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Poultry farm and local factory
The project aims to establish a chicken farm and a local processing plant to meet the needs of the local market for white meat and export the surplus to regional markets. The project is characterized by its ability to provide high-quality products to meet the growing demand for white meat. The project provides 100 direct jobs and 200 indirect jobs
Study content
Rationale for choosing the project
Growing demand for white meat: The local and regional market is witnessing a continuous rise in demand for white meat due to increasing population and changing dietary patterns.
Availability of infrastructure: The Kingdom provides a well-developed infrastructure that facilitates transportation and distribution, which enhances export opportunities to regional markets.
Government support: The Saudi government provides significant support for agricultural and manufacturing projects, including tax and financial facilities.
Export opportunities: Surplus production can be exported to regional markets that are also experiencing growth in demand for white meat.
Demand analysis
Population growth: Saudi Arabia is experiencing continued population growth, increasing the demand for white meat as part of the daily diet.
Dietary changes: There is a shift towards consuming more white meat due to health awareness and associated nutritional benefits, which is boosting the local demand for chicken and chicken products.
Developing regional markets: Countries in the region are witnessing an increase in demand for white meat due to population and economic growth, opening up significant export opportunities.
Changes in regional consumption patterns: Regional markets are increasingly demanding high-quality imported food products, with some neighboring countries relying heavily on imports to meet their food needs.
Government policies: The Saudi government provides significant support to the agricultural sector, including financial and tax facilities, which encourages the establishment of poultry farming and processing projects.
Self-sufficiency initiatives: The government seeks to reduce dependence on imports by supporting local projects that contribute to achieving self-sufficiency in food products.
Advanced infrastructure: The Kingdom has well-developed infrastructure to support agricultural and manufacturing activities, including transportation, storage and distribution facilities.
Modern technology: The use of advanced technology in poultry farming and processing can increase production efficiency and product quality, enhancing competitiveness in local and regional markets.
Job creation: The project can create 100 direct and 200 indirect jobs, contributing to reducing unemployment and promoting local economic development.
Development of rural areas: Choosing areas such as Riyadh, Al Jouf, Tabuk, and Hail promotes development in rural areas and utilizes available local resources.
Reducing dependence on imports: Despite efforts to increase local production, local supply does not meet the large demand for white meat, making the market highly dependent on imports to fill this gap. The project can reduce this dependence and achieve self-sufficiency.
Increased consumption of white meat: Demand for white meat peaks during the Eid and Rituals periods, which increases annual demand and creates opportunities to increase production to meet these needs.
Financial indicators
Capital:
SAR 55 million.
Internal Rate of Return (IRR):
10% per annum.
Total projected revenue:
Stable annual revenues are expected to be realized as the demand for poultry products increases, ensuring continued growth in the long term.
Return on Investment (ROI):
The return on investment is expected to be in the range of 10% per year, indicating that the project will realize a steady growth in returns.
Break-even Point:
The break-even point is expected to be achieved in 3 to 4 years, depending on the project’s cost structure and projected revenues.
Profitability:
The project is expected to achieve good profits after achieving the break-even point, as it will start generating the desired financial returns while benefiting from the high demand in the local market.
Cash flow:
With the expected rate of return, the project will generate positive cash flow starting from the third year of operation, which will help repay loans or fund future expansions.
Working capital cycle:
The financial cycle depends on the operating needs associated with the production and distribution of poultry products, and the cycle will be relatively short due to the continuous demand for the products.
Investment advantages
Constant demand:
Due to the ongoing population increase in the Kingdom, the demand for poultry products is continuously increasing, making the project economically viable in the long run.
Government subsidies and encouragement:
The Saudi government provides subsidies and support to the agricultural sector, including projects related to poultry production, which contributes to reducing initial costs.
Export opportunities to neighboring markets:
Products can be exported to the Arab Gulf countries and the Middle East, opening up new markets and increasing revenues.
Reducing production costs through integration:
By integrating the production stages from farming to processing into a single project, significant cost savings can be realized.
Strategic location in Saudi Arabia:
The Kingdom is an important hub in the region, facilitating access to internal and external markets at competitive prices.
Tax benefits and financing facilities:
The country offers tax incentives and financing facilities for the agriculture and livestock production sector, which enhances the financial viability of the project.
Features of the project
A contribution to achieving food self-sufficiency:
The project is an important step towards achieving self-sufficiency in poultry production, which helps reduce dependence on foreign imports.
Development of the agricultural sector:
The farm contributes to supporting and developing the local agricultural sector and enhancing local production, which contributes to the sustainability of the economy.
Realizing high financial returns:
With the continuous demand for white meat in the local market, the project is expected to generate good profits in a short period of time.
Utilize existing infrastructure:
The project can take advantage of existing facilities in the area, such as roads and utilities, minimizing set-up and operating costs.
Providing employment opportunities:
The project contributes to providing job opportunities for the local population in the areas of production, manufacturing, packaging, and distribution.
Potential for future expansion:
Production can be expanded by increasing the number of farms or opening new markets.
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