Investment in Animal Feed Manufacturing Plant In Karnataka, India

Opportunity Snapshot

  • Country: India India
  • Industry: Agriculture
  • Stage: Seed
  • Investment size: $586,726 / min. $586,726
  • Type of investment: Debt

Investment Opportunity

The proposed project will be set up in Karnataka and will enable the production of 0.5 tons compound animal feed per hour and 0.5 tons poultry feed per hour.

This feed and UMB will be given to livestock ad libitum in addition to green fodder to achieve high production. Different formulas may be used for the compoundpreparation.

The agriculture sector contributes 30% of the country's GDP, the livestock subsector contributing alone 18% of GDP. Feed is a major cost (about 70%) in livestock and dairy farming.

The main raw materials required are cottonseed cake, maize grain, corn gluten, rice polish, wheat straw, rice bran, molasses urea, salt, DCP and vegetable oil. All the grain ingredients are locally available at low prices but some vitamins and other ingredients will need to be imported.

The compound feed preparation process requires:

a) High accuracy and precision of weighing
b) Feed ingredient handling and processing
c) Mixing
d) Packing
e) Labeling

The rated plant capacity is 1,250 tons of compound animal feed and 31,250 poultry per annum when working on an 8-hour single shift. The plant will be operated in double shifts, producing 2,400 tons of animal compound feed and 30,000 blocks of poultry.

The total capital cost of the project is $586726. Employees will be employed
directly on the project. The civil works and plant installation are estimated to complete in 6 months.

Competitive Advantage

Some of the target clients of a compound feed manufacturer are, as follows:
. Dairy farmers
. Calf fattening farmers
. Sheep farmers
. Goat farmers
. Poultry farmers

The complete products will be manufactured by using organic raw materials and will be branded as ORGANIC POULTRY, CATTLE & SHEEP FEEDS. The due factor: These products are and will be in high demand in near future as there is a big boom on ORGANIC MEAT in India, which is one of largest markets in the world. Our idea will help us to keep away all the competitors and farmers/dairy farms/poultry owners.

Rationale for the deal


· Sales $ 25 Million
· Gross Profit Margin 18%
· Net Profit Margin 14%
· Internal Rate of Return 24%
· Net Present Value(14%)

Use of financing

Fixed Costs:

• Land and Building
• Plant and Machinery
• Furniture and Fixture
• Vehicles
• Pre-operating expenses
• Erection and Installation (5% of total machinery cost)

Working capital:

• Salaries for the first three months
• Admin and Marketing expenses
• Inventories (raw material)
• Miscellaneous expenses
• Cash balance required

Overhead costs:

• Admin and Marketing salaries
• Travel and conveyance
• Utilities
• Miscellaneous expenses

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