2.

COMMODITY DESCRIPTION

2.1. Poultry

Poultry: Poultry refer to all domestic birds, kept for production of meat and egg for human
consumption. It includes domestic fowl (chicken), turkey, ducks, ostriches and others. The
term can also refer to domesticated fowl reared for their meat or for their eggs or feathers.
Poultry comes from the French/Norman word, poullet; itself derived from the Latin word
Pullus, which means small animal.

2.2. Classification of the product

2.2.1. Chicken Eggs

Egg is the hard-shelled reproductive body produced by a bird and especially by the common
domestic chicken. Eggs are very rich in protein, fat and it is the only foods that contain
naturally occurring vitamin D and excellent food for humans

Eggs can be classified in to two:

 Hatching e g g s : are eggs that are first laid from the parent stock and then collected
to the hatchery. Candling will be undertaken so that the non-fertile eggs can be separated
from the fertile eggs. The hatchery is in short a place that specializes in artificially
incubating eggs to produce chicks. Hence these types of eggs can be called as fertile egg.
 Consumer Eggs: on the other hand, are eggs that are laid for the purpose of
the direct consumption or for the market. They are typically called table eggs. Table eggs
are intended only for commercial purpose and the type of chicken that lay eggs is
termed as layer.
2.2.2. Chicken meat

 Chicken Meat from Broilers: Broilers are specialized breeds that are reared or
raised for meat production and have a larger body frame and weight than
layers/dual. Chicken meats or broilers are not raised in cages, rather they are raised in
floor using litter or bedding such as wood shavings, peanut shells and rice hulls, indoors in
climate-controlled housing. Under modern farming methods, meat chickens reared indoors
reach slaughter weight at 5 to
9 weeks of age depending on breed, level of feeding and management. The meatiest
parts of a bird are the flight muscles on its chest known as breast meat, and the walking
muscles on the first and second segments of its legs, called the thigh and drumstick,
respectively.
 Chicken Meat from Egg Laying Hens: In commercial egg production, birds are
about 18 months old when they are replaced by new and young stock. It takes close to six
months for a female chicken to mature sexually and start laying eggs. Then, they are
kept for 12 to 14 months of egg production. After that their economic value declines
rapidly. So, they are disposed for meat production when they are around 18 to 20 months
old.
 Chicken meat from dual purpose hens: Some breeds of chicken are egg-laying
breeds and at the same time are meatier. Such breeds of chicken are known as dual-
purpose breeds. Meat produced from dual purpose chicken can be one source. Dual
purpose chicken lay brown eggs and usually have brown feathers, but this can vary per
breed.
2.2.3. Pullet and Commercial DOCs

Pullets refer to younger female chicks below the age of one year while DOCs (day old
chicks) are chicks of one day old. Some firms are specialized in selling pullet to the small
holder farmers so that they rear or raise them until they are marketed in their locality.
Even though it is rare, there is also a scheme of selling DOCs and fertilized eggs for in the
same way. The firms or individuals that purchase table eggs are expected to have the hatching
facility and the firms or individuals that buy DOCs to have the brooding facility. These all
implies firms have the options of generating revenue through these different alternatives.
2.2.4. Parent Stocks Vs Commercial Stocks

Most of the commercial poultry farms in Ethiopia start the production of poultry via the
importation of parent stock of day old chicks (DOCs), from breed of grandparent stocks.

Parent breeders are hatched from the fertile eggs from grandparent stocks and, after arrival
from the hatchery at one day-old, are reared, housed and managed similarly to great
grandparent and grandparent stocks. Distinct male and female lines of parents are crossed to
produce the next generation.

Parent birds are kept until approximately 64 weeks, and produce about 160 fertile eggs.
This third generation of breeders produces chicken stocks whose meat is processed for human
consumption (the commercial broiler chicken) that lay eggs up to 300 per year. Surplus male
breeders and birds of breeding lines not needed for the next generation (referred to as
‘off- sexes’), are either culled upon hatching or grown out for meat. Broilers or layers are the
birds at the final stage of the multiplication process and they are the ones that to be sold
to the consumers.

Commercial stocks are produced after the eggs that are laid from the parent stock are
hatched and reared to get layer or broilers, which means at the commercial stage, the
multiplication process ceases or no further hatching of eggs is made or the broilers at this
stage have not capacity to be used for further multiplication stage.
 3. RAW MATERIAL DATA

3.1. Major Raw Materials

 Day Old Chicks(DOCs)

 Poultry Feed

- If the farms are an integrated ones with feed processing plants, required
crops and ingredients for formulation in the ration will be recruited from the market
unless and other wise concentrated feed will be purchased from feed processing plants.
 Vaccines or disinfectants

3.2. Auxiliary Inputs

• Water

• Different Spices (for chicken meat processing only)

• Poly bags/plastic film and Labeling - as packaging materials.

3.3. Supply of Major Raw Materials

3.3.1. Supply of DOCs

Table 3.1. Import of DOCs, Chicks for Breeding in Kg (HS Code: 01059910)

2017 2018 2019 2020 2021

Imported Imported Imported
Exporters Imported quantity, Imported quantity,
quantity, quantity, quantity,
Kilograms Kilograms
Kilograms Kilograms Kilograms
World 13559 19872 20755 20113 23587
Brazil 5968 7872 6471 6903 10317
United Arab
3696
Emirates
Netherlands 3104 3364 5099 2616 3423

Belgium 3804 7406 4141 4796 2412

Hungary 252 2554 2216

Spain 776 624 324 1060

France 3038 2920 264

Kenya 200

Niger 164

Portugal 228

Germany 519
United
226 1095
Kingdom
Zambia 35

Source: ITC
 3.3.2. Domestic Supply of Poultry Feed

Required Poultry feed can be obtained from two sources, i.e., either from their own feed
processing plant (first and most recommended source) or can be bought from other animal feed
processing firms as a concentrate one.

Table 3. 2. Installed capacity of concentrated animal feed factories (‘tons)

Annual Installed Production

Sr. No. Name of factories
Capacity (ton/ annum or hour)
1 Alema Koudijs P.L.C 90,000
2 Akaki Animal Feed P.L.C 30,000
3 Kality Animal Feed Enterprise 19,200
4 Sidama Elto Union 1,016
5 Adama Miten Feed Factory 742
6 FHB Agro industry 896
7 H.B.A General Business 4,800
8 Addis Alem Ag. Development PLC 9,600
9 Ashraf 6.25 ton/ hr
10 Fantu and Family 0.5 ton/ hr
11 Ada’aa Dairy Cooperative 1.5 ton/ hr
Almaz Poultry and Feed Processing
12 Enterprise 0.5 ton/ hr
13 Ethio-Feed PLC 2 ton/ hr
14 BSLF Animal Feed Processing plant 0.5 ton/ hr
Source: Animal Feed Commodity Study, August, 2017 and previous poultry farm and processing raw data
Although the team asked all concerned organs, we could not get installed, actual capacity and even
updated list of current concentrated animal feed processing companies
Disaggregated poultry feed production data is not there in CSA reports. Hence, it is so difficult to
portray its production trend based on historical data analysis.
3.3.3. Supply of Vaccines/ Disinfectants

Vaccines for poultry is crucial as the integral part of the flock need to be vaccinate with
stipulated day/growth stage as revealed in the technical data of the document. Most of these
vaccines are imported from abroad and some of medicines and vaccines are available at
Debrezeit, National veterinary Institute. Vaccines such as rebies can be imported by the
institute too.

3.4. Demand of Major Raw Materials

• DOCs are majorly demanded by existing and incumbent poultry farms.

3.5. Availability of Water and Spices

Most sampled poultry farms have their own bore hole as a water source that can satisfy
anticipated water requirement. Different types of spices with meager quantity can be used on
chicken meat processing which could be easily found in domestic market.

3.6. Marketing Channel and Arrangement of the Raw Materials

One of the raw materials that are used in the poultry farming is the DOCs/parent stock. It is
imported from the known breeder elsewhere in the world. But the importation process needs
pragmatic knowledge on some technical aspects which include permission from the Ministry
of Agriculture, and ordering the breeder company before some days/months. The purchase
of the raw material is usually on cash basis and mostly the transportation of the chicken is
through airline.

There are two ways of recruiting poultry feed. The first one is when the farm directly
purchased the processed feed from the feed processors and the transportation cost is covered
by the buyer. On the other hand, a farm may have its own processing plant so that they
purchased the required raw material from different sources and mix it by their own processing
machines at their farms.

3.7. Price Trend of Major Raw Materials

The current price of major raw materials is presented on the parameter part of the document
though historical data was not obtained.
 4. CONSTRAINTS, RISKS, OPPORTUNITIES and SUCCESS FACTORS

6.1. Constraints

 Shortage of foreign currency

 Raw material price fluctuation

 Vaccine and Medication Shortage

 Lack of sufficient infrastructures and utilities like water and power,
 Poor understanding of organic production concepts by local officials and the community at large,
 Inability getting day old chicks for beginning at the area,
 Challenges of getting day old chicks for beginning at least first production cycle,
 Lack of scientifically prepared poultry feeds in the local markets,
 Problems of getting standard poultry equipment’s like feeders, waters, lighters/ heater, DOC boxer, brooding
equipment etc

6.2. Risks Factors

Poultry farming has some challenges that need to be attended to with vigor. Below are some of the
common challenges that are faced by poultry farmers:

Death of chickens: In poultry, one or many chickens usually die because of their fragile nature and the
weather they are living in. Some factors such as heat and overcrowding causing that death can be
controllable.
Diseases: Pneumonia and other minor diseases are among problems faced by poultry farmers, but this
problem can be solved by seeking a veterinary doctor.
6.3. Opportunities
 Domestically growing market

 Expansion and growth registered in the possible end-users

 Government support to ward sub-sector development

 Like in Ethiopia, there are many opportunities in poultry industry. The first opportunity is that
there is small number of large scale poultry farmers, and the other ones are small scale business
farmers. So this will make businessmen to vertically integrate in the poultry business.

6.4. Success Factor

 Professional management

 Integration of poultry farm with meat processing

 Availability of quality product at reasonable price

 Diversification of product and its market

 The existence of marketing strategy to cope up with the market

5. PARAMETERS, TECHNICAL COEFFICIENTS AND ASSUMPTIONS

7.1. Basic assumptions

 Working days per annum............................................300

 Number of shift in a day..............................................2 (for the processing)

 Working hours per shift................................................8

*The farm is continual and will be in operation more days in a year.

7.2. Revenue

Table 7. 1. Current farm/factory gate price of poultry products

Price before VAT/ Unit

Sr. No. Description UoM
(in birr)
Main
Products
1 Fertile egg pcs 11
2 Pullet pcs 115
3 Table egg pcs 3.62
4 pullet egg pcs 3
5 Chicken layer pcs 121
6 Spent hen pcs 120
7 Chicken meat (arosto) pcs 107.5
8 Chicken Mortodella kg 185
9 Chicken boiled fillet kg 215
10 Chicken fillet kg 192.61
11 Chicken ham kg 240
12 Chicken burger kg 185
13 Chicken croquette kg 210
14 Chicken meat boll kg 237
15 Chicken nuggets kg 230
16 Chicken shish kebab kg 230
17 Whole Chicken marinated kg 120
18 Chicken Hot Dog kg 190
19 Chicken cubes kg 220
20 Chicken leg marinate kg 138.33
21 Chicken wing marinate kg 111.17
 22 Chicken breast 198
By products
1 litter or manure of layer 117.39
M3

2 litter or manure of broiler M3

147.83

Source: Alema farms PLC, Elfora Agro Industries PLC, Addis Chicken Processing
PLC Note:
• Mortality rate in normal circumstance is estimated to be on average 8% from the total stock.

• Loss Percentage for Farm Egg Production to Hatched Day-Old-Chick

 Egg production and storage till before egg setting: 1 to 2 %. This includes over all
abnormality (extreme egg size, irregular shape, dirty cannot be cleaned, breakage
and the like)
 Egg incubation to hatching (candling): 13 to 15% loss for beginners and 10% to
established farms.
 Hatchery loss is 5% or Hatchability is 95% or more

 Health day old chicken production rate from hatched DOC is 98% or there will be 2%
loss due to unhealthy and deformed DOC

7.3. Investment Costs

7.3.1. Parent stock
Initial parent stocks of DOCs are considered as an investment cost
Table 7. 2. Purchase price of DOCs

Sr. No. Description UoM Price before VAT/Unit Purchase

(in birr) Source
1 Parent day old chicken pcs 390.00 Import
 2 DOCs Broiler pcs 56.52 Domestic
3 DOCS layers pcs 72.17 Domestic
Source: Alema Farms PLC,
Note:
• DOCs used as inputs for the poultry farmers which start from day old chicken and
outputs for those which imports parent stock and hatching the DOCs
• The ratio of male to female chicken is 1:10 or the male shares10% from total stock.
7.3.2. Machinery and Equipment

List of Machinery and equipments required for poultry farming, slaughtering and
processing is presented on the technical part of this document.

7.3.3. Vehicles

Table 7. 3. Lists of vehicles

Sr. No. Type of vehicle Purpose

1. Automobile For administrative works

2. Service Bus For employees service

3. Light duty truck For raw material transportation

4. Refrigerated van For product transportation

Remark: The number of vehicles determine based on the workload and plant size

7.4. Operational Cost

7.4.1. Poultry Feed

Feed requirement of poultry farm can be satisfied from two options:

Option 1: Supply from own feed processing firm

(recommended) Option 2: Purchase from other feed producing
factories
Accordingly, the respective promoter should select one of from the two options given
above. Table 7. 4. Price of Ingredients for Feed Processing (Own feed processing)
 Price before VAT/Unit
Description UoM
(in Birr)
Maize/corn Quintal
Soybean "
Furushka "
Salt "
Fagullo (peanut cake) "
Fish mail "
Meat boon "
Molasses "
Mineral and vitamin premix "
Ground Cake (peanut) "
Sun flower Cake "
Limestone "
Meals (fish, meat, blood, bone) "

Source: Alema Kaudijs Feed PLC

Table 7. 5. Price of feed from feed processing factories (Option no. 2)

Price before VAT/Unit

Type of feed UoM
(in birr)
Chicken Starter (Crumble) Quintal
Broiler Grower (Pellet) "
Broiler Finisher (Pellet) "
Rearing "
Pullet "
Layer Phase 1 "
Layer Phase 2 "
Layer Parent Phase 1 "
Layer Parent Phase 2 "
Broiler Breeder "
Layer Concentrate 25% "
Layer Breeder Concentrate 25 % "

Source: Alema Kaudijs Feed PLC

Table 7. 6. Feed Consumption Rate per Birds (for layers)

Age(weeks) Type of feed Consumption per birds per day

0-3 Chicken starter( crumble) 400 g
4-8 Rearing feeds 1.5 kg
9-5% lay Pullet Developer Feed 4.5 kg
5% lay -45 weeks Layer Phase 1 2.2 kg
45- up to end Layer Phase 2 2.8 kg
Source: Alema Kaudijs Feed PLC
Note: 5% lay means out of the total birds 5% of the birds starts laying egg.

Table 7. 7. Feed Consumption Rate per Birds (for Broiler)

 Age(days) Type of feed Consumption per birds per day
0-10 days Chicken Starter Crumble 250 g
11-30 days Broiler Grower Crumble 2 kg
30 days -slaughter Broiler Finisher Feed 2 kg
 Source: Alema Kaudijs Feed PLC

Feed formulation ratio

Feed formulation ratio can vary depending on many factors such as the price of
ingredients/raw materials, age of chickens, purpose of feeding and quality of suppliers feed, etc.
Table 7. 8. Ration formulation for layer

Ratio of feed ingredients (in kg) by

Feed chicken type
Ingredients Broiler Broiler
Layer Grower Chicks (starter) (finisher)

Maize 47 55 43 47 54

Nug cake 10.55 15 15.6 20 13

Wheat middling 16 13.6 14 19 17

Soya meal cake 15 12 23 7.5 10

Premix 0.5 0.5 0.5 0.5 0.5

Lysine 0.3 0.3 0.25 0.7 0.4

Methionine 0.15 0.1 0.15 0.3 0.2

Limestone 7.0 1.0 1.0 0.4 0.2

Bone and meal 3.0 2.0 2.0 4.3 4.3

Salt 0.5 0.5 0.5 0.3 0.4

Tota 100 100 100 100 100

 l
Source: Guide to chicken health and management in Ethiopia
 7.4.2. Vaccine and disinfectant
Table 7. 9. Price of vaccine and
disinfectants

Description Unit Price per unit (in birr)

Vaccines and
Medicines
Doses 1.1
Newcastle/asota
Doses 1.00
Newcastle, HB1
Doses 1.1
Newcastle, Therm
Doses 1.60
Estable, I2
Doses 0.55
Gumburo
Doses 0.55
Fowl Pox
Doses 0.72
Fowl Typhoid

Disinfectants
Potassium Permanganate Liters 4900
Formalin Liters 490
Source: Alema Farms PLC, Elfora Agro Industries PLC,

- Beak dipping vaccination (150 to 200 ml per 1000 chicks)

- Potassium Permanganate spray at poultry house gate and the consumption is estimated
to be 1L/each gate of chickens
7.4.3. Packing materials
Table 7. 10. Price of packing
materials

Description and Size UoM Price/unit (in birr)

 Plastic film( meat packing) 30*40 cm Kg 233.885
10*10 cm " NA
Paper try (egg holding) Pcs 7.75

PP bag (for feed packing ) 50kg Pcs 37.5

Source: Alema farms PLC and elfora agro industries

Note:

- A kg of plastic film used to pack 120 slaughtered hens.

- For the cost of spices please use Performa invoices
 7.4.4. Uniform & clothing

Table 7. 11. Price of uniform & clothing

Sr. No. Type of uniform/cloth UOM Price per unit in

Birr
1. Tuta Pcs 1000.00
2. Rain coat Pcs 652.00
3. Cape Pcs 35.54
4. Mouth cover Pcs 57.00
Source: Alema farms

7.4.5. Annual consumption of utilities

This data are taken from a poultry farm as an indicator of major consumption of utilities and
may vary depending on size of farm/processing, purpose of establishment or other factors.
• Water----------------------is determined based on the specification of employed machinery.

• Per-diem------------------- 1.2% of sales

• Stationary expense------- 0.11% of sales

• Telephone and fax---------- 0.09% of sales

• Electricity ----------------- Determined in association with the

capacity of machineries/equipment

Fuel, oil, & grease consumption of vehicles

• Fuel consumption for Automobile: 13-15 Km per litter

• Fuel consumption for

Truck: Table 7. 12. Fuel
 consumption

Gross Distance Fuel Fuel Consumption

Vehicle travelled in one Consumption per Km for each ton AVERAGE
Pay Load
lit/km/ton
7.5 TON 3.124 ton 5.840 km/lit 0.171 lit/km 0.055 lit/km/ton
12 TON 6.311 ton 5.500 km/lit 0.182 lit/km 0.029 lit/km/ton
0.035
18 TON 10.198 ton 4.540 km/lit 0.220 lit/km 0.022 lit/km/ton
• Fuel consumption for Service Vehicle: 0.013559 lit/seat/km.

• The cost of oil and grease: is 2% of fuel cost

 7.4.6. Insurance

Table 7.13.Major insurance categories

Description Types of Insurance

Buildings Earthquake and fire
Machinery & equipments and Fire and lightning
Furniture
Vehicles Accidents( life and property damage, and third party
insurance)
Life insurance Working hrs and work man composition for employee
and 24 hrs personal and work team for managers

For the rate of insurance premium, please refer to the “Cross Cutting Project Supporting Data,
2019’’ updated by Research and Project Data Management Directorate.

7.4.7. Depreciation &

amortization Table 7.14. Depreciation &
amortization

Sr. No. Descriptio % age of original

n value
1 Building for the factory and office 5
2 Machineries and equipments 10
3 Furniture and fixture 10
4 Vehicles 20
7.4.8. Repair and Maintenance
Table 7.15. Rate of repair and
 maintenance

Description Percentage of original value

Building and construction 2%

Machinery and equipments 5%

Feeding and Drinking Material 5%

Furniture and fixture 5%

 7.4.9. Working Capital
Requirement Table 7.16. Working capital
determination

Descriptio Periods (in month)

n
Raw material Imported DOCs 6 months
Feed 6 months
Salary and wages 6 months
Utilities 6 months
Uniform and Clothing One year
Fuel and Lubricant 6 months
Insurance One year
Stationary 6 months
Travel and Perdiem 6 months
Work in progress 1.5 days (for processing)
Stock period 1 month (for poultry meat)
REFERENCE

 Alema farms PLC

 Central Statistics Authority
 Debrezeit Agricultural
Research Center
 Elfora Agro Industries PLC
 ITC trade map
 Ministry of agriculture
 National Veterinary Institute
 United States Department of
Agriculture
 World Tourism Organization