University of Nigeria Feasibility Study On The... · Title A Feasibility Study On The Prospects Of...

University of Nigeria Research Publications

OGBU, Cosmas C.

Aut

hor

PG/MBA/93/18063

Title

A Feasibility Study On The Prospects Of Establishing A Piggery Farm In Enugu-Ezike

Facu

lty

Business Administration

Dep

artm

ent

Management

Dat

e September, 1998

Sign

atur

e

CERTIFICATION

Ogbu, Cosmas Chijama -a pos tgradua te s t u d e n t %n t h e Department

o f Management wi th R e g i s t r a t i o n No. PG/MBA/93/18063 - has

s u c c e s s f u l l y completed t h e requirements f o r t h e course and

r e s e a r c h work f o r t h e Degree Master o f Busj-ness Adminis t ra t ion i n

Management. The work embodies i n t n i s p r o j e c t r e p o r t is o r i g i n a l and

has n o t besn submi t ted i n p a r t o r f u l l f o r any o t h e r Diploma o r

Qegree o f t h i s o r any o t h e r u n i v e r s i t y .

( Head o a ~ e ~ a r t r n e n t ) (Supe rv i so r )

DEDICATION

To the memory of my Iatc brother Hyacinth Ogbu: Like 11 candle in the wind, that bounteous force thal stood by my side just flickered and d i d , leaving I~chintl a lingering pain.

This study is an attempt t o pr-obe into the potentials of pig prod~~cr ion er-r~erprise I in Ni!leria, by making an articulate study of the basic requiremerlts necessary for I commercial investment: in a tnodern pigclet-y farm. It seek:; to t.st;hlish tirat pig pl oc111ctio1\ i:; ;I pt u1it;hlc itlvestrrlul~t tur Nigeria etltrcpr c:rwur s. Chapter oric sc\-s O I I ~ t t 11: ~ ) ~ I c ~ ~ ~ I - c ) I I I I ( ~ , ~ I ~ I ~ ~ I ~ o : ; ~ . : '11r(1 t11i: l j ro l>lc~r~ o f t t ~ : r CLC'II 1.11,

while chapter two dwells on the theoretical franework and the review of the existing literature, thereby defining the dilection of the stt~cly. This exercise crystallised irlto two working a:;suinptions, th;it there is ii scar-lly body o f information on how t o rear pigs in modert~ ways in the country and that desi~l tc the existence of incipient demai~d for por.k, production level is still very low. In cthapter three, the method of research was set down. A total of 8 0 pork

cons rmers and 16 pork se1ler.s in the four cornmc~tlities in ~ n u ~ u - ~ z i k c were involt~ed in the study. Tkle town was chosen because of i ts divetse religious back!yound, with a good representation of adherents of Christian, traditional and Mosltbm religions, which is very critical factor in the dernand for pork. In the study, each participating consirrrw wiis required to fill irr a ciuestiorrr~ait.c: cont.ail~iriy 1 3 caref A y construcred questiorls, while each seller- was asked l o frll orre corrcainirlg I 6 cll-restions. In Ct~apter four, data was p~esz r~ ted and arlalysed. Ttlt: resultanr tr~er~d stlowed

that ihere exists a large, growing undertrapped rnarket for poi-k, m d the pi-oblerns of the pork sellers are found t o be largely lack of storage facilities, capital, irnage of pcrk and the belief among many that it is usually infected by diseases. However, the feasibility report based or) the research findings are presented in

Chapcer Five X-raying market and plarlt capacity, materials input, location and site, project engineering, plant organisation and overhead costs, rrlmpower, pr-oject impltmentation, financial and economic evaluation. At the end, i t is estdblished that there exists ;I gond pr.o:;pt:ct for the project i t ) t l iu towri. Arl;rly:.,el; of pr'0jt:~Lcd fiila~rcial r atios stwwed yr UIIL n~ar girls as t~ iy l i as 30 per writ in t l ~ e f~rsc year, with the expected rise up t o 59.2 per L ~ I I ~ by the f i f th year. Return on the Equity (ROE) is 43 per cent in the first year, alrd 160 per cent by the f i t i t l year. Return on investment (ROI) is also estimated a t 2 4 per cent by the first year, rising t o 88.3 per cent by the fifth; while the current ratio is 72 per cent in the first year, before irlakirlg a quai-rtun~ leap t o 93.1 per cerlt by the fifth. -I'he payback period is projected t o be at 2.04 years, and the break-eve11 point as a rate of utilisation of production capacity is 19.1 4 per cent. Final;y, the study establishes tha.t pig production enter,pr-ise in a typical Nigeria

rural :mviror~rnent is not only feasible but very profitable.

ACKNOWLEDGEMENTS

No srucly of \h is narurc is \he wIc el'fort only of irs author. 1 owe m ~ t c h to Professor E.U. I ~ n a p , who s u p e r v i ~ ~ l the entire stages ol' this work.

'J'.lBI.E OF CONTENTS TITLE PAGE CERTIFICATION DED!CA'TION ACKNOWLEDGEMENTS AB S'L'R ACT TABL,E OF CONTIINTS

CHAPTER ONE: 1NTRODUCTION BACKGROUND TO THE STUDY STATEMENT OF PROBLEM PURPOSE OF STLDY SIGKIFICANCE OF STUDY LIlCIITATION OF STUDY

CHAPTER TWO: CONCEI'TUAI, 1:OUND,4rl'IONS FEASIBILITY AN11 VIABILITY I'IPPKAISALS FEASIBILlTY ANtILYSIS INDICATORS LITERATURE REVIEW ON PIG PRODUCTION IN NIGERlA

Cl-1AI"IXR THREE: IIRSEAIICH ~IISTHODOLOCY SOLJKCES OF DA1.A METE-IQDS OF INVESTIGATION DE'TERI\/lINA'I'lOh OF SLIMPLE SIZE

CHAPTER FIVE: THE FEASIBILITY IIEPORT MARKET AND PL4NT CAPACITY IvIATERIAIS INPL'T LOCATION AND SITE PROJECT ENGINE.ERINC PLANT OKGANIS.4TION AND OVERHEAL) COSTS MANPOWER PROJECT IIvlPLEMENTATION FINANCIAL AND ECONOMIC EVALUATION

CI-IAJ'TEII SIX: SUMMARY AND CONC1,USION

CHAPTER 01'.J1;'

logy c:f the i n s r u s t r i a l i s e d n a t i o n s . Thus, t h e p u b l i c sector' dominated

t h e economic scene, wti i le t h e p r i v a t e s e c t o r p layed ori1.y p e r i p h e r a l role.

I a a d v e n t e n t l y : government a p p r o p r i a t e d more r e s p o n s i b i l i t y t h a n it

cod1.d .?f f ' i c i e n t l y d i s c h a r g e . Everybody looked up t o i t ; -for the ,:conon~ic,

p o l i t l c : t l l , s o c i a l , i n d u s - t r i a l and t e c h n o l o g i c a l emanc ipa t ion of Lhe

N i g e r i t n na t io i l . P r o v i s i o n o f s h e l t e r , j o b s , f o o d , e d u c a t i o n and i-teal-th-

carc wcrc a 1 1 s e e n as tiic e x c l u s i v e duLy of govcrnnlent ( J o h n Lzc, 1993,

1) :! ) . '1'11: counLry gn incd the lr:verag(: L o colic: L t ~ r c ~ u ~ ~ i i i . k ~ ; : rii:;cvv( i',y ui

i n t h e 1 980:i, c c o n o r ~ ~ i c r e c e s s i o n , i n t e r n a t j o i i d dcL L or id Lhc a d j u s Lrnent

The programme opened t h e market f o r s m a l l and medium- s c a l e

e n t e r p r i s e s , i n terms of a c c e s s t o r e s o u r c e s and m a r k e t s . N i g e r i a n s

~ o o k t h e c h a l l e n g e and a r e now found i n d i v e r s e b u s i n e s s s p h e r e s ,

rxost of whict. were h i t h e r t o n e g l e c t e d .

However, an imal b r e e d i n g seems n o t t o have ga ined s i g n i f i c a n t l y

from t h e growth i n e n t e r p r e n e u r s h i p v e n t u r e s . The r e s u l t 2 ; t h a t

meat which is t h e m a j o r h ~ ; o u r c e . . o f p r o t e i n i n t h e c o u n t r y has

remained s c a r c e and u n a f f o r d a b l e b y - l o w income e a r n e r s . .

T h i s r e s e a r c h e r b e l i e v e s t h a t through a w e l l - a r t i c u l a t e d

plsogramme or, p f g p r o d u c t i o n , t h e p r i c e s of meat may come do.i*lfi and

mEny inare peop le cou ld a f f o r d t o have i t i n t h e i r menu.

The opt imism i s p r e d i c a t e d on t h e n a t u r e of p i g , which b e l o n g s t o

t h ? group of domes t i ca ted a n i m a l s , g e n e r a l l y c a l l e d monogas t r i c o r

no:l-ruminant an imals . It i s a v o r a c i o u s e a t e r whose foods r a n g e froin

t a m c r o p s , waste p r o d u c t s t o o f f a l s of l i v e s t u c k and p o u l t r y . These

foods a r e e f f e c t i v e l y c o n v e r t e d i n t o pork, which y i e l d s e d i b l e p r o t e i n

and food! o f h i g h c e l o r i f i c v a l u e .

But p i g p r o d u c t i o n i n N i g e r i a , excep t f o r a few i s o l a t e d c a s e s

a r e s t i l l l a r g e l y i n t h e hands of t h e n a t i v e s u b s i s r e n c e f a r m e r s .

T h e r e f o r e improvement h a s been q u i t e s low, a s t h e an imals a r e c sad i t i c j -

n a l l y l e f t t o scavenge f o r foods w i t h l i t t l e o r no a t t e n t i o n s p a i d

t o them. T h i s h a s l e d t o s m a l l l i t tcr s i z e , l i igh m o r t a l . i t y r a t e ,

and low p r o d u c t i v i t y .

The i n t e r e s t f o r t h i s s t u d y t h e r e f o r e a r i s e s f rom t h e b e l i e f that

by e : ; t a b l i s h i n g r a t i o n a l e and t h e requ i rements i n e s t a b l i s h i n g a modern

piggi:ry farm i n a r u r a l s e t t i n g l t k e Enugu-Ezike, t h e r e s e a r c h e r may

have c o n t r i b u t e d t o t h e q u e s t f o r a b e t t e r i u ~ k ~ o v e d pork p r o d u c t i o n

p rogrannes i n t h e c o u n t r y .

I-I; h a s been es t&l i sk led I h - t p r o t e i n i n h k e i n N i g e r i a h a s reds-iced

(.!I>;.(!; 1, I ( ; i . ( I 11 :,v(.!C I L ~ I c yciir;; LIZ -jut: 1, i r ~ ~ , : ~ ~ l l : ; c ~ ~ ~ u ~ : r l i ~ i ~ ~ pl'(>pOr 1; ~ 0 1 1 01' L , ~ I c :

p o p u l , ~ ( ; ion c.nri af'l'ortl s~ut'f'i ciurlL i ~ l t n l t e 01' 1r1c:~iL p : ~ l,c i n. ' T ~ I c I I C : ~ I LLIL

and n ~ l L r - i t i o n : ~ l survey- conducLcd by Lkic 1;cderal. O f f i c e oi' SLal;isl.ic:; i n

1988( .:i Uun I. Anadu, 1'390, P . 2 ) e s t a b l i s h e d that t h e !l+.Lions u rban

c e n t r ~ : s have high p r o p o r t i o n of malnour ished p o p u l a t i o n w h i l e o v e r 20

p e r c e n t of c h i l d r e n aged f i v e oi- l e s s J-ears are i n d i r e s t a t e of' m a l n o u r i s

rnent . blany N i g e r i a n s have gave i n t o f i s h e r y , c s t t l e rear ing, g o a t r y , p o u l t r ;

among o t h e r s , b u t their. efforts have n o t a c h i e v e d t h e d e s i r e d r a t e of

s u c c e s s . Neanwhile, n o t many peop le have e x p l o r e d -tho econo~nic s u p e r i o r i - i ; , ~

of' 11i[,s over o~i;her red mi?;lt. Y t : t , pigs arc rncrc p ro1 i l ' ic : t h a n r ; ~ L L l e ,

s h e e p , o r goal;. II; is a l s o cstirnatud t h t p i g s i n the c o u n t r y pi>orluce a b o ~

t e n a . ~ d wean e i g h t p e r L i t t e r and t h a - t Lhcy are c a p a b l e oi' prod i l c t ing -Lr:lc.

1 t i . J y 1 . I n a d d i t-Lcin, p i g s hiivc~ h i ~ i h c r I'cct~rlili.l;y, higt-l,.:~~ ma.turXi-I,,;.

F u r p a s e of t h e S t u d y

T h j - s s t c d y i s i r k e n d e d t o make a v a i l a b l e e o m p r e h e n s i ~ e

in2ormat : ' -on o n t h e p r e l i m i n a r y p r o j e c t d e s i g n a n d e z o n o m i c d

a n a l y s i s re<uire/b:! e n t r e p r e n e u r s i n t h e d e c i s i o n - m a k i n g

p r o c e s s i n c o r n m i t t i n s s c a r c e r e s o u r c e s t o a p i g p r o d u c t i o n

v e n t u r e . The r e s e a r c h p r o b l e m h ~ s b e e n i d e n t i f i e d as t h e

f e a s i b i l t y a n d t h e e f f i c a c y o f e s t a b l i s h i n g a p i g g e r y f a r m i n

t h e rur .-al a r e a s a s a means t o a r r e s t i n g p r o t e i n d e f i c i e n c y

among t h e n a t i o n s c i t i z e n r y .

F i g e r i a i s a c o u n t r y w i t h h i g h p o p u l a t i o n gro7.nkh r a t e ,

b u t low a g r i c u l t u r a l p r o d u c t i v i t y . T h i s makes i t i m p e r a t i v e

f o r t h e n a t i o r , t o show more i n t e r e s t i n a g r i c u l t u r a l b u s s i n e s s ,

i f i t would a v e r t m 3 j o r S i sas te r i n n e a r f u t u r e .

The p u r p o s e o f s t u d y i s t h e r e f o r e t o e x p l o r e t h e p o t e n -

t i a l s o f a p i g g e r y f a r m as a way a n d m e a n s o f e c o a o m i c d i v e x s i f

i c a t i t > n , b o o s t i n q p r o t e i n i n t a k e ainonq t h e p o g u l a e e , a n d

g e n e r a t i n g n e a n i n q f u l employment f o r t h e p e o p l e .

Thic, i . n v e s t i g a t i o n i s s i g n i f i c a n t i n a v a r i e t y i i L ways. Ir: tile

f Lr :;t pl.ace, t:hrS f c a : ; i b i l i t y : ; t ~ i l y 011 t h c prospect:; O : i L J i j t : r ~if8.irn1i.tll;

coil ld bc of good u s e t o prospect i v c -Investors r i Ll.vc:; t n c k p r o d u c t i o n ,

whc, may Eind i t a u s c f u l i n s i g h t i n t o t h e i n d u s t r y nlld a g u i d e t u

s i n i l a r s t u d i e s i n t h e i r ow11 g e o g r a p h i c a l a r e a s . Secondly , t h e s t u d y

mar be b e n e f i c i a l t o o t h e r r e s e a r c h e r s on s p e c i f i c A s p e c t s of p i g g e r y

farming, as i t may s e r v e as a u s e f u l sp r ingboar f i . F i n a l l y , t h e genera l .

p u k l i c may g a i n u s e f u l i l l s i gh t from t h a s t u d y on t h e modern W;LYS o f p i g

p r s d u c t i o n and t h e r e b y change t h e i r conse rva t iv r . b e l i e f s abou t p i g s b e i ~

d i r t y , and in fes i -cd w i ~ h d l s e ; ~ s e s .

O I I C u~ , i . ! c t t .I.lil~l l;trtl.on ul. tlil:; s ~ u c l y i:, i t : ; i ~ ~ c t l . t i . - t l ~ .c 1.1: l . i~ l i i r - j w t u r c .

I t tlrxwt; i t s di1t.n i rom J l f rerent: f i e 1 . d ~ u f s t u d y : Ik inagemcl~t , i \k : r j cu l tu re ,

Environ.nenta1 s t u d i e s , C i v i l Eng ineer ing rind F inance . I!& means t t ls t

the b u l k of t h e d a t a used a r e a s g l e a r ~ e d Erom proi 'ess i .onals in r e l e v a n t

f i e l d s of s t u d y . T h e r e f o r e , r e l i a b i l i t y of t h e d a t a i s ~s t h e e x t e n t

o f a u t h o r s c i t e d o r pe rsons i n t e r v i e w e d . A s a r e ~ u l t , t h e r e s e a r c h e r d i d

nor go i n t o t h e i n t r i c a c i e s of p r o d u c t i o n t e c h n i q u e s but: adcpted produc-

t i o n method which p r a c t i t i o n e r s and r e s e a r c h e r s o c p i g p r o d u c t i o n

p o i n t e d o u t were most s u i t e d f o r t h e e ~ w i r o n m e n t G S t h e a r e a u n i l ~ r s t u d y .

i n ada;.ton, d a t a c o l l e c t e d from ifie s m a l l - s c z l e farmers were 1.imite.d

Lo w11.1 t they could r e c o l l e c t from memory rii.r~ce they d i d n o t keep m i . t cen

r e c o r d s .

.\noth,?r remark:ibli.! l i m i t a t i o n t o t h i s r e s e a r c h w,.t:; f i w n c c . . T h i s

rcsca::ctlc r .",as c o n f r o n t e d by ; I I o t oL l o l s i s t i c a l L o t - t . l ( . ~ ~ c c k s is ing

CHAPTER TWO f

CONCEPTUAL FOUNDXl'IONS --

F e a s i b i l i t y and V i a b i l i t y A p p r a i s a l s :

?re-f e a s i b i l i t y l f e a s i b i l i t y t o d e s i g n t r a n s f e r s i x g e i s econonlical..ly

t h e prime s t e p i n a p r o j e c t ' s l i f e . I n t h e Uni ted S t a r e s , major f e d e r a l

a c q u i s i t i o n s a r e by p o l i c y proceeded by thorough f e a s i b i l i t y s t u d i e s

( D . C le land and King Will iatns, 1988, p. 41) . P r o j e c t a p p r a i s a l i n v o l v e s

;L c r i t i c a l e v a l u a t i o n of a p r o j e c t from t h e p o i n t s o f v i e w o-f market:,

t echno logy , f i n a n c e , management and economy. A l l t h e s e a s p e c t s shou ld bg!

p r o p e r l y s t u d i e d because they a r e p i v o t a l t o t h e s u c c e s s f u l o p e r a t i o n a f

t h e p r o j e c t . The n e g l i g e n c e of any p a r t t h e r e o f may r i s k o r l i m i t : t l - ~ e

expec tzd p r o f i t a b i l i t y of t h e vencure (E.U.L. Image, 1995, p . 6U3).

According Cleland and W i l l i a m s ( l 988) , a p r o j e c t u s u a l l y s t a r t s ,is t'

i d e a i s exp lored f o r f i n a n c i a l and t e c h n i c a l f e a s i b i l i t y i n t h e f e a s i b i l r

o r p r e f e a s i b i l i t y s t a g e . I t i s t h e r e s u l t of t h e i n v e s t i g a t i o n of t h i s

c r u c i a l s t a g e t h a t de te rmines whether t o go i n t o o t h e r a s p e c t s which

i n c l u d e c a p a c i t y d e c i s i o n , l o c a t i o n c h o i c e , f i n a n c i a l a r rangements , over -

a l l s c h e d u l e and budget f o r ~ n u l a t i o n and t h e o r g a n i s a t i o n s s e t up. It i s

a t t h i s s t a g e t h a t t h e f i n a l l $ o / n o go" d e c i s i o n is taken .

F e a s i b i l i t y a p p r a i s a l s answer t h e q u e s t i o n , ' c C ~ n 1 t i t be done ' .

Any venturewhose f e a s i b i l i t y i n v e s t i g a t i o n i n d i c a t e s n e g a t i v e r e t u r n s

on Lnvestment ( K O I ) i s u s u a l l y n o t under taken , excep t of c o u r s e t h e

p r o j e c t i s non-commercial i n n a t u r e and t h e pr imary moti-ve behind it:

i s not p r o f i t b u t s o c i a l b e n e f i t s .

F e a s i b i l i t y and V i a b i l i t y I n d i c a t o r s

I n o r d e r t o unde r s t c lnd t h e i s s u e s i n t h e a s s e s s m e n t o f t h e f e a s i b i -

l i t y and v i a b i l i t y of a p r o j e c t , i t i s n e c e s s a r y t h a t we l o o k a t t h e

a s p e c t s t h a t would g u i d c a p r o j e c t a n a l y s t do a good work o f t h e f e a s i b i l i t y

s t u d y . S c h o l a r s w r i t i n g on t h i s s u b j e c t have d i f f e r e n t names f o r t h e s e

a s p e c t s , s u c h a s c r i t e r i a , components , i n d i c a t o r s o r g u i d e l i n e s , b u t t h i s

d i f f e r e n c e l i e s o n l y i n n o m e n c l a t u r e , a s t h e b a s i c e l e m e n t s of p r o j e c t

f e a s i b i l i t y r ema in t h e c e n t r a l i s s u e .

N . I k e d i a n y a (1975) :;ees f e a s i b i l i t y a p p r a i s a l a s a dependen t v a r i a b l e

i n c l u d i n g t h e p11ys i c a l , t e c h n o l o g i c : ~ l , l e g a l , f i n a n c i a l , ecnnomic , marke t

and m e r c h a n d i s i n g , p r o f i t a b i l i t y , v i a b i l i t y , s o c i a l , p o l i t i c a l and o t h e r

s t r a t e g i c c o n s t r a i n t s ,

imaga (1995) however c r y s t a l i s e d t h e s e a s p e c t s i n t o f i v e , name1.y -

marke t , t e c h n i c , ~ l , f i n,lni. ia1 , econornic and managemen t . He i n c o r p o r a t e s

i s s u e s r e l a t i n g t o s o c i o - p o l i t i c a l c o n s t r a i n t s u n d e r economic a n a l y s i s .

However, J o s e p h Luske t and J a c k bIann (1978) i d e n t i f i e d economic ,

m a r k e t , p h y s i c a l and f i . n ~ n c i a l f a c t o r s a s t h e most germane t o d e t e r m i n i n g

E e a s i b i l i t y . They wcom?a~ ; se t l t h c soc io -po l i t i c a l c o n s i d e r a t i o n u n d e r

p i ~ y s i c a 1 a s p e c t s ant1 s k i pl)ed t e c h n i c a l a s p e c t .

.I . A . 1Ji1icl1 (1997) iso o u t 1 inctl w!tat h e c a l l e d s i x i n d i c a t o r s , Viz.

t e c h n o l o g i c a l , p l ~ y s i c a - I , s o c i o - p o l i t i c a l , l e g a l , economic and f i n a n c i a l

i n d i c a t o r s . .

Fo r 1:he pu rpose c ~ f t h i s s t u d y , however , we have found I m a g a ' s a s p e c t

more app r .>p r i , i t e :IS t l i c y ~ i p p e a r Inore p r e c j s e , wl~i . le i n c o r p o r a t i n g t h e

c r i t ic<l l management a:;pec t ln i ssed o u t by o t h e r s . I n acldi t i o n , t h e

c h o i c e i s enhanced by t h e f a c t t h a t a l . 1 o t h e r i n d i c a t o r s enumera t ed

by o t h e r s c h o l a r s a r e i n c o r p o r a t e d a s s u b - p a r t s of h i s g u i d e l i n e s .

For i n s t a n c e , 1)hysic:ll i n d i c a t o r s a r e p r o p e r l y t r e a teci unde r t e c h n i c a l

a s p e c t i n h i s ~ 1 ~ 1 s s i i i c ' i t i o n .

Market Aspect

Llrider tk.e nlarlcet a s p e c t of f e a s i b i l i t y s t u d y , - n v e s t i g a t i o n is

c d r r i c d o u t t o a s c e r t a i n t h e p o t e n t i a l nlrrrkec f o r t h e p roduc t . L L

c o n s i d e r s t h e e x i s t i n g s u p p l y and demand p a t t e r n , t h e major cornper i t ions

w i t h i n t h e mzrket . It a l s o i n v o l v e s t h e q u a n t i t a t i v e and q u a l i t a t i v e

a n a l y s i s of b o t h t h e p r o d u c t s o f f e r e d and t h e m a r k e t ' s r e a c t i o n t o them,

p r o d u c t s and a b s o r p t i o n t r e n d s - t o f i n d whether t h e market i s s a t u r a t e d

o r u n d e r s u p p l i e d .

T h i s a s p e c t of t h e s t u d y a l s o ought t o under take market segnientatioxi

and p r o d u c t d i f f e r e n t i a l a n a l y s i s , i n o r d c r t o d i v i d e t h e t o t a l market

i n t o p r o d u c t c h a r a c t e r i s t i c s such a s l o c a t i o n , t y p e , s i z e , p r i c e o r

o r i . e n t ; i t i o n [:hat can be r e l a t e d purposefully 1-..o cor l su l~~crs and t o C l ~ e

e x i s t i n g c m p e t i t i o n t o gu ide i n t h e p r o d u c t development (Lusket alld

Muln, 1378 11.. I O ' I .

T e c h n i c a l Aspect

T e c h n i c a l : ; ~ u d y i s concerned wich t h e t e c h n o l o & , i c a l r e c l u i r c r ~ ~ c n t s o f a

p r o j e c t , whether i t i s v i a b l e from t e c h n i c a l and e n g i n e e r i n g p o i n t s of

view. T h i s t e c h n i c a l a p p r a i s a l i n v o l v e s t h e a n a l y s i s of t h e teclillology/

p r o d u c t i o n p r o c a s s , p l a n t c a p a c i t y , machinery and e o u i p ~ n e n t ~ n l c l t c r i a l s

and i n : m t s , Locrr t ion/prujecc s i t e , b u i l d i n g and c i v l c works, mL! ~ , r o j e c t

c h c + r t s and l a y o u t (Imaga, 1995, p. 607) .

T h i s a s p e c t .-tQnwt.rs t h e q u e s t i o n whether t h e p r o j e c t i s r e a l i s a b l e

w i t h i n t h e a v a i l a b l e t echnology , l d b u u r Lorce and s k i l l and o t l ~ c c

p h y s i c a l c o n s t r a i n t s . T h i s is i m p o r t a n t because i t af:ects t h e ~ o s t

o f development and d e t e r m i n e s whether t h e p r o j d c t can b t devclupeil , even

when o t h e r a s p e c t s a r e p o s i t i v e .

Financial Aspect

This aspect of the .study determines whetlier. a prsject is financially I

profitable in a given environment. The major sources of funds for projects I

are equity and debt. These sources are critically anal-ysed under this I

aspect and a proper mix determined.

The financial analysis is an exercise that begins with the calcu- . .

lation of the total project cost, followed by preparation of projected

income stetements and then the breakeven point, as well as, internal rate

of return. The format used for this analysis vary from analysts to

cnalysts and in accordance with available information and convenience.

But the purpose of analysis is always the ascertainment of the financial

position and the profitability of a project (Imaga, 1995 p. 611).

Economic A S D ~ C ~

Economic analysis has two facets: economic benefits and impact of

a project to the social-economic well being of the people. This aspect is

more important to the government which statutorily hawthe development

of socio-economic infrastructure as its main objective. This aspect

involves the analysis of value added, impact on foreign exchange position,

employment effect, and environmental impact. It also evaluates the

influence of economic conditions on the project.

It requires the review of the general economic conditions so as

to determine the past trend, :he current position and the future direction

of the national economy. Here, the analyst looks at the economic environ-

ment but instead of considering the possibility of establishing the

project, he now considers how the economy will affect the growth and

sustenance of the project.

This a n a l y s i s i s very important e s p e c i a l l y i n t he case of swine Y -

product ion because pork meat a s i t i s known i n t h i s country today i s

l a r g e l y income e l a s t i c : any major s h i f t i n economic f o r t u n e may a f f e c t I i t f o r good o r f o r bad, depending on the d i r e c t i o n of t he economic t u r n . I

David C l i f t o n and David Fyffe (1977), p. 8) s e e . t h i s a spec t a s

s o c i a l p r o f i t a b i l i t y a n a l y s i s , and lump toge the r market, t e c h n i c a l and

f i n a n c i a l a s p e c t s a s economic f e a s i b i l i t y s tudy.

Management Aspect

Management a n a l y s i s i s o f t e n neglec ted i n . f e a s i b i l i t y s t u d i e s of

,nany pro jecb . P r o j e c t s wi th h igh p o t e n t i a l s have been knowrto come t o

r u i n s because of poor management s k i l l s of t he p ~ o p l e i n charge.

There =Ire p r o j e c t s t h a t demand a g red t deal- of ulanagement s k F l l s ,

s t a r t i n g from the f e a s i b i l i t y t o design and product ion t o t u rn over and

s t a r t up. And such p r o j e c t s may meet wi th gr ie f i f the r i g h t t y p e o i

managers a r e not i n charge.

I t i s important a t the f e a s i b i l i t y s t a g e t h a t t h e a ~ a i l ~ l b i l i t y of

t he r i g h t c a l i b r e of management team and t h e i r procurclnent r e q u i ~ ~ e r n e n t ~

a r e a s c e r t a i n e d and considered along o t h e r f a c t o r s i n determining the

f e a s i b i l i t y and v i a b i l i t y of a p r o j e c t .

This managerial a spec t is necessary because i t i s t h e managers t h a t

determine how t h e resources a r e a l l o c a t e d and t ransicrmed i n t o t h e

product ion process , through and wi th o t h e r people, towards t h e achievement

of t he ovcra11 o b j e c t i v e s of t he p r e j e c t . I n soi!ie complex p r o j c c t s l i k e

A j 61c,kutd St,ecl Complex, ii~~inagement is '1 critics'. success Lactor whLch

oi~l:l~t t o ! )e glveu p r l m ~ r y c~onsidcra t i 0 1 1 I n tlic? f i ~ ~ s l b i l l t y 2 1 1 ~ 1 Lys L:, ,

Review of Literature on Pig Production

i. Experimentation and Breeds:

Literature on pig production in Nigeria is still scanty. Most of the

studies on pig production as reported in books and journals are works

done in America and Europe, especially with regards to marketing and

production. Thus we have to adopt their methods, irrespective of the

perculiarities of the environment.

As far back in time as 18th Century, meaningful experimentation on

pig production h ~ s started in the western nations of Europe and America.

The Yorkshire (large white), the world's most popular breed, originated

in Britain at the time. Both Japan and the Soviet Uniun too were in the

late 20th Century trying to breed leaner hogs with the help of iru~~ortant

breeds (The New Encyclopadia Britanica, P. 437).

However, scientific breeding was concentrated in Europe and the

United States of America. Theremarkable breakthrough in the United

States in the experiment with Maize in which two inbred strains were

countercrossedto give an improved yield of 20 percent, started more concer;

efforts towards breeds of pigs. The experiment was copied with pigs by

the University of Minnesota and else>;here by 1937. They crossnatched

the inbred. lines Tamwarth and Landrace to produce minnesota and China

No. 2 line (Canadian Yorkshire $Poland China) and these breeds have

been cross-bred commercially thereafter. Since then,

similar workshave been undertaken in other places in United Scates and

the results were the maryland, montana, Belt:-ville and Palouse breeds. I n

Canada too, the Lacombe is the product of a similar result (Encycl.-.pr:dia

Britannica, vol 17, p. 1070).

S r a n t y as t h e l i t e r a t u r e on N l g e r i ~ n P i g p r o d u c t l o n may t e , ~ h ~ ~ t

w does n o t however mean1 t h a t t h e c o u n t r y i s comple te ly b e r e f t of any

ii1(1 ,1 i i L u \ : ~ u I c I 1 arts i n t l i ; i ~ rel:,lrd. 'I'llc E ' l rn t Is t11;~t L I : I . e l l orL: of N i f : r ! - I r h n p i g p r o d u c e r s a r e l a r g e l y e m p i r i c a l arid no t f o m d e ( l on modern s c i e n -

I

t- i iLc l o g i c and c x p e r i m c n t a t i o n l i k e t h o s e i n Eurolw a d Unitcd SL:~tt?:i .

iluwevcr, c r l o r t s by N i g c r l a n Producers have y i e l d e d a fcw I 1 1 t l i ~ : c ~ i ~ i r t r s

. h e e d s o f p i g s . The predominant b r e e d s h i e t h o s e t h a t evo lved by a d o p t i o n

t o t r o p i c a l environment o r by cross-mat ing t h e l o c a l v a r i e t i e s w i t h

improved e x o t i c b r e e d s . C o n s i d e r a b l e improvements have no doubt been made

by g r a d l n g u p , t o s u c h a n e x t e n t t h a t p e r h a r p s t h e n a t i v e p i g s 'lie no

_ o n g e r t y p i c d i n d i g e n i o u s p i g s of many y c a r s ago. D . Kroesk.? ( I ,173, p . 15 )

p o i n t e d o u t t h a t upgrad ing p i g s w i t h h i g h l y p roduc t Lve exot ic : hrc-ecis r e . + u l t s

i n h e a v i e r weamers and f a s t e r f a t t e n i n g s t o c k i n comparison w i t h t h e l r

n a t i v e p d r e n t s .

T h e l o c a l b r e e d s however e n j o y p r e f e r e n c e i n roany t r o p i c a l . c o u n t r i e s

bccausc they a r c cheaper t h a n t h e e x o t i c b r e e d s and are more ~ V , I I L ; i L l e

t o t h e l o c a l f a r m e r s . They u s u a l l y have s m a l l e r l i t t e r and eve:, body

s i z e v h l c h concluiee mo-rc t o ~ ~ 1 1 3 1 1 s c a l e extcnsivc? t y p e of pi.g rc;~r:lng

t h a t a r e p r e p o n d e r a n t i n A f r i c a and most t h i r d wor ld c o u n t r i e s . I n

a d d i t i o n , t h e y a r e more adap t i .ve t o t h e l o c a l c.or,dit:ions anil more r e s i s -

t a n t t o t h e t r o p i c a l d i s e a s e s 2nd c l i m a t e

C. h v e n d r a and M.F. F u l l e r (1979, p . 7 ) l i s t e d some c f thc: i n d i g c -

nous b r e e d s which c r e Iound i n t h e t r " p i c s a s , nmo;~g o t h e r s : A\h.int:i

(Ghana) . Hairosi (Camerou-) . l b c e r i ~ (Co-.go), J a I a j s = l ( l ' h i l ip inc l s ) ,

k~.wai (China) , Cuino and Cardo Cosca te (Malaysia) P i a u ( I j r d z i l ) , l h l i i w s e ( i ~ l d o n e s i n ) and Kwai (Tha i l and) .

The e x o t i c breeds t h a t enjoy popu la r i t y and h igh r a t e of adoptic

i n the t r o p i c s inc lude : Large whi te (Yorkshire) , Berkshi re , l a r g e

b lack , Durcc J e r s e y s , Landrace, Hampshire and Poland China. I n Nigel

hokever, l a r g e white and landrace a r e the most popular .

ii. Production and Marketing Problems:

The s o c i a l image c a r r i e d by p i g s i s a t t h e r o o t s of some of t h e

p e r c u l i a r problems a s soc i a t ed wi th p i g product ion and marketing i n

many p a r t s of t he world. The sacredness and t h e r e l i g i o u s connotat ic

a sc r ibed t o p i g s i n many c u l t u r e s of t he world make i t a taboo t c

adherents of c e r t a i n r e l i g i o n s . For i n s t ance , i n New Guinea and Japz

r i t u a l c l eans ing was necessary f o r those who come i n con tac t w i t h pig

and pork i s forbidden t o Jews and moslems. They have come symbolise

degrada t ion i n c h r i s t i a n pa rab le s and words de r ived from them have cc

;o be u n i v e r s a l words of abuse.

P ius Nweke (1986, p. 45) s a i d t h a t pork was popular among Niger:

r u r a l dwel le rs because i t provided them wi th cheap source of a n i r n ~ l

p r o t e i n , po in t ing out t h a t whi le t he demand f o r q e a t products l i k e

bee f , mutton, chicken e t c increased during t h e o i l boom e r a i n t h e

count ry , t h a t of p i g showed no s i g n i f i c a n t changes. This he a t t r i -

buted t o t h e percept ion he ld by people about pork.

This may be r e spons ib l e f o r t h e low number of p i g s i n t h e coun

Less than t e n percent of t he product ion i s undertaken i n commercial

farms. And even t h e subs i s t ence r e a r e r s of t h e animal i n t h e r u r a l

a r e a s a r e few. The s i t u a t i o n i s a f a r c ry from what o b t a i n s i n scr

o t h e r l e s s developed c o u n t r i e s of South Eas t Asia and South Ameri::.

where many poor f a m i l i e s i n r u r a l a r e a s r e a r one o r two p i g s a t t h

back yard a s means of saving f o r t he r a iny day (H.B. Davidson, 195

P. 8 ) .

The predicament of t h e N i g e r i a n p i g g e r y i n d u s t r y was made more

m a n i f e s t by a s t u d y on t h e p r o d u c t i o n sys tems and t y p e s of p r o d u c e r s

of swine i n Sou thern Z a r i a . The s t u d y found t h a t w h i l e 98% of t h e

1)l.g; were r a i s e d on s u ~ a l l f a m i l y fa rms , tlic r c ~ n a i n h l ; two p c r c e n t wer

i n s t i t u t i o n a l o r l a r g e p r o d u c t i o n u n i t s . This r e f l e c t s t h e p a t t - e r n o

pii ; p r o d u c t i o n i n most p a r t s of t h e c o u n t r y w i t h e x c e p t i o n of Hendel,

Kw.xa, Imo, Oyo, Anambra, Enugu and Cross River where u;,, t o 8Z were

r e a r e d i n commercial f a rms (Zeb Taiwo, 1995, p. 1 0 ) .

What i s obv ious from t h e above is t h a t p i g p r o d u c t i o n i n N i g e r i a

i:; s t i l l low and c h a t t h e p r o d u c t i o n p r o c e s s i s a r c h a i c and inappru-

p r i a t c f o r modern p i g g e r y e n t e r p r i s e s .

Tllis s t u d y t l ~ c r e f o r c a t t e m p t s t o i n v e s t i g a t e f c a s i b i l . i t y a ~ ~ d

.)respects of e s t a b l i s h i n g a p i g p r o d u c t i o n fa rm i n Enug-Ezi.ke, wic'h

a v iew t o f i n d i n g s o l . u t i o n s t o t h e i d e n t i E i c l l problems o f under-

p r o d u c t i o n and poor p r o d u c t i o n sys tems.

CHAPTER THREE

RESEARCH METHODOLOGY --

S o u r ~ ? of Data: -.

The s u b j e c t of t h i s r e sea rch i s t o i n v e s t i g a t e t h e f e a s i -

bi1ir:y of e s t a b l i s h i n g a modern piggery farm i n Egugu-Ezike.

The s tudy tht. :r~?fou?involves an ex tens ive i n v e s t i g a t i o n of t he

market and t h e p a t t e r n of consumption of porks i n t h e a r e a .

It a l s o involves proper knowledge of t he modern methdd of p i g

product ion a v a i l a b l e i n t he country. Therefore, d a t a have been

obta ined from both primary and secondary sources.

The d a t a from t h e primary sources a r e o b t a i n e i by adminis-

t rz . t ion of ques t iona i r e s . Ques t iona i res a r e designed f o r

consumers and s e l l e r s of pork, while in te rv iews a r e adopted ;is

2 ,neans t o e x t r a c t information from producers and d e a l e r s -on p i g s ,

scaff of Minis t ry of Agr icu l turc Enugu, s t a f f of Federa l Live-

st..ock Centre , Okpuje, e t c and d e a l e r s on b y i l d i n g m a t e r i a l s and

v ix t inaxydrugs i n Enugu s t a t e , t o a s c e r t a i n r e l e v a n t p r i c e s .

Secondary d a t a a r e sourced from works i n t e x t s : books,

j ou rna l s , newspapers, magazines and unpublished m a t e r i a l s .

Methods of Invest igat ioi-L

To grapple w i th t h i s problem, we have t o i n v e s t i g a t e t h e

market f o r t he product . This i s because i t i s one of t'ne key

determinants of the f e a s i b i l i t y of a p r o j e c t . The n a r k e t w i l l

be surveyed us ing a sampling method. The a r e a s t o be sampled

have been s e l e c t e d on the b a s i s of t h e fou r autononous communi-

t i p s in t h e town w h i 1 ~ t h e 11n-f tc t n ho c ~ m n l o r l h g ~ r r , haan ,-hr.,-n.-.

usi.1~ random sapling. The questionnaires are randomly adminiscered to

people who live in the communities: Umnuozzi, Umuitodo, Essodo, and Ezeoc

The researcher also intends to probe into the production and : . . .

management of pigs, the cost factors of the civil engineering and other

facilities needed in the farm etc through personal interviews and

sustained participation approach.

The sustained participation~approach is a method of detailed

study of a social phenomenon, so that all the structural mechanisms and

aspects of the phenomenon could be researched. This method has been

applied to the study of the operations of the Federal Livestock Farm

(Pig Unit), Olcpuje in Nsukka T,ocal Government Area and the Intergrated

Feed Breeders farm, Isi Uja also in Nsukka Local Government Area. These

are pig farms managed in modern ways, and have helped the researcher see

in practice some of the techniques of pig production.

Determination of Sample Size:

In this study, the researcher defines the consumers (universe)

as people who individually have the potency of earning money and who

can affect and or effect purchase decisions on the foods they eat.

In designing of survey, one must confront the problem of the size

of the sample to be selected from the population. The implications

of the sample size decisions are obvious: if the sample is too large,

time and efforts are wasted; if the sample is toc small, inadequate

info::mation is obtained. That is why various statistical methods have

been deviced to arrive at appropriate sample sizes in researches.

When probability sampling is used to determine the sample size

from the uiliverse (consumers) ;

we have standard formulas for deriving the desired size. Clifcon

and Fyffe (1977, p. 12) reco~nmend that the appropriate formula for

determining the size of sample, using random sampling is:

Where n = Sample size

p = Percentage of consumers who will buy the prodxct

z = The standard error units that corresponds to the required reliability (using a normal distribution'table).

In order to resolve the difficulty inherent in this formula which

is determining the percentage of the universe which will purchase the

product, thz researcher has conducted a pilot study of the universe.

The pilot study has been conducted by administering three ( % ) question-

naires to pork consumers living in each of the four communities,

selected on random basis. All the questionnaires were returned.

However one in Umuitodo, two in Essodo, two in Umuozzi and one in

Ezeodo who were sampled were not williqg to buy. On the whole, we

h;d s i x out of twelve dissenting to purchase. From this study, the

percentage of consumers who would buy the product was put at 50%.

If therefore we assume that 95% reliability is sufficient in

the study and that the sample size is small in comparison with the

universe and that the precision - d of the percentage will be - + 10 percent, using a normal probability table, where the number of

standard error unit Z that corresponds to the required reliability of

55% found to be 1.9'6, we can then s~bstitute figurcs in the formula

thus : n = 50 (50) (1 .96)2 = 9604 = 96

1 o2 100

This implies that if a random sample of 96 consumers are conducted,

an estimate with a 95% probability that he sample percentage within

+ - 10 percent would be obtained.

The researcher however intends to sample the entire population

of pork sellers in the town, because the initial investigation has

shown that there are just a few of them, who could conveniently be

reached. The regular pork sellers number 16 on the whole: eight in

Umuozzi, four in Umuitodo, three in Essodo and one :-n Ezeodo

communities.

C.HAPTER FOUR

DATA PRESENTATION, INTERPRETATION AND ANALYSIS:

The primary data on the market and marketing situation

of pigs was collected using questionnaires - (see appendix).

T h r s data is separated and organised into meaningful order for

better understanding and analysis. On the whole, 1 1 2 question-

aires were distributed to pork sellers dnd consumers. Out of

the number 96 returned their own, in a response pattern of 80

consumers and 16 pork sellers.

This represents 86% re~rieval rate on the whole, and 83% and

100% retrieval rates from the consumers and pork sellers respec-

tively.

The researcher found the response rate significant enough

to yield a reliable result and decided to carry on with the s t u d y .

Consumption of Pork

Table 4.1: --

i ~:ommunity

Umuozzi

Umui todo

l!!ssorlc8

No. of Respondents

37

18

Percent

46.25

22.50

18-75

12.50 .- -

The table indicateathat a significant proportion of the p x k

consumers ( 46 .25%) live in Umuozzi conununity, while Umuitodo, Essodo

and Ezeodo are inhabited by 22.5, 18.75 and 12.5% of pork consuming

respondents respectively.

Characteristics of Consumers

Table 4.2

Sex

The number of male that responded to questionnaire outnumbered

Male 5 2 Female 1 28

1

females significantly at the proportion of 65:35.

Table 4.3

No. of respondents

65 35

Percent I

Table 4.4

Percent

51.25

Religion

Christian

Muslim

Traditional

Others

Age 30 31 - 40 41 - 50 51 and above

No of consumers

4 5

. No of Consumers

2 9 2 1 17 13

3

3 5

1

80

Percent

03.75

43.75

01.25

100

Table 4.5 -.-

-.

Annual/ income ( W ) -.

Lzss than 15,000

16,000 - 25,000 26,000 - 35,000 36,000 - 45,000 Above 45,000 --

I

No of consumers

15

4 6

12

5

Percent -- 18.75

57.50

15.00

06.25

(32.50

The analysis of the personal data of the respondents shows that

65% of pork consumers are males and 35% are females. It also indicai

that the majority of pork consumers were of the ages of 30 or less.

rhe trend shows that the meat is gaining in popularity, the table

4.4 (ages) indicates a progressive growth in conswnption of pork

towards che younger ages. ofthe 80 consumer:; sampled, 29 were 30

years or less; 21 were 30 years or less; 17 were aged between

41 - 50 years, while 13 were 51 and above,

On the religious inclination of respondents, the percentage

distribution as shown in table 3 were as follows; Christians 51.25,

Muslims 3.75, traditional 35% and others one percent. This findin?

indicates a strong presence of both Christian and tr~+ditional relig

in the area. This means that those who see eating of pork as tabu

on the basis 02 religion is negligible as it is not restrained by

christianity, while those who practice traditional religion are

known to patronise pork heavily especially during their festiviti,

'The iilcorne c l i s t r i h u t l o ~ i p a t t e r n of t he r e s p o n d e n t s ( t a b l c , . 5 )

h l ~ o w s L h t about 46X e a r n between W16,000 - 25,000 p e r ilnnum.

18.751 ea rn less than W15,OCO; i l v c p c r c c n t earn between W36,000 -

W45,000, whi le o n l y two p e r c e n t e a r n above W45,000. The i n f e r e n c e

from t h e t a b l e i s t h a t most of t h e p o p u l a t i o n i s w i t h i n t h e income

range of W16,000 - H25,OOO, and t h a t pa t ronage d e c l i n e s p r o g r e s s i v e l y

a s income i n c r e a s e d . T h i s r e f l e c t s t h e wide ly h e l d b e l i e f t h a t pork

i:; a meat f o r t h e poor .

Sources of Pork Consumed

Do you e a t pork meat?

I f y e s , why?

Tab le 4 .7

Response

Yes

No -

No of Consumers

6 1

19

80 -.-

-----

A v a i l a b i l i t y

P a l a t a b i l i t y

V a r i e t y

Uniqueness

P e r c e n t

76.25

23.75

100 ---. -

No of Consunrers

20

18

12

11 - 6 1

P e r c e n t - 32.78

29.50

19.67

18 .03

1 00 -- .. -

I f no, why?

Table 4.8 ----

Rel ig ion

I i i r t y Habbits

Fa tness

Diseases -

How o f t e n do you e a t pork?

--- No of Consumers

5

6

4

4

19

Table 4.9

Percent

26.32

31.57

21 .05

21 .05

100

- Everyday

Once a s e e k

Regular ly

Once a month

Occasional ly

lo of Consumers

12

15

18

10

2 5

Where do you buy the pork from?

Table 4.10

------ Native market

Meat shops i- Producers t--

No of Consumers

65

L

Percent -- 15 .OO

18.75

22.50

12.50

31.25

100 -

Percent

81.25

1.25

17.50

100

Most consumers in te rv iewed (76.25%) p a t r o n i s e pork, whi le 22%

d i d no t . Those tha: e a t pork gave a v a i l a b i l i t y , p a l a t a b i l i t y ,

v a r i e t y and uniqueness a s t h e i r reasons f o r accep t ing pork, b c t

w i th a v a i l a b i l i t y topping t h e l i s t wi th 32.78% ( see t a b l e 7 ) .

Those who d i d no t e a t pork gave va r ious reasons a s s o c i a t d

r e l i g i o n , d i r t y h a b b i t s , f a t con ten t s and d i s e a s e s . Again, 31.25%

of thasrb:;.h,-, e ~ : t p o r k do s o occas iona l ly , 15% everyday; 18.75X once a

week, 22.5% r e g u l a r l y and 12.5% once a month ( t a b l e 9 ) .

A ma jo r i t y of t h e consumers (81.25%) buy pork from t h e n a t i v e

market , 17.5;2 from producers , whi le a marginal 1.25% buy from meat

shops. The t r e n d i s exp la inab le by t h e v i r t u a l absence of nodern

meat shops i n t h e town.

P r i c e s of Pork i n Re la t i on t o Other Meat Types

A t what p r i c e pe r kilogramme do you buy meat?

Table 4.11

- WKg -- loo - 110

111 - 120

121 - 130

131 - 140

N o response

No of Consumers

15

7

9

15

34

Percent

18.75

08.75

11.25

18.75

42-50

How do you view pork i n r e l a t i o n t o o t h e r meat types?

T a b l e 4.12 -

More expensive i- - 1 - 06.25

- - Less expensive --

I f o f f e r e d choice , which meat would you p r e f e r ?

.

Table 4.13

Ln t a b l e 4.11, w e can s e e t h a t ma jo r i t y of t he consumers 42.50%

d id not i n d i c a t e the price:, o1 pork pcr kilograrame, because most of

them bought t h e i r meat from t h e open market where meat i s not so ld

by weight. P r i ce s given by respondents were as h igh a:; dl00 t o

W140 per kilogramme, Sor those who admit ted t o buying by weight.

When t h e consumers were asked t o make a choice of meat, ch icke

was ahead of t h e pack wi th 31.25% of respondents shswing prefcrenc.2

f o r i t ( t a b l e 4.13). Others followed i n ch i s order : beef 20%,

goa t ( l 8 .75 ) , pork ( l8 .75%), games (11.25%) and o t h e r s (6.252).

No of Consumers Percent

Pork

Beef

Coat

Chicken

I Caws

' Others -

-

15

16

15

25

9

5

80

---

18.75

20.00

18.75

31.25

11.25

06.25 - 100

NARKETING OF PIGS (PORK)

Characteristics of the Sellers -

Table 4.14

Percent -- 5 0

25 18.8

06.2

Name of Community

Umuozzi Essodo

Umuitodo

Ezeodo ,-.---

Male

Female 12.5

No of Consumers

8

4 3

1

Table 4.16

Table 4.15

Marital Status No oE Consumers Percent

Nnrried 12

Single 4 25

No of Sellers

3Oyrs or less 1 t . 3 1 3lyrs - 40yrs

2 i 12.5 i 41yss - 50yrs 8 50 I

i 5lyrs - 60yrs i 3 18.7 (

Table 4.19

-- Rel ig ion

C h r i s t i a n i t y

1:;lamism

Trad i t i ona l i sm

Others

Do you engage i n o t h e r jobs?

Table 4.20

No of S e l l e r s

6

0

10

0

16

I f yes , s p e c i f y

.- Percent

37.5

0

62.5

0

100

r

No of s e l l e r s Percent

Farming 4 I 40

Wine tapping 5 5 0

Trading 1 10 1

1

From the responses gathered from t h e survey , i t has been observed

t h a t men dominate t he bus iness of pork s e l l i n g i n t he town. A whopping

87.5% of them were males, while only 12.5% were femal-e s e l l e r s . O f

t he se se l l - e r s 6 . 3 % of them were l e s s than 3 1 y e a r s , 12.5% were between

31 and 40 years , 50% of them were between 51 a n d f8O y e a r s , while 1 Q c-/ - - - - - -I---- c,-,

Majority of the sellers were christians, while 35% were practi-

tioners of traditional religion. Apart- from selling pork 62.5 of

them engage in other business, namely wine tapping, farming and

trdding (table 20).

What are the sources of pigs slaughtered by you?

Table 4.21

Who are your major customers?

No of sellerss

Own animals 1

Bought from producers 5

Bought from middlemen 10

Boughc from another state -

16

Persent

6.3

31.2

62.5

-

100 m

What are the classes of pigs slaughtered?

I Households Butchers

Hotels

Middlemen

Table 4.23

I No of seilers

8

0

No 6f sellers

Porkers 4 Boars 1

S ~ W S 3 Combination 8

16

Percent

5 0

0

Percent

25

06.3

18.7 50

100 -.

6 37.5

2 1 12.5

What are the determination of the selling prices?

Table 4.24

- Quality of meat Quantity of meat

Weight of meat

I No of sellers Percent,,

4 25

10 62.5

2 10

16 100

How do you preserve CnSbld pork after the day's business'?

Table 4.25

By boiling frying By freezing

No left over

No of sellers Percent

6 37.5 0 0

10 62.5

What .?roblems are encountered in marketing pork in the rown?

Table 4.26 --

NO of sellers

Leck of storage facilities

Disease infection 3

Poor image of pork 5

16

By what measures are prices of pigs determined?

Table 4.27

Percent --

31.25 18.75

--

By weight By vi;ual size

No of sellers

4 12 - 16

Percent

25

75

100

H i m many pigs do you slaughter i n a month'!

No. of s e l l e r s

2

3

8

1

1

1

How much do y ~ u pay for a pig?

Table 4.29: --

-- PI

Lcss than 2000

2000 - 3000

5000 - 4000

About 5000

Abov? 5000 --

I

No of sellers

How much do you gain from selling a pork?

- W -.-

About ,500

I,l)ou t 1000

:\bout 2000

About 3000

About 4000

-- No. of sellers

-.--

8

Percent.

12.50

18.75

50

6.25

6.25

6.25

Percent -

Percent. - 50.00

'15 . O O

12.50

1.2.50

-

Sources o f P i g S l a u g h t e r e d . -

M a j o r i t y of t h e pork s e l l e r s l>oui;hL pigs Lroar Ll~c 111Lddlc 111cr1

oLlrers g o t from producers ;tnd those tllcy r e a r e d or1 t l ~ c l r owrr.

()u.- tntLtst ivcLy, 6Z.5Z 01 t h e s e l l e r s p r o c u r r e d p t g s Irorn tile middle-

men, 31.2% from p r o d u c e r s , w h i l e 6.2;; i n d i c a t e d own p i g s a s t h e i r

s o u r c e .

752 df t h e s e l l e r s v a l u e t h e p i g s purchclsed by v i s u a l a ssessmen .

whi le 25X de te rmine t h e v a l u e by p e r c e i v e d w z i g h t a s a s c e r t a i n e d by

hand.

From t h e f i n d i n g , a l l s e l l e r s s l a u g h t e r e d between 3 - 14 p i g s

e v e r y week.

C ~ ~ I S S C S of P i g s S l a u g h t e r e d and T h c i r R e s p e c t i v e P r i c e s : -- -- I i e s u l t s show t h a t 37.5% of s e l l e r s bought p l g s v a l u e d betwecn

W2000 - 3000, 35X b o u g l l ~ f o r betwecn W3000 - 4000, lU.7SZ bought £01

about W5000, w h i l e o n l y 6.25% bought f o r above W5000.

O f t h e 16 p i g s e l l e r s p o l l e d , 501 bought any combina t ions - p o r k e r s , b o a r s o r sows, 25% c o n c e n t r a t e d on p o r k e r s , 18.72 p a t r o n i s r

sows, w h i l e 6.3% goes f o r b o a r s .

P r e s e r v a t i o n oL unso ld Pork and Problems Encountered by t h e S e l i e r s

The r e s u l t of t h e su rvey shows t h a t 62.5% of t h e pork s e l l e r s

i n Ilnugu 1Czllw olwilys f i n i s h t h c i r s t o c k s on clay 01 s:Laughtcr i111ti

t h e r e f o r e e x p e r i e n c e no l e f t o v e r , w h i l e 37.5X t h a t a d m i t t e d t o t h e

problem of l e f t o v e r s a i d t h e y p r e s e r v e i t by b o i l i n g o r f r y i n g o r

both . None of then1 made u s e of f r e e z i n g a s t h e i r i e s p o n s e s show.

The ~>rob lems of t h e pork s e l l e r s v a r i e d frora I.ack of s t o r a g e

f a c i l i t i e s , c a p i t a l , image of pork , and the b e l i e f among many t h a t

i t i s u s u a l l y i n f e c t e d by d i s e a s e s .

MARKET :\NU .PLANT CAPACITY

Demand and Market S t u d ~ -

Pork i s consumed around t h e wor ld , b u t because i t i s r e g a r d e d

a s o t aboo by some r G l i g i o u s groups s u i n a s Judaism and Islauiism,

i t i:; v e r y unpopular among t h e pc6plc of Middle East iind some-locil l

p o p u l a t i o n s i n A f r i c a and As ia . However i .~ Germany, Denmark, Poland

and A u s t r i a i t is a v e r y c h e r i s h e d d e l i c a c y .

Back home i n N i g e r i a , 2 i e w y e a r s ago po?k was 'hardly . ~ c c e p t a l i l e

i n t h e c u i s i n e s of t h e peop le . The r e p u t a t i o n of pork a s b e i n g d i r t y ,

d i s e a s e d and b a s e r e p e l l e d many N i g e r i a n s from ch ,e r i sh ing i t . At t h a t

t ime, i t s consumption was l i m i t e d and o r p e r i o d i c a l , o f t e n r e s t r i c t e d

LO t h e t ime 01 sonic t r a d i t i o n a l f e s t i v a l s .

But today , t h e u s e of pork i s E a s t l y g a i n i n g in a c c e p t a n c e . Morc

peop le a r e coming t o terlns w i t h i t as a d e c e n t meat t h a t shou ld bt.

accorded s i m i l a r r e g a r d s and r e c o g n i t i o n as o t h e r meat t y p e s , such

as ch icken , beef and mutton. T h i s i s e v i d e n t i n s u p e r marke t s and

c h a i n s t o r e s i n u rban c e n t r e s i n t h e c o u n t r y w t e r e pork e n j o y prominer

d i s p l a y s . Secondly, commercial p iggery e n t e r p r i s e s a r e now s p r i n g i n g

a s thc? demand f o r pork h a s con t inued t o s o a r .

Demand e s t i m a t e f o r pork i n Enugu-Ezike cou ld be done th roukh

t h e c o ~ l ~ u r ! ~ p t i ~ i n r a t e s i n t h e a r e a whlch c o u l d be esi-irnated through thc

number of p i g s s l a u g h t e r e d . F i g u r e s o b t a i n e d frorll r e g u l a r pork s e l l e l

i n t h e iirL!il p u t t h e a v e r a g e number 01 p i g s s l a u g h t e r e d i n t h e Lown a t

150 p e r month. The pr imary concern of t h e r u r a l b r e e d e r s is t h e

f a t t e n i n g of t h e anirnals w i t h o u t c o n s i d e r a t i o n f c r 11sc o r a p p r o p r i a t e .

nc?ss. When one c o n s i d e r s t h i s , i t cou ld be e s t i m a t e d that-the-sxies-*

brought to the market have an average weight of 100 kilogrammes.

This estimate will put the demand for pork at 150,000 kilograrnmes

per month (1,800000'kilogrammes per month).

Future demand

The demand for pork is entrapolated to be on the increase side

in the future. Nigeria which is a highly populous country with an

annual population growth rate of 2.5% is already experiencing food

shortage problems. It is therefore expected that the country will

seek succour in the prolificacy, quick generation interval acd high

food conversion rate, of pigs by higher patronage of pork, more so

now that greater intensive management systems have put paid to

misapprehensions about the nature of pigs. Pork consumption no doubt

will continue tc increase. It is now a common practice for pork to

be served in our restaurants .i-n. form of exotic'menus~common in Western

countries, such as bacon, ham, etc.

A conservative estimate will put the rate of increase percent to

10 per annum in the next few years, this general scenario is expected

to i.mpact at a similar quantum on pork demand in Enugu-E3i.e. The

projection for the- demand in the town is shown in the table below:

Table 5.1 -- Demand Projection fox Pork (1995 -2000;

1

Kevenue at current of 120 per kg@mJ

216.0

237.6 ,. , - -261.4

---I 287.5

316.3

348.0

Year -7 Quantity (kg) 1995

!% 1997

1988

1999

2000

1800000

-.--..-- 1980000 2178000

2396000

2636000

2900000

The p r o j e c t i o n shows t h a t t h e dcn~aud f o r pork i n t h e a r e a w i l l

b c abou t t h r e e t imes t h e q u a n t i t y demanded i n 1995 by t h e y e a r 2000,

and t h e market p o t e n t i a l s f o r pork i n t h e town i s shown t o be abouc

H348 m i l l i o n &t t h a t y e a r .

Market Study

P iggery e n t e r p r i s e s u s u a l l y adop t d i f f e r e n t approaches i n t h e

p r o d u c t i o n and marke t ing of t h e i r p r ~ d u c t s . Some of them s p e c i i l i g e

i n tKe p2oduct ion ahd s a l e of f i n e b red a n i m a l s , e s p e c i a l l y f o r

f o u n d a t i o n s t o c k i n g . I n t h i s c a s e , a t t e n t i o n i s g i v e n t o deve lop ing

s t r a i n s w i th d e s i r e d c h a r a c t e r i s t L c s . Some of the c h a r a c t e r i s t i c s

d e s i r e d i n sows i n c l u d e q u a l i t y , l e n g t h of body, f e m i n i n i t y , and a

w e l l - d e v e l o ~ e d udder , having two rows of t e a t s w i t h a t l e a s t s i x t e a t :

i l l cilch row ; ~ n d capablc of suck.Lhg l i ~ r g e l i t ~ e r s of p I .~s . The ; ) o a r

i l l t h e o t h e r haqd i s expec ted t o show q u a l i t y , n ~ a s c u l l n i t y , good

d i s p o s i t i o n , and a b i l i t y t o s i r e s t r o n g r i g o r w ~ s p i g s . So t h e s e

e n t r e p r e n e u r s s e e t h e i r m i s s i o n i n b u s i n e s s a s t h e p r o d u c t i o n of p i g s

t h a t m a n i f e s t t h e s e q u a l i t i e s and which t h e y s e l l t o o t h e r f a r m e r s

a s i n - p i g s s g i l t s , b o a r s , sows o r f e e d e r s .

The second t y p e of t h e p i g s p r o d u c t i o n e n t . , ~ - r p r i s e s a r e i n t e r e s t e c

i n t h e b r e e d i n g of q u a l i t y p o r k e r s t o be s l a u g h t e r e d and s o l d as pork.

mcilt. Although some e n t e r p r i s e s may o p e r a t e a :ombination of t h e s e

approaches , a g r e a t d e a l of them s p e c i n l i s e i n one.

Thc m i s s i o n oL t h i s b u s i n e s s i s t o p rov idc meat t o t h e peop le

.lt p r o f i t , and e f f o r t s s h a l l be c o n c e n t r a t e d i n t h e p r o d u c t i o n and

m a r k e t i n g of porkers . These an imals a r e grown t o tl:u age and s i z e

01' p o r k e r s , ,lnd a r c s o l d as p c r t h e i r weight t o tlle r e t a i l e r l o r

sl lugh te r o r i n t h e a l t e r n a t i v e , t h e an imals may be s l a u g h t e r e d m d

packaged u i t h i n t h e farm and s o l d t o r e t a i l e r s ( ~ ~ s u a l l y meat s l~oy,s

o r : ;uperni ;~rkcts) . l lh is bus inesv w i l l a l s o e x p l o r e c s t a b l i s h l n g s e l l

poZ3ts where I t may c a r r y o u t d i r e c t s a l e s t o t h e f i n a l consumers.

Producer I

I

Butcher (RZitailer) .

1 > Consumer < I

F i g 1: Market ing Channels f o r pork.

The c u r r e n t wholesa le p r i c e s f o r q u a l i t a t i v e pork meat i n t h e

c o u n t r y i s pu t a t a range of W120 - 150 p e r k i lo~ramrne . I n some mea

shops and supermarke t s , t h e p r i c e d i f f e r e n t i a l s r a n g e from 15% t o

30X p e r kilogramme h i g h e r t h a n t h e wholesa le p r i c e .

Although i t has been c s t a b l i s h c d 111 o u r s u r v e y t h a t t h e r e are

some s i g n i f i c a n t m i s g i v i n g s abou t pork meat, t h e e x i s t e n c e o f a marl

prc: 1 ou11t1 nou ugh t o s u s t a i n b i g c n t e r p r i s c s i n t h e i n d u s t r y h a s bccr~

e s t ~ t b l i s h c d . And one way t o Ilarnc~!;:; Llle p o t e n t i a l s t o advan tage i s

th rough low-pr ic ing t e c h n i q u e , e s p e c i a l l y i n t h e p r h l r y a r e a of

Afte:: c a x e f u l c o n s i d e r a t i o n of t h e c ~ s t of p r o d u c t i o n , t h e Grr

of o t h e r meat t y p e s which a s o f now e n j o y more p : p u l a r i t y t h a n p o r

and t h e r o l e Lhat t h e p r o d u c t i o n of t h i s i tern should p l a y i n Enugu

Ezike i n p a r t i c u l a r , a p r i c e of W120 p e r kilogramme i s recommendec

w i t l i a n expected mat b I I ~ margin OF a t l e a s t 15X. T h i s w i l l rnske 1

p r i c e s v e r y t t t r a c t i v e i n r e l a t i o n t o o t h c c meat t y p c ~ l i k e b e e f :

mut ton, ch icken e t c whose p r i c e s range o v e r W180/Kg.

Although t h e r e is o n l y s c a n t y s t a t i s t i c s i n a d e q u a t e t o e s t a b l i s h

th(! i n d u s t r y demand f o r t h e p r o d u c t , p o i n t e r s from t h e su rvey on pork

co~isuincrs conducted i n Enugu-Ezike i n d i c a t e t h a t t h e r e i s high p r e s e n t

and p o t e n t i a l demand f o r t h e p roduc t . Even t h o s e whose a v e r s i o n - L o r

purks i s hinged on such r e a s o n s zs d i r t i n e s s and d i s e a s e i n f e c t i o n

.lrc expec ted t o be p o s i t i v e .~bouc pork when p r o p e r l y informed about

t h e modern methods invo lved i n t h e i n t e n s i v e p i g g e r y e n t e r p r i s e s and

how t h e s e ne thods e x c u l p a t e t h e b lemishes t h a t r e p e l them. T h i s w i l l

be b e t t e r achieved i f a p u r p o s e f u l and i n t e n s i v e marke t ing e f f o r t i s

c a r r i e d o u t on t h e consumers. It i s p r o j e c t e d based on t h e f i n d i n g s

from t h e su rvey t h a t t h e company s h a l l be a b l e t o s e l l abou t 600

p o r k e r s p e r annum.

l u o r d e r t o e f f e c t i v e l y s e l l t h e p r o d u c t , j g g r e s s i v e and '

a r t a c u l a t e d marke t ing s t r a t e g i e s have t o be adopted t o p l a c e n p o r k a t a

r e a s o n a b l e comparison w i t h o t l i e r common nieat t y p e s t h a t e n j o y p o p u l a r i t ]

i n o u r s o c i e t y .

The f i r s t and v e r y paramount marke t ing s t r a t e g y i s t o produce a

qua1 i t i 1 t i v c p roduc t . T h c g e n e r a l assumption I n o u r s a c i c t y i s rh ' l t

pork i s an i n f e r i o r meat which do n o t en joy t h e pa t ronage o f d . i c c n t m m e n .

e n t e r p r i s e i s expec ted t o employ modern p r o d u c t i o n t e c h n i q u e s t o

produce pork t h a c w i l l prove wrong such misconcep t ions . The m o ~ t

d e s i r a b l e pork i:; g r e y i s h i n c o l o u r , f i r m and f i n e g r a i n e d , w e l l

marbLed and covered w i t h a n o u t l a y e r of f i r m w h i t e t i s s u e ( t h e New

Encyclopeadia) . I n a d d i t i o n t o a h i g h q u a l i t y p o r k , t h e p r o d u c t i o n

p r o c e s s and meat packaging shou ld bc I n t h e most s a n i t a r y of c o n d i t i o n

L O , : I lily L I W I c , ~ r u o C thosc wllo t-l~iulc I L i s a d i r t y u~ca t .

It s h a l l a l s o be necessary t o engage i n a sys t ema t i c , aggress ive

~ C C S O L I ; ~ ~ s e l l i n g s t r a t e g y . dy t h i s means, the s a l e s team w i l l con tac t

meat shops, supermarkets and departmental s t o r e s w i t h i n the town dnd

o t h e r s nearby, and i f p o s s i b l e e n t e r i n t o supply arrangements with

thcm. The s a l e of t he product i n such b lue ch ip market u n i t s w i l l

h e l p enhance i t s r e p u t a t i o n among consurncrs. Moreover, t he e n t e r p r i s e

s h a l l s e t up meat shops a t some designated c e n t r e s i n and around the

town where t h e i r s a l e s persons w i l l be s t a t i o n e d t o s e l l t he product

d i r e c t t o con-;umers. The l a t e r a p p r o ~ c h h a s the advantage oE enabl ing

the sales team t o canvas; the inhe ren t n e r i t s i n t he product to t h e i r

cus torners.

with a q u a l i t y product and decent s e l l i n g p o i n t s , t h e e n t e r p r i s e

i s expected t o a l s o engage the s e r v i c e of l o c a l a d v e r t i s e r s , e s p e c i a l l y

those who have publ ic address system f L i c i l i t i e s and u s them t o inlorm

t h e c o n s m e r s on the h igh po in t s 01 the product . The)' a r e t o c m v a s

t h e decency, h igh q u a l i t y and n u t r i t i v e Galue of pork produced under

t he modern product ion system l i k e the p r o j e c t i n case.

I n a d d i t i o n , h a n d b i l l s may be d i s t r i b u t e d w!iere proper exp lana t ion

i s m.lde of the modern management system of the p i g product ion process

i n the f !rm ~ t s a g a i n s t the wi ld ly rei1rc.d p igs thiit abound i n tlle

, ~ r e a , po in t ing out t he h e a l t h and d c i t a r y advantages i l lherent i n

t l ~ fmn!s produced pork.

A 1 1 these no doubt , w i l l he enough Ln Lhe f i r s t few yea r s t o

make the product ga in s i g n i f i c a n t acceptance.

Market Pene t r a t ion and Accep tab i l i t y

The p r o j e c t , upon commi.sslon.wi.11 be expected t o pene t r a t e an

cap tu re about 22X of the present niarkce s i z e i n Enugu-Ezike. Lnfa

i f there i s an i n f i n i t e capac i ty , a v a i l a b l e t o cne p r o j e c t , i t cou

capture up t o 80% of t he market s i z e i n about i t s t h i r d year of

opera t ion . Since the p r o j e c t would be the pioneer modern p i g farrr

i n t h e town, i t s market share of 22% w i l l no t be i n any doubt.

The prime market of t h e pork has been i d e n t i f i e d a s Enugu-Ezi

bur the e n t e r p r i s e s marketing a c t i v i t i e s s h a l l s t r e t c h t o o t h v r ar

e s p e c i a l l y the meat shops i n Erlugu s t a t e . It i s expected t h a t 702

of the product would be so ld i n Enugu-Ezike, 30% i n Nsukka, Obollc

Orie Orba and 10% i n Enugu and i t s environs. The p r o j e c t i s expec

t o concent ra te on these t a rge t ed markets.

Sa l e s Forecas t

The s a l e s f o r e c a s t f o r t h i s p r o j e c t w i l l be based on the prcr

yea r ly production and t l ~ e suggested market p r i c t . It i s expectec:

ex-farm p r i c e f o r t h e pork w i l l be H120/kg. The p o t e n t i a l f o r t h

p r o j e c t i s a s shown i n t a b l e 5.2

Table 5.2 - Sa le s P r o j e c t i o n f o r t h e P r o j e c t --

-- Year of Porkers ( a t 70lcg each) .-

----? - Sales a t W120/kg of C n p a c i t j

Revenue £row s a l e s t o t he p r o j e c t a t t h e c u r r e n t p r i c e s h a l l

amount t o 242.7 m i l l i o n i n i t s f i r s t year of opera t ion . This i s

expected t o i nc rease t o W5.04 m i l l i o n by t h e f i f t h yea r of opera t io :

a t f h l l product ion u t i l i z a t i o n .

P l an t Capacity

The a n a l y s i s of demand and supply of pork i n t h e town has amply

demonstrated t h a t t h e r e e x i s t s a huge p o t e n t i a l f o r breeding of pork1

p i g s t he re . Cons t ra in ts i n t h e design f o r op t imal p l a n t capac i ty arc

t hese fo re mainly the a v a i l a b i l i t y of improved s t o c k t o be used a s

i n i t i a l s tock; funds f o r i n i t i a l c a p i t a l investment , and t h e r e q u i r e -

n e n t s of minimal capac i ty t o breed porker p i g s economically and

compet i t ive ly , v i s - av i s r u r a l producers who p r a c t i c e wild and e x t e n s i ~

r e a r i n g which t akes minimal c o s t .

Taking a l l t he se i n t o account , we recommend a farm s i z e capac i ty

o:i 600 porker p i g s per annum, which w i l l s e rve about 22% of t h e t o t a l

pcrk market i n Enugu-Ezike. The major c o n s t r a i n t s Se re i s t h e s e l e c t :

of pure breed animals a s foundat ion s tock . To acqu i r e s t r a i n s t h a t

possess t h e r i g h t t r a i t s o f t e n pose problems t o farmers because what

arc? usua l ly a v a i l a b l e i n most farms s r e mixed breeds wi th no generat ic

s t a t i s t i c s t o guide t h e farmer i n p ick ing the animals f o r t h i s farm.

However, t h e farm i s expected t o c a r e f u l l y p i ck i t s foundat ion

sto.:?~ from the ~ > i g s Progmy, Ckntre a t Okpu'je, i t w i l l s t a r t w i th

53% capac i ty u t i l i s a t i o n i n t h e f i r s t year , t hea mwe up t o 802 i n

t he second year before a t t a i n i n g the f u l l capac i ty l e v e l i n t h e

t h i r d year .

The b a s i s f o r annual capac i ty u t i l i S A t i 6 f i - i s :

i. t h a t t he farrowing of sows averaged a t twice a year and e i g h t p i g l e t s per l i t t e r ;

ii. t h a t t he primary mission of t h e farm i s t o produce and s e l l porkers only;

iii t h a t t h e animals t h a t possess t he d e s i r e d q u a l i t i e s a r e bred t sows and boars t o i nc rease t h e breeding s t o c k a t a r a t e t h a t would y i e l d the 600 porkers a-year product ion.

Table 5.3

Capacity U t i l i s a t i o n and Estimated Annual Capacity Praduct ion of PC

MATERIALS- INPUT

- - . -2

Mate r i a l a and Input

An est imated yea r ly m a t e r i a l s c o s t f o r t he p ro j ec t ed f i v e y e z

P a r t i c u l a r s ( ~ r . 1 / Yr.2 I

U t i l i s a t i o n of capac i ty 153% ' 80%

opera t ion a t 1995 c o s t cons tan t p r i c e s has been put a s fo l lows:

Yr.3

100%

42000

Year 1

Year 2

Year 3

Year 4

33600 T o t a l annual product ion (kg)

The primary raw m a t e r i a l s i n p i g product ion i s t h e beginning

Yr.4

100%

42000 L-

22400

~ t o c k - 6 a ~ i n n i n g .st ockmay come i n form of p i g l e t s , weaners, q i l i s , boar

Yr.5

100%

42000

sows i n c h e i r requi red propor t ions according t o t.he s i z e of t he f

in-pigs wi th boars f o r f u t u r e mating o r a combin&tion of them a s

des i r ed by the farmer. The important t h ing i s t h a t t h e farmer i s

guided by the des i r6d q u a l i t i e s i n t he s e l e c t i o n of t h e breeding

s ince i t is paramount t o the f u t u r e performance of t he farm. I n

t h i s s e l e c t i o n , t he farmer i s guided by such f a c t o r s as p r o l i f i c i t }

feed u t i l i z a t i o n e f f i c i e n c y , s i m i l a r i t y of co lou r , markings and

conformation. Sows a r e d e s i r e d i f they show q u a l i t y , l eng th of

body, f emin in i ty , well-developed udder, two rob:, of t e a t w i th a t

l e a s t s i x t e a t s i n each row and capac i ty of suck l ing l a r g e l i t t e r s

of p igs ; while t h e boar i s apprec ia ted i f i t has q u a l i t y , mascu l in i t

good d i s p o s i t i o n and a b i l i t y t o s i r e s t rong , vigorous p igs (Encyclop

Br i t ann ica , 1970 ed, p 107).

For t he purpose of t h i s p r o j e c t , i t i s recommended t h a t in--pigs

2e purchased a s t h e breeding s tock. I f t h i s i s done, i t i s expected

10 f a c i l i t a t e t he progress of t h e f a r q a s l e s s t ime i s spent i n

growing weaners t o mating s i z e o r mating g i l t s o r sows.

Thus, the in-pigs and boars needed f o r t he d i f f e r e n t es t imated

~ ~ 1 p . 1 : i t i . e ~ a r e as Follows: 20 in-pigs 2nd -one boar f o r the beginning

yea r , another t e n in-pigs added i h t h e second year , the t h i r d year

e i g h t a r e added - and a t t h i r d s t a g e the number needed f o r t he farm

i s a t t a i n e d .

Ta3le 5.4

No of In-pigs - Required

1 20 1

2 I 10

-- Cost per I ~ r . Tot Boar (H) 1 No of -Boars

Required

1

- - 9,000

-

Cost per In-pig ypl)

"7500 I 1

8 - I

159 , O O

75 ,oo II

I - -

-

I - 1 60,OO I - I -

- -

Another important m a t e r i a l s needed f o r t he sustenance of t h

f a r u a r e t h e animal feeds . Feed r e p r e s e n t s about 43.4% of t he t

c o s t of y o d u c t i o n s i n c e f eeds a r c very c o s t l y , i t i s recommende

t h a t they be manufactured i n t h e farm. P igs a r e normally f e d w i

d i e t s b u i l t on hay, spent g r a i n s , palm ke rne l c i l , f i s h waste ,

groundnut cake, soyabeans meal, and sometimes cassava , a t va r iou

combinations. It i s however recommended t h a t t h i s p r o j e c t adopt

use of palm ke rne l kake (PKC), groundnut cake, soyabean meal, sp

g r a i n , f i s h waste and such combinations which have been found no

only economical bu t r i c h i n n u t r i e n t and a r e 6 f f i c i e n t l y i n u se

many modern piggery e n t e r p r i s e s v i s i t e d i n course of our i n v e s t i

The m a t e r i a l s needed f o r t h e product ion of -the complete corn

of feeds f o r t h e 320 porkers f o r t h e f i r s t year on average consu

t i o n r a t e of 200 kilogrammes of f eeds per porker a r e e s t i m a t ~ d : L

shown i3 t a b l e 5.5

Table 5.5 Feed Product ion

? l a t e r i a l

PKC

Groundnuc cake

Soyabem cake

Spent g ra ins

F ish waste

S a l t .- -

Unit p r i c e ( W )

16.8lkg

13.O/kg

25.0lkg

-2.olkg

1201kartons

500lbag'

Quanti ty - T o t a l Cost (W:

16 tones

i 26,880 8 tones 104,000

4 tones

43 tones

24 ca r tons

8 bags

100,000

86,000

28,000

4,000 2

591,600

The t o t a l c o s t of primary m a t e r i a l s (p igs ) i n yea r one i s

W159,000, while the c o s t 6f f eeds i s put a t W591,600. Therefore , t

t o t a l m a t e r i a l c o s t s f o r t h e product ion of 320 po rke r s a r e e s t ima te

a t W750,000 whi2h amounts t o W2,346 per porker f o r y e a r 1.

I n year two, t he p ro j ec t ed product ion volume i s 480 porkers , a

hold ing the above year one c o s t constant, we e s t ima te t h a t 10 a d d i t i

in-pigs needed t o meet t a r g e t f o r the year w i l l c o s t W75,000 and t h .

feeds f o r t h e product ion of t he p r o j ecrsed W48Orpprkers rare expected

c o s t W887;400, whiSi'sli&^up t o W962,400. And f o r t h e t h i r d y e a r ,

t o produce a t t h e f u l l capac i ty of 600 porkers per y e a r , e i g h t

a d d i t i o n a l in-pigs a t t h e c o s t of 4460,000 a r e t o be added, and t h e

m a t e r i a l needed'for feeding the animals a r e es t imated a t W1,109,250

thus t o t a l l i n g W1,169,250. The c o s t f o r subsequent y e a r s a r e expec

t o average a t t h i s amount (W1,169,250), a s t h e number of sows needel

i n t he farm has been a t t a i n e d a t 38, and s h a l l remain a t t h a t u n t i l

change i s e f f e c t e d on the farm capac i ty .

Packaging Cost

I n o fde r t o enhance the decency of t he product , pork i s u s u a l l :

s o l d i n n e a t packs. The u s u a l method i s packing i t i n sma l l po1.y-

thene bags. To pack 1000 kilogrammes of pork, an average of 1000

small-s ize polythene bags a r e needed a t a c o s t of about W200

(quan t i t y p r i c e ) .

Annual package c o s t s a r e shown i n t a b l e 5.6

Year

1

2

3

4

5

Annual Prodn of Pack (kg)

22,400

33,600

42,000

42,000

' 42;ooo

U t i l i t y Costs

( a ) E l e c t r i c i t y

Annual Packing c o s t (W)

4480

6720

8400

8400

-8400

To produce porkers , t h e e l e c t r i c i t y usage i s l i m i t e d t o what

is used by e l e c t r i c p i g brooder ( f o r warming p i g l e t s , weaners, and

growers) and what i s consumed a t t he farm house f o r t h e farm hands.

Cansumption i s es t imated t o c o s t about W12,500

(,b) ke ros ine O i l

About 200 l i t r e s of keros ine f o r lamps t o provide l i g h t i n t h e

farm a t n igh t and s toves t o be used i n p l ace of e l e c t r i c P ig Brooders

dur ing cases of power f a i l u r e s a r e requi red per annum. The c o s t i s

es t imated a t W8.50 per l i t r e = W1700.

( c j Water

Water c o s ~ s a r e es t imated a t W52,000 f o r t h e f i r s t year of

opera t ion . This i s based on an es t imated W l O O O FeT-wi5iZk needed-fo - '

f i l l t h e 500 ga l lon tank i n t h e farm. The t o t a l u t i l i t y charges

a r e t abu la t ed i n t a b l e 5.7.

Table 5.7 Annual Utilitv Costs

Supply Programme

The breeding stock of in-pigs which are the primary material £01

the farm is expected to be obtained from the Federal Livestock Depart

Toral Utility cha (%>

Electricity I . Kerosine .. i Charges (N) Charges(W) I I

ment, Pig BreedingIProgeny Centre, Okpuje,'-Nsukka Local Government

Water . Charges(8)

Area, Enugu State, which is just 30 kilometres away from the locatios~

site of the project. Since it is of paramount importance to stock

qualitative breeds that would sire offsprings that will meet the '

farmer's various desires of high fecundity, high maturity, short

generation interval and the degree of lean meat or fat stored by the

animal etc, the search for these initial stock may involve going to

alternative sources such as Austen Farms; An&, Oyi Local Govern-

ment Area, Anambra State. As already stated above, these animals

will-be purchased in the following order: twenty (20) in-pigs

and a boar in the first year, ten (10) in-pigs fcr year two, and

eight in year three to make for the required number 38. These

animals (38 in-pigs and a boar) are expected to yield not less than

600 porkers per annum as from year three.

These animals are expected to be of the exotic breeds such as

large wh:te, landrace and some crossbreeds.

\\ lip ition, fuel for the farm's vehicle and kerosine oil for the standby lamps and stoves are easily procured in the many filling

stations near the location. Furthermore, the presence of access

roads to the location will no doubt facilitate the movement of iten

to and from the project location. The availability c.f these utili-

ties will contribute in no small measures to the successful operatic

of the project.

ii. Availability of Manpower

The existing social amenities in the location will help attraci

people into the area. The movement trend in the town is towards

the headquarters where these amenities exist, and thus will make

labour readily available for hire for the farm.

iii Social Amenities -

Thp i m n n r t a n t s n r i a l i n f r a s t r l ~ r t ~ ~ r e 1 i k e h n s n i ta1 s . nine-bc

v. Plant Size and Local Conditions -

The piggery farm is medium in scale and is expected to cover

a land spsce of about 1000 sq metres. The farm is located in a wide d

expanse of land which is close by the Nkpamute-Igogoro road. The - i land is inexhautible in the near future and is copiously available

for future expansion activities.

Our findings also indicate that while a plot of land (50 X 50sqm)

sells for W40,000-50,000 at some more central points, a plot of land

here could be procured with W25,OOO. The site is quite serene and

conducive to concentrated farming, in addition to being under no

environmental threat.

Environment Impact

Contrary to general opinion, the pig is a clean animal if given

sanitary surroundings. Most pigs are forced to live in anunsnnitary

environment. Under an intensive management system, the type expected

in the farm, the farm poses no environmental harzard to the people.

On the contrary, the pig dungs when collected and dried are sold as

manure which will help to enrich the environment with healthy plants.

PROJECT ENGINEERING

Lay out and Physical Coverage of Project

The farm will be made up of three farm houses, each with an

average of 16 pens. These houses will be arranged 'in a row in the

eastern part of the farm, with a minimiurn of six feet gap to enable

air to circulate freely in and around the houses. At the Southwest end

of tte farm will be an office block, with three rooms attached for

attendants.

J u s t c l o s e b y t h e farm houses , towards t h e s o u t h e a s t w i l l be Located

a s t o r e house , where f e e d s and some farm implements w i l l b e s t o r e d .

AC Clic ~ i o r t l i c r n - n ~ ~ s t p l r t of ~ l l c I'i~ral w I I1 he l o ~ i ~ t ~ ~ ~ l i ~ [ i i~h i~ tLOLr ,

where tlic: 1;1r1n a n . l r n ~ ~ l s w l l l be s l aug l l t e red and packaged L n sali1l;dry

c o n d i t i o n . f o r t h e onward t r a n s m i s s i o n t o t h e s e l l i n g p o i n t s . T h i s

ar rnngement i s expecred t o e n a b l e t h e farm a t t e n d a n t s t o have s l e e p i n g

abodes which a r e of s a f e d i s t a n w from t h o s e of t h e an imals . The

c l o s e n e s s of t h e f e e d s s t o r e t o t h e p i g houses w i l l a l s o e n a b l e t h e

f e e d i n g p r o c e s s t o be e a s i e r and l e s s cumbersome. The s p a c i o u s

arrangement i n a d d i t i o n g i v e s room f o r f r e e nioveinent of farm p e r s o n n e l .

1':nch f:irin house i s e s t i m a t e d t o covcr a f l o o r s l )ace oC 75sq

lrletrus, t h e o l l l c e b l o c k i s t o cover 60sq nierre w h i l e t h e a b a L t o l r

i s a l l o c a t e d 20sq met re . The p h y s i c a l coverage of t i i e farm house

a n d o t h e r e s s e n t i a l b u i l d i n g s w i t h i n t h e farm i s e s t i m a t e d a r not

lc-i:; t h a n 430sq mctrtls.

Te'chnology and Dquipir!r.rlt - -

a . -- Technology

The p i g p r o d u c t i o n p r o c e s s i n t h i s p r o j e c t w i l l be adap ted t o

t h e l o c a l . t echno logy , e s p e c i a l l y i n f e e d i n g of t h e au imals . Uut i n

g e n e r a l t h e p r o d u c t i o n technology i s s imple .

The S t a g e s i n P i g P r o d u c t i o n

The g i l t s a r e u s u a l l y b r e d a t 8 t o 81 months o f a g e , t o f a r r o w

t h e i r f i r s t l i t t e r when one y e a r o l d . A f t e r t h a t , two l i t t e r s a

y e a r may bc a t t a i n e d ant1 rllc sow is rct;~it~ccl a s Lu~lg a s h c r u s e f u l l -

l w s s c o n t i n u e s . A young b o x on L-llc o t h e r hand w h i ~ h show v i g o r d s i t y

111ay be b red a t e i g h t months 01 age and ~n~ltccl t o 20 oi 30 so\,.; a t t h e

f i l ' s t s e a s o n , and ~ u b ~ s q u e n t l v t o 40 - 60 snwq dlli inct n c n l c n n -

(the Encyclopeadia Britannica, 1970 ed, p 1070). The period of

extrus (he~t) in the sow is about three days, and it should be

nated with the boar on the second or third day. If not pregnant,

the sow a a e s on heat every three weeks. After the mating, the gilt

or sow is restricted and fed properly in an isolated pen to minimise

disturbance by other pigs. The pregnancy period is 114 days. The

feeding ration at pregnancy is properly regulated to have the animal

:.n good condition at farrowing time, but it must not be fed to be

too fat.

Farrowing of The Pigs

Accurate breeding rates should be maintained so that the sows

or gilts could be removed to a clearly prepared individual farrowing

pen three days before parturition. Straws are usually provided to

the sow to make nest. The sow is usually scrubbed with warm water,

soap and disinfectant and put in the crate. Providing pens with

guard rai1.s (Creep) helps prevent sows from crushing their young.

=he mother cannot enter the creep area and this restricts contact

with the piglets in the pen. The sow is usually removed from the

crate three days after farrowing. The use of the electric pig brood

:stove) facilztates warmth and prevents chilling of young pigs.

Special-attention should be given to preventing loss of pigs during

:he first two weeks of life when most losses usually occur. The

,~ig reproduces by multiple birth with litter size of about 8 to

12 under intensive management system.

Castration of the Piglets

It is the usual practice among farmers to castrate male pfgleti

:lot required for breeding. This is done to prevent uncontrolled

rlating and the development of boar odour. The castration is usually

cione when the piglets are still suckling their mother.

Keaning of the Pigs -

New'born pigs depend on their mothers for the first three weeks

AEter that they eat supplementary feeds in addition. Pigs are

weaned from their mothers at six to ten weeks of age. The sow is

usually taken away from the piglets. This is done to reduce suEkling

period and make the sow available to be served again.

The target weight of each piglet at weaning is between I 1 - 23 kg, and the number of piglets weaned by a sow after each litter

is on the average of eight.

Fat:tening of the Pigs -

Pigs should be well fed and cared for during the growing and

fattening periods to produce rapid and economic gains. They are

nornally fattened in groups of the same size. The type of ration

givcn to them should be rich in protein. Pigs produced for pork

are usually slaughtered at between 57 to 90 kg of live weight.

Processing of Pork

Pigs are glaughtered at the abattoir and their carcasses reduced

to saleable weight. The pork is usually dressed and sold, it is

usually stored in the refrigerator or cold store.

Routine Management of the Farm

There are some management practices basic to well-managed

piggery enterprises, which include daily and periodic operations.

Some of these practices are outlined hereunder:

Table 5.8

Schedule of Day - to - Day Operations in a Modern Piggery Farm

Appropriate Time (Hour)

Farm Operations

Routine Daily Operations

Cleaning of all pig pens

Cleaning of Farm premises

checking the herd, spotting out sick animi

Periodic Operations

Weighing of the stock

Cutting needle teeth of piglets

Castration and vaccination

Identification of ba6y pigs by ear-notchin

Sale of ready for market stock.


Disinfection of pens

Disposal of animal waste

Washing of pigs

Periodic Operations

Deworming the animals

Treatment of sick pigs


Feeding of the second half of concentrate ration to breeding and growing steck

Making daily entries in farm records

3 Checking nurs ing sows and g i l t s i n t he f a I 1

Source: Imo S t a t e A g r i c u l t u r a l Development Corporat ion (hDC) p i g farm (1985).

B

1

2

3

(b) Equipment:

I n r ecen t yea r s , equipment c o s t s have become g r e a t e r a s l a r g e

Pe r iod ic Operat ions

Weaning of p i g l e t s

weekly scrubbing of t h e feed and water trc

Attending t o farm purchases-

pig producers a r c i nc reas ing ly s u b s t i t u t i n g more c a p i t a l f o r labour

w i th g r e a t e r use of t he confinement system. The equipment f o r t h i s

p r o j e c t 2s here def ined t o !.nclude a l l t he instr-uments and machines

in use f o r t he execut ion of t h e bus iness .

The t o t a l sum expected t o be spent i n t h i s a spec t of the p ro j ec

is P15463420. Some of t he equipment and t h e i r cost; a r e a s fo l lows:

1 ptr) metal water tank (W20,OOO) ; 4 wllecl harrows (Hll,5OO) ; 4 me ta l

pickers (PIB0.00 each) , 4 head p a n s (PI600 each): 4 11,ct;ll buclccts

(MOO each) ; 7 p a i r s of work boots (W350 each ) , 4 c ~ ~ l a s s e s (W5OOeac

4 f i f t y - l i t r c cans (H250 each) ; t e n sto$es '(W500-edch3;'2 lanips

(F650 each) ; a s e t of t a b l e s and c h a i r s (W5,000); t ypewr i t e r (W5,OOC

5 deep f r e e z e r s (W45,000 each) and a f a i r l y used second-hand pickup

Other equipments a r e e i g h t p i g ca tches (g4000) and 3 p ince r s

C i v i l Engineering

Land and S i t e Development

Land development w i l l involve c l e a r i n g and l e v e l l i n g of s i t e ,

cons t ruc t ion of road, dra inages and supply of u t i l i t i e s . It i s

es t imated t h a t 1000 s q metre of land w i l l be r equ i r ed f o r t h e t h r e e

farm houses, t h e o f f i c e b lock , t he s t o r e house and t h e a b a t t o i r ,

a:ld s t i l l leaving enough room f o r f u t u r e expansicn. IJsing t h e 1000

s q metres l and space, t a b l e 6.2 below shows t h e t o t a l c o s t of l and

development.

Cost of Land Development

1 Clearing and l e v e l l i n g 1 30 I 1000n12 30,000

1

I

i Drainage

t Cost of land

1 Roads 1 2500 1 120m 30,000

Rate ( W )

100

I I / I1encc and g a t e l O U , O O O ,

Area c o s t i.n ( W ) .

1000m2 100,000 \

1: lec t r ic i ty supply(connec I I 1:iun tc main l i n e ) 5000

Building and S t r u c t u r e s

5 p o l e s :!5,000

I (on t igenc ie s t 10,000 I

-- A_-_

Far-n House

--

Pig housing, i n a d d i t i o n t o t h e primary o b j e c t i v e of provid ing

I 310,000 1

p r o t e c t i o n t o the p i g s a g a i n s t ha r sh weather cond i t i ons , saves l a b o u ~

heal thy growth and development of t he animals.

Structures of the Farm House --

The floor of the pig house is usually strongly built with

ccrncrete, and it slopes gently to one end of each row of the pens.

The sloping is to facilitate the run off of urine and water when

the pens are being washed.

The roofs should be made of corrugated asbestos sheets because

it needs to be weather proof (ie a bad conduct of heat and light).

The walls of the farm houses should be built with blocks at

the lower half and the other half closed only with galvanised wire

guaze.

These pig houses are normally demarcated into pens, with each

pel having a floor space of 0.9 -- 1 .8m2. While a fhrrowing pen

accommodates a sow and its litter, the weaners and fattening pens

house up to' 30' pigs.

Three 16-pen farm houses are to be constructed in this farm.

And according to findings, estimated cost of one 16-pen pig house

Another building structure needed in the farm Is the office

block with three rooms attached for attendants. This will cost an

estimated amount of W250,OOO. The store house is estinated to cost

W55,000, while the abattoir's cost is put at $425,000. Table 5.10

shcw the total cost of buildings.

Table 5.10

Particulars

3 Farm Houses (W350,OOO each)

Office B1oc.k (with rooms attached)

Store House

Abattoir

Total

Cost in (W) -- l,O5O,OOO

250,000

55,000

25,000

1,380,000

PLANT ORGANISATION AND OVEKHEAD COSTS

Plant Organisation

The farm is to be organised in such a way that functions are

dcpartmented into two-production and administrationlsales. These

two departments shall be manned by two staffers of supervisors rank,

wto are to be answerable to the farm manager, who is the head of the

farm administration and is responsible for the success of the enterpr:

He is only answerable to the Director (the owner) of the farm from

whom he needs to seek endorsement for policy matters.

The two supervisors are entrusted with specific functions.

The production supervisor ensures that all opera'cional details are

carried out by the farm attendants. The administrative/sales super-

visor oversees the work of administrative and sales staff to ensure

that they are working to targets. The manager on the other hand is

the chief executive of the farm and co-ordinates both production and

administrative/sales department.

Fig 5.1

Director

I I

Farm Manager I AdrninISales Supervisor s Farm Supervisor i_=J

Salesmen ecurity Typists Driver 17=-Tpl p-ajtendants/

' h b costs of training, technical assistance is cclpitalised and cha

to loachinery/equipment and written off over 10 years. T h i s increa

t h e depreciation charge to W205,756.

Maintenance and Supplies

The additional costs for accessories i~nd spares i o r ma-Lntainl

farm equipment has been put at .5% of the total equipment costs fc

the initial two years. And for subsquent years, an allowance of 2

of equipment is made for this purpose. This will amount to N2732

the first two years and W10,928 in subsequent years.

Interest Expenses

The annual interest expenses according to the proposed nlethoc

of financing are shown in table 5.12

-- .- Interest on : Interest on short-term loan 3 long-term loan I

It is expected that working capital will be generated intern;

from capital reserve after the fi.rst three years of operation.

MANPOWER .-

The proposed cnrerprise will require the recruitment and

training of farm attendants as well as administrative, clerical and

ancillary staff to achieve its targets.

Labour and Staff

Piggery enterprise draws its workforce largely from the unskil

labour, which abound in the town of l_acation. These unskilled labou

usually school leavers are trained on the job to discharge routine

duties in the farm. There is however need for competent technical

personnel on the areas OF pig management and sales. This group of

staff should be drawn from among the University/Polytec?nic graduate2

in Agricultural and Business disciplines. It is this c-op of skillet

staff that provide training to the farm attendants.

The enterprise should engage the services of a farm manager,

preferably a graduate of Agricultural Economics. He takes the

responsibility of thc whole busincss of pig production. This includ~

all activities of breeding, financial affairs and ~aarketfing outlets.

Production -----

The production department also requires 6 professional

husbandman or Animal Science graduaa to take charge of the breeding

process. He is to serve as the production supervisor and would

work with the four pig attendants to ensure that the animals are

properly managed.

Administrative/Sales

It will be necessary to employ one more supervisor to oversee

the activities of all non-production staff, including clerical staf

security men, and sales force. A sales force of five sales persons

will be needed to man each of the five selling points to be created

for the sales of the enterprise's product. Two typists/clerical sta

would be needed to handle the purchases of raw materials for the

company and to handle orders and deliveries to (or collections by)

organisation's selling or consuming pork. One driver w X l be require

for the picking van. Two security men will be required to ensure the

safety of property of the enterprise both at day and nigit.

The administrative/sales supervisor shall be HND/B:;C holders

in Business Administration, and should be responsible for designing

the appropriate saleslmarketing strategy for the farm's groduct, and

overseeing the activities of all the staff in the department to

ensure they work to targets and specifications.

Personnel Costs --

The progressive increase in the capacity utilization of the

farm up to near 3 is not expected to increase the total manpower

requirements, at least in the foreseeable future. An estimated

allowance of 50% is made for fringe benefits and annual increase in

labour cost due to inflation and promotions. A breakdown of annual

labour costs is estimated thus:

Table 5.13 - Breakdown of Laboar Costs

--- --- Total S

Ccsignation No-loyed - Annual salary (W) expense

Farm Manager 1 60,300 60,C

Production

Farm Supervisor

Pig attendants

Admin/Sales

Supervisors

Sales persons

Driver

Security men

l'ypis t s

Add 50% Fringe Benefits and allowance for Salary increases 240,001

PROJECT IMPLEMENTATION

It is expected that implementation of the pig production projec.

will be in four phases. The first phase involves the preliminary

activities necessary for the project developmenr such as (a) the

financial approval (b) detailed farm design and equipmeni: selection.

- * this first phase is expected to last one month.

The second phase should consist of site preparatioc, the erect

of buildings and allied structures, (c) delivery oi equipnent and

{hen- the initial personnel training. This second chase is expected

to take five months.

1.1 :he t h i r d phase, what takes centra.L s t a g e i s t h e t e c h n i c a l

duty of ;ourcing and s e l e c t i n k t h t breeding s t o c k t h i s i s supposed

t o t ake one month, s i n c e the animals have t o be observed and propel

t t s t e d .to ensure they meet t he q u a l i t i e s neede! by the e n t e r p r i s e .

However, tlic p r o j e c t should not be regarded a s completed u n t i l t h e

foundat ion s t o c k of in-pigs a r e farrowed and watched LO measure thc

performance, t e s t t he f a c i l i t i e s a v a i l a b l e and eFfec t any c o r r e c t i ~

measures wh,.c:re n x e s s a r y .

The f o u r t h s t a g e begins a f t e r about f i v e months of thc farrow:

02 the in-pigs . A t t h i s s t a g e the s a l e s fo rce i s r e c m i t e d , and

t r a i n e d and the marketing channels e s t a b l i s h e d , ready t o t ake f i r s t

s t o c k of pork.

The p r o j e c t should be commissioned f o r u se w i t h i n one year of

incept ion .

I n order t o a f f e c t t hese clan- , a nucleus p r o j e c t team should

be s e t up t o t ake respons : i3 i l i ty f o r over a l l p r o j e c t implementatil

I:? - t h i s i n s t ance , t h e nucleus p r o j e c t team shou7J be made up of thl

d i r e c t o r (tl-r! owner) and t h e farm manager. I t i s t h i s farm manage-

who should r e c r u i t t he necessary personnel and c a r r y out on t h e s i

t r a i n i n g of t h e personnel , e s p e c i a l l y t h e farm a t t e n d a n t s . T h e

s t a f f i n g s h ~ u l d begin wi th t h e engagement of t h e s ~ : e r v i s o r s which

should be used a s resource persons f o r t h e t r a h i n g of t h e j u n i o r

s t a f f .

FINANCIAL AND ECONOMIC EVALUATION

(a) (TaSle 5.14) Total Investment Outlay

i. Fixed Assets Investment: Value i.n(W) .-

Land and Site development 310,000

Building and Civil works 1,380,000

Farm machinery/Equipment 558,400

Furniture, Fixture and office equipment 15,000

Pre-operating Expenses

ii. Working Capital:

Raw materials 750,000

Other Liquid Assets 234,000

Net working capital 958,000

Total project cost (i + ii) 3,378,000

(b) Project Financing

It has been estimated that the over all investment cost for

piggzry farm of the capacity proposed, including the first year's

working capital put at W985,000 is about W3.37 million. The fixed

assets component of this project whose costs amount tc W2.39 millio

is expected to be financed as follows:

Equity:

The entrepreneufi . stake in this ventures is expected to

account for about 55% of the long term funds required for it,

amounting to W1.31 sillion; while the remaining 45% should be raise

through long-term loan. The entrepreneur may invite 3ther interes-

ted financiers to contribute to the equity funds of the enterprise

Long-term Loan

The long-term-loan of W1.08 m i l l i o n (which i s 45% of t h e

non-working c a p i t a l of t he p r o j e c t ) i s expected t c ~ be f inanced

through t h e a g r i c u l t u r a l f i nanc ing i n s t i t u t i o n s i n t h e country a t

an expected i n t e r e s t r a t e of 10%. The loan is expected t o be pa id

back w i t h i n f i v e y e a r s - i n f i v e ins ta lments .

Short-term Loan

The working c a p i t a l of about W985,OOO which forms a s i g n i f i -

c a n t 30% of t h e t o t a l c o s t ou t l ay of t h e p ig product ion p r o j e c t is

expected t o be r a i s e d through commercial Banks. The loan i s p r o j e c t e d

t o be f o r a per iod of t h r e e yea r s a t an i n t e r e s t r a t e of 2.1 per annum.

This f i nanc ing proposa l i s expected t o y i e l d a deb t / equ i ty

r a t i o of about 2:l. Table 5.15 and 5.16 show t h e i n t e r e s t and

p r i n c i p a l repayment schedule f o r t h e p r o j e c t .

Table 5.15 I n t e r e s t and P r i n c i p a l Repayment S c h e d d e ,

Short-term Loan

Year

1

2

T o t a l P r i n c i p a l Outstanding

( w

985,000

656,700

I ' P r i n c i p a l , I n t e r e s t I T o t a l

328,400

Payable (W

Payable (W

328,300 206,850 535,150

328,300 137,900 466,200

238,400 1 69,000 397,400

Table 5.16 I r L t e r e s t and P r i n c i p a l Repayment S-hedule,

Long-term Loan

I ( T o t a l P r i n c i p a l 1 P r i n c i p a l I n t e r e s t I T o t a l

roduct ion Costs

Year

The expected product ion c o s t s f o r t h e p r o j e c t f o r a yea r i s

computed hereunder, while those f o r subsquent y e a r s cr e e x tr apol a

Outstanding (W

based on year 1 f i g u r e s .

I 1,080,000

Table 5.17

Payable (W

Year 1 Production Cost

Payable E'ayab l e ( w

216,000

Di rec t Ma te r i a l

D i rec t Labour

I n d i r e c t Wages

I n d i r e c t m a t e r i a l s

Rent

Depr.. of f a c t o r y p l a n t and

Equipment ,

Power ,- hea t and l i g h t

108,000 324,000

Value i n (N) -

For the subsquent yea r s , a l l t he product ion f a c t o r s a r e

expected t o be cons t an t , except f o r v a r i a t i o n s i n d i r e c t all11 i n d i r e

m a t e r i a l s . When these expected v a r i a t i o n s a r e computed i .nto t h e

product ion c o s t s f o r t hese yea r s up t o t he f i f t h , we have s p p r o x i ~

t o t a l s a s fol lows:

Year 2 , W1,754,000; year 3, W1,850,000; year 4, W1,955,400 and

year 5, F2,077,100.

Table 5.18

Sa le s

Cost of s a l e s

Gross p r o f i t

Admin expenses

I n t e r e s t Expen.

Operating p r o f i t

Other income

P r o f i t before t a x

Tax ( a t 35%)

P r o f i t a f t e r Tax

Appropriat;iOn

Dividend

Retained p r o f i t

Commercial P r o f i t a b i l i t y

P ro j ec t ed Income Statement (year 1 - year 5)

Year 1 ( H I

2,688,000

(1523567)

1164433

(48600)

(314,850)

800983

-

800983

(280,347)

520,639

year 2 ( W

4,032,000

(1823567)

2208433

(30,000)

(224,300)

1954133

-

1954133

(683947)

1,270,186

year 3 (W

5,049,000

(2012368)

3027632

(20,500)

(133,800)

2873332

-

2873332

(1005666)

1,867,666

(I,l2O6OO:

747066

-- f e a r 4

(W -- 5,043,000

(201 2368)

3027 632

(2G, 500)

(43,200)

2963932

-

2963932

(1037376)

1,926,556

(1155934)

770622

Year 5 (W

5,040 ,(

(20123(

302763:

(20,501

(21,601

298553:

-

298553

(LO449

1,940,

(11643

7762

Proiec ted Balance Sheet f o r End of Year 1 - vear 5

-

ASSETS

Fixed Assets

bu i ld ings

pickup Van

machinery/ equipment

Current Asse ts --

Stock a c end:

Feeds

P i g s

Cash a t hand

Bank Balance

LTAUILITIES - Cap i t a l and Reserves :

Equity investm.

Cencral Reserve

Current L i a b i i i t i e s : ----- Shcrt-term loan

Long-ter 11

L i a b i l i t i e s - Prov i s ioa f o r L i a b i l i Lies & Charges

year 1 year 2

- (N (W e a r 3

(W

,242,000

125,000

254,800

392,300

475,472

46,900

l4O,6O@ --- ! ,677,072

rear 5 (m

L ,lO4,O(

-

lgl,2O

377,30(

475,472

46 ,go(

l4O,6O(

2,335,47: -

1,210,00(

776,231:

- 111,6%

237,601

2,335,47

PROJECTED CASHFLOW STATEMEtTT -

y e a r 3 ( W )

5,040,000

-

-

P a r t i c u l a r s e a r 1 ( W ) Year2 (W) L i\ INFLOW --

S a l e s

z q u i t y lnves trnent

Long-term Loans

Short-term Loans

--

OUTF1,CW - --.- Fixed A s s e t s Investment 2,393,640

M a t e r i a l s lnpu t 750,000

S a l a r i e s 723,Or)O

Adrnin/General S e r v i c e 119,280

Debt S e r v i c e 859,150

Corpora te rdx 52G,G39 --

-- -

:ash S u r p l u s 600,291 51,374 463,38t 823 ,A94 H31 , O

Ana lys i s of S e l e c t e d F i n a n c i a l R a t i o s --

I n o r d e r t o measure t h e performance of t h e b u s i n e s s a g a i n s t

c e r t a i n i n d i c e s and g u i d e l i n e s , some f i n a n c i a l r a t i o s a r e p r e s e n t e d t

a s s e s s th? p r o j e c t e d o p e r a t i o n s of t h e b u s i n e s s . These r a t i o s would

h e l p t o g Lve an i n s t a n t p i c t r t r e of t h e o r g a n i s a u i o n ' s h e a l t h and Its

a b i l i t y t o g e n e r a t e conf idencc among !ts v a r i o u s p u b l i c s .

(i> Frofit Margin = profit Before Tax (PBT), Sales

In year 1, PBT = N800983 Sa1.e~ = F12688000

: . the profit margin = W800983 = 30% W2688000

For the susquent years, the margin would be 45.5%,58.2% and 59.2%

from second year to the fifth year respectively.

(ii) Return on Equi.ty:

Profit After Tax (PAT) Equity

for year, PhT = £4520639 Equity = W1210,OOO

: Return on Equity = £4520639 = 432 W1210,OOO

In the second year it would be 105%; third year, 160%.

(iii) Return on Investment (ROT)

Profit Before Tax

Total investment

For year 1, ROI = W800983 = 24x W3378000

For other years, the ROI are 58%, 85%, 87.72, and 88.3% respuctivel

from year 2 - year 5.

(iv) CurrentRatio:

Current Assets

Current Liabilities

For year 1, Current Ratio = W832375 = 12z W597000

For subsquent years it is as high as 130% in year 2, 252% in year 3

654% in year 4; and 931% in year 5.

(v) Pay Back Period:

= Tota l Investment Average P r o f i t a f t e r t a x + Depr

The p r o j e c t c o s t i s p ro j ec t ed t o be W3,378,000, whi le the

es t imated average n e t p r o f i t i s W1505279. I f we add t o t h i s the

annual dep rec i a t ion of W150,800, t h e n e t cash inf low would sutn up

thus : W1505279 f 150,800 = W1656,079

: the pay back per iod = 3378000 1656073

= 2.04 yea r s

Break Even Analysis

The Break-even a n a l y s i s i n d i c a t e s a l e v e l of ope ra t ion a t wl

a p r o j e c c makes n e i t h e r p r o f i t nor l o s s . I f an e n t e ~ p r i s e s operat

above the break-even p o i n t , i t has h ighe r chances of making p r o f i t

ant1 lower chonccs nl' making l o s s ( l n ~ a ~ a , 1995, p 6 1 4 ) .,

'I'he Break-even p o i n t (BEP) ( i n terms of p l~ys i c i t l u n i t s ) :

BEP ( i n terms of Sa l e s Revenue):

The UEP o f t h i s p r o j e c t i n terms of phys i ca l u n i t s :

T o t a l f i x e d cos t (FC) = 585600

S e l l i n g p r i c e per

v a r i a b l e c o s t per

:. BEP = FC - SP-vt:

u n i t (SF) = W120/kg

u n i t (VC) = W47.17

BEP as a r a t e of u t i l i z a t i o n of production capacl-ty equals:

8040.6 X 100 = 19.14%

Break-even point i n terms of s a l e s revenue:

BEP = SPFC = 120 (585600) = W964877 SP-VC 120 - 47.17

This means t h a t s a l e s revenue a t a production l e v e l of 8040.6kg

of pork (115 porkers) equals W964877 and t h a t a t t h i s s a l e s l e v e l ,

t h e en te rp r i se w i l l make ne i the r p r o f i t nor l o s s .

This post--tax p r o f i t a b i l i t y i s expected t o grow subsquent:Ly up t o

W1.94m i n the f i f t h year .

From the a n a l y s i s of some of t he performance . ind ica tors , tile

p r o f i t margin f o r the f i r s t y e a r ' s ope ra t ion i s a s h igh a s 30X. T h i ~

i s expected t o grow subsquent ly from 48.5% i n the seconc! year up t o

59.22 i n the f i f t h yeLr. The Return on Equity ( R O E ) Eor t h e f i r s t

year i s a l s o est imated a t 43% bu t would inc rease t o 105% i n the seconc

y e a r , r i s i n g f u r t h e r up t o 160% i n t h e f i f t h . The Return on Invesc-

ment (ROI) i s a l s o good a t 24% i n the f i r s t yea r , 58% i:~ t h e second

y e a r , soa r ing up t o 88.3% i n t h e f i f t h year . The payback per iod f o r

t he investment i s j u s t a low 2.04 years . This means t h a t i t w i l l

t ake j u s t bout two yea r s t o ga in hack the o r i g i n a l investment on t h e

p r o j e c t . The BreakEven Poin t (BEP) i s a t 19.4Z, when expressed as

, I ~ L I L C 01 u t i l i z a t i o n oL procltlctlon capac i ty . T11.l.s g i v e s I w l r l c :

margin of s a f e t y i n case of unforeseen o p e r a t i o n a l h i t c h e s . What a l l

the:^ po in t t o i s a projecL chat s co res h igh i n v a r i o u s a spec t5 o i

investment. app ra i sa l .

This s tudy has been a b l e t o a f f i r m t h a t p i g product ion e n t e r p r i s e

i n Enugu-Ezike i s f e a s i b l e because of t h e s i r p l e p r o c e s s technology

a v ~ i l a b l e , modest equ i ty investment r equ i r ed , and the zx i s t cncc of

l a r g e market f ~ r pork. I n a d d i t i o n , t h e v i a b i l i t y of t h e p r o j e c t i s

underscored by i i S h i g h p r o f i t a b i l i t y .

This r e sea rche r t h e r e f o r e adjudges the p r o j e c t a s a sound inves t -

m n t and recommend i t t o en t r ep reneur s , government agencies , f i n a n c i a l

i n s t i t u t i o n s and any o t h e r bodies t h a t may be i n t e r e s t e d i n it : .

.- . -mv*T\! 6 N~GF'~,

Alludu, D.I. "Pisherieu Development i n N i ~ o r i u : Contribution t o a

Rural Development" . Unpublished Lecture Mir?~o(~; ru~lh , ASUTLCH,

E n w , 1990.

Cleland, D. and W i l l i a m King, eds. Pro;iect Management Handbook. 2nd ec New York: Van Nostrand Reinhold Inc., 1988.

Cl i f ton, David S. and David E. Fyffe. Project Feas ib i l i t y Analysiz: a Guide t o Prof i table New Ventures. New York: John Wiley & Sons Inc., 1977.

Dafwang , I. Extension Services and Pig Production i n Nigeria" . paper presented a t the Internat ional Seminar on Pig Production p p e r i n the t ropics , UNN, February 4, 1985.

Davidsoxi, H.R. The Production and Marketing of Pi~s. Bris to l : Western Printing Service, 1966.

Devandra, C . and M.F. Fuller. Pig Production i n the tropic. London: Oxford University Press, 1976.

Downs, Anthony. "Characterist ics of Varlous Economic Studies" Appraisal Journal, 36 No 5 , 1366, 329 - 341.

E m , John. "Sw11 3uoinesr;". Unpubliuhed Lec turn M i ~ e o ~ m p h , Uepr tnen t of Management, UNN, 1994.

Grasskamp, J.A. A Guide t o Feas ib i l i t y Analysis. Chicago: Co-society o f ,Rea l Esta te Appraisers, 1970.

Ikedianya , N. "A Sys t e a t i c Approach t o Feas ib i l i t y Analysis" . The Ee t a t e Surveyor and Valuer, 1, No 2 ( ~ u l y 1975), 32.

Imaga, 13UL. Production and Operations Management. Lagos: h f r i t m d e Internat ional Limited, 1994.

Kroeske , D, "Stimulating Pig Production i n Developing Countries". World Animal Review, 2 ( 1 ~ 7 2 ) ~ 15.

Lua-teck, J. and L. Mann. "The E'errtiibility 9f kcmcrt;ioml Land 9uvclopn~ant" . Appmisul J o u n u l , 45 (19'[l~) , 599.

Nweke, Pi-&. "Inv6sting in Pig ProSuction". Paper presented a t a Seminar on Economics of Pig Production i n Nii:erits, University of Ibadan, Apri l 12, 1986.

Omorodion, Geoffery. "Structura l Adjustment Programme i n Black Afr. Impact on Small and Medium Scale Enterpr5ses". Unpublished Articlo.

llPigs'l New Encyclopeadia Britannica. l97Oed.

New EncycPopeadia Britannica. lg93ed.

S cheaf f erantizl , Richard, e t a1 . . Elementary Survey Samplixg . 3rd ed. Massachussets: Pitman Publishing Inc , 1970.

Taiwo, Zeb. Problems of Commercial Pig Production i n Kigeria. Paper presented at a Seminar on Economics of Pig Produc t im i i

Nigeria, Universi ty of Ibadan, April 12, 1986.

U m e h J.A. Fea s ib i l i t y and V iab i l i t y Appraisal, Ibadan: Onibono je Pub1 ishers, 1977.

T h i s q u e s t i o n n a i r e is des igned f o r acndemi:: research

purposas only . All r e s p o n s e s made t o q u e s t i o n ; i n i t s h d l

h e t r e a t e d i n s t r i c t conf idence and s h a l l be used on1.y i n

r e l a t i o n t o t h e study of t h e p r o s p e c t s of a pig* p r o d u c t i o n

e n t e r p r i s e i n dnugu-Ezike, P l ea se as much as ~ o s s i b l e g i v e

a c c u r a t e answers t o t h e s e q u e s t i c n s , a s your r e s p o n s e s s h a l l

h e l p t o de termine t h e r)bize o f p o t e n t i a l pork consumers i n t

- Please t i c k / V / a g a i n s t you r cho ice o f ;tn:;u.rer, v:here

a 3 p l i c a b l e .

1 , h ~ m c of c o m u n i t y - 2. Sex: Elale Female /--I 3. Marb ta l s t h t u s : S i n g l e /7 Married /-'7 I ; . : 30 y e a r s o r l e s s 1 - 7

y e a r s -- 50 y e a r s

51 y e a r s -- 60 y e a r c /-/ Above 60 pears L3

5. R e l i g i o n : C h r i s t a i n i t y 1 - 1 Islamism /-I -

T r s d i t i o n a l / / o t h e r s 1-1 6. To which income group do you belong?

More t h a n i435,000 / / 6. ( a ) 00 y o u e a t pork? Yes /- No /-.-7

( b ) I f y e s , why - -- ( c I I F N U , dhy -

, How o f t e n do you e a t pork?

I rr ,-1

10. HOVI is t h e p i c e o f p o r k in r e l a t i o n t o o t k r

s i v e /7

11. i i ~ what p r i c e 2er hilcpamme do you h i y pork?

12. I f o f f e r e d c h o i c e which meat wohld y o u r a n k

Goat meat (chevon) / /

53. How do you u s e pork?

As stew meat /'7 ?or cooking sou& /7 -

A s r o a s t d d neat 1 6s f r i e d meat 1-/'

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