Market Pointer for Furniture to Haiti

DECEMBER
INVESTMENT PROPOSAL FOR 2019
GOAT

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CONTENTS
LIST OF ACRONYMS ................................................................................................................................. 3
EXECUTIVE SUMMARY ............................................................................................................................. 4
PRODUCT PROFILE ................................................................................................................................... 5
HOW TO RAISE GOATS............................................................................................................................ 7
SWOT ANALYSIS FOR THE ESTABLISHMENT OF A 20-ACRE GOAT FARM ................................... 9
MARKET ANALYSIS .................................................................................................................................. 10
MARKET PRICES ................................................................................................................................... 11
AVAILABLE MARKET POTENTIAL ..................................................................................................... 12
BUSINESS MODEL AND FINANCIAL ANALYSIS FOR INVESTMENT IN GOAT FARMING .......... 13
AGRICULTURAL INCENTIVES AND SUPPORT SERVICES .................................................................. 14
SUPPORT SERVICES ................................................................................................................................. 15
APPENDIX 1: COST OF PRODUCTION FOR UP TO 100 HEADS OF GOATS ............................... 16
APPENDIX 2: NPV AND IRR (NORMAL) ............................................................................................ 18
APPENDIX 3: PROJECTED CASH FLOW .............................................................................................. 19
APPENDIX 4: SMALL RUMINANTS’ POPULATION IN JAMAICA BY PARISH IN 2017 ................ 20

TABLE OF FIGURES
FIGURE 1: 5 YEAR GOAT IMPORTS (YR 2013- 2017) ....................................................................... 10
FIGURE 2: LIVESTOCK SLAUGHTER OVER 7 YEARS. ....................................................................... 11
FIGURE 3: 5 YEAR GOAT IMPORTS .................................................................................................... 11

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 LIST OF ACRONYMS
JMD - Jamaican Dollars

MICAF - Ministry of Industry, Commerce, Agriculture and Fisheries

STATIN - Statistical Institute of Jamaica

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 Executive Summary
Farm Size: 20 acres (8 hectares)
Project Description: The project is seeking to establish a 20 acre
Goat farm starting with 35 ewes and 2
rams.

The average annual net profits over a 10

year period is projected to be
approximately J$8.23M

The accumulated 10 year net profit is

projected to be approximately J$57.6M.
Project Sector Agriculture: Livestock Production of Goat

Financial and Economic Analysis Internal Rate of Return: 52% (at normal
and Recommendation investment assumptions)

Net Present Value: J$27.37M (at normal

investment assumptions)

Based on the outcomes of the analysis, the

project is considered to be viable

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 Product Profile
Jamaica Creole Botanical Name and Origin: Domestic goat or
simply goat (Capra aegagrus hircus) is a subspecies of C.
aegagrus domesticated from the wild goat
of Southwest Asia and Eastern Europe. The goat is a
member of the animal family Bovidae and the
subfamily Caprinae, meaning it is closely related to
the sheep.

There are over 300 distinct breeds of goat. Goats are

one of the oldest domesticated species of animal, and
have been used for milk, meat, fur and skins across
Anglo-Nubian much of the world. Milk from goats is often turned
into goat cheese.
Female goats are referred to as does or nannies,
intact males are called bucks or billies and juvenile goats
of both sexes are called kids. Castrated males are
called wethers. While the words hircine and caprine
both refer to anything having a goat-like
quality, hircine is used most often to emphasize the
distinct smell of domestic goats.
In 2011, there were more than 924 million goats living
in the world

Species: There are several breeds of small ruminants

(goat and sheep) in the world that can be produced in
Jamaica. However, the conscientious recommendation
is that the following breeds are more suitable for the
Jamaican climatic conditions:
1. Jamaica Creole: A native breed created through
natural selection; however, most of its genetic
traits come from the Spanish Dairy Goat and
British Alpine. The animal is very hardy and fully
adapted to the Jamaican Environment. The
breed is present in various colours and range
from small to medium in size.

2. Anglo-Nubian: The breed was developed in

Britain and imported into Jamaica. The Nubian
is a dual purpose animal, which can be raised for

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 both meat and milk. The breed tends to be large
framed and sturdy and varies in colour.

3. British Alpine: The Alpine is a Swiss breed,

developed primarily for milk; however, the
animal has been used as foundation for many
commercial meat goats, because of its large
frame and fast growth rate.

4. Boer: The Boer was developed in South Africa,

it is solely a meat goat breed, and recognized for
its hardiness, excellent meat to bone ratio and
fast conversion of feed to meat. The breed is
characterized by a white body and red to brown
head.

Health Uses: Goat meat is low in calories, total fat,

saturated fat and cholesterol than
traditional meats, goat meat has higher levels of iron
when compared to a similar serving size of beef.

Value Added Products: yogurt, cheese, lotions, milks,

soaps, ice cream, kefir, soaps, shampoo, lotion, lip
balm, paint (whitewash)

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 How to raise Goats
Suitable Locations: Goats are produced in all parishes of Jamaica; however they tend to
strive better in the southern parishes in the plains that experience variable (low) rainfall
and dry vegetation. It is important that the areas are properly ventilated to prevent
respiratory issues.

Raising Goats for Meat and Milk: Goats are prolific milk producers. Each doe will give
roughly 90 quarts of milk per month, with two months off right before she gives birth.

Feeding Goats: The goat is a ruminant, having a four-part stomach like the cow and sheep.
Goats are energetic, inquisitive and versatile in their feeding habits. They are adaptable to
various environments and can consume over 90 different plants. Browse materials (trees,
leaves, bushes, twigs, etc.) appears to be advantageous and enjoyed by dairy goats.
However, the importance of such materials toward the nutritional requirements of
lactating dairy goats is probably quite small, especially where a fairly large number of dairy
goats are being maintained.

Goats require energy, protein, vitamins, minerals, fiber (bulk) and water. Energy (calories)
is usually the most limiting nutrient, whereas protein is the most expensive. Deficiencies,
excesses and imbalances of vitamins and minerals can limit animal performance and lead
to various health problems. Fiber is necessary to maintain a healthy rumen environment
and prevent digestive disturbances. Water is the cheapest feed ingredient and often the
most neglected.

Although the goat has a great capacity for consuming fibrous feed (roughage), it needs to
be given forage of good quality, such as legume hay.

The four (4) main source of feed for goats are:

 Pasture and browse
 Hay
 Silage and haylage
 Concentrate (grains)
Fencing goats: This will depend on availability of materials and its price. Wood is preferred
to concrete blocks, clay, brick is a good choice. Regardless of the construction material
barns should provide enough space for animals, favorable conditions such as temperature
and humidity and proper ventilation.

Disease Control:
• Keep surrounding clean, clean Kraal where possible and remove manure regularly
• Supplement rations with extra feed during colder periods and remember
that pregnant females need more feed to produce healthy offspring.

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 • Avoid overcrowding and treat the animals in a relaxed manner. If you are
transporting them, make sure they have enough water, and that they are not too
hot or too cold. Avoid loading too many animals on one truck.
• Provide vaccination; especially females
• If extensive grazing takes place, keep kids with their mothers at night so they can
suckle.

Intercropping: Goats can be raised with tree crops such as coconut. However, special care
should be given to ensure that either the plants or the goats are fenced to ensure that the
goats do not have access to the crops.

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 SWOT Analysis for the Establishment of a 20-Acre Goat Farm

Strengths Opportunities
 Ready market.  Access to production information/
 Internal rates of return up to 52%. technologies as a result of research and
 The demand local markets is excellent. development work conducted by local,
 Marketing and production information regional and international agencies.
are readily available.  Access to special short term credit facilities
 Government of Jamaica committed to at low interest rates.
expanding the agricultural sector.  Accessing the services of the Praedial
 Access to experts and good networks Larceny Unit at MICAF.
(RADA, AIC and JAMPRO).  Opportunities for development along the
 Vast unused land resources value chain
 Price of goat milk and its products is high  Goat with high genetic potentials
 Dietetic and therapeutic properties of goat  Small number of goat farmers
meat, milk and milk products  Low market orientation of goat farmers
 Raising awareness amongst local  Growing inters of processing sector for
population on properties of goat milk goat milk
 Supplies lower than demand

Weakness Threats
 High initial investment.  Increase in land prices.
 Growing foreign market of goat products  Natural disasters and pest/disease
epidemics.
 Severe market changes and fluctuations in
prices.
 Praedial larceny.
 Stringent Government regulation for
export and registration.
 Possible budget instability and reduction
of subsidies for the sector
 Increasing prices of grains

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 Market Analysis
Small Ruminant production in Jamaica has been taking place in since the first European
Colonizers arrived in the island. The sector was never treated as major commercial venture
from then until now, most farmers have continued to raise small holdings of 20 -30 animals
using limited inputs and little to no management practices.

Goats and Sheep are considered small ruminants because of a special chamber in their
stomachs called a rumen which allows them store food and regurgitate for consumptions
(essentially chewing their cud). Goat meat is called “chevon” and Sheep meat is called
“mutton”. They’re one of the world most widely consumed meat.
Chevon/ Goat meat is commonly referred to as the healthy red meat, because is alkaline
very lean and contains limited fats; also it contains high volumes of B12 Vitamins and high
volumes of iron when compared to other meats. 1
Small ruminants are grown all over the world in many different climatic conditions, most
breeds are adaptable, and therefore they can be transferred all over the globe. The top
three (3) exporters of goat meat are New Zealand, Australia and the United Kingdom,
while the major importers include China, United States of America, Holland and Germany.
Ruminants can be developed under strictly organic conditions which opens the
opportunity for investment in the growing Organic/Healthy market segment.
Parishes with the highest population of ruminants are Westmoreland, Clarendon, St.
Catherine, St. Elizabeth, Manchester and St. Ann. All with the exception of St. Ann are
parishes from the southern section of the Island.
Experts suggest that for the best production in the Jamaican environment a three-way cross
between the Native goat , Nubian/Alpine and the Boer Goat would provide the best breed
type with the required genetic disposition to strive and give the maximum return on your
investment.
Figure 1: 5 Year Goat Imports (YR 2013- 2017)

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Data was only available up to YR 2017
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Source: STATIN 2017

Figure 2: Livestock Slaughter over 7 years.

2011 2012 2013 2014 2015 2016 2017
Livestock
slaughter
(heads)
Goats 56,498 54,694 52,682 55,201 56,728 60,074 59,671
Goats' meat
1,316 1,094 929 902 888 1,069 925
(000 kgs)
Source: STATIN 2017

Figure 3: 5 year Goat imports

5 yrs Goat Imports
$1,000,000.00

$800,000.00
Amt (kg)

$600,000.00

$400,000.00

$200,000.00

$-
Year

2013 2014 2015 2016 2017

Market Prices
The market potential for small ruminant production presents good earning potential
especially for specialty cuts for restaurateurs and within the tourism and hospitality
sector. Consumers of the goat are willing to pay premium prices for the locally produced
animals and demand for same increases during specific seasons. Normal prices for goat
meat ranges from $400-450 for live animals, and $900-1000 for dead weight.
Goat Production needed to meet demand –

 Slaughtering 20,648 heads annually

 Increased herd size of 30,972 does

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In 2017 Jamaica imported $853,064.62 USD worth of chevon products. In addition, local
production only covers on average 15 % of the total demand. Therefore the market
potential is remarkable and yearning for investment.

Available market potential

The available markets for goat are:
 Farmers
 Butchers
 Hoteliers
 Restaurateur
 Local Consumers

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Business Model and Financial Analysis for Investment in Goat
Farming
INVESTMENT OPPORTUNITY BUSINESS MODEL

Opportunity for Investment in

Goats 18% Internal Rate of Return

 J$10.19 M investment
opportunity for a 20 acre
goat farm. Other Local Farmer Domestic Market
 Sell produce (live and meat)
to domestic buyers and
processors for local markets. Sales + Marketing

 Requires investments in in a Certified Butcher

goat house.
 The first sales is expected 6 Labour + Cost Structure

months after starting.

 Intercropping of cash crops Goat farm
can be practiced to gain
additional income in the first
Support
two years of establishing the Services
farm.
 The investment will be Agro-inputs and Equipment
financed by 60% equity and
40% loan financing at an
interest rate of 10%
 The estimates are made for a Land
20-acre area of production. Acquisition/Identification
Starting with 35 does and 2
Equity + Loan +
rams Interest
 Land with be sought by Bank
investor.

Agri-Planning at AIC

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 FINANCIALS

Investment Cost
The initial investment is estimated at J$5.75M (See Appendix 1 - Cost of Production).

Revenue
Average revenue for the ten years is expected to amount to J$10.45M (See Appendix 3 –
Cashflow statement).

Return on Investment
The estimated financials of the project are promising show an Internal Rate of Return
(IRR) of 52% and Net Present Value (NPV) of J$27,371,861.04 when future cash flows
were discounted utilizing a rate of 10% percent based on the going bank lending rate (See
Appendix 2 – NPV and IRR)

Projected Cash Flow

The cash flow projections for Goat production on a 20 acre farm are low for the first two
years and then increases over subsequent years. Net cash flow after debt service
accumulates to J$117.99M (See Appendix 3).

Agricultural Incentives and Support Services

A project of this size can benefit from agricultural incentives which comprises of two levels,
the general approval for benefits of the Productive Inputs Relief (PIR) and the higher level
approval that includes Income Tax relief.

An entity or individual must be registered with the Rural Agricultural Development

Authority (RADA) in their respective parish offices in which the farm exists to benefit from
the Productive Input Relief Incentive for the Agricultural Industry.
The approval for the Productive Input Relief benefit requires that the Commissioner of
Customs be satisfied that the items imported are to be used in primary
production/approved farming activity. It should be noted that PIR can last from six (6)
months to three (3) years.

A farmer can also benefit from a twenty percent (20%) concession on farm vehicles. For
a 20-acre goat farm, there is a limit to the number of vehicles. Medium Farms (11-50 acres)
can benefit from two motor vehicles every five years.

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 Support Services
Agro-Investment Corporation (AIC)
The Agro-Investment Corporation (AIC) is an agricultural investment facilitation, advisory
and management agency, which functions as the Ministry of Agriculture and Fisheries
business facilitation department. The agency is responsible for agricultural investment
promotion and facilitation, as well as project and market development. AIC provides
investment support to entrepreneurs, covering the investment chain from the identification
of opportunities through to feasibility studies, business planning, fundraising, operations
management, long term business performance monitoring and technical support.

Jamaica Promotions Corporation (JAMPRO)

JAMPRO’s continuous mission is to promote Brand Jamaica, attract and land jobs and
wealth-creating investments to Jamaica and secure lucrative markets for quality Brand
Jamaican products. As the Agency seeks to facilitate local investments, a number of support
services are available, namely:
• Provision of business information and advisory services
• Trade and investment incentives
• Export-related training
• Creation of business linkages

Rural Agricultural Development Authority (RADA)

The Rural Agricultural Development Authority (RADA) promotes agricultural development
in Jamaica through an extension service. Farmers can solicit information and technical
assistance in areas such as agronomy, plant health, irrigation post-harvest techniques,
production and marketing.

Contact our Investment Team today for more information on available

investment opportunities!

AGRO-INVESTMENT CORPORATION
AMC Complex, 188 Spanish
Town Road Kingston 11
PO Box 144, Jamaica, West Indies
Telephone: 1 876 764 8071
Telephone: 1 876 923 9268
Telephone: 1 876 923 0086
Telephone: 1 876 923 9261
Fascimile: 1 876 758 7160
E-mail: [email protected]

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Appendix 1: Cost of Production for up to 100 heads of Goats
Chevon Cost of Production- Based on 35 does and
Marketing 52 Kids
This is based on a one year period with one and a half production cycles
Herd Profile Total
Number of does 35
Number of bucks 2
Number of Kids 52
Pasture size (acre) 20
Annual kidding frequency 1.5
Litter size 1.6
Months to Market 8
Market Weight (lbs) 90
Items Unit No. of Units Cost/unit Total Cost ($)
($)
Operating Costs
Feed
Doe-
Goat Ration kg 2782.5 60.00 166,950.00
Buck-
Goat Ration kg 365 60.00 21,900.00
Kid-
Goat Ration kg 1404 60.00 84,240.00
Medication
Kids animal 52 430.00 22,360.00
Buck animal 2 684.00 1,368.00
Doe animal 35 684.00 23,940.00
Water month 12 3,104.68 37,256.11

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Labour animal 89 1,500.00 133,500.00
Motor Vehicle Expense month 12 3,691.81 44,301.75
Housing Maintenance animal 89 500.00 44,500.00
Pasture Maintenance acre 20 6,000.00 120,000.00
Subtotal $ 700,315.86
Capital Investment
Building animal 120 20,833.33 2,499,999.60
Fencing acre 20 11,500.00 230,000.00
Breeding stock
Doe each 35 45,000.00 1,575,000.00
Buck each 2 75,000.00 150,000.00
Water tanks and accessories each 2 35,000.00 70,000.00
Farm equipment 105,450.00
Subtotal 4,630,449.60
Depreciation @ 10% $ 426,640.49

Total $ 5,757,405.95

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Appendix 2: NPV and IRR (Normal)
Capital Investment Net Cashflow
Yr 0 5,757,405.95
Yr 1 181,738.87
Yr 2 1,200,838.04
Yr 3 3,422,988.57
Yr 4 7,841,585.37
Yr 5 16,115,354.88
Yr 6 31,175,511.82
Yr 7 58,059,813.34

NPV 27,371,861.04
IRR 52%

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Appendix 3: Projected Cash Flow
Projected Cash Flow
Items Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Inflows
Revenues 1,239,651.98 2,288,588.28 3,909,671.64 6,818,085.92 11,919,730.62 20,883,368.05 36,522,054.63
Loan 2,302,962.38 - - - - - - -
Equity 3,454,443.57 - - - - - - -
Total Inflows 5,757,405.95 1,239,651.98 2,288,588.28 3,909,671.64 6,818,085.92 11,919,730.62 20,883,368.05 36,522,054.63
Outflows
Capital costs 0 - - - - - - -
Capital Replacement - - - - - - -
Operating costs 700,315.86 911,891.86 1,329,923.86 2,041,891.86 3,288,363.86 5,465,613.86 9,280,155.86
Total Outflows 0 700,315.86 911,891.86 1,329,923.86 2,041,891.86 3,288,363.86 5,465,613.86 9,280,155.86

Net Cash flow Before Debt Service 539,336.12 1,376,696.42 2,579,747.78 4,776,194.05 8,631,366.76 15,417,754.19 27,241,898.76

Debt Service:
Principal 143,965.69 158,153.85 173,850.93 191,105.97 210,073.61 230,923.82 253,843.46
Interest 213,631.56 199,443.40 183,746.32 166,491.28 147,523.64 126,673.43 103,753.79
Total Debt Service 357,597.25 357,597.25 357,597.25 357,597.25 357,597.25 357,597.25 357,597.25
Net Cash flow after Debt Service -5757405.95 181,738.87 1,019,099.17 2,222,150.53 4,418,596.80 8,273,769.51 15,060,156.94 26,884,301.51

Cumulative Net Cash flow 181,738.87 1,200,838.04 3,422,988.57 7,841,585.37 16,115,354.88 31,175,511.82 58,059,813.34

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Appendix 4: Small ruminants’ population in Jamaica by Parish in 2017

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