwise tube lights of improved design having electronic choke should be fitted and lighted only when required. Best use of natural light should be made as far as possible. Generator should be well maintained and serviced at regular intervals and should be run only in case of electric failure/load shedding. Only essential equipments should be run when generator is in operation and the load should be kept to its optimum. Proper ventilation and cooling should be maintained in generator room.

FINANCIAL ASPECTS
A. Fixed Capital
(i) Land and Building i) Land 20000 sq. ft. ii) Land Development Value L.S. Sub Total Amount (In Rs.) 1,50,000 25,000 1,75,000

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Builtup Area and other Civil Works i) ii) Hatchery-cum-office building (60'120') 7200 sq.ft. Store (30'60') 1800 sq.ft Amount (In Rs.) 5,40,000 1,35,000 2,25,000 10,000 30,000 35,000 Sub Total Total (ii) Machinery and Equipments Sl. Description No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Egg Hatcher (Automatic)(capacity 4500 eggs) Egg setter (capacity 13500 eggs) (Automatic) Electric egg tester Electric Deb-eaker Egg weighing scale (1-100 gram cap.) Feeder, waterer and brooder Misc. items like buckets, trays, baskets etc. Weighing balance Generator (10 KVA) Air conditioner (1.5 TR) Veterinary clinic instruments/equipment Office equipments/furniture Refrigerator Electrification and installation Qty./No. 2 No. 2" 1" 1" 1" LS LS 1 No. 1" 1" LS LS 1 No. LS Total (iii) Preliminary and Pre-operative Expenses like Legal Expenses, Establishment Cost, Travelling, Start up Expenses, Consultancy Fees, Interest during Construction, Trial Run Expenses etc. (iv) Other Fixed Expenses for Purchase of About 1500 Nos. Day-old Parent Stock chicks and Feeding Charge up to Laying Stage Total Fixed Capital (i+ii+iii+iv) Amount ( In Rs. ) 1,40,000 2,00,000 600 1250 750 35,000 10,000 5,000 90,000 25,000 6,000 20,000 25,000 25,000 5,83,600 30,000 9,75,000 11,50,000

iii) Layer/Breeder House/Sheds (100'30') 3000 sq.ft. iv) Disposal pits v) Water storage tank

vi) Boundary wall/barbed wire fencing, etc.

1,50,000

19,13,600

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B. Working Capital (per month)

(i) Personnel Sl. Staff/Labour No. 1 2 3 4 5 6 7 8 Hatchery Manager Supervisor Operator Sexer Accountant-cumclerk Skilled worker (Stockman) Unskilled workers Watchman-cumpeon No. 1 1 1 1 1 1 6 1 Salary/ month 4,000 2,000 1,800 1,600 1,600 1,300 1,000 1,000 Amount (In Rs.) 4000 2,000 1,800 1,600 1,600 1,300 6,000 1,000 2,895 Total Say 22195 22000

(iv) Other Contingent Expenses Postage and Stationery Telephone Consumable stores Repairs and maintenance Transport charges Advertisement and publicity Insurance Taxes Sales expenses Misc. expenditure Total (v) Total Recurring Expenditure (i+ii+iii+iv) (vi) Working Capital Recurring expenditure (for one month)

Amount (In Rs.) 1,000 500 1,000 1,000 5,000 5,000 650 500 2,000 8,000 24,650 1,63,20

Perquisites @ 15%

Amount (In Rs.) 1,63,200

(ii) Raw Materials and Packaging Materials Sl. Description No. 1 2 3 4 Parent stock chicks Poultry feed Feed Mix Medicine/ vaccines/ antibiotics Chemicals/ sanitisers/ lime etc. Chick baskets Qty/No. 225 Nos. 8 Tonnes LS LS Rate No. 75 6000 Amount (In Rs.) 16,875 48,000 5,000 20,000

C. Total Capital Investment

(In Rs.) Fixed Capital Working Capital (For 1 month) Total 19,13,600 1,63,200 20,76,800

MACHINERY UTILISATION
At 75% efficiency, the indicated machinery and equipments have capacity to produce about 3 lakh day old chicks per year. During the first year of the implemention of the project, about 2 lakh day old chicks will be produced per year and hence capacity utilisation will be 66%. During second year, capacity utilisation has been worked out at 80%. The capacity of the hatchery may further be enhanced by installing additional setter and hatcher incubator in the same premises.

LS

10,000

175 Nos. Total

35

6,125 1,06,000 Total (In Rs.) 7,500 1,200 1,850 10,550

(iii) Utilities Power 3000 KWH units @ Rs. 2.5 Water 400 K.Lt. @ 3 Fuel like Diesel, K/oil etc. LS Total

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FINANCIAL ANALYSIS
1. Cost of Production (per year) a) Total recurring expenditure b) Depreciation on building and other Civil Construction @ 5% c) Depreciation on machinery and equipments @ 10% Amount (In Rs.) 19,58,400 48,750 50,000 7,000

Fixed Cost e) Interest on Total investment f) g) Insurance 40% of salary and wages

Amount (In Rs.) 3,12,000 7,800 1,05,600 1,15,200 6,50,350 4,92,500

h) 40% of other contingent expenses Total 2. Net Profit (per year) B.E.P. = Fixed cost 100 Fixed cost + profit = 650350 100 1142850 = 57%

d) Depreciation on hand tools and misc. equipments and poultry equipments @ 25% e) Depreciation on office equipments and furniture @ 20% f) Interest on Total capital @ 15% Total or Say 2. Turnover (per year)

4,000 3,12,000 23,80,150 23,80,000

A DDITIONAL INFORMATION
For more technical details, entrepreneurs may contact the State Directorate of Animal Husbandry and Veterinary Services, Veterinary Colleges located in different States, and Central Veterinary Research Institute, Izzatnagar, Bareilly (UP). Addresses of Machinery Equipment Suppliers and

Amount (In Rs.) 27,50,000 5,000 1,12,500 5,000 28,72,500 4,92,500 17% 24%

a) By sale of 200000 Nos. of day old chicks @ Rs 13.75 b) By sale of 2500 Nos. of unfertile eggs @ Rs. 2 c) By sale of 2500 Nos. of culled birds @ Rs. 45

d) By sale of 500 bags litter @ Rs. 10 Total 3. Net Profit (per year) (before Income Tax) 4. Net Profit Ratio 5. Rate of Return 6. Break-even Point i) Fixed Cost a) Depreciation on machinery and equipment b) Depreciation on hand tools c) Depreciation on office equipment and furniture

Amount (In Rs.) 50,000 7,000 4,000 48,750

d) Depreciation on building and other civil works

1) M/s. Farm Equipment Enterprises 32, DSIDC, Industrial Complex Jhilmil, Taharpur, Shahdara, Delhi-110032. 2) M/s. Diamond Poultry Equipments B-16/8, Jhilmil Industrial Area, GT Road, Shahdara, Delhi-110032. 3) M/s. Dayal Poultry Appliances WZ-16, Lajwanti Garden, New Jail Road, New Delhi-110046. 4) M/s. Eastern Industro Commercial (India) 8/3A, Hathi Bagan Road, Kolkata-14.

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5) M/s. Famous Metal Works 10-2-284/A, Jama Masjid, A, Battery Lane, Opp. ITI Shantinagar Colony Road, Hyderabad-500457. 6) M/s. Diamond Incubators 32, DSIDC, Industrial Complex, Jhilmil Industrial Area, GT Road, Shahdara, Delhi-110032. 7) M/s. Jayant Brothers 425 A, Kilpauk Garden Road, Chennai-10. Addresses of Medicine Suppliers 1. M/s. Alved Pharmaceuticals Pvt. Ltd. 5, Chandra Bagh Avenue, Dr. Radha Krishnan Road, Chennai-600004. 2. M/s.M.J. Pharmaceuticals Pvt. Ltd. Animal Health Care Division, 56, Jolly Maker Chambers, Nariman Point, Mumbai-400021. 3. M/s. Micro Labs Pvt. Ltd. 423, Kilpauk Garden Road, Chennai. 4. M/s.Alarsin Marketing Pvt. Ltd. 12 K., Dubash Marg, Fort, Mumbai-400023. Mineral Mixture and Vit Pre-mix and Feed Suppliment Suppliers 1. M/s. Roche Products Ltd. 28, Tardeo Road, Mumbai-400034. 2. M/s. AGVET Industries 14-41/1, Prasant Nagar, Uppal, Hyderabad.

3. M/s. Aries Agro-Vet Industries Pvt. Ltd. Aries House, Plot No. 24, Deonar, Govandi (East), P.B. No. 1, Mumbai-400043. 4. M/s. Domes Pvt. Ltd. Machavaram, Vijaywada-24 5. M/s. M.J. Pharmaceuticals Pvt. Ltd. 56, Jolly Maker, Chamber-1, Nariman Point, Mumbai 400021. 6. M/s. Blue Cross Farma 16-2-147/3, New Malakapet, Hyderabad. 7. M/s. Venvet Chemicals Pvt. Ltd. 3-6-97 Shaheedyar Jung Road, Opp. Tirumala Apartment, Bhaseer Bagh, Hyderabad -29 8. M/s. Emco Industries Royal Talkies, Sultan Bazar, Hyderabad-1. 9. M/s.Mohan Traders Injapur Village, Ranga Reddy-500035 10. M/s. Khatauli Manure Mills Khatoli, Muzaffarnagar-251201(U.P.) 11. M/s. Standard Bone Manore 32, Madarsa Sadet, Hapur, Ghaziabad (U.P.) 12. M/s. Rakshak Farm Aids Pvt. Ltd. Flat No.9, Kochar Apartments, Begumpet, Hyderabad-16. Poultry Feed Suppliers 1. M/s. Yarana Feeds and Farms B-55-56, Industrial Estate, Gokul Road, Hubli-580030.

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2. M/s. Mysore Feeds Ltd. 283-284, Old Tharagupet, Bangalore-560053. 3. M/s. Godrej Soaps Ltd. Animal Feeds Division, Eastern Express Highway, Vikroli, Mumbai-400079. a. M/s. Factory I Plot No. IB, Industrial Estate, Ambathar, Chennai-98. b. M/s. Factory II Plot No. 2B, MIDC Industrial Area, Miraj-416410. 4. M/s. A-1 Feeds, Kothapet Cross Road, Hyderabad. 5. M/s. Nava Bharat Feeds Saidabad, Hyderabad-500569. 6. M/s. Momarla Feeds Old Tharagupet, Bangalore-560053. 7. M/s. Sudarshan Feeds Jagadish Baug, Navanagar, Hubli, Dharwad Road, Hubli-580025 8. A number of poultry feed manufacturing units are working in local areas from where feed could be purchased but proper care should be taken in purchasing feed from local market to ensure the quality of the feed. Parent Stock Suppliers 1. M/s. Venkateshwara Hatcheries Pvt. Ltd. 13/6, Milestone, Poona Pansheel Road, PO Gininagar, Pune-411025.

2.

3. 4. 5. 6. 7. 8.

9.

9A. 10. 11.

12. 13.

M/s. Hy Lay Hatcheries Pvt. Ltd. No. 19, Mill Corner, Seshadripuram, Bangalore-560020. M/s. Hi-Bred (India) Pvt. Ltd. Karnal, Haryana. M/s. Komarla Hatcheries Old Tharagupet, Bangalore-560053. M/s. BLV Hatcheries 1-1-169/A, Charminar X Road, Hyderabad-20. M/s. Essex Farms Pvt. Ltd. New Delhi M/s. Deejay Group Street Patricks Complex, Brigada Road, Bangalore-560025. M/s. Koteswara Hatcheries Pvt. Ltd. 4A, 25th Woard, Cantonment, Bangalore-560025. M/s. R.O. No. 5, Vimla Building, Residency Road, Bangalore-560025. M/s. United Hatcheries 504, Karancentre, S.D. Road, Secunderabad-500003. M/s. Tirumala Hatchery Pvt. Ltd. 2-287/B, Kishanpura, Kanamkonda-506001. M/s. Venkataramana Hatcheries Pvt. Ltd. 16-11-310/14/6/3, Opp TV Tower, Saleem Nagar Colony, Hyderabad-500036 M/s. Shree Nagar Hatcheries Holilal Road, Dharwad-580003. M/s. South West Pearl Hatchery Pvt. Ltd. 31, 2nd Main Road,

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Gangena Hall, Bangalore-560032. 14. M/s. Perundurai Poultry Farm and Hatcheries 136-M Block, Connaught Circus, New Delhi-110001. 15. M/s. Kegfarms Pvt. Ltd. 8th Floor, Eros Apartment, 56, Nehru Place, New Delhi-110019.

16. M/s. Venco Research and Breeding Farm Ltd. 1316, Mile Stone Panshet Road, P.O. Giri Nagar, Pune-411025. 17. M/s. Vedette India Breeders Pvt. Ltd. 101, 5th Main Road, Jaya Mahal Extension, Bangalore-560046.