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Tuesday, July 5, 2016

Small Scale Poultry Business Plan in Nigeria


There are two types of poultry businesses in Nigeria namely; backyard poultry and commercial poultry. The backyard poultry is usually a small sized poultry business which most times is run from residences and have a capacity for less than 1,000 birds which are reared for either meat or eggs. Most operators of backyard poultry business in Nigeria run them as an extra source of income for the family hence it’s not surprising to see civil servants and housewives running this business.

The commercial poultry on the other hand is run from farm houses owned by business enterprises engaged in rearing chickens for meat or eggs. Unlike the backyard poultry, commercial poultries need huge capital outlay, technical expertise and complex marketing strategies. It’s not just enough to have birds for sale but getting those birds to the market on time is the real deal with commercial poultries. The faster the sales they make, the more profitable they can become.
 
Market Opportunities for poultry products in Nigeria
Nigerians consume about 1.2 million tons of poultry meat annually according to Poultry Association of Nigeria whereas all the poultry farms in Nigeria produce 300,000 tons per annum leaving the outstanding 900,000 tons to smuggling since officially there is a ban on importation of poultry products in Nigeria since 2004. 

Secondly, egg production poultry is more lucrative than meat production hence why Nigerian poultry farms generate 650,000 tons of eggs per annum. On average it costs N15 per day to feed an egg laying fowl but that fowl which will likely lay between 180 to 288 eggs per annum can fetch you between N4,500 to N7,200 per annum for each bird. 

The average daily cost of feeding a meat producing fowl is about N13 per day and they can be sold off within 22 weeks after being purchased as day old chicks for between N1,200 and N2,200 depending on their size and breed. The poultry business can also involve large scale hatchery i.e production of day old chicks in large quantities for resale to poultry farms. 

Poultry Industry Challenges in Nigeria
There are many challenges poultry businesses face in Nigeria regardless
  • Inadequate finance to fund expansion for small poultries due to risky and unusual nature of poultry business which commercial and micro finance banks are not eager to lend to. 
  • Disease epidemics are a recurring theme in this business with bird flu resurfacing in February 2016. This has led to loss of birds by unfortunate poultry farms although government sometimes pays compensation 
  • Bird feeds are very expensive 
  • Transportation and logistics are major operating challenges for poultry farms in getting their products to their target market 
  • Presence of many middlemen and competition leads to low profit margins for poultry farmers 
  • Smuggling and illegal importation of poultry meat mostly from Brazil which is much cheaper than locally produced poultry products leads to reduced demand from local consumers 
Financial Projections on Poultry Farming Business
  • Total sales for egg laying poultry of 1,000 birds is N8,640,000 and N6,000,000
  • On average annual net profit per egg-layer is between N1,200 and N2,400 per annum multiplied by total number of birds = N1,200,000 to N2,400,000 for 1,000 birds
  • On average net profit per broiler is between N100 and N400 per quarter multiplied by total number of birds = N1,000,000 to N1,600,000 for 4,000 birds reared per annum
  • Return on investment is between 10 to 40% per annum, that means if you invest N1 million into this business you should expect between N100,000 to N400,000 depending on the location of your poultry and proximity to your customers and other operating costs
How Much does it cost to start a poultry business in Nigeria?
The assumption for this startup cost is based on setting up in a residential part of a town or even a village. The second assumption is that the profits will be ploughed back into the business to fund expansion

  • Second hand Poultry bird Cages – N96,000
  • Poultry House/shed – 250,000
  • Animal Feeds – N120,000
  • 100 Birds – N120,000
  • Rent on 1 acre of Land – N50,000
  • Contingency – N150,000
  • Total – N786,000
Looking to start a small to medium scale poultry farm in Nigeria and need a bankable business plan? Give me a call: 0803 206 4106  or email me: paulonwueme@gmail.com to get one professionally written for you.

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