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This document provides a pre-feasibility report for KAAN's Dairy Farm. It includes sections on the company profile with vision, mission and goals. It performs a SWOT analysis and discusses the purpose of the document. The project profile outlines plans for the proposed dairy farm including location, capacity, production process, marketing strategies, farm management, machinery/equipment, human resources and financial projections. The overall aim is to establish a sustainable dairy farm in Pakistan to provide quality milk and dairy products.
This document provides a pre-feasibility report for KAAN's Dairy Farm. It includes sections on the company profile with vision, mission and goals. It performs a SWOT analysis and discusses the purpose of the document. The project profile outlines plans for the proposed dairy farm including location, capacity, production process, marketing strategies, farm management, machinery/equipment, human resources and financial projections. The overall aim is to establish a sustainable dairy farm in Pakistan to provide quality milk and dairy products.
This document provides a pre-feasibility report for KAAN's Dairy Farm. It includes sections on the company profile with vision, mission and goals. It performs a SWOT analysis and discusses the purpose of the document. The project profile outlines plans for the proposed dairy farm including location, capacity, production process, marketing strategies, farm management, machinery/equipment, human resources and financial projections. The overall aim is to establish a sustainable dairy farm in Pakistan to provide quality milk and dairy products.
Submitted By: Ahmad Raza (BC11-225) Nasir Niraj (BC11-233) S. Khurram Ali (BC11-246) Azeem Rafique (BC11-249) Submitted To: Prof. Rai Imtiaz Hussain Program: B.Com 5 th Semester Section (D) Morning Hailey College of Commerce, University of the Punjab Lahore
PREFACE The purpose and scope of this information memorandum is to introduce the subject matter and provide a general idea and information on the live stock in Pakistan. All the material included in this document is based on data/information gathered from various sources and is based on certain assumptions. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information.
Dedicated to
Dearest and nearest to our heart, those who provide assistance when we need and encourage us when we lost our heart. So, dedicate this project to you.
Dear parents & Respected Teachers
ACKNOWLEDGEMENT
In originally under taking this project we have received valued assistance from many persons. Above all we are thankful to ALLAH Almighty who showers His blessings upon us. We are thankful to Mr. Rai Imtiaz Hussain who is actually teaching the course and helped us to complete this project and to Ch Naveed Aslam Bloch, Hajji Muhammad Iqbal, Malik Ashfaq Ahmad, Ch. Javed jutt, Sardar Zahid Hassan and to live stock department of Punjab Pakistan who has provided us valuable information.
DISCLAIMER The reason and range of this information note is to initiate the subject substance and give a universal plan and information on the supposed area. All the material incorporated in this article is based on facts/information collected from different sources and is based on convinced assumptions. Although, due care and conscientiousness has been taken to assemble this document, the contained information may differ due to any change in any of the concerned factor, and the real results may differ significantly from the presented information. WE do not presume any legal responsibility for any financial or other loss resulting from this memo in result of undertaking this activity. The probable user of this memo is encouraged to carry out extracarefulness and gather any information he/she feels essential for making an informed conclusion.
FORWARDING
This project of live stock(Dairy Farming) from students of B.Com (Hons) Morning Ahmad Raza (BC11-225), Nasir Meraj (BC11-233), Syed Khurram Ali Naqvi (BC11-246) and Azeem Rafique (BC11-249) Hailey College of Commerce University of the Punjab Lahore is completed under my supervision.
Dated---------------------------------- Signature of Supervisor--------------------------
1. COMPANY PROFILE 1.1. Name of Company-------------------------- 1.2. Monogram------------------------------------ 1.3. Slogan------------------------------------------ 1.4. Status------------------------------------------ 1.5. Industry--------------------------------------- 1.6. Vision------------------------------------------ 1.7. Mission---------------------------------------- 1.8. Goals------------------------------------------- 1.9. Objectives------------------------------------- 2. Purpose OF Document 3. SWOT Analysis 3.1 Strength------------------------------------------------- 3.2 Weakness----------------------------------------------- 3.3 Opportunity-------------------------------------------- 3.4 Threats--------------------------------------------------
4. Project profile------------------------------------ 4.1 Project brief------------------------------------ 4.2 Background------------------------------------- 4.3 Defining the Product--------------------------- 4.4 Raw Material-------------------------------------- 4.5 Raw Material Availability----------------------- 4.6 Proposed Live Stock---------------------------- 4.7 Opportunity Rationale------------------------------- 4.8 Proposed Capacity------------------------------------- 4.9 Market Entry Timing--------------------------------- 4.10Proposed Location----------------------------------- 4.11 Proposed Business legal status------------------- 4.12 Economic Size (Total project cost) -------------- 4.13Production Process Flow--------------------------
5. Current Dairy Farms------------------------------------- 6. Marketing------------------------------------------------ 6.1 Marketing Mix---------------------------------------- 6.2 Marketing Strategies-------------------------------- 6.3 Target Customer------------------------------------- 7. Farm Management------------------------------------- 7.1 Site Selection----------------------------------------- 7.2 Structural Design of Land----------------------- 7.3 Soil Sampling--------------------------------------- 7.4 Pond-------------------------------------------------- 7.5 Fertilizers-------------------------------------------- 7.6 Animal Growth-------------------------------------- 8. Machinery and Equipment-------------------------- 9. Human Resource Requirement--------------------- 10.Land and Building--------------------------------
11. Projected Financial Statements: 11.1 Projected Income Statement 11.2 Projected Cost of Goods Sold Statement 11.3 Projected Balance Sheet
Executive Summary
1. COMPANY PROFILE Name of Business KAANs Dairy Farm Monogram
Slogan Doodh to phir doodh hai naa
Status Partnership Industry Dairy Farming
Vision Our vision is to provide first class milk with ideal purity , vitamins and protein , supported by healthy animals , which boost the quality of life in Pakistan.
Mission We committed to provided that the best milk to people throughout their life. With our distinctive experience of probable consumers needs and creating solution, we devote to your welfare and improve your importance of life. As consumers prolong to make choices about milk which they use.
Goals& Objectives Goals: Guarantee the stable enhancement and implementation of milk health initiatives. The upgrading of existing operations, including the area of cattleprocessing, market for the cattleand dairy products. Sustainable landscape management. Protection and development of animals and plants. Preserving high professional level of workers in Dairy Farming industry. Promotion of milk and by products. Objectives: Lactation period Milk Composition Breeding stock development. 2. Purpose of Document: The purpose of the pre-feasibility study is chiefly to smooth the progress of probable entrepreneurs to smooth the progress of investment and provide an indication about dairy and cattle farming. The project pre-feasibility may figure the basis of a vital investment decision and in order to hand out this objective, the document covers different aspects of dairy and cattle concept expansion, start-up, production, finance and dealing management. The document also provide vital information, brief on government policy andinternational situation, which have some manner on the project itself.This particular pre-feasibility is about cattle farm which comes under Livestock and Agriculture sector. Before studying the entire document one must deem
followingsignificant aspects, which form the foundation of any investment choice.
3. SWOT Analysis Internal Factors: 3.1 Strengths Intense production. Favorable propagation backgrounds. Relatively inexpensive farmland. High household consumption Excellent milk quality. Main source of food, i.e. Milk& Meat Sufficient human resource service sector. Low cost living set. Full family participation, dutiful& Hardworking Sector. 3.2 Weakness: High starting costs. Low levels of feed production. Poor organization level in fairly a few cases. Lack of education and inventiveness in farmer. Unorganized sector, unconscious of basic farm management practices. No or low use of research work and rare breed record keeping.
External factors: 3.3 Opportunities: Govt. of Pakistan & Sate Bank of Pakistan precedence sector. Dairy products requirements are much higher than availability. Commercially feasiblesegment with great credit likely and inclusioncapability. Vast range of area of business, more needs and scope of improvement. Value added dairy products are in demand. Cooperatives can play a big responsibility for expansion in dairy sector like India. 3.4 Threats: High danger of sickness in livestock. Inequality between prices of inputs & outputs. Growing trend of cost of manufacture with higher rate of interest as contrast to profit ratio. Rising level of deficiency.
Project Profile: 4.1 Project Brief: The project is about establishing a dairy farm in the potential areas of Pakistan, which provide desire suitable environment. The project would serve as facility to utilize the everyday resources in the farm of feed for dairy farm that usually ends up as a cultural waste. On the other hand it would generate employment for local inhabitants and moreover would possibly cause cash inflow as well. The proposed project is primarily focused on local customers and national markets due to the prevailing high demand and taste preferences. The main features of the project would include naturally grown animals in clean environment keeping in view the quality standards and principles. This prefeasibility study explores the viability of setting up dairy farm based on economic and technology trends and available local strengths, weaknesses, opportunities and threats. 4.2 Background: Defining the Product: Cattle are a high protein, low fattening food that provides high variety of health payback. The white fleshed cattle is lower in fat than any other source of protein and enrich in omega 3 fatty acids. Cattle meat is medically suggested as a diet for person body, it produced necessary nutrients in major amount which is obligatory for healthy body. Moreover cattle areshort in bad fats normally found in red meat, called omega 6 fatty acids that construct it even more positive product as compare to red meat.
4.3 Raw Material: The main raw materials used for dairy farming are Green Founder, silage, etc in addition wandda is use to improve the milkvalue and improve productivity for better growth. Maze is used 250 days in a year and all agriculture green fodders are used as raw material. The price of these fodders is normally 150pkr to 200pkr per 40kg. In August the price of these raw materials turn out to be high i-e up to 350pkr due to shortfall in maze. Globally some non-natural feeds such as Australian silage are used for feed purpose but these are very expensive and are not suggested as economical in Pakistan. However, it is the choice of entrepreneur or feed professional to use or make a decision the amount of daily feed requirement.
4.4 Availability of Raw Material: Raw material is effortlessly available from any fertile land. 4.5 Proposed CattleFarm: Globally the one and only common technique isexperiencedfor cattlefarming. 4.6 Opportunity Rationale:
Livestock production is an essential part of Pakistan's agriculture sector and plays a criticalrole in national economy. At present, livestock is contributing about 52.2% to the agricultural sector and 11 per cent to the GDP. Pakistan is geographically situated close to the Middle East and South-East Asia.Both of these regions are lacking in livestock goods and depend upon import from other countries.The livestock business in most of the developed world is extremely subsidized.With reduction of subsidies in the wake of WTO, the local livestock sector should have better opportunities to compete.Livestock registered a strong growth of 4.30 percent over the last years remarkable growth of 7.5 percent due to raise in the livestock and rooster products. The role of livestock in rural economy may be assessed by the fact that 30 to 35 million of the total rural inhabitants is engaged in livestock farming, having 2 to 3 cattle/buffalo and 5 to 6sheep/goats per family deriving 30 to 40 per cent of income from it.
4.7 Proposed Capacity: The project will start operation with 170 cows of different ages,for the first 4 year cycle with survival rate of 80%. The proposed capacity of the farm is 4 acres that comprises of 1 pond, round about 25000 square feet covered area remaining area will open15 partitions for green foonder and 5 for banula, office building, guard room and open space.
4.8 Market Entry Timing: For the dairy farming business 365 days are the marketing entry time due to short fall in this business in Pakistan. Milk shortfall is 30% to 40%. Maximum output and profit will be in the months of September to April. In rest of the year this potential will reduce to 50%. 4.9Proposed Location: The proposed location for the establishment of the dairy farm will primarily be the areas that provide suitable environment and particularly water temperature range 5-30 degree centigrade. Our business is located in Depalpur, Okara. It is based on input cost matters normally. 4.10Proposed Business Status: The proposed legal structure of the business entity is partnership.
4.11Economic Size (Total Project Cost): The total investment required for this project isRs.50 million.
Table 1: Capital Investment Description Amount (Rs) Machinery and Equipment 13800000 Cows 15750000 Land and Building 9800000+6000000 Total Capital Costs 45350000
5. Current CattleFarm: Total area covered by the Dairy Farms across the province Punjab Pakistan is about 10,500 hectare. There are 7 million farming families and near about 67milloin cattle and buffalos in Pakistan.More than half of them are in Punjab. According FAO (Food and Agriculture Organization) report a number of 13000 Cattle Farms have established across Pakistan, employing around 50000 people either directly or indirectly.
6. Marketing: The marketing of Cattle follows traditional channel of distribution. 6.1 Marketing Mix: Product: milk and meet. Price:We decide price by demand and supply. Place: Sale point at Dairy Farm. Promotion:Visiting cards, wall chalking. 6.2 Marketing Strategies: Our purpose is to give best satisfaction to the customer of target market by providing the good quality product. To attract customer we set as low price as possible. We are following Focus marketing strategy.
6.3 Target Market: Nestle. Farm Management: 7.1 Site selection: Special deliberation should be given to the place of proposed facility. It should be located in an area that is neither subject to flooding nor close to to rivers. The location should have sufficient water supply and green founder round the year, easy road access even during the rainy season and away from high populated area and close to agricultural activities.
7.2 Structural Design of the land: The site of proposed Dairy Farming should be fertile enough too produced healthy, full of nutrition and able of producing enough fodder for the cattle. The quality of water must be good enough to that should not harm the health of animals i.e. that should not be salted or contaminated. 7.3 Soil Sampling: Soil samples should be taken in account of the proposed site for analysis. The sample should be collected from the surface, middle and depth. The required lab tests are pH, soil composition (The ratio of sand to silt to clay), total dissolved salts, calcium and magnesium etc. Clay is most desirable for water retention.
7.4 Pond: Preferably a rectangular shaped pond is desirable. It should be constructed by excavation 2 to 3 feet soil and elevating for 4 to 5 feet from ground level.
7.5 Fertilizers:
Nitrogen and Phosphorus are main Nutrients required to stimulate productivity of the animals because these are use in the enlargement of green founder i.e maiz,bajra, jawaar etc. In Pakistan, there are many sources of getting green founder.
7.6 Animal Growth: Growth is defined as heaviness gain during a specific period of time. Cattle are cold blooded animals and their growth rate is governed by temperature and climate. Approximately temperature 25 to 30 degree centigrade.
7.7 Rules of Animal Feeding: A regular feeding schedule must be followed, because irregular feeding will have little measurable effect on growth. The cattle should be fed on daily basis during the warm months. The quantity given must be calculated by the farmer based on the actual sample weight data collected at the end of each month. Cattle must be fed at the same time each day and at the same place in the dairy. The animals will quickly become a accustomed to being fed, and will often move to the feeding.
Ration for Dairy Animals
The ration is stipend of nutritionally balanced feed in 24 hours. It includes dry matter and focus to increase animal output. Wheat straws also used as dry fiber along with green silage. About 1 kg of concentrate is required for the production of 3liters of milk. These feed ingredients when mixed according to feed principle will provide ample energy according to energy and protein requirements of animal in production. 7.8 FARM OUTPUT Lactation Period
The lactation period is the time during which the animals yield milk. These animals are called wet animals. Generally the lactation period of cows is 280 days and that of buffaloes is 305 days. Thecalving interval (The interval between two calvings) in a buffalo is about 18-20 months, while cow has15-16 months. The standard milk yield of buffaloes is estimated at 1500 to 2300 liters per lactation.
Milk Composition: Buffalo milk contains less water, more total solids, more fat, a little more lactose, and more protein than cow's milk. It seems thicker than cow's milk because it generally contains more than 16% total solids compared with 12-14% for cow's milk. The butterfat content is usually 6- 8%. Cow's milk butterfat content is usually between 3% and 5%. Since of its high butterfat content, buffalo milk has significantly higher energy value than cow's milk. Phospholipids are lower but cholesterol and saturated greasy acids are higher in buffalo milk. Studies have shown that this does not adversely affect the digestibility. Because of the high fat content, the buffalo's total fat yield per lactation compares favorably with that of improved breeds of dairy cattle. Normally the protein in buffalo's milk contains more casein and slightly more albumin and globulin than cow's milk. The mineral content of buffalo milk is nearly the same as that of cow's milk except for phosphorus, which occurs in roughly twice the amount in buffalo milk.
Buffalo milk tends to be lower in salt. Buffalo milk lacks the yellow color carotene, ancestor for vitamin A, and its whiteness is frequently used to differentiate it from cow's milk in the market. Despite the absence of carotene, the vitamin A content in buffalo milk is almost as high as that of cow's milk. Apparently the buffalo converts the carotene in its diet directly to vitamin A. The two milks are similar in B complex vitamins and vitamin C, but buffalo milk tends to be lower in riboflavin.
Breeding Stock Development The proposed farmer will raise breeding stock, both future breeding bull and future dairy animals at his own farm by selecting good off springs of high producers. The first generation (F1) will be capable of giving milk after 2 years in case of cows and 3 years in case of buffaloes. Increase in Milk Yield The milk yield will be improved as a result of appropriate breeding systems discussed earlier. Low yielding animals are sold in the market. On an average, cows are productive for 7 to 8 years while buffaloes are productive for 8 to 9 years. Evening Milk Milk can be stored in a milk chiller / freezer on 14.5% Total Solids at the farm if milk collection is not possible in the evening.
Male Calves 3 months old male calves will be sold at the farm sooner after birth for Rs.7000 per animal. They can also be reared in separately for beef production.
Machinery and Equipment: Table 2: Equipment details
Description No Total Price (PKR) Tube well 1 700,000 Machinery and equipment - 13030000 Water Pump 4 60000 Collection equipment 1 150,000 Telephone set 1 10,000 Generator 2 770000 Office Equipment - 200,000 Total 12 31220000
7. Human Resource Requirement: Table 3: Human Resource Requirement Details Description No. of Employees Salary Per Month (Rs) Annual Salary (Rs) Manager 1 20,000 240,000 Milking Man 4 32000 384,000 Labour @ Rs. 8,000/ person 15 120000 1440,000 Guard 1 8000 252,000 Doctor 1 25000 300,000 Chiller man 1 90000 108,000 Office Man 1 8000 96,000 Electrician 1 8000 96,000 Driver 3 27000 324,000 Total 28 338000 3240000
11. Projected Financial Statements 11.1. Projected Income Statement For the Year Ended Dec. 31 St _______ Sales (45000 lit. * 53) 23,850,000 Gross profit 23,850,000 General administration and selling expense Admin exp 675,000 Office exp 100,000 Depreciation 3,433,000 Cultivation exp. 225,000 Salaries 3,240,000 7673000 7,673,000 Operating income 16,177,000 Interest exp. 1,500,000 Net Income 14,677,000
11.3. Projected Balance Sheet As on Dec 31st ________ 1 st Year 2 nd Year 3 rd Year Current assets Cash in hand 15775000 15775000 15775000 Cash at bank 995000 6244700 3625530 Total current assets 16770000 22019700 19400530 Fixed assets Land 6000000 6000000 6000000 Building 8820000 7938000 7144200 Shed (25000 feet) 360000 3240000 2916000 Animals 7000000+8750000 7000000+8750000 7000000+8750000 Machinery and equipment 12420000 11178000 10060200 Milking Equipment 135000 121500 109350 Airing Cooling system 5472000 4924800 4432220 Intangible Assets 450000 405000 364500 Total assets 66,177,000 66,177,000 66,177,000 Liabilities and equity Long term debt Loan 10000000 10000000 10000000 Interest Payable 1500000 1500000 1500000 Paid up capital 40000000 40000000 40000000
+profits/losses 14,677,000 14,677,000 14,677,000 Total 66,177,000 66,177,000 66,177,000