Feasibility Report On Fish Farm Production 5b3k3i
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Feasibility Report on The establishment of Inland Fish Farming Production.
Presented by: Fashola Olayinka Nurudeen 099029008. MBA Executive BUS 812 – Entrepreneurial Development
Executive Summary.
The objective of this feasibility is to establish and educate potential entrepreneur/ investors on the cost benefit analysis of investing into this project. The project is about establishing an inland cat fish farm in the potential area of Ogun state, Nigeria which provides suitable environment. The project would serve as facility to utilize the everyday resources in the form of feed for inland fish farm that usually ends up as cultural waste. On the other hand it would generate employment for the local inhabitants and more over would possibly cause cash inflow as well. Ultimately the investors would also smile to the bank at the end of the project.
A total sum of 10,310,000.00 (Ten Million Three Hundred and Ten Naira) is required for this project, the project would break even at the end of the third production cycle which is about one and half year into the project; at the end of the 3rd year the investors would have made a total sum of 33,806,625.00 (Thirty Three Million Eight Hundred and Six Thousand Six Hundred and Twenty-Five Naira) which is 30% return on investment.
This project is environmental friendly and the risk associated with it is low, however, the project will be managed by seasoned practitioners in the industry with over 10 years experience in the field of Fish Farm production and Management, thus the risk would be mitigated towards ensuring that the investors make above average returns on their investment.
Table of Contents Table of Contents....................................................................................................... 3 1.0 Product and Services............................................................................................4 1.1 Brief Background...............................................................................................4 1.2 Defining the product..........................................................................................4 1.3 Raw Materials....................................................................................................5 2.0 The Market Analysis..............................................................................................5 2.1 The Target Customer.........................................................................................5 2.2 Marketing..........................................................................................................6 2.3 Market Opportunities.........................................................................................6 2.4 Market Threats..................................................................................................7 3.0 Resources and Capabilities...................................................................................7 3.1 Site Location......................................................................................................7 3.2 Human Resources.............................................................................................8 4.0 Legal Requirements..............................................................................................9 5.0 Financials.............................................................................................................. 9 5.1 Total Capital Outlay...........................................................................................9 5.2 Cash Flow........................................................................................................10 5.3 Projected Profit and Loss for 3 Years..............................................................12 5.4 Projected Balance Sheet for 3 Years................................................................13 6.0 Conclusions and Recommendations...................................................................13
1.0 Product and Services. 1.1 Brief Background Fish farming is an ancient practice that had been used for food purposes for centuries. Australian, African and Asian regions were the historical fish breeding centers since 6000 BC. The concept of inland aquaculture away from the seacoast and big rivers was widely practiced in cerntral Europe during the middle ages. Inland fish farming was started on commercial basis in 18th century. Seth Green was the first to practice commercial inland fish farming in 1864 at Caledonia (USA). It laid down the foundation of commercial fish farming and people has started practicing it in other countries like UK and Canada. During 19th century improvement in transportation made fish farming more convenient and profitable business by targeting the ading market of the inland fish farming zone. 1.2 Defining the product. Fish is an animal which lives and breathes in water. All fish are vertebrates (have a backbone) and most breathe through gills and have fins and scales. Fish make up about half of all known vertebrate species. Fish is a high protein, low fattening food that provides high range of health benefits. The white fleshed fish is lower in fat than any other source of protein and enrich in omega 3 fatty acids. Fish meat is medically recommended as a diet for human body, it produced essential nutrients in significant amount which is required for healthy body. Moreover fishes are low in the bad fats
commonly found in red meat, called omega 6 fatty acids that make it even more favorable product as compare to red meat. 1.3 Raw Materials The primary raw materials used for fish farming are Katti and cow dung, in addition urea is added to enhance the water quality and enhance productivity for better growth. Globally some artificial feeds such as fish meal are used for feeding purpose but these are a bit expensive. Thus the combination of both will be uses to achieve effectiveness and efficiency of the feeds. Considering the fact that feed is one of the major components that will determine the profitability or otherwise of the fish farm produce.
2.0 The Market Analysis 2.1 The Target Customer. The target customers for fish are: •
Households,
•
Hotels,
•
Restaurants and
•
Pharmaceutical companies.
Initially the project will focused on local market, depending upon its successful operation it would be market in other customer groups of the country at national level.
2.2 Marketing The marketing of Fish follows the traditional channels of distribution. Generally fish are distributed in the market through middlemen and wholesalers. The role of middlemen and wholesalers is to identify buyers and negotiate the price. Fish are transported to the urban market and are sold to retailers. The time spent in getting fish from the farm to the retail shop varies from area to area. Although collection and handling of fish has improved with the use of loader vehicles, but it is an established fact that greater the distance between the farm and consumer, more complicated will be marketing system including their collection, handling and transportation to the middlemen or consumer as per perishable nature of the product. The trick in marketing is availability of current market information of fish supply and demand, which will determine the selling price.
The approach that will be adopted here will be that of forward integration the company will have her own marketing team that will source for the market and ensure that the products are delivered to the customers. With this method the bottle neck associated with middle men will be eliminated and the cost price of the product to the final consumer will be lower compare to our competitors in the market. 2.3 Market Opportunities Following are some major opportunities for the proposed project: •
Diversified demand of the product from the food industry and medicine.
•
Availability of abundant raw material.
•
Lack of specialized producer.
•
Established market and demand.
2.4 Market Threats. The proposed project will be facing the following threat: •
Substitute’s availability.
•
Price fluctuations and macroeconomic instability.
3.0 Resources and Capabilities. 3.1 Site Location Special consideration was taken in the identification and location of proposed facility. It located at Otta in Ijako village a swamp area that is not prone to flooding. The site have the following unique features that is conducive for fish farming •
Located in a swamp.
•
The area is not subjected to flooding
•
There is enough elevation in the area.
•
The soil texture of the area is china clay soil which is the most preferred for fish farming.
•
There is round the year adequate supply of water.
•
There is good road network access leading to the farm location.
•
The PH of the water was found to be very good and will be favorable for fish farming.
3.2 Human Resources. Human resources capabilities are key to the successful execution of this project, the project team consists of people with relevant qualifications and experience in the field of management and expertise is in fish farm. Detailed below are the list of the resources and their capabilities. •
Nurudeen Fashola – Managing Director o
Over 10 years of management experience in the field of Fish production.
o Masters in Business istration (Specialization in Entrepreneurship Management) o Masters in Information Technology o BTech in Animal Production and Health. •
Kolade Folorunsho – Farm Manager. o Over 7 years in the field of Fish production and Management. o BSC in Fisheries and Aquaculture.
•
About 3 Farm attendants with over 5 years experience in fish farming production.
4.0 Legal Requirements. The farm land has been purchased from the local village land owners, however, the following legal requirements are still outstanding. •
Transfer of the land ownership to the company’s name
•
Payment of all government dues towards obtaining the Certificate of Occupancy.
5.0 Financials. 5.1 Total Capital Outlay. The project will require a total capital outlay of 10,310,000.00 (Ten Million Three Hundred and Ten Thousand Naira) as detailed below.
Capital Investment Land Building/Infrastructure Equipment/Machinery Furniture/Fittings Construction of 10 ponds Total Capital Cost Working Capital Purchase of Fingerlings Purchase of Feeds Medications
Amount (N) 1,000,000.0 0 500,000.0 0 375,000.0 0 30,000.0 0 500,000.0 0 2,405,000.0 0 Amount (N) 750,000.0 0 6,000,000.0 0 200,000.0 0
300,000.0 6 months staff salaries Fuel/Transport/Maintenance Cost of Sales expenses Total Working Capital
0 555,000.00 100,000.00 7,905,000.0 0
Total Investment
10,310,000. 00
The following assumptions were used to arrived at some of the figures above •
The working capital is for the production of 30,000 Tons of table six of fish with each pond expected to produce 3,000 Tons.
•
The staff salary consist of 20,000 Naira for 1 farm manager monthly and 3 farm attendants of 10,000 Naira monthly each.
•
The total cost required for a pond is 695,000 Naira only. 5.2 Cash Flow
With the first seven months of operation this project requires the capital out lay to be released as detailed in the cash flow analysis below. Thereafter the project will be buoyant after the sales of the first production and it will be able to fund itself. Month
1
2
3
4
5
6
7
Inflow
Balance B/f
-
-
Investors Funds
2,455,000.00
Total Inflow
2,455,000.00
-
-
-
-
-
1,895,000.0
1,670,00 0.00
1,670,000 .00
1,670,000 .00
650,00 0.00
150,00 0.00
1,895,000.0
1,670,00
1,670,000
1,670,000
650,00
150,00
0
0
0.00
.00
.00
0.00
0.00
-
-
-
-
-
Out Flow Start up cost
Land
1,000,000.00
-
500,000.0 Building/Infrastructure
0
Equipment/Machinery
0
Furniture/Fittings
0
Construction of 10 ponds
0
375,000.0 30,000.0 500,000.0
Sub-Total
-
2,405,000.00
-
Monthly Operating Cost 50,000.0
50,000.0 00.00
50,0 0.00
50,00 0.00
50,0 00.00
0.00
1,500,00 0.00
1,500,000 .00
1,500,000 .00
500,00 0.00
-
50,00
30,0 00.00
-
20,0 00.00
-
0.00
50,0 00.00
-
-
-
-
100,00 0.00
1,670,00 0.00
1,670,000 .00
1,670,000 .00
650,00 0.00
150,00 0.00
1,670,00 0.00
1,670,000 .00
1,670,000 .00
650,00 0.00
150,00 0.00
Salaries
0
0
Stock
-
0
Feed
-
0
Transportation
-
0
Fuel
-
0
Farm Maintenance
-
0
00.00
0.00
Sales expenses
-
-
1,895,000.0
Sub Total
0
1,895,000.0
50,00
50,00
750,000.0
1,000,000.0
40,000.0
50,0 00.00
15,000.0
20,0 00.00
40,000.0
50,000.0
Total Out Flow Cash Flow Balance
0
2,455,000.00
0
50,00 0.00
0.00 20,00
0.00 50,0
20,00 0.00
50,00
50,00
-
-
-
-
-
-
-
5.3 Projected Profit and Loss for 3 Years. Detailed below is the projected profit and loss for 3years with the flowing assumptions. •
A production cycle is for 6 months.
•
The Income is base on the sales of 1 ton @ 400 Naira for a the first and second production and 425 Naira and 450 Naira for 3rd, 4th and 5th, 6th respectively.
•
A straight line method is used for the depreciation of the fixed asset. It is expected that a sum of 400,833.33 is depreciated at the end of each production.
•
The sum of 38,062.5 is assumed for the bank charges – COT and VAT inclusive.
1st Production
Cost of Stock
2nd Production
3rd Production
4th Production
5th Production
6th Production
750,000
750,000
800,000
800,000
850,000
850,000
6,000,000
6,000,000
6,250,000
6,250,000
6,500,000
6,500,000
Medication
200,000
200,000
210,000
210,000
220,000
220,000
Cost of Labour/overhead
300,000
300,000
350,000
350,000
400,000
400,000
Fuel/ Transport and others
555,000
555,000
600,000
600,000
650,000
650,000
cost of sales
100,000
100,000
100,000
100,000
100,000
100,000
-
100,000
100,000
100,000
100,000
100,000
Cost of Feeding
Pond rehabilitations
Total Cost of Production
7,905,000
8,005,000
8,410,000
8,410,000
8,820,000
8,820,000
Income
12,000,000
12,000,000
12,750,000
12,750,000
13,500,000
13,500,000
Gross Profit
4,095,000
3,995,000
4,340,000
4,340,000
4,680,000
4,680,000
Less Depreciation
(400,833.3)
(400,833.3)
(400,833.3)
(400,833.3)
(400,833.3)
(400,833.3)
Less Bank Charges
(38,062.5)
(38,062.5)
(38,062.5)
(38,062.5)
(38,062.5)
(38,062.5)
Net Profit
3,656,104.17
3,556,104.17
3,901,104.17
3,901,104.17
4,241,104.17
4,241,104.17
5.4 Projected Balance Sheet for 3 Years. Detailed below is the projected balance sheet of the project for the next 3 years showing the status at the end of each production. The following can be deduced: •
At the end of the 3rd production the project will break even, that is, the investors would have gotten back their investment.
•
At the end of the 3rd year (6th Production) the investors would have made a total sum of 33,806,625.00 Naira which is 30% return on investment.
1st Production 10,310,000.00
10,009,166.67
10,013,333.34
9,612,500.01
9,621,666.68
6th Production 9,220,833.3 5
3,656,104.17
3,556,104.17
3,901,104.17
3,901,104.17
4,241,104.17
7
Financed By
13,966,104.17
13,565,270.84
13,914,437.51
13,513,604.18
13,862,770.85
Cash at Hand
11,961,937.50
11,961,937.50
12,711,937.50
12,711,937.50
Fixed Assets
2,004,166.67
1,603,333.34
1,202,500.01
801,666.68
400,833.35
13,966,104.17
13,565,270.84
13,914,437.51
13,513,604.18
13,862,770.85
Funds for next production
8,005,000.00
8,410,000.00
8,410,000.00
8,820,000.00
8,820,000.00
Funds paid back to investors
3,956,937.50
3,551,937.50
4,301,937.50
3,891,937.50
4,641,937.50
Capital Base Net Profit from production
Net Asset
2nd Production
3rd Production
4th Production
5th Production
4,241,104.1
13,461,937.52
13461937.5
13461937.5 -
6.0 Conclusions and Recommendations. From the facts and figures presented above the following can be concluded and recommended.
13,461,937.52
13,461,937.50
•
The project is viable and is environmental friendly.
•
The project demonstrates the fact that the local community will be engaged which shows a sense of corporate social responsibility on the part of the promoters.
•
The Financials are okay, as the breakeven point for the project is very good and it will give value to the investors.
•
The expected return on investment is 30%.
•
The investor would start collecting back of their investment at the end of the first production.
•
The management teams that will be in charge of the project are well seasoned professionals in the industry.
Presented by: Fashola Olayinka Nurudeen 099029008. MBA Executive BUS 812 – Entrepreneurial Development
Executive Summary.
The objective of this feasibility is to establish and educate potential entrepreneur/ investors on the cost benefit analysis of investing into this project. The project is about establishing an inland cat fish farm in the potential area of Ogun state, Nigeria which provides suitable environment. The project would serve as facility to utilize the everyday resources in the form of feed for inland fish farm that usually ends up as cultural waste. On the other hand it would generate employment for the local inhabitants and more over would possibly cause cash inflow as well. Ultimately the investors would also smile to the bank at the end of the project.
A total sum of 10,310,000.00 (Ten Million Three Hundred and Ten Naira) is required for this project, the project would break even at the end of the third production cycle which is about one and half year into the project; at the end of the 3rd year the investors would have made a total sum of 33,806,625.00 (Thirty Three Million Eight Hundred and Six Thousand Six Hundred and Twenty-Five Naira) which is 30% return on investment.
This project is environmental friendly and the risk associated with it is low, however, the project will be managed by seasoned practitioners in the industry with over 10 years experience in the field of Fish Farm production and Management, thus the risk would be mitigated towards ensuring that the investors make above average returns on their investment.
Table of Contents Table of Contents....................................................................................................... 3 1.0 Product and Services............................................................................................4 1.1 Brief Background...............................................................................................4 1.2 Defining the product..........................................................................................4 1.3 Raw Materials....................................................................................................5 2.0 The Market Analysis..............................................................................................5 2.1 The Target Customer.........................................................................................5 2.2 Marketing..........................................................................................................6 2.3 Market Opportunities.........................................................................................6 2.4 Market Threats..................................................................................................7 3.0 Resources and Capabilities...................................................................................7 3.1 Site Location......................................................................................................7 3.2 Human Resources.............................................................................................8 4.0 Legal Requirements..............................................................................................9 5.0 Financials.............................................................................................................. 9 5.1 Total Capital Outlay...........................................................................................9 5.2 Cash Flow........................................................................................................10 5.3 Projected Profit and Loss for 3 Years..............................................................12 5.4 Projected Balance Sheet for 3 Years................................................................13 6.0 Conclusions and Recommendations...................................................................13
1.0 Product and Services. 1.1 Brief Background Fish farming is an ancient practice that had been used for food purposes for centuries. Australian, African and Asian regions were the historical fish breeding centers since 6000 BC. The concept of inland aquaculture away from the seacoast and big rivers was widely practiced in cerntral Europe during the middle ages. Inland fish farming was started on commercial basis in 18th century. Seth Green was the first to practice commercial inland fish farming in 1864 at Caledonia (USA). It laid down the foundation of commercial fish farming and people has started practicing it in other countries like UK and Canada. During 19th century improvement in transportation made fish farming more convenient and profitable business by targeting the ading market of the inland fish farming zone. 1.2 Defining the product. Fish is an animal which lives and breathes in water. All fish are vertebrates (have a backbone) and most breathe through gills and have fins and scales. Fish make up about half of all known vertebrate species. Fish is a high protein, low fattening food that provides high range of health benefits. The white fleshed fish is lower in fat than any other source of protein and enrich in omega 3 fatty acids. Fish meat is medically recommended as a diet for human body, it produced essential nutrients in significant amount which is required for healthy body. Moreover fishes are low in the bad fats
commonly found in red meat, called omega 6 fatty acids that make it even more favorable product as compare to red meat. 1.3 Raw Materials The primary raw materials used for fish farming are Katti and cow dung, in addition urea is added to enhance the water quality and enhance productivity for better growth. Globally some artificial feeds such as fish meal are used for feeding purpose but these are a bit expensive. Thus the combination of both will be uses to achieve effectiveness and efficiency of the feeds. Considering the fact that feed is one of the major components that will determine the profitability or otherwise of the fish farm produce.
2.0 The Market Analysis 2.1 The Target Customer. The target customers for fish are: •
Households,
•
Hotels,
•
Restaurants and
•
Pharmaceutical companies.
Initially the project will focused on local market, depending upon its successful operation it would be market in other customer groups of the country at national level.
2.2 Marketing The marketing of Fish follows the traditional channels of distribution. Generally fish are distributed in the market through middlemen and wholesalers. The role of middlemen and wholesalers is to identify buyers and negotiate the price. Fish are transported to the urban market and are sold to retailers. The time spent in getting fish from the farm to the retail shop varies from area to area. Although collection and handling of fish has improved with the use of loader vehicles, but it is an established fact that greater the distance between the farm and consumer, more complicated will be marketing system including their collection, handling and transportation to the middlemen or consumer as per perishable nature of the product. The trick in marketing is availability of current market information of fish supply and demand, which will determine the selling price.
The approach that will be adopted here will be that of forward integration the company will have her own marketing team that will source for the market and ensure that the products are delivered to the customers. With this method the bottle neck associated with middle men will be eliminated and the cost price of the product to the final consumer will be lower compare to our competitors in the market. 2.3 Market Opportunities Following are some major opportunities for the proposed project: •
Diversified demand of the product from the food industry and medicine.
•
Availability of abundant raw material.
•
Lack of specialized producer.
•
Established market and demand.
2.4 Market Threats. The proposed project will be facing the following threat: •
Substitute’s availability.
•
Price fluctuations and macroeconomic instability.
3.0 Resources and Capabilities. 3.1 Site Location Special consideration was taken in the identification and location of proposed facility. It located at Otta in Ijako village a swamp area that is not prone to flooding. The site have the following unique features that is conducive for fish farming •
Located in a swamp.
•
The area is not subjected to flooding
•
There is enough elevation in the area.
•
The soil texture of the area is china clay soil which is the most preferred for fish farming.
•
There is round the year adequate supply of water.
•
There is good road network access leading to the farm location.
•
The PH of the water was found to be very good and will be favorable for fish farming.
3.2 Human Resources. Human resources capabilities are key to the successful execution of this project, the project team consists of people with relevant qualifications and experience in the field of management and expertise is in fish farm. Detailed below are the list of the resources and their capabilities. •
Nurudeen Fashola – Managing Director o
Over 10 years of management experience in the field of Fish production.
o Masters in Business istration (Specialization in Entrepreneurship Management) o Masters in Information Technology o BTech in Animal Production and Health. •
Kolade Folorunsho – Farm Manager. o Over 7 years in the field of Fish production and Management. o BSC in Fisheries and Aquaculture.
•
About 3 Farm attendants with over 5 years experience in fish farming production.
4.0 Legal Requirements. The farm land has been purchased from the local village land owners, however, the following legal requirements are still outstanding. •
Transfer of the land ownership to the company’s name
•
Payment of all government dues towards obtaining the Certificate of Occupancy.
5.0 Financials. 5.1 Total Capital Outlay. The project will require a total capital outlay of 10,310,000.00 (Ten Million Three Hundred and Ten Thousand Naira) as detailed below.
Capital Investment Land Building/Infrastructure Equipment/Machinery Furniture/Fittings Construction of 10 ponds Total Capital Cost Working Capital Purchase of Fingerlings Purchase of Feeds Medications
Amount (N) 1,000,000.0 0 500,000.0 0 375,000.0 0 30,000.0 0 500,000.0 0 2,405,000.0 0 Amount (N) 750,000.0 0 6,000,000.0 0 200,000.0 0
300,000.0 6 months staff salaries Fuel/Transport/Maintenance Cost of Sales expenses Total Working Capital
0 555,000.00 100,000.00 7,905,000.0 0
Total Investment
10,310,000. 00
The following assumptions were used to arrived at some of the figures above •
The working capital is for the production of 30,000 Tons of table six of fish with each pond expected to produce 3,000 Tons.
•
The staff salary consist of 20,000 Naira for 1 farm manager monthly and 3 farm attendants of 10,000 Naira monthly each.
•
The total cost required for a pond is 695,000 Naira only. 5.2 Cash Flow
With the first seven months of operation this project requires the capital out lay to be released as detailed in the cash flow analysis below. Thereafter the project will be buoyant after the sales of the first production and it will be able to fund itself. Month
1
2
3
4
5
6
7
Inflow
Balance B/f
-
-
Investors Funds
2,455,000.00
Total Inflow
2,455,000.00
-
-
-
-
-
1,895,000.0
1,670,00 0.00
1,670,000 .00
1,670,000 .00
650,00 0.00
150,00 0.00
1,895,000.0
1,670,00
1,670,000
1,670,000
650,00
150,00
0
0
0.00
.00
.00
0.00
0.00
-
-
-
-
-
Out Flow Start up cost
Land
1,000,000.00
-
500,000.0 Building/Infrastructure
0
Equipment/Machinery
0
Furniture/Fittings
0
Construction of 10 ponds
0
375,000.0 30,000.0 500,000.0
Sub-Total
-
2,405,000.00
-
Monthly Operating Cost 50,000.0
50,000.0 00.00
50,0 0.00
50,00 0.00
50,0 00.00
0.00
1,500,00 0.00
1,500,000 .00
1,500,000 .00
500,00 0.00
-
50,00
30,0 00.00
-
20,0 00.00
-
0.00
50,0 00.00
-
-
-
-
100,00 0.00
1,670,00 0.00
1,670,000 .00
1,670,000 .00
650,00 0.00
150,00 0.00
1,670,00 0.00
1,670,000 .00
1,670,000 .00
650,00 0.00
150,00 0.00
Salaries
0
0
Stock
-
0
Feed
-
0
Transportation
-
0
Fuel
-
0
Farm Maintenance
-
0
00.00
0.00
Sales expenses
-
-
1,895,000.0
Sub Total
0
1,895,000.0
50,00
50,00
750,000.0
1,000,000.0
40,000.0
50,0 00.00
15,000.0
20,0 00.00
40,000.0
50,000.0
Total Out Flow Cash Flow Balance
0
2,455,000.00
0
50,00 0.00
0.00 20,00
0.00 50,0
20,00 0.00
50,00
50,00
-
-
-
-
-
-
-
5.3 Projected Profit and Loss for 3 Years. Detailed below is the projected profit and loss for 3years with the flowing assumptions. •
A production cycle is for 6 months.
•
The Income is base on the sales of 1 ton @ 400 Naira for a the first and second production and 425 Naira and 450 Naira for 3rd, 4th and 5th, 6th respectively.
•
A straight line method is used for the depreciation of the fixed asset. It is expected that a sum of 400,833.33 is depreciated at the end of each production.
•
The sum of 38,062.5 is assumed for the bank charges – COT and VAT inclusive.
1st Production
Cost of Stock
2nd Production
3rd Production
4th Production
5th Production
6th Production
750,000
750,000
800,000
800,000
850,000
850,000
6,000,000
6,000,000
6,250,000
6,250,000
6,500,000
6,500,000
Medication
200,000
200,000
210,000
210,000
220,000
220,000
Cost of Labour/overhead
300,000
300,000
350,000
350,000
400,000
400,000
Fuel/ Transport and others
555,000
555,000
600,000
600,000
650,000
650,000
cost of sales
100,000
100,000
100,000
100,000
100,000
100,000
-
100,000
100,000
100,000
100,000
100,000
Cost of Feeding
Pond rehabilitations
Total Cost of Production
7,905,000
8,005,000
8,410,000
8,410,000
8,820,000
8,820,000
Income
12,000,000
12,000,000
12,750,000
12,750,000
13,500,000
13,500,000
Gross Profit
4,095,000
3,995,000
4,340,000
4,340,000
4,680,000
4,680,000
Less Depreciation
(400,833.3)
(400,833.3)
(400,833.3)
(400,833.3)
(400,833.3)
(400,833.3)
Less Bank Charges
(38,062.5)
(38,062.5)
(38,062.5)
(38,062.5)
(38,062.5)
(38,062.5)
Net Profit
3,656,104.17
3,556,104.17
3,901,104.17
3,901,104.17
4,241,104.17
4,241,104.17
5.4 Projected Balance Sheet for 3 Years. Detailed below is the projected balance sheet of the project for the next 3 years showing the status at the end of each production. The following can be deduced: •
At the end of the 3rd production the project will break even, that is, the investors would have gotten back their investment.
•
At the end of the 3rd year (6th Production) the investors would have made a total sum of 33,806,625.00 Naira which is 30% return on investment.
1st Production 10,310,000.00
10,009,166.67
10,013,333.34
9,612,500.01
9,621,666.68
6th Production 9,220,833.3 5
3,656,104.17
3,556,104.17
3,901,104.17
3,901,104.17
4,241,104.17
7
Financed By
13,966,104.17
13,565,270.84
13,914,437.51
13,513,604.18
13,862,770.85
Cash at Hand
11,961,937.50
11,961,937.50
12,711,937.50
12,711,937.50
Fixed Assets
2,004,166.67
1,603,333.34
1,202,500.01
801,666.68
400,833.35
13,966,104.17
13,565,270.84
13,914,437.51
13,513,604.18
13,862,770.85
Funds for next production
8,005,000.00
8,410,000.00
8,410,000.00
8,820,000.00
8,820,000.00
Funds paid back to investors
3,956,937.50
3,551,937.50
4,301,937.50
3,891,937.50
4,641,937.50
Capital Base Net Profit from production
Net Asset
2nd Production
3rd Production
4th Production
5th Production
4,241,104.1
13,461,937.52
13461937.5
13461937.5 -
6.0 Conclusions and Recommendations. From the facts and figures presented above the following can be concluded and recommended.
13,461,937.52
13,461,937.50
•
The project is viable and is environmental friendly.
•
The project demonstrates the fact that the local community will be engaged which shows a sense of corporate social responsibility on the part of the promoters.
•
The Financials are okay, as the breakeven point for the project is very good and it will give value to the investors.
•
The expected return on investment is 30%.
•
The investor would start collecting back of their investment at the end of the first production.
•
The management teams that will be in charge of the project are well seasoned professionals in the industry.
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