Cow Supply Business Plan

Executive Summary
Cattle are the most predominant and highly valued livestock in Nigeria. They are kept
for beef, hide, and milk and for traction and to many as status symbol. The livestock
system employed by the farmers is characterized by traditional system of production.
Beef and Beef products are known worldwide as a very important diet because of their
high nutritive quality and significance in improving human health.
Farrow Limited intends to go into the purchase and supply of cows to government and
private abattoirs in Abuja, Lagos and Enugu. Two trailer load of cows each containing
between 30 -35 bulls will be supplied in each month. The bulls which usually have an
average weight of 365kg will be purchase at a price of between N220, 000 – N300, 000
each and are then sold at a Price N750 – N1, 000 per kg.
The project requires about N11, 630,000 in which the applicant intend to contribute
N3,630,000 to the project which represent 31% of the project worth as equity and
intends to secure a loan of N8,000,000 from AGSMEIS program of the CBN which will
represent 69% of the project worth.
Projected Revenue of N61,429,500 is expected to be realized from the project quarterly
(every three months). . The cash flow projection shows positive net cash balance at the
end of each circle. A projected profit and loss account shows indication of profitability at
the end of each year of the project with Net profit of N19,030,846, N19,160,846, and
N19,520,846 from year 1 to final. The return on Sales, Capital employed and Equity are
detailed below
NET PROFIT 19,030,846 19,160,846 19,520,846
RETURN ON SALES 8% 8% 8%
RETURN ON CAPITAL EMPLOYED 31% 32% 32%
RETURN ON EQUITY 524% 528% 538%
Farrow Limited Cow Supply Business Plan
The loan is expected to be paid back in 3 years. The cash flow shows a positive return
with Net Present Value (NPV) of N108,377,914 Benefit Cost Ratio of 1.19 and an
Internet Rate of Return (IRR) greater than 50%. All factors indicate positive viability of
project which is worth the bank investing into. The summary of the total cost and
financing plan is shown below
SUMMARY OF TOTAL PROJECT COST AND FINANCING PLAN
S/NO ITEMS BANK APPLIC. TOTAL
CONTR. (N) CONTRI. (N) COST (N)
2 OPERATING EXPENSES
2.1 Management & Labour 280,000 280,000
2.2 Material Inputs 7,000,000 1,580,000 8,580,000
2.3 Other Expenses 1,240,000 1,240,000
2.4 Project Insurance 200,000 200,000 400,000
SUB-TOTAL 7,200,000 3,300,000 10,500,000
2.5 10% Contigency 800,000 330,000 1,130,000
GRAND TOTAL 8,000,000 3,630,000 11,630,000
%Contribution 69% 31% 100%
NB : Contingency adjusted by N80,000 to roundup loan volume

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