Profitability and Sustainability of the Emerging Poultry Business in Developing Countries: A Case of a Poultry Grower of Nepal

Poultry is an important part of rural life in several developing countries. Commercialization of this business appears more beneficial but has not obtained the expected momentum, mainly due to lack of information and perception of high cash requirements and thus risky nature. Although the technical knowhow may also be one of the barriers, it is not assumed to be restricting, as found from previous researches as well as pre-survey data of this research. Hence, we study the most frequently admitted problematic side of the business, that is, financial aspect. Discussion with the farmers of Chitwan district in Nepal formed the basis of this research, followed by a detailed business analysis of a commercial poultry grower. Analysis revealed the business to be profitable, sustainable, and less sensitive to adverse conditions. The positive and high value of net worth shows that the business is in a strong position. Again, the financial ratio, liquidity ratio, and solvency ratio showed that the business is on a strong foundation, is capable of repaying its loans anytime if demanded, has sufficient liquid balance, and is financially viable. Net cash earnings are also positive, along with considerable profits as shown by the profit margins. Simple rate of return on investments is also high, hence the business could be said to be earning high profits. A business analysis over a period of ten years showed that the net present value of the business is greater than zero. The internal rate of return is also higher than the market interest rates as well as the required rate of return for both total investment and the debt portion of investment. The benefit-cost ratio is higher than unity, an indicator of significant profits, hence showing that the business is acceptable. Sensitivity analysis of the business to adverse conditions like inflation or changes in the cost of input as well as price of output showed that the business is also viable under these unfavorable conditions. These analytical results, taken together, give ...