A PROJECT FEASIBILITY STUDY

“PHILIPPINE MALLARD DUCK (’ITIK’) EGG PRODUCTION AND

PROCESSING”

In partial fulfillment of the requirement

for degree of Master in Business Administration

of the University of Cagayan Valley

Presented to:

PROF. LIBAN

Proponents:

MYLA D. BUNAGAN
ERVIN T. DEJUMO
ARLEEN A. GASPAR
ROMEO Q. MALLILLIN
MBA-1
ACKNOWLEDGEMENT

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 Table of Contents

A. Project Title . . . . . . . .

B. Project Location . . . . . . . .

C. Project Rationale . . . . . . .

D. Statement of the Objectives. . . . . .

I. MARKET ASPECT

1. The Need of the Project. . . . . .

2. Market Description. . . . . . .

3. Demand . . . . . . . . .

4. Supply . . . . . . . . .

5. Demand Supply Analysis. . . . . .

6. Market Share . . . . . . . .

7. Marketing Program. . . . . . .

8. Price Study . . . . . . . .

II. TECHNICAL ASPECT. . . . . . . .

1. The Product . . . . . . . .
2. Manufacturing Process . . . . . .
3. Plant Size and Production Schedule . . .
4. Machinery and Equipment . . . . .
5. Plant and Project Location . . . . .
6. Plant Layout . . . . . . .
7. Building and Facilities . . . . .
8. Raw Materials and Supplies . . . . .

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 9. Utilities . . . . . . . .
10.Water Disposal . . . . . . .
11.Production Cost . . . . . . .
12.Labor Requirements . . . . . .

III. ORGANIZATION AND MANAGEMENT ASPECT . . . .

IV. FINANCIAL ASPECT . . . . . . .

1. Total Project Cost . . . . . .

2. Sources of Fund . . . . . . .
3. Preparation of Financial Statements . . .
4. Financial Analysis . . . . . .

V. SOCIO-ECONOMIC ASPECT . . . . . .

VI. 1. SUMMARY OF FINDINGS . . . . . .

2. CONCLUSIONS AND RECOMMENDATIONS . . . .

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A. Project Title

The Project is entitled “A Feasibility Study on

Philippine Mallard Duck (’Itik’) Egg Production and

Processing”. There are several reasons why the

proponents choose to venture on this project. Firstly,

duck-raising is a profitable livestock industry in the

Philippines because of its egg. Duck is second to

chicken in economic importance as source of egg and

meat. Its most important product, the “balut” (boiled

incubated duck’s egg) is sold daily throughout the

archipelago for its delicious flavor and nutritive

value. Secondly, duck is considered as the most

versatile avian specie because it can subsist under a

wide range of climatic and nutritional conditions

(Lambio 2002). Also, duck-raising is inexpensive and

can start off with a minimal start-up capital. It

requires non-elaborate housing facilities, and little

attention, and less space for rearing compared to

chickens. More importantly, ducks are shown to be

relatively hardy, resistant to common avian diseases,

and subsist on a variety of feeds. Thus, the

researchers endeavor to study the feasibility of

putting up this business.

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B. Project Location

Ducks can be raised in areas near bodies of water

or in areas where there are rice fields to feed on

after harvest. As a rural Municipality, the

proponents have chosen Solana, Cagayan specifically in

the barangay of Lanna to be the main location of the

proposed project. The lot which will house the farm

has an area of ______. The farm is relatively far from

residential areas about 230 meters, as required by

Department of Environment and Natural Resources

(DENR).

Municipal Assessor’s office has provided us the

cost of the lot where the fowl is situated, which

range from ____ to ___ per square meter. Since the

farm occupies 300 square meters, the lot will cost Php

300,000.

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C. Project Rationale

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D. Statement of the Objectives

This study entitled “A Feasibility Study on

Philippine Mallard Duck (’Itik’) Egg Production and

Processing” aims to explore the possibility of

venturing into Itik Egg Production and Processing in

the Municipality of Solana, Cagayan.

Specifically, the study seeks to:

Present sufficient information and analyses

regarding the market, technical, financial, management

and organization and socio-economic implications.

In order to determine the feasibility of the

proposed project, the following questions shall be

answered:

A. Market Aspect

1. What benefits can be derived from the proposed

project?

2. What are the products to be produced?

3. Are the products competitive as to other goods

in the market?

4. Is the production capacity of the project

adequate for the market?

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 5. Are the products produced acceptable by the

prospective market?

B. Technical Aspect

1. Is there ready and adequate location for the

proposed project?

2. Is the location accessible for transportation?

3. Are there available resources of equipment and

other technical requirements like raw materials

needed for the proposed project?

4. Are there qualified technical personnel who can

provide service for the installation and

maintenance of the equipment?

5. Are there qualified people to look into the

physical preparation of the proposed project?

6. Are there enough utilities – electricity, fuel

and water for the operation of the proposed

project?

7. Is the proposed project environmentally-

friendly?

8. Are there available methods of waste material

disposal?

C. Financial Aspect

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 1. What is the total financial requirement of the

proposed project?

2. How will the proposed project be financed?

3. Is the proposed project financially viable?

4. What kind of taxes and licenses will the

proposed project pay?

D. Organizational Aspect

1. What form of organizational structure will the

proposed project adapt?

2. Are the enough qualified people to manage the

proposed project?

3. Do we have some assistance from the government

regarding organization and development of the

association that can best manage this type of

project?

E. Socio-economic Aspect

1. Will the project affect the lifestyle of the

farmers in Solana, Cagayan?

2. Will it generate employment?

3. Will it earn additional investment in the

community?

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4. Will it improve the economic condition of

Solana, Cagayan?

5. Will it add income to the government?

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I. MARKET ASPECT

1. The Need of the Project

This study aims to ascertain the feasibility of

putting up a business on Itik Egg Production and

Processing in Lanna, Solana, Cagayan. The need for the

project could be viewed from the effects it could

generate to enterprise citizens and to the researchers

in particular, who are exploring viable investment

projects where they could channel their resources. The

study will provide comprehensive vital background

information on all aspects of the business. It

encompasses five major aspects, namely: market aspect,

technical aspect, financial aspect, management and

organization aspect, and socio-economic aspect. In as

much as the setting of the study represents a typical

town, the findings of the study may be applicable to

other similar rural communities where ducks could be

grown and raised. Hence, potential entrepreneurs may

find this study useful and applicable.

The project could be implemented by any prospective

investor who can generate the necessary resources to

start the business. Once the project is implemented,

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the owner and the community as a whole will enjoy

several economic and social benefits:

a. It will generate income to the owner and other

people who will be directly or indirectly

employed in its operations like the farmers,

vendors, and other retailers.

b. It will channel idle resources of investors to

fruitful undertakings.

c. It will generate employment to certain

residents of the community and hence contribute

to the massive livelihood program now being

launched by the government.

d. The Municipality of Solana would receive income

from permits, fees, licenses and taxes to be

paid by the investor.

e. The nutritional level of the consumers of the

“balut” will be improved since the product is a

good source of protein supply and hence, the

product would be readily available and sold at

a reasonable price.

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 2. Market Description

The proponents seek to penetrate the market as

producers of duck egg. The eggs will be distributed

retailers and then subsequently sold to consumers.

Details of the marketing will be discussed thoroughly

in the Marketing Program (page _). As producers, the

eggs will be used as an input to the production of

balut, penoy and century/salted eggs.

Duck egg production and processing is s profitable

enterprise; even the so-called ‘low’ quality eggs,

such as those that have thin and cracked shells can

still be sold in the market and used as table egg. The

most popular egg products are balut, penoy, red salted

and century eggs.

As to its competitive advantage, duck eggs are

larger and more nutritious than chicken eggs (FNRI,

1990). The composition of duck eggs and their by-

products gives the consumers more calories, more

protein content, more nutritional punch, and contain

more beneficial omega 3s, minerals, and vitamins than

chicken eggs (108 Kcal for ducks; 75 Kcal for

chickens). These and more are the contributing factors

why duck eggs are beneficial to the consumers.

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 3. Demand

3.1 Present Demand

At present, marketing of duck eggs is not a problem

since demand is high. In fact, supply is still unable

to meet the demand for balut and other egg products.

In the Philippines, about 90 percent of total duck

egg production is used for processing (BASSRTC 1998).

87 percent of which is processed into balut and

another 7 percent is processed into salted eggs. The

remaining 6 percent consists of century eggs, penoy,

and other unidentified forms. This means that balut

accounts for about 80 percent of total egg production.

This emphasis on balut production is a unique feature

of the Philippine duck industry. Although unfamiliar

to most foreigners, balut and penoy are delicacies in

the Philippines for their unique taste and nutritional

content. Cooked balut is sold as snacks in the

evenings by street vendors, either peddling on the

street or stationing on the sidewalk.

3.2 Projected Demand

The table shows the projection of the demand of the

product for the first five years.

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 Table 1. A table showing the Projected Demand of Duck
Egg for 5 years
Year Projected Average Projected
Population Consumption Demand
1
2
3
4
5

Source:

Interpretation:

4. Supply

4.1 Present Supply

As mentioned previously, supply is still unable to

meet the demand for balut and other egg products.

4.2 Projected Supply

The table shows the projection of the supply of

the product for the first five years.

Table 2. Projected Supply of Duck Eggs

Year Projected Supply
(per annum)
1 240,000
2 360,000
3 400,000
4 480,000
5 560,000

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 5. Demand Supply Analysis

Table 3. Demand Supply Analysis

Year Total Total Variance Percentage of
Demand Supply Satisfied/Dissatisfied
1
2
3
4
5

6. Market Share

Year Total Demand Target Market % of Market

Share Share
1
2
3
4
5

Table 4. Projected Market Share

-assume for the supply annually

7. Marketing Program

7.1 Present Marketing Program

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(Marketing program of other producers)

7.2 Proposed Marketing Program

The duck egg will be sold to the market at 7.00 per

piece. There are four marketing channels used in marketing

duck eggs. The flow of marketing duck eggs is shown below.

1. Producer -> assembler-wholesaler -> retailer ->

consumer

In this type of marketing channel, the assembling of

duck eggs is in the producer’s area and the eggs are

later sold to retailers in the market.

2. Producer -> assembler-wholesaler -> balut operator ->

retailer(vendor) -> consumer

The producer sells the duck egg to the assembler-

wholesaler. The assembler-wholesaler will then sell

the egg to the balut operator and the balut is

retailed by the vendor to the consumer.

3. Producer -> balut operator -> retailer(vendor) ->

consumer

In this instance, the balut operator directly gets

duck eggs from the producer and sells to the retailer/

vendor then ultimately to the consumer.

4. Producer -> assembler-wholesaler (century/salted

eggs)-> wholesaler/retailer -> retailer -> consumer

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 The producer sells the duck egg to the assembler-

retailer for processing. The assembler-wholesaler

engages in century and salted egg production and sells

them to the wholesaler/retailer then to the consumer.

8. Price Study

8.1 Present Selling Price

At present, the selling price of duck eggs in the market is

pegged at 7.00 per piece. The cost of production has an

estimated cost of 3.00 per egg piece.

8.2 Projected Selling Price

Table 5. Projected Selling Price

Year Present Selling Price Projected Selling Price

Unit Total Unit Total

Quantity Description Quantity Description
Price Price Price Price
1
2
3
4
5

II. TECHNICAL FEADIBILITY ASPECT

1. The Products

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 The products to be marketed are mainly duck eggs for

distribution to different outlets and balut/penoy/salted

egg processors in Tuguegarao City.

2. Manufacturing Process

The processes involved in the manufacturing the eggs

begins with the breeding, feeding, proper housing and

handling of the ducks until the ducks are ready to lay

eggs. The breeding the ducks, several stages are involved;

selection of stocks, sex ratio and mating system,

management of replacement breeder stocks, proper care and

handling of hatching eggs, incubation and hatchery

management, candling and fertility determination, handling

of ducklings, hatchery waste disposal and utilization and

culling.

3. Plant Size and Production Schedule

3.1 Plant Size

The lot which is about 300 square meters will

accommodate the farm where the ducks will be grown and

nurtured and a small office space, with an area of 50

square meters.

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 3.2 Production Schedule

The ducks has an estimated mortality rate of 12% (1%

per month. Simply stated, in every one thousand ducks to be

nurtured, 88% or 880 ducks will live and be utilized for

egg production. The 12% will be accounted as cost of the

business enterprise.

The 880 ducks which survived has an estimated egg

production of 70%. Simply put, 70% of 880 surviving ducks

is 560 ducks. These 560 duck are capable of producing egg.

4. Machinery and Equipment

5. Plant/Project Location

The farm shall be located in Lanna, Solana, Cagayan where

6. Plant Layout

7. Building and Facilities

The building which will house the office of the

management has an area of 300 square meters. The office

space will be constructed with an estimated cost of

200,000.

8. Raw Materials and Supplies

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 8.1 Initial

Quantity Description Unit Cost Total Cost

1000 pcs Drakes 10.00/drake 10,000.00
300 pcs Ducks
20 sacks Duck Feeds 1,100/sack 22,000.00
10 packs Vetracin 500/pack 5,000.00
(supplement)
50 meters Screen
2 pieces 15x18 tent
12x15 tent

8.2 Projected Materials/Supplies

Year Quantity Description Unit Cost Total Cost

9. Utilities

10. Waste Disposal

In a duck hatchery or balutan, the primary product is

balut and day-old ducklings. Infertile eggs and penoy are,

likewise, used as food. The fully or partially developed

embryos that was either partly hatched or not hatched are

processed and utilized by pigs for feeds.

11. Production Cost

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Raw Labor Overhead Operating Other Cost of
Material Cost Cost Cost Pertinent Production
Cost Cost

12. Labor Requirements

Type/Position Number of Wage Rate Total

Workers
Direct Labor
Sales
Representative
Indirect Labor
Delivery Boy
Administrative
Manager
Total

Projected Operating Salary

Position No. of Year Year Year Year Year

Workers 1 2 3 4 5
Direct Labor
Indrect Labor
Administrative
Labor
Total

Projected Overhead Cost

Overhead Year 1 Year 2 Year 3 Year 4 Year 5

Cost
Electricity
Water

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 III. ORGANIZATION AND MANAGEMENT ASPECT

1.1 Form of Organization

The business venture shall adopt a centralized form of

organization. The following figure shows the organizational

chart of the business enterprise.

1.2 People involved Before and During the Operation

The operation of the business shall be governed by the

co-owners. The manager shall be the overseer of the main

operation in the farm namely, the breeding, raising, care

and handling of the ducks, and production of duck eggs. The

helpers will man the growth of the ducks. They will be

directly involved in all the processes of pasturing the

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 ducks until it is ready to lay eggs. Upon the laying of the

eggs, proper care and handling of the hatching eggs will be

their next task. The distribution of the eggs that are

ready to be sold in the market will also be their function.

1.3 Qualifications and Number of Labour Required

Position No. of Educational Qualification Age Experience

Labor
Manager 1 *At least 2 years in 25-35 2 years of
college with units in years experience
agriculture or old in
agribusiness managerial
* Knowledgeable in proper position
breeding, raising, feeding
and handling of ducks and
duck eggs
Helper/Farmer 2 *must know how to read and 20 At least 1
/Delivery Boy write years year of
*must be knowledgeable in of experience
proper breeding, raising, age in poultry
feeding and handling of or raising
ducks and duck eggs older
*must know how to drive
*must have a driver’s
license
*has no derogatory record

1.4 Training and Number of Labour Required

1.5 Implementing Strategy

1.5.1 Work Schedule

IDENTIFICATION ACTIVITY DESCRIPTION TIME/DURATION

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OF ACTIVITY (Month)
A Feasibility Study 3 months
Preparation
B Preparation of other 45 days
Supporting Documents
C Plan, Design and 2 months
Specification preparation
D Site assessment and 1 month
appraisal
E Purchase and Delivery of 45 days
Equipment
F Construction and 2 months
installation of
facilities, equipment,
furniture and fixtures
G Hiring of Personnel 15-20 days
H Advertising Campaign 1 month

IV. FINANCIAL FEASIBILITY ASPECT

1. Total Project Cost

Pre-Operating Cost
Pre-Operating Salaries 5,000.00
Pre-Operating Activity 10,000.00
Fixed Assets
Land/Land Improvement
Building
Machine and Equipment
Installation of Machinery
Working Capital
Labor
Direct
Indirect
Administrative
Total
TOTAL PROJECT COST

2. Sources of Financing the Project

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 The capital of the business venture will be derived

from the cumulative investments of the owners of the

business. Each partner will invest 50,000 as an initial

capital of the enterprise. Other fund source will be

derived from loans to bank amounting to ____________.

3. Preparation of Financial Statement

3.1 Income Statement

Table shows the cost and return of producing eggs from

ready to lay ducks, 800-head module (Year 1).

Year 2015 2016 2017 2018 2019

Sales

Sale of eggs 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000

Sale of culls
Sale of empty
feed bags
Total Sales
Less: Cost of
Sales
Pullets/Ducks
Feeds
Medicines and
Supplements
Gross Profit
Less: Operating
Expenses
Labor
Salaries
Transportation
Light and Water
Repair and
Maintenance
Insurance
Telephone Bill
Taxes and

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Licences
Miscellaneous
Total Operating
Expenses
Income from
Operation
Less: Income Tax
Net Income

3.2 Cash Flow Statement

Year 2015 2016 2017 2018 2019

Cash Receipts

Cash Beginning 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000

Sales
Proceed of Loan
Intial Capital
Less: Cash
Disbursement
Operating
Expenses
Purchase of Fix
Assets
Building
Construction
Farm
Construction
Purchases
Payment of Loan
Amortization
Payment of
Interest
Payment of Taxes
Total Cash
Disbursement
Cash Ending

3.3 Balance Sheet

Year 2015 2016 2017 2018 2019

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ASSETS

Current Assets 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000

Cash
Inventory on
Hand
Total Current
Assets
Fixed Assets
Machinery and
Equipment
Land
Building
Less:
Accumulated
Depreciation
Furniture and
Fixtures
Total Fixed
Assets
Other Assets
Total Assets
LIABILITIES AND
PARTNERS’EQUITY
Liabilities
Loans Payable
Tax Payable
Total
Liabilities
Partners’ Equity
Capital
Net Income
Total Partners’
Equity
Total
Liabilities and
Partners’ Equity
Net Worth

4. Financial Analyses

4.1 Test of Liquidity

4.2 Test of Profitability

V. SOCIO-ECONOMIC ASPECT

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 a. Socio-economic Contribution

b. Employment Opportunity

VI. SUMMARY OF FINDINGS

1. Management Feasibility

2. Market Feasibility

3. Technical Feasibility

4. Financial Feasibility

5. Socio-Economic Feasibility

CONCLUSIONS

1. Management Feasibility

2. Market Feasibility

3. Technical Feasibility

4. Financial Feasibility

5. Socio-Economic Feasibility

RECOMMENDATIONS

Based on the findings and conclusions made, the

researchers strongly recommend the project for funding and

immediate implementation.

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