A Feasibility Study of Establishing an Integrated Goat Farm and Meat Shop in Pinugay, Baras, Rizal

Date

10-2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Nimfa D. Montes

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Abstract

In the Philippines, goat farming is still very unpopular. Compared to the other livestock industry, the goat industry is still much undeveloped. The demand for goat and goat meat far outweighs the supply being readily available for the people. One way for the country to achieve sufficiency in terms of goat meat is to develop its own goat meat farms and Industry. By doing so, it will allow people access to better nutrition that can be provided for by goat meat.

The study entitled, “A Feasibility Study of Establishing an Integrated Goat Farm and Meat shop In Pinugay, Baras, Riza” aimed to: (1) To present the goat farm and its planned operation in Pinugay, Baras, Rizal. (2) To determine the market, production, organizational and financial viability of establishing a Goat shop in Pinugay, Baras, Rizal and a meat shop along Marcos Highway; (3) To identify the possible risk and problem involved in the business; and, (4) To recommended specific course of action based on the findings of the study.

Primary data about the technical and organizational aspect of the study was collected through key informant interviews with resource person that are knowledgeable in raising goats. Data about the market was gathered by conducting surveys through cluster sampling and systematic sampling. Secondary data was gathered from various publications and comprehensive internet articles. The data gathered from the interviews was analyzed using descriptive method of analysis and capital budgeting techniques like Net Present Value (NPV), Internal Rate of Return (IRR), and Payback period.

The main product of the farm is goats for slaughter and goat meat. All products will be retailed from the meat shop that will be established along Marcos highway. Prices for goats for slaughter will be 130 pesos/ kg and dressed meat will be sold at 250 pesos/ kg.

The farm will start with 150 F2 Anglo-Nubian does and 6 Pure Boer bucks. The breeding stock will all be purchased at Alaminos Goat Farm. The farm will maintain a 500-doe level production to ensure supply adequate supply of meat throughout the year. All live goats that will not be for breeding will be either sold for slaughter or as meat in the meat shop along Marcos Highway.

The business will operate in partnership between Franklin Joven P. Asuncion and Victorino M. Asuncion. In total, the business will have 9 personnel consisting of the owner and manager (being as one), three caretakers, two butchers, a veterinarian and a driver. An initial investment of Php5,492,629.48 will be needed to start the business. fifty percent of the initial investment will be borrowed from the bank, while the remaining thirty percent will be financed by both Franklin Joven P. Asuncion and Victorino M. Asuncion.

Considering a 1 percent decrease in sales due to meat spoilage with a constant production and operating expense, the study’s results showed that it is feasible to establish a goat meat farm in Pinugay, Baras, Rizal and a meat shop along Marcos Highway. The project shows a positive NPV of Php 2,657,986.91, an IRR of 26% and a payback period of 6.2 years.

According to the results of the sensitivity analysis, it can be said that the project is sensitive to the changes in sales level. These changes in sales can be brought about by customers’ patronage or the lack of it, environmental factors and the prices of materials needed for production. Given a 10 percent decrease in meat sales and a 4 percent increase in production expense, the business will incur a lower NPV of Php 2,025,239.19, a lower IRR of 23% and a longer payback period of 6.7 years. Given A 10 percent decrease in the total sales and an increase of 4% on production expense, the company will garner a NPV of Php 1,511,075.30, an IRR of 21% and the longest payback period of 7 years. On the other hand, when the project is subjected to a 5% increase in sales while a 4% increase on all costs, it will acquire the highest NPV of Php 2,893,195.28, an IRR of 27% and the shortest payback period of 5.9 years.

With the results of the analysis, it is suggested that the business is profitable, viable and worth inversing in. The results also suggest that there are risk and problems in venturing into this business. Factors like climate change, mismanagement and calamities can greatly decrease the level of productivity of the animals. For the project to be successful, proper farm management should be administered in order to reduce, if not avoid, the occurrence of such problem.

For the farm to perform at its optimum, the study recommends that promotion be done intensively and that competent managers, caretakers, butchers and veterinarians be employed. Financially, the study suggests establishing partnership or a cooperative to reduce the burden of capital investment.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2010 M17 A88

Notes

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Document Type

Thesis

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