Feasibility Study of Establishing a Pelletized Chicken Manure Fertilizer Plant in Pinamalayan, Oriental Mindoro

Date

4-2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jimmy B. Williams

Committee Member

Jeanette Angeline B. Madamba, Normito R. Zapata, Jr., Dinah Pura T. Depositario, Reynaldo L. Tan

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Abstract

Fertilizer is one of the important inputs in producing rice. It is also a critical factor in increasing the yield of the farmer‟s crops along with the other agricultural inputs.

This study entitled, “Feasibility Study of Establishing a Pelletized Chicken Manure Fertilizer Plant in Pinamalayan, Oriental Mindoro” intended to: (1) present the pelletized chicken manure in Pinamalayan, Oriental Mindoro; (2) determine the market, production, organizational, and financial viability of operating the business in Pinamalayan; (3) identify possible problems and risks in pursuing the project; and (4) recommend specific courses of action based on the findings of the study.

The study utilized primary and secondary data to gather information. The primary data were gathered through the use of interview with the dealers of agricultural inputs. On the other hand, secondary data were gathered from the Fertilizer and Pesticide Authority (FPA), Municipality of Pinamalayan, Bureau of Internal Revenue, National Statistics Office, and Philippine Council for Agricultural Forestry and Natural Resources Research and Development(PCARRD).

The proposed finished product for the project is a pelletized chicken manure fertilizer. It will use pelletizing machine from Henan Jingxin Machinery Co. and compost activator which is EM•1. The product is easy to handle and to use.

The chosen location for the plant is Pinamalayan, Oriental Mindoro. The area is almost at the center of the province. There are also reliable resources in the place. Moreover, the product will be distributed to different agricultural input dealers in different towns in the province, Calapan to Roxas, including the project area. This will be done through the help of an elf truck.

The production process of the proposed product includes aerobic composting, harvesting, cleaning, pelletizing, drying, grading, bagging, storing and distributing. With this production process, the plant can produce 48 bags of fertilizer each day. In doing so, the plant will utilize 72 bags of chicken manure and 164 oz. or 5.12 liters of EM•1 solution.

The business will be employing seven personnel, six of whom are the laborers, machine operator, and packer and a supervisor. The overall business operation will be handled by the manager.

The total initial investment amounted to P1,870,317.18. The project will be financed using 100% equity. It was assumed that the project‟s life is ten years. Financial tools such as Net Present Value(NPV), Internal Rate of Return(IRR), Payback Period, and Return on Investment(ROI) were calculated. The resulting NPV was P1,763,426.18 and an IRR of 35.41%. The Payback Period was 2.69 years.

The project was also subjected to sensitivity analysis. The vital factor which is the price of the chicken manure was adjusted from P60-P67 per 50-kilogram bag. Furthermore, the expenses were also adjusted with the use of inflation rates. The results of the sensitivity analysis shows that the business will only be viable at prices P60 and P65.

The potential risks and problems that were identified in the market aspect are competition with the available organic fertilizer in the province and maintenance of the market. In production aspect, the identified potential problem is the maintenance of the quality of the product. In organizational aspect, the potential problem that is identified is the worker‟s continuous ability to produce a standardized and quality product.

These potential problems and risks were given solutions through conducting seminars, establishing good relationship with the buyers by ensuring quality products, continuous training for the employees and the manager on composting, and establishing good relationship with the employees by knowing them.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2010 M17 H45

Notes

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Document Type

Thesis

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