Lorelee FriesenLorelee FriesenKim KotylakKim KotylakKelly VolkKelly Volk

Amanda ZieglerAmanda Ziegler

Dykal Holdings

Purpose of the ProjectPurpose of the Project To determine the feasibility of a new To determine the feasibility of a new

chicken processing plant in chicken processing plant in SaskatchewanSaskatchewan

To determine demand for Halal To determine demand for Halal poultry products in the Prairie poultry products in the Prairie ProvincesProvinces

Overview of the CompanyOverview of the Company Chicken Processing PlantChicken Processing Plant Halal and non-Halal chickenHalal and non-Halal chicken Frozen and fresh productsFrozen and fresh products Selling throughout Western CanadaSelling throughout Western Canada

Mission StatementMission Statement““Dykal Holdings, a Saskatchewan Dykal Holdings, a Saskatchewan

based company, will strive to meet based company, will strive to meet the needs of all customers by the needs of all customers by providing competitive prices and a providing competitive prices and a premium, value-added product while premium, value-added product while providing a pleasant working providing a pleasant working environment for all employees.” environment for all employees.”

Goals of the companyGoals of the company Short Term Objective – Achieve a Short Term Objective – Achieve a

20% pre-tax profit on gross sales of 20% pre-tax profit on gross sales of $4.54 million in the first year of $4.54 million in the first year of operationsoperations

Long Term Objective – Grow net Long Term Objective – Grow net sales to $9.39 million within the first sales to $9.39 million within the first ten years of operationsten years of operations

Operations PlanOperations Plan

BuildingBuilding

Process FlowProcess Flowa. Receive Live Birds

b. Hand Slaughter c. Stunning and Slaughter

d. Scalding and Defeathering

e. Head Puller/ Hock Cutter

f. Evisceration g. Giblets

h. Cooling

i. Cutting

k. Packing and Grading

j. Blast Tunnel

l. Refrigeration

k. Packing and Grading

m. Freezer

n. Distributionn. Distribution

i. Cutting

SuppliesSupplies Raw MaterialsRaw Materials PackagingPackaging

SupplierSupplier Different packaging for Halal and non-Different packaging for Halal and non-

Halal productsHalal products

Limitations to OperationLimitations to Operation Sufficient water supplySufficient water supply Adequate method of waste disposalAdequate method of waste disposal

WaterWater Product WasteProduct Waste

Human ResourcesHuman Resources

Human ResourcesHuman Resources Number of Employees Training Programs

Safety, First Aid and CPR Benefits Job Descriptions and Criteria

Plant Manager Secretary/Accountant Maintenance Plant Workers HACCP and CFIA

Employee Flow ChartEmployee Flow Chart

Evisceration

Hanger

Cutter

Gutters (3)

Cropper (3)

Offal Preparers (2)

Office Staff

Accountant

Secretary

Packaging

Packer

Shipper

Cutter (2)

Other

Custodian

Sanitizer (2)

Maintenance

HACCP Coordinator

CFIA Inspector (1.5)

Kill

Receiver (2)

Killing

Plant Manager

CEO

Employee Salary Employee Salary SummarySummary

2004 2006 2008 2010 2012Direct Labour CostsPermanent Labourers 499,200 527,155 555,110 583,066 611,021 Overhead Salary WorkersHACCP Inspector 40,000 42,240 44,480 46,720 48,960 CFIA Inspector 90,000 95,040 100,080 105,120 110,160 Maintenance Supervisor 47,877 50,558 53,239 55,920 58,601 Total 177,877 187,838 197,799 207,760 217,721 Admin Salary WorkersPlant Manager 100,000 105,600 111,200 116,800 122,400 Receptionist/Accounting Clerk I 51,352 54,228 57,103 59,979 62,855 Total 151,352 159,828 168,303 176,779 185,255 Total Salaries and Benefits 828,429 874,821 921,213 967,605 1,013,997

Marketing PlanMarketing Plan

Marketing PlanMarketing Plan ProductProduct

NameName TypesTypes QualitiesQualities

Place Place Islamic CentresIslamic Centres IGAIGA

Price Price Market RateMarket Rate PaymentsPayments Halal Credit PolicyHalal Credit Policy

PromotionPromotion StickersStickers Sales pitchesSales pitches Magazines/news Magazines/news

lettersletters Trade showsTrade shows WebpageWebpage

Marketing Plan Con’tMarketing Plan Con’t

2004 2006 2008 2010 2012Advertising Magazine ads 36,000 38,016 40,032 42,048 44,064 Newsletters 20,400 21,542 22,685 23,827 24,970 Total Advertising 56,400 59,558 62,717 65,875 69,034 Promotion & Development Web page 18,000 Maintance 2,000 2,112 2,224 2,336 2,448 Travel expenses 28,000 29,568 31,136 32,704 34,272 Trade shows 2,000 2,112 2,224 2,336 2,448 Total Promotion 50,000 33,792 35,584 37,376 39,168 Total Marketing Expenses 106,400 93,350 98,301 103,251 108,202

Advertising Budget

Marketing Plan Con’tMarketing Plan Con’tSWOTSWOT

StrengthsStrengths WeaknessesWeaknesses Constant supply of raw Constant supply of raw materialmaterialAccommodate a 50% Accommodate a 50% increaseincreaseTwo markets, one lineTwo markets, one lineAir chilledAir chilledVegetable fedVegetable fedFederally InspectedFederally Inspected

High start up costsHigh start up costsHigh shipping costsHigh shipping costs

Market Plan Con’tMarket Plan Con’tOpportunitiesOpportunities ThreatsThreats

Only one other processor Only one other processor in Saskatchewanin SaskatchewanGrowing Halal marketGrowing Halal marketHalal products are Halal products are becoming more popularbecoming more popular Large pool of workersLarge pool of workersHealthy meat alternativeHealthy meat alternative

LilydaleLilydaleProcessing losses in pastProcessing losses in pastStrict Halal processing Strict Halal processing requirementsrequirements

Market Plan Con’tMarket Plan Con’t Market AnalysisMarket Analysis

Past PerformancesPast Performances Muslim populationMuslim population

CompetitionCompetition LilydaleLilydale Maple LeafMaple Leaf Small Halal processorsSmall Halal processors

Financial PlanFinancial Plan

Financial PlanFinancial Plan All prices, expenses and wages are All prices, expenses and wages are

gown by inflation of 2.5% per year. gown by inflation of 2.5% per year. A total of $2,219,111, at a rate of A total of $2,219,111, at a rate of

7.2% will be amortized over a 25 7.2% will be amortized over a 25 year period. year period.

The remaining $739,704 will be The remaining $739,704 will be invested by the single equity holder. invested by the single equity holder. 2004

Long Term Debt 75% 2,219,111 Owner's Equity 25% 739,704 Total 2,958,815

Financial Plan Con’tFinancial Plan Con’t Capital BudgetCapital Budget

2004Land 1 Building 1,099,999 Equipment: Arrival department 20,691 Defeathering department 284,130 Evisceration department 182,805 Chilling department 290,000 Weighing department 141,224 Offal department 67,933 Miscellaneous 136,030 Spare parts 82,432 Office Supplies 50,000 Electrical 20,000 Installation 250,000 Piping 22,000 Air Conditioning 30,000 Total Capital Costs 2,677,244

2004Cash 200,000 Accounts Receivable 340,461 Inventories 16,143 Accounts Payable 275,032 Total Net Working Capital 281,571

Financial Plan Con’tFinancial Plan Con’tBase Case Results

2004 2006 2008 2010 2012Selling Prices (per kg)Non-Halal Poultry 2.798 2.955 3.111 3.268 3.425Halal Poultry 2.850 3.009 3.169 3.328 3.488Average Selling Price 2.824 2.982 3.140 3.298 3.456

Gross Margin -65,941 745,112 849,933 914,983 945,249Net Income (Loss) -510,777 308,403 336,041 319,928 333,498Net Cash Flow from Operations -392,624 557,372 555,702 497,030 484,194Cash end of year 54,857 503,893 1,510,825 2,311,756 3,068,886

Net Present Value of Equity Investment 264,330

Internal Rate of Return on Equity Investment 27%

External Rate of Return on Equity Investment 14%

Financial Plan Con’tFinancial Plan Con’t

2,496,000kg’s will be processed in year 1. By 2006, 4,121,000kg’s of product will be

processed Running at 25% capacity The addition of more chickens per hour will

further lower the cost to produce one kilogram of saleable meat.

2004 2006 2008 2010 2012COGM 4,623,441 7,176,718 7,489,528 7,844,989 8,235,236Kg's of Poultry Manufactured 1,622,400 2,678,650 2,678,650 2,678,650 2,678,650Total Cost per Kg 2.850 2.679 2.796 2.929 3.074

Financial Plan Con’tFinancial Plan Con’t

If any of the above Variables change by more then the specified amount all profits will be eliminated

Very risky project

Key Variables Base Case IRR=0 Allowable % ChangeSelling Price Non-Halal $2.798/Kg $2.680/Kg 4.20%Raw Materials $1.289/Kg $1.358/Kg 5.10%Frieght Non-Halal $0.04/Kg $0.16/Kg 75%Direct Labour Employees 20 29 31%

Feasible enterpriseFeasible enterprise Rural DevelopmentRural Development 27% IRR27% IRR Sensitive to input costs and selling Sensitive to input costs and selling

pricesprices

Dykal Holdings

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