SMEDA Calf Fattening Farm

Pre-Feasibility Study
CALF FATTENING FARM

(FEEDLOT SYSTEM)
Small and Medium Enterprise Development Authority

Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
6th Floor LDA Plaza Egerton Road, Lahore
Tel 111 111 456, Fax 6304926-7 Website www.smeda.org.pk
REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE

PUNJAB SINDH NWFP BALOCHISTAN
5TH Floor, Bahria Ground Floor Bungalow No. 15-A
8 th Floor, LDA Plaza, Complex II, M.T. Khan Road, State Life Building Chaman Housing Scheme
Lahore, Karachi. The Mall, Peshawar. Airport Road, Quetta.
Tel: (042) 111-111-456 Tel: (021) 111-111-456 Tel: (091) 9213046-47 Tel: (081) 831623, 831702
Fax: (042)6304926-7 Fax: (021) 5610572 Fax: (091) 286908 Fax: (081) 831922
helpdesk@smeda.org.pk helpdesk-khi@smeda.org.pk helpdesk-pew@smeda.org.pk helpdesk-qta@smeda.org.pk
March, 2009
Pre-Feasibility Study Calf Fattening Farm (Feedlot System)
1 INTRODUCTION TO SMEDA..........................................................................................................4
2 PURPOSE OF THE DOCUMENT.....................................................................................................4
3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT ..........................5

3.1 STRENGTHS .....................................................................................................................................5
3.2 WEAKNESSES ..................................................................................................................................5
3.3 OPPORTUNITIES ...............................................................................................................................6
3.4 THREATS .........................................................................................................................................6
4 PROJECT PROFILE .........................................................................................................................7
4.1 OPPORTUNITY RATIONALE ...............................................................................................................7
4.2 MARKET ENTRY TIMING ..................................................................................................................8
4.3 PROPOSED BUSINESS LEGAL STATUS................................................................................................8
4.4 PROPOSED CAPACITY ......................................................................................................................9
4.5 PROJECT INVESTMENT .....................................................................................................................9
4.6 PROPOSED LOCATION ......................................................................................................................9
4.7 KEY SUCCESS FACTORS/PRACTICAL TIPS FOR SUCCESS ..................................................................10
5 SECTOR & INDUSTRY ANALYSIS .............................................................................................. 11
5.1 MAJOR PLAYERS ...........................................................................................................................11
5.2 HUBS OF CALF FATTENING FARMING .............................................................................................11
6 MARKET INFORMATION............................................................................................................. 11
6.1 SECTOR CHARACTERISTICS ............................................................................................................11
6.2 MARKET POTENTIAL......................................................................................................................12
6.3 TARGET CUSTOMERS .....................................................................................................................13
7 FARM INPUTS................................................................................................................................. 13
7.1 LAND ............................................................................................................................................13
7.1.1 Land Requirement................................................................................................................13
7.1.2 Land Lease ..........................................................................................................................14
7.1.3 Suitable Locations ...............................................................................................................14
7.1.4 Herd Mix .............................................................................................................................14
7.2 ANIMAL MARKETS ........................................................................................................................15
7.3 ANIMAL HOUSING .........................................................................................................................15
7.4 FARM MACHINERY ........................................................................................................................16
7.5 FEED .............................................................................................................................................17
7.5.1 Ration for Calf Fattening .....................................................................................................17
7.5.2 Green Fodder for Calves......................................................................................................17
7.5.3 Fodder Production Economics .............................................................................................18
7.5.4 Daily Fodder Requirement...................................................................................................19
7.5.5 Daily Total Mixed Ration Requirement.................................................................................19
7.5.6 Total Mixed Ration (TMR) Formula for calves:....................................................................19
7.5.7 Mineral Mixture...................................................................................................................19
7.5.8 Wheat Straw (Bhoosa or Turi)..............................................................................................20
7.6 VACCINATION & MEDICATION .......................................................................................................20
7.7 CALF QUARANTINE .......................................................................................................................20
7.8 LABOR REQUIREMENT ...................................................................................................................20
8 FARM OUTPUT............................................................................................................................... 21
8.1 FATTENING PERIOD .......................................................................................................................21
8.2 MEAT COMPOSITION ......................................................................................................................21
8.3 INCREASE IN WEIGHT GAINS ...........................................................................................................22
1
PREF-17/March, 2009/Rev 3
8.4 SALE PRICE ...................................................................................................................................22

9 USEFUL TERMINOLOGY ............................................................................................................. 23
10FINAICIAL ANALYSIS................................................................................................................... 24
10.1 PROJECTED INCOME STATEMENT ...............................................................................................24
10.2 ........................................................................................................................................................24
10.3 ........................................................................................................................................................24
10.4 PROJECTED BALANCE SHEET .....................................................................................................25
10.5 PROJECTED CASH FLOW STATEMENT .........................................................................................26
11KEY ASSUMPTIONS ...................................................................................................................... 27
12ANNEXURE 1................................................................................................................................... 28
13ANNEXURE 3................................................................................................................................... 30
14ANNEXURE 4................................................................................................................................... 31
14.1 DIFFERENT BREEDS OF BUFFALOES AND COWS ..........................................................................31
DISCLAIMER
The purpose and scope of this information memorandum is to introduce the subject
matter and provide a general idea and information on the said area. All the material
included in this document is based on data/information gathered from various sources
and is based on certain assumptions. Although, due care and diligence has been taken
to compile this document, the contained information may vary due to any change in
any of the concerned factors, and the actual results may differ substantially from the
presented information. SMEDA does not assume any liability for any financial or
other loss resulting from this memorandum in consequence of undertaking this
activity. The prospective user of this memorandum is encouraged to carry out
additional diligence and gather any information he/she feels necessary for making an
informed decision.
DOCUMENT CONTROL
Document No. PREF-24
Revision 3
Prepared by SMEDA-Punjab
Issue Date March 2002
Revised In March 2009
Issued by Library Officer
1 INTRODUCTION TO SMEDA
The Small and Medium Enterprise Development Authority (SMEDA) was established
with the objective to provide fresh impetus to the economy through the launch of an
aggressive SME support program.
Since its inception in October 1998, SMEDA had adopted a sectoral SME development
approach. A few priority sectors were selected on the criterion of SME presence. In depth
research was conducted and comprehensive development plans were formulated after
identification of impediments and retardants. The all-encompassing sectoral development
strategy involved recommending changes in the regulatory environment by taking into
consideration other important aspects including finance, marketing, technology and
human resource development.
SMEDA has so far successfully formulated strategies for sectors including, fruits and
vegetables, marble and granite, gems and jewelry, marine fisheries, leather and footwear,
textiles, surgical instruments, transport and dairy. Whereas the task of SME development
at a broader scale still requires more coverage and enhanced reach in terms of SMEDA’s
areas of operation.
Along with the sectoral focus a broad spectrum of business development services is also
offered to the SMEs by SMEDA. These services include identification of viable business
opportunities for potential SME investors. In order to facilitate these investors, SMEDA
provides business guidance through its help desk services as well as development of
project specific documents. These documents consist of information required to make
well-researched investment decisions. Pre-feasibility studies and business plan
development are some of the services provided to enhance the capacity of individual
SMEs to exploit viable business opportunities in a better way.
This document is in the continuation of this effort to enable potential investors to make
well-informed investment decisions.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk.
2 PURPOSE OF THE DOCUMENT

The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs
to facilitate investment and provide an overview about dairy and livestock farming. The
project pre-feasibility may form the basis of an important investment decision and in
order to serve this objective, the document covers various aspects of dairy and livestock
concept development, start-up, production, finance and business management. The
document also provides sectoral information, brief on government policies and
international scenario, which have some bearing on the project itself.
This particular pre-feasibility is regarding “Calf Fattening Farm” which comes under
“Livestock and Agriculture” sector. Before studying the whole document one must
consider following critical aspects, which form the basis of any investment decision.
3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR

INVESTMENT
Calf fattening is all-inclusive activity, related to meet animal’s care, housing, medication,
feeding and management. It is defined as all those aspects and activities relating to
raising of calves for meat purpose. Before making the decision, whether to invest in the
livestock farming or not, one should carefully analyze the associated risk factors. A
SWOT analysis can help in analyzing these factors, which can play important role in
making the decision.
3.1 Strengths
 Back bone and main stay of economy.
 Provides raw material for food & Leather industry.
 Concentrated production.
 Favorable breeding backgrounds.
 Relatively cheap farmland.
 High domestic consumption
 Low cost living standard.
 Full family involvement, devoted & hardworking Sector.
 Major source of food, i.e. Meat.
 Source of Farmyard Manure (FYM).
 Sizeable foreign exchanges earning through exports.
 Ample human resource employment sector.
 Stationed, permanently located secured loaning sector.
3.2 Weaknesses
 High production costs.
 Low levels of bulk feed production.
 Poor management level in quite a few cases.
 No or low application of research work and pedigree record keeping.
 Animals are kept for social rather than commercial reasons.
 There is no registered beef breed in Pakistan.
 Low or lack of interaction with farmers. Poor information about each other. Lack of
extension services.
 Lack of education and initiative in farmer, traditional approach due to lack of skills
and management.
 Unorganized sector, unaware of basic farm management practices.
 Remote area, lack of farm to market approach & transportation.
 Non-availability of communication services.
 Lack of farm/ market infra structures & marketing information.
 Management of livestock farm is a challenging job.
 Nutrition is still a problem hampering the livestock productivity in general and meat
production in particular
3.3 Opportunities
 Govt. of Pakistan & Sate Bank of Pakistan priority sector.
 Vast range of area of operation, more needs and scope of development.
 Value added dairy products are in demand.
 Meat and meat products needs are much higher than supply.
 Commercially viable sector with great credit potential and absorption capacity.
 Vast range of area of operation, more needs and scope of development.
 Value added meat products are in demand. If the government lifts the price fixing
taboo, then there are bright chances for the flourishing of meat market. Customers
are ready to pay prices for the good quality meat.
 Massive migration of labour to cities can be checked / stopped.
 Corporate financing will become a niche in lending market.
 Progressive meat retailing firms can promote the sale of processed and quality meat
cuts to consumers, which is packed and labeled at a price, including the cost of
processing, packaging and quality.
 Development of slaughtering and processing operations can help in obtaining
maximum value.
 Improving the control of external parasites may enhance the value of hide or skin.
3.4 Threats
 Rising trend of cost of production with higher rate of interest as compared to profit
ratio.
 Implementation of WTO will result in open & competitive commodity pricing.
 Due to fear of default, banker community has reluctance for lending loans.
 High risks of diseases in live stock. Animals are subject to serious diseases that may
lead to mortality.
 The formal meat market not growing due to the government regulation of price
fixing as Municipal Corporation fixes the meat prices in the urban markets.
 The fixed prices are not likely to be viable for selling the quality meat.
 Butcher market not ready to pay the premium prices for the fattened animal.
 Defective and unorganized markets.
 Imbalance between prices of inputs & outputs.
 Rising trend of cost of production with higher rate of interest as compared to profit
ratio.
 Lack of media projection, non-recognition of problems and monopoly of
multinationals.
 Lack of community organizations and out dated farm practices.
 Lack of coordination towards common causes & goals.
 Lack of awareness about economics, demand & supply in market.
 Low saving, low holding capacity & increasing level of poverty.
 Non-availability of subsidy & tax holidays.
4 PROJECT PROFILE
4.1 Opportunity Rationale

Livestock production is an integral part of Pakistan's agriculture sector and plays a vital
role in national economy. At present, livestock is contributing about 52% to the
agricultural sector and 10.9% to the GDP. Pakistan is geographically located close to the
Middle East and South-East Asia. Both of these regions are deficient in livestock
products and depend upon import from other countries. The livestock industry in most of
the developed world is highly subsidized. With reduction of subsidies in the wake of
WTO, the local livestock sector should have better opportunities to compete. Livestock
registered a strong growth of 4.30% over the last year’s impressive growth of 7.5% due
to increase in the livestock and poultry products. The role of livestock in rural economy
may be assessed by the fact that 30 to 35 million of the total rural population is engaged
in livestock farming, having 2 to 3 cattle/buffalo and 5 to 6 sheep/goats per family
deriving 30% to 40% of income from it. During year 2007-08, the total red meat
production was 1.55 and 0.58 million tons for beef and mutton, respectively. The per
capita consumption indicates a growing demand of meat in the years to come. Calves for
fattening may come from the dairy herd.
Table 4-1: Population of livestock (million)1

Species 2005-06 2006-07 2007-08
Cattle 29.6 30.7 31.8
Buffalo 27.3 28.2 29.0
Sheep 26.5 26.8 27.1
Goats 53.8 55.2 56.7
Table 4-2: Production of Livestock Products2

Product 2005-06 2006-07 2007-08
Milk (million tones) 31.20 32.22 34.06
Beef (000,tones) 1,444 1,493 1,549
Mutton(000,tones) 554 565 578
Livestock production is growing rapidly as a result of the increasing demand for animal
products. In a Food & Agriculture Organization (FAO) study: Livestock to 2020: The
Next Food Revolution, it is suggested that global meat production and consumption will
rise from 233 million tones (2000) to 300 million tones (2020), and milk from 568 to 700
million tones over the same period. Egg production will also increase by 30% 3. These
1 Economic Survey of Pakistan, 2007-08

2
Economic Survey of Pakistan, 2007-08
3
The Livestock to 2020 study used base figures for 1993 and these have been recalculated for the year 2000 based on
FAO STAT data.
predictions show a massive increase in animal protein demand, needed to satisfy the
growth in the human population.
The overall growth in the live stock population can be seen from the following table:
Table 4-3 Livestock (Population Growth) 4 (Numbers in Millions)

Fiscal Year Buffaloes Cattle Goats Sheep Poultry
2000-01 23.3 22.4 49.1 24.2 292.4
2001-02 24.0 22.8 50.9 24.4 330.0
2002-03 24.8 23.3 52.8 24.6 346.1
2003-04 25.5 23.8 54.7 24.7 352.6
2004-05 26.3 24.2 56.7 24.9 372.0
2005-06 27.3 29.6 53.8 26.5 433.8
2006-07 28.2 30.7 55.2 26.8 443.2
2007-08 29.0 31.8 56.7 27.1 510.1
Calf fattening enterprise is an agro-based project. The calves, preferably males, 8-9
months of age are fed on concentrated feed and fodder produced from the agricultural
land. Balanced feed is given to calves for a period of 120 days to get higher weight gain.
Live weight of these calves is between 80-90 kg. If these calves are fed properly on the
formulated fattening feed, their weight can be raised up to 180-200 kg during the
fattening period. The daily weight gain of fattened calves varies between 600-800 grams
depending on the quality of feed given to them. There is a shortage of beef in the country.
This shortage is being observed through meat-less days. If the calf fattening projects are
carried out in the country then the domestic demand of beef could be fulfilled. As the
fattened animals have higher meat contents (55%) as compared to grazing animals (48%).
4.2 Market Entry Timing

Since beef demand is increasing day by day, therefore, the demand of fattened calves is
also higher. The demand increases especially before occasions like Eid-ul-Fitr and Eid-
ul-Azha. That’s why the animals in such occasions are sold at a bit higher prices as
compared to other days. The proposed business can be started before these occasions or
any time through out 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 livestock breeders and farmers. The ability to work with people/
animals and efficient use of resources are important aspects in modern and commercial
calf fattening farm.
4.3 Proposed Business Legal Status

The proposed legal structure of the business entity is either sole proprietorship or
partnership. Although selection totally depends upon the choice of the entrepreneur but
this financial feasibility is based on Sole Proprietorship.
4
Pakistan Livestock Census, Statistics Division, Ministry of Economic Affairs & Statistics, GoP.
4.4 Proposed Capacity

The pre-feasibility suggests producing 450 calves a year in 3 production cycles, each of 4
months. This size of a farm justifies the recurring costs of this project.
4.5 Project Investment

The total cost of the project is Rs.4, 933,113 out of which capital cost of the project is Rs.
4,439,944 for purchasing the animals and constructing the building and the rest is used to
meet the working capital requirement.
Table 4-4 Project Costs

Description Amount (in Rs.)
Land 506,944
Building and Civil Works 2,374,000
Plant and Machinery 379,000
Furniture/ Fixture & Equipment 100,000
Pre-operational Expenses 292,500
Vehicles 787,500
Total Fixed Cost 4,439,944
Working Capital 493,168
Total 4,933,112
The proposed pre-feasibility is based on the assumption of 50% debt and 50% equity.
However this composition of debt and equity can be changed as per the requirement of
the investor.
Table 4-5 Project Financing

Debt 50% 2,466,556
Equity 50% 2,466,556
Total Project Investment 4,933,112
Table 4-6 Project Economics

Viability Project
IRR (%) 55.71%
NPV @20% (Rs) 27,540,982
Pay Back Period (year) 4.10
4.6 Proposed Location

The development of urban or peri-urban commercial calf fattening farms is something
new in livestock production. Metropolitan cities like Lahore, Karachi, Multan,
Faisalabad, Rawalpindi, etc are the major markets of meat. Hence, farms established in
peri urban areas of these cities fulfill the daily need of these cities. The other locations
may be around the bigger cities e.g. Sialkot, Jhang, Rahim Yar Khan, Bahawalnagar,
Bahawalpur, Sahiwal, Okara etc.
4.7 Key Success Factors/Practical Tips for Success

The livestock production research institutes and universities have conducted many studies
to ascertain the beef production potential of indigenous livestock under the feedlot
fattening regimes. Weight, growth and efficiency are major factors influencing the
economical meat production.
The carcass yield depends upon several factors such as breed, age, sex and degree of
finishing. The studies suggest substantial live weight gain and carcass yield from the
buffalo and different indigenous breeds of cow calves. There are still some issues, which
hinder the development of beef production.
The thrust in calf fattening farm is on the increased use of capital and management.
Successful farming harnesses all available resources into productive and profitable unit.
Calf fattening is highly complex as it includes farm management, feeding, housing,
disease control and hygienic production of milk on farm. The judicial use of means and
resources to achieve clearly defined goals is the key success factor i.e. the art of
maximization and optimal utilization of resources and means for maximizing productivity
and profits.
Feeding meat animals on nutritious compound feed along with green fodder can be
adopted. Other farm management practices include comfortable and ventilated barns,
drinking water and feed according to the requirements. Timely vaccination against
Rinderpest, Black Quarter and Foot & Mouth Disease. The prevention of internal and
external parasites will also improve the over all performance of herd. The absence of calf
weaning program is a shortcoming to the development of beef industry. Too many young
male calves are slaughtered quite young due to high cost of milk required to feed them.
Those left are generally underfed and stunted thus unable to achieve the normal growth.
A suitable plan could provide animals of 100-150 kgs of weight, which could be raised to
the desired market demand.
An efficient program aim at moving the calves from liquid to dry feed as quickly as
possible if calf fattening is integrated with dairy farming. High quality calf starter feed
with digestibility, palatability and composition should be fed free of choice from the third
day of birth. Quality of diet is the key to a successful early weaning system. Weaning
could be started once the consumption reaches 800 grams a day, which would provide
healthy and thrifty calves. The changing of this system by small farmers and peri-urban
dairy farm entrepreneurs will be a long and difficult process to which some incentives are
essential. Another option is to buy feeder calves from the cattle markets.
Attention must be given to the selection of animals. Once the calves are purchased and
placed in pens, farmers would face many technical problems affecting the success of their
operation. It will be worthwhile to get technical assistance from the livestock
professionals and experts. It is advisable to purchase fattening rations initially from the
public or private sector feed mills. Once the experience is gained and practices are
established, feed processing equipment, such as the grinder-mixers can be installed as per
capacity of the farm.
10
5 SECTOR & INDUSTRY ANALYSIS
5.1 Major Players

Though livestock production is fragmented and most units in Punjab are small with 10
percent holding around 10 to 20 buffalo cows, and only five percent over 20 heads each.
Such units are often run by capable and business-oriented farmers who are open to
change and eager to adopt improved production practices. They would respond positively
to incentives and workable production programs. In mid 90’s the US Feed Grain Council
introduced commercial meat production. A number of farmers from Punjab and Sindh
participated in the program. They produced many ‘lots’ of fattened animals but felt
difficulty in selling the animals at proper price.
Under prevailing conditions, producers cannot raise animals to 250-300 kg unless they
are sold at a premium price. Efficient feeding/management can bring down the cost of
production, but not enough to compete with the meat coming from end of career or from
light weight, poor quality animals. A positive measure could be to terminate the ceiling
price policy and create integrated production-distribution projects.
5.2 Hubs of Calf Fattening Farming

Karachi is a big market for good quality meat. The Karachi market is expanding, as daily
requirement of meat is about 1,000 metric tons. Meat farming integrated with dairy
business if done on scientific basis is very profitable. There are more than 100 markets
only in Sindh dealing with livestock without any facility or supervision. The major
markets are Tharparkar, Mirpurkhas, Sanghar, Dadu and Badin. All this will facilitate
farmers in rearing their livestock in a more healthy way.
The countries can also be grouped by the percentage of the beef herd in the total cattle
herd, a situation that is reflected in the typical farms:
 Milk Countries: with the beef herd as < 25 percent of the total are Poland, Pakistan,
Hungary, Czech Republic and Germany.
 Mix Countries: with a share between 25 and 75 percent of the beef herd of the total
are Austria, France, Ireland and Spain.
 Beef Countries: with > 75 percent of the beef herd of the total are U.S., Brazil,
Australia, Argentina and Uruguay.
6 MARKET INFORMATION
6.1 Sector Characteristics

Currently, meat sector in Pakistan is working on an informal basis from animal raising to
meat selling. Animal traders purchase animals from the rural areas and sell them to the
animal markets in the urban areas. Butchers purchase these animals from animal markets
and slaughter them in the slaughterhouses. Butchers act as meat traders and dominate the
meat market both in rural and urban areas. The animals sold in these markets are
generally diseased and culled animals. Butchers/traders prefer to buy these cheap
animals.
11
The current red meat production system is both traditional and inefficient. Beef mostly
comes from the end of career, or emergency slaughtered animals. A lot of baby buffaloes
and calves are slaughtered when these are only 1-2 weeks old. Few calves are raised to
60-80kg but on extremely poor and unbalanced diets. Lack of commercial, on-farm
livestock feeding could be blamed for existing price ceiling, which is fixed too low to
recover the production cost. Traditional and unhygienic slaughtering techniques are
major constraints, which are not acceptable to those who believe in health and hygiene.
The livestock resources hold potential for increasing the production of meat. It is
estimated that about 6-7 million buffalo/cattle male calves if raised on balanced diet
could double the production. Sheep and goats can also be raised for quality meat
production.
The meat industry as a whole, from livestock farming to marketing of meat is in a poor
state at the moment. General crop farming has progressed from the 'subsistence level
farming' to 'commercial farming', at least in major crops in the country because of
research, extension focus and 'market pull factors'. Whereas the livestock farming has
remained least commercialized and survives under subsistence farming conditions. Beef
yield has remained low due to the following constraints:
 Despite immense potential, breeding has not been done for increasing productivity.
 Feeding methods are primitive with hardly any feed management. Despite abundant
fodder production, there is always a shortage between seasons. This shortage is met
by "bhoosa" (wheat straw) which has very low nutritional value. Quality feed
concentrates from existing by-products is not being used efficiently.
 Large-scale livestock farming has not been practiced due to the total manual
procedures adopted in feeding and herd management. Reliability of manual labour is
severe especially in view of illiteracy and poor farmer education on the subject.
6.2 Market Potential

In Pakistan, the beef industry is an important segment of livestock production. The
increasing population and the rising consumer buying power have together contributed to
an increase in demand resulting in relatively favorable prices for beef. Worldwide
consumption of meat during 1983 for developed world was 74 kg compared to 14 kg for
developing countries and 11 kg for Pakistan. The data for 1993 indicates 76kg, 21 kg and
16kg for the three, respectively. The challenge for Pakistan now is to achieve 47 kg per
capita consumption by 2020. According to statistics there is a gap in demand and supply
of beef in the market. This gap is met through meatless days and through poultry meat.
12
Figure 6-1: Market Value of Dairy & Livestock in Pakistan
(Source: Agricultural Statistics of Pakistan, 2003-04)
6.3 Target Customers

The pre-feasibility suggests selling the animals in the urban market. The buyers could be
the corporate buyers e.g. hotels and exporters. The animal mandies of big metropolitan
cities can also be considered for selling the animals in bulk. The animals will be sold on
live weight basis. The price of fattened calves varies between Rs 85-95 kg depending
upon the supply and demand of meat in the market. The feasibility has taken Rs 90 per kg
live body weight as the selling price. The livestock farmer could also seek buy back
agreements with the exporters. Following are some of the target clients for a calf-
fattening farmer:
1. Local people
2. Butchers
3. Contractors
4. Slaughter house owners
The cost of production per kg of meat should be lower than its sale price so that farmer
could feel it economical.
7 FARM INPUTS
7.1 Land
7.1.1 Land Requirement

Around 1 acre of land would be required which cost Rs.506,944 for a calf-fattening
project of 450 animals in a period of one year. It is assumed that the Total Mixed Ration
(TMR) will be purchased from market @ Rs. 11 per Kg. Around 6,000 sq. ft. area would
be used for building a shed for the animals to protect them from severity of the weather.
13
Table 7-1: Land Requirements

Description Area (Sq. ft)
Shed for Calves 6,000
Open Paddock for Calves 9,000
Stores (Feed & machine) 120
Servant Room, Wash room 120
Open land 20,760
Office block 500
Total Land Requirement Sq. ft 36,500
7.1.2 Land Lease

Lease is a better option for a new investor. Land on lease is available in rural areas for a
period of 5-15 years. Advance rent for a few years will be charged initially. Good
agriculture land is available with an annual rent of Rs 8,000-10,000 per acre. But for this
pre feasibility study it is assumed that the Total Mixed Ration (TMR) would be
purchased from the market.
7.1.3 Suitable Locations

Peri urban and rural areas in the neighboring areas of Lahore, Karachi, Islamabad,
Faisalabad & Multan etc. where water, electricity is available to irrigate the crops are
suitable locations for establishing a calf-fattening farm.
7.1.4 Herd Mix

Some breeds of cattle are known as 'dual purpose' because they are suitable for producing
milk and beef. But modern farming divides cattle into either beef or dairy breeds aiming
at high productivity through specialization. British beef breeds include Hereford,
Galloway, Beef Shorthorn, Aberdeen Angus and South Devon. A recent trend in the UK
has been the introduction of large Continental breeds such as Charolais, Limousin and
Simmental. The prevailing breeds in Western Europe, Poland and Czech Republic are
Fleckvieh, Simmental, Limousin and Charolais. In Hungary, Ireland, the U.S. and the
Southern Hemisphere, breeds of British origin (mainly Hereford, Angus and their
crosses) dominate. Particular cases are Brazil (Nelore, coming from India) and Pakistan
where the local buffalo breed is used for both milk and beef production5.
The Calves of different breeds (7-8 months of age) can be used for fattening purpose at
an average body weight of 80-100 kgs for 90-120 days. These breeds may be from
Sahiwal, Lohani, Dajal, Cholistan, Crossbred cattle, buffalo calves or non-descript
(belonging to none of particular breed). Experiments carried out on Livestock Production
Research Institute, Bahadurnagar, Okara shows that cost of meat production for
Cholistani and Crossbred calves is relatively cheaper than Sahiwal, Dajal, Non-descript
and buffalo calves fed on the same Total Mixed Ration (TMR).
5
(IFCN Beef Report 2007)
14
7.2 Animal Markets

The feasibility suggests purchasing calves on live weight basis from the rural areas or
animal mandies. The animals are being traded across the country in animal mandies
round the year. Most of which operate on weekly basis. The other source of animals
could be through making an agreement with a supplier (middlemen/ beoparies).
Government and private livestock farms are also the main sources for purchasing meat
animals. Animal markets are situated in different places in Punjab, which includes
Sheikupura, Okara, Sahiwal, Arifwala, Muridke and Jhelum. These markets operate on
rotational basis in a week, or once a month. There are different contractors available in
the markets that would help in locating the proper animals. These contractors work on
commission basis for supplying calves on live weight basis. Commission rate charged
may vary from some %age of the animal price.
7.3 Animal Housing

There is a general trend to keep the fattened calves in semi-confinement in order to
control waste production, where these calves are confined and housed over slatted floors.
All faeces and urine can be collected, thus eliminating the need for using bedding
material. At present most of the cattle in feedlots are still kept on concrete floors, or in
dry regions, on an unpaved area. More efficient growth rates will be achieved if shade is
provided. Solids from manure are either collected daily and stored, or allowed to dry in
the feedlot and removed periodically before spreading on fields. Collection of urine is
limited to feedlots with a slatted floor.
Sheds of the animals should be airy with protection of the animals from extreme
temperatures and strong winds. The animal housing should be facilitated with drinking
water for animals. There should be proper drainage system to keep hygiene at the farm. It
consists of a built up animal shed, a brick soling paddock for animals, one room for
storing farm equipment and one for compound feed storage. But the pre-feasibility has
taken feeding manger, open paddock and water trough as the major housing requirement
for the calves.
Animal sheds should be located with long axis north to south, to get direct sunlight and
yet face away from the direction of prevailing winds, whenever possible. Tree plantation
can be carried outside the sheds to provide natural shades and these trees will also act as
windbreakers.
Dimensions of water troughs will be the same as that of feeding mangers and water will
be available round the clock. Generally all the animals feed at the same time in a shed,
but not all animals drink water simultaneously. The following figure shows the animal
housing layout for calf fattening farm.
15
Figure 7-1 Animal Housing Layout

Water Trough
Water Trough
Open paddock Open paddock
Fodder
Manger
Gate Gate
Table 7-2 Total Infrastructure Cost

Description Sq.ft Rate/Sq.ft Total Cost
Shed for Calves 6,000 300 1,800,000
Open Paddock for Calves 9,000 10 90,000
Stores (feed & machine) 120 300 36,000
Servant Room, Wash room 120 400 48,000
Office block 500 800 400,000
Total Infrastructure Cost 15,740 2,374,000
7.4 Farm Machinery

The pre-feasibility suggests, hiring tractor for land preparation to grow fodder crops.
Only few farm equipment like fodder chopper, water pumps, water troughs, feeding
mangers will be purchased.
Table 7-3 Farm Equipment

Farm supplies Rate No. Rs.
Chopper 12,000 1 12,000
Water pump 10,000 1 10,000
Tube Well 300,000 1 300,000
Weighing Scale 50,000 1 50,000
Miscellaneous farm utensils 7,000 1 7,000
Total Machinery Cost 5 379,000
16
7.5 Feed
7.5.1 Ration for Calf Fattening

The ration is allowance of nutritionally balanced Total Mixed Ration (TMR) in 24 hours
to increase animal productivity. Wheat straw6 is also used as dry roughage in TMR. The
cost of TMR will be lowered if feed ingredients are mixed on farm. The composition of
the rations fed in the finishing operations depends largely on the types of feed produced
local availability and on weights and grades of calves to be fattened. Rations can range
from high-roughage low energy rations to high-energy rations composed almost entirely
of concentrates. Examples of ingredients in rations are:
 Maize and maize silage with Soya bean meal and urea
 Barley, maize silage, by-products feeding large feed lots (e.g. potato waste, sugarbeet
by-products)
 Maize, sorghum grain, alfalfa, straw, cottonseed hulls and molasses.
Some hormone-like growth stimulators, antibiotic feed additives and ionophores (rumen
altering factors) are legalized to be included in the feed and are very commonly used.
Table 7-4 Average Production Parameters and Ranges7

Reasonable Production Parameter Range Average
Starting weight (kg) 70-100 85
Daily gain (kg) 0.70 - 1.0 0.8
Feed Efficiency (kg growth per kg feed DM) 6 - 12 9
Fattening period (days) 90 - 150 120
Final weight (kg) 150-200 175
7.5.2 Green Fodder for Calves

Fodder is grown at the land, which is acquired on lease or owned by the entrepreneur.
Due to increased demand, improved forage crops such as multi-cut oats, berseem,
lucerne, Sorghum- Sudan grass hybrids, mott grass, sorghum, maize and millet have been
developed. These have become very popular in irrigated areas such as Kasur,
Sheikhupura, Gujranwala, Faisalabad, Sargodha, and Renala Khurd (Punjab), Nowshera,
Charsada, Mardan, and Peshawar (North West Frontier Province), and Hyderabad,
Sukkur, Larkana and Nawabshah in Sindh for peri-urban dairies. Details of fodder
cultivars released by Research Institutions in Pakistan are given in Annex 2. Average
forage yields in Pakistan are extremely low compared to yields obtained on research
institutes and from well-managed farms and fields. These are very low as compared to
their potential, with 22.8 tons per hectare a recent estimate 8.
6
A byproduct of wheat harvesting used as dry roughage for livestock and dairy animals
7
FAO Statistics
8
FAO Statistical Databases
17
Although improved varieties and technology are available, they have been slow to reach
the dairy farms. Recent medium scale on-farm work has indicated that yields can be
enhanced two to three fold by using available improved varieties and appropriate
agronomic techniques. In an area where land and irrigation are the major limiting factors
to enhancing fodder production, intensification is the only way to meet the needs for
forage. Intensive and economical forage production per unit area per season would be the
best choice. Also efforts should be made to produce and provide sufficient quantities of
seed of multicut forage varieties and hybrids like Mott grass to commercial dairy farms.
The fodder yield (except multi cut Mott Grass which yields 100-150 tones/ acre in 4 to 6
cuttings per year) varies between 10 tons to 40 tons per acre depending upon the fertility
of land, quality of seed and application of fertilizer.
Table 7-5 Types of Dry & Green roughage9

Dry Roughage Green Roughage
Wheat Straw Summer Fodder Winter Fodder
Rice Straw Maize Barseem
Oat Straw Sorghum Alfalfa (Lucerne)
Maize/Sorghum Stubble Millet Oats
Sugarcane Baggass Mott Grass Rye Grass
Cotton Seed Hulls Sadabahar Sugarcane tops
Corn Cobs Guar
7.5.3 Fodder Production Economics

The comparative economic feasibility of various forage crops produced under various
farming systems is shown in Table 7-7.
Table 7-6 Economics of forage production under improved production system per
hectare in Pakistan10
Item Forage Crop
Maize Sorghum S. S hybrid Berseem Lucerne Oats
Land preparation 938 974 974 875 875 750
Seed & Sowing 1,200 688 2,000 1,250 1,250 1,250
Fertilizer 1,750 1,750 5,000 2,500 2,500 2,250
Irrigation 750 750 1000 1,100 750 500
Land Revenue 1,750 1,750 4,500 6,250 6,250 1,875
Harvesting / Transport 1,875 1,750 3,500 3,000 3,750 3,000
Total expenditure 8,263 7,662 13,774 14,825 15,635 9,625
Yield (Kilos) 80,000 79,750 160,000 102,500 103,750 115,000
Price/kg (Rs) 1.00 1.00 1.00 1.50 1.50 1.25
9
Livestock & Dairy Development Department, Lahore & FAO Statistical Databases
10
FAO Statistical Databases
18
7.5.4 Daily Fodder Requirement

There is no fixed fodder requirement for the animals but a rule of thumb says that an
animal needs daily fodder equal to 4.5% of live body weight on Dry Matter (DM) Basis.
One third of this DM will come from green fodder and 2/3 rd will be supplemented by
TMR in fattening calves to get maximum daily weight gains. According to these
estimates, one calf of 80 Kgs body weight will consume 8-10 kgs fodder daily for 120
days (preferred if fed free of choice i.e. ad libitum).
7.5.5 Daily Total Mixed Ration Requirement

Since an animal needs daily feed equal to 4.5% of its live body weight on Dry Matter
(DM) Basis. The 2/3 rd of this DM will be supplemented by TMR. For an animal of 80
kgs body weight, it will be 8-10 kgs per day (Preferred if fed free of choice i.e. ad
libitum)
7.5.6 Total Mixed Ration (TMR) Formula for calves:

Calves can also be fed on TMR in feed lot system. The Crude Protein (CP) value of this
ration should be 12-13 % with 65-70 % Total Digestible Nutrients (TDN). These feed
ingredients when mixed according to feed formula will provide adequate energy
according to energy and protein requirements of animal.
Table 7-7 Details of Raw Material

Material Percentage Input
Cottonseed cake/ Maize grain 9%

Corn gluten meal (20%) 8%
Rice Polish 15%
Wheat bran 20%
Wheat Straw 26%
Molasses 17%
Urea 1%
Salt 2%
DCP 2%
Total 100%
Crude Protein (CP) 12.7%
Total Digestible Nutrient (TDN) 65%
7.5.7 Mineral Mixture

This is used as a feed supplement. It includes a mix of minerals (magnesium, iron,
sodium and salts). Mineral mixtures are good source of energy and increase the animal
productivity to produce more lean meat. Urea Molasses Blocks can also be used to
supplement the minerals.
19
7.5.8 Wheat Straw (Bhoosa or Turi)

Wheat straw is a major, typical, and very popular feed, it is always chaffed, and is the
main or even only major dry roughage used on almost all the farms. Traditional threshing
methods break the straw into short pieces. Modern mechanical threshers have been
designed to break the straw. In places where it is produced, it is available at Rs.1.0 per
kilo. In recent years baling units have been installed in central Punjab; bales are
transported to major cities, even to Gilgit, Skardu, and Chitral.
Table 7-8 Daily Feed Requirements for One Fattened Calves in 120 Days
Fattening Body Weight (Kgs.) Feed Requirement/ Day Daily Feed Cost (Rs.)
Days
1 100 4.5 50
30 123 5.5 61
60 147 6.6 73
90 171 7.7 85
120 195 8.8 97
Total Feed Cost 8,767
7.6 Vaccination & Medication

Vaccination & medication is required to prevent any disease out break in the animal herd.
Each new animal will be vaccinated before putting into the farm. Anthelmantics are used
to treat the animals for internal parasites where as spraying and dipping with some dis
infecting solution is used to eradicate external parasites. The total cost will be Rs.200 per
animal. Vaccines are produced at Veterinary Research Institute, Ghazi Road, Lahore. The
vaccines are provided to the Government Farms and Hospitals on payment. Farmers can
also obtain these vaccines on payment according to prescribed schedule from the
Institute. Technical guidance is also provided to the farmers. Farmers can have their
animals vaccinated from the field Veterinary Hospitals and Centres.
7.7 Calf Quarantine

A quarantine yard will be made for new animal handling, dipping, weighing, and
vaccination etc. The newly purchased animals will be dewormed and medicated with
proper and necessary vaccinations in this yard. Only the disease free animals will proceed
to the feedlot from the quarantine sheds. Quarantine arrangements will minimize the
chances of disease spread in the farm by ensuring that the new animals do not carry any
disease before they are taken to the main sheds. This seven-day period will also be
helpful in acclimatizing the new animals before they enter the main feedlot sheds. The
behavior of the animal will be recorded during these seven days and then its requirement
of feed will be calculated accordingly before sending it to the main feedlot.
7.8 Labor Requirement

For a calf-fattening farm, manpower is required for performing different animal
husbandry practices at the farm e.g. housing, feeding, watering, medication and care of
animals etc. One person can handle 25 calves easily for feeding and other management.
20
Five persons will be required to look after the fattening farm. The monthly salary of each
attendant is taken as Rs 6,500. A supervisor cum farm manager can be hired to supervise
all the farm activities. The supervisor with a B.Sc. (Honors) degree in Animal Husbandry
(AH) may be hired as a farm manager so that he can handle the farm practices,
administration & account matters at the dairy farm.
Table 7-9 Labor Requirements

Description No. Salary/month/Person Annual Salary
Farm Supervisor 1 20,000 240,000
Attendant 5 6,500 390,000
Total Labor Cost 6 630,000
8 FARM OUTPUT
8.1 Fattening Period

The fattening period is the period during which the animal puts on weight. These animals
are called fattened animals. Generally the period is 90-120 days. Following are the
desirable size and thickness of fattened animals. Large frame size with no.1 thickness is
desirable.
Figure 8-1 Frame size and Thickness Grades of Fattened Animals
8.2 Meat Composition

Like all meat, beef is also very high in protein. It also contains significant quantities of 'B'
vitamins and minerals such as sodium, potassium and phosphorus. Offal, particularly
liver, is rich in Vitamin B12, A, C and D, folic acid, iron and riboflavin. The moisture
content of lean meat is 75-79 % where as the crude protein content is 18-22 %. There is a
21
5-6.5 % mineral content in it. The percentage of lean meat, bone and other tissues of
carcasses of different breeds is given as under;
Table 8-1 Meat Composition of Different Breeds11

Parameters Sahiwal Dajal Cholistani Non- Cross Buffalo
Descript bred
Lean meat % 67.2 70.6 66.7 67.7 67.5 62.8
Bone % 16.3 15.2 16.8 17.3 16.3 17.6
Fat% 12.7 10.3 12.5 11.7 11.7 14.9
Other tissues % 3.4 3.7 3.7 4.1 4.3 4.6
Dressing % 55.5 58.0 56.5 53.6 54.4 51.6
8.3 Increase in weight gains

Average weight gains and feed efficiency values as such of different breeds of calves are
given as under:
Table 8-2 Values of Different Parameters for Different Breeds

Parameters Sahiwal Dajal Cholistani Non- Cross Buffalo
descript bred
Total weight 78.20 84.00 82.60 82.60 82.80 86.20
gain (kgs)
Daily weight 0.85 0.91 0.90 0.90 0.90 0.84
gain (kgs)
Feed efficiency 8.48 8.69 8.34 8.60 9.40 7.63
(as such basis)
8.4 Sale Price

Selling price is another limiting factor for the determination of the profitability of this
business. In Pakistan, the beef business is controlled by the informal sector. There are no
organized markets for the beef sale and purchase. The meat business is in the hands of a
community called butchers or Kassab.
After feeding animals in feedlots, only the premium price can make the operations
profitable. In this pre feasibility study, the animals will be sold on farm at Rs. 90 per Kg
live body weight. Only fetching good price can justify the costs incurred on rearing
animal in feed lots. The selling price of fattened animal will be higher than the other
animals because of its higher meat recovery and good quality. To avoid the risk of price
fluctuations, certain buy back agreements with institutional buyers will be a good
approach for the success of this business. Linking the project with the live animal export
or beef exports will assure good returns on the business. Near the urban market and
especially around Eid-ul-Azha, the selling price of beef is Rs.130-140 per kg live body
weight.
11
Livestock Production Research Institute, Bbahadurnagar, Okara
22
9 USEFUL TERMINOLOGY
-Cake
Mass resulting from the processing of seeds, which is rich in protein and is used as a
source of feed for livestock, e.g. cottonseed cake?
-Calf
Young animal of dairy origin between seven and 120 days of age.
-Compound feed
Any ground mixture of ingredients intended for feeding the animals. It includes a
concentrate mixture accordingly to formula.
-Dressing percent
Dressing percent is important because it reflects the amount of carcass in relation to
the animal’s live weight. Dressing percent is calculated by using the following
formula:
Dressing % = Hot Carcass Wt. x 100
Live Animal Wt.
Dressing percent is affected by the fill, finish, muscling, sex, type, and if the animal is
pregnant or not. Normal Range is 55-67% for young fattened calves.
-Fat Thickness
The primary estimate of fatness is fat thickness at the 12th rib. It is used to assess total
fat on the carcass. (Average: 0.5 inches)
-Feedstuffs
Any substance of nutritive and biological value used in production of compound feed.
-Home Mixed Feed
Feed prepared on farm of the owner.
-Live Weight
Cattle have a wider range of market weights than other species due to differences in
type and maturity.
-Ration
Amount of balance feed in 24 hours
-Weaning Calf
Young animal of between five and nine months coming from the cow-calf enterprise
and being reared by a suckling cow until weaning. The term is used to indicate a
difference of calves from dairy herds, referred to as ‘dairy calves’.
23
10 FINAICIAL ANALYSIS
10.1 Projected Income Statement

Const Year Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Year-10
Sales 7,858,620 10,085,229 12,678,574 15,689,735 19,176,343 23,203,375 27,844,049 33,180,826 39,306,516 46,325,537
COST OF GOODS SOLD
Raw Material 7,635,348 8,662,865 9,774,046 10,974,688 12,270,959 13,669,420 15,177,049 16,801,269 18,549,967 20,431,532
Payroll (Production Staff) 390,000 409,500 429,975 451,474 474,047 497,750 522,637 548,769 576,208 605,018
Direct Electricity 14,308 15739 17313 19044 20949 23044 25348 27883 30671 33738
Total 8,039,656 9,088,105 10,221,334 11,445,206 12,765,955 14,190,213 15,725,035 17,377,921 19,156,846 21,070,289
Gross Profit (181,036) 997,124 2,457,239 4,244,529 6,410,388 9,013,161 12,119,015 15,802,905 20,149,670 25,255,248
OPERATING EXPENSE
Payroll (Admin) 240,000 252,000 264,600 277,830 291,722 306,308 321,623 337,704 354,589 372,319
Administrative & Factory Overheads 15,717 20,170 25,357 31,379 38,353 46,407 55,688 66,362 78,613 92,651
Depreciation 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600
Mortality loss 36,000 44,100 52,920 62,512 72,930 84,235 96,487 109,754 124,106 139,620
Total 487,567 512,120 538,727 567,571 598,855 632,799 669,648 709,670 753,159 800,439
Operating Profit (668,604) 485,004 1,918,512 3,676,958 5,811,533 8,380,362 11,449,367 15,093,235 19,396,512 24,454,809
NON-OPERATING EXPENSE
Financial Charges on Running Finance 68,649 72,082 75,686 79,470 83,443 83,443 83,443 83,443 83,443 83,443
Land Lease 0 0 0 0 0 0 0 0 0 0
Building Rental 0 0 0 0 0 0 0 0 0 0
Total 68,649 72,082 75,686 79,470 83,443 83,443 83,443 83,443 83,443 83,443
PROFIT BEFORE TAX (737,253) 412,922 1,842,827 3,597,488 5,728,090 8,296,919 11,365,923 15,009,792 19,313,068 24,371,366
Tax 0 41,292 460,707 899,372 1,432,022 2,074,230 2,841,481 3,752,448 4,828,267 6,092,841
PROFIT AFTER TAX (737,253) 371,630 1,382,120 2,698,116 4,296,067 6,222,689 8,524,442 11,257,344 14,484,801 18,278,524
10.2
10.3
24
10.4 Projected Balance Sheet
Current Assets
Cash 0 (547,359) 14,075 1,585,908 4,473,645 8,959,240 15,371,362 24,085,142 35,531,725 50,205,666 68,673,229
Stocks and Inventory 493,169 517,827 543,718 570,904 599,449 629,422 660,893 693,938 728,634 765,066 0
Total 493,169 (29,532) 557,793 2,156,812 5,073,095 9,588,662 16,032,255 24,779,079 36,260,359 50,970,732 68,673,229
Gross Fixed Assets 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444 4,147,444
Less: Accumulated depreciation 0 166,600 333,200 499,800 666,400 833,000 999,600 1,166,200 1,332,800 1,499,400 1,666,000
Net Fixed Assets 4,147,444 3,980,844 3,814,244 3,647,644 3,481,044 3,314,444 3,147,844 2,981,244 2,814,644 2,648,044 2,481,444
Intangible Assets
Pre-operational Expenses 292,500 263,250 234,000 204,750 175,500 146,250 117,000 87,750 58,500 29,250 0
Total 292,500 263,250 234,000 204,750 175,500 146,250 117,000 87,750 58,500 29,250 0
Total Assets 4,933,113 4,214,562 4,606,038 6,009,207 8,729,639 13,049,357 19,297,100 27,848,074 39,133,503 53,648,026 71,154,674
Current Liabilities
Running Finance 493,169 517,827 543,718 570,904 599,449 629,422 660,893 693,938 728,634 765,066 0
Total 493,169 517,827 543,718 570,904 599,449 629,422 660,893 693,938 728,634 765,066 0
Long-term liabilities
Long-term Loan 1,973,388 1,952,878 1,932,060 1,910,930 1,889,482 1,867,714 1,867,714 1,867,714 1,867,714 1,867,714 1,867,714
Total 1,973,388 1,952,878 1,932,060 1,910,930 1,889,482 1,867,714 1,867,714 1,867,714 1,867,714 1,867,714 1,867,714
Equity
Paid-up Capital 2,466,556 2,466,556 2,466,556 2,466,556 2,466,556 2,466,556 2,466,556 2,466,556 2,466,556 2,466,556 2,466,556
Retained Earnings 0 (737,253) (365,622) 1,016,498 3,714,613 8,010,681 14,233,370 22,757,813 34,015,156 48,499,958 66,778,482
Total 2,466,556 1,729,304 2,100,934 3,483,054 6,181,170 10,477,237 16,699,927 25,224,369 36,481,713 50,966,514 69,245,039
Total Liabilities And Equity 4,933,113 4,214,562 4,606,038 6,009,207 8,729,639 13,049,357 19,297,100 27,848,074 39,133,503 53,648,026 71,154,674
25
10.5 Projected Cash flow Statement

Operating activities
Net profit (737,253) 371,630 1,382,120 2,698,116 4,296,067 6,222,689 8,524,442 11,257,344 14,484,801 18,278,524
Depreciation 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600 166,600
Stocks-RM (493,169) (24,658) (25,891) (27,186) (28,545) (29,972) (31,471) (33,045) (34,697) (36,432) 765,066
Cash provided by operations (493,169) (566,061) 541,589 1,550,784 2,865,421 4,461,945 6,387,068 8,687,248 11,418,497 14,644,220 19,239,441
Financing activities
Long term debt principal repayment (20,510) (20,818) (21,130) (21,447) (21,769) 0 0 0 0 0
Addition to long term debt 1,973,388
Addition to running finance 493,169 24,658 25,891 27,186 28,545 29,972 31,471 33,045 34,697 36,432 (765,066)
Issuance of share 2,466,556
Cash provided by/ (used for) financing activities 4,933,113 18,702 19,845 21,049 22,316 23,650 25,054 26,531 28,086 29,722 (771,877)
Total 4,439,944 (547,359) 561,434 1,571,833 2,887,737 4,485,595 6,412,122 8,713,779 11,446,583 14,673,941 18,467,563
Investing activities
Capital expenditure (4,439,944) 0
Cash (used for)/ provided by investing activities (4,439,944)
Net Cash 0 (547,359) 561,434 1,571,833 2,887,737 4,485,595 6,412,122 8,713,779 11,446,583 14,673,941 18,467,563
26
11 KEY ASSUMPTIONS
Table 11-1: Financial Assumptions

Project life (years) 10
Debt Equity ratio 50:50
Interest rate on short term debt 14%
Interest rate on long term debt 18%
Debt tenure (years) 10
Debt payments per year 12
Table 11-2: Revenue Assumptions

Annual Production (calves) 450
Number of Calves per herd 150
Number of production herds per year 3
Capacity Utilization 100%
Live body weight at purchase time (kg) 100
Average daily weight gain 0.8
Feeding days 120
Selling price (Rs/ kg live body weight) 90
Table 11-3: Expense Assumptions

Purchase price (Rs/kg live body weight) 80
Mortality Rate 1%
Vaccination/ Medication cost (per calf) 200
Open Space per animal (Sq. ft) 60
Total Mixed Ration requirement (% of live 4.5
bodyweight)
Price of Total Mixed Ration (Rs. Per Kg) 11
Table 11-4: Economy-Related Assumptions

Electricity growth rate 10%
Wage growth rate 5%
Table 11-5: Cashflow Assumptions

Raw Material Inventory (Days) 30
27
12 ANNEXURE 1
Table 12-1 Vital Statistics of Cattle & Buffaloes

Parameters
Rectal Temperature 101.5 degrees F (38.5 degree C)
Heart Rate 60-70 beats/minute
Respiratory Rate 30 breaths/minute
Table 12-2 Common Diseases of Livestock

Infectious Diseases
Disease Symptoms Preventive measures Medication
Anthrax Fever, grinding of teeth, Vaccination in February. Antibiotic therapy

release of blackish blood from Dead animal should be
natural openings, which buried in 6 feet deep pit
doesn’t clot. without any postmortem.
Foot and mouth Excessive salivation, Pustules FMD vaccine after every FMD Serum, cleaning
Disease on lips, tongue and between 4 months especially of pustules by
the cleft of hooves, staggering before the onset of rainy potassium
gait weakness due to inability season. permanganate solution,
of ingestion. cleaning of hooves by
phenyl solution
Non Contagious Diseases
Indigestion Loss of appetite, watering 5 grams Stomach
from mouth, stiffening of powder (mixed in feed
rumen, bloating, severe pain in or dissolved in water)
stomach twice a day
Bloating Difficult breathing due to air Avoid grazing early in Mustard (Sarson) oil &
(air trapped in trapped in stomach, animal morning especially on turpentine oil mixed
stomach) may die due to suffocation fodder with dewdrops. with chloral hydrate
mixed in drinking
water.
Dysentery Diarrhea, smelling feces, Avoid excessive intake of Calcium carbonate,
weakness milk especially in magnesium carbonate
newborn kids. and bismuth carbonate
Avoid wheat straw or stiff dissolved in water OR
feed during dysentery entox tablets OR
nimkol with
sulfademadine (4-5 cc).
Offer rice groule to
affected animals
Internal Parasites
Liver flukes Weakness, off feed, jaundice No grazing around Zanil or Carbon tetra
in severe cases, swelling on stagnant water chloride OR nilzan
joints plus, oral
administration
28
Round Worms Weakness, diarrhea, anemia, Fecal samples should be Systamax or rental, oral
hair fall from body coat examined for administration
roundworms.
Ectoparasites
Flies/ ticks/ Irritation on body coat, Cleanliness in sheds, Apply sulfur oil,
maggots sometimes holes in skin, loss Spray of DDT in shed tetmasol or ecoflax on
of hair from body coat wounds and dipping of
whole herd with a 0.15
% solution of negavan.
Table 12-3 Vaccination Schedule

Name of Disease Name of Qty Time for Duration Preventive
Vaccine administered Vaccination of Measures
(ml) Immunity
Foot & Mouth Foot & Mouth 5 ml Start of spring 4 months Should be given 4
Disease Vaccine months prior to the
(FMD) expected symptoms
of disease.
Anthrax Anthrax spore 0.5 ml March-April One year Every year

vaccine or monsoon vaccination should
season be done every year.
Rabies Anti rabies 10 ml According to One year Vaccine should be
(Bowla Pun) vaccine need used right after
preparation.
Hemorrhagic HS vaccine 5-10 ml Start of Spring 4 months Should be given 4
Septicemia (HS) months prior to the
expected symptoms
of disease.
Table 12-4 List of vaccines and their prices at Veterinary Research Institute, Ghazi
Road, Lahore.
Vaccines/Sera/Antigens Packing With Bottles Price
Haemorrhagic Septicaemia Bottle of 300 ml (60 doses) Rs.90.00

Black Quarter Vaccine Bottle of 300 ml (60 doses) Rs.80.00
Enterotoxaemia Bottle of 300 ml (100 doses) Rs.67.00
Foot and Mouth Vaccine Bottle of 320 ml (64 doses) Rs.484.00
Foot and Mouth Serum Bottle of 300 ml (6 doses) Rs.380.00
Anti Rinderpest Serum Bottle of 300 ml (20 doses) Rs.374.00
Anthrax Spore Vaccine Bottle of 50 ml (100 doses) Rs.70.00
Rinderpest Vaccine (TCRV/CTV) Ampoule of 100 doses Rs.21.00
Anti Rabies Vaccine 440 cc bottle for Cow/Horse Rs.840.00
For further inquiry contact:
Director General (Research), Veterinary Research Institute, Ghazi Road, Lahore.
(Ph) 042-9220143
29
13 ANNEXURE 3
Table 13-1 Disposal of Death

Sr. no Calf No. Date of purchase Sex Mode Cost Remarks
1.
2.
Table 13-2 Details of Purchase / Sale of product/byproduct (Feed and fodder's,

medicines, ingredients, animal, etc.)
Sr. Particulars Quantity Per unit rate Total cost Remarks
no
Table 13-3 Calf Disposal

Sr. no Wt. Of calf Disposal Date Remarks
Table 13-4 Herd Health Register

Date Animal Symptoms Diagnosis Treatment Detail of Cost of treatment
vaccination/
medication
Table 13-5 Monthly Expenses & Income Report

Sr. no Particulars Quantity Rate (per unit) Total cost
--
30
14 ANNEXURE 4
14.1 Different Breeds of Buffaloes and Cows
Kundi Nili Ravi
Lohani Red Sindhi Bull Sahiwal Cow
Rojhan Dajal Tharparker
31

SMEDA Calf Fattening Farm

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SMEDA Calf Fattening Farm

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Pre-Feasibility Study

CALF FATTENING FARM

Small and Medium Enterprise Development Authority

REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE REGIONAL OFFICE

2 PURPOSE OF THE DOCUMENT.....................................................................................................4

3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT ..........................5

8.4 SALE PRICE ...................................................................................................................................22

2 PURPOSE OF THE DOCUMENT

3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR

4.1 Opportunity Rationale

Table 4-1: Population of livestock (million)1

Table 4-2: Production of Livestock Products2

1 Economic Survey of Pakistan, 2007-08

Table 4-3 Livestock (Population Growth) 4 (Numbers in Millions)

4.2 Market Entry Timing

4.3 Proposed Business Legal Status

4.4 Proposed Capacity

4.5 Project Investment

Table 4-4 Project Costs

Table 4-5 Project Financing

Table 4-6 Project Economics

4.6 Proposed Location

4.7 Key Success Factors/Practical Tips for Success

5 SECTOR & INDUSTRY ANALYSIS

5.1 Major Players

5.2 Hubs of Calf Fattening Farming

6.1 Sector Characteristics

6.2 Market Potential

Figure 6-1: Market Value of Dairy & Livestock in Pakistan

(Source: Agricultural Statistics of Pakistan, 2003-04)

6.3 Target Customers

7.1.1 Land Requirement

Table 7-1: Land Requirements

7.1.2 Land Lease

7.1.3 Suitable Locations

7.1.4 Herd Mix

7.2 Animal Markets

7.3 Animal Housing

Figure 7-1 Animal Housing Layout

Table 7-2 Total Infrastructure Cost

7.4 Farm Machinery

Table 7-3 Farm Equipment

7.5.1 Ration for Calf Fattening

Table 7-4 Average Production Parameters and Ranges7

7.5.2 Green Fodder for Calves

Table 7-5 Types of Dry & Green roughage9

7.5.3 Fodder Production Economics

7.5.4 Daily Fodder Requirement

7.5.5 Daily Total Mixed Ration Requirement

7.5.6 Total Mixed Ration (TMR) Formula for calves:

Table 7-7 Details of Raw Material

Cottonseed cake/ Maize grain 9%

7.5.7 Mineral Mixture

7.5.8 Wheat Straw (Bhoosa or Turi)

7.6 Vaccination & Medication

7.7 Calf Quarantine

7.8 Labor Requirement

Table 7-9 Labor Requirements

8.1 Fattening Period

Figure 8-1 Frame size and Thickness Grades of Fattened Animals

8.2 Meat Composition

Table 8-1 Meat Composition of Different Breeds11

8.3 Increase in weight gains