Construction of an agro-complex for turkey breeding and turkey meat processing in Volodarsky district of Nizhny Novgorod Region

Establishing of large-scale agro-industrial farms for turkey breeding ad turkey meat processing is in itself a promising business development. The turkey is a large bird with a very high meat yield, which is about 80%. Besides, turkey breeding with further meat processing covers feed expenses well. However, there are objective factors that can influence effectiveness and rate of return of such projects. For example, it is impossible to achieve high project indicators without organizing high-level conditions of poultry breeding. The young of the first incubation period require conditions of an especially high level, as they need warm and clean housing conditions and high nutrient feed. These are not all the criteria that can influence effectiveness of project implementation, therefore, during analysis and justification of project implementation effectiveness one should take account of absolutely all nuances that must be reflected in business plans and technical and economic feasibility studies.

Intesco Research Group has repeatedly developed business plans on creation of agro-industrial complexes, including those concerning poultry breeding and meat processing. As for the issue of creating agro-industrial complexes for turkey breeding and turkey meat processing, a good example is the business plan for construction of an agro-complex in Volodarsky district of Nizhny Novgorod region with the rated production capacity of 3500 tons of meat per year.

The main aim was to develop economic justification and show effectiveness of implementation of the project. Project implementation was to begin from ground, with the use of exclusively modern technologies of construction and fitting out (primarily, of German production firms), including computer control of various management systems. Together with basic facilities of the agro-complex, associated infrastructure was to be built.

Project investments

Project implementation required attracting investments in the volume of 972.6 million rubles. In part, financing was to be based on the company’s own funds (18%), but mainly loan funds (73%) were used, with the annual interest rate of 14%. The other part of funding was reinvested generated circulating assets of the agro-complex.

Investment structure

Tasks of the first stage of project implementation

The tasks of the first stage of project implementation were the following:

• construction of a slaughter house with the slaughter capacity of 500-600 heads/hour with consideration for final output, as well as fitting out of the workhouse with modern refrigerating equipment for meat deep freezing and chilling;
• purchase of incubation chickens of a high-yield turkey cross;
• fitting out the plant with modern facilities for recycling waste and by-products.

Effectiveness estimates

According to the conducted analysis and calculations, specialists of Intesco Research Group obtained the following effectiveness estimates:

• net income – 1,211,612,000 rubles;
• net present value – 215,335,000 rubles;
• profitability index – 2.21 units;
• simple/discounted pay-back period – 5.16/7.3 years;
• internal rate of return – 20.6%;
• breakeven point – 36% or 51,030,000 rubles per quarter.

The planned market price of products was 180 rubles per kilo.

The given estimates make it possible to make a conclusion about a high level of project implementation effectiveness and presence of good conditions for investment. During analysis of project effectiveness the current presence of a sales market (Nizhny Novgorod region) was taken into account, with potential sales market expansion on the federal level, with the enterprise running at its full capacity.

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