Hatchery

Uploaded on : September 2019

India is a densely populated country having predominantly agricultural economy. Almost every part of our country is suitable for poultry farming. During the past few years poultry industry have gained enormous potential particularly in and around major cities and towns. The Government of India through State Directorates of Animal Husbandry and Veterinary Services have been giving thrust on and incentives for the development of poultry industry. Development of poultry industries may further be accelerated, if improved varieties of layers/broilers are made available to the poultry farmers which could ensure fast growth, maximum feed to meat/egg conversion and low mortality among the poultry birds. Therefore, it is essential that hatcheries are set up in different areas having potential on decentralised basis, so that poultry farmers may get high yielding varieties of chick which in turn may give good returns to the farmers. This will not only reduce the pressure of unemployment in rural and sub-urban areas but also help in increasing per capita consumption of poultry meat and eggs and thus strengthen the economy of our country. In the modern nomenclature of poultry industry, the term hatchery covers the sector which is engaged in production and supply of one-day old chicks by artificial incubation. A hatchery can be a part of a breeding farm or it can be a franchiser or sub-franchiser for producing parent and day–old chicks of broilers or layers. The term hatchery can be extended to an organisation which does not maintain any breed stock (mating stocks) but only procures hatching eggs for producing (supplying) day old chicks. The organisations producing day old chicks only for replenishing their 13 75 own requirements of birds are not covered under the term hatchery.

 

Market Potential

 

Fast urbanisation, changes in life style and food habits of consumers, improvement in standards of living etc. have resulted into increase in per capita consumption of egg and poultry meats but per capita consumption of these commodities in our country is still far below that of developed countries showing enormous potential/scope for poultry development. Increasing number of poultry farms in different areas has emphasised that hatcheries should be set up in potential areas. Exorbitantly increasing transportation cost and mortality during transportation of day old chicks have also emphasised that hatcheries should be set up on decentralised basis hereby. In India, the hatcheries in private sector had their emergence in early sixties in collaboration with some famous main hatcheries based in Canada and America. Such collaborations are still continuing involving many more foreign based hatcheries. However, some old hatcheries have taken up their own Poultry Breeding Programmes. In public sector too, significant contribution has been made by the Central Poultry Breeding Farms, Ministry of Agriculture and the ICAR in developing high yielding commercial chicks. But due to tremendous increase in poultry farms in different areas, it could be said that these hatcheries set up so far are not adequate to meet the increased demand of one day old chicks of broilers or layer poultry birds which shows good scope for hatcheries.

 

Basis and Presumptions

The project profile has been prepared based upon the following presumptions:

Working hours/shift :	8 hrs.
No. of shift/day :	1
Working days : (iv) (v) (vi)	300
Total number of working hrs. :	2400 hrs.
Working efficiency :	75%
Time period for achieving maximum capacity utilisation:	3 years
Labour charge :	As per the minimum Wages Act of State Govt.
Margin Money of capital investment. :	25%
Rate of interest on working capital :	15% P.A.
Rate of interest on fixed capital :	15% P.A.
Operative period of the project :	10 years
Value of machinery and equipment :	Taken on the basis of a particular supplier of machinery & equipments ruling at the time of the preparation of the project.
Value of raw material, packing :	As per the local market rates on whole materials and others sale basis.
Construction charges :	Rs. 75/- per sq. ft.
Break - even point :	Calculated on full capacity utilisation basis.
Pay-back period :	4 years

 

Implementation Schedule

 

The project may be implemented in 6 months after the sanction of the loan. The implementation schedule has been worked out as follows:

 

Project preparation	0-1 month
Site selection, acquisition of land and development etc.	1-2 months
Sanction of loan	1-3 months
Construction of poultry sheds	3-4 months
Sanction of electric power and telephone connection	3-4 months
Procurement of parent stock chicks	4-5 months
Construction of hatchery building and other civil works	3-5 months
Procurement of machinery and equipments	4-6 months
Electrification & installation of Machinery	6-7 months
Recruitment of Staff and labour	7-8 months
Trial Run	8-9 months
Commercial production	9-10 months

 

Technical Aspects

Process of Manufacture

One day old parent stock chicks of improved species of broiler or layers are procured from the reliable parent stock suppliers. Procured chicks are transferred to poultry sheds. These poultry birds are given balanced nutrition like poultry feed, feed mixes, medicines, etc., depending upon their age and variety upto laying stage. The layed eggs are collected and transferred to hatchery section. The eggs are cleaned thoroughly to get rid of foreign matters and checked for their suitability for hatching, eggs having cracked shells and unfertile eggs are segregated and disposed off by selling at subsidised rates. Thoroughly cleaned eggs are stored in air conditioned room in order to bring down normal to suitable temperature. The conditioned eggs are transferred to setter incubators and incubated for 18 days. A temperature of 99.9ºF and relative humidity of 82% is maintained in the setter incubators. At the end of 18th day, eggs are transferred to holder incubators maintained at a temp. of 98.9ºF and relative humidity of 87% and incubated for 3 days. At the end of 21 days, chicks come out after breaking egg shells. Egg shell and membranes are removed and each chick is checked for its sex and separated out. Each and every chick is vaccinated by Marex-D vaccine and packed in chick baskets and are sold to the poultry farms. In order to produce healthy day-old chicks of high potentiality in the most economical manner, proper planning of hatchery is needed which involves application of sound scientific and business principles.

 

Quality Control and Standards

 

Day old chicks are produced keeping in view the customer's requirements. The Bureau of Indian Standards has laid down specifications for day old chicks (layer/broiler) under the following ISI Specification: IS: 9800:1981: Basic requirements for day old chicks (layer/broiler) Entrepreneurs interested in getting ISI mark shall have to abide by the specifications laid down. However, it is optional to get ISI mark but the hatchery must maintain the quality of chicks to compete in the present day cut-throat competition.

 

Production Capacity (per annum)

 

a) Quantity: 2 lakhs day old chicks

b) Value: Rs 28,72, 500

Motive Power 15 K.W.

 

Pollution Control

 

If hatchery is run on scientific lines, no significant pollution is created. However, hatchery unit must take care in maintaining proper hygienic and sanitary conditions, in and around hatchery and poultry sheds. Proper disposal facility should be made available for dumping refuse and discharge of water from the hatchery. Litter should be replaced at frequent intervals and disposed off early. Dead poultry birds, diseased birds, spoiled eggs and other refuse and rejects should be dumped in disposal pit without any delay. Entrepreneur should get No Objection Certificate from State Pollution Control Board. Energy Conservation Main energy source in a hatchery is electricity and to some extent diesel to run generator in emergency. Electric bulbs of only required wattage should be fitted in poultry sheds where these are required otherwise tube lights of improved design having electronic choke should be fitted and lighted only when required. Best use of natural light should be made as far as possible. Generator should be well maintained and serviced at regular intervals and should be run only in case of electric failure/load shedding. Only essential equipments should be run when generator is in operation and the load should be kept to its optimum. Proper ventilation and cooling should be maintained in generator room.

 

Financial Aspects

Fixed Capital

 

Land and Building	Amount (In Rs.)
Land 20000 sq. ft. Value	1,50,000
Land Development L.S.	25,000
Sub Total	1,75,000
Built–up Area and other Civil Works	Amount (In Rs.)
Hatchery-cum-office building (60'×120') 7200 sq.ft.	5,40,000
Store (30'×60') 1800 sq.ft	1,35,000
Layer/Breeder House/Sheds (100'×30') 3000 sq.ft.	2,25,000
Disposal pits	10,000
Water storage tank	30,000
Boundary wall/barbed wire fencing, etc.	35,000
Sub Total	9,75,000
Total	11,50,000

 

Machinery and Equipment

 

Sl. No.	Description	Qty./No.	Amount (In Rs.)
1	Egg Hatcher (Automatic)(capacity 4500 eggs)	2 No.	140000
2	Egg setter (capacity 13500 eggs) (Automatic)	2"	2,00,000
3	Electric egg tester	1"	600
4	Electric Deb-eaker	1"	1250
5	Egg weighing scale (1-100 gram cap.)	1"	750
6	Feeder, waterer and brooder	LS	35,000
7	Misc. items like buckets, trays, baskets etc.	LS	10,000
8	Weighing balance	1 No.	5,000
9	Generator (10 KVA)	1"	90,000
10	Air conditioner (1.5 TR)	1"	25,000
11	Veterinary clinic instruments/equipment	LS	6,000
12	Office equipments/furniture	LS	20,000
13	Refrigerator	1 No.	25,000
14	Electrification and installation	LS	25,000
Total			5,83,600
(iii) Preliminary and Pre-operative Expenses like Legal Expenses, Establishment Cost, Travelling, Start up Expenses, Consultancy Fees, Interest during Construction, Trial Run Expenses etc.			30,000
(iv) Other Fixed Expenses for Purchase of About 1500 Nos. Day-old Parent Stock chicks and Feeding Charge up to Laying Stage			1,50,000
Total Fixed Capital			19,13,600

 

Machinery Utilisation

 

At 75% efficiency, the indicated machinery and equipments have capacity to produce about 3 lakh day old chicks per year. During the first year of the implemention of the project, about 2 lakh day old chicks will be produced per year and hence capacity utilisation will be 66%. During second year, capacity utilisation has been worked out at 80%. The capacity of the hatchery may further be enhanced by installing additional setter and hatcher incubator in the same premises.

 

Financial Analysis

 

Cost of Production (per year)	Amount (In Rs.)
Total recurring expenditure	19,58,400
Depreciation on building and other Civil Construction @ 5%	48,750
Depreciation on machinery and equipments @ 10%	50,000
Depreciation on hand tools and misc. equipments and poultry equipments @ 25%	7,000
Depreciation on office equipments and furniture @ 20%	4,000
Interest on Total capital @ 15%	3,12,000
Total	23,80,150

 

Turnover (per year)	Amount (In Rs.)
By sale of 200000 Nos. of day old chicks @ Rs 13.75	27,50,000
By sale of 2500 Nos. of unfertile eggs @ Rs. 2	5,000
By sale of 2500 Nos. of culled birds @ Rs. 45	1,12,500
By sale of 500 bags litter @ Rs. 10	5,000
Total	28,72,500

 

•  Net Profit (per year) 4,92,500 (before Income Tax)

•  Net Profit Ratio 17%

•  Rate of Return 24%

 

Break-even Point

 

Fixed Cost	Amount (In Rs.)
Depreciation on machinery and equipment	50,000
Depreciation on hand tools	7,000
Depreciation on office equipment and furniture	4,000
Depreciation on building and other civil works	48,750
Interest on Total investment	3,12,000
Insurance	7,800
40% of salary and wages	1,05,600
40% of other contingent expenses	1,15,200
Total	6,50,350

 

Net Profit (per year) 4,92,500

B.E.P. = Fixed cost × 100 Fixed cost + profit = 650350 × 100 1142850 = 57%

 

Additional Information

 

For more technical details, entrepreneurs may contact the State Directorate of Animal Husbandry and Veterinary Services, Veterinary Colleges located in different States, and Central Veterinary Research Institute, Izzatnagar, Bareilly (UP).

 

Addresses of Machinery and Equipment Suppliers

 

•  M/s. Farm Equipment Enterprises 32, DSIDC, Industrial Complex Jhilmil, Taharpur, Shahdara, Delhi-110032.

•  M/s. Diamond Poultry Equipments B-16/8, Jhilmil Industrial Area, GT Road, Shahdara, Delhi-110032.

•  M/s. Dayal Poultry Appliances WZ-16, Lajwanti Garden, New Jail Road, New Delhi-110046.

•  M/s. Eastern Industro Commercial (India) 8/3A, Hathi Bagan Road, Kolkata-14.

•  M/s. Famous Metal Works 10-2-284/A, Jama Masjid, A, Battery Lane, Opp. ITI Shantinagar Colony Road, Hyderabad-500457.

•  M/s. Diamond Incubators 32, DSIDC, Industrial Complex, Jhilmil Industrial Area, GT Road, Shahdara, Delhi-110032.

•  M/s. Jayant Brothers 425 A, Kilpauk Garden Road, Chennai-10.

 

 

For further information please contact

Information Manager
TIMEIS Project
E-mail: timeis@ficci.com