Contract Chicken Farming Opportunity in a Growing Sector in Tanzania

Contract broiler chicken farming for the largest chicken meat processing and distributors in Tanzania. Funding for the purchase of land and construction of hen houses.

The new company will be a contract chicken farming business located 120km north of Dar es Salaam Tanzania.

The company intends to purchase initially 5 acres of land for the project increasing to a total of 10 acres as the operation expands. Poultry One will commence operations with a capacity of 7,000 chickens (the minimum required by the major contract buyers in Tanzania).

The company will increase capacity in stages to a total of 21,000 chickens within 18 months of commencing operations. Poultry One intends to partner and work closely with the largest chicken meat processing and distribution companies in the country, to ensure that a high standard of infrastructure is in place and best practices are adhered to not only in the husbandry of livestock but also in administration.

Contract farming reduces market risk as the final product is assured of a buyer. The contract buyer will provide chicks, feed, medicines, vaccines and most importantly technical support in the growing process.

Revenue is guaranteed as the price per live bird is locked in before the growing cycle begins all but assuring a steady and predictable cash flow. Because the chickens are grown on the contract they are no slaughtering or cold storage required nor is there any marketing and distribution costs as that will be done by the buyer.

The project will take a maximum of 2 months to commence production with the first batch ready for delivery to the contract partner around 35 days.

The company projects an average turnover of $62,000.00USD over the next 5 years with an average annual profit of $32,000.00USD.

The company is looking for an equity or debt partner to invest up to $70,000.00USD in the business with an expected return over a maximum of 5 years. The company is willing to explore any suitable structure including the guaranteed minimum return, preference shareholding, equity partner and debt, or a combination thereof.

Guaranteed income, a predetermined price will hedge the farmer from any fluctuations in market prices.

The short production cycle of chicken farming (35 days) coupled with a guaranteed income from the buyer improves cash flow for the farm.

The direct operating cost of inputs and consumables are largely covered by the buyer.

Day-old chicks, feeds and vaccines transport of chickens transportation of day-old chicks and chickens ready for slaughter.

No marketing and distribution costs for the farmer or a need to source buyers for the finished product.

Reduced risk and exposure as the livestock remain the possession of the buyer and not the farmer throughout the growing cycle.

Tanzania is Africa's 10th largest economy with a growing middle class.

Demand for chicken meat is steadily increasing with cheap imports banned in the country.

The Tanzanian government supports and encourages investment in agriculture with a very open corruption-free system of registration and licencing of investments.

They are very few large scales commercial poultry producers in the country.

Only One Round of Financing will be required as the business will begin to generate income with a short period after commencing operations.

Purchase of land...................................$7,500
Perimeter fencing and security...........$3,000
Construction of hen house..................$25,000
Construction of storage facilities........$3.000
Construction of staff housing..............$7,000
Feeders...................................................$2,000
Automated Drinker system..................$5,000
Brooders.................................................$2,000
Water system borehole and storage...$3,000
Purchase of light utility vehicle.............$3.000
Licensing and registrations.....................$1,000
Working capital.......................................$8,500