Emu farming
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Step by step guide to start a emu farm.
![Date: 1st September 2010<br />1737360278130<br />Final Project<br />In partial fulfilment of the requirements of the course <br />“Project Managementquot;
of MBA (Full Time)<br />Submitted To:-<br />Prof. H.K. Shrivastav<br /> <br /> Submitted By:-<br /> Tanesh Gagnani <br />Roll No. 081121<br /> TOC quot;
1-2quot;
<br />Introduction PAGEREF _Toc271337128 2<br />Emu PAGEREF _Toc271337129 2<br />What is Emu Farming PAGEREF _Toc271337130 3<br />Why Emu Farming PAGEREF _Toc271337131 3<br />Scale proposed for Start-up PAGEREF _Toc271337132 3<br />Resources Required PAGEREF _Toc271337133 3<br />Cost of Building and interiors PAGEREF _Toc271337134 7<br />Rationale PAGEREF _Toc271337135 10<br />Why I am choosing Emu Farming PAGEREF _Toc271337136 10<br />Industry outlook PAGEREF _Toc271337137 10<br />Establishing PAGEREF _Toc271337138 11<br />Operational Process PAGEREF _Toc271337139 12<br />Cash Flow Projections and Break-Even Analysis Money is not raised through loan PAGEREF _Toc271337140 14<br />Only Eggs are sold PAGEREF _Toc271337141 14<br />Eggs and meat both are sold PAGEREF _Toc271337142 16<br />Cash Flow Projections and Break-Even Analysis Money is raised through loan and further refinanced by NABARD PAGEREF _Toc271337143 18<br />Only Eggs are sold PAGEREF _Toc271337144 18<br />Eggs and Meat are sold PAGEREF _Toc271337145 20<br />Risks PAGEREF _Toc271337146 21<br />Risk Assessment PAGEREF _Toc271337147 21<br />Exit Strategy PAGEREF _Toc271337148 22<br />Introduction<br />Emu<br />The Emu, Dromaius novaehollandiae, is the largest bird native to Australia and the only extant member of the genus Dromaius. It is also the second-largest extant bird in the world by height, after its ratite relative, the ostrich. The soft-feathered, brown, flightless birds reach up to 2 metres (6.6 ft) in height. It can survive in almost any climate; it has very strong immune system which means it requires very little care.<br />Emus are birds of very docile and calm nature and live in flocks with a flock size ranging between 16 to 20 Emus. In captivity it is prescribed that each bird should have a minimum area of 400 to 500 sq Ft. Emus breed mostly in monogamous pairs with 1 male for 1 female. In some rare cases the ratio may go up-to 1 male for 2 females. Emus live for about 45-50 years.<br />What is Emu Farming<br />Emu farming is a branch of poultry in which Emus are domesticated and farmed; much like farming of chickens. Only differentiating factor in my opinion is though chickens are farmed for direct consumption i.e. for their meat and eggs which are consumed and their consumption is very common whereas Emu derivatives have mostly medicinal value and their meat is not very popular, Possibly because it is not easily available.<br />Why Emu Farming<br />The main reason for considering Emu Farming is <br />,[object Object]](https://image.slidesharecdn.com/emufarming-110225092406-phpapp02/85/Emu-farming-1-320.jpg)
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Emu farming
- 2. Very high Return on Investment
- 4. Land: Here land is the most significant of all costs, although land required for Emu farming is of very low quality i.e. flat baron land on which nothing grows and on which water must not stay i.e. rain water should flow away from it. Also there is no concern over the location of farm since Emus can survive almost any temperature range (0°C to 52°C) only constraint is it must not be in region of heavy rainfall or mountains/ hilly regions).
- 5. Cost: Absolutely baron lands can be acquired anywhere in Rajasthan, Gujarat, western Madhya Pradesh (this is in the order of my personal preference) will cost anywhere between Rs.1.5Lakh to Rs.1.7Lakh per acre. We are estimating cost of land to be Rs.1.7Lakhs. The location will be either in outskirts of a city or in a village; whichever is available.
- 7. Fencing: A 6’ high and 1870 ft long meshed fencing would be required to fence entire farm. Fence’s purchase and installation cost I am estimating to be Rs. 100000.
- 9. Office Space: Office space required will be very less but for my own convenience I would like it to be of dimensions 12’x12’.
- 14. Chick new born: Rs. 1200 per chick.
- 15. Emu Meat: Rs. 400-700 per Kg depending upon region.
- 16. Emu Fat: Rs. 1700 per Litre
- 17. Emu hide: Rs. 1000 per mature Emu
- 19. Here I have taken an assumption that I will not slaughter the bird. I will only sell its eggs.
- 20. Cost of building, land improvement and caretaker salaries have already been discussed in resources required.
- 21. Feed here I have taken an assumption that when birds are young will eat less and hence the feed cost will be less. It has not been taken very low because Emus grow very fast.
- 22. I am assuming there will be no maintenance in 1st and 2nd year of operation since everything will be new but maintenance will be incurred 3rd year onwards.
- 23. Miscellaneous expense will be highest in 1st year of operation since business will be new and since there will be a lot of learning from 2nd year onwards I will be able to avoid a lot of miscellaneous expense but at 50000 it will stabilize, hence the figure Rs 100000 in 1st year, Rs70000 in 2nd, Rs 50000 in 3rd and 4th year.
- 24. No eggs will be produced in 1st year hence no sales.
- 25. 160 Emus purchased 10 will not survive till 2nd year.
- 26. During 2nd year eggs are only produced at an average rate of about 15 eggs per Emu (pair) and since each egg is sold for Rs 1000 the total is Rs 1125000.
- 27. From 3rd year onwards eggs will be produced at an average rate of about 25 eggs per Emu (pair) and since each egg is sold for Rs 1000 the total is Rs 1875000.
- 29. Here I have assumed that I will from second year onwards I will slaughter only half the birds.
- 30. The only additional expense here is hiring of a butcher, I have estimated his salary to be Rs 5000 per month, upon including bonuses his cost to farm will be Rs 70000 per year for 1st year and Rs 73000 from second year onwards.
- 31. Fat derived from every bird will average out to be of Rs. 3000.
- 32. Meat selling price I have taken a conservative estimate of Rs 500 per Kg and assuming each bird will provide 20Kg of meat.
- 33. Hide is sold for Rs. 1000 per bird.
- 34. Everything else bones, feathers, empty shells, un-hatched shells, nails, and beaks I have assumed will be sold for Rs 1500 per bird which is a conservative estimate.
- 36. It is estimated (conservative) that I will be able to get loan on 80% of the net capital expenditure and working capital needs.
- 37. It is estimated (conservative) that I will be able to get 60% of the loan refinanced through NABARD.
- 39. It is estimated (conservative) that I will be able to get loan on 80% of the net capital expenditure and working capital needs.
- 40. It is estimated (conservative) that I will be able to get 60% of the loan refinanced through NABARD.
- 42. Since I will investing most of the money by raising loan and considering the very high ROI and knowing my own capacity I will be able to bear some extra cost.
- 43. Contractors leaving: Contractors contracted for construction of building and land improvement may ask for more money or may leave the job unfinished.
- 44. In this case project will be delayed
- 45. Emus may die of disease: This is a very high risk which can kill the entire project.
- 46. This is highly unlikely since Emus have very strong immune system.
- 47. Caretakers may Quit: It’s a low skill job so new caretakers can be hired and trained within a week.
- 48. New caretakers will be hired and trained on the job by me.
- 49. I may fail as a Manager: I may not have the heart to make money out of slaughter of Emus.
- 50. If this happens then nothing can be done besides selling off the business.Risk Assessment<br />Risk EventLikelihoodImpactDetection DifficultyWhenRisk ValueBudget overshoot432implementation24Contractors leaving333implementation27Emus may die of disease153Start15Caretakers may Quit234anytime24I may fail as a Manager252Post-implementation20<br />There is actually very little risk involved with this and this is one of the biggest reasons of me being attracted towards this business.<br />Exit Strategy<br />I will sell off the entire business piece by piece. All of the money invested will be recovered and more by this method if it happens after 2 years of procurement of Emu chicks. if not then I will somehow sustain the business for 2 years and then quit. <br />Each pair of breeding Emus are sold for anywhere between Rs.40000 to Rs. 45000. Therefore total money recovered by selling Emus will be 33.75Lacs upon taking conservative estimate of Rs 40000 per pair.<br />I will still make profit. All I have to do is keep the birds alive.<br />