Egg Hatchery Project Report - Business Plan

Introduction to Egg Hatchery Project Report, Business Plan in India: India is a heavily populated nation having a mainly agricultural economy. Almost every region of our country is appropriate for poultry farming. In the modern terminology of the poultry industry, the term hatchery includes the sector that is involved in production and sourcing the one-day-old chicks through the process popular as artificial incubation. A hatchery can be a part of a breeding farm or it can be a franchiser or sub-franchiser for breeding parent and day-old chicks of broilers or layers. The term hatchery can be prolonged to an organization that does not keep any mating stock (breed stocks) but only obtains hatching eggs for supplying day-old chicks. The firms producing day-old chicks only for restocking their supplies of birds are not categorized under the term hatchery.

A Guide to Egg Hatchery Project Report and Business Plan in India

**Egg Hatchery Business Plan** (Image source: Pixabay)

Market potential of Egg Hatchery Business: Rapid urbanization, modifications in lifestyle and food patterns of consumers, enhancement in standards of living, etc. have resulted in an upsurge in per capita intake of egg and poultry meats but per capita consumption of these supplies in our nation is still far down than that of developed republics showing huge potential/scope for poultry expansion. The growing number of poultry farms in diverse areas has accentuated that hatcheries should be established as potential places.

Immensely increasing transportation prices and death during transportation of day-old chicks have also stressed that hatcheries should be built on a decentralized basis hereby.

Business plan for starting Egg Hatchery Unit in India

To start the business you need to consider the following points to design a perfect business plan for Egg Hatchery Unit:

Basis and presumptions
Implementation schedule
List of certifications and registrations
Insurance required for the farm
List of licenses and permits
Quality standards

Project economics

Basis and Presumptions of Egg Hatchery Business

The project report has been designed based on the following beliefs:

Working hours/shift: 8 hrs.
No. of shifts per day: 1
Working days: 300
Complete working hrs. : 2400 hrs.
Working efficiency: 75%
Time duration for attaining maximum capacity utilization: 3 years
Labor costs: According to the Minimum Wages Act of State Govt.
Margin income: 25% of capital investment.
ROI on working capital: 15% P.A.
ROI on fixed capital: 15% P.A.
Operative duration of the project: 10 years
Cost of machinery and equipment: Taken based on a specific dealer of machinery & equipment during project implementation.
Cost of raw material, packing: As per the local market expenses on whole products and others sale basis.
Construction expenses: Rs. 75/- per sq. ft.
Break-even time: Calculated based on full capacity utilization.
Pay-back duration: 4 years

Implementation schedule of Egg Hatchery Business

The project can be done in 10 months of duration including the period of sanction of the loan amount. The implementation schedule has been divided as follows:

Project preparation: 0-1 month
Land selection and construction: 1-2 months
Loan Availability: 1-3 months
Establishment of poultry sheds: 3-4 months
Electricity connection and phone connection: 3-4 months
Sourcing parent stock chicks: 4-5 months
Building of hatchery shed and other constructions: 3-5 months
Obtaining machinery and equipment: 4-6 months
Installing machinery and electrification: 6-7 months
Appointment of staff and workers: 7-8 months
Testing for 8-9 months
Commercial production begins in 9-10 months
The project will start giving output by the 11th month.

Certification and registrations are required for Egg Hatchery Business in India

Before starting the Egg Hatchery Business, you need to acquire the following list of licenses, permits, and registrations:

Certificate of company registration
Pan card
Insurance policy
Poultry farm business permit
Business License
Animal care standards
Aadhar card
Voter ID
Driving license
Ration card
Business agreement
Memorandum of association
Articles of association
NOC (No Objection Certificate)
Bank statement

You also need to provide the farm with vaccines as it is essential for the birds to make them healthy from infections.

Insurance for Egg Hatchery Business

You also need to get the below list of insurance for starting the Egg Hatchery Business in India

Pollution liability coverage
Animal protection /cruelty coverage
Equipment breakdown coverage
General liability
Poultry farm insurance
Worker’s compensation

List of licenses and approvals required to start an Egg Hatchery Business in India

Here is the list of licenses that you need to get from the local establishments or state government of India. These include-

No objection certificate from the region where you are planning to start the Egg Hatchery Business.
Electricity provision by verifying the need for a transformer that is determined based on the farm size.
Permissions regarding the water supply should be acquired from the groundwater department.

FSSAI licenses are required for starting an Egg Hatchery Business in India

For the Egg Hatchery business, you need to register with FSSAI for a food license which is effective for a tenure of five years:

FSSAI Registration license is obtained if the turnover is less than 12 lakhs
FSSAI State license is availed if the turnover is greater than 12 lakhs
FSSAI Central license is procured, if the turnover is greater than 20 crores

Quality standards required for starting an Egg Hatchery Business

The BIS (Bureau of Indian Standards) has laid down particulars for day-old chicks (layer/broiler) under the following ISI Specification: IS 9800:1981: Common requisites for day-old chicks (layer/broiler).

Procedure to Establish the Egg Hatchery Unit in India

In case you miss this: Feed Mill Project Report and Business Plan.

One-day-old parent stock chicks of better-quality species of broiler or layers are obtained from consistent parent stock dealers. Procured chicks are moved to poultry sheds. These poultry birds are provided balanced nutrition using poultry feed, even medicines, feed mixes, etc., based on their age and variety till the laying stage. The laid eggs are gathered and transported to the hatchery department. The eggs are washed thoroughly to avoid foreign matters and tested for their suitability for hatching, eggs having cracked shells and unfertile eggs are categorized and disposed of by selling at subsidized costs. Thoroughly cleaned eggs are placed in the AC room to sustain a normal and suitable temperature. The conditioned eggs are moved to setter incubators and nurtured for about 18 days. Around 99.9ºF temperature and relative humidity of 82% should be sustained in the setter incubators.

On the 18th day, eggs are moved to holder incubators preserved at a temperature of 98.9ºF and relative humidity of around 87% and nurtured for 3 days. On the 21st day, chicks arrive by breaking eggshells. Eggshells and membranes are cleaned and each chick is examined for its sex and separated. Every chick will get vaccinated with the Marex-D vaccine and packed in chick baskets and will be sent to the poultry farms for selling.

For producing healthy day-old chicks of high potential and to get economic benefits, proper planning of hatchery is required which includes application of sound scientific and business principles.

Energy Conservation in Egg Hatchery Business

The main energy source for the hatchery is power and to some extent, diesel is necessary to run a generator during power cuts. Electric bulbs of only appropriate wattage must be installed in poultry sheds where these are needed otherwise tube lights of enhanced design having electronic choke must be added and lighted only when needed. It is recommended to have natural light as much as possible during the daytime at least.

The generator should be in good condition and maintained by proper servicing at regular periods and should be run during any power failure/load shedding. Only essential machinery should be linked with the generator and the load must be maintained to its optimum. Proper aeration and cooling should be sustained in the generator place.

Egg Hatchery Project Report/ Economics of Egg Hatchery Business in India

A. Fixed Capital

i) Land 20000 sq. ft. Value Rs. 1,50,000

Land Development Rs. 25,000
Sub Total Rs. 1,75,000
Built–Area and Other Civil Works
Hatchery-cum-office building (60’×120′) 7200 sq.ft.: Rs. 5,40,000
Store (30’×60′) 1800 sq. ft: Rs. 1,35,000
Layer/Breeder House/Sheds (100’×30′) 3000 sq.ft.: Rs. 2,25,000
Disposal pits: Rs. 10,000
Water storage tank: Rs. 30,000
Boundary wall/barbed wire fencing, etc.: Rs. 35,000

Sub Total: Rs. 9,75,000

Total costs for land and building construction: Rs. 11,50,000.

ii) Machinery and Equipment

Egg Hatcher (Automatic)(capacity 4500 eggs): Rs. 1,40,000
Egg setter (capacity 13500 eggs) (Automatic): Rs. 2,00,000
Electric egg tester: Rs. 600
Electric Deb-eaker: Rs. 1250
Egg weighing scale (1-100 gram cap.): Rs. 750
Feeder, waterer and brooder LS: Rs. 35,000
Misc. items like buckets, trays, baskets, etc. LS: Rs. 10,000
Weighing balance 1 No.: Rs. 5,000
Generator (10 KVA): Rs. 90,000
Air conditioner (1.5 TR): Rs. 25,000
Veterinary clinic instruments/equipment LS: Rs. 6,000
Office equipments/furniture LS: Rs. 20,000
Refrigerator 1 No.: Rs. 25,000
Electrification and installation LS: Rs. 25,000

Total: Rs. 5,83,600.

(iii) Preliminary and Pre-operative Expenses like Legal Expenses, Establishment Costs, Travelling, Startup Expenses, Consultancy Fees, and Interest during Construction.

Trial Run Expenses etc.: Rs. 30,000.

(iv) Other Fixed Expenses for Purchase of About 1500 Nos. Day-old Parent Stock chicks and Feeding Charge up to Laying Stage: Rs. 1,50,000.

Total Fixed Capital (i + ii + iii + iv): Rs. 19,13,600.

B. Working Capital (per month)

(i) Personnel

Hatchery Manager: Rs. 4000
Supervisor: Rs. 2,000
Operator: Rs. 1,800
Sexer: Rs. 1,600
Accountant-cum-clerk: Rs. 1,600
Skilled worker (Stockman): Rs. 1,300
Unskilled workers: Rs. 6,000
Watchman-cum-peon: Rs. 1,000
Perquisites @ 15%: Rs. 2,895

Total: Rs. 22,195

Say: Rs. 22,000.

ii) Raw Materials and Packaging Materials

Parent stock 225 Nos. chicks 75: Rs. 16,875
Poultry feed 8 Tonnes 6000: Rs. 48,000
Feed Mix LS: Rs. 5,000
Medicine/vaccines/antibiotics LS: Rs. 20,000
Chemicals/ LS sanitizers/ lime etc.: Rs. 10,000
Chick baskets 175 Nos. 35: Rs. 6,125

Total: Rs. 1,06,000

iii) Utilities

Power 3000 KWH units: Rs. 2.5 7,500
Water 400 K.Lt.: Rs. 3 1,200
Fuel like Diesel, K/oil, etc. LS: Rs. 1,850

Total: Rs. 10,550.

iv) Other Contingent Expenses

Postage and Stationery: Rs. 1,000
Telephone: Rs. 500
Consumable stores: Rs. 1,000
Repairs and maintenance: Rs. 1,000
Transport charges: Rs. 5,000
Advertisement and publicity: Rs. 5,000
Insurance: Rs. 650
Taxes: Rs. 500
Sales expenses: Rs. 2,000
Misc. expenditure: Rs. 8,000

Total: Rs. 24,650.

v) Total Recurring Expenditure (i + ii + iii + iv): Rs. 1,63,200

vi) Working Capital

Recurring expenditure (for one month): Rs. 1,63,200.

C. Total Capital Investment

Fixed Capital: Rs. 19,13,600

Working Capital (For 1 month): Rs. 1,63,200

Total: Rs. 20,76,800.

1. Cost of Production (per year)

a) Total recurring expenditure: Rs. 19,58,400

b) Depreciation on building and other civil construction @ 5%: Rs. 48,750

c) Depreciation on machinery and equipment @ 10%: Rs. 50,000

d) Depreciation on hand tools and misc. equipments and poultry equipments @ 25%: Rs. 7,000

e) Depreciation on office equipment and furniture @ 20%: Rs. 4,000

f) Interest on Total capital @ 15%: Rs. 3,12,000

Total: Rs. 23,80,150

Say: Rs. 23,80,000.

2. Turnover (per year)

a) By sale of 200000 Nos. of day-old chicks @ Rs 13.75: Rs. 27,50,000

b) By sale of 2500 Nos. of unfertile eggs @ Rs. 2: Rs. 5,000

c) By sale of 2500 Nos. of culled birds @ Rs. 45: Rs. 1,12,500

d) By sale of 500 bags litter @ Rs. 10 5,000

Total: Rs. 28,72,500

3. Net Profit (per year) (before Income Tax): Rs. 4,92,500

4. Net Profit Ratio: 17%

5. Rate of Return: 24%

6. Break-even Point

i) Fixed Cost

a) Depreciation on machinery and equipment: Rs. 50,000

b) Depreciation on hand tools: Rs. 7,000

c) Depreciation on office equipment and furniture: Rs. 4,000

d) Depreciation on building and other civil works: Rs. 48,750

Fixed Cost

e) Interest on Total investment: Rs.3,12,000

f) Insurance: Rs.7,800

g) 40% of salary and wages: Rs.1,05,600

h) 40% of other contingent expenses: Rs.1,15,200

Total: Rs.6,50,350.

2. Net Profit (per year): Rs. 4,92,500

B.E.P. = Fixed cost × 100 / Fixed cost + profit = 650350 × 100 / 1142850 = 57%.

Frequently Asked Questions about Egg Hatchery Business

Common Questions	Expert Answers
What is an egg hatchery business?	It’s a specialized facility where eggs are incubated artificially to hatch poultry for various purposes, including meat and egg production.
How to start an egg hatchery business?	Start by conducting market research, securing a location, investing in incubation equipment, and obtaining necessary permits and licenses.
What equipment is needed for an egg hatchery?	Key equipment includes incubators, hatchers, egg trays, candling lights, and temperature and humidity control systems.
How much does it cost to start an egg hatchery business?	Initial costs can vary widely but typically range from moderate to high, depending on the scale and technology of the hatchery.
What are the main types of poultry incubated in hatcheries?	Chickens, ducks, turkeys, and quails are among the most commonly incubated poultry in commercial hatcheries.
How to ensure high hatchability rates in my hatchery?	Maintain optimal temperature, humidity, and ventilation in the incubators, and regularly turn the eggs to ensure high hatchability.
What are the legal requirements for starting an egg hatchery business?	Legal requirements include business registration, agricultural or livestock permits, and adherence to local health and safety regulations.
How to market my egg hatchery business?	Market through online platforms, agricultural shows, local farm networks, and direct marketing to poultry farms and businesses.
What is the profitability of an egg hatchery business?	While incubation requires minimal lighting, proper light levels are important for chick-holding areas to stimulate feeding and growth.
How to select eggs for incubation?	Profitability depends on operational efficiency, market demand, and the scale of the hatchery, with the potential for high returns.
Can an egg hatchery be automated?	Yes, modern hatcheries often use automated systems for egg handling, incubation, and chick sorting to improve efficiency and outcomes.
What are the biggest challenges in running an egg hatchery?	Challenges include managing biosecurity, disease control, maintaining equipment, and fluctuating market demand.
How long does it take for eggs to hatch in a hatchery?	Incubation periods vary by species, with chicken eggs typically hatching in 21 days, duck eggs in 28 days, and quail eggs in 17-18 days.
What is biosecurity in the context of an egg hatchery?	Biosecurity involves measures to protect poultry from disease, including sanitation practices, disease monitoring, and controlled access to the hatchery.
How to finance my egg hatchery business?	Select clean, well-formed eggs of optimal size and weight, free from cracks or defects, to increase the chances of successful hatching.
What is the importance of water quality in an egg hatchery?	High water quality is crucial for maintaining humidity levels in incubators and for general sanitation and health of the hatchery.
How to manage waste in an egg hatchery?	You can implement a waste management plan including proper disposal of egg shells, dead embryos, and hatchery by-products in an environmentally responsible manner.
What are the best practices for egg storage before incubation?	Store eggs at a consistent temperature of 55-65°F (13-18°C) and 75-80% humidity, and incubate within 7-10 days of laying for optimal viability.
How to ensure the health of chicks post-hatch?	Provide immediate care including warmth, proper nutrition, and vaccination as per local veterinary guidelines to ensure chick health.
What are the energy requirements for running an egg hatchery?	Hatcheries require a reliable energy source to maintain incubator temperatures and operate equipment, often necessitating backup power solutions.
How do I maintain optimal temperature and humidity in incubators?	Use digital controls and regular monitoring to maintain temperatures around 99.5°F (37.5°C) and humidity levels between 40-50% during incubation, increasing in the final days.
Financing options include personal savings, bank loans, agricultural grants, and investments from partners or investors.	Yes, businesses can scale up by increasing incubation capacity, automating processes, and expanding market reach.
What training is required to operate an egg hatchery?	Operators should have knowledge of poultry science, incubation techniques, and hatchery management, often obtained through agricultural courses or hands-on experience.
How to handle unsold or unhatched eggs?	Dispose of unhatched eggs in a biosecure and environmentally friendly manner, following local regulations for waste disposal.
What are the trends in the egg hatchery industry?	Trends include automation, genetic selection for improved poultry strains, and sustainable practices to meet consumer demand for ethical production.
How does egg rotation impact hatching success?	Regular egg rotation mimics natural conditions, preventing the embryo from sticking to the shell and promoting even development.
What role does ventilation play in an egg hatchery?	Proper ventilation is crucial for removing excess heat and gases, supplying fresh air, and maintaining a healthy environment for embryos.
How to make my egg hatchery more sustainable?	Incorporate renewable energy sources, reduce waste through recycling programs, and use eco-friendly packaging for chicks.
What impact does lighting have in an egg hatchery?	While incubation requires minimal lighting, proper light levels are important for chick holding areas to stimulate feeding and growth.
How to ensure customer satisfaction in my egg hatchery business?	Deliver healthy, high-quality chicks on time, provide excellent customer service, and maintain transparent business practices.

Egg Hatchery Project Report – Business Plan

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