A Feasibility Study of Establishing Organic Native Egg Producing Farm in San Jose, Batangas

Date

4-2011

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Dr. Reynaldo L. Tan

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Abstract

The Philippine poultry industry nowadays, faces tough challenges. One of the problems addressed in the commercial egg production is the prevalence of diseases and parasites. Commercially raised chickens are susceptible to pests and diseases and very dependent in antibiotics and veterinary supplements. Recent studies have shown that the synthetic medicine injected to the chickens to avoid diseases as well as pest are passed on humans through food chain and are said to be carcinogenic.

Because of these rising problems, Filipinos are going back to the native chickens and prefer organic product to ensure safety.

The study was conducted to determine the feasibility of establishing a two-hectare organic native egg producing farm in San Jose, Batangas. Specifically it aimed to present the organic native egg producing farm and its planned area of operation, determine the market, production, organizational and financial viability, identify possible risks and potential problems to the implementation of the project, and recommend specific courses of action on the findings of the study.

The project life of the sole proprietorship is ten years. The farm will be situated in Brgy. Palanca, San Jose, Batangas. There is a 2-hectare land available for the project. The 1.8 hectare of land will be allocated for the ranging area of the chicken and the remaining 0.2 hectare will be utilized for other facilities such as the brooder house and egg storage.

The farm will produce one product which is the organic native egg. The total production of organic native egg in the first year of operation is 54,000 eggs. The farm will distribute its product to Fiesta Market Market and Robinsons Supermarket Lipa Branch.

The project was found to be a feasible investment option. A total of Php 1,023,732.50 is needed as the initial investment which will be sources from the owner’s equity. Financial projections showed that the payback is expected at 3.88 years with an NPV value of Php2,372,209.65 and an IRR of 41%.

A sensitivity analysis was also conducted to test the project’s viability given varying circumstances. The project is feasible in the three scenarios because all the scenarios give positive value of NPV and an IRR greater than the cost of capital. However, The NPV and IRR became lower as the decrease in production yield increases in each scenario. The payback period for the entire scenario is less than 2 years.

There are many potential problems and risks that may be encountered in the four functions of the business such as competition, lack of awareness of consumers in the health benefits of organic native egg and many others. However, these problems can be managed by means of intensive promotion, product development and many other strategies.

Language

English

LC Subject

Markets--Management, Credit--Management

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2011 M17 S65

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Document Type

Thesis

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