THE COMPANIES (ACT 110)COMPANY LIMITED BY GUARANTEE AND NOT HAVING SHARE CAPITAL.PROJECT PROPOSAL FOR: A HATCHERY/ INCUBATOR (POULTRY) PROJECTCONTACT PERSON: MR. JJUUKO EDWARD |
O778441525/0700327764OFFICE LOCATION: MASAKA MUNICIPALITYKIMANYA KYABAKUZA DIVISION, KYABAKUZA “A” BEHIND NELSON MANDELA SS. IMPLEMENTING AGENTS : GARDEN OF HONOR JUSTICE MISSION FOR CHILDREN (GHJMC)
TARGET GROUP: VULNERABLE CHILDREN, ORPHANS, YOUTHS GROUP
DURATION : OVE 25 YEARS
ESTIMATED COSTS: 47,320,000/=
Exchange rate: $1.00 = 3,500 ugx
RE: APPLICATION FOR GRANT, SUPPORT OF SHS, 39,000,000/= THIRTY NINE MILLION UG. SHS.
For our capacity building and revolving fund, We humbly submit our application for consideration of grant support from your esteemed office in order to start hatchery which can successfully empower and carry out capacity building/ skills training of poor youths, vulnerable, orphans and extend a revolving fund to these needy people in the poorest and remote parts of greater Masaka.
This will enable us start or improve on our ability to start our own income generating projects. As a measure to assist and to empower the impoverished rural youths with the functional literacy/ interpreneual skills and revolving fund program will enable these youths to become self reliant and generate income for their households.
The youths would run their own individual Micro projects and would enjoy the fruits of their own labor being facilitated by NGO.
Our capacity building and empowerment project will help at least other 2,000 youths to have self employment activities grow in a period of 4years after 1st 2nd and the 3rd to 4th round of poultry investment project.
This poultry investment project will include all categories of youths, young women and men, vulnerable and orphans of Uganda inclusive who are the economically disadvantaged group; and rural youths especially those who are illiterate are more economically disadvantaged especially young women though some young men fall in the same problems.
We are a local/ indigenous community based organization registered with Masaka district development office and republic of Uganda government. GHJMC is involved in capacity building of rural poor children and youths groups and poultry project will help the poor youths, vulnerable and orphans plus their close and distant relatives; our mission is to empower and improve the poor people’s opportunities to access skills in self help projects.
In conclusion we thank you in advance for this support which we believe that is going to transform the political, economical and social lives of our vulnerable,orphans, youths who are often marginalized and lack access to means of production.
We have attached on this a copy of itemized budget for a hatchery. Thank you .
In order to get project out puts we have used an approach which is feasible to avoid frustration during the implementation of this hatchery project. There are criteria or factors that we have seen which will enable the implementation of this hatchery project with ease and cost effectiveness e.g.
a) Resources and their availability like finances, labour, tools, equipments, personnel, Land and skills and these will be achieved through local contribution and donation.
b) Needs assessment: to show how proposed budget can meet the desired objectives and show that the project out puts are sufficient but not too much exceeding the demand;
c) The youths of greater Masaka are willing and have great zeal for the hatchery project and to be part of project participants.
d) Capacity: these people (youths) have the capacity to contain this hatchery project and to run it successfully because they are hard working committed and a big number has attained sufficient training integrated organic farming.
a. Back yard gardening
b. Poultry farming
c. Education on field hygiene
d. Pests and diseases control
MANAGEMENT OF THE PROJECT
This hatchery project will be organized and managed in such a way that: a committee will be chosen and formed to run the project in order to do:
i. Maximum utilization of scarce available resources
ii. Management of the project through the participation of stakeholders, the direct and indirect beneficiaries of the project.
iii. Delegation of duties and systemic accountability on regular basis in order to avoid fraud and sleeping partners.
iv. Establishment of the organizational structure which clearly stipulates the duties and the role of the GHJMC members.
v. The choosing of implementation committee headed by the chairman.
vi. Technical advisor to the project steering committee responsible for all administration and management of the project.
vii. Advising the youths, vulnerable and local farmers on how to feed and mentain hygiene during project intervention.
viii. Teaching farmers how to control pest and diseases using both local and scientific methods.
There are various institutions that will liaise with the hatchery project during its implementation period and lifespan because no project can exist alone or in isolation. It must contribute and benefit from the efforts of other projects or institutions especially those in smaller activities and these strengthens the sustainability of the benefits generated by the project during its period of implementation like:-
1. Food and agriculture organization (FAO)
2. Poultry keepers
4. Local councils (LC)
5. Electricity technicians who will be available at the time of need in case of any mechanical breakdown.
ASSUMPTION AND RISKS
Any project work involves making assumptions and risk about altitudes, motivations and expectations of various parties involved.
Any project has to take an account of external or environmental factors outside the project control which might constitute a risk to success of the project however these factors can be:
Natural events: national economic policies, political and religious influence as well as social economic and cultural factors at the participant level e.g. inflation in Ugandan currency, price fluctuation in planned inputs and this can bring about knock off effect at the level of planned output.
Project analysis and explanation
– Made of 8 district
– Lyantonde and Kalangala
– Non-government organisation type – Private
– Capital – Kampala
– Main language spoken is Luganda followed by English especially students
Economy comprises of agriculture, industry and manual labor service sector e.g. local farming, bodaboda, building construction, fishing but others especially school drop outs are idle and disordely.
– Situated in South Uganda boarding T.Z in south, Mbalala in west and Mubende and then Mpigi in the north boarding Entebbe in Lake Victoria areas.
– Total land area of 11,295 square kilometers.
– 1,295 square kilometers of water bodies with 80 kilometer coastline.
– Exclusive fishing zone of 200 nautical KMs with costal plains for subsistence farming.
– Annual population growth rate is high.
– Literacy, defined as those of age 18 and over who can read and writing.
The investment climate remains positive as evidenced by the stable political and macroeconomic environment. The business environment continues to be conducive for local direct investment and private public partnership initiative. The region has open and liberal trade policies with a commitment to improving public and local service delivery. The region has a comparatively fairly educated and cheap labor force competitive to any region of Uganda. As a member of economic community to be in greater Masaka a hatchery is an economic gateway providing access to an economic market of over 15 consumer markets.
Being a developing region Greater Masaka also has its fair share of challenges. Principally among these are:-
– It being a small open economy with high domestic demand given its population size.
– Endowment with a narrow wide resource base.
– An undiversified export base.
– Low domestic savings.
– Heavy reliance on agriculture and boda-boda for employment among youths.
– Growth volatility reliance on a few real sector activities and terms of trade vulnerabilities.
In view of the private effort to make youths of greater Masaka the gateway efforts development that are still being made to improve the business environment in efforts to reducing cost of doing business. We ask the private enterprises to be keen to make greater Masaka a leading agro-industrial region to be committed to providing incentives to increase agricultural productivity and investment among youths groups.
The Uganda is attractive to foreign direct investment for a number of reasons. These include;-
– Stable political environment: Uganda is a country with stable democracy with transparent and accountable governance with a legal system premised of English law.
– Macro-economic policies: The government has macroeconomic policies with the principal mandate of ensuring price stability and prudent government expenditure.
– Capital Accounts: The Uganda has a liberal business environment with provision for 100% foreign investments ownership and allowance for profit repatriation due to high code of member states market (National and regional security organizations)
– Physical infrastructure: The Uganda has no seaport but has a very good airport and road networks capable of meeting the transportation needs of businesses.
Telecommunication facilities in the Uganda are excellent with more private service providers offering telephone, internet and other telecommunication services.
– Labor force: Currently has an educated human resource base, both skilled and unskilled labor with relatively cheap wage rates.
– Warm and friendly people: Uganda is internationally acclaimed for her hospitality to investors and tourists. Therefore we can use the chance of this peaceful government to do our own local investment in order to enjoy the grace of being Ugandans.
– Consumption: 200,000 eggs daily in Masaka municipality
– Total annual imports: 1n 2015 was about ,400 metric tons.
– Current domestic production: in 2016 is 80, metric tons of eggs daily, domestic production only meets 5% of total egg consumption daily. there fore the demand for eggs is still high.
7. Broiler Chicken:
– Total import: 400 tons annually.
– Total domestic production: 80 metric tons annually.
– Total domestic production: less than 95% of consumption.
– Feed production plant: capacity of 5,tons daily.
8. Sector overview
Globally the poultry market is dominated by the United States. The US account for just over 20 percent Of the world production, of which 17% is exported. China, Brazil and Thailand are making inroads in the broiler production.
Tariff and non tariff barriers are erected both by developing countries to protect their poultry industry from competition. These barriers make it difficult for poultry farmers and business in developing countries to compete because of the imports of cheap subsidized poultry products from the US and the EU.
Therefore as a matter of fact the youths of greater Masaka would like to boost the local production of poultry in order to compete favorably.
The global broiler production increased by 37% between 2002 to 2011. Consumption of chicken and other chicken products also continued to grow.
Currently nearly 42 kilograms of chicken is produced annually per person worldwide, but chicken consumption varies greatly by region and socioeconomic status in the industrial world they eat more than 80kilograms per person each year.
With the above trends there are growth opportunities in both development and country markets.
With the limited growth opportunities under developed countries, poultry businesses are increasingly attracted by developing markets where growth is strong. The domestic poultry farmers have to raise production and efficiency levels to be able to compete against imports.
The youths of Greater Masaka would like to be empowered in order to boost local production in a modern state of poultry plant with a capacity of 1000 one day chick be commissioned. This will reduce the high costs, limited availability and poor quality of locally produced chicken.
9. Future trends in production and imports
The food and Agricultural Organization estimates of chicken meat and egg production in masaka from 2016 t0 2025 are presented in the table below. The table also shows the amount of poultry products (whole chicken cut and Tinned) to be imported from 2016 to 2025. It is clear that annual production does not satisfy the needs and requirements of the region and the country. The differential figures below indicates gap in domestic production and this presents an opportunity for investments in the poultry industry.
Poultry products are imported from different sources but predominantly from Brazil with South Africa and Uganda being one of local importers.
Estited monthly importation of eggs for 2016 to 2025 is presented in figure below and shows fluctuations in both values and quantities. The highest monthly importation of eggs was reported in October (27,000) trays coinciding with the start of the winter tourist season and the least in August.
10. The poultry value chain:
The poultry value chain in Uganda has tremendous value and has been relatively under developed.
The market demand is high for eggs mainly from Masaka municipality and other districts that make Greater Masaka it is difficult for local producers to compete. However, there exit opportunities in the domestic market which is yet to be exploited. This becomes a problem to the farmer whose production become cheap while feeds are too expensive like maize bran, silver fish and other ingredients.
• We have breeders and Hatcheries which are currently established in country.
• Ugachick farm has about 29.200 capacity hatcheries from its parent stock eggs and others from South Africa.
• Biyinzika farm has a capacity to produce about 20,000 broiler day old chicks also from its parent stock.
Therefore, the youths of Greater Masaka would supplement to the current suppliers with 10,000 day old chicks (DOC) on what is already existing.
The required incubator
12. Suppliers of day Old chick (DOC):
• According to animal health and production services many broilers and layers DOC were imported in 2004 up to 2005 but today Uganda has started many plants which we need to supplement with the rest of the world.
• Department of veterinary services (DVS) indicated that many broilers and layers DOCs were imported in 2007 But if the youths of greater Masaka are facilitated we shall reduce on the number of DOCs.
• According to Uganda Bureau of statistics (UBOS) few DOCs were imported in 2010.
• Currently the main local importers are Ugachick, Kagodo Biyinzika etc. the cost of buying one day old chick is shs 3500 layers and shs 1900 broilers.
• Local Breeders pay per broiler and layer DOCs 3500 and 1900 respectively to supplement to what is being produced from their local hatcheries.
13. Feed production and distribution:
There are many factories of animal feeds and many feed mills under construction in Uganda e.g. Biyinzika, Mutima, Kagodo. And Bugingo Animal feeds These comprise BSC farms and other new feed plants which are under construction.
There also exist maize, oyster shells and smoke fish suppliers that provide ingredients to the feed manufacturers and producers which are being produced in Masaka from Lake Albert and Victoria.
• BSC farms sell poultry feed packed in 50kg, 70kgs and 100kgs respectively.
• Shops sell poultry feed packed in 50kg at Ug Shs100,000 bag for broiler and 100kgs for layers.
• Charge a transportation fee of Ug Shs1000 – 2000 per bag depending on the distance by boda boda or taxi.
• Local markets like Wandegeya and other markets of Uganda Pay 25000 per kg at harvest in October/ November at UgShs30,000 per kg.
• Oyster shells sold at 400sh per kg and above that towards Christmas season.
• Dried silver fish packed in 30kgs box sold at prices range from 100000 to 120000 Sh. At shs 4000 1kg of silver fish (Mukene).
• Cotton is imported from Tanzania via Rakai to Masaka at 2,500/= per kg.
• Soabeans are bought from Teso at3,000shs and also used as ingredients.
• The marketing of broilers is conducted at the production site and involves the selling of live birds and dressed frozen broilers to individuals or to middlemen. Other birds are bought locally by people who have ceremonies like wedding, graduation and baptism parties. Other birds are sold on bus stops, road side especially the roasted ones and some passagers can buy like birds from the road side sellers.
• Masaka region has not attained a level of processing and packaging on farm like the USA but it has a steady market to consume chicken.
• Farm gate prices of live birds range between 20s,000 -30,000 shs per bird depending on the breed and size.
• Farm gate prices for dressed chicken range between 40,000 – 60,000 ug shs per bird.
• Dressed broilers are sold between 30,000-50,000 through supermarket network e.g Wandegeya, Nakasero and kamwokya.
• Poultry manure bagged in 50kg bags sold at 8,000ug shs for manure to be used in garden.
The producers market their eggs through the following channels.
• Middlemen or collectors collect eggs from the producer and sell them to retailers operating small retail shops, kiosks and restaurants in urban centers and domestic consumers. Others are exported to Juba, Rwanda, Tanzania and DRC.
• Purchase price of 30 egg crate or tray depending on size and availability range between 8,500 -9,000ug shs unfertile eggs.
• Normally sold at a markup of 10% when they resell to customers.
• Retailers operating small super and minimarkets retail eggs by the crate/tray. At shs10,000.
• Small retail shop sell a single egg at 500/=\super and minimarkets sell a 30 egg crate which is fertilized at 15,000/-.
• Biyinzika with its distribution network of supermarket, holdings, retail at 17,000 per crate of fertile eggs.
The production cost of the commercial broiler production system is estimated to be 1000 birds per 3weeks. This presented in the table below. It shows a total of 20,000 out taxes for first cycle of 60 weeks. The margin in second cycle is higher at 50,000 because of the size of eggs is bigger and the cost of utencils already covered.
Production and revenue computation of a commercial broiler enterprise with 500 birds.
Exchange rate: $1.00 = 3,500 ugx
With such a project, the profit margin is about 30% . An annual increase sales volume 10-15 will be expected in the first five years whilst day old chick (DOC) breeding program will be ongoing to enable the farm to maintain and increase its production of DOC into broiler and layers.
Value chain analysis made from local farmers of poultry industry in areas of Greater Masaka.
15. Commercial layer production cost and returns in (Ugshs)
The production cost of commercial layer production system is estimated using 1000 layers. This is presented in the table below. It shows a total cost of 17,380,000 with a gross margin of ………percent for a production cycle of 80 weeks. Housing not include in the model.
Based on the challenges faced by the actors in the poultry sector, the following investment opportunities exist in Kyazanga in Greater Masaka.
A hatchery will help us to get
Specialized poultry slaughter and packaging facility: a stat of the art slaughter/ packing facility will compliment the poultry sector immensely.
Currently the only packaging that a commercial poultry industry producer could consider is located at wandegeya therefore hatchery for the supply for day old chick (DOC) Breeders and hatcheries will play crucial role in the commercial poultry industry because of supply of day one chic DOC) are currently bought from Uganda with Biyinzika, Kagodo and other local farmers with occasional shortages in supply. An investment in hatchery will improve the productivity and efficiency level of poultry producers and reduce their costs.
Veterinary suppliers and services: Inadequate veterinary services make it difficult for poultry farmers to invest in broiler/ layer breeding as this requires veterinary services. The lack of appropriate medicines and expertise is a threat to success of farmers., however the NRM youths brigade of Greater Masaka will employ the experts to give appropriate medicine and expertise.
17. Profile of the enabling environment:
1n 2006 the department of state for agriculture with support NRM government prepared the draft agriculture and Natural resources policy. The draft document provides a broad –based policy framework for the Agriculture and Natural resources sector to cater for the following.
• In the short term- a strengthened agricultural sector supported by at least above 20% of the national budget, producing sustainable increased level of self sufficiency in food production by at least above 20% as well as to increase income and food security of small holders; being facilitated by NADDS proramme but at shot falls.
• In the long term Uganda will get a vibrant diversified modernized agricultural sector with high levels of competitiveness, and a major source of sustainable food security, agricultural trade and investment.
18. Tariff pricing policies for the industry:
The tariff charged by the National water and electricity company (NAWEC) for water and electricity for agricultural purposes shoud be less than the charges for domestic and commercial purpose.
19. Available investment incentives:
Investment incentives are offered by the Uganda government and administered by the Uganda investment and export promotion agency above minimum investment above two hundred and fifty thousand US Dollars (USD250,000) in priority sectors (Agriculture was a priority sector) to qualify for a special investment certificate (SIC) or EPZ license for business looking at exporting. Holders of theses quality for the following:
• Tax holiday for 5 years on corporate or turnover tax above 32%.
• Import sales tax waiver on importation of manufacturing plant, construction materials and spares for a period of 5 years from date of signing an intermediate agreement.
• Import sales tax waiver on importation of raw and intermediate inputs for a period of 5 years from the date of commencement of operations.
• Exemption from depreciation allowance calculations for tax purposes.
• Exemption from withholding tax on divided payments.
Further to the above incentives, businesses designed as economic processing zone (EPZ could qualify for below incentives depending on the percentage of manufactured products exported. Those exporting minimum of 80% of their output quality for the following waivers:-
• Import of exercise duty and sales tax.
• Corporate or turnover tax.
• Municipal tax.
• Import duty on capital equipment.
• Withholding tax on dividends.
• Depreciation allowance.
Those exporting 30% of their products but below 80& within designated EPZ could qualify for the following;-
• A certain percentage points concession on corporate tax for five years.
• Financial planning and advisory services.
• Participation in training courses, symposia, seminars and workshops on export promotion of poultry products.
• Export market research.
• Advertisement and publicity campaigns in foreign markets.
• Products design and consultancy.
Investments located within a region, irrespective of percentage of manufactured products export, enjoy these incentives and benefits over an eight year period. License entitling investors to these benefits are however, renewable on a yearly basis under circumstances of evidence of compliance with the agreed guideline of employment creation, export thresholds, and general protocols and statutes.Here the youths of greater Masaka pledge to keep integrity and faithful with government funds.
Sustainability and monitoring:
– The region will be made aware of the project facility through inviting the community for seminars observing the incubator, giving the participants day one old chick from incubator.
– Members of the community will be given free services of mating their local birds with the exotic breed from the parent stock of the project in order to have improved birds (cross breed).
– There will be giving prizes and incentives to proper performers during project intervention and there will be innovation of new ideas to make the project prosper.
– Financial control will be strict and emphasized to avoid fraud and misappropriation of organization resources. Monitoring indicators will be used to measure the steady progress of the project.