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1. EXECUTIVE SUMMARY There is a very strong need for a commercial feed mill in Lyantonde District (South Western Uganda) by SKY & LAKES, given the large herd sizes of livestock (sheep, goats, dairy cattle, etc.), and poultry, and the lack of nutritional feed to service this need. A feed mill in South Western Uganda could also service much of the domestic market of Western and Central Uganda livestock producers while also being strategically positioned to export quality and price-competitive compound animal feeds to the Rwanda and North Western Tanzania export markets that are well within its definitive market catchment area given the large amount of grains available in the region, road access, etc. This profile envisages the establishment of a plant in Lyantonde District with a rated capacity of up to30,000 metric tonnes of compound livestock feeds per annum working on 8 Hours single shift. The plant will be operated in double shifts. This feed will be supplemented to livestock in addition to green fodder ad libitum (Freely available to animals) for high production. Different formulae may be used to prepare compound feed such as calf fattening formula, dairy animal formula, commercial layer feed, commercial broiler feed, etc. to facilitate the customers nationwide. The present demand for the proposed product is in South Western Uganda is estimated to be 80,000tonnes per annum. The demand is projected to reach 120,000tonnes by the year 2016. It is also worth noting that the domestic market for feeds is weak, with supplies of uneven quality both of ingredients and finished products. There are large variations in prices of some ingredients resulting in escalating costs of production. This problem applies to the domestic food market generally, due to low production and low levels of incomes. While some manufacturers of animal feeds have identified regional markets, specifically Rwanda and Kenya, issues of quality and limited capacity hampers full utilisation of this market. The project will create direct employment opportunities for 42 persons. The rationale for establishment of a new feed mill in Lyantonde district by SKY & LAKES with a rated output capacity of 30,000 MT per annum would thus be based on
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Agriculture is the largest economic sector, accounting for 22.9% of Gross Domestic Product (GDP) in 2011 at current prices and 65.6% of employment. Most industries and services in the country are based on this sector and approximately 48% of total merchandise exports consist of Agricultural products. Food accounts for 57.78% of agricultural GDP of which 56% is from subsistence. Food production contributed 12.5% to GDP in Financial Year 2011/12. It is estimated that only one third of total food produced is marketed. While the country is endowed with some of the best agricultural land in the region, with a relatively favourable climate, only 5 million hectares out of the 18 million hectares of arable land is under cultivation. Agricultural production grew by an average of2.4% in 2009/10 and 0.9% in 2010/11. 2.2 Overview of the Livestock sub-sector
Data from the 2012 Statistical Abstract by Uganda Bureau of Statistics (UBOS) shows that livestock production contributes about 17% to 19% to agricultural GDP equivalent to about 3.89% to 4.35% of total GDP. Livestock production grew by about 3% per annum between 2010 and 2011 for cattle, sheep and goatswhile pigs and poultry numbers increased by 3.5 percent and 10.0 percent respectively in the same period. Current estimated livestock population consists of 12.47 million cattle (of which 93.29% are indigenous breeds and only 6.71% are improved or exotic), 13.66 million goats, 3.72 million sheep, 3.55 million pigs, 47.52 million poultry, 408,000 rabbits and 56,562equidae (Donkeys, Camels and Horses). It is estimated that mixed farming smallholders and pastoralists own over 90% of the national cattle herd and almost all the small ruminants, pigs and poultry producing the bulk of the meat and milk. These production units are characterized by low output per animal and unit area, slow growth rates and small mature sizes. Livestock production from intensive systems of production accounts for only 10% of total livestock production. This system is characterized by high input-high output production, utilizing high yielding germ plasm. It is mainly peri-urban based and uses compounded animal feeds to supplement rations.
Livestock productivity is still very low whether measured in animal units or unit factor of production. Comparative performance figures for cattle and goat breeds are much lower than for exotic temperate breeds (MAAIF, 1997). This has been attributed to the following factors: Prevalence of animal diseases, limiting increase in numbers and improvement in production. Inadequate nutrition reducing livestock productivity. The legume content of pastures is very low and both digestibility and protein content are below requirements for high levels of animal production. Water scarcity in the semi-arid areas. Currently, the capacity of the natural and man-made reservoirs to supply total livestock water demand is only 30%. (DWD, 2001). Inadequate supporting infrastructure such as poor road network, lack of storage and processing facilities, quarantine stations, diagnostic and analytical laboratory facilities, holding grounds. Lack of information, knowledge and skills concerning better methods of animal husbandry, soil conservation and pest and diseases control, marketing opportunities, pricing and processing is a major constraint. Lack of capital, limited financial management skills and failure to access financial services limits investment and thus improvement in livestock production, processing and marketing. 2.4 The Animal Feeds Industry in Uganda
As noted above, one of the constraints limiting production is poor nutrition. For optimum production, especially improved breeds, there is a need to supplement the conventional feed resources with compounded feeds. While animal feed production has increased from 32,000 MT in 1993 to the current production of 80,000 MT, the present capacity utilization is still low at around 40 -45% of installed capacity. Most feed factories are located in and around Kampala and Jinja far from areas of high cereal and other input production. Since most inputs and poultry feeds themselves are bulky, transport makes the final products expensive. The output of feed mills varies considerably from season to season, resulting in irregular supplies and prices for farmers. Quality is inconsistent between various manufacturers and also within the same company from season to season. Generally, there is a lack of technically
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Present Production Not known Closed 15 tons per week 6 tons/wk 1,100 MT/annum 5 tons/day 6 7 MT/hour 20 22 tons/day 1.5 MT/hour
2.4.1.1
Given Uganda's good climate and the generally favourable balance of natural resources, there is considerable potential for increased livestock production. This potential can be harnessed by adopting, on a national scale, proper livestock management systems on
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Survey findings indicate that there is an enormous potential for production of feed ingredients. Production of cereal grains and legume seed is increasing. However, the quantity of the ingredients available is reduced by the demand for human requirements for the same items. Fermentation by-products such as native beer residues and brewer's grains are produced in large amounts in Uganda. Potential feed ingredients include maize, sorghum, cassava, sweet potatoes, cottonseed cake, soyabean, sunflower, fish, lake shells, bone ash, blood meal and bananas among others. This can give rise to considerable amounts of agro-processing by-products, which can be used for the manufacture of animal feeds. Uganda is well adapted to the production of soybeans, sunflower and groundnuts although the volumes are not adequate presently to support large scale processing of feeds. Cottonseed meal is readily available and the quantity appears to be adequate to support the formulation of mixed feeds. The major energy feed supplies are maize bran, bagasse and molasses. The sources of protein include cottonseed cake, sunflower cake and soybean meal. 2.4.2 Constraints in the Animal Feeds Industry Lack of raw materials
2.4.2.1
Some of the constraints to efficient use of agro-industrial by products include bulkiness and high costs of transportation and, therefore, their use is limited to feeding livestock only in a given locality. Besides, there are several competing uses for some of them, which include mulching, alcohol brewing, direct human consumption and fuel. 2.4.2.2 Seasonal variation in availability
Output of raw materials varies from season to season. This leads to inconsistency in quality and quantity of animal feeds between firms and also within the same firm. 2.4.2.3 Weak market
The domestic market for feeds is weak, with supplies of uneven quality both of ingredients and finished products. There are large variations in prices of some
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The financial market does not adequately cater for the livestock sub-sector. Poultry and dairy farmers have limited access to credit facilities, and this prevents significant expansion of the feed business. All major feed manufacturers do not have arrangements where farmers can be supplied with inputs (feeds) on credit. Many farmers have desires to increase their output but are constrained by lack of capital or favourable terms of input supply. 2.4.2.5 Lack of knowledge and skills
Lack of information, knowledge and skills concerning good manufacturing practice in the production of animal feeds is a constraint. Most of the feed manufacturers, especially the small holders lack basic training in animal nutrition and feed milling technology. This has led to poor quality feeds on the market. Several farmers have resorted to on-farm mixing to reduce costs of production. Others have abandoned farming altogether. This is further compounded by lack of quality extension services to empower farmers to demand for quality feeds. Besides, there are no regulations under which defaulting manufacturers can be put to task. 2.4.2.6 Science and technology development
An effective national science and technology development programme can reduce the country's dependency on a limited number of feed ingredient sources. There is currently very research in alternative sources of feed ingredients or in feed processing technology. Skilled manpower in this field is lacking although Makerere University Faculties of Agriculture and Veterinary Medicine have specialized laboratories in feed analysis, which occasionally assist manufacturers. These institutions have however focused more on teaching and less on applied research.
There are many public and private sector entities that can assist feed manufacturers in obtaining information, solving technical problems, and improving their operations. Many of these services are, however, diffused and sometimes duplicated across agencies. At present there is no policy and institutional arrangement for regulation and guiding of the animal feeds industry. Other institutions which feed processors might depend upon for information like the Uganda Investment Authority, Uganda Manufacturers Association, Uganda Revenue Authority and Institutions of higher learning need to be coordinated to enable them to play their roles effectively.
The effort to modernize and promote accelerated economic growth in livestock and livestockproductsmarkets requires a solid business development approach. The objective of acommercial feed mill is to strengthen the capacity of farmers to increase production of raw cropsand legumes, develop nutritionally balanced feed rations, and promote the efficient use andincrease of animal production inputs. These inputs are necessary for nutritionally balancing feedrations that become an integral part of the commercial feed mill program. These rations will alsoincrease production for specific livestock and poultry production markets, control productioncosts and maximize product competitiveness. A key factor in this process is transforming the animal feed sector in Uganda into a sectorthat is based on the commercial production and efficient utilization of high quality, balancedrations. On the feed production side, the feed mill owner is required to provide high quality,balanced rations on a continual basis at competitive prices. For the livestock and poultryproducers, they need to know how to use these rations efficiently in order to increase, not onlytheir productivity, but also their profitability. Thefeed mill will be able to utilize the by-products from the oil, cotton, and flour milling sectorsalong with whole grain production of maize and grain sorghum. The objective of the project is therefore to establish a new animal compound feed manufacturing facility,capable of producing both ruminant feed (feed for cattle) and monogastric feed (feed for pigs andchicken) on two separate production lines (dualistic concept), in an efficient and cost effective way, capable of addressing all the current deficiencies. The new planned SKY & LAKES feed mill will be a specialized manufacturing unit, using the mostadvanced feed milling technology and equipment. Current intentions are that Buhler equipment willbe used; and the plant will have the ability to produce both ruminant feed, as well as monogastric (poultry) feeds, on two separate lines (dualistic concept). The production capacity of the monogastric line will be sufficient to supply in the total future broiler feed needs of Namibia.
Ugandas economy is mostly agrarian with a limited industrial base. The trend for concentrate feeding to livestock is changing from the conventional concentrate feeding to a formulated compound feed. Nowadays, compound feed is used by many livestock and dairy farmers to get the maximum potential in terms of milk and meat. Livestock production is gaining a significant momentum in Uganda's agriculture sector and is playing a vital role in national economy. At present, livestock is contributing about 17% to 19%to the agricultural sector which is equivalent to about 3.89% to 4.35% of total GDP. In rural economy the role of livestock, may be assessed by the fact that 21.2 million Ugandans are engaged in livestock farming, having 2 to 3 cattle and 4 to 5 sheep/goats per family and around 35% of the income source is being derived from livestock only. In view of the share and importance of Livestock, the role of balanced animal feed in animal productivity is critical. Out of the given options to make nutritionally balanced feed available according to their body needs, mechanized feed mills are imperative. An animal feed mill is an agro-based project in which locally available feed resources rich in protein and carbohydrate are mixed according to nutritional formula. 3.3 Project Scope
This Project Profile carries out an integrated financial, economic, stakeholder and risk investment appraisal of the proposed animal feed plant with annual production capacity of 30,000 tons. The plant will be capable of mixing high-quality feed for cattle, pigs, broilers, egg-layers and game animals. The inputs for animal feed include, but not limited to: maize and its by-products, corn silage, wheat bran, molasses, sorghum, fiber, feedlime, cotton seed, sunflower oilcake, soya oilcake, fish meal, urea and possibly other ingredients. The compound animal feed is expected to sell mostly to the local animal breeders, and probably also to the export markets of Rwanda and Tanzania. The export of feed may be feasible to the neighboring countries if the products price is competitive. The possibility for exporting the feed to other countries within the East African Community (EAC) is under close consideration, but this opportunity must be further explored before making any quantitative projections.
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In order to enhance productivity and profitability of dairy and livestock production systems, availability of balanced feed around the year is imperative. In view of the high competition between crops for human consumption and animal fodder, it is forecasted that THE gap between the supply and demand for balanced feed for livestock and dairy animals would further widen, resulting in poor performance of these value chains. Commercially prepared animal feed from various crop residues, therefore comes as the most viable option to bridge the widening supply demand gap. On the demand side, lack of awareness has been a limiting factor with small and medium farmers, who have been using traditional feed ingredients like cotton seed cake, rice polish, and maize bran until recently. With increasing awareness on the part of small farmers that balanced compound feed has on their profitability, more and more farmers are ready to switch to commercially prepared feed, subject to availability of the same around the year. The demand for compound feed is increasing day by day with the increase in awareness among farmers A recent study: Utilization of Market Crop Wastes as Animal Feed in Urban and PeriUrban Livestock Production in Uganda by Constantine Katongole et al suggests that with the increasing awareness, demand for commercially prepared balanced, compound feed is increasing; however consumption is constrained in several areas, due to limited availability. Cost of feed due to high transportation costs involved over long distances, and consistent availability has been cited as the main factors. Various research studies verify that significant (more than 20%) productivity increase is achievable with the compound feed use. With the establishment of medium-sized commercial feed mills in the private sector, availability of consistent quality balanced compound feed may be improved, alleviating a major constraint limiting productivity and profitability of the value chain. At present only 6-7 large mills are preparing compound feed for the poultry industry and dairy and livestock cattle, out of an installed base of over 60small and large feed
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The livestock sub-sector objective is "to contribute towards maximization of the potential of Uganda's livestock sub-sector on a sustainable yield basis within the framework of sound environmental management limits". The SKY & LAKES contribution to improved animal nutrition will be achieved through improved production and utilization of compounded animal feeds and forage. The broad objectives of the proposed animal feeds plant are therefore to: Goal: To facilitate the availability of high quality animal feed in reach of small, medium and large livestock owners to enhance productivity and ensure better health of livestock. The objectives of mixed feed manufacturing are to: 1. Produce feed that is safe for animal use; 2. Produce feed that ensures that the food product arising thereof is safe to the human consumer; 3. Produce feed that meets the nutritional requirement of the animal; and 4. Make a profit through the feed manufacturing endeavour. The specific objectives are: To stimulate increased feed production and availability; To ensure the production and sale of quality animal feeds on the market and protect end users against improperly formulated, contaminated, decomposed and deceptively packaged or labeled feeds; To put in place strategies for reducing production costs and ensure that the proposed animal feeds manufacturing plant caters for its interests as well as those of livestock farmers with regard to feed prices and profitability; To stimulate and build capacity for the development of the animal feeds industry through the start-up and successful operation of an animal feeds manufacturing enterprise; To provide income generation, employment and animal feed business development; and Reduction in the production cost of milk, meat and poultry products through improved productivity.
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The success of livestock farming is largely dependent on the continuous supply of good quality nutritious feeds at competitive price. Feed alone constitute about 60-70 per cent of total cost of production of livestock products. Therefore, it needs more attention though other factors are also important for remunerative return from livestock enterprises. The farmers used to feed the crop residues to the cattle and poultry birds, however, sheep and goat are normally maintained on grazing/browsing with supplementary feeding of broken grains/other by-products. Therefore, feeding of balanced concentrate feed to these animals was not common, because of low productivity and low remunerative prices for the livestock products. Improved poultry is fed only with concentrated feed. The requirement of food of animal origin like milk, meat and eggs is increasing at a faster rate due to increased awareness about the significance of protective proteins for the maintenance of human health. Farmers in Uganda have realized its importance and started rearing good quality and highly productive animals/birds under stall-fed conditions. 4.2 Important Livestock Species
The livestock and poultry production industries are well developed in Uganda. The different livestock species kept in Uganda include poultry, cattle, sheep, goats, donkeys, horses, pigs, rabbits and rats. The poultry species includes indigenous and imported chickens, guinea fowls, turkeys, ducks and geese. Majority of the ruminants (cattle, sheep and goats) are supplied with fodder feeds harvested from rangelands and grazing reserves. Cattle production systems are a mixture of commercial ranching and pastoral systems, with a good proportion of cattle being maintained in transhumance and agro-pastoral systems. Most other livestock resources are reared under the traditional extensive systems. Also over 90 percent of the countrys pig and rabbit production is managed under traditional husbandry systems. Poultry outnumber all other species of livestock in Uganda. Poultry are found throughout Nigeria even though ducks, guinea fowls and pigeons are commonly kept, chickens are by far the most common. More than 90 percent of these birds are commercial layers and broilers kept under intensive systems and are primarily meant for profit-making. Eggs, broiler birds and spent layers are sold for different prices depending on time of the year and bargaining power of the buyer. Large numbers of birds are reared intensively on commercial basis. A few of the birds (Local breeds) are
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It has been reported that apart from the higher crude fibre values and low crude protein observed in some commercial livestock feeds, the finished feed and feed ingredients were adulterated with sand, sawdust, and other. More than 80 percent of feed manufacturers in Uganda buy grains and oil cakes from distant source locations and therefore incur costs in transporting them to their manufacturing premises. The company pays the contractor for grains, transport, his labour, profit, and interest on the money he borrowed and possibly kickbacks, which are all billed into his invoice. This is in addition to exorbitant prices paid for vitamins and trace minerals due to the low currency exchange value of the Uganda Shilling vis--vis the US Dollar. Also there is the cost of bags for the feed, bagging, sewing the bag and transportation. The further away the feed moves from the manufacturer, the more expensive it becomes to the farmer. Much of the impurities and existence of unwanted particles depends on how the ingredients are handled before it arrives at the Feed mill. The presence of broken bottles, metal objects, stones and sand are major problems confronting the feed mill industry in Uganda. Also poor methods of processing and storage lead to infestation by insects of feed ingredients, mould growth and rodent attack. The problem of storing grains for long-term use without regular checking of the moisture content is very rampant in Uganda. Most grains are stored on bare floors without pallets and under very poor conditions and high temperatures too. 4.4 Clarifying Activities for the Commercial Feed Mill
The SKY & LAKES proposed commercial feed mill activities that should be implemented include but are not limited to: a. Develop and execute training for feed mill personnel in business development, management, feed formulation capacity and the management/inventory of raw material.
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SKY & LAKES the business firm that is proposing to establish and operate the animal compound feeds manufacturing plant is a Ugandan-incorporated company with its Head Office based in Kampala and land holdings in Lyantonde District of South Western Uganda. SKY & LAKES proposes to use the opportunity of a strong market for animal feeds in South Western Uganda and the absence of an integrated animal feeds industry in the area to providing our customers with professional services and high quality animal feed products. In doing so, SKY & LAKES aspires to offer only the best feed and products in the industry that has hitherto been lacking in this area of Uganda that is renowned for its strong tradition of livestock farming. SKY & LAKES will also offer its customers the option of custom made animal feed. The SKY & LAKES mill will enable the enterprise to provide high levels of quality products that will always be fresh and available. SKY &LAKES' primary focus will be on keeping its customers satisfied. Professional and reliable service, competitive pricing, and a knowledgeable staff will provide for continued growth in the years to come. The focus of SKY & LAKES will be on the core animal feed products, its sales and promotions will put strong emphasison its history and reputation for quality and customer service. Even though SKY & LAKES is spearheaded by its owners who have the time, energy, interest and knowledge to invest in an already successful business with a string of other smoothly running agro-based and trading enterprises, its greatest asset will be their commitment and pride in protecting and growing the proposed business. 6.2 Company Legal Status
SKY & LAKES is a privately-held (limited liability company) Ugandan-registered company that was founded in ---------------------. The companys authorized share capital is UG Shs. -------------- made up of ----------- Ordinary Shares of UG Shs. ------------ each. The company has ---- shareholders that are enterprising individuals who have various other business interests and responsibilities. The shareholding structure of SKY & LAKES is indicated below:
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ANIMAL FEEDS DAIRY CATTLE Standard Dairy Meal High Yield Dairy Meal Calf Pellets PIGS Sow &Weaner Meal Pig Finishing Meal
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Manpower required and the corresponding labour costs are indicated in Table 3. Table 3: Manpower Requirement and Labour Cost Sr. Description No. 1 2 3 4 5 6 7 8 9 Plant Manager Livestock Specialist Accounts Officer Maintenance Engineer Sales Officers/Feed Technicians Chemists Floor Supervisors Mill Operators (MOAs) Stores Supervisor Requirement (Number) 1 1 1 1 4 2 3 4 1 1 1 1 21 42 Salary (per month) 2,000 1,500 1,200 1,200 1,000 1,000 800 800 800 800 800 800 500 --Total Salary 2,000 1,500 1,200 1,200 4,000 2,000 2,400 3,200 800 800 800 800 10,500 31,200 9,360 40,560
10 Assistant Accountants 11 Electrical Supervisor 12 Mechanical Supervisor 13 Skilled workers Total Incentives and Perks (30% of the salary) Total monthly payments 8.2 Production Team
The mills production team will include a Feed Mill manager, Livestock Specialist and mill assistants. The Feed Mill manager will bear the ultimate responsibility for the monitoring and manufacturing process; handling products and materials; and ensuring that volume, cost standards, quality parameters of feed production, environmental, and safety requirements are achieved. The Livestock Specialist will have technical responsibility for ingredient selection, feed formulation (i.e. mixing appropriate ingredients and quantities for specific livestock species), feed processing and quality assurance. This individual will train the mill operations assistants in these areas. The mill operations assistants will assist the Feed Mill Manager and Livestock Specialist
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a. Requirements for operating the feed mill will be a General Manager/Plant Manager, a Livestock Specialist and a Maintenance Engineer. Three to four welltrained technicians will support the management team. These technicians should possess strong mechanical aptitudes in their specific areas of responsibility. Those areas include: 1) Grain Storage and Handling Facility, 2) Bulk and bag receiving areas for grain, feed by-products, and vitamin/minerals, 3) Hammer milling section and mixing area, and 4) Bagging and Warehousing. b. General labour personnel will support each one of these areas. Each area would have a minimum of two labourers with the exception of the bagging and warehousing sector, which would have six to eight general labourers. 8.2.2 Marketing/Training Program
a. The marketing program must have four well-trained feed technicians that are not only technically strong but also strong in sales and marketing. They will be required to set up the feed demonstration units for the different sectors of livestock, provide extension type training to livestock producers, organize workshops for livestock producers and potential feed distributors throughout Uganda. b. The trained feed technicians will also work with select groups and existing organizations in training and distribution. They will assist in setting up company owned feed distributors in strategic locations within the marketing grid. c. Feed technicians will also be responsible for working with outlets and other successful agricultural distributors of seed and chemicals. 8.3 Collection of Raw Materials
The proximity of the mill to some of the major grain markets in South Western Uganda gives it access to procure and transport the raw materials to the mill at minimum cost. Most of the major grains producing areas of South Western Uganda are located within a radius of 150 kms to the proposed location of the mill in
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Total tons = 30,000 Layer feed = 0.45 x 6 = 2.7 days Broiler feed = 0.25 x 6 = 1.5days Cattle feed = 0.3 x 6 = 1.8 days Monday, Tuesday and Wednesday will be devoted to producing Layer and Broiler feeds, Thursday for cattle feed while Friday and Saturday will be used for the following activities: stock balance, writing of weekly reports, evaluation, planning for the next week and general sanitation of the mill. 8.5 Distribution of Finished Product
The farm truck will deliver finished feed to distribution centres in town. The mill can also have a shop in Lyantonde town to break the monopoly of middle men. In these shops livestock farmers can buy the products, or purchase directly at the farm gate and payment will be on cash and carry basis. The feed may be packed in different colours for ease of identification within the mill and between selling points and for storage purposes. 8.6 Record Keeping
Below is the inventory for monitoring raw materials brought in and finished products leaving the farm. Every ingredient is to have a card. Regular checks of material quality and quantities to ensure prompt action. Raw Materials
Date Raw material Quantity in stock Quantity used Balance
8.7
We will also be contracting an external accountant/auditor (CPA) to handle the corporate book keeping and business accounts. We value and understand how important proper accounting and reporting of all sales activities are to the successful growth of a company. It is through development of this accuracy that true business growth will be verified and available for the continued security of this well-established family business. 8.8 Health & Safety Standards
The proposed SKY & LAKES commercial feed mill will take several safety measures. In addition to providing workers with safety and hygiene equipment and tools, the proposed SKY & LAKES commercial feed mill will supply its workers with and train them in the proper use of protective clothing including uniforms, masks, boots, and gloves. The company will provide animal feed safety system training to its managers, technical staff, feedmill workers, and selected livestock producers. Finally, the proposed SKY & LAKES commercial feed millwill design and implement a Hazard Analysis Critical Control Point (HACCP) system and train its employees in the system. 8.9 Management and Marketing
The proposed SKY & LAKES commercial feed mill will improve its internal systems by adopting a Manual of Procedures for various activities within the commercial feed mill enterprise.
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The proposed SKY & LAKES commercial feed mill will institute one of the most sought-after competitive edges in the industry. The company will have its own individual feed mill that can produce any animal feed requested. All it will need are a few ingredients and some time to make its own specialty custom feeds. The proposed SKY & LAKES commercial feed millwill be built and wired with a 3phase electrical system (industrial strength) and the best equipment on the market today. While other feed stores dream of having access to their own mill; this is where the proposed SKY & LAKES commercial feed millwill make most of its money. Instead of having to be the middle man and purchase a large inventory of generic feeds, the commercial feed mill will custom-blend and produce its own feed to keep the costs down. When the proposed SKY & LAKES commercial feed mill can produce and market feed that costs it nearly 80% less than it costs to purchase a generic feed, it can afford to keep its shelf prices lower than its competitors. Let's face it, lower prices + higher quality feed = money in the bank. The owners of the proposed SKY & LAKES commercial feed mill will market its products to new customers in various strategic ways. This will aid in bringing in more customers...and will also aid in spreading the word that the company is expanding its business. We expect most of the customers to come from within a radius of 100 kms of the commercial feed mill plant near Lyantonde Town. Through delivery, we will be able to offer our products and services to anyone willing to pay for it. The proposed SKY & LAKES commercial feed mills next competitive edge is that it will be running its delivery truck on a daily basis (once we implement delivery and obtain the necessary business). Most of the other local feed millers do not deliver or only deliver within a short distance from their location. Again, this will serve the SKY & LAKES commercial feed millcustomers with a higher quality feed, high level of professional service, and be willing to take it to their door. The proposed SKY & LAKES commercial feed mills strongest competitive edge is that its project promoters have long-standing personal relationships and have worked together for a long time that they have become like part of one family while also their knowledge of the feed industry runs deep. With the resources available, the energy the key project promoters can contribute to the growth of the enterprise, the raw talent for
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The proposed SKY & LAKES commercial feed mill will implement the following Marketing Strategies in the following order: 1. Direct Marketing: we will personally market (sell face to face) our products to various feed stores, livestock farms (both public and private concerns), livestock co-operative societies and district farm institutions. 2. Customer Referral: we will provide customer incentives for direct referrals, in the form of price discounts. 3. Website Marketing: we will implement our web plan and review the outcome to determine the efficiency it has on our customer base. 4. Event Marketing: we will visit area livestock events (within 300 miles) to hand out flyers, business cards, and product catalogs, and to meet potential customers face to face. Through marketing our products in these ways, we project that the proposed SKY & LAKES commercial feed millwill almost double its business within the first 2 years of its inception.
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The proposed location for the SKY & LAKES animal feed mill processing plant will be in Lyantonde District on property belonging to the main project promoter Mr. Ambrose Mutafungwa which is located at a distance of only 7 kms from the main Kampala Mbarara highway route to South Western Uganda and quite near to Lyantonde Town itself. Four (4) criteria have been considered in the choice of this location for the animal feed mill plant:1. Lyantonde District is the place where the SKY & LAKES project promoters happen to possess a substantial land acreage holding that will be ideal for location of the animal feed mill plant. 2. Positioning the animal feeds plant in this area is quite ideal in terms being proximal to central and western Uganda where there is contemporary high product demand for poultry and cattle feed products respectively. 3. The location of the livestock feed plant in Lyantonde District will also enable it to easily and directly source for raw material ingredients such as maize grain from Western Uganda and the high protein-rich silver cyprinid fish from the nearby Lake Victoria that is an important ingredient in the production of animal feeds in Uganda. 4. The livestock feed plant will be close to one of the major highways in Uganda linking Kampala to Western Uganda and is immediate neighbours of Tanzania to the south, DR Congo to the west, and Rwanda to the South West that will greatly assist in the quick distribution and movement of products to these export strategic markets. 5. The feed mill will be the mechanism for developing a sustainable and profitablemarket for corn (maize), wheat, and other grain and oils seed crops for the local and regional farmers. Total land requirement for the envisaged plant is 7 acres (28,000 m2), of which 2,929 m2 is earmarked for processing plant building area, storage for raw material and finished product and office-cum-laboratory space. The totalexpenditure for land and site development is estimated at USD 17,670. Expenses for this item are displayed in Table 4 below.
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acres
845
/acre
5,915
Land and site development Land levelling 70,000 Barbed wire 850 fencing Internal roads Gate Security cabin Sub-Total
300,000 50 30
10.2
Civil Structures
The total cost of building and civil works is USD 236,420. Details of expenses for this budget item are shown in Table 5 below. Table 5: Expense Budget for Civil Structures
S.No. Particulars i) Raw material and finished feed godown Machinery Hall Office cum laboratory Generator and switch room Canteen and change room Garage for vehicles ResidentialQtrs a. Manager (one) b. Supervisor (3) c. Labourers (10) (viii) Architect Fees Sub-Total 31 Quantity Specifications Unit Cost USD Unit 59.00 118.00 63.70 50.00 50.00 35.00 59.00 54.00 34.07 /Sq.mts. /Sq.mts. /Sq.mts. /Sq.mts. /Sq.mts. /Sq.mts. /Sq.mts. /Sq.mts. /Sq.mts. Total Cost (USD)
Sq.mts. Sq.mts. Sq.mts. Sq.mts. Sq.mts. Sq.mts. Sq.mts. Sq.mts. Sq.mts. % of civil-cum landdevt costs
10.3.1 Materials The main raw materials are Cottonseed cake, Maize grain, Corn gluten, Rice Polish, Wheat straw, Rice bran, Molasses, Urea, Salt, DCP and Vegetable Oil. All the ingredients of grain are locally available at low prices but some vitamins other ingredients will need to be imported. Raw material required for the production of 1 metric ton ofvarious types of livestock feed, at full operation capacity and the corresponding costs are shown in Tables 6 9 below. Table 6: Commercial Layer Feed Formulations to Produce 1 MT (1,000 kgs)
Sr. Ingredient No.
Commercial Layer Feed Grower Layer Proportion Value Proportion Value Proportion Value
(Kg) 511.90 50.00 0.00 50.00 0.00 50.00 6.5 0.14 0.07 0.02 0.19 0.07 0.03 230.00 32.2 50.00 3.5 5.00 0.1 10.00 5.00 30.00 1.9 0.35 10.00 5.00 30.00 1.9 0.35 5.00 0.1 10.00 4.00 30.00 1.9 0.28 120.00 8.4 20.00 0.4 80.00 11.2 90.00 6.3 (USD) 40.952 3.5 0 4 0 0.13 90.00 11.7 110.00 15.4 (Kg) 319.30 50.00 60.00 100.00 124.10 (USD) 25.544 3.5 4.2 8 6.205 130.00 16.9 (Kg) 391.50 50.00 40.00 60.00 0.00 (USD) 31.32 3.5 2.8 4.8 0
Chick
Cost
(USD/ Kg) 0.08 0.07 0.07 0.08 0.05
1 2 3 4 5 6
7 8 9 10 11 12
13 14
Maize Rice Polish Sorghum Rice bran DEO Rice Polish DEO Groundnut cake DEO Soyabean meal Sunflower meal/extract Limestone powder Di-calcium Phosphate Salt Pure Poultry Mineral Mixture Shell Grit/ Marble Grit Vitamin and
0.9 1 6.63
Finisher
Proportion (Kg) 573.00 0.00 30.00 20.00 0.00 60.00 235.00 25.00 5.00 10.00 4.00 30.00 0.00 6.00 1.50 0.50 1,000.00
Value
(USD) 40.96 3.5 0 0 0 9.1 39.2 2.1 0.1 1.9 0.28 0.9 0 3.57 4.56 1.18 107.40
Value
(USD) 45.84 0 2.1 1.6 0 7.8 32.9 1.75 0.1 1.9 0.28 0.9 0 3.06 4.56 1.18 104.00
1 2 3 4 5 6 7 8 9
Maize Rice Polish Sorghum Rice bran DEO Rice Polish DEO Groundnut cake DEO Soyabean meal Sunflower meal/extract Limestone powder
0.08 0.07 0.07 0.08 0.05 0.13 0.14 0.07 0.02 0.19 0.07 0.03 0.02 0.51 3.04 2.36
10 Di-calcium Phosphate 11 Salt Pure 12 Poultry Mineral Mixture 13 Shell Grit/Marble Grit 14 Vitamin & Probiotics Mix 15 D.-L. Methionine 16 L.-Lysine Total(Kg)
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Cost (USD/Kg)
0.14 0.08 0.05 0.05 0.07 0.17 0.08 0.07
Proportion (Kg)
150 100 470 100 20 20 120 20 1,000
Value (USD)
21.00 8.00 23.50 5.00 1.40 3.40 9.60 1.40 73.30
10.3.2 Utilities Utilities required by the animal feed plant are electricity, steam and water for processing and sanitation.Annual utilities requirement of the plant and corresponding cost are indicated in Table 10. Table 10: Annual Utilities Requirement and Cost No. Description Quantity 1 Electricity (KwH) 26,494 2 Water (M3) 2,914 3 Steam (Kg) 3,608 Total
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The feed manufacturing process can be explained as follows: A. Procurement and Logistics of Raw Materials In order to obtain the most suitable and cost effective raw materials, quotations are obtained from various commodity suppliers. After quotations and contracts are agreed and import documents have been gathered and approved, delivery will be negotiated. Raw materials will be transported from the supplier to SKY & LAKES animal feeds factory by road. The incoming raw materials will be verified against the product order and contract. Physical incoming inspection will be conducted during offloading. Samples will be taken and sent to the local laboratory for analysis and retained for traceability. Once approved, the raw material will be used by the factory to manufacture thevarious feed products. B. Technical & Feed Formulation A technical team of highly qualified post-graduate animal nutritionists will be responsible to improve current products and develop new ones, by applying the latest results from local and international research studies. Technology exchange and knowhow agreements with international feed companies will ensure that the latest technology and research data is applied. The latest simulation models will be used to optimize the utilization of nutrients within the feeds under different environmental conditions. The in - house nutritionists will also
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E. Proportioning & Weighing During the proportioning & weighing processes, the various raw materials will be discharged from dosing bins into scales. The scales will control and weigh the amount of raw material that is required per the recipe via the PLC system. All the scales will simultaneously discharge the raw materials to go onto grinding. F. Particle Reduction Process The grinding process is a crucial process, as different animals require different feed particle sizes to enable the animals to absorb the maximum amount of nutrients from the feed. There will be separate hammer mills that will grind the various raw materials to ensure the correct particles size for each type of animal. The proposed installation will also make use of a post grinding system, which means that all raw materials will be added together, where after they will be sieved and only the particles that are not fine enough will be ground accordingly. G. Homogenizing The homogenizing process will make use of two independent mixers, a separate mixer for eachline: the ruminant line (for cattle feed), and for the monogastric line (for poultry
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H. Liquid Addition Different liquids will be added at two different stages, namely in the mixer, and also in the homogenizer where the bulk of the liquid will be added. Different types of liquids will be added, e.g. to enhance taste (molasses), for preservation, improving energy levels (by adding a fat coating on pellets), etc. I. Pelleting During the pelleting process the feed is conditioned by means of steam, to enable the required chemical process of the glutonisation of starch to take place. This chemical process will ensure a good pellet quality when the feed is compressed and shaped through a die by means of rollers. After the product is pressed through the aperture of the die, a blade will cut the pellets to ensure a more or less equal pellet length. This process will need to happen at high temperatures, for two reasons. The first reason is to trigger the glutonisation process, and the second reason is for bio security reasons (salmonella control). Cooling after the pelleting process is essential to ensure that no condensation takes place before the product is packed. Any moisture due to condensation will result in mould formation, which can negatively affect feed performance and animal growth.
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J. Bagging Finished product pellets or mash will be packed into poly-propylene bags at the required mass.The bags will be sealed by a stitching machine and a ticket with vital traceability and otherproduction information is added. The bags will then be packed onto pallets and moved to the on hold quality area before they will be released to the distribution area for despatch. K. Quality Control The quality system will consist of a fully integrated quality control programme managed by a specialized Quality Control Manager. The quality programme is an integrated ISO 9001:2001, as well as an ISO 22 000 system. The mill will be continuously audited in different quality related issues. Biological (e.g. salmonella, gizzard erosion, and pathogens), chemical (e.g. mycotoxins), physical (e.g. moisture, contaminants, particle size, colour, odour, texture, etc.) and nutrient analysis will be performed onall raw materials before they are off-loaded. These analyses will be undertaken continuously to ensure that the raw material specifications are consistent and also for updating the formulationmatrix. Only good quality raw materials from accredited suppliers will be used. All finished products are first analyzed for various nutrients by Near Infrared Technology (NIR).
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Grinder
Blending bins
Grinder
Steam conditioning
Extruder Blending Cooler Fat coater Store and pack meal or pellets in bulk totes or bagged
10.4.1.2
Source of Technology
The required machinery and equipment will be imported from India, Peoples Republic of China or Switzerland.
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Plant and Machinery Intake and 1 grinding section Mixing section 1 Bagging and 1 services Electricals 1 Steel structures 1 Erection and Lumpsum commissioning Hopper speed controland hopper Lumpsum & misc. equipment Transportation, Lumpsum insurance, etc. 1 Boiler 1 Pellet Mill Sub-Total Miscellaneous Fixed Assets Lab equipments Lumpsum Weighing machine Lumpsum Office furniture Lumpsum and computers Sub-Total Electricals
----
D. i)
Generator 1 125 KVA Transformer and accessories and Lumpsum -external lighting Sub-Total Water Supply System Undergroundwater lane, well, pump, Lumpsum -filtration plant, etc. Sub-Total TOTAL
41,750
Lumpsum
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Compound animal feed is used in all classes of livestock throughout the year that the demand never gets affected with seasons. So the proposed business can be started at any time of the year. At the commencement of the proposed business, it is important that the entrepreneur must have good knowledge of the production and have contacts with the farmers. The following are some of the target clients for a manufacturer of compound feed. Dairy farmers Calf fattening farmers Sheep farmers Goat farmers Piggery farmers Poultry farmers The price of compound feed per kg should be lower than that of simple cakes so that farmers can find affordable and economical. The cheaper the product, the more will be
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Wholesaler
Retailer
End User
11.2
The price of processed animal feed depends upon the availability and value of raw materials. In this profile, the weighted average ex-factory sales price of compound animal feed to be produced by the project under consideration is estimated to be USD 312 per tonne (Please refer to Section 16: TECHNO-ECONOMIC PARAMETERS). For the envisaged project, it is recommended either to distribute the product directly to end-users wherever they are accessible or by establishing a small distributing store or using commissioned agents at strategic locations.
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The proposed SKY & LAKES compound animal feed mill will create significant social
impact for high numbers of rural smallholder farmersby working with a targeted 3,000 farmers in South Western Uganda, and eventually rolling out to cover 10,000 farmers through a gradual expansion program in the next three years. The primary benefit will be in transportation cost savings for farmers. By delivering feeds to and buying eggs directly from clients, SKY & LAKES core poultry business model will provide automatic access to markets and eliminate the need for farmers to travel, often considerable distances, to buy and sell these products. Furthermore, farmers face significant risk of egg breakages during transport, resulting in lost revenues. SKY & LAKES will introduce storage containers and vehicles that are specially equipped to handle eggs with minimal breakage.
The proposed SKY & LAKES compound animal feed mill will also introduce and
operate a Farm Gate Purchase of Eggs Scheme that will enable poultry farmers especially to access distant markets and sell their eggs (and culled birds) without having to leave their farms. This is crucial as poultry farming in Uganda has several social knock-on effects such as its enhancement of gender equity. Women control about 70 percent of poultry production. The scheme will thus contribute to poverty alleviation and the upward mobility of farmers as they will be able toget good prices for their produce, technical support, and high quality animal feed. An additional area of impact will draw on SKY & LAKES unique position as both a supplier of farmers inputs and buyer of their outputs. By providing consistently high quality animal feeds, SKY & LAKES will enable its farmers to realize higher egg productivitythe company estimates a 15% increase over earlier production rates. This will contribute to a significant increase in each farmers annual revenue, and will be the largest component of the social impact. The higher quality feeds, along with the training that SKY & LAKES will provide on animal health best practices, will also contribute to improved animal health, which will lead to fewer deaths of livestock. As a result, farmers will have more livestock available to be sold for meat, further increasing annual revenues per farmer. Poultry and poultry products are also an important pillar of food security. Additionally, the proposed SKY & LAKES compound animal feed mill will contribute directly and indirectly to job and wealth creation. Directly, 42 people will work in the plant and as field officers. Indirectly, each livestock/poultry farmer will have at least three people
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Period
Commence Operations Commissioning of Plant (*) Full Staffing (2) Hiring Key Executives (2) Arrangements for Animal Feeds Plant Input Supplies (1) Procure Project Office Stationery and or Equipment (1) Animal Feeds Plant & Equipment: Installation (1) Animal Feeds Plant & Equipment: Shipment & Delivery (3) Animal Feeds Plant & Equipment: Identification of Equipment Suppliers/Opening of LCs and Order of Equipment (1) Civil Infrastructure/Site Development (8) Incorporation & Licensing (1) Seed Financing (1)
10
11
12
13
14
15
1 month 3 months
1 month
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Investment in dairy and livestock sector is increasing day by day and quality feed is a pre requisite in profitable dairy and livestock farming. Compound animal feed formulation produced according to modern techniques with proper utilization of locally available cheaper feedstuffs leads to success in poultry, dairy and livestock farming hence for feed business too. 14.2 Weaknesses
Limited availability of protein sources of standard quality due to low or static production, processing technology, variable composition and adulteration. Comparatively poor nutrient composition of indigenous feed ingredients due to differences in varieties and use of improper soil fertilizers. Improper use of pesticides, the residues of which result in poor feed utilization. Lack of proper storage facility. Due to this fact various agricultural products when produced under quite high moisture content, thus liable to be affected with insect damage, auto-oxidation and fungal contamination. Lack of nutritional data of indigenous fed ingredients particularly for amino acids, energy, vitamins, minerals and by pass protein value especially in high producing cattle/buffalo. Improper storage, transfer, grading, feed milling and mixing of feed ingredients may also affect the quality of feed. Compound animal feedcannot be produced economically on a small scale. The cost of labour for each batch and cost of overhead keep on decreasing with the increasing production. 14.3 Opportunities
The annual growth rate in livestock population of Uganda was 3 percent (Uganda Census of Agriculture & Livestock, 2008/09) due to which there is demand for compound animal feed. The increased productivity would require
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Implementation of WTO (World Trade Organization). Open and competitive commodity pricing. There is no feed ingredient quality control program as improper storage, transfer, grading, feed milling and mixing of feed ingredients may also affect the quality of feed. The prices of different feedstuffs vary throughout the year. Improper storage of raw material can affect its nutritional value. There is limited availability of protein sources of standard quality due to low or static production, processing technology, variable composition and adulteration. Lack of proper labeling on product. Lack of awareness among dairy and livestock farmers to use compound animal feed for the high production of their animals is a constant threat for feed mill business as well.
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The plant is expected to attain 70% capacity in the first year, thereby increasing the capacity by 10 % per annum. The detail of operating capacity is worked out is given belowin Table 12. Table 12: Evolution of Compound Animal Feed Production Year 1* Year 2 Year 3 Capacity 70% 80% 90% Commercial Broiler Feeds 2,625 6,000 6,750
(MT) Commercial Layer (MT) Cattle Feed (MT) Feeds
4,725 3,150
10,800 7,200
10,500 24,000 *First Year production is for 6 months only. 16.2 Project Capital Costs
The fixed capital cost on the initial fixed assets is estimated as follows: Table 13:Project Capital Costs Investment Item Land and Site Development Civil Structures Plant and Machinery Miscellaneous Fixed Assets Vehicles Electricals Water Supply System Fixed Assets Preliminary & Pre-Operative Expenses (2.5%) Project Capital Cost Margin Money (25%) TOTAL PROJECT COST
Cost in USD 17,670 236,420 75,880 37,570 66,800 33,400 41,750 509,490 12,737 522,227 130,557 652,784
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Initial working capital to the amount of USD 130,557 will be required for the project. Table 14: Initial Working Capital Disbursements Description First Three Months Expenses Admin and Marketing Expenses Inventories Raw Material Miscellaneous Expenses Cash balance required Total 16.4 Overhead Costs
The following Overheads are assumed to occur in the first year of production. Table 15: Overhead Costs Description Admin and Marketing salaries Travel and conveyance Utilities Miscellaneous expenses Total
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Table 16: Project Financing (In USD) Investment Item Equity Financing (USD) Land and Site Development 17,670 Civil Structures 236,420 Plant and Machinery 0 Miscellaneous Fixed Assets 0 Vehicles 66,800 Electricals 0 Water Supply System 0 Fixed Assets 320,890 Preliminary & Pre-Operative Expenses (2.5%) 12,737 Project Capital Cost 333,627 Margin Money (25%) 0 TOTAL PROJECT COST 333,627 Percentage Ratio 51.11% 16.6 Project Viability
External Financing (USD) 0 0 75,880 37,570 0 33,400 41,750 188,600 0 188,600 130,557 319,157 48.89%
Total Financing (USD) 17,670 236,420 75,880 37,570 66,800 33,400 41,750 509,490 12,737 522,227 130,557 652,784 100.00%
Table 17: Project Returns (In USD) IRR (Internal rate of Return) Payback Period NPV @ 20%
% Years USD
26.9% 3 127,023
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1 2
Capacity of the plant ( MT / 2 shifts per day ) No. of operating shifts per day (8hrs/shift)
100 2
No. of working days in a year First year Second year 150 300
Capacity utilization (%) First year Second year Third year Fourth year 70% 80% 90% 100% 1.00
5 6
Wastage of raw material (%) Raw material consumption (MT) First year Second year Third year Fourth year
2.67
5.09
16
Product mix (%) Comm. broiler - starter Comm. broiler - finisher Commercial Layer - Chick mash Commercial Layer - Grower mash Commercial Layer - Layer mash Cattle Feed 12.50 12.50 5.00 10.00 30.00 30.00
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Quantity of feed manufactured(MT) First year Second year Third year Fourth year 10,500 24,000 27,000 30,000
18
Sale price of feed (USD per MT) Commercial broiler starter (mash) Commercial broiler finisher (mash)
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376 376
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Product Contamination Animal feed can become contaminated through: Receipt of contaminated raw materials e.g. chemical residues, pathogenic bacteria such as salmonella, antibiotic residues and debris such as metal, wood, or stones; Poor storage conditions e.g. raised moisture levels promoting insect, mould and bacterial growth; Poor hygiene standards within the processing operations, e.g. unclean machines, unhygienic handling.
A system of feed traceability is required through the feed chain. Dust and Aerosols Dust may arise from storage, handling and drying activities; aerosols typically arise from the use of compressed air and high-pressure water for cleaning. Workers may inhale or ingest dust and aerosols exposing them to biological and microbial hazards which present a risk of occupational lung disease. When combined with high levels of humidity they may give rise to skin irritation or allergic reactions. A dust cloud of any flammable material (such as grain) will explode where: o The concentration of dust in air falls within the explosive limits; and o A source of ignition is present. The most common locations for fire and explosion are in driers, grinding mills and hot work on plant. The grinding operation may generate considerable quantities of heat and dust and the temperatures of raw materials may rise by 10 - 20C.
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Energy usage has a direct correlation to the operating costs of the company and energy generation and consumption may be regulated or taxes/levies applied to reduce energy use and associated emissions of gases such as carbon dioxide. Manual Handling and Repetitive Work Lifting, repetitive work and posture injuries occur as a result of lifting and carrying heavy or awkward shaped items such as sacks, lifting of boxes and manoeuvring carts/manual forklifts within the plant. Repetitive tasks such as the operation of machines can lead to musculoskeletal injuries. Collision In a busy manufacturing environment it is common to have injuries where people are struck by moving or falling objects such as crates, boxes, equipment, conveyors and forklift trucks.
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Wastewater Treatment Operations producing prepared meals may produce wastewater with a high organic content. However, other operations producing compound animal feed generate practically no significant quantities of wastewater. Wastewater will arise primarily from cleaning, surface water runoff and steam condensate. These present a significant risk if allowed to enter a watercourse without treatment as they may contain: Powdered organic material, e.g. grain, protein meal;
Medicinal additives; Cleaning products; Solvent and oils used in equipment operation; Oils, fats and molasses from blended products.
Animal feed plants normally discharge to the municipal wastewater treatment system but some onsite pre-treatment may also be required. Waste water discharge from animal feed processing will typically require a permit. Odour Odour can be an issue particularly where products are mixed with fats or molasses. Environmental permits may place requirements on the design and height of chimneys and vents to maximize dispersion. Noise The noise generated by equipment such as hammer mills, grinders, ventilation, banging equipment, and manoeuvring trucks can be a nuisance if the site is located close to residential areas and other sensitive receptors.
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Confined Spaces Storage silos are dangerous confined spaces and entry to them must be strictly controlled and avoided wherever possible. Noise Noise induced hearing loss can occur from working in noisy areas, e.g. hammer mills, grinders. Machinery All equipment should have safety guarding and workers should be issued with appropriate personal protective equipment to protect against unavoidable sharp items and edges. Particular attention should be paid to conveyors, mills, mixers, rotary valves, pelleting presses and packaging machinery. Slips, Trips and Falls Slippery floors and surfaces caused by oil deposits present a high risk of slips, trips and falls where spills have not been cleared up or effective cleaning has not taken place. Hazardous materials Cleaning and disinfecting process areas and some food preservation processes use materials that if inappropriately used and stored could result in chemical contact burns, inhalation of harmful/toxic fumes or ingestion of harmful substances. 19.3 Key Social, Labour, and Community Risk/Liability Issues
Trucks delivering bulky raw materials may cause traffic congestion or excessive noise;
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Environmental Improvements Reduce dust emissions by: o Enclosing and sealing plant and equipment to prevent escape and accumulation of dust; o Use of doors/plastic strip curtains on building access points; o Redesigning processes to reduce free-fall distances and speed of movement for grain and other dry products; o Installing windbreaks and covers in outside handling areas; o Replace any external bulk storage areas with silos, fitted with alarms to prevent overfilling; o Install a centralized piped vacuum cleaning systems; o Installation of dust extractors e.g. cyclones and fabric filters; o Improving ventilation within buildings; o Maintaining a slight negative pressure within storage vessels such as bins and silos; o Install dust monitoring equipment at the most sensitive points; Reduce the risk of fire and explosion by: o Reducing dust emissions as above; o Improved removal of metal, stones and glass which can cause sparking; o Locate equipment within a lightweight building so that the roof and wall cladding panels can act as explosion relief; o Consider locating grinding equipment in a separate building; o Fit silos and bins with extraction systems to reduce the risk of explosion; Reduce spoil and loss by: o Weather proofing windows, doors and other openings against pests and water; o Controlling moisture content in grain storage; Monitor product losses during processing operations;
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Health and Safety Improvements Provision of personal protective equipment (PPE) that is fit for the task to prevent injury and maintain hygiene standards. Staff should be trained in the correct selection, use and maintenance of PPE. PPE should be inspected regularly and maintained or replaced as necessary; Train workers in correct use of machinery and safety devices; Redesign manual processes to avoid heavy lifting/repetitive activities; Install mechanical lifting aids where possible and rotate work tasks to reduce repetitive activities; Separation of people from moving equipment; o Ensure that the process layout reduces opportunities for process activities to cross paths; o Installation of safeguards on moving parts of conveyor belts and packaging machinery to reduce risk of entrapment of employees; o Install walkways to separate people from vehicle movements to reduce risk of collision; Walking and working surfaces should be kept clean and dry. Restrict access to areas being cleaned or where spillages have occurred. Floor cleaning should be
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Community Health and Safety Improvements Implement a quality control plan including: o Sampling procedures and frequencies; o Analysis methods; o Destination of non-compliant product; o Records and samples of the ingredients used and of each product batch; Product traceability systems that facilitate tracing of products once released for sale. 19.5 Action Plans
Dependent on the individual business, select appropriate improvements from the list above to include in the action plan. As a minimum any business should be required to have the following in place: Operational procedures to manage environmental, health and safety risks; Monitoring programmes; Improvement objectives, targets and project plans; Training for personnel; Regular inspections, checks and audits with records to demonstrate achievement of the required level of performance against legal requirements and improvement action; Emergency plans for environment, health and safety accidents; Management review/demonstrated involvement in environment, health and safety management.
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