Feasibility Study of Establishing an Integrated Halal Certified Goat Farm for Processed Meat and Milk in Maragondon, Cavite for Export in Riyadh, Saudi Arabia

Date

4-2011

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Nimfa Beatris D. Montes

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Abstract

Goat is a small domesticated ruminant that can survive on bushes, trees, desert scrub and aromatic herbs when sheep and cattle would starve to death. According to Bureau of Agricultural Statistics, the total inventory of goat is 4.21 million heads as of January 1, 2010. Goats are primarily used for their milk, meat (chevon), hair and skins but in the twentieth century, they also gained popularity as pets. Goat’s meat and milk are known for their high protein content and less fat which serves as therapeutic aids. Goat meat has been established as a lean meat with favorable nutritional qualities, and it’s an ideal choice for the health-conscious consumer.

Processed foods such as spiced and dried meat, sausages and smoked meat which are new in the eyes of Arabians are now in demand in the export market because of the constraints in transporting raw products. Also there is a high demand on pasteurized goat’s milk in the market.

The general objective of the study is to determine whether it is feasible to put up an integrated Halal certified goat farm in Maragondon, Cavite for export in Riyadh, Saudi Arabia. Specifically, the study aims (1) to present the integrated goat farm and its planned area of operation; (2) to determine the market, production, organizational and financial viability of the operating business in Maragondon, Cavite; (3) to identify potential risks and problems involve in the business and; (4) to recommend specific courses of action based on the findings of the study.

The project would be an integrated Halal certified goat farm located in Maragondon, Cavite that would produce processed meat and pasteurized milk, all for export in two supermarkets in Riyadh, Saudi Arabia, namely Al-Rajhi Group of Supermarkets and Halwani Supermarket. Quarterly, 600 kilograms of processed meat and 625 liters of pasteurized milk will be brought to Al-Rajhi while 500 kilograms of processed meat and 500 liters of pasteurized milk will be brought to Halwani.

The owner would be Mr. Arnel O. Ylanan. A manager, sales person, veterinarian, caretakers, process workers and driver would be hired for the operation of the farm. The target market would be the Muslims.

The farm would buy 100 doe of Anglo- Nubian and 4 bucks of Boer. It would be bred by batch to produce the needed supply quarterly. The 8 month old grower would be slaughtered and processed to produce tapa which will be sold at SR 22.45 per 500 grams carton box. After kidding, the goat will be milked for 15 days and the milk will be pasteurized at be sold at SR 48.27 per one liter. It would be transported through Wi-trade Cargo via seaport for 8,500 pesos per cubic meter. The payment of the supermarket would be cash advance or letter of credit.

The total initial investment needed to establish the farm is Php 3, 969, 795.36. The project life would be 10 years. 60 percent of the total initial investment will be borrowed from the bank for an interest rate of 14%. The remaining amount will be financed by the owner. The project would have a negative income for the first year since fixed assets will be bought by those years. The NPV of the project is Php 948, 810. 99 with an IRR of 15%. The payback period is 3.81 years. This analysis shows that the project is feasible since it has a positive NPV and the IRR is greater than the cost of capital.

The project was subjected to different scenarios for sensitivity analysis and it lowers in NPV until it became not feasible to implement especially when there is an appreciation of peso. A small fluctuation in the exchange rate can affect the whole project since it is for export. Diseases in animals can greater affect the production. Since the project is feasible, the owner should pursue the project. It would lead to higher income as you increase the production. If the owner would want to increase the herd production, he should consider the land specially the pasture area for the feeds of goat.

Language

English

LC Subject

Goat industry, Goat meat--Quality

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2011 M17 Y53

Notes

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Document Type

Thesis

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