M/S Gulshyam Dairy Products


Name Of Business : M/S Gulshyam Dairy Products

Address: Plot No. B/71,

Talasari, Thane District,

Maharashtra

Telephone # 079- 40198776, 079-32323455

Name Of Promoters Share

Abdul Gulsha 20 %

Aditya Churiwala 20 %

Tehseen Chauhan 20 %

Nidhi Desai 20 %

Varun Jain 20 %
Gulshyam Dairy Products

Table Of Contents

Sr.No. Topic Pg. No.

1 Statement of Purpose 02

2 Marketing Plan 05

3 Marketing Mix 08

4 Financial Statements 24

5 Break Even Analysis 27

6 Capital Equipments 28

7 Organisation Plan 33

8 Annexure

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 Gulshyam Dairy Products

Statement of Purpose

Milk is a basic household need. It is consumed by almost everyone in one form or the
other. The dairy industry is one of the fastest growing industries and so because of
constantly rising demand for milk and milk products. Milk, cheese, ghee and butter are the
most popular and highest demanded products of milk. (Co. Name) aims to fulfil these needs.
It aims to provide milk, ghee and butter and contribute towards the fulfilment of these
demands.

The company will buy 25 acres of land at Talasari at the rate of Rs.5 lac/acre.

This land will then be developed which includes building of sheds, fences, a building and
development of open areas of land. The buffaloes will be always in their sheds but cows will
be allowed to roam freely in the open lands when they are not in use. Application for
electrical connection and water supply will be made. 2 borewells will be dug which will
provide most of the water supply. All the paperwork will be taken care of in the most
appropriate manner. An agent will be hired who will be taking care of all the paperwork as
well as the development of the land.

We will be having 500 buffaloes and 300 cows. Each animal is capable of giving milk
for about 9 months every year and this continues for about 7-8 years in the livestock’s life.
This makes it very expensive to purchase livestock as each buffalo costs about Rs. 50000 and
each cow costs about Rs. 30000. Also, since the livestock can give milk only for 9 months at
a time it is not feasible to buy livestock. An option to be considered is to maintain 2 lots of
livestock but it makes the initial investment too high which is not exactly feasible. To solve
this problem, we have entered into a contract with an agency that is into rearing of
livestock. Every year, the co. will pay Rs.2 crore to the agency which will provide livestock all
round the year. If at a point of time an animal stops giving milk the agency will replace the
animal.

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A cow is capable of giving about 25 litres of milk everyday and a buffalo is capable of
giving 13 litres of milk a day. The difference in the costs of a cow and a buffalo is because of
the fact that buffalo’s milk contains about 9% fat whereas cow’s milk contains only 3%. Also
buffalo milk is more popular due to this fact which drives up the demand for buffalo milk
leading to higher buffalo prices. In open market cow’s milk is sold at about Rs.21/litre and
buffalo milk is sold at Rs.28/litre. Also we will be selling skimmed milk which is beneficial to
health conscious consumers. We will be milking the cows and passing the milk through
various processes to reach our final products which we will be supplying to 2 agencies which
will distribute our products over various places. These agencies are located at Bhivandi and
the company has to transport the finished product to this place.

The company will be a partnership firm where there will be 5 partners who will
contribute in equal ratio. The PSR for Ms. Tehseen, Mr. Aditya, Ms. Nidhi, Mr. Abdul and Mr.
Varun will be 1:1:1:1:1. The proprietors will thus share 20% of the profits each and wil get
additional 12% interest on capital.

Co. will be taking a loan of Rs. 8 crore mainly because eof need for cash at hand
because of large expenses over the year. This loan in addition to the capital contributed will
take the total initial investment to Rs. 11 crore. These funds will be used for purchase of
land, development of land, purchase of machinery, contract with supplier of livestock, etc.
For more information check financial statements.

The loan will gradually paid off along with an annual interest at 12% which is equal to
Rs. 1 crore. This loan will gradually be paid off in about 4 years. For more details refer Break
Even Analysis. In the first year 1 crore loan will be paid off. In the second year 2 crore loan
will be paid off. In the third year 3 crore loan will be paid off and in the 4 th year 2 crore loan
will be paid off. Every year an interest of Rs. 1 crore will be paid. So over 4 years 8 crore
principal amount + 4 crore interest will be paid.

An amount of Rs. 2 lakhs will be maintained as working capital.

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LOAN REQUIRED

Loan Required : Rs. 8,00,00,000

This loan is required for starting the business. The annual revenue in the first year
being Rs. 11,00,00,000, it can be said that the loan is being taken because of requirements
of cash in hand to get the project underway and to have cash to conduct the daily activities
and pay for various expenses. The amounts are recovered each year because of which cash
inflow is always more.

REPAYMENT

The loan will be repaid in the following manner:

1st Year: Rs. 1,00,00,000

2nd Year: Rs. 4,00,00,000

3rd Year: Rs. 3,00,00,000

In the first year Rs. 1 crore of the loan amount will be repaid.

In the second year Rs. 4 crore of the loan amount will be paid. This is because the company
will be saving on spendings on livestock, it wont have to spend on land and machinery.
Because of this, a lot of money will be spared which will be used to repay the loan. The
company will be saving Rs.1.5 crore every year on livestock, 1.25 crore on land, and certain
amount on machinery. In addition to this the revenue will begin to rise because the
company will be on its way to establish itself as a brand.

In the third year Rs. 3 crore of the loan amount will be repaid. This is because of continuing
profits and lack of expenditure on land, livestock and machinery.

This way the entire loan will be repaid in 3 years.

However in addition to the loan amount, every year Rs. 1 crore will be spent as interest on
loan which is charged at 12.5% per annum.

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 Gulshyam Dairy Products

Marketing Plan
DAIRY FARMING INDUSTRY IN INDIA

Dairy farming is the single largest contributor to India's GDP. Today, more than four
hundred dairy plants exist in the public, cooperative and private sectors in India. The
liberalization of the Indian economy in 1991 has attracted multinational dairy enterprises
like Heinz, Nestle, SmithKline Beecham, Nutricia, Baskin Robbins and hundreds more.

India is the world's highest milk producer and all set to become the world's largest food
factory. It has emerged as the biggest producer of milk with an output of 81 million tonnes
in 2000-01. Milk production has been growing at about 3-4% per annum, a trend which
looks likely to continue. 60% of the milk comes from buffalos where India has some 95
million of these animals or 57% of the world’s total. The rest comes from other breeds of
dairy cattle of which India has many different breeds. The total cattle population is in excess
of 260 million.

Dairy production in India is carried out by some 70 million households or one in two of rural
households in 130,000 villages across the country. It gives employment to 90 million people
of whom 75 million are women. 46% of the milk is consumed in a liquid form and 47% into
processed cottage (consumer) products and 7% processed industrially.

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COMPETITORS

We have a number of competitors in the dairy industry, probably in hundreds! But the
market leaders that are among the top five dairies in India are:

AMUL:

Amul was formally registered on December 14, 1946 , is a dairy cooperative movement in
India. It is a brand name managed by an apex cooperative organisation, Gujarat Co-
operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some
2.6 million milk producers in Gujarat, India[1]. It is based in Anand town of Gujarat. It is also
the world's biggest vegetarian cheese brand. Amul's product range includes milk powders,
milk, butter, ghee, cheese, curd, chocolate, ice cream, cream, shrikhand, paneer, gulab
jamuns, basundi, Nutramul brand and others.

MOTHER DAIRY:

Mother Dairy's range of products include the brands Mother Dairy (milk, milk products,
curd, ice cream, butter, dairy whitener etc), Dhara (range of edible oils) and Safal (range of
fresh fruits and vegetables, frozen vegetables, fruit juices).

Mother Dairy was set up under the Operation Flood Programme in Delhi. It later expanded
in Mumbai, Punjab and eastern India. Future plans include expansion to South India.

AAREY:

Aarey Milk Colony (established in 1949) is situated in Goregaon East, a suburb of Mumbai.
On an average 16,000 cattle are reared on 1287 hectares of land, and 32 cattle farms.

MAHANANDA:

THE Maharashtra Government-owned Aarey dairy — a well-known brand in Mumbai — will

now be managed by Mahananda, a State-backed milk co-operative.

This was announced by Mr Jayant Patil, Maharashtra's Finance Minister on the 30th of
March, 2008.

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FUTURE OPPORTUNITIES

 India progressing very fast, one of the world’s fastest growing economy. GDP growth
8.5%.
 Progress leading to more economic development which means more purchasing
power.
 Per capita Milk consumption is still very low in our country (due to poverty). So,
tremendous growth potential.
 Due development, demand for quality product will also grow so we need to organise
our business as compared to being carried out presently on old conventional system.
 Modernisation will be the need of the hour, both production facility and packaging.
 Must look into branding productlike organised companies (amul and mother dairy,
ect) and developing more efficient distribution network.

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Marketing Mix
PRODUCT

Whole Milk

Fresh Milk from which no cream has been removed. Amul Gold contains 5% fat and 9% SNF
minimum and is ideal for making sweet dishes (like kheer, payasam etc.) and for setting
curds. It is also ideal for drinking straight from the pack for kids and adolescents who simply
love the creamy taste of milk without the inconvenient cream layer.

Production: 2500 litres/day

Standardised Milk

A mixture of whole and toned milk to attain 3.5% fat and 8.5% SNF minimum. It is the ideal
multipurpose milk. Growing children will love its taste while benefiting from its
comprehensive nutrition.

Production: 2400 litres/day (Buffallo) + 2400 litres/day (cow)

Toned Milk

It is milk processed so as to remove a percentage of cream. It contains 1.5% fat and 9% SNF
minimum and is ideal for tea and coffee whitening and for setting curds. It is also just right
for drinking straight from the pack for those who would like to enjoy the taste the goodness
of natural while avoiding the hazards of too much fat.

Production: 1000 litres/day (Buffallo) + 1500 litres/day (cow)

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Double Toned Milk

It is milk for the health conscious milk lovers. With virtually zero fat content, nil cholesterol
and 8.7% SNF minimum, it gives you all the proteins, vitamins and minerals of natural milk
without your having to take in unnecessary fat in the deal.

Production: 500 litres/day (Buffallo) + 1000 litres/day (cow)

Butter

It is a dairy product made by churning fresh or fermented cream or milk. Butter is used as a
spread and a condiment, as well as in cooking applications such as baking, sauce making,
and frying. Butter consists of butterfat surrounding minuscule droplets consisting mostly of
water and milk proteins.

Production: 60 kgs/day

Ghee

It is made by melting butter and removing all forms of not fat solids, moisture and other
impurities from it so as to get up to 98% pure fat. In India Ghee is liked more than butter
and hence has a larger market potential. Our preparation methods ensure that the best
quality is served without losing the ‘Desi Ghee’ aspect.

Production: 100 kgs/day

Fresh Cream

It is the cream layer which settles on milk and contains high percentage of fat. Some like it
plain, some use it on deserts. Our fresh cream can be used in any form of cooking without
much hassle as it is ready to serve right from the packet and so fresh that one will not be
able to distinguish it from fresh milk cream. Production: 60 kgs/day

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PRODUCT QUALITY

Treatment of Milk

All the products go through Ultra Heat Treatment (UHT), which has been adopted by the
leaders in the business like Amul and Nestle, to provide bacteria-free milk to its consumers
and help maintain a long shelf life of up to 150 days with or without refrigeration. The
product also goes through stringent quality checks and can be consumed straight from the
pack and no boiling is required.

Also the milk is homogenised before processing so that the milk can be enjoyed without the
cream layer settling on the milk even after a prolonged time.

Anti-adulteration Practice

Adulteration of milk has become a major concern among the households today. In order to
protect the milk from getting adulterated during retail we seal our packets with a specially
designed seal that is not possible to replicate from ordinary sealing machines. Also the milk
is directly transported from the dairy to the processing plant so that there can be no
adulteration during transportation.

Quality Certifications

The entire dairy is so installed so as to maintain high levels of hygiene and quality required
to meet the AGMARK and ISO 9000 certification. All the machines are pre equipped with
milk quality testers so that any stage the quality of milk can be checked.

ISO 9000: Quality Management and Quality Assurance Standards - Guidelines for selection
and use

AGMARK: Promotion of Grading and Standardisation of agricultural and allied commodities

under Agricultural Produce (Grading & Marking) Act, 1937.

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PRICE

Taking advantage of the benefits of a small scale industry and economies of scale, our
products are competitively priced without sacrificing on quality. The following is the price
list of our products as compared to the existing price trends in the market

For Retail:

Existing Price
Variety Fat (%) SNF (%)* Our Price(Rs)
(Rs)
Whole milk 5 9 28 30
Standardised milk 3.5 8.5 26 28
Toned milk 1.5 9 24 26
Double toned milk Nil 8.7 26 29
Fresh Cream (1 kg) 60 4 85 90
Butter (500gms) 80 2 83 87
Pure Ghee (1 litre) 100 0 180 190

For Distributors:

Existing Price
Variety Fat (%) SNF (%)* Our Price(Rs)
(Rs)
Whole milk 5 9 25 26
Standardised milk 3.5 8.5 24 25
Toned milk 1.5 9 22 23
Double toned milk Nil 8.7 23 25
Fresh Cream (1 kg) 60 4 79 84
Butter (500gms) 80 2 78 83
Pure Ghee (1 litre) 100 0 167 175
*Every 100 parts of SNF (Solids Not Fat) contains 56 parts of carbohydrates, 34 parts of
protein and 9 parts of minerals.

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Place
Plant for Production and Processing: Talasari, Maharashtra (150 kms from Mumbai)

Advantages of Plant Location

 Cheap availability of huge stretches of land at just Rs 5,00,000 per acre as compared
to above Rs 30,00,000 per acre in and around Mumbai
 A well developed network of transportation for quick transportation. The National
highway is only 3 kms away from the plant
 Incentive are given by the Government for industrial development in the area like
availability of a soft loan up to 15 % of the total borrowed funds for setting new
industries in the area
 Cheap availability of electricity and water required to run the plant and machinery
 Availability of huge stretches of pasture land which is required to feed the cattle
 Availability of cheap unskilled labour from nearby villages and skilled labour from
cities like Mumbai and Surat and Nasik.

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DISTRIBUTION

Distributors: Kasturi Foods: Bhiwandi, Thane West

National Dairy: Ulhasnagar No 4, Thane

The above distributors are located around 70-80 kms from Talasari and 70 kms from
Mumbai. Also these are the major distributors of their respective areas and have a wide
customer base. In order to eshtablish a goodwill before expanding to cities like Mumbai and
Surat these distributors will help build goodwill in surroundindg villages and smaller cities
like Nasik by promoting our products in exchange of better margins for the products. Also
these distributors own small stores where they sell dairy products other than door to door
delivery of milk. Milk will be supplied twice to these distributors once early in the morning
around 5 o’clock and in the afternoon around 4.30 p.m.

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PROMOTION STRATEGY

Being a small scale industry we will be promoting our products well as our brand name on a
small scale. We can’t afford to promote our products on a large scale by incurring heavy
expenditures i.e. advertising on televisions, radios, etc. Though we won’t be promoting our
product on a large scale we will try to promote it in a more effective way such that the
people will notice our brand. Basically we will be following a low budget promotion strategy:

1. We will have our hoardings with our brand name and slogan printed on it
placed at different appropriate locations throughout Mumbai, Thane, Navi Mumbai,
Bhiwandi, Ulhasnagar, the places where we will be conducting our business. The hoardings
will also be placed at different locations throughout the National Highway no.8 between
Talasari and Mumbai. This is a PUSH STRATEGY to attract prospective customers. We will be
giving this contract to Kapole Hoarding Agency in Mumbai at a cost of around Rs20,00,000
excluding the fees charged.

2. The other promotion strategy we will be undertaking is distribution of pamplets giving

complete information about our products and brand. We will be distributing pamplets
through news paper agencies located throughout the areas where we will be conducting our
business. Besides that we will be distributing our pamplets at the retail shops who will be
selling our product. This is a PUSH STRATEGY to attract prospective customers. The
promotional activity will cost us around Rs10,00,000.

3. We will be undertaking an event which will be notified in news papers in our

advertisements. For this event we will be finalizing 6 locations (2 in mumbai and 1 in each of
the cities) where we will carry on the event on the given date. In this event we will be
holding a Milk Drinking Competition. The person who will win this event i.e. who will drink
the highest quantity of milk within 100 seconds will get 1 whole years supply of milk for free

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by us. (Max. 2 liters of milk daily). By this event we are trying to create a taste for our milk in
the people. This will indirectly lead to our brand by evoking recall for our brand. This will
indirectly increase the awareness of our brand and products. It will even help us to know
about the perception that consumers have about particular brands in dairy products as the
participants will even fill up feedback forms. This event will take place twice in the first year.
This is a PULL STRATEGY to attract prospective customers. The expenses incurred in carrying
out this whole event including right from the advertisements in paper will cost us around
Rs7,00,000.

4. We will be promoting our products in selected schools throughout the given cities. Here
we will try to create a relation with the entire family through their children. The basic idea
behind this is that children are the one who are being pampered in the family and its their
health which is taken care of and nothing else than milk can be considered as the best
health product for them as it provides them with the complete nutrients and energy. Here
we will be giving them a brief lecture on how to take care of health, what to eat and what
not to, importance of drinking milk and its benefits, the various milk products right from ice-
creams to sweets as per the products preferred by them and the scenario of dairy industry
in India. After the brief lecture we will be providing them with 250ml of milk packets and
advising them how they can drink it by adding different flavors to it and making it more
delicious. This is a PULL STRATEGY to attract prospective customers. The entire cost of
operating this event will be around Rs8,00,000.

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SWOT ANALYSIS

STRENGTHS:

1. Demand scenario

India has quadrupled its milk output in forty years, becoming the world’s largest milk-
producing nation, with a gross output of 94.6 million tons in 2006. The supply of milk in
India is increasing daily in correspondence to increasing demand. Thus giving a lot of scope
to people engaged in this field. India’s production is likely to continue to grow at about 4%
per annum and production will exceed 100 million tons in next few years.

2. Changing the face of ‘tabela’ in India

Despite this achievement, India’s dairy industry is relatively inefficient and unproductive,
with yields per cow less than one-fifth those of foreign producers. Moreover, much of
India’s milk products are of relatively poor quality, a consequence of poor animal health, a
polluted and unclean environment, and manual handling delays. The resulting poor quality
prohibits Indian milk from being exported. We will be ‘tabela’ a new meaning in India by
trying to adopt western culture for rearing cows and providing them with more nature
friendly and pollution free environment. Cows will be reared in 6 acres of open lawn where
they will roam around freely and will feel close to nature. Buffaloes being a lazy animal wont
be reared in the lawn but will be kept in clean and hygienic conditions. There will be soft
music played in the background. All this will help us to increase the productivity as well as
quality.

3. Location
Talasari is located in Nationl highway no.8 thus giving it an easy access to most of the
location. There are many developed as well as developing areas situated nearby or
connected through Highway thus beimg in our reach we have an easy access to such places
in order to expand our business in future.

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4. Anti-adulteration Attempt
We will be selling milk in packets which will be sealed in packets having our brand name this
will provide guarantee for non-adulterated milk by our side.
The packaging material provided by us will be of certain quality so that it does not affect the
quality of the product. The milk will meet all PFA (prevention of food adulteration)
guidelines.

5. High Quality with Competitive Prices.

We will be proving our high quality products at competitive prices in order generate
demand for the product by the people by providing it to them at affordable and usual
prices. We will use the best machinery available in the market. We plan to also apply for
AGMARK and ISO certification, giving a guarantee for the quality of products provided by us.

For eg

Products Our Price (Rs/lt) Ongoing Market Price (Rs)

Cow Milk 21 20-25

Buffalo Milk 28 27-30

Ghee 185 175-190

6. Capacity to expand range of products.

Dairy industry is a industry where wide range of products can be manufactured. Products
range extends from barfi to kulfi, shrikhand to kalkhand , ghee, cheese, butter, milk powder
are only few to be named. Thus there’s lot of scope to expand business by expanding the
product range

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WEAKNESS:

1. No control over yield.

The production of milk or the yielding capacity is an uncontrollable factor. In an average a
cow gives about 25 liters of milk daily while a buffalo gives about 13 liters of milk daily. We
can just try to improve the yielding capacity by providing them with more favorable
conditions but still the yielding capacity is not within our control sometimes the cattle may
yield less and sometimes more than it usually does.

2. Perishability of milk.
The shelf life of a fresh milk is 8-10 hours only. This is a major problem faced by many dairy
industries as the milk needs to be consumed within the specified time. This created lots of
time constraint with respect to delivery of milk and its consumption. However by using the
technique of pasteurization we can avoid this problem to some extent i.e. it will increase the
shelf life of milk by another 48 hours but still this too is a major concern.

3. Rising cattle prices and other costs but comparatively stable selling prices.
The prices of cattle are increasing day by day even the costs incurred on their maintenance
and development is also increasing daily. The maintenance of per cattle per day costs about
Rs110 this cost increases as time passes by but the selling price increases comparatively at a
very slow rate. This becomes a major concern the profit margin decreases.

4. Business of a small scale.

It’s always been trend since the Industrial Revolution as the big fish feeds on small one
similarly large industry takes over the business of small scale industries. Here in dairy
industries also large scale industries like Amul, Aarey, Mother Dairy have already built their
brand name which operates on large scale and has larger capacity of production which
tends to be a serious threat as they face the benefit of working on a large scale.

5. Competition
As said earlier in this industry there’s a lot of competition faced due to large scale industries
and not only that there’s also competition from local vendors who distribute their milk at a
stall near the residential areas in fact they are the major competitors in developing cities.

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The other competitors as usual include big brand names like Amul, Aarey, and Mother Dairy
etc. As said earlier the supply is increasing day by day thus suplementing increase in demand
and increasing the competition further.

OPPORTUNITIES:

1. Rising demand for milk and milk products

As every day passes by the demand for milk and milk product also increases. India ranks 1 st
in the whole world in production of milk it produced about 94.6 mn tones of milk in the year
2006. With the increase in demand it’s soon to cross 100mn tones nargin. Dairy industry is a
industry where wide range of products can be manufactured. Products range extends from
barfi to kulfi, shrikhand to kalkhand , ghee, cheese, butter, milk powder, ice creams are only
few to be named. People in India consume milk daily as a result about 60% of the milk
produced over here is consumed directly while the remaining 40% is used for producing
other milk products.

2. Increasing no. of health conscious population

Now-a-days people are becoming more health conscious and milk is a drink which provides
them with nutrients, proteins as well as fats. Previously people over here liked to consume
whole creamed milk but now-a-days due to increasing health consciousness people prefer
to drink skimmed which is low fattening thus we can see even though there’s rise in health
consciousness milk is a part of their daily diet as it provides them with energy they need.

3. Rising standard of living

As the standard of living of the people increases their purchasing power also increases and
they tend to consume more. Here most of the people who used to drink milk one time daily
will start drinking milk twice a day due to increase in their purchasing power. They will
consume more of products like sweets, ice creams etc. which in a way or other requires
milk. Thus with the rise in the standard of living of a common man the demand for milk and
milk products will also increase.

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4. Capacity to expand to other cities due to proximity
We have selected a location in Talasari which is located on National Highway No.8 that
connects Mumbai-Ahemdabad-delhi and is near Maharashtra Gujarat border. As we are
now concentrating on only few cities and that too within Maharashtra in future we have a
scope to other major cities in Maharashtra and also in Gujarat.

5. Low transportation costs

We have the benefit of low transportation cost as we will not be doing the job of retailing.
We will be supplying goods up to Bhiwandi from where it will be carried forward to other
small retailers in the given cities. We will be supplying to the wholesalers at lower price than
the given MRP so that they can have their profit margin.

6. Incentives provided by government

Being a small scale industry the government promotes us by giving several incentives and
cash concessions. We have selected the location in Talsari as over here we get the benefit of
soft loan in which we get loans at relatively low interest rate i.e. between 3%-5% depending
on the project. After the White Revolution Dairy industry in India has gained the position of
leader in dairy industry now after the second stage it’s said to become a global giant.

7. Value Addition
There is a phenomenal scope for innovations in product development, packaging and
presentation. Here the over all package and the brand name can do wonders by creating an
identity for the company. This an industry where with the help of one raw material(milk) we
can manufacture variety of products there’s only a need for innovation with respect to
increasing number of product listing under the category of dairy industry.

8. Export Potential
In the long term we plan to export our product to countries like Sri Lanka, Bangladesh,
Middle East where Amul one of the Indian brands has already made a mark by providing
high quality milk at competitive prices.

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THREATS:

1. Competition form large scale firms like Amul, Aarey, Gokul etc
Competition from huge co-operatives like Amul and Aarey and competing in the same area
as them will be a huge challenge looking at their huge capacities of over 1 lakh litres of milk
everyday, well eshtablished goodwill in the market and competing against their experience
is one of the biggest threat to any small scale industry.

2. Adulteration at selling points

We supply our milk to the wholesalers and not directly to the consumers or retailers thus
there’s great scope of adulteration by the middle man. But in order to avoid such
adulteration we provide our products in sealed packages which will minimize the risk of
adulteration but still it’s just a precaution and not a cure for this problem.

3. Less land available for cattle rearing

The availability of land is a major problem as most of the land available in our country is
used for urbanization and industrialization. Now a days the problem is not only the
availability of land but also the cost of land which proves to be a major hurdle for acquiring
land and increasing the production capacity and expanding the business. The current rate of
land in Talasari is 4 lacks per acre but is said to shoot by another 50% within next 5 years.

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FUTURE PLANS

 We plan to expand our current capacity from the current 13,000 litres to 25,000
litres per day by early 2010 in 2 phases of 6,000 litres expansion each.
 We also plan to produce cheese after the first phase of expansion expected in Mid
2009.
 Along with the cheese plant we plan to set up a plant for Whey Proteins, a by-
product during the production of cheese. It is currently not produced in India by any
dairy and therefore can be a big step towards the health care industry.
 After the second phase of expansion in 2010, flavoured milks, butter milk (sweet and
salted), and other products will be introduced.
 A technological upgrade is planned in mid 2014 so as to compete with the best in the
industry as far as quality of production is concerned.
 We plan to enter the Gujrat market after the first phase of expansion after having
captured a good market share in Maharashtra and having developed a goodwill
among the consumers.

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 Gulshyam Dairy Products

Financial Statements
TRADING ACCOUNT
Dr. Cr.

Particulars Rs. Particulars Rs.

Livestock 35000000 Sales 100000000
Wages 3500000

Gross profit c/d 61500000

100000000 100000000

PROFIT & LOSS ACCOUNT

Dr. Cr.

Particulars Rs. Particulars Rs.

Advertising 5000000 Gross Profit b/d 61500000
Transport Costs 1100000
Bank Charges 5000
Audit 200000
Depreciation 100000
Electricity/Water 500000
Sundry Expenses 100000
Interest on Loan 10000000
Interest on Capital @ 12% 3600000
Maintenance of Livestock 29200000
Rates and Taxes 10000000
Net Profit 295000
61500000 61500000

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 Gulshyam Dairy Products

CASH FLOW SUMMARY

Inflow Rs. Outflow Rs.

Capital Account: Fixed Assets:
Varun 6000000 Land 12500000
Abdul 6000000 Machinery 8000000 20500000
Tehseen 6000000 Livestock 35000000
Nidhi 6000000 Building/Land Development 2000000
Aditya 6000000 30000000 Expenses:
Loan from SIDBI 80000000 Advertising 5000000
Sales 100000000 Transport 1100000
Bank Chs. 5000
Audit 200000
Depreciation 1000000
Elec./Water 500000
Sundry Expenses 100000
Interest on Cap.3600000
Rates and Taxes 10000000 21505000
Labour 3500000
Maintenance of Livestock 29200000
Loan Repay 30000000

220000000 141705000

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 Gulshyam Dairy Products

BALANCE SHEET

Liabilities Rs. Assets Rs.

Capital Account: Land 12500000 16000000
Add: Development 3500000
Varun 6000000 Machinery 8000000
Abdul 6000000 Less: Depn. 800000 7200000
Tehseen 6000000 Bank 55695000
Nidhi 6000000 Livestock 35000000
Aditya 6000000 30000000 Less:c/f 10000000 25000000
Loan 80000000
Less: paid off.10000000 70000000
Net Profit 295000
Interest on Capital 3600000

103895000 103895000

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 Gulshyam Dairy Products

BREAK EVEN ANALYSIS

SCALE
X AXIS : 1 UNIT = 2250 CUSTOMERS | Y AXIS : 1UNIT =50 LAKHS

12

10
TOTAL REVENUE
8

6 FIXED COST

4 VARIABLE COST

0
0 5 10 15 20 25 30 35 40 45 50 55

CUSTOMERS (UNITS)
Total Revenue = Rs 10,00,00,000
Fixed Cost = Rs 8,42,05,000

Milk in litres(output) = 51,10,000

Unit Price = 21.52

Variable Cost/ unit = 2.94

BEP = Fixed Cost

Unit price – Variable cost/unit

= 8,42,05,000 = 45,32,024 litres

21.52 - 2.94

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 Gulshyam Dairy Products

CAPITAL EQUIPMENTS
Cow Milker
Description: An apparatus for milking cows. It consists of a glass receiver, having a cover
which may be closed air-tight. Through this cover extend
four rubber tubes, which terminate in metal tubes attached
to teates. Air is exhausted from the receiver by the pumps
shown, and the milk thus drawn down. Each milker can
milk up to 15 litres in 2 minutes.

Quantity: 10 Milkers of 15 Litres capacity each

Cost: Rs 3,50,000 Each

Total 10 x 3.5 = Rs 35,00,000

Supplier: Goma Engineering Pvt Ltd, Thane

Stainless Steel Cream Can / Milk Can

Description: Stainless Steel container to store or transport processed/unprocessed milk or
cream for a short period without affecting the quality and taste of milk and protecting it
from the outer conditions.

Quantity: 200 Cans of 50 litres capacity each

Cost: Rs 3,000 each

Total: 200 x 3,000 = Rs 6,00,000

Supplier: Bishan Steel Industries, Navi Mumbai

Milk Tanker
Description: Used in transportation of milk over long distances. It contains facilities of
cooling milk to preserve even raw unprocessed milk for a short period of time without

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 Gulshyam Dairy Products
making the milk curdle in the process. Also used to distribute milk to various distributors or
taking the milk for processing.

Quantity: 1 Tanker of 10,000 Litres capacity

Cost: Rs 7,50,000

Supplier: Bharat Earth Movers Ltd

Ultra High Treatment Plant

The decisive factors in the selection of the appropriate Heat Treatment process for thermal
product treatment are product quality, production safety and efficiency. The UHT plants
allows for thermal and aseptic treatment of products with portions of fibres and particles.
Along with correct cooling, UHT is one of the most important safety measures in milk
processing. It destroys unwanted or disease-
causing bacteria without reducing the nutritional
quality of milk. The UHT technology is a step
ahead of the Short Time Heating Plant (STHT
plant) a.k.a. Pasteurizer in maintaining high levels
of product quality to maintain a shelf life of up to
150 days.

Quantity: The capacity of UHT plants range from

50 – 5,000 litres/hour for the treatment of low
and medium viscosity products.

Cost: Rs 15,00,000 for 5,000 litres/hour capacity

plant

Supplier: Larsen & ToubroLtd. / Alfa Laval (India) Ltd

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 Gulshyam Dairy Products

Homogeniser

Description: Homogenised milk is produced by mechanically forcing milk through a small

passage at high velocity. This breaks down the fat globules in milk into much smaller ones
and creates a stabile fat emulsion. Homogenisation
diminishes the tendency of the fat globules to
clump together and coalesce into cream.

Quantity: 1 Plant of 3,000 litres/hour capacity

Cost: Rs 3,50,000

Supplier: SSP India Pvt Ltd

Butter Churn

Description: Used to convert cream to butter by electronically churning, melting and

filtering the cream and attaining the desired fat , moisture and SNF percentage. Also
converts churned butter into the purer form – Ghee by melting butter and removing all
moisture and SNF.

Quantity: 1 Unit of 100 litres/hour capacity

Cost: Rs 2,50,000

Supplier: Alfa Laval (India) Ltd

Standardiser

Description: Milk standardisation ensures that different milk products - such as full fat,
skimmed and semi-skimmed - have the right level of fat concentration. The system uses a
centrifuge to separate the raw milk into standardised milk and cream, which are drawn off.
Another device is installed on the inlet feed to the centrifuge and measures the flow of raw

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 Gulshyam Dairy Products
milk into the separator. A signal is taken from the
instrument and used to control a pump which regulates the
flow of raw milk into the separator.

Quantity : 1 plant of 3,000 litres per hour capacity

Cost: Rs 5,00,000

Supplier: HMT Limited, Dairy Udyog India Ltd

Bag Filling and Packing Machine

Filling of processed milk into bags in a aseptic way so as to maintain a long shelf life with or
without refrigeration and to ensure novelty of seal to prevent resealing of packet and
prevent adulteration. Also used for stamping
packets with details like price, date of expiry
& manufacture.

Quantity: 1 machine packing 120 (30 x 4)

packets per minute

Cost: Rs 2,50,000

Supplier: Tetra Pak India Ltd

Liquid Transfer Pump

Description: Pumping milk through hoses over a

distance of one plant to another.

Quantity: 2 Pumps of 1 H.P. each

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 Gulshyam Dairy Products
Cost: Rs 30,000 each
Total: 2 x 30,000 = Rs 60,000

Supplier: M A N Industries

Milk Hose

Description: Hose for pumping milk safely and hygienically.

Quantity: 2 hoses of 100 feet each

Cost: Rs 2,000 each

Total: 2 x 3,000 = Rs 6,000

Supplier: Goma Engineering Pvt Ltd, Thane

Milk Check Teat Wipes

Description: A cleansing wipe impregnated with 0.5% chlorhexidine

gluconate and 9.0% isopropyl alcohol for premilking teat preparation.
Wipes are thick, durable and gentle

Quantity: Stock for 6 months

Cost: Rs 7,000

Supplier: Goma Engineering Pvt Ltd, Thane

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 Gulshyam Dairy Products

Organisation Plan
ORGANISATIONAL STRUCTURE

Abdul Aditya Tehseen Nidhi Varun

Supervisor Supervisor
1 2

Dairy Milk
Farming Processing

Functions of the Partners:

The promoters are responsible for the way the consumers look at our brand and the
way it is projected at them. Also it is their responsibility to maintain to look at future
prospects for expansion, select new means to reach the consumers, expanding capacity to
meet market demand, altering the products according to the changing needs of consumers,
handling professional services like finance, accounting and legalities of various decisions.
Also it is their responsibility to check the functioning of the works assigned to the Dairy
Farming Supervisor and the Milk Processing Supervisor. They are the ones who ensure that
the CSR activities promised by them are met. They form the management personnel of the
business.

Functions of the Supervisors:

They are the ones actually responsible for handling the day to day work of handling
the entire process given to them. They are responsible for allocating the work to the skilled
and unskilled labourers and make sure both, the dairy farming unit as well as the milk

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 Gulshyam Dairy Products

processing unit work in co-ordination. They are also responsible towards keeping the
management informed about the problems faced and implement the decisions taken by the
management. It is their responsibility to ensure that the production meets the ISO and
AGMARK standard and that no type of adulteration takes place in the production process.
They are the link between the labourers and the top management and hence it is their
responsibility to ensure the smooth functioning and co-ordination of both the levels. They
are a part of the management personnel of the business.

Functions of the Dairy Farming Team:

They are the labourers actually responsible for milking the cows and buffalos,
feeding them, and maintaining hygiene in the farm, supplying milk to the milk processing
unit. They have to follow the directions of their supervisor. They are also responsible for
delivering the milk to the various distributors and make sure that no adulteration takes
place during the production as well as during delivery. They are responsible for keeping the
cattle in the best of health and informing their supervisors when the cattle need medical
attention. They are the non-management personnel involved in the functioning of the
business.

Functions of the Milk Processing Team:

They are the ones responsible for processing the milk, removing cream from it,
maintaining different levels of fat in it, ensuring that milk has a long shelf life, meeting the
norms of the PFA (Prevention of Food Adulteration Act) and the international certifications,
checking for adulteration at each and every process, making butter and ghee, packing and
making the products ready for transportation and delivery. They are trained to run their
machineries in the most effective manner and getting the most out of it. They are
responsible to their supervisor and must therefore follow all his instructions. They are the
non-management personnel involved in the functioning of the business.

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 Gulshyam Dairy Products

STAFFING
Unskilled Labour

Sweepers, Cleaners, Operators (Cow Milker), Driver : 50

Cost of labour: Rs 4,000 p.m.

Total : 50 x 12 x 4000 = Rs 24,00,000

Supervisors : 1

Cost of labour : Rs 10,000 p.m.

Total : 2 x 12 x 10,000 = Rs 2,40,000

Skilled Labour

UHT : 2

Salary : Rs 10,000 p.m.

Total : 2 x 12 x 10,000 =Rs 2,40,000

Supervisors : 1

Cost of labour : Rs 10,000 p.m.

Total : 2 x 12 x 10,000 = Rs 2,40,000

Standardiser, Butter Churn, Homogeniser, Packaging : 6

Salary : Rs 9,000 p.m.

Total : 6 x 12 x 9,000 = Rs 6,48,000

Veterinarian (Visiting) : 1

Salary : Rs 5,000 p.m.

Total : 12 x 5000 = Rs 60,000

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Gulshyam Dairy Products
PRODUCTION PROCESS

MILK

Raw Milk Milk Quality

Distribution
from Farm Skimming Checks

Heat Homogenis Transpor

Packaging
Treatment ed Milk taion

FRESH CREAM

Quality
Raw Milk Checks
Packaging

Pasteurized Transportat
Raw Cream
Cream ion
Distribution

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Gulshyam Dairy Products
BUTTER AND GHEE

37