Construction of a poultry agro-complex for turkey breeding and turkey meat processing in the village of Stavotino, Luzhsky district, Leningrad Region

Poultry production is one of agricultural business planning fields in greatest demand, which is explained by high, for agriculture, profitability and related interest of investors. At the moment, the most promising business development variant in terms of profits and short pay-back period is construction of poultry production complexes in the field of chicken and turkey breeding, with turkey breeding and processing showing higher effectiveness and investment justification, with other parameters equal.

Analysts of Intesco Research Group continuously conduct research of various markets of poultry production in agriculture, but of greatest relevance are our services in the field of development of business plans. Many projects based on our business plans are implemented within the framework of regional industry-specific programs of poultry business development. An example of such projects is the business plan for construction of a poultry agro-complex for turkey breeding and turkey meat processing in the village of Stavotino, Luzhsky district, Leningrad Region. 

The main task of developing the business plan was justifying effectiveness of building a complex that included 3 poultry yards and slaughter facilities.

Production volumes and structure

According to calculations, reaching the planned capacity was possible as early as after the first slaughter in February of 2013. While running at its project capacity, production was to amount to 700 tons of meat annually, with the share of active meat output of 541 tons (77,3%) and the following annual indices by separate products:

• breasts – 175 tons (32.68 million rubles);
• thighs – 81 tons (13.44 million rubles);
• bone steaks – 67 tons (8.192 million rubles);
• wings – 49 tons (5.04 million rubles);
• skin – 42 tons (3.36 million rubles);
• necks – 35 tons (3.712 million rubles);
• viscera – 21 tons (2.08 million rubles);
• chops (breast parts) – 18 tons (2. 592 million rubles);
• other parts – 55 tons (5.824 million rubles).

Project investment volume

For the sake of project implementation it was planned to attract investment in the volume of 79.2 million rubles, 20.8 million rubles of which had already been assimilated, and the rest of the required investment amounted to 58.4 million rubles.
Structure and volume of project implementation costs

Structure and sources of financing

The investment structure by sources of financing suggested by Intesco Research Group was to be the following:

• 24.3 million rubles – the company’s own funds;
• 54 million rubles – loans obtained in two tranches and directed to cover the main part of operating and capital costs;
• 0.9 million rubles – reinvested profit from sales directed to cover operating costs.

Project effectiveness estimates

With consideration for all indicators, the analysis confirmed project effectiveness and its attractiveness for investment, which was reflected in the following values:

• net income/net present value of the project – 218.352 million rubles/80.458 million rubles;
• simple/discounted pay-back period – 2.69/3.25 years;
• profitability index – 2.1 units;
• internal rate of return – 48.4%
• breakeven point – 45% or 9.383 million rubles per quarter.

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