Newsletter No 74 – Financial Plan

Once the infrastructure required to supply the targeted markets is defined, it is then possible to establish the capital investment and working capital required for the various sectors of the value chain.  In this structure funding the collaborative approach enables the small farmers to operate independently, but still have a stake in the processing business.   The business model discussed here and here, with farmers operating on a small scale requiring movement of chicks and feedlot birds introduces certain management aspects adding additional management costs and biosecurity risks.

In that model all operations are independently owned and financed, with the central trust assisting with the business plan and funding applications.  Currently in South Africa there are special funding schemes to support the development of farmers from the previously disadvantaged communities as a result of Apartheid.  Each country will have different challenges and opportunities to structure their ostrich projects.

The advice of the World Ostrich Association to any new comers is to ensure the business plan incorporates all aspects of the value chain with the finances in place prior to commencement.  We still find a few people being tempted with offers of buy-back schemes prior to the development of the infrastructure and markets.  The wording of these schemes needs to be viewed extremely carefully.  Do not join any scheme that is based on selling birds to other producers.  Production for slaughter birds must be the objective.