Business Idea Information about Company Business Objectives Market Analysis Challenges Marketing Strategies Location , Cost &

& distribution Layout and Building

Hindustan Hi-Tech Dairy Ltd ( HHTD)

Shudhata Hi Hai Hamari Pehchan

To establish a hi-tech dairy farm with all the latest technologies on feeding , milking, and breeding programme and supply of high quality milk to the customers.

To be known as number one Hi-Tech Dairy in India providing the Best Quality of milk.

India ranks first in the world with present production level of 110 million tones milk per annum. The business idea focuses on the huge scope that dairy farming has to offer to the farmers in India. To bring in private participation into the Indian dairy sector through public private partnerships.

Ensuring Quality Procurement and efficiencies in supply chain Product differentiation and value addition Alternative Employment Source Self Employment Increasing Milk Requirements Government Assistance eg NABARD, NDDB No Foreign Competition

There is catena of laws governing dairy sector and as many as ten different ministries and department administers dairy sector. The laws affecting dairy sector are: Prevention of Food Adulteration Act 1954 and Prevention of Food Adulteration Rules 1955. The Prevention of Food Adulteration Act (PFA), 1954 focuses primarily on the establishment of regulatory standards for primary food products, which constitute the bulk of the Indian diet.

Act provides for public analysts and food inspectors with an objective of inspecting food establishments, sampling and testing of food and investigating the complaints.

ENVIRONMENT PROTECTION ACT, 1986: This Act incorporates rules for the manufacture, use, import and storage of hazardous microorganisms / substances / cells used as foodstuff.

POLLUTION CONTROL (MINISTRY OF ENVIRONMENT AND FORESTS): A no-objection certificate from the respective State Pollution Control Board is essential for all dairy plants. INDUSTRIAL LICENCES: No license is required for setting up a dairy plant in India. Only a memorandum has to be submitted to the Secretariat for Industrial Approvals (SIA) and an acknowledgement obtained. However, a certificate of registration is required under the Milk and Milk Products Order (MMPO), 1992.

In India, rural households consume almost 50% of Indias total milk production. The remaining 50% of milk production is sold in the domestic market. Of the share of milk sold in the domestic market, almost 50% is used as fluid milk, 35% is consumed as traditional products (paneer, cheese, yoghurt and milk based sweets).

15% is consumed for the production of butter, ghee, milk powder and other processed dairy products (including baby foods, ice cream, whey powder, casein, and milk albumin). The organized dairy sector consumes 15% of Indias total milk production, which it uses primarily for the production of liquid milk, butter, cheese, and milk powder.

The unorganized dairy market in India is about 80% and still the dudhaiya and halwai dominate this section of the market. In this traditional system the milk produced is directly sold to the consumers at the farm .

The organized sector basically pertains to the dairy cooperatives and private and Govt. dairies which procure, process and market milk and milk products. In this channel, the milk produced is deposited by the farmers in the collection centres at the village level and then this milk is pooled and transferred to the chilling centres and bulk milk cooling units where the milk is cooled to 4C.

Small Holder Level Collection Level Processing Level At the Storage & Logistics Level Marketing

 a)

Challenges at Small Holder Level

Inadequate Feeding of Animals b) More Disease Incidence c) Lack of Chilling Capacities d) Delayed Payment of Dues

 a) b) c) d) e) f)

Challenges at Collection Level Milk Base Mainly Consisting of Small Holders Involvement of too Many Intermediaries Gaps In Information Absence of a Screening System Lack of Infrastructure Manipulation of the Quality of Milk by the Farmers

 a) b)

Challenges at the Processing Level Adulteration and Food safety Lack of trained and skilled workers

Challenges at the Storage & Logistics Level Lack of cold storage facilities Gap in the cold chain and transport facilities

a) b)

 a) b) c)

Challenges for Marketing Majority of the Market is still unorganized Acceptability of the Consumer Less penetration to the rural Market

Government Initiatives & Schemes

a) b) c) d) e)

Project for Cattle & Buffalo Breeding Integrated Dairy Development Program Strengthening Infrastructure for Quality & Clean Milk Production Central Fodder Development Organization Scheme National Dairy Plan

There will be three types of packets Pure Buffalo Milk Pure Cow Milk Mixed Milk (Buffalo & Cow)

Packaging: Full Cream Half Cream Skimmed Milk

1 litre = Rs20 1 litre = Rs18 1 litre = Rs 15

1 litre = Rs20 litre = Rs 10 250ml = Rs 5

Rural Market CSR Campaign- Utthaan Local News Paper, Regional TV Channel.

Urban Market Sample, Internet, Social Media, Newspaper, Magazines.

Haryana Region Cost will be around 10 crore Franchisees would be distributed in targeted regions. Local General Stores

Financial and Operational Structure

About two acres of land is required for a milk processing plant handling about 10000 L of milk per day (8 hours). Location of site in proximity to road/rail facilities, services, such as water, electricity and social infrastructure, etc. The subsoil of the site should be firm with proper drainage.

Entire site to be fenced with barbed wire or compound wall to be constructed with gates at suitable places. Internal roads should be of tar/bricks depending upon the soil conditions and the number of vehicles moving every day.

The civil works comprises of factory building, quarters, office, garages, security post etc. The factory building for the milk reception, quality control, processing, packing and storage of milk products should be as per the BIS.

The total covered area will depend upon the processes involved, products manufactured, the quantity of milk handled and the equipment chosen for services and product manufacturing. About 4000 sq.ft. area of building is required for handling 10000 liters of milk.

Raw Milk Reception Dock (RMRD) consisting of can conveyor, can washer, weighting balance, dump tank etc.

Processing Hall - cream separator, chiller, homogenizer, pasteuriser and other related machinery are installed.

Storage area- for milk storage tanks. Packing area-for packing of liquid milk and other products. Cold storage-for keeping the milk and milk products before sending to market. Quality Control Laboratory-for testing the quality of milk and milk products.

Utilities area for installing boiler, generator set, water treatment plant, maintenance and store area for spares. Waste water treatment plant area for treating the dairy effluents before releasing to the fields. Quarters and office area-for all the essential staff. Vehicle parking area-both for the milk procurement and distribution vehicles. Input supply area- for providing veterinary service, supply of feed, fodder seeds, etc.

The machinery as per the BIS. Most of the dairy machinery are manufactured in the country by ALFALAVAL, L&T, HMT, Nichrome Pvt. Ltd., Samarpan Fabricators , Goma Engineering Ltd. etc. Specifications, quantity and costs for 10,000 litres capacity plant will be :

Land (including registration charges): 2acre*90,00,000/acre = 180,00,000 Development charges (Brick Wall) : 1000 RM*200/RM = 200,000 Gates (Steel) : 2*28000 (each) = 56,000

Raw Material : The principal raw material is milk. The extent of milk shed area, milch animal population , average milk yield etc will determine the size of the plant. The method of procurement and transportation of milk is also required. The availability of other inputs such as packing materials, disinfectants and consumable should be ascertained.

Power : A three phase electricity supply is required for milk processing plants. The power requirement depends upon the load to be connected and the necessary approval from SEB should be obtained for connection. Depending upon the position of power supply, standby generators may be considered for connecting the essential sections.

Water : A milk processing plant requires the water in the ratio of 2:1 (2L of water for 1L of milk processed) for cleaning of equipment, cold storage and drinking purposes.

Steam : The steam requirement (kg/hr) depends upon the processes involved and the source of steam may be met by coal/oil/gas fired / electric boiler. Fuel : coal/gas requirement and the availability to be ascertained.

Compressed Air : It will be required for various pneumatic operations flow control operations as well as for cleaning purposes. The total requirement of compressed air and the capacity of the compressors is required to be furnished. Vehicles : The vehicles required for procurement and distribution of milk depends on the quantity of milk to be handled. The number of vehicles required, source of supply, rental charges etc. need to be furnished.

There are no hazardous effluents generated from a milk processing plant. However, construction of effluent treatment plant is necessary in case of multiproduct large size plants for treating the effluents before discharging for proper disposal. The final effluent should meet the requirements of Pollution Control Board and is necessary to get clearance from them.

The capital cost includes the cost of land, development of land, fencing, internal roads, civil works (Plant building, office, quarters, godowns, etc.), plant and machinery, preliminary and preoperative expenses, margin money for working capital etc. Capital cost of a model dairy processing plant with capacity to process 10000 litres per day works out to Rs.116.581 lakhs. The project cost comprises of Rs. 4.81 lakhs on land and land development , Rs.14.52 lakhs on civil structures, Rs. 64.38 lakhs on plant and machinery , Rs.22.43 lakhs on account of misc. fixed assets, deposits & preliminary and preoperative expenses, Rs. 3.50 on vehicles, Rs.4.57 lakhs of contingency and Rs. 2.37 lakhs of margin money for working capital.

The projects on milk processing including manufacturing of milk products would be considered for refinance support by National Bank. Therefore, all participating banks may consider financing this activity subject to their technical feasibility, financial viability and bankability . The company should normally meet 25% of the project cost out of their own resources.

Interest rate will be determined by RBI/NABARD from time to time. Repayment time will depend upon the gross surplus generated, it may be upto 8 years with first one/two years as the grace period.

Land requirement

2 acres

Milk handling capacity

10000 liters/day

Products to be manufactured

Toned milk, Standard milk, Cream, Gee Domestic

Market

Cost of the project

18crore

Bank loan

10 crore

Margin money (Down payment)

8 crore

A)

LAND AND SITE DEVELOPMENT Land (including -registration charges) Gates Steel 2 acres 5000000/acre

Price (in lakhs)

i)

100.00

ii)

25000each

1.00

iii)

Water Supply (borewell, tank, pump)

--

--

1.75

iv)

Miscellaneous

20

Total

122.75

B) i) ii) iii) iv) v)

CIVIL WORKS Dairy plant building E T Tanks Condenser tank Superviser quarters Workers quarters 4000 sq.ft --450 sq.ft. 600 sq.ft. 70.00 5.00 3.00 15.00 30.00

Total

123.00

Sr.No.

Particulars

Number

Salary/Wages (Rs./month) 7500

Total (Rs.year) 1200000

1.

Plant Manager

2.

Procurement officer

5000

600000

3.

Field supervisors

3000

200000

4.

Processing supervisors

3000

180000

5.

Mechanics

2000

260000

6.

Driver

1500

200000

7.

Watchman

1500

180000

8.

Administrative staff

2000

200000

9.

Laboratory staff

2000

200000

10.

Unskilled labour

1500

180000

Total

25

3300000

Other perks

(40% of the salary

1320000

Total salary and wages

4620000

PLANT AND MACHINERY i) Can conveying and washing system Weigh scale Dump tank and accessories Detergent tank Milk chiller --1.23

ii) iii) iv) v) vi)

500 kg 1000 lts -3000-5000lph

2 1 1 1 1

2.36 0.59 0.31 0.97 5.7

Cream Separator 2000-5000 lph

vii)
viii) ix) x)

Milk pasteuriser 5000 lph

Storage tanks S S tanks Packaging machine & accessories Ghee boiler 10,000 lts 300 lts 2500 pph

1
2 1 1

7.82
6.38 0.76 3.14

xi)

500 kg

1.76

xii) xiii) xiv) xv) xvi) xvii) xviii) xix)

Ghee storage tank Boiler & accessories D.G. set Refrigeration equipment

1000 lts 300 kg/h 62.5KVA --

1 1 1 -1 set 4 ---

99,000 LS LS LS LS 30,000 LS LS

0.99 5.46 3.00 15.21 3.02 1.20 2.00 2.50 64.38

Electrical panels -& cables Pumps S S pipes & fittings Erection & commissioning Total ----

D) i) ii) iii) iv) v) vi) vii) viii)

MISC. FIXED ASSETS Furniture Computer Fire fighting equipment -Pentium ------500 --0.50 0.50 0.10 0.60 0.28 3.00 0.52 2.50

Collection centre Centrifuge, equipment butyr.20 Work table Milk cans -40 lts (plastic)

Crate conveying -system & trolleys Lab equipment --

ix)
x)

Effluent treatment plant

Water softener Total

---

---

3.25
0.20 12.45

E) i) ii)

VEHICLES Jeep Mahindra Scooter Bajaj 1 1 3,25,000 25,000 3.25 0.25