Profile No.

: 190 NIC Code: 10501

PASTEURIZED MILK PLANT WITH COLD ROOM

1. INTRODUCTION:

Dairy is a part of fragmented industry and the local needs of consumers are to be met
through local supplies of milk and milk products. On an average the demand of milk is
around 20000 LPD for a population of 100000. The consumption for milk products will vary
depending upon cultural diversity and seasonal conditions. While there are a few National
brands in milk like Amul, Mother Dairy, Britannia and Nestle but for small towns even these
companies are making strategic alliances with local players in mini dairy segment to cater to
the requirements of those markets. India is currently largest producer of milk with around
122 million MT per day. By 2020 it is expected to have a demand supply gap of almost the
same volume as today’s production.

2. PRODUCT & ITS APPLICATION:

Milk and milk products are stipulated diet for almost every Indian. Milk is rich source of many
nutrients and has many uses in many recipes. Products made from milk are cheese, paneer,
sweets, ghee, cream, buttermilk, curd, chocolates, cookies etc.

3. DESIRED QUALIFICATIONS FOR PROMOTER:

Successful running this project does not require any specific qualification.

4. INDUSTRY LOOKOUT AND TRENDS

The primary appeal of milk powder is the increased shelf life it offers due to less moisture
content. Longer shelf life is desirable in places with extreme temperature and poor transport
facilities. The reduced transportation and storage costs associated with milk powder fuels the
growth of the global milk powder market. Moreover, the rising disposable income of
population living in emerging nations and increasing adoption as an alternative to milk are
likely to boost the demand for milk powder.

The growth of the global milk powder market is anticipated to be hampered with the
growing concerns for ultra-high temperature (UHT) milk. Whole milk powder has all the
nutrients present in milk, except vitamin C, vitamin B12, thiamine, and a reduced amount of
protein. Moreover, the 2008 Chinese milk scandal, in which hundreds of infants died due to
the consumption of adulterated powdered milk, has led to the development of stringent
regulations regarding milk powder in many countries including China. These regulations
coupled with globally declining prices of dairy products pose a challenge to the
manufacturers, thereby impeding the growth of the global milk powder market.

The global milk powder market is segmented on the basis of type, applications, and
geography. The key regions studied are Asia Pacific, Europe, North America, and Rest of the
World Globally, New Zealand is the leading exporter of milk powder. The U.S. is the leading
producer of milk powder; however, a large part of the volume is consumed domestically.
China and France are also among the largest markets for powdered milk.

By type, the global milk powder market is segmented into dry whey products, dry dairy
blends, dry buttermilk, dry whole milk, and non-fat dry milk. Based on application, the
market is segmented into infant formulas, nutritional foods, confectionaries, and baked
sweets and savouries.

5. MARKET POTENTIAL AND MARKETING ISSUES, IF ANY:

India is a country of over 100 metropolitan cities (with population of more than 4 millions).
There are 400 middle India towns (1lac to 1million population) and over 2000 small towns
with population around 1lac of population. On an average the demand of milk is around
20000 lpd for a population of 100000. Major requirements of the milk in small towns is met
by unorganized players who are exploiting farmers and bringing milk to the households in
unclean utensils and by adulterating the milk with non-descript extraneous material. With
advanced pasteurized milk plant, storage of milk will be easy and shelf life will be increased.
Moreover, there will be hygienic milk packets which will increase consumer’s trust. It will also
help in wastages of milk and thus help farmers to get more revenue and high yield. It will
become win-win situation for farmers and consumers both.

6. RAW MATERIAL REQUIREMENTS:

The basic raw material is milk. Apart from this, packing materials of food grade quality and
disinfectants/consumables will be required as per need.

7. MANUFACTURING PROCESS:

The major process steps involved are as follows:

Milking: The most important part of a milk collection is how cattle are prepared for milking.
Poor milking practice cause poor quality of milk and mastitis. The milk produced from the
cattle must be clean and low in sediment.

Storing: The collected milk should be stored at 10o C to prevent bacterial spoilage.
Mechanical coolers do the cooling of stored raw milk.

Homogenization: This process mixes all type of milk and emulsifies the milk for better
emulsion of that milk does not separate on standing.

Cream separation: Clarification at this stage is carried out with simultaneous cream
separation. The process of clarification is carried out in cold condition but after
homogenization.

Pasteurization: The milk after clarification and separation is subject to a temperature of 62°
– 63° C for about not less than 30 minutes. The process is carried out in vat pasteurizer with
jackets and agitators. Separated cream is also pasteurized.
 Refrigeration: The pasteurized milk is stored in a chilled condition for further packing and
delivery. The cream is also stored in chilled in a storage tank before packing

8. MANPOWER REQUIREMENT:

The enterprise requires 12 employees as detailed below:

Designation of Salary Per Monthly

Sr. No. Number of employees required
Employees Person Salary ₹
Year-1 Year-2 Year-3 Year-4 Year-5
Variable Labour:
Workers
1 Operator ₹ 10,000.00 ₹ 10,000.00 2 2 2 3 3
2 Un Skilled Workers ₹ 8,000.00 ₹ 24,000.00 4 4 4 7 7
sub-total ₹ 34,000.00 6 6 6 10 10
Fixed Staff:
1 Accountant ₹ 12,000.00 ₹ 12,000.00 1 1 1 1 1
2 Store Keeper ₹ 8,000.00 ₹ 8,000.00 2 2 2 3 3
3 Sales Staff ₹ 12,000.00 ₹ 24,000.00 3 3 3 5 5
sub-total ₹ 44,000.00 6 6 6 9 9
Total ₹ 78,000.00 12 12 12 19 19

9. IMPLEMENTATION SCHEDULE:

The project can be implemented in 6 – 8 months’ time as detailed below:

Sr. No. Activity Time Required

(in months)
1 Acquisition of premises 1.00
2 Construction (if applicable) 2.50
3 Procurement & installation of Plant & Machinery 2.50
4 Arrangement of Finance 1.00
5 Recruitment of required manpower 1.00
Total time required (some activities shall run 6.00 - 8.00
 concurrently)

10. COST OF PROJECT:

The project shall cost ₹ 67.69 lacs as detailed below:

Sr. No. Particulars ₹ in Lacs

1 Land 10.00
2 Building 8.50
3 Plant & Machinery 12.40
4 Furniture, other Misc Equipments 1.20
Other Assets including Preliminary / Pre-operative
5 1.24
expenses
6 Margin for Working Capital 34.35
Total 67.69

11. MEANS OF FINANCE:

Bank term loans are assumed @ 60% of fixed assets. The proposed funding pattern is as
under:
Sr. No. Particulars ₹ in Lacs
1 Promoter's contribution 16.92
2 Bank Finance 50.77
Total 67.69
12. WORKING CAPITAL CALCULATION:

The project requires working capital of ₹34.35 lacs as detailed below:

Sr. No. Particulars Gross Amt Margin % Margin Amt Bank Finance
1 Inventories 17.18 0.25 4.29 12.88
2 Receivables 8.59 0.25 2.15 6.44
3 Overheads 8.59 100% 8.59 0.00
4 Creditors - 0.00 0.00
Total 34.35 15.03 19.32
 13. LIST OF MACHINERY REQUIRED:

A detail of important machinery is given below:

Qtt Rate Value

Sr. No. Particulars UOM
y (₹ in Lacs) (₹ in Lacs)

Plant & Machinery / equipments

a) Main Machinery
1 Homogenizer Nos 1 ₹ 1.35 ₹ 1.35
2 Refrigeration Plant Nos 1 ₹ 1.20 ₹ 1.20
3 Filtration Plant Nos 1 ₹ 1.05 ₹ 1.05
4 Pasterizer Nos 1 ₹ 1.55 ₹ 1.55
5 Emulsifier Nos 1 ₹ 0.95 ₹ 0.95
6 Cream Separator Nos 1 ₹ 1.20 ₹ 1.20
7 Packing Machine Nos 1 ₹ 1.50 ₹ 1.50
8 Boiler Nos 1 ₹ 1.10 ₹ 1.10
9 Milk Cans, Storage Tanks Nos LS ₹ 1.30 ₹ 1.30
10 Material Handling Equipment Nos LS ₹ 0.55 ₹ 0.55
11 Misc. Tools Nos LS ₹ 0.65 ₹ 0.65
sub-total Plant & Machinery ₹ 12.40

Qtt Rate Value

Sr. No. Particulars UOM
y (₹ in Lacs) (₹ in Lacs)

Furniture / Electrical installations

1 Office furniture and Electrification LS 1 ₹ 1.20 ₹ 1.20
sub total ₹ 1.20
Other Assets
1 preliminary and preoperative LS 1.24 ₹ 1.24
sub-total Other Assets ₹ 1.24
Total ₹ 14.84
All the machines and equipments are available from local manufacturers. The entrepreneur
needs to ensure proper selection of product mix and proper type of machines and tooling to
have modern and flexible designs. It may be worthwhile to look at reconditioned imported
machines, dies and tooling. Some of the machinery and dies and tooling suppliers are listed
here below:

1. Fry-Tech Food Equipments Private Limited

S. No. 4, Raviraj Industrial Estate,
Bhikhubhai Mukhi Ka Kuwa Bharwadvash,
Ramol, Ahmedabad - 380024,
Gujarat, India

2. Hindustan Vibrotech Pvt. Ltd.

Office No. 2, Ground Floor,
Vrindavan Building, Vile Parle East,
Mumbai – 400057,
Maharashtra, India

3. Electrons cooling systems Pvt. Ltd.

S-27, SIDCO Industrial Estate
Kakkalur Industrial Estate
Tiruvallur – 602003,
Tamil Nadu, India

4. Springboard Enterprises India Ltd.

1st, 2nd & 3rd Floor,
Plot No. 7, 8 & 9,
Garg Shopping Mall,
Service Centre, Rohini Sector 2
New Delhi – 110085,
Delhi, India
5. Flour Tech Engineers Private Limited
Plot No. 182, Sector 24,
Faridabad - 121005,
Haryana, India

6. P Square Technologies
3, Swami Mahal,
Gurunanak Nagar,
Off. Shankarsheth Road Bhavani Peth,
Pune - 411002,
Maharashtra, India

7. Ricon Engineers
10 To 13, Bhagwati Estate,
Near Amraiwadi Torrent Power,
Behind Uttam Dairy,
Rakhial, Ahmedabad - 380023,
Gujarat, India

8. Kamdhenu Agro Machinery

Plot No. 6, Near Power House,
Wathoda Road Wathoda,
Nagpur - 440035,
Maharashtra, India

14. PROFITABILITY CALCULATIONS:

Sr. No. Particulars UOM Year-1 Year-2 Year-3 Year-4 Year-5

1 Capacity Utilization % 60% 70% 80% 90% 100%

2 Sales ₹. In Lacs 124.20 144.90 165.60 186.30 207.00
 Raw Materials & Other
3 ₹. In Lacs 90.44 105.52 120.59 135.67 150.74
direct inputs
4 Gross Margin ₹. In Lacs 33.76 39.38 45.01 50.63 56.26
Overheads except
5 ₹. In Lacs 17.46 18.55 20.73 21.38 21.82
interest
6 Interest @ 10 % ₹. In Lacs 5.08 5.08 3.38 2.54 2.03
7 Depreciation @ 30 % ₹. In Lacs 3.72 2.79 2.23 1.49 1.12
8 Net Profit before tax ₹. In Lacs 7.50 12.97 18.66 25.22 31.29

The basis of profitability calculation:

This unit will have 1000 Liter/Day capacity. The growth of selling capacity will be increased
10% per year. (This is assumed by various analysis and study; it can be increased according
to the selling strategy.)

Energy Costs are considered at Rs 7 per Kwh and fuel cost is considered at Rs. 65 per liter.
The depreciation of plant is taken at 10-12 % and Interest costs are taken at 14 -15 %
depending on type of industry.

15. BREAKEVEN ANALYSIS:

The project shall reach cash break-even at 42.39% of projected capacity as detailed below:

Sr. No. Particulars UOM Value

1 Sales at full capacity ₹. In Lacs 207.00
2 Variable costs ₹. In Lacs 150.74
3 Fixed costs incl. interest ₹. In Lacs 23.85

4 BEP = FC/(SR-VC) x 100 = % of capacity 42.39%

16. STATUTORY / GOVERNMENT APPROVALS

The Ministry of Food Processing Industries has been operating several plan schemes for the
development of processed food sector in the country during the 10th Plan. One of the
schemes relates to the Technology Up-gradation/ Establishment/ Modernization of food
processing industries.

The Indian food processing industry is regulated by several laws which govern the aspects of
sanitation, licensing and other necessary permits that are required to start up and run a food
business. The legislation that dealt with food safety in India was the Prevention of Food
Adulteration Act, 1954 (hereinafter referred to as "PFA"). The PFA had been in place for
over five decades and there was a need for change due to varied reasons which include the
changing requirements of our food industry. The act brought into force in place of the PFA is
the Food Safety and Standards Act, 2006 (hereinafter referred to as "FSSA") that overrides
all other food related laws.

FSSA initiates harmonization of India's food regulations as per international standards. It

establishes a new national regulatory body, the Food Safety and Standards Authority of India
(hereinafter referred to as "FSSAI"), to develop science based standards for food and to
regulate and monitor the manufacture, processing, storage, distribution, sale and import of
food so as to ensure the availability of safe and wholesome food for human consumption.
Entrepreneur may contact State Pollution Control Board where ever it is applicable.

All food imports will therefore be subject to the provisions of the FSSA and rules and regulations
which as notified by the Government on 5th of August 2011 will be applicable.

Key Regulations of FSSA

A. Packaging and Labelling
B. Signage and Customer Notices
C. Licensing Registration and Health and Sanitary Permits

17. BACKWARD AND FORWARD INTEGRATIONS

The objective of the scheme is to provide effective and seamless backward and forward
integration for processed food industry by plugging the gaps in supply chain in terms of
availability of raw material and linkages with the market. Under the scheme, financial
assistance is provided for setting up of primary processing centers/ collection centers at farm
gate and modern retail outlets at the front end along with connectivity through insulated/
refrigerated transport.

The Scheme is applicable to perishable horticulture and non-horticulture produce such as,
fruits, vegetables, dairy products, meat, poultry, fish, Ready to Cook Food Products, Honey,
Coconut, Spices, Mushroom, Retails Shops for Perishable Food Products etc. The Scheme
would enable linking of farmers to processors and the market for ensuring remunerative
prices for agri produce.

The scheme is implemented by agencies/ organizations such as Govt. / PSUs/ Joint

Ventures/ NGOs/ Cooperatives/ SHGs / FPOs / Private Sector / individuals etc.

Backward Linkage:
 Integrated Pack-house(s) (with mechanized sorting & grading line/ packing line/
waxing line/ staging cold rooms/cold storage, etc.)
 Pre Cooling Unit(s)/ Chillers
 Reefer boats
 Machinery & equipment for minimal processing and/or value addition such as cutting,
dicing, slicing, pickling, drying, pulping, canning, waxing, etc.
 Machinery & equipment for packing/ packaging.

Forward Linkage:
 Retail chain of outlets including facilities such as frozen storage/ deep freezers/
refrigerated display cabinets/cold room/ chillers/ packing/ packaging, etc.
 Distribution center associated with the retail chain of outlets with facilities like cold
room/ cold storage/ ripening chamber.

18. TRAINING CENTERS AND COURSES

There are few specialized Institutes provide degree certification in Food Technology, few
most famous and authenticate Institutions are as follows:
 1. Indian Institute of Food Science & Technology,
Plot No.1, Near Maa-Baap ki Dargah,Opp to Nath Seeds,
Paithan Road Aurangabad
Aurangabad - 431005
Maharashtra, India

2. MIT College of Food Technology, Pune

Gate.No.140, Raj Baugh Educational Complex,
Pune Solapur Highway,
Loni Kalbhor, Pune – 412201
Maharashtra, India

3. CSIR - Central Food Technological Research Institute (CFTRI)

Cheluvamba Mansion, Opp. Railway Museum,
Devaraja Mohalla, CFTRI Campus, Kajjihundi, Mysuru
Karnataka – 570020

Udyamimitra portal ( link : www.udyamimitra.in ) can also be accessed for handholding

services viz. application filling / project report preparation, EDP, financial Training, Skill
Development, mentoring etc.

Entrepreneurship program helps to run business successfully is also available from

Institutes like Entrepreneurship Development Institute of India (EDII) and its
affiliates all over India.

Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many machine
manufacturers are available in the market. The addresses given for machinery manufacturers
have been taken from reliable sources, to the best of knowledge and contacts. However, no
responsibility is admitted, in case any inadvertent error or incorrectness is noticed therein.
Further the same have been given by way of information only and do not carry any
recommendation.