Economic Feasibility of Chicken Broiler Industry in Qena Governorate

Melad, Mikhail Bahig; Elsaman, Mohammed A. M.; Hamdoon, Montaser M. M.

doi:10.21608/jsasj.2022.284248

Economic Feasibility of Chicken Broiler Industry in Qena Governorate

Document Type : Research and Review Papers

Authors

¹ South Valley University Teaching Assistant

² Agricultural Economics’ Department Faculty of Agriculture Sohag University Sohag 82524 Egypt

10.21608/jsasj.2022.284248

Abstract

The Chicken Broiler Industry faces several crises in Egypt, that causes increasing in price of production inputs, and therefore reluctance to invest in the broiler sector in Qena. Qena is very important in Upper Egypt because of its area, and the state's orientation to develop the Chicken Broiler production sector in Qena. The study is interested in discovering the current status of chicken broiler farms in Qena and the economic feasibility in three production capacities. It uses free cash flows FCFF, and some indicators such as: Simple and Discount Pay Back Period, Profitability Index PI, Internal Rate of Return IRR, Modified Internal Rate of Return MIRR, sensitivity analysis, Break Even Analysis BEP and using Weighted Average Cost of Capital WACC which is the Discount Rate. Results discovered significant increase, during (2000-2019), in number of Broiler Farms, total dormitories, working dormitories, full, actual and deactivated production capacity. Net Present Value showed feasibility of 3 capacities, but comparing profit margin with WACC, proved only the third capacity is feasible, because of purchase on credit of production inputs in Qena. Break Even Point BEP was 30%, 23%, 15% for first, second and third that explains the third capacity is the most flexible, and the most sensitivity is first capacities. The study shows Sensitivity Analysis in two conditions, costs increasing by 10%, and revenues Decreasing (selling price of chickens) by 10%, for feasibility indicators and BEP.

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