Transcript Dykal Holdings - Student Agribusiness Plan Collection
Dykal Holdings
Lorelee Friesen Kim Kotylak Kelly Volk Amanda Ziegler
Purpose of the Project
To determine the feasibility of a new chicken processing plant in Saskatchewan To determine demand for Halal poultry products in the Prairie Provinces
Overview of the Company
Chicken Processing Plant Halal and non-Halal chicken Frozen and fresh products Selling throughout Western Canada
Mission Statement
“Dykal Holdings, a Saskatchewan based company, will strive to meet the needs of all customers by providing competitive prices and a premium, value-added product while providing a pleasant working environment for all employees.”
Goals of the company
Short Term Objective – Achieve a 20% pre-tax profit on gross sales of $4.54 million in the first year of operations Long Term Objective – Grow net sales to $9.39 million within the first ten years of operations
Operations Plan
Building
i.
Cutting
Process Flow
a.
Receive Live Birds
b.
Hand Slaughter
c.
Stunning and Slaughter
d.
Scalding and Defeathering
e.
Head Puller/ Hock Cutter
f.
Evisceration
h.
Cooling
i.
Cutting
g.
Giblets
j.
Blast Tunnel
k.
Packing and Grading
k.
Packing and Grading
l.
Refrigeration
n.
Distribution
m.
Freezer
n.
Distribution
Supplies
Raw Materials Packaging Supplier Different packaging for Halal and non-Halal products
Limitations to Operation
Sufficient water supply Adequate method of waste disposal Water Product Waste
Human Resources
Human Resources
Number of Employees Training Programs Safety, First Aid and CPR Benefits Job Descriptions and Criteria Plant Manager Secretary/Accountant Maintenance Plant Workers HACCP and CFIA
Employee Flow Chart
CEO Plant Manager Office Staff Secretary Accountant Kill Receiver (2) Killing Evisceration Hanger Cutter Gutters (3) Cropper (3) Offal Preparers (2) Packaging Cutter (2) Packer Shipper Other Custodian Sanitizer (2) Maintenance CFIA Inspector (1.5) HACCP Coordinator
Employee Salary Summary
2004 Direct Labour Costs
Permanent Labourers
Overhead Salary Workers
HACCP Inspector CFIA Inspector Maintenance Supervisor Total
Admin Salary Workers
Plant Manager Receptionist/Accounting Clerk I Total
Total Salaries and Benefits
499,200 40,000 90,000 47,877 177,877 100,000 51,352 151,352
828,429 2006
527,155 42,240 95,040 50,558 187,838 105,600 54,228 159,828
874,821
44,480 100,080 53,239 197,799 46,720 105,120 55,920 207,760 48,960 110,160 58,601 217,721
2008
555,110 111,200 57,103 168,303
921,213 2010
583,066 116,800 59,979 176,779
967,605 2012
611,021 122,400 62,855 185,255
1,013,997
Marketing Plan
Marketing Plan
Product
Name Types Qualities
Place
Islamic Centres IGA
Price
Market Rate Payments Halal Credit Policy
Promotion
Stickers Sales pitches Magazines/news letters Trade shows Webpage
Marketing Plan Con’t
Advertising Budget 2004
Advertising Magazine ads Newsletters Total Advertising Promotion & Development Web page Maintance Travel expenses Trade shows Total Promotion
Total Marketing Expenses
36,000 20,400 56,400 18,000 2,000 28,000 2,000 50,000
106,400 2006
38,016 21,542 59,558
2008
40,032 22,685 62,717
2010
42,048 23,827 65,875
2012
44,064 24,970 69,034 2,112 29,568 2,112 33,792
93,350
2,224 31,136 2,224 35,584
98,301
2,336 32,704 2,336 37,376
103,251
2,448 34,272 2,448 39,168
108,202
Marketing Plan Con’t
SWOT Strengths
Constant supply of raw material Accommodate a 50% increase Two markets, one line Air chilled Vegetable fed Federally Inspected
Weaknesses
High start up costs High shipping costs
Market Plan Con’t
Opportunities Threats
Only one other processor in Saskatchewan Growing Halal market Halal products are becoming more popular Large pool of workers Healthy meat alternative Lilydale Processing losses in past Strict Halal processing requirements
Market Plan Con’t
Market Analysis Past Performances Muslim population Competition Lilydale Maple Leaf Small Halal processors
Financial Plan
Financial Plan
All prices, expenses and wages are gown by inflation of 2.5% per year. A total of $2,219,111, at a rate of 7.2% will be amortized over a 25 year period. The remaining $739,704 will be invested by the single equity holder. Long Term Debt Owner's Equity
Total
75% 25%
2004
2,219,111 739,704
2,958,815
Financial Plan Con’t
Capital Budget Land Building Equipment: Arrival department Defeathering department Evisceration department Chilling department Weighing department Offal department Miscellaneous Spare parts Office Supplies Electrical Installation Piping Air Conditioning
Total Capital Costs 2004
1 1,099,999 20,691 284,130 182,805 290,000 141,224 67,933 136,030 82,432 50,000 20,000 250,000 22,000 30,000
2,677,244
Cash Accounts Receivable Inventories Accounts Payable
Total Net Working Capital 2004
200,000 340,461 16,143 275,032
281,571
Financial Plan Con’t
Base Case Results
2004 2006 2008 2010
Selling Prices (per kg) Non-Halal Poultry Halal Poultry Average Selling Price Gross Margin Net Income (Loss) Net Cash Flow from Operations Cash end of year 2.798
2.850
2.824
2.955
3.009
2.982
3.111
3.169
3.140
3.268
3.328
3.298
2012
3.425
3.488
3.456
-65,941 -510,777 -392,624 54,857 745,112 308,403 557,372 849,933 336,041 555,702 914,983 319,928 497,030 945,249 333,498 484,194 503,893 1,510,825 2,311,756 3,068,886 Net Present Value of Equity Investment Internal Rate of Return on Equity Investment
264,330
External Rate of Return on Equity Investment
27% 14%
Financial Plan Con’t
COGM Kg's of Poultry Manufactured Total Cost per Kg
2004
4,623,441 1,622,400 2.850
2006
7,176,718 2,678,650 2.679
2008
7,489,528 2,678,650 2.796
2010
7,844,989 2,678,650 2.929
2012
8,235,236 2,678,650 3.074
2,496,000kg’s will be processed in year 1. By 2006, 4,121,000kg’s of product will be processed Running at 25% capacity The addition of more chickens per hour will further lower the cost to produce one kilogram of saleable meat.
Financial Plan Con’t
Key Variables Selling Price Non-Halal Raw Materials Frieght Non-Halal Direct Labour Employees Base Case $2.798/Kg $1.289/Kg $0.04/Kg 20 IRR=0 $2.680/Kg $1.358/Kg $0.16/Kg 29 Allowable % Change 4.20% 5.10% 75% 31% If any of the above Variables change by more then the specified amount all profits will be eliminated Very risky project
Dykal Holdings
Feasible enterprise Rural Development 27% IRR Sensitive to input costs and selling prices