TEAM PROFILE

Pre-Feasibility Study Ostrich Farming

EXECUTIVE SUMMARY
Ostrich Farming is a project of the livestock sector, particularly to cater to health
conscious meat consumers. Demand for Ostrich meat has started rising in Pakistan in
recent years due to zero percent fat, low cholesterol, richness of iron & protein and good
taste. Few famous restaurants are offering Ostrich dishes, which has great demand from
regular customers. Besides Ostrich meat, all other items like ostrich feathers, hide, fat,
nails and eggs have a great demand in local and foreign market. This pre-feasibility is
about setting up an Ostrich Farm for commercial purpose of ostrich breeding, fattening
and slaughtering with a maximum installed capacity of 4,289 live birds. It is suggested to
start the farm with a flock of 45 proven breeders (30 female and 15 male) birds of 3-year
age in order to decrease project cost. The proposed business venture should be located in
suburbs of metropolitan cities like Lahore, Islamabad, Karachi etc., as the target market
of the final product of Ostrich Farm (Ostrich meat & Ostrich chicks) is generally from
metropolitan cities or in surroundings of metropolitan cities (Ostrich farms). Ostrich
breeding management according to best husbandry practices is the key success factor for
this business.
The estimated total cost of the proposed ostrich farm is Rs. 39.60 million out of which
Rs. 37.69 million is the capital cost and Rs. 1.92 million is for working capital. The
project is to be financed through 50% debt and 50% equity. The project NPV is around
Rs. 60.67 million, with an IRR of 34% and Payback Period of 4.95 years. The project
will provide employment opportunities to 13 people when it reaches to its maximum
capacity, however initially 3 persons are enough to handle the net flock of 181 birds. The
legal business status of this project is proposed as ‘Sole Proprietorship’.

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BRIEF DESCRIPTION OF PROJECT & PRODUCT

Ostrich is an African origin bird with a large flightless hard body structure. It belongs to
running bird family with a very hard and tough physique. It can survive in temperatures
ranging from 2 degrees to 50 degrees Celsius and can be reared on barren land. It mainly
consumes only green fodder and water. Ostrich farming has been started since last 150
years in South Africa, initially for its feathers, then for its hide and now for its meat also.
Ostrich farming has now become an international industry with great demand for ostrich
meat due to its hygiene. Health consciousness in the modern world has led to diversified
food habits. The tendency of consuming low caloric foods has resulted in an increased
demand for ostrich meat and it ranks highest among health foods in Europe. The
recognition of ostrich meat in terms of health value is attributed to “zero” percentage fat,
low cholesterol and calories, rich in protein and iron. Besides this ostrich meat has a great
taste which now has big demand. Other than meat, ostrich produces high premium
feathers, which are mostly used in fashion industry as a raw material for accessories,
show business, brush industry and automobile industry. Furthermore, ostrich produces
high quality Oil, Luxury Leather and other by- products. This pre-feasibility study is
about setting up an Ostrich Breeding Farm which will offer live ostrich birds for fattening
and further breeding purposes to different ostrich farms, ostrich eggs (for hatching, food
and shells for painting) and ostrich meat to restaurant industry along with household
through super markets. It is suggested to initiate this project in surrounding rural areas of
Metropolitan cities of Pakistan like Lahore, Karachi and Islamabad as most of the target
customers / farms are located near these cities. It will help the entrepreneurs to deliver
ostrich meat and other by-products on time and in good hygienic condition from a nearby
area.

Installed & Operational Capacities

In this pre-feasibility study, it is proposed to start the business operations with 45 birds in
order to make the project cost effective. However, with passage of time capacity of birds
can be increased and in the year 10, the farm will be having 1,115 net birds.

CRITICAL FACTORS
Following are the factors critical for the success of this business venture:
 Technical know-how, relevant expertise and experience of entrepreneur.

 Selection of high quality ostrich breeding birds.

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 Selection of appropriate farm tools and equipment.

 The farm supervisor should ensure timely feeding, watering, lighting, vaccination, medication,
temperature / humidity control and culling of ostrich birds as per best husbandry practices.

 Time management is very important in Ostrich Farming business. Delay in eggs hatching can
result in high cost and delay in meat delivery can cost in thousands, as the product is perishable.

 Sanitation and disinfection program should be strictly followed and regularly monitored.

 Birds should be given enough space according to their age as less space could arise different
complexities.

 Feed should not be stored for a long time as it would lose its nutrition and there is a chance that
feed would get fungal and can prove to be poisonous.

 The entrepreneur should be well aware of the supply and demand of ostrich meat and other by-
products in the market.

 Higher return on investment and a steady growth of business is closely associated with regular
training and capacity building of the entrepreneur and employees.

GEOGRAPHICAL POTENTIAL FOR INVESTMENT

Adjoining rural areas of metropolitan cities of Pakistan, for instance Lahore, Karachi,
Islamabad, Faisalabad, Gujranwala, Rawalpindi and Multan are most suitable
geographical areas for investment in ostrich farming, as most of the ostrich farms are
located in these areas.
Since, this pre-feasibility suggests to provide live birds of up to 2 months and ostrich
eggs (for hatching) to ostrich farms and ostrich meat to restaurants and house hold
consumers through super markets, therefore, it is very important to initiate this business
in neighboring rural areas of suggested cities where entrepreneur can find the target
market easily in order to sell the product.
POTENTIAL TARGET CUSTOMERS / MARKETS

Ostrich meat is a good source of protein and iron as compared to broiler or other meats. The
proposed Ostrich Farm will mainly offer 2 months old ostrich chicks, ostrich eggs (for
breeding, food and painting) and ostrich meat. Therefore, major target markets for the
proposed project are local buyers, who generally trade for these products. Sale of ostrich bird
is mostly made through personal contracts on farm gate basis or supplies to bulk / retailers in
urban areas. The key consumer of the ostrich meat is the diabetics and cardiovascular
patients. Major clients for meat are Super Stores, Meat Markets, Restaurants and Hotels
(including various 3 to 5 Star Hotel Chains) across the country.

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DEMOGRAPHICS & PSYCHOGRAPHICS

The demographic and psychographic compositions of those that require the products of an
ostrich range from those who intend to consume it as meat, to those who intend to use other parts
of the ostrich for further non-consumable products. This therefore means that those who require
the products of an ostrich cuts across various demographics from restaurants, households,
research institutes, furniture manufacturers and to car manufacturers.
And so it can be seen that the demographics is all encompassing as it includes those that
consume ostrich meat for health purposes, those who use it for financial purposes and for other
purposes as well.
Space Requirement
Approximately, 7 acres of land would be required for setting up the proposed Ostrich Farm. As
this business is land intensive, therefore, it is suggested to purchase the required land instead of
rental or leased land. However, in order to avoid the initial high capital costs, the long-term lease
contract for land acquisition may be considered. But entrepreneur can be more risk free on
purchased land because of making heavy investment on shed and boundary wall as well as future
business expansion. The cost of land is estimated at Rs. 1.20 million per acre; hence total cost of
required land is Rs. 8.40 million. The infrastructural requirements of the project mainly comprise
of the construction of Management Office, Hatchery Room, Storage, Open Space and other
facilities. Details of space requirement and cost of construction of building and infrastructure for
the proposed farm is provided in the table below:

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Decisions made about setting up an Ostrich Farming Unit need to be well thought out,
right from the selection of the site to the final stages when the birds are sold. The farm
should be located at a place where transportation of birds and feed can be easily handled.
Utilities and Other Costs
An essential cost to be borne by the project is the cost of electricity which is estimated to
be Rs. 228,000 in the first year of operations. The promotional expense being essential
for marketing of ‘Ostrich Farm’ is estimated as 1% of total revenue i.e. Rs. 119,246.
Furthermore, travelling expenses are assumed to be Rs. 60,000 per annum.
Revenue Generation
Based on the assumption of starting business with 45 birds, sales revenue during the first
year of operations are estimated as under:

Contact Details

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In order to facilitate potential investors, contact details of consultants and experts relevant
to the proposed project are provided below:

Industry Overview

The ostrich industry in America as well as in Europe is still in its breeding phase as there is little
commercial processing taking place. As at 1992, more than 150,000 ostriches were slaughtered
globally with 95% of this slaughtered amount processed in South Africa. However, present
analysis gives no indication on whether the ostrich population will meet current much less future
demands.
Although ostrich farming declined in the United States of America during the early periods of
1930, it slowly regained its popularity in the 1990s especially in the eastern part of the country.
Even though commercial ostrich farming started in South Africa for more than 15 decades ago,
other countries such as the United States of America and Israel have joined in the commercial
farming as well. According to the 2007 Agriculture Census, 714 farmers raised 11,188 ostriches
but marketed about 5,697 birds. This was a marked decrease from 2002 where more than 1,600
farmers raised more than 20,000 ostriches. The three top states in ostrich production in the
United States of America are Texas, California and Kansas.
Ostrich meat is promoted as low-cholesterol red meat due to its red color, low fat content as well
as its texture which is like beef. The average carcass dressing percentage stands at 57%. The
feathers are usually cropped once a year and sold to several companies in the United States of
America.
Unique Value Proposition

Even though ostrich farming offers plenty benefits from the meat to its feathers, if you are just
newly starting up, there are certain areas you might wish to concentrate on especially if you do
not have the required finance to run all the niches at once.
Therefore some of the major ostrich farming business niches that you may decide to go into are;

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 Full cycle (this include breeders, egg layers, incubating, hatching, and then growing the
chicks to slaughter stage)
 Breeders
 Incubation facility
 Growing out facility

The Level of Competition in the Ostrich Farm Industry

The ostrich farm business might be uncommon in the United States of America but it is slowly
becoming a very popular business as more people have been known to start the business which
has led to more competition in the industry. Because of the health benefits of ostriches, more
people are beginning to see the importance of consuming this meat and yet supply still outweighs
demand which has led to the increase in competition amongst ostrich farmers as measures are
being put in place by some farms to ensure that they create a website that will make them more
visible to others around the country.
Also, already established ostrich farms have an advantage over new ostrich farms and this is
because the large businesses already have a network of contacts and large economies of scale.
The smaller ostrich farms on the other hand are able to compete by offering specialized services
and better customer care than the large ostrich farms and in this way, the smaller farms are able
to generate revenue for themselves.
There are certain brands that have stood out and made a name for themselves and they are;

 Ostrich land USA

 Arizona ostrich farm
 R&M Ostrich Farm
 American Ostrich Farms
 Rooster Cogburn Ostrich Ranch
 Osfarmers- Ostrich Company (Lahore)

MARKETING IDEAS AND STRATEGIES

To ensure that you are able to meet with your revenue goals and targets, it will require that
you make out a plan on how you intend to market your products and services.

Some of the platforms that you can therefore use to market and grow your ostrich farm
business are:

The company:

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 Ensures that their ostrich farm business is formally introduced to several big chain hotels
and restaurants, grocery stores and meat marts, other ostrich farmers and any other
stakeholders in the industry.
 Ensure that they place adverts in newspapers, agriculture, and food and lifestyle
magazines as well as on radio and television stations.
 Ensure that their ostrich farm business is listed in farmers’ guide, yellow pages as well as
online directories.
 Attend livestock farmer’s seminars and conventions in order to remain aware of industry
trends while also using the chance to market your business.
 Will work with other farmers by forming a cooperative in order to be able to market their
produce to the larger markets.
 Create cooking instructions as well as recipes for their ostrich meat and conduct
presentations for customers.
 Invite food bloggers and give them free vouchers if the restaurants where you are
supplying ostrich meat and ask them to taste the dishes which are made from ostrich and
give review to the social media.
 Use online fashion channels to market the by-products of ostrich.
 We can use website as well as social media platforms such as Facebook, Twitter, Linkedin
and Instagram to increase awareness and promote your business vigorously
 Place adverts in local and national newspapers plus food and agricultural magazines as
well as on radio and television stations
 Distribute handbills and paste fliers in certain strategic locations all around the city
 Place and position billboards in strategic locations all around the area where your ostrich
farm will be located
 Write guest articles for popular food and agricultural related blogs and websites that will
educate and inform the audience and use this to generate awareness for your brand
 Ensure that they encourage their loyal customers to spread the word about our business,

PRODUCT DEVELOPMENT ACTIVITIES

Ostriches are now not considered as wild birds and in Pakistan. They have been declared a part
of livestock/poultry and gaining fastest popularity toward commercial ostrich farming. This is a
fruitful effort to country demands for meat, hide, eggs, feathers and other products in local and
foreign market in future. Demand for Ostrich meat is increasing in the country day by day
because of healthy meat (zero percent fat, low cholesterol, richness of iron and protein) and good
taste. Ostrich is gaining popularity over other leathers because of its luxurious purses, high
fashion shoes, brief cases, handbags etc. Similarly cosmetic industry is also seemed to be
interested to exploit ostrich products (ostrich oil, fat and feather) to boost their recognition in
fashion. However, ostrich producers are only meeting 10% of the customers demand. Therefore,
it is high time to capture our share in the local and international market. Ostrich dishes are now
regularly offered in some of the restaurants and hotels of well-known reputation because of the

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huge demand for the new taste from their regular customers. Therefore, major target markets for
the proposed project are local buyers, who generally trade for these products. Sale of ostrich bird
is mostly made through personal contracts on farm gate basis or supplies to bulk / retailers in
urban areas.

Quality of ostrich products (meat, leather, oil and fats, feathers) are potentially excellent and
present the opportunity to develop value-adding activities which could contribute to part of the
economic activity of existing farming businesses and in other parts of the rural areas of Pakistan.

As quoted by Abbas et al. [2] and others [ Doosti et al. [17]; Komano et al. [24] which may cause
production of plenty (low fat and low cholesterol) of favorite meat for the people without fear of
cardiovascular and other health problems. Subsidies for breeding stock and research grants for
genetic improvement may have high contribution for the development of new poultry industry
(Ostrich industry) to lead the world.

THANKYOU!

AVESTRUZZ TIERRA