Joining the San Miguel Foods Inc.’s (Magnolia) roster of poultry contract breeders and growers is a good business opportunity for farm owners.

The success story of Magnolia’s contract grower, Ofel Dator together with her husband Serafin Dator, owners of Ofel’s Poultry Farm, began breeding chicken in 2005 with just minimal capital on hand. Today, in just a span of four years, Ofel’s Poultry Farm is doing a great business, earning well over P2.5 million a year.

So, why they chose this kind of investment?
1. The fact that Magnolia Fresh Chicken is one of San Miguel Food Inc.’s power brands, and therefore, it is a sure-fire investment.

2. They firmly believed, even in the face of the current economic crisis, that there would be no end to the need for chicken meat products — and therefore, no end to the need for their products.

3. It is a way to help provide jobs for other people in their community.

Now, are you ready to be one? For sure, you’d definitely be in good company since you’re joining the elite team involved in delivering Filipinos their beloved Magnolia Fresh Chicken.

Application Requirements/Process for New Contract Breeders

Contract Breeding

I. Application Process

1. Investor’s Forum
2. Submission of application form and letter of intent
3. Site Inspection
4. Processing of permits / Submission of requirements
5. Start of Construction
6. Completion of Farm and Dry Run
7. Chick Loading – Start of Farm Operations

II. Investment Details

1. Definition
   • It is an Agreement between SMFI and the Grower for the growing of broiler chicks to produce grown broilers:
     • at marketable size,
     • at the right volume,
     • at the right time
   • Meeting quality standards at the least possible cost.
   • Income is derived from farm production efficiencies
     • Harvest Recovery (HR)
     • Average Live Weight (ALW)
     • Feed Conversion Ratio (FCR)
   • It is NOT AFFECTED by market price or demand fluctuations
   • A sure and steady income
2. SMFI’s Undertakings
   • Day Old Chicks
   • Feeds
   • Vaccines and Medicinces
   • Technical Support
   • Laboratory Services
   • Delivery and Hauling Services
   • Competitive Payment Scheme
3. Grower’s Undertakings
   • Agricultural Land
     • Minimum of one (1) hectare
     • Must be within an agricultural zone / agro-industrial zone
     • At least 1 km away from nearest residential area or from nearest poultry/livestock farm and related operation
     • Within 80km radius from nearest SMFI operated processing plant
   • Production Houses
   • Controlled Climate System, Auto Feeding & Drinking Equipment
   • Support Facilities
   • Power and Water Supply & Distribution System
   • Skilled Labor
   • SMFI Requirements & Government Permits
   • Barangay Permit & Resolution
   • Mayor’s / Business Permit
   • SEC Registration and Articles of Incorporation
   • DTI Registration
   • BIR Certificate of Registration (COR)
   • Official Receipt (OR)
   • Environmental Compliance Certificate
   • Audited Financial Statements
   • Disclosure Statement
   • Electrical Audit Certificate from SMFI accredited electrical contractors
4. Standard CCS Poultry Building
   • CCS3 Elevated Houses
     • Pre-fabricated buildings with insulated walls and ceilings.
     • Elevated five feet (5ft) from the ground to facilitate manure collection
     • Ventilation fans in the basement
   • Advantages of CCS3 Elevated Building
     • Prevents fly proliferation
     • Removal of manure can be done on a regular basis without disturbing the birds
     • Prevents build-up of noxious gases
     • Faster cleaning time
     • Additional income from additional cycle per year
5. Financials – Investment CostEstimated Investment for 36k Capacity Broiler Farm
   

   	Elevated Building
   Site Development	175,000.00
   Production Building	17,350,000.00
   Support Facilities	1,777,000.00
   Water Supply System	453,000.00
   Waste Water Treatment Facility	160,000.00
   Tools and Farm Equipment	474,000.00
   Permits	31,000.00
   TOTAL	PHP 20,420,000.00
   ESTIMATED INVESTMENT COST PER BIRD	PHP 567.22

   Financials – Operational Expenses

   Estimated Operational Expenses for 36k Bird Capacity

   	Elevated Building
   Labor	3.12
   Power	3.35
   LPG	0.85
   Harvest	0.40
   Cleaning	0.55
   Vitamins / Medication	1.50
   Repairs & Maintenance	0.45
   Fly Control	0.40
   Operational Expenses per Bird per Cycle	PHP 10.62

   Financials – Payback Period

   Comparative Payback Period

   	Sample Grower’s Fee
   Gross Income	26.40	24.98	23.09
   Operational Expenses per Bird per Cycle	10.62	10.62	10.62
   Net Income	15.78	14.36	12.47
   Investment	567.22	567.22	567.22
   Payback Period in Years, 7.77 cycles	4.63	5.09	5.86

III. Contact Details

IV. Application Form

Updated: 08/13/2020
Sources: Magnoliachicken.com, The Philippine Star, Sept 2009

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