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- 01
Anuj Sharma- 11
Gorav Mahajan- 21
Niyaz Bohra- 32
Shaveta Sawhney- 42

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ACKNOWLEDGEMENT

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 Sharma
Anuj Sharma
Gorav Mahajan
Niyaz Bohra
Shaveta Sawhney

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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

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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)

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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, dairying is
in a backward condition, and has not received the attention it deserves. Poor

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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:
a. As animal husbandry services being provided by the animal husbandry
department are not effective, qualified private parties should be allowed to

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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.

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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.

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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:

Milk Cheese Price

Hut Resident
Lane demand/ demand Source /ltr (In Quality
no. s
day(in ltrs) (in gms) Rs.)
Manu Marg 8 2+1 1 250/week Vendor 17 Poor
Manu Marg 7 2+1 1 250/week Vendor 18 Poor
Manu Marg 5 1 .5 500/week Vendor 18 Poor
Manu Marg 3 2 2 350/week Vendor 18 Poor
Manu Marg 2 2 250/week Vendor 18 Poor
Manu Marg Vendor 18 Poor
Manu Marg Vendor 18 Poor
Manu Marg Vendor 18 Poor
Vashistha Vendor
1 1 2 250/week 15 Poor
Marg
Vashistha Vendor
2 2+1 1.5 200/week 19 Poor
Marg
Vashistha Vendor
3 2 1.5 250/week 17 Poor
Marg
Vashistha Vendor
5 1 2 250/week 18 Poor
Marg
Vashistha Vendor
2 2 500/week 17 Poor
Marg
Vashistha Vendor
Poor
Marg
Vashistha Vendor
Poor
Marg
Vashistha Vendor
Poor
Marg
Chankya Marg 6 2 1.5 100/week Vendor 18 Good
Chankya Marg 3 1 200/week Vendor 18 Poor
Chankya Marg 2+1 1.5 150/week Vendor 18 Poor
Chankya Marg 5 3 150/week Amul - -
Chankya Marg 3 1.5 100/week Amul - -
ToTAL 24/day 3.75/wee - -

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STAFF QUARTERS

Milk Cheese Source

Qrtr Price/ltr
Residents demand/day demand Satisfaction
no. (In Rs.)
In ltrs In gms
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
1.45 -
TOTAL 13.5 ltrs/day - -
kgs/week

OTHERS SOURCES:

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Pantry-College Of Management: 1.5-2 ltr/day

Price: Amul powder milk. Rs. 30/ltr

Pantry-Administration Block: 1 Ltr

Price: Rs 30

Pantry-College Of philosophy: 2 Ltr

Price: Rs 30/ ltr

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

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 TOTAL
(in Rs.) 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

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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

11. 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

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chillers will also prevent spoilage of milk in extreme summers. This chiller will be
of BlueStar India Ltd. having a capacity of approx. 600ltrs.

Others: 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 2000 60,000 7,20,000

cows)
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 -------- ------- 6,000

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

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

10. Miscellaneous ------- 2,000 24,000

Expenses
11 TOTAL 13,58,490

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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 30 to 35 5 to 7 5 to 5.5
days(280-300)
Dry Days (60) 20 to 25 8 to 10 1 to 1.5

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.

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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

Bank 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

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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 PAY BACK

INT. 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.

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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 1,09,281

CYCLE

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BANK LOAN AMORTISATION SCHEDULE (SCHEDULE 1)

INITIAL ANNUAL INTREST PAID PRINCIPAL

INVSTMT. INSTLMT
10,00,000 2,77,390 1,20,000 1,57,390
8,42,610 2,77,390 1,01,113 1,76,277
6,66,333 2,77,390 79,960 1,97,430
4,68,903 2,77,390 56,268 2,21,122
2,47,781 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)

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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

EQUIPMENT DEPRECIATION SCHEDULE

Years Initial amount Depreciation WDV

1 99600 14,940 84660
2 84660 12699 71961
3 71961 10794 61167
4 61167 9175 51992
5 51992 7799 44193

Equipment includes - Milk cans, chiller, coolers, ceiling fans, others, chaf cutler
and generator set.

BUILDING DEPRECIATION

Years Initial amount Depreciation WDV

1 4,50,000 67,500 3,82,500
2 3,82,500 57375 325125
3 325125 48769 276356
4 276356 41453 234903
5 234903 35235 1,99,668

VEHICLE DEPRICIATION

Yrs. Initial amount Depreciation WDV

1 2,30,000 34,500 1,95,500
2 1,95,500 29,325 1,66,175
3 1,66,175 24,926 1,41,249
4 1,41,249 21,187 1,20,062
5 1,20,062 18,010 1,02,052

Depreciation @ 15%

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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)

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

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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
Depreciation= 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 S. NO CREDIT AMOUNT

(In Rs.) (Cr.) (In Rs.)
1. To expenses 10,64,200 1. By sales 21,60,000
2. To interest 1,32,930 2. By manure 6000
expenses sales
3. To preliminary 30,000 3. By 67,500
expenses accumulated
building dep.
4. To building 67,500 4. By 14,940
dep. accumulated
equip. Dep.
5. To equip. Dep. 14,940 5. By 34,500
accumulated
veh. Dep.
6. To vehicle dep. 34,500
7. 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.

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ST
BALANCE SHEET (1 YEAR)

LIABILITIES AMOUNT (In ASSESTS AMOUNT (In Rs.)

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

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PROJECT RISK MANAGEMENT

RISKS ASSOCIATED WITH THE PROJECT:

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 S.No RISK SOURCE IMPACT ALTERNATIVE

1. Improper Preservation Poor milk quality Installation of

leading to consumer good quality Milk 25
dissatisfaction Chillers.

2. Time lapse in milk May lead to milk Chillers and

supply spoilage setting up of Dairy
farm near the
university campus

3. Demand: Supply Loss of Outsourcing

Mismatch( Either D>S Business( either by through local
or S>D) Stock out or by ) vendors.
Looking for
alternative
markets like Katra
during vacations.
4. Feed problems like ill-health of cattle Better relations
shortage in supply, leading to reduced milk with feed
non-availability of production suppliers
nutritious feed for
cattle

5. Seasonal influences on Fluctuations in supply;

milk production Inability to meet
capacity of cattle demand; loss of
customers.

6. Diseases in cattle Loss of lactation Regular

capacity; death of cow veterinary check-
leading to loss of ups, proper
business vaccination and
provision for
extreme losses.
7. Shortage in electricity Effects regular DG Sets
operations

8. Risks from workers Sudden impact on Good working

:Attrition, adulteration business, leading to conditions,
of milk by workers, loss of image, Regular reviews
Sale of cows by and lactometer
workers testing before milk
supply followed
by proper seal on
milk cans.
9. Rejection of proposal Delay in project Borrowing loans
by Bank implementation and at a higher
pushback for certain interest rate from
period. NBFCs
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DISEASES IN CATTLE:

Sr. Name of Type of Type of Duration of Remarks

disease vaccine vaccination immunity
No.

1 Anthrax (Gorhi) Spore vaccine Once in an One season -

year
premonsoon
vaccination
2 Black Quarter Killed vaccine - do - - do - -
(Sujab)
3 Haemorrhagic Ocladjuvant - do - - do - -
Septicaemia vaccine
(Galghotu)
4 Brucellosis Cotton strain 19 At about 6 3 or 4 To be done
(Contagious (live bacteria) months of age calvings only in
abortion) infected herds
5 Foot and Mouth Polyvalent At about 6 One season After
disease tissue culture months of age vaccination
(Muhkhar) vaccine with booster repeat
dose 4 vaccination
months later every year in
Oct./Nov.
6 Rinderpest Lapinised At about 6 Life long It is better to
(Mata) avianised months of age repeat after 3
vaccine for to 4 years
exotic and
crossbred catte,
caprinised
vaccine for zebu
cattle.

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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.

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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
untapped 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.

PROJECT MANAGEMENT GROUP1/MBA

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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

PROJECT MANAGEMENT GROUP1/MBA

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PROJECT MANAGEMENT GROUP1/MBA