Dairy Project Report

1

SCHOOL OF BUSINESS

COLLEGE OF MANAGEMENT

PROJECT PROPOSAL FOR

“VAISHNAVI DAIRY”

Submitted to: Mr. Sanjay Mishra

Submitted on: 2 nd November’ 2007

Submitted by:Aarshi Sharma- 01Anuj Sharma- 11Gorav Mahajan- 21Niyaz Bohra- 32Shaveta Sawhney- 42

PROJECT MANAGEMENT GROUP1/MBA

2ACKNOWLEDGEMENT

Our special thanks are due to Mr. Sanjay Mishra for giving us a practical

endeavor as a part of project management. The efforts during the project have

added to our knowledge and have encouraged us to think in practical terms. We

owe thankfulness to him for encouraging us to go for the proposal of setting up a

dairy near the university campus. The project proposal could not have been

framed without his guidance and support.

We also thank our respective wardens to facilitate our visits to Jammu and Katra

for the purpose of this project.

Last but not least, we owe our sincere gratitude to the ALMIGHTY, our family and

friends who have helped us in bringing out the best in the project, directly or

indirectly.

Aarshi SharmaAnuj SharmaGorav MahajanNiyaz BohraShaveta Sawhney


3

TABLE OF CONTENTS

TOPIC PAGE NUMBER

Reasons for taking up the Project 4

Overview of Dairy Industry

1. In India 5

2. In Jammu & Kashmir 6

Business Profile 8

Project Marketing Analysis 9

Project Technical Analysis 11

Project Financial Analysis 16

Project Risk Analysis 23

Project Economic Analysis 26

Conclusion 27

References 28


4

REASONS FOR TAKING UP THE PROJECT

Acute shortage of good quality milk in the campus.

Huge cumulative demand in the campus from the Caterer operating the

university mess, residential area and tuck shop.

Clients and/or consumers are ready to pay premium price for the supply of

good quality milk.

The development continuously taking up in the campus that will finally lead

to rise in demand from the campus(Inferences from the demand analysis

form university campus)


5

OVERVIEW OF DAIRY INDUSTRY IN INDIA

India has one of the highest livestock populations in the world, accounting for

50% of the buffaloes and 20% of the world’s cattle population, most of which are

milch cows and milch buffaloes. India’s dairy industry is considered as one of

the most successful development programmes in the post-Independence era.

As of 2005-06 total milk production in the country was over 90 mn tonnes with a

per capita availability of 229 gms/day. The industry has been recording an

annual growth of 4% during the period 1993-2005, which is almost 3 times the

average growth rate of the dairy industry in the world. Milk processing in India is

around 35%, (with the organized dairy industry accounting for 13% of the milk

produced) while the rest of the milk is either consumed at farm level, or sold as

fresh, non-pasteurized milk through unorganised channels.

Dairy Cooperatives account for the major share of processed liquid milk

marketed in the India. Milk is processed and marketed by 170 Milk Producers’

Cooperative Unions, which federate into 15 State Cooperative Milk Marketing

Federations. Over the years, several brands have been created by cooperatives

like Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras (Rajasthan). Nandini

(Karnataka), Milma (Kerala) and Gokul (Kolhapur). The milk surplus states in

India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra,

Andhra Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk

products is concentrated in these milk surplus States.

As per data released by the Ministry of Food Processing Industries, exports of

dairy products have been growing at the rate of 25% p.a. in quantity terms and

28% in value terms since 2001. Significant investment opportunities exist for the

manufacturing of value-added milk products like milk powder, packaged milk,

butter, ghee, cheese and ready-to-drink milk products.

For a country like India with a large vegetarian population, milk is a very

important food. Despite this fact and the large number of milch animals in India,


6dairying is in a backward condition, and has not received the attention it

deserves. Poor quality cattle, insufficiency of feeds and fodder, high incidence of

disease and lack of organized production, improper handling of milk and milk

products are problems that have caught the attention of policy makers only

recently. Dairying is an important source of subsidiary income to small/marginal

farmers and agricultural laborers. The manure from animals provides a good

source of organic matter for improving soil fertility and crop yields. The gober gas

from the dung is used as fuel for domestic purposes as also for running engines

for drawing water from well. The surplus fodder and agricultural by-products are

gainfully utilized for feeding the animals. Since agriculture is mostly seasonal,

there is a possibility of finding employment throughout the year for many persons

through dairy farming. Thus, dairy also provides employment throughout the year.

The main beneficiaries of dairy programmes are small/marginal farmers and

landless laborers small/marginal farmers and land less agricultural laborers play

a very important role in milk production of the country. Dairy farming can also be

taken up as a main occupation around big urban centers where the demand for

milk is high. Central and State Governments are giving considerable financial

assistance for creating infrastructure facilities for milk production.

DAIRY DEVELOPMENT IN JAMMU AND KASHMIR

With a steady growth in the production of milk, Jammu and Kashmir has become

a milk surplus state. The milk production increased from 3.69 lakh metric tonnes

in 1995-96 to 6.66 lakhs metric tonnes in 2001-02. As the demand for milk and

milk products has been increasing at a faster rate, there is scope for dairy

development in the State. As there is abundance of the local breed of cattle and

the introduction of some new breed has not yet started in Jammu and Kashmir, it

is lagging far behind the state of Punjab. The sector has good potential for

creating considerable job opportunities. From the current stage of subsistence

activity, dairy development can grow through modernization and thereby increase

income and employment opportunities. For this purpose, the required policy

decisions are summarized below:


7a. As animal husbandry services being provided by the animal husbandry

department are not effective, qualified private parties should be allowed to

provide some of these services. Selective privatization of animal husbandry

services would be the preferred approach, as some services in which the public

interest is greater than individual interest would have to be provided by the

government.

b. The development of the dairy sector needs the provision of specialized

infrastructure such as bulk farm coolers and refrigeration systems as well as

basic infrastructure like power and water. Providing a cost-effective and continual

supply of power and water to procurement and processing units will have to be

top priority. This will reduce costs and improve milk quality considerably. The

government needs to upgrade rural roads leading to milk collection centers to

increase the frequency of collection, reduce logistical costs, and improve the

quality of the raw milk.


8

BUSINESS PROFILE

Business Name and Address: VAISNAVI DAIRY

Near SMVDU Campus,

Kakriyal, Udhampur

Telephone Number: 01991-285634-2111

Mobile no: +91-94191-10077

Type of Organization: Partnership Firm

Certificate of approval: District Information Centre, Udhampur.


9

MARKETING ANALYSIS

Demand Pattern:

Amul Parlor: 12-15 ltr/day

Boys Hostel Tuck Shop: 30 ltr/day

Darshan Dhaba (behind Trikuta hostel) 50 ltr/day

Tent / Guest house/ Girls Hostel mess: 150 ltr/day

Boys’ hostel mess: 100 ltr/day

RESIDENTIAL AREA FACULTY:

LaneHut no.

Residents

Milk demand/day(in ltrs)

Cheese demand(in gms)

SourcePrice/ltr (In Rs.)

Quality

Manu Marg 8 2+1 1 250/week Vendor 17 PoorManu Marg 7 2+1 1 250/week Vendor 18 PoorManu Marg 5 1 .5 500/week Vendor 18 PoorManu Marg 3 2 2 350/week Vendor 18 PoorManu Marg 2 2 250/week Vendor 18 PoorManu Marg Vendor 18 PoorManu Marg Vendor 18 PoorManu Marg Vendor 18 PoorVashistha Marg

1 1 2 250/weekVendor

15 Poor

Vashistha Marg

2 2+1 1.5 200/weekVendor

19 Poor

Vashistha Marg

3 2 1.5 250/weekVendor

17 Poor

Vashistha Marg

5 1 2 250/weekVendor

18 Poor

Vashistha Marg

2 2 500/weekVendor

17 Poor

Vashistha Marg

VendorPoor

Vashistha Marg

VendorPoor

Vashistha Marg

VendorPoor

Chankya Marg 6 2 1.5 100/week Vendor 18 GoodChankya Marg 3 1 200/week Vendor 18 Poor


10Chankya Marg 2+1 1.5 150/week Vendor 18 PoorChankya Marg 5 3 150/week Amul - -Chankya Marg 3 1.5 100/week Amul - -ToTAL 24/day 3.75/wee - -

Qrtr no.

ResidentsMilk demand/dayIn ltrs

Cheese demandIn gms

Source Price/ltr (In Rs.)

Satisfaction

1 2+2 2 250/week Vendor 18 Poor

2 2+2 3 250/week Vendor 20 Good

3 2 1.5 200/week Amul 30 -

4 - - - - - -

5 2+2 2.5 500/week Vendor 18 Ok

6 2 1.5 - Amul 30 Ok

7 - - - - - -

8 2+1 1 - Amul 30 Ok

9 - - - - - -

10 -- - - - - -

11 2 1 250/week Amul 30 Ok

12 - - - - - -

20 1 .5 - Vendor 20 Good

14 1 .5 - Amul 30 Ok

TOTAL

13.5 ltrs/day1.45 kgs/week

-- -

STAFF QUARTERS

OTHERS SOURCES :

Pantry-College Of Management: 1.5-2 ltr/dayPrice: Amul powder milk. Rs. 30/ltr

Pantry-Administration Block: 1 LtrPrice: Rs 30

Pantry-College Of philosophy: 2 LtrPrice: Rs 30/ ltr

Cumulative demand in the University Campus: 387.5~~390 Ltrs.


11

TECHNICAL ANALYSIS:

We propose setting up a dairy near the university campus. Right now we are not

going for milk packaging and sterilization as there are already 3 well established

players operating in the same segment.

After analyzing the demand pattern in SMVD University campus we found that

residents are facing acute shortage of good quality milk although they are paying

a premium price for it. The local villager who has been supplying milk in campus

to most of the consumers is not able to fulfill their demand which is shown in

Annexure -I.

At the preliminary stage our mode of operation would be:

1. To produce milk on our own by rearing cows in sufficient quantity, to meet the

respective demand.

2. Supply the milk to the Customers in the University campus.

FIXED EXPENSES

S.No DESCRIPTION QUANTITY PRICE/UNIT(in Rs.)

TOTAL COST(in Rs)

1. Land 2 canals 1,80,000 3,50,000

2. Cows 20 23,000 4,60,000

3. Buildings 1 --------------- 4,50,000

4. Milk cans( 20 ltr) 20 400 8,000

5. Tata ACE 1 2,30,000 2,30,000

6. Milk Chiller(250 Ltr) 1 27,000 27,000

7. Air Coolers 6 2500 15,000

8. Ceiling Fans 12 800 9600

9. Others --------------- -------------- 5000

10. Chaf Cutler 1 5,000 5,000


1211. Generator Set 1 30,000 30,000

TOTA,L 15,89,600

Land requirements: land to be acquired would be near university campus within

1km radius of the campus.

Cows:

Breed of cows=Jersey cow.

Capacity= 20-23 ltrs/day.

Source of procurement = From Local villagers in R.S Pura District or from Punjab.

Building: It would include a shed for cows, 2 rooms for 4 permanent workers,

one godown for feed storage and one room for storing the milk.

Milk cans: 20 milk cans of capacity 20 litres each will be procured to store &

supply milk. Source of procurement: From utensils store karan market, Jammu.

Vehicle: One Tata Ace will be used for supplying milk as well as for daily

procurement of feed and sometimes to ferry cows to hospital in case they are ill.

Vehicle cost includes the cost of vehicle and the one time costs like registration

fees permit costs etc.

Milk Chiller: Considering the fact that the milk produced by the cow in the

evening will be supplied next morning to the consumers, Chiller is needed to

store the milk in good condition and to prevent it from being spoiled. These

chillers will also prevent spoilage of milk in extreme summers. This chiller will be

of BlueStar India Ltd. having a capacity of approx. 600ltrs.


13Others: These are various miscellaneous expenses like. Stationery, Tables,

chairs, Lactometers etc.

RUNNING REQUIREMENTS: (30 days assumed in a month)

S.NO DESCRIPTION PER DAY PER MONTH PER YEAR

1. Feed Expenses(20 cows)

2000 60,000 7,20,000

2. Vehicle Expenses

2.1 Driver pay ---------------

3000 36,000

2.2 Diesel cost 31/Ltr 1000 12,000

2.3 Maintenance ------------- 800 9600

2.4 Taxes ----------- ----------------- 2000

3. Workers Pay (4) ----- 11,200 1,34,400

4. Insurance Premium ------- -------- 20,700

5. Bank Installment ------- 23,116 2,77,390

6. Tata Ace Installment ------- 6200 74,400

7. Vehicle Insurance Premium

-------- ------- 6,000

8. Generator Diesel ------- 500 6,000

9. Electricity Bill -------- 3,000 36,000

10. Miscellaneous Expenses

------- 2,000 24,000

11 TOTAL 13,58,490

Feed and fodder: A cow will normally consume fodder of Rs.100/day. The feed

for cows will be brought in the morning itself while returning back after supplying

milk to the consumers. The feeding requirements of cows differ during lactation

and dry days. Quantity in Kgs

S.no Green Fodder Dry Fodder Concentrate

Lactation

days(280-300)

30 to 35 5 to 7 5 to 5.5

Dry Days (60) 20 to 25 8 to 10 1 to 1.5


14

Vehicle Expenses: This head includes all the Cost incurred daily on vehicle, like

pay of driver which has been estimated as Rs. 3000/ month.

The vehicle will be making daily supply to the university and the coverage

will be 6 Kms. Also the vehicle will visit Katra twice a week to bring fodder

for the cattle. Katra is almost 12 Kms away from the dairy farm; so on an

average the vehicle will cover 24 Kms in one visit and 48 Kms in two visits

to Katra. So the vehicle will cover almost 90 Kms per week (48Kms to

Katra+42 Kms to university).

The on road mileage of Tata Ace is around 18 Kms per litres of diesel, so

the diesel requirements will be 5 litres per week. Taking into consideration

the poor road infrastructure, the diesel requirement is estimated to be 7

litres/week.

The maintenance cost including engine oil change, greasing and servicing

etc is estimated to be Rs. 800 per month.

The taxes for light commercial vehicles in the range of 1 tonne to 2 tonnes

capacity, is around 1000 per year, fitness certificate required, permit

renewal fee etc is around Rs.1000. So total taxes are around Rs 2000 per

year.

Workers Pay: 4 permanent workers will be needed to rear cows and to look after

the cattle 24x7.

Miscellaneous Expenses: Monthly expenses like medical treatment,

vaccination to cows in general.

Insurance cost: 4.5% of the cost of cows


15Bank Loan: Total requirement of funds at start of project is = initial investment

13,37,600 (excluding tata ace) + first 35 days cycle working capital

requirements, 1,16,401= 14,54,001

Taking bank loan for 70% of funds required= .7* 14, 54,001= 10, 00,000

Annual installment on loan= 10 lacs/PVIFA12%, 5yrs = 2,77,390

So, monthly installment = 23,116

Gross Profit :

Daily Production: 400 Ltr

Monthly Production: 12,000 Ltr

Yearly Production: 144,000 Ltr

Actual Yearly Production 120,000 Ltr

(due to contingencies like diseases, bad health of cows or pregnant cows etc)

Selling price = Rs 18/Ltr (This is the running market price in the region)

Yearly sale of milk = 18*120,000= Rs. 21, 60,000

Yearly Sale of manure = @ Rs. 300/ cow/ year= 300*20= Rs. 6000

So, total revenue / year= Rs. 21, 66,000

Yearly Expenses = Rs. 13, 58,490

Projected Profit = 21, 66,000 - 13, 58,490 = Rs. 8, 07, 510


16

FINANCIAL ANALYSIS

One time expenses (at start of project)

Vehicle permit, registration, etc. = Rs. 30,000

Sources of funds:

S.No. SOURCE AMOUNT RATE OF INT.

PAY BACK PERIOD

1. Bank Loan 10,00,000 12% 5 yrs.

2. Tata motor finance 1,72,500 7.5% 3 yrs.

3. Capital 6,00,000 ____ ___

4. Total funds reqd. 17,72,500

Total requirement of funds at start of project is = initial investment , 14,17,100 (excluding 172,500, financed from tata motors)

+ finance from tata motors, 172,500 + first 35 days cycle working capital

requirements, 1,09,281 + one time expenses, 30,000

= 17, 28,881

Note: Tata motors finance 75% of the cost of vehicle.

So, 0.75* 2,30,000=1,72,500 is financed by tata motors finance.


17

WORKING CAPITAL REQUIREMENTS

The operating cycle in the dairy farm is approximately 35 days considering the

time required to collect the monthly payment from the consumers as such delay

in the payment is a normal routine in this sector.

WORKING CAPITAL REQUIREMENT FOR 35 DAY CYCLE (In Rs.):

S.NO ITEM AMOUNT (In Rs.)

1. Feed 6000*12= Rs. 72000(Rs. 6000 is required

after every 3 days, so 12

times for 35 days)

2. Vehicle Requirements:

2.1 Diesel Cost: 1085

2.2 Maintenance: 800

3. Electricity bill 3500

4. Bank installment 23,116

5. Vehicle installment 6200

6. Generator diesel 580

7. Miscellaneous Exp 2000

TOTAL FOR A 35 DAY WORKING CYCLE

1,09,281


18BANK LOAN AMORTISATION SCHEDULE (SCHEDULE 1)

INITIAL INVSTMT.

ANNUAL INSTLMT

INTREST PAID PRINCIPAL

10,00,000 2,77,390 1,20,000 1,57,3908,42,610 2,77,390 1,01,113 1,76,2776,66,333 2,77,390 79,960 1,97,4304,68,903 2,77,390 56,268 2,21,1222,47,781 2,77,390 29,734 2,47,656

Annual installment on loan= 10 lacs/PVIFA12%, 5yrs = 2, 77,390

So, monthly installment = 23,116 ( 277390/12)

VEHICLE LOAN SCHEDULE ( SCHEDULE 2)

[for 3 yrs. (34 installments)]

For first 2 yrs: (24 installments)

Vehicle is financed @ 7.5% p.a (flat rate). So, annual installment for vehicle =

74,400, monthly installment= 6200

Annual interest paid= 12,930, monthly interest= 1078

Annual principal paid= 61,470, monthly principal paid= 5122

For 3rd yr: (10 installments)

Vehicle is financed @ 7.5% p.a (flat rate). So, annual installment for vehicle =

62000, monthly installment= 6200

Annual interest paid= 12,930, monthly interest= 1078

Annual principal paid= 49070, monthly principal paid= 5122


19EQUIPMENT DEPRECIATION SCHEDULE

Years Initial amount Depreciation WDV1 99600 14,940 846602 84660 12699 719613 71961 10794 611674 61167 9175 519925 51992 7799 44193

Equipment includes - Milk cans, chiller, coolers, ceiling fans, others, chaf cutler

and generator set.

BUILDING DEPRECIATION

Years Initial amount Depreciation WDV1 4,50,000 67,500 3,82,5002 3,82,500 57375 3251253 325125 48769 2763564 276356 41453 2349035 234903 35235 1,99,668

VEHICLE DEPRICIATION

Yrs. Initial amount Depreciation WDV1 2,30,000 34,500 1,95,5002 1,95,500 29,325 1,66,1753 1,66,175 24,926 1,41,2494 1,41,249 21,187 1,20,0625 1,20,062 18,010 1,02,052

Depreciation @ 15%

COW EXPENSES

Cow life taken to be 8 yrs. Total cost of cows is 4, 60,000

So, annual expenses for each of 8 years= Rs. 57,500. (Straight line depn)


20

INCOME STATEMENT

1 2 3 4 5

Revenue 21, 66,000 21, 66,000 21, 66,000 21, 66,000 21, 66,000

(-) op. cost 10,06,700 10,06,700 10,06,700 10,06,700 10,06,700

EBIDT 11,59,300 11,59,300 11,59,300 11,59,300 11,59,300

(-) depn 116940 99399 84489 71815 61044

EBIT 1042,360 1059,901 1074,811 1087,485 1098,256

(-) Interest 132930 114043 92890 56268 29734

PAT 909430 945858 981921 1031217 1068522

(+) depn 116940 99399 84489 71815 61044

C.F 1026370 1045257 1066410 1103032 1129566

P.V of C.Fs @ 12% cost of cap. = 38,50,667

INITIAL INVESTMENT= fixed investment + working capital for 35 day

cycle + preliminary expenses

= 15,89,600+ 1,09,281 + 30,000

= 17,28,881

So, N.P.V = 38,50,667- 17,28,881

= 21, 21, 786

Notes:

Revenue =milk sales+ manure sales

Operating cost = Feed Expenses+ Vehicle Expenses+ Maintenance +

Taxes+ Workers Pay+ Insurance Premium+ Vehicle Insurance Premium+

Generator Diesel+ Electricity Bill+ Miscellaneous Expenses


21Depreciation= depn. Of bldg, equip and vehicle.

Interest = interest on bank loan + interest on vehicle

PROFIT AND LOSS ACCOUNT ( 1ST YEAR)

S. NO DEBIT (Dr.) AMOUNT (In Rs.)

S. NO CREDIT (Cr.)

AMOUNT (In Rs.)

1. To expenses 10,64,200 1. By sales 21,60,0002. To interest

expenses1,32,930 2. By manure

sales 6000

3. To preliminary expenses

30,000 3. By accumulated building dep.

67,500

4. To building dep.

67,500 4. By accumulated equip. Dep.

14,940

5. To equip. Dep. 14,940 5. By accumulated veh. Dep.

34,500

6. To vehicle dep. 34,5007. To net profit 9,38,870

22,82,940 22,82,940

Interest = interest on bank loan + interest on vehicle

Preliminary expenses include expenses for vehicle permit etc.


22

BALANCE SHEET (1 ST YEAR)

LIABILITIES AMOUNT (In Rs.)

ASSESTS AMOUNT (In Rs.)

Capital 6,00,000 Cash 9,60,410

Loan 9,53,640 Vehicle 2,30,000

Net profit 9,38,870 Land 3,50,000

Building 4,50,000

Cows 4,02,500

Equipment 99,600

24,92,510 24,92,510


23

PROJECT RISK MANAGEMENT

RISKS ASSOCIATED WITH THE PROJECT:

S.No RISK SOURCE IMPACT ALTERNATIVE

1. Improper Preservation Poor milk quality leading to consumer dissatisfaction

Installation of good quality Milk Chillers.

2. Time lapse in milk supply

May lead to milk spoilage

Chillers and setting up of Dairy farm near the university campus

3. Demand: Supply Mismatch( Either D>S or S>D)

Loss of Business( either by Stock out or by )

Outsourcing through local vendors.Looking for alternative markets like Katra during vacations.

4. Feed problems like shortage in supply, non-availability of nutritious feed for cattle

ill-health of cattle leading to reduced milk production

Better relations with feed suppliers

5. Seasonal influences on milk production capacity of cattle

Fluctuations in supply; Inability to meet demand; loss of customers.

6. Diseases in cattle Loss of lactation capacity; death of cow leading to loss of business

Regular veterinary check-ups, proper vaccination and provision for extreme losses.


247. Shortage in electricity Effects regular

operationsDG Sets

8. Risks from workers :Attrition, adulteration of milk by workers, Sale of cows by workers

Sudden impact on business, leading to loss of image,

Good working conditions,Regular reviews and lactometer testing before milk supply followed by proper seal on milk cans.

9. Rejection of proposal by Bank

Delay in project implementation and pushback for certain period.

Borrowing loans at a higher interest rate from NBFCs

10. Competition from local villagers and threat if University sets up its own dairy farm

Effect on sales leading to loss of business

Differentiation strategy (providing optional lactometer testing at the time of milk purchase) and search for new customers.

11. Natural calamities like Drought etc.

Shortage of feed for Cattle; leading to negative effect on milk production

Two months stock/ bulk procurement from Punjab

12. Refusal of District Information Center(DIC) to approve the project

Delay in implementation

Submission of project proposal to NABARD


25

DISEASES IN CATTLE:

Sr.

No.Name of disease

Type of vaccine

Type of vaccination

Duration of immunity

Remarks

1 Anthrax (Gorhi) Spore vaccine Once in an year premonsoon vaccination

One season -

2 Black Quarter (Sujab)

Killed vaccine - do - - do - -

3 Haemorrhagic Septicaemia (Galghotu)

Ocladjuvant vaccine

- do - - do - -

4 Brucellosis (Contagious abortion)

Cotton strain 19 (live bacteria)

At about 6 months of age

3 or 4 calvings

To be done only in infected herds

5 Foot and Mouth disease (Muhkhar)

Polyvalent tissue culture vaccine

At about 6 months of age with booster dose 4 months later

One season After vaccination repeat vaccination every year in Oct./Nov.

6 Rinderpest (Mata)

Lapinised avianised vaccine for exotic and crossbred catte, caprinised vaccine for zebu cattle.

At about 6 months of age

Life long It is better to repeat after 3 to 4 years


26

PROJECT ECONOMIC ANALYSIS

Economic Analysis involves analyzing the benefits and losses of the project to

the society where it is basically implemented. It is done through social cost-

benefit analysis of the project. VAISHNAVI DAIRY seems to be a beneficial

project for the people whom we are catering to, as residents in the University are

facing acute shortage of good quality milk, we will be providing them pure milk

and that too at reasonable prices. The project has a lot of scope for future

expansion as we are planning to move into milk processing sector as soon as we

get our return on investment. When Vaishnavi Dairy will be expanded to a milk

processing unit producing a number of other milk products like flavored milk, ice-

cream, ghee etc, it will generate employment opportunity for the people of

Kakriyal and Panthal area thereby giving them a continuous source of income.

But this project has some social costs also as the villagers and local vendors who

are currently supplying milk in the campus will be taken away by his source of

income. Similarly, when the project will be expanded to include milk processing

also, heavy equipments and others will be installed, so a lot of area will be made

plain, trees will be cut and it may disturb the ecological balance of the area.

But as the project seems to a financially viable project and somehow, the social

benefits outweigh social costs in intensity, so we propose that this proposal

should be put to implementation.


27

CONCLUSION

The entrepreneurs of any time have been successful because they had started

their businesses while keeping in mind the demands of the consumers they are

targeting. We got the idea to go for a dairy business by analyzing the milk

shortage in the campus and the opportunities in the business in the coming

years. Considering the fact that University is still not packed to its full capacity

and it will be having a large consumer base in the next 3 to 4 years, this proposal

seems to be a viable and profitable one. Also, we are not just making money by

selling milk; we are adding value to the consumer’s purchase by providing them

good quality pure milk at the prices they are already paying for milk (not good

quality) and an option to verify the quality of milk at the time of purchase with the

help of a lactometer.

While going through the financial analysis of the proposal, the NET PRESENT

VALUE comes out to be positive. The vehicle loan is completed by the end of

third year and the investment loan from bank is completed by the end of 5 th year,

the NPV at the end of 5th year comes out to be positive. So the project proposal is

a financially viable proposal as the investment amount will be paid back at the

end of fifth year. So after five years, the project will make more profits when the

liability of both vehicle and bank loan will be completed.

We also endorse this project as the market is going to be more opportunity-laden

in the coming years and then we can plan to expand our business to milk

processing sector and we can also include other markets like Katra, Jammu and

Udhampur in our customer scope. We thereby conclude that this segment is still


28untapped in the region of Jammu and Kashmir and entrepreneurs can think of

exploring the maximum potential in this sector by foraying into it in various

regions of Jammu.

REFERENCES

www.indiadairy.com

www.wikipedia.com

www.nabard.com

www.india.gov.in

www.jammuandKashmir.nic.in

www.bluestarindia.com

Officials of District Information center, Jammu


http://www.jammuandKashmir.nic.in/

http://www.india.gov.in/

http://www.nabard.com/

http://www.wikipedia.com/

http://www.indiadairy.com/

29


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