16-07-2014, 03:39 PM
CATTLE FEED MANUFACTURING PLANT
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MARKET STUDY
1. Past Supply and Present Demand
According to the resource potential assessment study of SNNPRS, natural grazing land is the main source of feed in the region which supply crude proteins and metabolize energy for maintenance and production requirement of ruminates. However, most of the forage resources are not consumable as the dry period advanced due to increase in lignin in the cell wall. As a result livestock reducing their body weight and condition and exposed to economically important diseases in most part of the year.
Although the amount and quality of feed resources is the determining factor for the condition and productivity of animals, the use of improved feed is virtually negligible in the region. Hence, the production of livestock products such as milk, meat and other livestock products has remained very low.
Currently, there are few animal feed processing plants in the country which are concentrated around Addis Ababa. The average annual local production of animal feed during the period 2000 – 2005 is about 5,000 tonnes. Since transporting animal feed to far places is not economical, the demand estimate is worked out based on the existing livestock population of the region.
According to the SNNPRS Basic Socio-Economic and Demographic Information (1997 EC), there are 8831.45 thousand cattle in the region. According to the information gathered with respect to animal feed, the recommended average consumption is 2 kg/head a day. As per the recommended average consumption, the total amount of animal feed required for the region's cattle population is 6.45 million tonnes ( 2 kg/head day X 8.83 million total cattle X 365 day/years).
Considering conditional limiting factor such as product adaptability and awareness and income of farmers and the like only 10% of the cattle population are assumed to be fed with industrially processed cattle feed initially. Accordingly, the current demand for cattle feed in the region is estimated at 644,696 tonnes.
Plant Capacity
In this study, a plant with annual capacity of 15,000 tonnes is envisaged considering the market study and minimum economies of scale. The plant will operate a single shift of 8 hours a day, and 300 days a year.
2. Production Programme
The plant will start operation at 85% of its rated capacity in the first year. It will then build up its production capacity to 95% and 100% in the second and third year, respectively.
The low production level at the initial stage is to develop substantial market outlets for the product. Machinery operators will also get enough time to develop the required skills and experience.
RAW & AUXILARY MATERIALS
The basic raw materials are: oil cake, molasses, and bone meal, bran of cereals, maize, salt and limestone. Most of the raw materials, except molasses which can be obtained from the existing sugar factories in the country, are obtained in the region. Cereals like maize are grown widely in type with disparities in volume of production. Hence, Sidama, KAT, Alaba, Hadya Bench Maji, Derashe, D.Omo, GamoGofa, Wolayta, Basketo, Silte, Gurage, Yem, Konta and Kaffa have been found for the best potentials among which the first five rank superior. These are followed by Gedeo, Amaro, Burji, and Basketo as medium producers.
. Land, Building and Civil Works
The total land area of the plant including the open space for future expansion is 1,000 m2. The built-up area required by the plant is estimated at 600 m2. The total cost of civil works and construction at the rate of Birr 2300 per m2 is estimated at Birr 1, 380, 000. The total cost of land lease on the basis of lease value of Birr 0.1 per m2 for a period of 80 years is estimated at Birr 8,000. The total cost of land, building and civil works is estimated at Birr 1.388 million.
3. Proposed Location
The plant is best located where there is a conducive environment for commercial animal rearing and inputs for the plant are available in the near vicinity. Considering the above mentioned factors, Omosheleko woreda, Mudula town is proposed to be an ideal location for the envisaged plant.
MANPOWER REQUIREMENT
The manpower requirement of the plant will be 33 persons, out of which 18 will be engaged in production activities and the remaining 19 will be involved in administrative activities. Table 6.1 shows the details of manpower requirement of the plant and estimated annual labour cost including fringe benefits. The total annual cost of manpower is estimated at Birr 273,600.
ECONOMIC BENEFITS
The project can create employment for 33 persons. In addition to supply of the domestic needs, the project will generate Birr 8.11 million in terms of tax revenue.