Economic feasibility study for a broiler production project in Assiut Governorate | ||
| Egyptian Journal of Agricultural Research | ||
| Article 7, Volume 98, Issue 3 - Serial Number 1, September 2020, Pages 488-501 PDF (699.68 K) | ||
| Document Type: Original Article | ||
| DOI: 10.21608/ejar.2020.50808.1042 | ||
| Author | ||
| Hesham El-Gendy* | ||
| Agriculture Economic Research Institute, Agricultural Research Center, Giza, Egypt | ||
| Abstract | ||
| The state is working to increase the supply of white meat in Egypt. Fattening chickens' projects is one of the medium-intensive projects for operating capital in the area unit. It falls within the projects that attract private investment in Egypt. The research aims to conduct an economic feasibility study for a project of a fattening chicken farm with a capacity of 5000 chicks in the session in Assiut Governorate. It is estimating the indicators of the economic efficiency of the project. In addition to assessing the indicators of the financial evaluation of the project by using some non-discounted measures such as the recovery period of the invested capital and Rate return of on investment, by using the discounted measures such as benefit/ cost ratio, the net present value of the project and internal rate of return of the project. It is conducting a sensitivity analysis of the project to test its ability to face the unfavourable conditions that may face the project in the future, according to several scenarios represented by the increase in costs or the decrease in revenues or both. The research relied on unpublished secondary data as well as on preliminary data from a questionnaire and a personal interview for a large number of workers in this industry with their various jobs, for the 2019/2020 productive season. The most important results of estimating the financial evaluation measures of the project were that the recovery period of capital amounted to about3.17 years and that the return to costs ratio amounted to1.15, 1.13at the discount rates 9% and 12%, and that the net present value of the project at the discount rates amounted to1937936, 1336377pound for each of them, respectively, and the internal rate of return for the project reached 40% and therefore the project is acceptable and financially profitable. The sensitivity analysis showed the project's ability to withstand unfavourable changes according to the three assumptions assumed by the research, as the internal rate of return was about 17%, 15%, and 16%, for each case respectively, and the project is more sensitive to imposing a decrease in revenues than in the case of the other two assumptions. In light of the results obtained, the research recommends that the project be accepted for its financial and economic viability. In the context of encouraging investors to adopt this project, the following is recommended: The necessity of working to stabilize the prices of production requirements such as feed, medicine and chicks by encouraging expansion in producing its components locally instead of relying on import, working to provide appropriate financing for the project from the social fund and other financing institutions with easy interest while providing technical assistance to investors in the fields of production and marketing, encouraging investors to insure farms to reduce production risks by facilitating procedures and reducing costs insurance. | ||
| Keywords | ||
| Feasibility study; Project evaluation; Assiut Governorate; broiler production projects; Internal rate of return; The sensitivity analysis | ||
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