Birds a day

4 800

14 000

One shift to Year 3, two from Year 4

Trading days

255

255

Birds a year

1 224 000

3 570 000

Roughly 0.32% of national slaughter at maturity

Average live weight

1.95 kg

1.95 kg

Industry survey average slaughter weight is 1.77 kg

Dead on arrival and condemnations

0.8%

0.8%

Deducted before processing

Dressed yield

73.0%

73.0%

Eviscerated carcass as a percentage of live weight

Dressed weight per bird

1.423 kg

1.423 kg

Own-account share of throughput

62%

82%

Contract slaughter fills the line during the ramp

Blended dressed price

R49.48/kg

R62.05/kg

Escalated at 5.8%; commodity IQF reference is R35.38/kg

Live bird price

R24.50/kg

R30.93/kg

Escalated at 6.0% — marginally faster than selling prices

By-product recovery

R5.22 a bird

R6.54 a bird

27.6% of contribution

Contract slaughter fee

R9.60 a bird

R12.04 a bird

Reported industry reference is R7.83

Processing cost

R7.65 a bird

R9.73 a bird

Escalated at 6.2%

Processing line, chillers and cold store

R32 800 000

Specified at 2 000 birds an hour, sized for both shifts from the outset

Building, civils and food-grade finishes

R12 800 000

20-year life

Effluent treatment and water reticulation

R7 100 000

9.5% of capital; high-strength effluent is the constraint most plans underestimate

Portioning, deboning and packaging

R6 400 000

Vehicles, generation, reception and rendering

R11 250 000

Five refrigerated units; standby generation on continuous loads

Laboratory, offices, fees and commissioning

R4 180 000

Total capital expenditure

R74 530 000

Working capital and pre-operational cost

R25 710 000

Of which R5 420 000 is pre-opening cost charged to Year 1

Total funding requirement

R100 240 000

Second shift capital, Year 4

R14 200 000

Funded from operating cash flow; adds R4 650 000 of annual fixed cost

Fixed cash costs, single shift

R19 623 884

Escalated at 5.5%

Depreciation

R5 882 381 rising to R7 065 714

Straight-line over asset lives of 7 to 20 years

Equity and DFI quasi-equity

R72 240 000

72.1% of the structure

Senior debt

R28 000 000

Eight years at 11.03%

Capital moratorium

Two years

Interest paid from Year 1; principal from Year 3

Working capital facility

R24 000 000

Committed at drawdown; fully drawn in Year 4

Corporate tax

27% with assessed losses carried forward

Section 20 limitation applied; no tax before Year 4

Debtor days / stock days / grower payment

38 / 21 / 7

The structural cash gap in meat processing

Exit multiple

6.0x Year 5 EBITDA

Sustainable earnings and the replacement cost of a registered plant

Live bird price of R24.50 a kilogram

Escalated at 6.0% a year

Written pricing formulas with contracted growers before construction

The largest single exposure. Contribution reaches zero at R34.17/kg

Abattoir registration obtainable at the chosen site

Granted before commissioning

In-principle confirmation from the provincial executive officer before construction

The plant cannot lawfully operate and has almost no alternative use

Trade effluent capacity available

Municipal discharge plus on-site treatment

Written municipal confirmation before the site is committed

A site that cannot discharge cannot process, whatever else is right about it

Blended dressed price of R49.48 a kilogram

Escalated at 5.8% a year

Offtake agreements or letters of intent covering half of Year 1 output

An 8% shortfall removes R17.9m of EBITDA at capacity. Commodity IQF is R35.38

Dressed yield of 73.0%

From commissioning

Line supplier performance guarantee tested at acceptance

Two points is worth R3 071 016 a year and cannot be recovered later

Own-account share reaching 82%

From 62% in Year 1

Customer pipeline and the working capital to fund it

Own account earns R18.88 a bird against R2.68 on toll

Working capital facility of R24 000 000

Committed at drawdown

Written facility terms alongside the term debt

Working capital reaches R38.3m; the balance must come from retained earnings