Business Plan INDUS Dairy Farm

8/9/2019 Business Plan INDUS Dairy Farm

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BY:

ISMAIL RAJPUT

MAZOOR MEMONSAAD

IHSAN MEMON

HIRA JATOI

RUQIA KHUWAJA

PURE & HEALTHY PRODUCTS

INDUS DAIRY FARM


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Indus Dairy Farm

1. Introduction:

The name of the venture is Indus Dairy Form, locatacted near Naushahro Feroze

bypass, in the province of Sindh, Pakistan. Its function is to provide milk and value added dairy

products to the Naushahro Feroze and its surroundings and some restaurents, hotels and

industries, The business will also provide cattle care services. For this venture one acer land

will be purchased in Rs.600,000. The total amount will be invested in the business will

approxemetly Rs. 5530,500. We will start this business with 9 buffalos and 6 cows. Our focus

will be on Sindh province specially on Naushahroferoz District. We would also rear animals for

sacrificial purposes that would almost yield 10000 per animal within two months. Initially weplan to hold 2 calves for sacrificial purposes. The number of animals for fattening purposes

would be increased with our growth. Finally we would focus on a niche market, that is animal

banking ( i.e. rearing animals for certain fees or Adhyari). This would open up a new market.

Pakistan is fifth largest milk producing country but it lacks in organized farming. Pakistan have

to import powdered milk from various countries for meeting its domestic demand. We are

planning to add 5 animals per year as per our growth strategy. The milk pasturing unit is also

the core part of our growth strategy.

We will differentiate our business by providing Pure Milk, and Healthy Meat.


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Account Head Total Cost (Rs)

Land 600,000

Building/Infrastructure 1,545,500

Machinery & equipment 55,000

Animal Cost 30,00,000

Pre-operating costs 70,000

Total Capital Cost 5270500

Raw material inventory 80,000

Cash 1,80,000Working Capital Requirement (Rs) 2,60,000

Total Investment (Rs) 5530500

Debt 65% 3594825

Equity 35% 1935675

Total project Investment 5530500

2. Financial Plan:

The total cost of the project is Rs.5530500. Out of which capital cost of the project is Rs. 5270500 for

purchasing the animals and constructing the building and the rest is used to meet the working capitalrequirement.

Project Cost:

The proposed pre-feasibility is based on the assumption of 65% debt and 35% equity. However thiscomposition of debt and equity can be changed as per the requirement of the investor.

Project Financing:


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Shed for Cows 1,500 310 465000

Open Paddock for Cows 1,500 10 15000

Shed for Buffaloes 2,000 310 620000

Open Paddock for Buffaloes 500 10 5000

Shed for Calves 550 300 165000

Open Paddock for Calves 550 10 5500

Shed for Calves (older than one year) 400 300 120000

Open Paddock for Calves (older then one 400 10 4000

Stores for fodder, concentrate & machineroom

0

100 310 31000

Utensils & milk storage 100 310 31000

Servant Room, Wash room 200 420 84000

total infrastructure cost 1545500

Description No. Salary/month/Person Annual Salary (Rs)

Farm Supervisor 1 15,000 180,000

Workers 3 7,000 252,000

Total Labor Cost 4 432,000

Infrastructure cost Total:

Wage and Labor Cost:


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INCOME Statement for 3 years:

Year 1 Year 2 Year 3

Revenue 2,834,800 3,553,000 4,317,400

Cost of goods sold 735,800 922,500 1,162,500

Gross Profit 2,099,000 2,630,500 3,154,900

General administration & selling expenses

Administration expense 432,000 474,060 520,215

Office expenses (stationary, etc.) 8,640 9,481 10,404

Professional fees (legal, audit, etc.) 12000 15000 18000

Depreciation expense 85861 85861 85861

Amortization expense 20000 20000 20000

Subtotal 558,501 604,402 654,480

Operating Income 1,540,499 2,026,098 2,500,420

Interest expense 400342 398282 380120

Tax 261884.83 344436.66 425071.4

NET PROFIT/(LOSS) AFTER TAX 878,272 1,283,379 1,695,229


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Balance Sheet for 1

st

year:

Assets

Current assets

Cash & Bank 180,000

Raw material inventory 80,000

Total Current Assets 260,000

F ixed assets

Land 600,000

Building/Infrastructure 1,545,500

Animals 30,00,000

Revaluation Surplus/ (loss) -

Net value of animals 30,00,000

Machinery & equipment 55,000

Total Fixed Assets 5,200,500

I ntangible assets

Pre-operation costs 70,000

Total Intangible Assets 70,000

TOTAL ASSETS 5,530,500

Liabilities

Long term liabilities 3594825

Stock holder's Equity

Paidup capital 1935675

Gain or loss

Retained earnings

Total equity 5530500


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3.Marketing Plan:

*Market research:

Marketing has a direct impact on overall business success. Changing buyer

demands, local and global competition, and Marketing research is the main basic component

to start a new business as we have not much knowledge about the market and its other

componentes in that area so we have decided to search for that and where the market of

cattle care business is standing now, we also want to know about the cutomers, goods

suppliers and others who are linked with the business, for that we have plan to start our

resarch on customers, goods suppliers and market. Beacuase our team is too mush intersted

to know about all those facts about the market.

For our marketing research first of all we will visit many cattle carecenters to know about the environment of centers and daily tasks who have started

performance in cattle care center, the tools for the business and their qulaity we will also try

to know the experience of owners of cattle care centers in the business and what kind of

difficultuies they face and how they resolve them. We will also visit google to know about the

some world class cattle care centers that how they are going in their business and what are

their strategies about the market. If we talk about the customers the mostly customers of

cattle care centers are from dairy firms, they puchase dairy products from the cattle care

centers and then they convert those in their products, for the other product cattle care like

meat we will contact only incially with only dealers on eid ul azha festival.


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*Products:

1. Pure Milk; at reasonable price, without injecting buffalos, No mixture of powder, chemicals

and water.

2. Meat; Freash and healthy meat (free of water use) , no sick animals, anyone can see the

animals before slattering.

3. Cattle care services; Feeding on time, reasonable charges, Full care of animals, neat and

clean enviroment.

*Promotion:

We shall use cable media, A tea party to especial and populor persons, and use of penaflex as

well and we shall invite local people to visit the place and enviroment. We can take 200,000

promotion cost.

*Pricing:

Pricing will be reasonable so that people can afford for quality producys and services. We shall

compare the prices with competitors, The price will be relatively high then competitors

because of best quality and services, and people will willingly pay the prices for quality. Local

customers will not have the credit policy but companies and restaurants will have the credit

facility.


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*Place:

Our business place is near Naushahro Feroze on national highway, people can come easily,with a wide interior area along with parking place, as customers required. And there is no

competitor near to our business.

*Customers:

Local people, Tea Hotels, restuarents, milk pack companies, icecream producers.

I.e: Nestle foods company.

*Competition:

Local dairy forms will be the competitiors. But we shall make our image so strong that our

customers will remain loyal to us.

4. SWOT Analysis:

Strengths:

Initially wide scope of milk production.

Important source of food. i.e: milk & meat.

Fresh meat and pure milk.

Quality cattle care service.

Vatenory medication.

Neat and clean enviroment for animals.

Reasonable price.

Market approach and transportation.


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Weaknesses:

Hard climate of interior Sindh.

Limited market area initially.

No exports of products.

Lack of record maintainance.

Unawareness of basic farm managent practices.

Dairy farm management is challanging work.

Opportunities:

Very few dairy farms in Pakistan.

No any dairy farm in Naushahro Feroze bypass.

Always their is high demand of Milk.

On Eid-ul-Azha high demand of Healthy live stock with high rates.

High chances of growth.

High demand of value added dairy products.

Threats:

Security concerns.

Viral dieases in live stock.

Defective & unauthorized market.

Inbalance of prices of inputs and outputs.

Low saving.

Sudden death of live stock.

Fear of default.

Increasing cost of production and higher rate of interest.

Business Plan INDUS Dairy Farm

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