Selecting a suitable project in terms of Investment, space, capacity, running hours, future plans is very important thing. We have to consider following points before selecting a project:
Many other costs involved in the project other than Feed mill like boiler, transformer, genset, civil work, taxes, transportation, Weigh Bridge, ware house, building construction, working capital etc. Hence considering all the costs in the project report is necessary.
Minimum 40 % capacity utilization is must for break-even point.
Future trends and concentrate of livestock , poultry and other animal production, demand & availability of feed, demand & availability of raw material , grain surplus or deficit area, kind of feed grains grown and fed , future trends in feed potential etc. We can cover approx. 200 kms radially in terms of transportation cost.
Competition in market:
Kinds & prices of feeds sold, credit policy of competitors, services offered to customers, share of local market, man power availability & cost , nature of farmers & traders , discount policy , trend of on-farm grinding and mixing.
Selecting the site:
Condition of roads, availability of power, water and manpower, drainage & nature of soil, water level, federal and local regulations for pollution & air quality, attitude of local people and government towards a new feed manufacturing unit, taxation and subsidy rules etc. All these factors must be taken into consideration while selecting a site for feed mill.
Raw Material + Processing cost + Packaging + over heads = Total Cost of production Where raw materials are grains like Maize, Soya, Mustard, GNE, Cakes, DORB, Oils, Molasses, Medicines, Supplements etc.; processing cost involves Boiler Fuel, Electricity, Labour, Maintenance, general Wear & Tear; packaging cost for PT Bags, overheads are depreciation, bank interest, salaries, promotions & branding etc.
Hence all above factors affects the cost of production and considering all these factors along with working capital, selling price & profits we can easily calculate the project feasibility & return on investment.