hydroelectricity lowliness: David Garcia Gonzalez ? Entrepreneurial Initiative: Ostrich Company

BUSINESS IDEA AND OPPORTUNITIES

Ostrich Company Ltd.
Ostrich Farming Business specialized in obtaining ostrich meat which is tasty and juicy, low in fat, low in cholesterol and high-iron. Ostrich meat will be commercialized to grocery stores and delicatessen stores and meat as well as eggs will be sold to restaurants and catering services. Ostrich meat will be presented in fillet, burger, sirloin steak, cold meat and pate.

Starting point
The Company will purchase chicks more than three months old (the highest mortality rate is from one day to three months). Although more expensive than purchasing eggs or hatchlings, the purchase of chicks at this age will probably prove more cost effective because the mortality rate is greatly reduced after the age of three months.

Core business

Meat for the alimentary industry, supermarkets, grocery and delicatessen stores.
Meat and eggs for restaurant industry and caterings.

Parallel business lines

Eggshells for home decoration market.
Oil for cosmetic industry.
Beak and nails (for buttons) at the textile industry.
The fine hide is soft and durable, will be sold for the production of high quality leather products (wallets, boots).
Big feathers for textile industry.
Small feathers features ideal for feather dusters.
Eyelashes for rimel brushes.

Opportunities:

High productivity, 1 year is the optimal moment for the slaughter.
Ostrich? life span (80 years).
Ostrich desirable climate conditions is low-humidity and mild temperatures.The climatic characteristics of eastern and southern peninsula are ideal for ostrich farming.
Ostrich feeding based on maize, cereals, nuts and alfalfa.
Ostrich?s weight is 100 kg, from which 30 kg is usable meat.
Quality of meat : low in fat, low-cholesterol, rich in protein and iron. Per 100 grams of meat, the fat content hardly reaches 1.6 grams, even less than in a chicken breast, and cholesterol ranges between 40 and 50 mg.
Egg?s weight: 1,5 -2 kg (equivalent to 20 chicken eggs)
Average of 60 eggs laid per year and the female ostrich may begin to produce eggs at the age of 2.
An ostrich leather reaches 15 feet square.
Increasing demand from central Europe (Germany, Belgium, Austria, Switzerland)

PESTEL

POLITICAL
-Potential consumers increase, as European Union increases.

-No barriers for selling abroad.
-No promotion, research and generic marketing by bigger role-players.
-Subsidies have been avoided
-UE protection against external competitors: If an European country want to import ostrich meat from a non-European country, they must sign an agreement between both parties. Once the meat is delivered to that country, it is forbidden to sell the meat to a third country.

ECONOMIC

-Breakup of a South African ostrich monopoly has caused the worldwide price of ostrich products to decrease, and these goods are now beginning to become affordable to the common man
-Reports suggest that global meat consumption will increase by as much as 25% by 2025
-Higher production than pork and beef industry, but the performance is lower due to more animals are required.
-Ostriches live in trios, two females, one male. Each trio needs 1500m2 of terrain.
-The minimum initial investment that requires a farm with a trio of ostriches (one male and two females) is about $ 60,000 and $ 65,000, the return on investment starts from six months of operation.
-The average annual expenditure of breeding of two and half years of age and older is about $ 20,000, both male and female ostriches.
-60 eggs laid per year.
-Life span is 80 years
-At birth, ostriches weight 1kg. After a year they weight 100kg and they are ready for the slaughter.
-30% of the weight is usable for meat (lower than pork or bovine)
-Higher final prices than other classes of meat.
-Ostrich leather is the second most valuable (just after cocodrile?s)
-There is no large scale production in Europe.
-Fixed cost are high due to the need of terrain
-High fuel prices
-Raw materials are wheat, barley and alfalfa which are cheap and easy to find and with low fluctuations of their price
-Economic crisis, difficult to gain the trust of the banks to get funds.
-Vulnerability against extreme climatic conditions can have an effect on availability of products in market
-Low consumption in domestic market: Farms which focused on domestic market failed.
-Belgium, Germany and Switzerland are the main consumers in the EU
-South-Africa shares the 83% of the ostrich production in the world.

SOCIO-CULTURAL

-Increase of health conscious consumers throughout the world, who are worried about the risk of heart attacks, high blood pressure, and heart disease
-Meat products represents 20.8% of total expenditure that Spanish consumers spend in their diet.
-Total meat consumption amounts to about 2.878 million kilos, around 18.642 million euros. (The highest percentage of demand is concentrated in households (79%) while restaurant? consumption accounts for 16.9% )
-The homes of upper and upper middle class have the highest meat consumption while lower-class households have lower consumption.
-In restaurants fresh pork is the most consumed meat (78.5 million kilos) but the biggest expense is associated with beef (664 million euros).
-Studies published by the Ministry of Environment and Rural and Marine Affairs, claim that 86.2% of the Spanish population surveyed has never acquired ostrich food and who have consumed it, considers it as a ?delicatessen?.
-The main reasons to try it are curiosity and the challenge of proving an exotic food generally surprising by its flavor and juiciness of the meat.
-More people ?buy using internet nowadays, which decrease the investment for commercialize products.

TECHNOLOGICAL

-The impact of science and technology in process and product is low: Both process and product are fixed.
-Obsolescence of technology is low.
-High technological levels in abattoirs.
-An incubation building is needed and also a raising building for the first 4 months of life of the baby ostriches.
-Warm and especially low humidity climate is the optimum.
-Lack of skilled workers.

ENVIRONMENTAL

-Ostrich farming is environment friendly, it has the natural capacity of optimising quality in all aspects of agriculture and the environment.
-Worthy candidate for biodiversity, many observers are of the opinion that ostrich farming is a best option for organic agriculture.
-Many places have perfect climate conditions within Spain.

LEGAL
-Documentation needed to set up the farm:

Data related to the corporation (corporation name)
Project describing the installations and the planning of the activities that are going to be developed.
System for the elimination of feces.
Veterinarian report: ?Disinfection, Rat pest control, Desinsectation, ?Hygienic program, Data of the veterinarian that will supervise the farm.

-Ostriches are ruled by the same laws as other birds: Real Decreto 1317/1992, Real Decreto 2087/1994, Real Decreto 54/1995.
-No specific legislation.
-28 days before the slaughter, it is forbidden to administer drugs to the ostriches.
-A veterinarian must be hired. He will report monthly the sicknesses and the treatments that have been taken.

SWOT

Strengths

Ostriches consume little amounts of food.
Ostriches are very resilient and they have strong health.
The return on investment starts very early, from six months of operation
Cheaper commercialization through internet.
Minimum environmental impact, good perception.
Opportunity to grow as a learning centre.
Diversity of potential clients and uses (food, textil industry, cosmetic industry?)

Weaknesses
A minimum plot of land, ?infrastructure and investment is required. Starting from scratch.
Mortality of newborn calves is about 30%, which in some cases could reach 50%.
Lack of consumer awareness.
Prices of ostrich meat and the other associated ostrich goods are high.
High investments in marketing and advertisement in order to raise awareness.
The farming operation won?t be able to withstand price decreases or cycles.
Vulnerability against extreme climatic conditions can have an effect on availability of products in market.

Opportunities
Breakup of a South African ostrich monopoly, affordable prices to the common man.
African bird perceived as exotic food.
Healthier than traditional red meats.
Recent food crisis: avian flu and mad cow.
Alliances or Coops to provide the ostrich packers with a consistent supply of meat.
Exports to central Europe.
People willing to buy healthy food
Untapped domestic market.
The generic promotion of ostrich meat. Currently it is almost non?existent.
Growth in meat demand by far outstrips supply.

Threats
Lack of skilled workers.
Small and unstable market.
Lack of wide specific legislation.

Constant pressure from international pressure groups like Compassion for World Farming.

Grocery stores refuse animal products if they don?t adhere to the usual standards of production.

GROUP 6:

Elena Arboleya

Tatiana Casquero

David Garc?a

No hay comentarios / 06 feb 2012 por David Garcia
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