Meshack Poultry and Farms

Business Plan

A division of Mapitsi wa Noko (Pty) Ltd

Compiled by: MS Malatji

1. EXECUTIVE SUMMARY

Meshack Poultry & Farming is an agri-business entity which endeavours to specialize on

avocados, nursery and supply of seedlings and broiler production.

The management of the business has recognized the rapid growth potential made possible by
the quick success and fast return on investment from the proposed business activities. Payback
of total invested capital on the business plan will be realized in less than two years of
operation.

Cash flow becomes positive from operations immediately and profits are substantial by three
years.

This business plan was drawn with the purpose of requesting funding from Department of
Department of Small Business Development, Department of Agriculture and other funding
Institutions; the required funding amounted to the value of R5, 750, 000.00 for rehabilitation,
development of the nursery and expansion of existing farm infrastructure, procurement of
farming equipment and capitalization of the farm to stimulate production as well as the
viability of the business; wherein

 10% (R575,000.00) for installation of irrigation systems,

 20% (R1 550 000.00) for purchasing of additional farming implements
 30% (R1 725 000.00) for administrative costs and stock
 50% (R2 875 000.00) for construction and development

The applicants have Permission to Occupy (PTO) the land from the Local Traditional Council
to farm.

Currently the farm has two broiler houses and some implements while having plans to upgrade
in and increase the capacity of these chicken broilers units in the first production cycle.

The business request funding to stimulate intensive avocados and broiler production.

The cash flow projections of this project indicate a positive outlook (viability, profitable,
sustainable and repayment).

Already the Managing Director Ms Mapitsi S Malatji invested R 450 00.00 to the business,

The business will adopt local Non-Profit Organizations as part of our social responsibility
providing them with fresh avocados from the farm.

Funding Summary

<Summary Chart>
2. OVERVIEW

The business, Meshack Poultry & Farming is registered as Mapitsi wa Noko Trading and Projects
(Pty) Ltd with the registration number 2016/380147/07.

The company is an agricultural business owned by dedicated emerging female farmer,

established due to the farming business opportunities existing in the district and outside.

The d irector owns 100% of the land and business.

Three key success factors for our business

 Product quality. Not only high-quality standards but great service to the market.

 Controlling costs at all times without exception.

Instituting management controls to ensure efficient operations. This applies equally to product
control and to financial control.

The farm is approximately 5 km away from Greater Giyani Local Municipality in the Mopani
District Municipality, Limpopo Province.

The business occupies an area of approximately 4 hectares of land.

The farm has one entrance from the R81 district road.

This plan included the procurement and construction of a reservoir with a capacity of 160
000 litres and have 2.5 hectares piece of land which is installed with drip irrigation system for
avocados production.

There are quite significant areas of about 10 hectares which still need to be cleared or
debushed and installed with suitable irrigation infrastructure.

The business will have also four broiler units with carrying capacity of about 2000 each per
cycle. The business endeavours to specialize on intensive avocados and broiler production.

According to the analysis made, the total capital investment required to expand the farm
in making it viable and sustainable the amount of R 5 725 000.00 is required.

According to the assumptions made in the business plan, the estimated Gross Margin will be
<XXXX> during the first-year production, that is, if the business is in full operation.

It is recommended that; part of the disposable income be used to build up reserve fund and
to assist in the following year’s production inputs.

Provision must also be made for the payment of value added tax, if necessary.

It is imperative to note that; the success of this project lies on an effective marketing approach
and however, a good and committed farm manager will obviously have best plans and
strategies to this.

The Department of Agriculture will have to proactively act by provision of extension services
and also assist We on a continuous basis during the production season, since this is an
agricultural enterprise and is one of the department’s competencies.
3. COMPANY ETHOS

The predominant activity on the farm will be avocados and broiler production. These
products have been chosen primarily by its suitability and also because of its lucrative market
both locally and nationally.

Mission
 To become the largest avocados and broilers producer in the market

Vision
 To become a market place and leading suppliers of avocados and broilers in the
province and country at large

Business Goals

The business is intending to produce high quality avocados

and broilers in order to:

 Supply the local market on a regular basis

 To meet the required quality and standard of the
products in demand
 To meet and satisfy the needs of customers and institutional clients
 Generate sustainable income
 Promote job creation
 Technology transfer and
 Skills development

4. OBJECTIVES

a. Short-Term Objectives

 Access funding for installation and rehabilitation of irrigation systems

 Access funding for acquisition of farming implements
 Access funding for procurement of production inputs
 Accessing working tools

b. Medium to Long-term objectives

 Use the farm to its full potential in order to maximize farm profits from various enterprises
produced on the farm
 Contribute to local economic development
 To build strategic partnership with commercial farmers and inputs suppliers
 To build strategic partnership with the local markets and retailer

5. SWOT ANALYSIS

Strengths
 Readily available suitable land
 Abundant labour
 Favourable climatic conditions
 Government support services

Weaknesses
 Inadequate farming experience
 Lack of operational financial capital
 Opportunities
 Availability of market both locally and nationally
 Possibility for enterprise diversification.
 High demand for vegetable and white meat
 Lack of tight competition within the target market

Threat
 Diseases
 Natural disasters
 Inflation
 Price fluctuations

6. STAKEHOLDER ANALYIS

There are various stakeholders who will be involved in the daily operations to ensure
sustainability of the business. The stakeholders are expected to play different roles depending
on the competency.

Amongst others, the following are identified as key stakeholders who are currently identified to
assist in ensuring effective and efficient operations of the farm.

Government Interventions
 Department of Agriculture
 Department of Rural Development and Land Reform

Farmer Support/Funding and Implementation

 ZZ2

Business Planning and Skills Development

 Shijantsalu Holdings (Pty) Ltd

Irrigation System and Layout/design

 TCH

Business Principles and Governance

 LEDA

Bookkeeping and Financial Management

 Solanny Business Enterprises

Funders
 Land Redistribution for Agricultural Development (LRAD)
 Sector Specific Assistance Scheme (SSAS)
 Isivande Women’s Fund (IWF)
 Strategic Business Unit (SBU): Agri-business and agriculture
 Land Bank
 Business Process Services (BPS)
 Aquaculture Development and Enhancement Programme (ADEP)

Marketing
 Creatively Drew
7. BUSINESS OUTPUTS
Business Direct Output
High quality avocados will be produced and sold local retailers, fresh produce markets,
hawkers and processing companies such as Pick n Pay and Spar.

Healthy chicken broilers will be produced and marketed directly to consumers and some will
be packaged and sold to local retailers as Meshack Chickens

Jobs will be created and the standards of living for the We and farm workers will be improved.

Business Indirect outputs

The spin-offs of the project include the:

Indirect neighbouring community benefits through:

 Temporary workers opportunity.

 Improved infrastructure development.

8. TECHNICAL FEASIBILITY
Suitability to proposed location

The suitability of the location will be looked at in terms of climatic and weather condition, soil
types and availability of water.
Climatic and weather conditions

The project is located within the summer rainfall region of South Africa, receiving more
than 80% of its rainfall between November and March.

The area has mean annual rainfall ranging between 600 and 800mm. In terms of
temperatures, the area experiences high daytime temperatures of up to 38°C in summer,
while winter is generally mild with temperatures ranging between 7 and 28°C.

Soil types

The area is characterized by very fertile soil. The soil type is mostly sandy loamy within the entire
farm.

The soil in the area has demonstrated over the past that it has the capacity to produce wide
variety of crops even though; no fertilization and irrigation are needed.

The output levels will be improved with the application of testing and determining the correct
soil composition.

Availability of water
The farm has no borehole but through this plan one will be installed which will be
equipped with submersible pump machines.
These boreholes will be connected to a reservoir and the water will be distributed to the fields
using the drip irrigation system.

Availability of technical advice

Meshack Poultry & Farming is very fortunate indeed to be closer to Tompi-Seleka
Agricultural Training Centre and Madzivandila Agricultural College.

This colleges have a track record in terms of offering advice and support to the local small-
scale farmers.

9. CAPITAL STRUCTURE

Table below depicts the infrastructure requirements to make the project viable and
sustainable in the medium to long term run.

The total investment required amounted to R5, 750,000.00.

It is envisaged that this infrastructure and capitalisation will be procured over one- y e a r
period, wherein the fixed capital infrastructure procured first and followed by production
inputs for both broilers and vegetable enterprises.

10. SKILLS DEVELOPMENT

The farming skills and knowledge through training and practical experience gained by the
management thus far is an added advantage in managing the farm. We have been exposed
to both formal and informal agricultural training and are currently involved in farming.

To ensure sustainable growth and competency in the farm management the We will need to
attend compulsory training in business management from an independent training institution.
We will need to attend farm training courses offered by Private and government structures
(such as Department of
Labour, LIBSA & SEDA) which provides training at no cost. Some of the training will include:

 Farm management
 Nursery Development
 Financial management
 Marketing management and negotiations skills
 Poultry Processing
 Conflict management
 Plant production
 Animal Production
 Quality Management System
 Occupational Health and Safety

Succession planning will be critical in the recruitment process of workers.

The Business Management Consultant will be involved in the development of proper Job
Output Models and Skills Development Plans.

11. MARKETING PLAN

The investigation of markets is an ongoing process and the We should make it their tasks to
find the market for their produce.

It is envisaged that the We may fetch better prices if marketing is planned accordingly. The
effective marketing of all produce will be very important for the financial success of the
project.

Market Analysis
 Current market composition
 Fresh Produce Markets
 Local chain stores,
 Catering companies,
 Guesthouses and Hotels
 Informal Sector (i.e. Hawkers and Stokvelss

12. PRODUCTS
The farm will specialise on the selling broilers and avocados of the best quality cultivar and
will be disposed to different markets.

In future when the business is booming, we intend to increase production and adding value
to the produce, as a marketing strategy, this will also increase their profit margin.

13. PLACE
The activities of the business will be at Giyani - Malamulele R81 Road, 5km away from Giyani
in Limpopo Province of South Africa.

The target market place for farm produce includes amongst others the local retailer (Pick n
Pay) who we have already established a relationship with and are ready to sign a 5-year
supply contract should we be able to meet their monthly quota.
ZZ2 is also a potential partner as they are currently looking for strategic role players in the
avocado production market.
The local markets cannot get enough of the chickens and it seems to have increased in
volume in the past few years as many other players have entered the market.

14. PRICE
Item Unit Normal Price Bulk
Broiler Each R50.00 R40.00
Avocado Kilogram R50.00 R40.00

15. PROMOTION

Meshack Poultry & Farming should be seen as a symbol of achievement by rural people, a
pride of the area. It is therefore envisaged that people all over the district and across should
know about it. To this end, the following promotional tactics will be employed.
 Branding: our intention is to place stickers on the cars that belong to the farm. This will
go a long way in promoting the image of the business.
 Signage Boards: another method of promoting our business is to have sign boards
next to the main road indicating the direction of the business. We are very fortunate
enough to have our business located just few meters away from the main road.
 Packaging and branding: in our attempt to promote and market the business, we will
also make sure that all the products produced within the business bears the business
name and contact details.

16. MARKETING STRATEGY

Location Target Group Core Strategic Strategic Approach
Output Focus
Limpopo Local Marketing Community Arrange with local
(Mopani) Community Meetings authorities to secure
slots during their
community gatherings
Newspapers Marketing Print Media Identify print media
and which have slots for
Magazines farm activities
Find out about the
size, cost and other
logistics for such slots
Secure date for the
print of the slot
 Compile brief slot
based on the
requirement of the
newspaper or
Magazine
Radio and Marketing Radio and TV Arrange with local
Television Slots stations to secure slots
during community
network programs,
current affairs and
news time.

Flyers Marketing Promotional Identify service

Material provider for
promotional materials
that can be utilised by
members as uniform
package and can be
sold
Purchase of
promotional material
and identification of
distribution
Strategy
Website Marketing Online Identify Service
Presence Provider
Draft a brief
description of the
farm, i.e. history,
activities,
achievements and
challenges
 17. RISK AND DISASTER ANALYSIS
Type of Risk Impact Probability Contingency Plan Comment
Production If any of this disaster could The probabilities Contingency or The farms would get
Risk occur, the impact will be that this risk emergency measures a weekly, monthly,
huge. could occur are will be applied. quarterly and daily
minimal reports on any
There will be a total loss of Spraying against any disease which would
income for the entire farm. kind of disease which occur from
could occur. Department of
Agriculture and
commodity group

Marketing This might result in serious
Risk loss of farm revenue (gross
income from a business)
This type of risk Product may be in- Marketing
usually occurs in vested in a broad information would
farming. range of securities to be readily available
lessen risk of loss, if to farmers from
Agricultural prices are low. Department of
products are Agriculture.
price inelastic.

Financial Risk The project would lack the This usually Farmer’s workshop on Farmers would be
working capital which occurs as the financial trained at the
might results in total results of management Agricultural Training
collapse of the business. improper courses would be Centre on financial
financial conducted. management.
management
practices.

Institutional This will delay the In most cases Local politicians, Information sharing
Risk implementation part of the local politicians chiefs and other would be necessary
project. interfere with influential to every influential
the running stakeholders will be stakeholder.
projects. consulted or brought
forward during the
project planning
sessions.

18. MANAGEMENT

Ms Mapitsi Malatji is a Managing Director of Mapitsi wa Noko Trading and Projects (Pty) Ltd
t/a Meshack Poultry & Farming who is:

 A visionary and inspirational leader.

 Multi-skilled and action driven team player
 Excellent communication and negotiation skills.
 Able to identify and develop opportunities in an institution.
 Far-sighted development strategist.
 Computer literate (Word, Excel, PowerPoint and Publisher).

19. VALUES

We aim to be an employer of choice, attracting, training and retaining skilled people. We

are an equal opportunities employer; Honesty is our key to success.
 a. Pursuit of Excellence
We aim to continue in our excellency in delivery of quality and value in Project
Management sectors through integrated solutions, products and services;

b. Customer Focused
With our access to an array of multi-disciplinary expertise, we deliver a quality and
professional product to satisfy all of our customer's individual needs;

c. Striving for Integrity

Based on recognised codes of conduct and a system of accountable, transparent
corporate governance, we strive to maintain a high standard of business integrity;

d. Pursuit of Innovation
We continually seek and develop innovative products within both the commercial
and residential property sectors and within the vacation ownership industry;

e. Superior Performance
We look to ongoing growth and premier service delivery through a customer-centric
focus that sets the benchmark for others to emulate.

20. Company Structure

Managing
Director

Administration Production Marketing

Drivers Labourers Sales

Packers
21. FINANCIAL ASSESSMENT

The over-all financial plan for growth allows for use of the significant cash flow generated by
operations.

The capital investments requirement of <XXX> allows for well-planned business expansion
plan and it is more efficient to pull the business venture during its first operational year, the
financial requirements for the second business year is well catered for in the cash flow
projections.

Outside investment capital also allows a buffer of excess cash so that the expansion plan
can be revised on short notice.

Every opportunity will be seized to accelerate expansion past the critical dates in this plan if
cash flow from new establishment exceeds projections.

22. IMPORTANT ASSUMPTIONS (NOTES AND CALCULATIONS)

The financial plan depends on the important assumptions, most of which are shown the
following tables.

The key underlying assumptions are:

 We assume a slow growth economy, without major recession

 We assume access to equity capital and financing sufficient to maintain our financial
plan as
 We assume the continued demand for vegetables and poultry nationally
 Check the inputs cost to get the prices of inputs and the selling prices
 10% increase in inputs costs and selling price is affected in year 2
 Farm profitability formula = Net profit/Total capital employed
 Own capital Ratio = total own capital (net worth)/total assets
 Current ratio = Current Assets/Current liabilities
 Capital turnover ratio = gross production value/average total capital employed

23. CONCLUSION

Based on through analysis of the projected financial statements, the enterprise will require a
capital injection to the value of <XXX>.

This amount is required to ensure that the business is operating to the full potential in order to
realize its maximum return on investment. It is envisaged that the business will generate
sufficient positive cash flow during its first year of operations and some of this amount will be
retained to cover the costs of the preceding years of operations.

It should also be noted that the success of this business depends largely on the commitment
of various stakeholders who will assist the project based on their competencies.

24. ANNEXURES
a. Projected Income Statement
b. Projected Balance Sheet
c. Farm Layout and Diagram
d. Registration Documents
e. ID Copy and BBBEE Certificate
f. Permission to Occupy Banking Details
g. Supplier and Service Provider Quotations