PROJECT REPORT OF MANER DAIRY PROJECT FOR MILK PRODUCTION 

 

Submitted by

Mr Abhay Kumar

PROJECT REPORT OF MANER DAIRY PROJECT FOR MILK PRODUCTION 

 

Submitted by

Mr Abhay Kumar

 CONTENTS  PART- A PARTICULARS PAGE NO  1. PREFACE, INTRODUCTION AND PROJECT DETAIL 3 2. PROJECT AT GLANCE 4 3. SHED DIMENSIONS ,AREA REQUIREMENTS AND STRUCTURE COSTS 5 4. COST OF PROJECT AND ADVANCES REQUIRED FROM BANK 6 5 STATEMENT OF LIVESTOCK PROJECTIONS 7 6 ASSUMPTIONS FOR TECHNICAL PARAMETERS AND COSTS 8 7 MILK PRODUCTION PROJECTIONS 9 8 EXPECTED SALE PROCEEDS STATEMENT 9 9 EXPECTED OPERATIONAL EXPENDITURE STATEMENT &PROJECTED BALANCE SHEET CASH FLOW STATEMENT 1010 STATEMENT OF PROFIT AND LOSS,RETURN ON CAPITAL INVEST&BENEFIT :COST 1111 LOAN DISBURSEMENT AND PAYMENT SCHEDULE 1112 CASH BALANCE AFTER DEBT SERVICE STATEMENT 1113 COST OF MILK PRODUCTION STATEMENT 12 REQUIREMENTS OF FEED FODDER AND LAND FOR FODDER CULTIVATION 13  

1 PREFACE, INTRODUCTION AND PROJECT DETAIL   World milk production has doubled in the last few decades. India is the largest milk producing country in the world. But even then, there is huge gap in demand and supply of milk in most parts of our country. The present low level of per capita availability of milk with the higher growth of population clearly indicates the ever-increasing need as well as demand of fresh milk in the country as whole. Further, most of the milk comes from traditional dairy farms and individual farmers without giving much consideration for the quality of milk. The existing ways of supply milk to consumer’s, are i) collecting the raw milk from particular milk shed area to supply to the city consumer as such . ii) the milk is brought to the big capacity milk processing plant situated near the city, it is processed and distributed iin the city where the plant is located. Plants of such capacity require continuous supply of milk from existing small rural livestock units.With modernisation and urbanisation the rural milk supply to these plants are likely to suffer both in terms of quantity and quality. Enormous scope exists for modern dairry farming for producing quality milk for meeting increasing demand of urban population. The last few years have also   witnessed a consistent increase in the organized production of milk .Over time cow rearing has shifted from the backyard to commercial farms and largebusiness enterprises. Apart from dairy farms growth   in the traditional bastions, it is also gaining a foothold in other regions of the world where  cattle rearing was always a traditional activity. The immense popularity of cow milk has ensured growth in dairy cattle industry. However for this species to perform optimally under the pressure of intensive production systems and having focus on the desired higher output, it is highly desireable to have scientific management with some degree of mechanisation . Cattle farminng in india, although potentially excellent milk production, still languish in obscure conditions of poor nutrition, breeding, management and welfare under traditional system and certainly performe excellent when scientifically managed.

Keeping all these points in view, it has been proposed to establish a commercial dairy farm (50cattle and followers), producing about 1000 Lt. Milk/day, initialy the milk will be sold as such to bulk buyer and later on after processing and packaging in the near by areas. Feasibility of the venture of the proposed ‘Mini Dairy’ mainly depends on the effective production and procurement of low cost quality feed Proposal for setting up the ‘cattle dairy farm has been taken by conducting necessary surveys confirming the regular availability of good quality raw milk at reasonable price and market where the finished products can be distributed with reasonable profit. Care full studies regarding the milk production, feed/fodder availability and market situation indicates that the proposal is technically and economically feasible the proposed area is Maner (Dist: Patna)

  

buffalo farming.During the course of research on this project, I was assisted and encouraged by manyindividuals and organizations. I owe my gratitude to them all. In particular, I would like tothank Dr Ole Lind, DeLaval, Tumba, Sweden, Prof. Kerstin Svennersten-Sjauna and MsJosephina Nordstrom, SLU, Sweden and Prof. Rupert M. Bruckmaier, University of Bern,Switzerland. A special thanks also to Mr. Hemant Ogale, M.D. DeLaval India for his strongsupport for improving dairy buffalo production in India.C. Santosh ThomasPreface© DeLaval

RESULTS AT GLANCE:Year-1 Year-2 Year-3 Year-4 Year-5 AV.

1)ESTIMATED CAPITAL REQUIRED (Rs) 6,425,000 or rupees 128500 per animal unita) Owners Capital (Rs) 1,284,999.90b) Loan Amount (Rs) 5,139,999.602a) RETURN ON CAPITAL INVEST. (%) (Excluding gain in animals) 247.24 101.67 294.29 428.28 385.36 291.372b) RETURN ON CAPITAL INVEST. (%) (considering animal gains +/_ ) 244.21 101.46 295.24 428.15 384.96 290.813) BC RATIO 6.16 1.62 2.75 8.58 4.34 4.694) COST OF MILK PRODUCTION (Rs)with out considering gain in animal units 12.34 53.86 53.55 16.32 33.14 33.845) COST OF MILK PRODUCTION (Rs) with considering gain in animal units 13.12 53.93 53.24 16.35 33.25 33.98

2 PROJECT AT GLANCE:

PROPOSED LOCATION OF PROJECT: MANER NAME& ADDRESS OF ENTERPRENIOUR:  ABHAY KUMAR S/O-RAM AYGA SINGH YADAV

INTRODUCTION: Mr. Abhay Kumar having newly established organisation with its farm land at Maner, Dist : Patna, state Bihar.The organisation has this proposal for establishing a commercial dairy cow farm , initialy procouring best available breed of lactating cows advance pregnant cows ,and to manage them scientifically using latest techno-economically feasible techniques,to produce about 2000 lt.milk/day .Initialy the raw milk will be sold to bulk milk purchaser like Army Cant. Danapur,Sudha Dairy & also the option of local market is available there.Technical programme: The proposed dairy farm will have 50 cows and followers. Animals will breed using artificial insemination techniques . Non productive and surplus animals will be disposed of at the earliest. The farm will keep only high yielding cows above break even production levels.The farm will ensure minimum possible intercalving period and will manage feeding using least cost feed formulation techniques. The project will be impemented with minimum gestation period and will be managed by the above address enterpreniours using services of hired manager and experienced consultants.Funds Requirements:The progect requires investment of Rs 64,25,000 (both investments and recurring costs).The cost return projections of the project has been worked as 4-5 years. The margin money will be 20% and rest of the funds will be borrowed from the bank loan amount Rs.51,40,000 . A portion of the fund to meet the depriciation on shed and equipment @10% will be kept aside each year to create a depriciation fund. Back ground of the promoters of the project: Proprietor of the project Mr Abhay Kumar is qualified ,experinced and have basic knowledge and training in the field of dairy farming.persons and are experinced managers of other established buiseness. Schedule of impementation:The enterpreneour has already procoured the land and livestock will be procoured after the complition of animals shed .Animals will be purchased in2-3 lots.The complition of shed will require 2-3 months and animal procouremetf another 2-3 months.

3 SHED DIMENSIONS , AREA REQUIREMENTS AND STRUCTURES COST:

Size of the Dairy Unit ( cow) 50a)Sheds breadth calculationFeeding manger(ft) 2.5Standing place(ft) 5.6feeding alley for fodder trolley(ft)in center 4animalsitting place in breadth(ft) one side 6height(ft) 20height at eves(ft) 12open space/side(ft)kachha(covered only in c.b cows ) 30shed bredth excluding acrylic covered  kaccha place 32.2shed breadth inclding  tractor space(ft)including open space 92.2b)length calculation

number of animals/row 50Space width/animal (ft) 2.5No of water troughs/side 0T. water trough length (@5ft) 0total space at entry and end(ft) 0Total length (ft) 125Area of one shed and Number of sheds and thire cost calculations:CoveredArea /shed(sq.ft) excluding kaccha acry lic covered area 4025 `CoveredArea /animal(sq.ft) 40.25Area open(sq.ft) 3750total area/shed (sq ft) 7775total area/animal (sq ft) 77.75Rate/Sq ft covered area with fittings 345Rate /sq feed acrylic sheet covered kaccha area 170Cost covered area(Rs) 1388625Cost Open area(Rs) 637500Total cost/shed () 2026125Av.Total number of animal unit 50.0Number of sheds required 1.00Total Cost of sheds and paved open area( Rs) 2,026,125.00Cost of other structures(stores,offices ,chilling unit shed etc /roads) @20%(Lakh) 202,612.50Total Cost of structure(shed+paved open area) and roads(Lakh) 2,228,737.50

4  COST OF PROJECT AND ADVANCES REQUIRED FROM BANK 

Cost of sheds +open paved area+roads+other structures i.e office,stores,chilling unit shed etc 2,228,737.50Cost of machinary(milking,feeding,cleaning etc) 150,000.00

Cost of livestock()cowsand 1 bulls(one teaser ) 50,000.00

Other costs(consultancy,Two month working capital etc) 996,262.00

Total costs() 3,424,999.50

Market price of a unit of cow(Rs) 60,000.00

Estimated cost/cow (Rs) 3,000,000.00

Estimated Housing +Equipments cost (Rs), 2,378,737.50

Estimated capital Investment /cow unit (Rs) 128,499.99

Estimated total capital (Rs)Detail given below 6,424,999.50

Rate Of Interest 11

Margin money (%) 20

Owners Capital 1,284,999.90

Term Loan from bank (Rs) = 5,140,000

5) STATEMENT OF LIVESTOCK PROJECTIONSLIVESTOCK PROJECTIONS:

Initial live stock Year-1 Year-2 Year-3 Year-4 Year-5 AV.Total lactating cow units at the start 50 47.5 47.5 50.9 49.7 49.1bull and teaser bull purchased 0 0 0 0 0 0.0cow purchased for replacement(advance preg) 0 2.5 2.5 0.0 1.2 1.2Total preg/conceivable cow 50.0 50.0 50.0 50.9 50.9 50.4Total heifer at the start of year 0.0 0.0 10.5 8.4 8.0 5.4Total Growing calf(above 1Year) 0.0 11.6 9.3 8.8 8.8 7.7Total female young calf brought/born of year 25.0 20.0 19.0 19.0 20.4 20.7initial Total animal units at start (including calf born) 57.5 56.0 55.7 56.6 57.0 50.4mortality detailTotal lactating cow mortality(No) 1.5 1.5 1.5 1.5 1.5 1.5Total heifer mortality(No) 0.0 0.0 0.3 0.3 0.2 0.2Total Growing calfmortality(No} 0.0 0.6 0.5 0.4 0.4 0.4Total young calf mortality(No) 1.8 1.4 1.3 1.3 1.4 1.4Total mortality(adult unit) 2.0 2.2 2.4 2.4 2.4 2.3stock after mortalityTotal lactating cow less mortality 48.5 48.5 48.5 49.4 49.4 48.8Total lactating heifers less mortality 0.0 0.0 10.2 8.1 7.7 5.2Total growing calves(above 1 year) mortality 0.0 11.0 8.8 8.4 8.4 7.3Total female calves less mortality 23.3 18.6 17.7 17.7 18.9 19.2total stock less mortality 55.5 59.6 68.4 67.0 67.0 63.5stock culled&Soldlactating cow 1.0 1.0 7.3 7.4 7.4 4.8heifer 0.0 0.0 0.5 0.4 0.4 0.3Growing female calves(above1 year) 0.0 0.6 0.4 0.4 0.4 0.4female calf 11.6 9.3 8.8 8.8 9.5 9.6Total femqale unit culled 4.5 4.0 10.7 10.7 10.8 8.1final stock at the end of yearlactating cow 47.5 47.5 41.2 42.0 42.0 44.0heifer 0.0 0.0 9.7 7.7 7.4 5.0Growing calf (above1 year) 0.0 10.5 8.4 8.0 8.0 7.0calf 11.6 9.3 8.8 8.8 9.5 9.6Toal animal units at the end of year 51.0 55.6 57.7 56.3 56.1 55.4Gain in animal unitanimal unit at the end of year 51.0 55.6 57.7 56.3 56.1 55.4Gain in animal unit -6.5 -0.4 2.0 -0.3 -0.9 5.0value of gain animal unit -194475 -13027 61145 -7784 -25723 -35973

6 ASSUMPTIONS FOR TECHNICAL PARAMETERS AND COSTS :

Year-1 Year-2 Year-3 Year-4 Year-5 AV.Annual Increase in Feed Cost, Milk Selling prices & wages % 8.00 8.00 8.00 8.00 8.00

Milk Selling Price (Rs)/Lit. (av) : 30.00 30.00 32.40 34.99 37.79 40.81 35.20

Purchase price of Green Fodder (Rs)/KG: 0.90 0.97 1.05 1.13 1.22 1.06

Purchase price of Straw (Rs)/KG: 3.00 3.24 3.50 3.78 4.08 3.52

Purchase price of Concentrate (Rs)/KG: 11.00 11.88 12.83 13.86 14.97 12.91

Contractual labor Wages /cow unit/year 5000 5000 5400 5832 6299 6802 5866.60

Number of manager/supervisor hired@1 per/50A.unit 0 0 0 0 0 0

Supervisors salary / annum (with annual increase) 120000 240,000 259,200 279,936 302,331 326,517

Total Supervisors salary / annum 2 2 2 2 2 2

PRODUCTION PARAMETERS CONSIDERED AND LIVESTOCK STRENGTH

Average daily milk yield of cow purchased 20.00Increase in Milk Production Over Previous Year in % 3 3 3 3 3.00pregnancy (Act.conception rate)% 80% 80% 80% 80% 80% 80.00%inter calving period months 14.00 14.00 14.00 14.00 14.00 14.00mortality adult 3.0% 3.0% 3.0% 3.0% 3.0% 3.00%Mortality heifer% 3.0% 3.0% 3.0% 3.0% 3.0% 3.00%Mortality growing calf%(above 1 year) 5.0% 5.0% 5.0% 5.0% 5.0% 5.00%Mortalityyoung calf% 7.0% 7.0% 7.0% 7.0% 7.0% 7.00%Culling rate adult cow 2.0% 2.0% 15.0% 15.0% 15.0% 9.80%culling rate heifer 5.0% 5.0% 5.0% 5.0% 5.0% 5.00%culling rate growing calf (above 1 year) 5.0% 5.0% 5.0% 5.0% 5.0% 5.00%culling rate calf 50.0% 50.0% 50.0% 50.0% 50.0% 50.00%

one young calf equal to adult 0.30 0.30 0.30 0.30 0.30one growing calf(above 12 month) 0.50 0.50 0.50 0.50 0.50One heifer/cow 1 1 1 1 1

7) MILK PRODUCTION PROJECTIONS Year-1 Year-2 Year-3 Year-4 Year-5 AV.

Total number of expected lactations/year* 42.9 32.6 32.6 34.9 34.1 35

Expected Milk yield/Lactation 6000 6180 6365 6556 6753 6371

Total milk production (lit) 257143 201419 207461 228804 230124 224990

Minus milk for feeding calves (lit)(300Lt/f.calf,60 lit m.calf,av 180 lit) 7714 5867 5867 6282 6134 6373

Milk available for sale (lit) 249429 195552 201595 222523 223990 218618

Daily availability of milk for sale 683 536 552 610 614 599

8) EXECTED SALE PROCEEDS STATEMENT Unit Cost (Rs.) Year-1 Year-2 Year-3 Year-4 Year-5

I) Milk sale(rs) 7,482,857 6,335,885 7,054,197 8,409,429 9,142,077

Male calf sold(1-2month) @RS250/- 250 6,250 5,000 4,753 4,753 5,089

Animal unit sold (culled)at 60% of purchase cost 1800000 8,023,500 7,264,969 19,182,402 19,213,449 19,515,029

Insurance Claim of mortality (75% of B.Value) 2,250,000 3,375,000 3,375,000 3,375,000 3,435,276 3,435,276

cow dung/animal unit 1500 76,526 83,349 86,613 84,506 84,214

iii) Total Sales(Rs) 18,964,133 17,064,202 29,702,964 31,147,413 32,181,685

9)EXPECTED OPERATIONAL EXPENDITURE STATEMENT &PROJECTED BALANCE SHEET

Ist year Unit Cost (Rs.)Year-1 Year-2 Year-3 Year-4 Year-5

G. Fodder cost @ 30kg/animal unit 0.9 502,777 547,601 569,045 555,202 553,286

Straw @ 3Kg/animal unit 3 167,592 197,136 221,245 233,132 250,913

Concentrate for milk production @ 2.50Kg/Lit 11 1,131,429 957,141 1,064,724 1,268,200 1,377,556

Concentrate maintenance @1.5Kg/ani. unit 11 307,253 361,417 405,615 427,408 460,008

Cost of newcow for replacement 0 7,410,000 7,410,000 0 3,592,012

Medicines & AI etc. 3000 153,053 166,697 173,225 169,011 168,428

Rent/leasing cost for land for Shed etc /A.unit. 400 0 0 0 0 0

Contractual labor Wages /cow unit/year 5000 255,088 300,055 336,750 354,843 381,908

Salary of supervisor/annum 120000 2 2 2 2 2

Insurance premium 100 120,000 132,000 145,200 159,720 175,692

Electricity charges@ 2000 /animal unit/year 2500 127,544 138,914 144,354 140,843 140,357

Other misc. charges@1200/animal unit 1500 76,526 83,349 86,613 84,506 84,214

(a) Total operating cost 2,841,263 10,294,312 10,556,773 3,392,867 7,184,376

Operating surplus (Total sale - Operational cost) 16,122,870 6,769,890 19,146,191 27,754,545 24,997,309

(b) Dep. On shed machinery & Equipments 10 237,874 237,874 237,874 237,874 237,874

Total Exp. (a+b) 3,079,137 10,532,186 10,794,647 3,630,741 7,422,249

10)STATEMENT OF PROFIT AND LOSSRETURN ON CAPITAL INVEST.( %)&BENEFIT COST STATEMENT Year-1 Year-2 Year-3 Year-4 Year-5

NET PROFIT 15884996 6532016 18908317 27516672 24759436

10) RETURN ON CAPITAL INVEST.( %)&BENEFIT COST STATEMENT 247 102 294 428 385

G) B)RETURN ON CAPITAL INVEST.( %)including ani.gain 244 101 295 428 385

H) BC RATIO 6 2 3 9 4

11) LOAN DISBURSEMENT AND PAYMENT SCHEDULE

YEAR Loan Interest Installment Total

1 5,139,999.60 565,399.96 1,027,999.92 1,593,399.88

2 4,111,999.68 452,319.96 1,027,999.92 1,480,319.88

3 3,083,999.76 339,239.97 1,027,999.92 1,367,239.89

4 2,055,999.84 226,159.98 1,027,999.92 1,254,159.90

5 1,027,999.92 113,079.99 1,027,999.92 1,141,079.91

6 0 0 0 0

12) CASH BALANCE AFTER DEBT SERVICE STATEMENTYEAR

Open.Surplus Payments Cash balance1 16,122,869.98 1,593,399.88 14,529,470.10

2 6,769,889.97 1,480,319.88 5,289,570.09

3 19,146,190.56 1,367,239.89 17,778,950.66

4 27,754,545.37 1,254,159.90 26,500,385.47

5 24,997,309.49 1,141,079.91 23,856,229.57

13)COST OF MILK PRODUCTION STATEMENT

Year-1 Year-2 Year-3 Year-4 Year-5

Ia) COST OF MILK PRODUCTION (Rs)with animal gain 12.3 53.9 53.5 16.3 33.1

Ib) COST OF MILK PRODUCTION (Rs) 13.12 53.93 53.24 16.35 33.25

milk selling price 30.00 32.40 34.99 37.79 40.81

14)REQUIREMENTS OF FEED FODDER AND LAND FOR FODDER CULTIVATION Year-1 Year-2 Year-3 Year-4 Year-5

concentrate required annualy(ton)* 130.8 111.0 114.6 122.4 122.8green fodder required annualy(ton) 558.6 563.4 542.1 489.7 451.9wheat straw required annualy(tons) 55.9 60.8 63.2 61.7 61.5

average concentrate(kg) /animal unit 7.02 5.47 5.44 5.95 5.99average green fodder(kg)/animal/unit 30.00 27.78 25.72 23.81 22.05average straw(Kg) /animal unit 3.00 3.00 3.00 3.00 3.00*Normally concentrateformulae has 1/3 grains,1/3 oilcakes and 1/3 industrial by productsall oil cakes(tons) 43.6 37.0 38.2 40.8 40.9mustard cake(3/4 of all cakes)tons 32.7 27.7 28.6 30.6 30.7mustard cake for 3 months(Tons) 10.9 9.2 9.5 10.2 10.2FINANCE REQUIRED FOR FEEDING

Year-1 Year-2 Year-3 Year-4 Year-5Finance for concentrate required annualy(Rs) 1438681 1318558 1470339 1695609 1837564Finance for green fodder required annualy(Rs) 502777 547601 569045 555202 553286Finance for wheat straw required annualy(Rs) 167592 197136 221245 233132 250913

Total 2,109,051 2,063,295 2,260,629 2,483,943 2,641,763% of total operational cost 74.23 20.04 21.41 73.21 36.77

land required for fodder growing(acre)Land productivity/annum(qt) considered 750.00Accordingly calculated land required for fodder(acres) 7 8 7 7 6%of required fodder grown 75% 75% 75% 75% 75%Accordingly land required for fodder growing(acre) 5.59 5.63 5.42 4.90 4.52Total fodder to be purcased(ton)/year 140 141 136 122 113if silage feeding its level 50% 50% 50% 50% 50%Green fodder replaced for silage (tons) 70 70 68 61 56Additional fodder for silage making loses (15%) 10 11 10 9 8Total fodder to be purcased for silage(ton)/year 80 81 78 70 65Total fodder for feeding (purchased)(ton) 70 70 68 61 56

Annexure-A Annexure-B -

Annexure-B A Equipment1 Milking system 550002 Bulk Milk Cooler 500003 Water Troghs 100004 Barn Stalling and equipments 05 Mixer wagon/tractor trolley For Feed Dispensing in sheds /b3000006 Manure Handling Equipments 200007 Miscellaneous Testing Equipments 100008 Vehicles, Delivery Van etc. 08 Farm Equipmet- Chaff Cutter, Cutter etc 500009 Power Supply equipments 2500010 Lab equipments 1500011 DG Set 1 100000Slurry Pump 0Manure seperator 0Cross channel Scraper 0

Total equipment cost 635000B Other utilitiesWater tank, 100000Electrical Cabling & Wiring 75000Plumbing 50000Internal fittings - fan, tubes, etc 100000Total cost of utilities 325000C total Contruction cost(shed ,roads etc) 22287375000000Total above 22287375960000Miscl cost (structure /machinary )etc 11462619040000

TotalCost of machinary,utilities,construction of shed etc33749995000000

Sheds/Housing (extendable to500 cows)Farm machinnary