Marianas Feasibility Study
evaluating the feasibility of a slaughterhouse/meat business
Project components
About the project



Enterprise-level economic considerations

·         Analytical models

·        Capital costs

·         Operating costs

·         Enterprise proforma and sensitivity analyses on key assumptions



1.      Analytical models

·         Marianas Slaughterhouse Feasibility Study Illustrative Analysis spreadsheet:

§         This excel-based planning tool was developed by BES specifically for this project.  The spreadsheet provides a broad range of user-customizable inputs regarding operations and economics aspects of a potential slaughterhouse and meat business to be based in the islands.

·        Click on the following link to download the excel file:  http://www.agenergyenterprises.com/feasibility/MFS_illustrative_analysis_v8b.xls

§        The spreadsheet is designed to easily evaluate multiple scenarios (each scenario consists of a different mix of animal types and/or # of head to be processed per day). 

·         Click on the following link to download the accompanying notes and explanatory information to the spreadsheet:  http://www.agenergyenterprises.com/feasibility/notes_to_analyses.pdf

§        The model includes preliminary estimates of key assumptions as discussed below.  The assumptions can be modified or updated by the user as desired.

§         The model was constructed so that key inputs and outputs are on a single page and can be viewed concurrently with the proforma on a widescreen monitor.

·        Feasibility Analysis for a Mobile Slaughter Unit

§         This excel-based planning tool, based on the Thundering Hooves mobile processing unit in Washington State, lets you test the feasibility of owning and operating a similar unit yourself, based on your data: # of head, days/week used, yield assumptions, pricing, and other details. The program is set up for the MPU to work with a local processor to cut and wrap the meat.

§         This tool was created by Kathleen Painter, an analyst at the University of Idaho. 

§        AES recommends that the excel file be saved to the hard drive and opened and operated within Microsoft Excel, rather than trying to operate the spreadsheet within a browser window.  The planning tool can be obtained from this site: http://www.extension.org/pages/Feasibility_Analysis_for_a_Mobile_Slaughter_Unit

·        Guam Slaughterhouse Study, April 1997

§         Although this is not a user-interactive model and the study was undertaken 14 years ago, the report provides useful insights into the potential feasibility of a slaughterhouse business in the Marianas.

§         Click here to download a copy of the report.  (Note: the pdf document is 96 pages long and a 5.2MB file, so it may take additional time to download.)


2.     Capital costs

Factors to consider include:

·         site                  

§         land     

§        site preparation

§         utilities to the site/building      

§         liquid waste management          

§         solid waste management           

§         parking, fencing, other 

·        slaughterhouse             

§        animal unloading & cull re-loading

§         animal holding pens

§        building

§         equipment

§         instrumentation & controls

§         plumbing

§         electrical

§        air conditioning & ventilation

§         water heater

§        cold storage

§         back-up generator

§         office equipment

§         cleaning equipment

·         processing facility                     

§         building

§         equipment

§        instrumentation & controls

§         plumbing

§        electrical

§         air conditioning & ventilation

§        cold storage

§         back-up generator

§         office equipment

§         cleaning equipment

·         working capital

·         reductions in capital costs from public sector support

§        for example, grant funds from federal, Guam/CNMI government, or local municipal agencies.


3.      Operating costs

Factors to consider include:

·         Fixed operating expenses

§        Labor

·         general manager

·         butcher

·        assistant

§         USDA inspection

·         The USDA Food Safety and Inspection Service is required by law to provide an inspector (at no cost to the slaughter/meat business) to inspect the slaughtering operation.  However, overtime labor costs for the inspector would have to be borne by the business.  According to the Federal Register (April 12, 2011) FSIS’ overtime rates for 2011 are approximately $67/hour: http://www.federalregister.gov/articles/2011/04/12/2011-8699/new-formulas-for-calculating-the-basetime-overtime-holiday-and-laboratory-services-rates-rate#p-12 

§         Utilities

·         water

·        electricity

·         sewer

·         solid waste management

§        Other

·         Cleaning solutions and supplies

·        office-related

·         maintenance

·         property taxes

·         advertizing and marketing

·        General and administrative (G&A) expenses

·         Variable operating expenses

§        Cost of animals

·         Since, as of January 2011, there are no formal animal markets in the Marianas (no auction barns or commercial slaughterhouses with animal production contracts), no data exists on which to base estimates of live weight costs, so a commercial operation may reflect significant variance from the preliminary estimates set forth in the analysis model.

§         Wrapping and packaging

·         These costs reflect the type and extent of packaging to be used by the facility for the target products.

§        Transport of products to markets

·         For the islands, this will vary significantly between road transport to on-island markets vs. air/sea transport to other islands.


4.      Proforma and sensitivity analyses on key assumptions