Feeding, slaughtering, and distribution of red meat in South Africa. The funding will be used to buy extra heads of cattle as well as stockfeed.
Large family business been around for 20 plus years. Looking to increase production by 50%, for profit increase of 100%. Infrastructure is in place.
The main goal of the expansion is to utilise the production capacity that is not fully used at the moment. The existing infrastructure can maintain, feed and slaughter 3300 heads of cattle ( around 825 000 kg) per month. There is buying contracts from feeders to the extent of 700 heads per month. Thus out of the 3300 we need to produce 2 600 ourselvels. We currently produce around 1700 carcasses out of our own feedlot. The company has the necessary suppliers and clients already lined up for the expansion.
The cash payback period 24 - 30 months if equity is taken up. The project ROI if equity of 33% is taken up for the $ 5 000 000 would be around 19.7 % per year.
This is a good business idea because it has been tried and tested