(Financial Evaluation of Poultry Feed Manufacturing in Fayoum Governorate)

Document Type : Research and Review Papers

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Agricultural Economics Department Faculty of Agriculture Fayoum University Fayoum Egypt

Abstract

The research aimed to financially evaluate the poultry feed manufacturing in Fayoum Governorate, through conducting a comprehensive inventory of poultry feed factories in the governorate, using undiscounted and discounted criteria. It was found that the value of the internal rate of return amounted to about 29%, which is considered a low rate of return and is much lower than the lending rate in commercial banks, which indicates that the project is not financially feasible. It was also shown that the project recovers its invested money within 3.4 years, and that the return on investment reached approximately 29.23 %, which means that every pound invested achieves a net return estimated at approximately 29.23 piasters, and the benefit-to-cost ratio reached approximately 1.05, which indicates that every pound spent provides net benefits estimated at approximately 0.05 pounds. Sensitivity analysis showed that increasing the purchase price of a ton of yellow corn by 5% led to a decrease in the internal rate of return from 29% to 19%, a decrease of 34.5%, and that increasing the purchase price of a ton of soybeans by 5% led to a decrease in the internal rate of return from 29% to 15%, a decrease of 48.28%, It was found that increasing labor wages by 5%, led to a decrease in the internal rate of return from 29% to 28%, a decrease of 3.45%,  and that increasing production capacity by 5% led to an increase in the internal rate of return from 29% to 63%, an increase of approximately 117.24%. Therefore, the study recommends the need to redirect national projects' investments towards investing in the production and import of feed raw materials and additives, thus solving the problem of high and constantly fluctuating prices of raw materials and additives by setting price ceilings for them.

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