BUSINESS PLAN

SHAFQAT DAIRY FARM

ENTREPRENEURSHIP

“Doodh Pio Sehat Banao”

BUSINESS PLAN OF SHAFQAT DAIRY FARM

Submitted To:

DR. IBN-E-HASSAN

Submitted By:

SHAFQAT ULLAH
MCMM-18-52
M.Com (Morning)
2nd SEMESTER (2018-2020)

DEPARTMENT OF COMMERCE
BAHAUDDIN ZAKARIYA UNIVERSITY
MULTAN
 TABLE OF CONTENTS

Executive Summary.............................................................................................................1

CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT..........3

Strengths...........................................................................................................................3

Weaknesses......................................................................................................................3

Opportunities....................................................................................................................4

Threats..............................................................................................................................4

IMPORTANCE OF MILK..................................................................................................5

LIVESTOCK OF PAKISTAN............................................................................................5

Promising developments in livestock sector................................................................5

INDUSTRY ANALYSIS....................................................................................................8

PRODUCTION OF MILK..................................................................................................9

MILK SECTOR OF PAKISTAN......................................................................................10

INDUSTRY SWOT ANALYSIS......................................................................................12

Strengths.........................................................................................................................12

Weaknesses....................................................................................................................12

Opportunities..................................................................................................................12

Threats............................................................................................................................13

MAJOR MILK PROCESSING PLANTS CURRENTLY IN OPERATION...................13

COMMERCIAL DAIRY FARMS....................................................................................14

COMPANY ANALYSIS...................................................................................................15

1. Company Analysis.....................................................................................................15

2. Goals..........................................................................................................................15

3. Focus..........................................................................................................................15

4.Culture.........................................................................................................................16
 5.Market Share...............................................................................................................16

COMPANY ANALYSIS...................................................................................................16

Strengths.........................................................................................................................16

Weakness.......................................................................................................................16

Opportunities..................................................................................................................17

Threats............................................................................................................................17

OPERATIONAL PLAN....................................................................................................17

Land...............................................................................................................................17

Shed................................................................................................................................17

Animals..........................................................................................................................17

Milk Storage & Cooling Tank.......................................................................................18

Filling and Packaging.....................................................................................................18

Delivery..........................................................................................................................18

Fodder............................................................................................................................18

MARKETING STRATEGY.............................................................................................19

Product...........................................................................................................................19

Brand name....................................................................................................................19

Quality............................................................................................................................19

Packaging.......................................................................................................................20

Price...............................................................................................................................20

List price........................................................................................................................20

Payment Terms..............................................................................................................20

Promotion.......................................................................................................................20

Project Investment..........................................................................................................20

Machinery, Vehicle........................................................................................................21
CUSTOMER ANALYSIS.................................................................................................21

COMPETITOR ANALYSIS.............................................................................................21

STRENGTHS OF COMPETITORS.................................................................................25

Weaknesses....................................................................................................................25

Market Segmentation.....................................................................................................25

FARM INPUTS.................................................................................................................26

Land...............................................................................................................................26

Herd Mix........................................................................................................................26

Breeds of Buffalo...........................................................................................................26

Animal Housing.............................................................................................................27

Feed................................................................................................................................27

FINANCIAL FORECAST................................................................................................27

LOAN INVESTMENT PROPOSAL................................................................................31

 Executive Summary

Company Name, Address and Phone Number

Shafqat Dairy farm, District D G Khan, Post office Qasba Samina Sadat and Moza
Sabrah. 03431396819

Brief Description of business, its products and services, customer problems and
solution

“Shafqat dairy farm” the new brand we are going to launch. Our survey results shows that
most people are not satisfied with the current milk providers, they are looking for
someone who is reliable and provide pure milk with affordable price. ‘Shafqat dairy
farm’ will solve their problem and meet their expectations with in minimum time to
satisfy them and get a market share. After establishing our brand name in the market, we
will focus to expand our target market making sure not to compromise on the quality.

Establishment of our Dairy Farm will require one Acre land at Samina Sadat to establish
our dairy farm. We will initially start with6she-buffaloand their number will increase to
50 animals with in next 5-years.We will purchase Buffalo from Sahiwal and Okara. The
Sahiwal Kundi and Neeli Ravi breed are most famous for milk productivity so we
purchase these 6she-buffalo .

The stored cool milk in cooling tank will befilled in bottles and packed for delivery. The
delivery will be made through a van with Refrigerator fitted for keeping the milk cool to
avoid spoilage. Our cooling plant will operate 24 hours and we will deliver milk only in
morning.

Brief overview of the strategies that will make our farm successful

We will hire 2 workers to look after the buffaloes, milk storage, packaging and delivery.
One drivers and one assistance is needed for distribution and billing purposes. The top
level management will consist of Manager and they control the whole system.

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The price of our Shafqat dairy farm milk will be Rs.60 that has been decided by keeping
in view the expectations of customers provided by survey results. Payments will be
receive on monthly bases from each customer.

Overview of market products and services, how the money will be used

The market we are targeting is very saturated with many milkmen and processed milk
producers. We have selected D G Khan as our target market where we will start niche
marketing of D G Khan where middle class lives. To get the response of our target
customers we conducted a survey that will surely help to rectify our idea.

The initial investment of the project that will be financed it is estimated to be about Rs.
24,00,000 and it will result Net Income of Rs. (5000), Rs.11,130,00, Rs.1200,00, in first
3-Years respectively

Business Description

There are many products that are used daily in households. One of them is milk. It is used
by every household. It is the necessity of our daily life.

“My children are growing. They need pure milk, but the milk provided is not ‘very
nutritious. I am tired of using impure milk. I need pure milk that can help my children to
grow well.” This is the problem of every housewife. We have brought the solution of this
problem by providing pure milk . The milk provided by their milkmen has different
categories with different costs. But we will provide quality milk at one price that will be
very competitive. The milk provided by us will be nutritious and pure to stimulate the
growth of the family members’ especially young children.

We will start our business by targeting the nearest local market i.e. D G Khan City.
Althea households of District DG Khan city are our target market geographically. To get
the response of our target customers we conducted a survey that will surely help to rectify
our idea. Later on our relationship with customers will be built on personal interaction
basis. Initially we will start our business by providing only pure milk.

2
At the introductory stage, we will focus on advertising and acquiring more customers.
For this purpose, we will distribute brochures and pamphlets to all households. In this
way we will create awareness among customers about our existence. The market is
already very saturated with many national and multinational companies and milkmen
dealing in dairy business.

CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR

INVESTMENT

• Management
• Breed of animal
• Food of animal

This SWOT analysis helped us in analyzing these factors, which can play important role
in making the decision.

Strengths

• Provides raw material for food & Leather industry.

• Major source of food, i.e. Milk & Meat.
• Wide scope of Milk Production, ranking 5th in the world.
• Human resource employment sector.
• Huge demand and supply gap in dairy sector

Weaknesses

• Lack of appropriate knowledge & research.

• Lack of commercially viable breeds of animal.
• Lack of education and initiative in farmer.
• Remote area, lack of farm to market approach & transportation.
• Non-availability o f communication services.
• Lack of farm/ market infrastructures & marketing information.

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 • Lack of record keeping on farm.
• No or low application of research work.
• Management of dairy farm is a challenging job.
• Production losses due to endemic diseases every year.

Opportunities

• Government of Pakistan & Sate Bank of Pakistan priority sector.

• Ample opportunities are available in the Banking Sector.
• Commercially viable sector with great credit potential and absorption capacity.
• Value added dairy products are in demand..
• Corporate financing will become a niche in lending market.

Threats

• Implementation of WTO will result in open & competitive commodity pricing.

• Due to fear of default, banker community has reluctance for lending loans.
• High risks of diseases in livestock.
• Defective and unorganized markets.
• Imbalance between prices of inputs & outputs.
• Rising trend of cost of production with higher rate of interest as compared to
profit ratio.
• Lack of media projection, non-recognition of problems and monopoly of
multinationals.
• Lack of awareness.
• Low saving, low holding capacity.

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 IMPORTANCE OF MILK

Milk is the main ingredient of almost all dairy products. Milk and dairy products contain
many nutrients and provide a quick and easy way of supplying these nutrients to the diet
within relatively few calories. Milk is a significant source of riboflavin (vitamin B2)
which helps promote healthy skin and eyes, as well as vitamins A and D. Milk, cheese
and yogurt all provide the following beneficial nutrients in varying quantities.

 Calcium - for healthy bones and teeth

 Phosphorous - for energy release
 Magnesium - for muscle function
 Protein - for growth and repair
 Vitamin B12 - for production of healthy cells
 Vitamin A - for good eyesight and immune function
 Zinc - for immune function
 Riboflavin - for healthy skin
 Folate - for production of healthy cells
 Vitamin C - for formation of healthy connective tissues.
 Iodine - for regulation of the body’s rate of metabolism (how quickly the body
bums energy and the rate of growth.

LIVESTOCK OF PAKISTAN
Reference

DAWN NEWS

https://www.dawn.com/1318665
Promising developments in livestock sector

Mohiuddin AazimUpdated March 06, 2017

SOME promising developments are taking place in the livestock sector raising optimism
about this sector’s solid growth and its enhanced contribution to the overall economy.

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Livestock census has begun. Animal genetics and genomics are under focus. Issues in
fodder cultivation and storage are being addressed. New methods of animal breeding are
being employed.

Milk and meat processing has covered many milestones. Marketing infrastructure of
value-added products is improving. Domestic demand for these products is picking up
and new export opportunities are also opening up.

Exports of meat and meat preparations have grown rapidly — though a decline is visible
due to a growing consumption in local markets and smuggling of live animals to
neighboring countries

“In the next three to five years, livestock sector should grow 4-5pc per annum and its
contribution to GDP looks set to remain in double digits”, says a senior official of the
Ministry of National Food Security and Research. In FY16, livestock growth was 3.6pc
and its 11.6pc contribution to GDP value-addition paled 10.9pc share of large-scale
manufacturing.

Officials of the Pakistan Bureau of Statistics say that the current livestock census in
Punjab, unlike in the past animal head counting, will cover agricultural machinery stock-
taking and census of villages simultaneously under the head of agricultural census.

In other provinces, too, livestock census will be on the same pattern.

Meanwhile, the University of Veterinary and Animal Sciences (UVAS), Lahore, recently
unfolded its plan to establish a livestock technology park at its Ravi Campus in Pattoki in
collaboration with relevant institutions of the other three provinces—Sindh, Balochistan
and KPK.

Its key component include: livestock information management, livestock breeding,

genetics and genomics, disease control and product development. Besides, livestock
entrepreneurship and transfer of livestock technologies will also be promoted through this
technology park.

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Pakistan Agriculture Research Council (Parc) plans to spend Rs635m in Sindh for quality
cattle breeding, taking care of special breeds of camels and growing healthier varieties of
fodders in certain areas of the province.

And, under the World Bank-funded Sindh Agricultural Growth Project, subsidised milk
chillers are being installed in Tharparkar, Mirpurkhas and Hyderabad districts and
officials and livestock farmers are being trained in animal breeding and in obtaining
higher milk production.

Punjab Livestock and Dairy Development Board (PLDDB) has succeeded in boosting
milk production of weak cows and buffaloes up to 8.5 liters/day per animal from 5 litre
s/day, officials say.

Besides, the Board has successfully introduced among small farmers a green fodder
storage programme using 60kg silage bales so that they can store the required amount of
fodder without first drying them.

Exports of meat and meat preparations have grown rapidly — from 72$m in FY09 to
$269m in FY16 though a decline has set in during the first seven months of FY17, due to
a growing consumption in local markets and smuggling of live animals to neighbouring
countries.

Marketing infrastructure of dairy and meat products has also seen a big improvement
over the years. Large milk processing companies are successfully operating hundreds of
milk collection centres in the country. Small dairy farmers also have more access to
better ways of dairy farming and marketing now than in the past, thanks to targeted
public-private partnership programme.

In January this year, dairy farmers in Punjab celebrated successful completion of a five-
year $21m project of sustainable dairy development. Through a partnership with the
Punjab government and Nestle Pakistan, the project improved the lives of over 50,000
small dairy farmers through its skills-based training programmers, resulting in a 17pc
increase in the average milk yield and an over 10pc boost in farmers’ incomes, according
to media report.

Published in Dawn, Business & Finance weekly, March 6th, 2017

7
8
 INDUSTRY ANALYSIS

Reference:http://irigs.iiu.edu.pk:64447/gsdl/collect/electron/index/assoc/HASHb0cd/1a9
391f4.dir/doc.pdf

Within the livestock sector, milk is the largest and the most important single commodity.
Pakistan is ranked as the fifth largest country in buffalo milk production. Approximately
28 million liters of milk is produced annually from 24. 2 million cattle and26.3million
buffaloes. Out of the total milk produced, 97% is in the informal sector (i.e. loose milk
consumed in the villages and or sold in the cities through “Gawallas” in unhygienic
conditions and without any quality standards). The annual milk production of 28 million
liters in Pakistan is shared between a 71.1% share for the rural economy and a much
smaller urban share of 29%.

Only 3% of the total production of milk is processed and marketed through formal
channels. For the other 97%, a multi-layered distribution system of middlemen has
evolved to supply milk. The contribution of the formal sector processed milk to real GDP
in Pakistan is 0.43% in 2004-05. Despite only a small percentage (3%) of milk being
processed, the (UHT) market is growing at a steady rate of 20% a year. Presently 97% of
raw milk produced in the rural economy is not linked to the market mechanism because
of a number of reasons (defined ahead in this paper). Due to this reason, the dairy sector
in the rural economy is not making a significant impact in the National economy in
accordance with its potential and also with the quantity of milk, which is available.

Neli Ravi and Kundi buffaloes, Sahiwal & Red Sindhi cattle are the quotable examples
among the best dairy breeds of Pakistan. The population of livestock is increasing at
annual estimated rates of 2.38 in Pakistan. The availability of milk per capita per day is
50 ML mean, one cup of tea is available to every person of Pakistan per day. Landless
small farmer of rural areas produce more than 60% of marketable milk.

9
 PRODUCTION OF MILK

Reference: https://images.app.goo.gl/L3YPDnWRAFYD2×C26

Milk (Gross production)

Reference: https://images.app.goo.gl/L3YPDnWRAFYD2×C26

10
 MILK SECTOR OF PAKISTAN

Reference: https://images.app.goo.gl/L3YPDnWRAFYD2×C26

Milk production and processing is the most important component in livestock sector in
Pakistan. The value of milk alone exceeds combined value of wheat, rice, maize and
sugarcane. Average daily production of milk in Pakistan is about 130 million liters. Most
of the traded milk is marketed unprocessed, and hardly two percent of the traded milk is
processed by the dairy industry in Pakistan. Processed liquid milk in the form of
pasteurized milk or ultra-heat-treated (UHT) milk is the main dairy product in Pakistan.
Other products include dry powdered milk, cream, butter, butter oil, yoghurt, cheese and
ice cream. The milk in Pakistan is predominantly produced under four different
production systems namely.

• Rural Subsistence Smallholdings

• Rural Market Oriented Small -holdings
• Rural Commercial Farms
• Peri urban/ Urban Dairying

11
The overall animal herd is thinly spread across thousand of square kilometers with and
average of 3-5 animals per house hold and more than 40 million people in the rural area
are engaged in livestock rising. Out of total milk produced, 97 % is marketed in informal
sector (loose milk consumed in the villages and/or sold in the cities through” Gawallaws”
is unhygienic conditions and without any quality standards). Demand for milk and dairy
products is increasing at a high pace due to population growth, urbanization and increase
in per capital income.

The milk-manufacturing process includes pasteurization, homogenization, UHT

treatment and packing. Through little additional work, cream is also produced during the
pasteurization cycle. Pasteurized cream is churned to make butter. In order to obtain
butter oil, butter is heated to 90C degrees in ghee-melters and then liquefied. The milk
powder-making process primarily involves “evaporation” and “drying.

The rural supply chain for processed milk industry has three patterns: milk collection
through third-party milk collectors, self-collection system of dairy plants and farmer
cooperatives. Third party collection and self-collection are the more prevalent collection
systems, whereas to date dairy co-operative systems have failed to succeed in Pakistan.

Of the total milk sold by the farmers, 15-19% is thought to be wasted en route-to-market
due to spoilage from a lack of proper cooling, storage, and transport systems. There is an
imperative need to prevent the wastage of milk, which is the result of a poor cold chain.

Milk being a highly perishable commodity does not give many choices for storage or
channels; consequently, the unorganized middlemen as a speedy substitute to a cold chain
dominate the supply chain. Both investment and regulation are required to develop the
cold chain, which will help consolidate the milk collection system. The cold chain
infrastructure is envisaged as a means to create rural entrepreneurs in the rural economy.
Improved supply chains may reduce milk collection costs faced by the processing
industry, presently averaging around 16% of the factory gate costs being the price paid
for the milk.

12
The above factors create a situation under which middlemen have unfair advantages over
the formal sector, and in addition contribute to poor quality milk to the detriment of
consumers (especially those who cannot afford the higher quality presentations provided
by the processors) and to the medium term development of a robust dairy industry.

INDUSTRY SWOT ANALYSIS

Reference: https://images.app.goo.gl/L3YPDnWRAFYD2×C26

Strengths

• Pakistan dairy industry is the World’s fifth largest industry

• Farmers are engaged in agriculture and dairy at the same time.
• By-product of Agriculture is used in Dairy
• By-product of dairy is used in agriculture

Weaknesses

• Poor profitability for farmers.

• Lack of contact for farmers to the market mechanism.
• Poor dairy infrastructure in rural areas.
• Lack of education among the farmers is making it difficult to change farm and
dairy management systems.

Opportunities

• There is an opportunity for companies to introduce value-added products like

ice creams, paneer, khoya, flavored milk, dairy sweets, etc.
• Dairy products needs are much higher than supply.
• Value added dairy products are in demand

13
Threats

• Very low quality milk is provided by the milkmen to dairy farms which is a
very big threat for the entire market.
• The shortage of milk providing animals is also a threat for entire milk industry.
• High risks of diseases in livestock.
• Imbalance between prices of inputs & outputs.
• Rising trend of cost of production with higher rate of interest as compared to
profit ratio.
• Increasing level of poverty.

MAJOR MILK PROCESSING PLANTS CURRENTLY IN

OPERATION

Reference: https://images.app.goo.gl/L3YPDnWRAFYD2×C26

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 COMMERCIAL DAIRY FARMS

Reference: https://images.app.goo.gl/L3YPDnWRAFYD2×C26

Commercial Dairy farms have been set up in peri urban areas. Few of the commercial
dairy farms are:

• Sar Sabz Dairy Farm, Okara

• Green Sands Livestock Farm, Jhang
• Muzafarabad Livestock & Dairy Farms, Chishtian, Bahawalnagar.

15
 • Imam Dairy Farms, Khanewal
• Arshad Dairy Farm, Fateh Jang, Attock
• J.K Dairies, Rahim yar khan
• Sweet water Dairy
• CSK Dairies Kasur
• Engro Dairies, Sukhur
• Royal Dairies, Badian Road Lahore
• Sapphire Dairies, Raiwaind , Lahore
• Dr. Abu! Hasan Dairy, Jhang

COMPANY ANALYSIS
1. Company Analysis

Shafqat dairy farm

“Shafqat dairy farm”. We are a setting a new dairy farm and we come to market with
the brand name “Shafqat dairy farm”. We first need to establish a brand name, capture
the local market, i-e D G Khan, Kot chota and Qasba Samina sadat. Our survey results
shows that most people are not satisfied with the current milk providers, they are looking
for someone who is reliable and provide pure milk with affordable price. ‘Shafqat dairy
farm’ will solve their problem and meet their expectations with in minimal time to satisfy
them and get a market share. After establishing our brand name in the market, we will
focus to expand our target market making sure not to compromise on the quality.

2. Goals

We are a new company and we need to establish a brand name. We wish to capture the
local market after establishing our name. We are looking forward to expand all over
Pakistan and also export our product to Middle-East countries.

3. Focus

The focus will be on providing pure and hygienic milk to the people living in our selected
section of D G Khan. We will be providing our product at their door steps. The purity

16
would be hundred % and product would be a hygienic as any other multinational
organization provides in the market.

4.Culture

The organization will not be a traditional one. It will not be a bureaucratic organization.
The organization culture will represent decentralization, because it is the demand of the
modem time. The employers will be friendly with both the employees and the customers.
We will be providing easy access on our tables for queries, suggestions and possible
complaints.

5.Market Share

Currently we have no market share at all because we are new in the market. Our goals are
to capture the local market soon because of the worth of our product. There are almost
2000 households located in our target market. We assume that only 5% of the total
market will be captured by Shafqat dairy farm in 1st two years.

COMPANY ANALYSIS

The brief SWOT analysis of our company is:

Strengths

• Pure and hygienic milk

• Delivery at door step
• Cost effectiveness
• Excellent customer relationship building
• Customer’s need satisfaction as priority

Weakness

• New to market
• Low market share

17
 • Lack of appropriate knowledge.
• Lack of experience

Opportunities

• Product line extension

• Expansion in future
• B2B sales

Threats

• Animal diseases
• Increase in fodder prices
• New entrants/competitors
• Increase in transportation cost
• Product line extension
• Expansion in future
• B2B sales

OPERATIONAL PLAN
Land

 Land require 2 Acre

Shed

 Shed will be proper cover and secured.

 Shed in 20 Marla.

Animals

We will purchase Buffalo from Sahiwal and Okara. The Sahiwal Kundi and Neeli Ravi
breed are most famous for milk productivity so we purchase these 6 Buffalo at the rate of
Rs. 150,000 per She-buffalo. Total cost is Rs 900,000.

18
Milk Storage & Cooling Tank

The milk will be extracted twice a day i-e Morning time & Evening time, and will be
stored in the cooling tank.

Filling and Packaging

After the milk reach to the cooling tank, it is filled in bottles and packed for delivery.
This process is done manually in start, as customers increase and our production capacity
increase we will buy a packaging plant. One room will be constructed for this
purpose where employees will fill the bottles. They start their working at 2:00am so that
the process will be completed before 6:00am. The packed milk will be shifted to the van,
contains fridge that will keep the milk cool until delivered to final customers.

Delivery

For delivery, we will purchase a van with Refrigerator fitted for keeping the milk cool to
avoid spoilage.

Fodder

Green grass is the main fodder required for Buffalo that will be purchased on regular
basis from Mandi and from nearly located villages at the rate of Rs.50 per bail.Moreover
Khal-Banola at price of Rs.l8OO 40kg and Bhoosa Bundle at the rate of Rs.300 per 40kg
will be used as fodder. The concentrate feed is also a main ingredient and its price is Rs
14 per kg if purchased from market. The cost of concentrate will be lowered if feed
ingredients are mixed on farm it would be approximately be Rs 10 per kg. Initially we
will buy concentrate feed from market but later we will mix our own.

19
Service Flow Chart

MARKETING STRATEGY
Product

In start our product includes only Milk. As we are new in the market and we had not
enough resources to cover over target market completely. Therefore we are initially
focusing only on milk.

Brand name

We are entering to the market with a new brand name called “Shafqat dairy farm”.

Quality

We are looking forward to provide quality milk that is pure and hygienic to our
countrymen. As our survey results showed that most people are quality conscious.
Quality is also the main reason of their dissatisfaction from the conventional milk
providers.

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21
Packaging

Packaging will be done in our plant by our employees. Packaging bottles are purchased in
start, and sealing machine will is also being purchased to tightly seal the bottles to stop
contamination. All the process is done internally by our employees.

Price

The pricing strategy will be according to the needs and desires of the customers. The
expected volume of our production will be about 12 liters per buffalo. 12×5=60 liter in
morning.

List price

Initially the price will be Rs.60 per liter of milk. It is comparatively low with respect to
the competitors and also acceptable by the customers. With the quality we are providing,
the price is too low, therefore it attracts more customers.

Payment Terms

Monthly bases.

Promotion

 Advertising
 Free sampling
 Public relations
 Promotional programs

Project Investment

The total cost of the project is Rs. 24,00,000 out of which the capital cost of the project is
Rs. 9,00,000 for purchasing the animals and constructing the building 700,000 and the
rest is used to meet the working capital requirement Rs 500,000.However the cooling

22
tank is being provided to us by Livestock & Dairy. Development Board (LDDB) free of
cost. This cost is not included in our total project cost.

Machinery, Vehicle

Necessary machinery Rs. 100,000

Vehicle Rs 200,000

CUSTOMER ANALYSIS

As we are focusing only on D G Khan, Qasba Samina Sadat and Kot chota There are
about 12000 houses in adjacent area and they are our targeted customers market. Among
12000 houses, 82% people are willing to buy from us, but there is a limitation. In start we
had only 120 liters of milk to provide to customers. So initially we are capturing only 5%
of the market, after a year as the number of our animals increase we will increase our
market share slowly making sure not to compromise on the quality.

COMPETITOR ANALYSIS

Dairy sector in Pakistan is not very organized and there are different players in the
market who are fulfilling the needs but are not satisfying the customers. In the market,
there exists a gap. You can find pure branded milk at shops but that is not delivered at
your doorstep and it is also very costly. Secondly, milkmen are providing unprocessed
and adulterated milk to customers but they are not satisfied with milk.

However market is very saturated with many milkmen and processed milk producers. We
have selected dour market where we will start our niche market ‘of D G khan where
middle class lies. They want pure milk but they can’t afford branded milk, therefore they
are using unprocessed milk provided by milkmen. She-buffalo milk is most liked by the
people and is used by 51% of the total market.

23
Our main competitors are these milkmen who come from surroundings of D G Khan on
motorcycles and bicycles. They have developed their contracts over the years and have
monthly agreements with their customers. They cover almost 61% of our target market.
Milk shops had 7% of share and people are also not satisfied because they also provide
impure and unhygienic milk. Our eyes are on at 68% of the total market. Retailers are
also having a good market share of 32%; they Use to sell the branded milk.

24
As our survey analysis shows that people are not satisfied with the milk provided by the
milkman and milk shops, especially quality. Our survey shows that 76% people are not
satisfied as shown below.

Almost 36 % people of the total market use branded milk and among them 84% are
satisfied with both quality and price, and 16% are not satisfied due the price and taste of
branded milk. So these 16% people are also included in our target market i-e 6% of the
total market is added to our target market, 68% +6% = 74%. Now we focused on 74% as
our target market.

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Tills shows that customers have developed the taste of branded milk over the years and
prefer to buy it. However the real issue that confronts is the price sensitivity. Our niche
market is very price sensitive. If we will provide them pure and processed milk, at their
door step, 82% responded favorably and 9% will think over it as shown by survey
results.

Among the branded milk, Olper has highest market share and mostly, customers prefer it.
The processing plants of Olper are situated in Sukkur and Sahiwal.

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 STRENGTHS OF COMPETITORS

The big brand names are the major strengths of our competitors. The trust of customers
on the local milkmen and their continued relationship with them makes them a strong
competitor as well. They also hold most of the share in the market. In addition to this,
their early entry in market also acts as a major factor in their strengths.

Weaknesses

Apart from all the strengths, our competitors are not meeting the customer’s demands.
Some may have good quality but also carry high price with that. Others may have low
prices but also have unimaginably poor quality of the product. The product is either
unhygienic or impure.

Market Segmentation

Description

Our target segment is the household of the D G Khan, Qasba samina sadat and Kot chota.

Percent of Sales

We are assuming hundred percent of our sales. Because it is our only target market
segment, consisting of 12000 houses. Initially we had only 120 liters of milk to supply.
So our sales are 100%.

What They Want

They want pure milk at a comparable low price at their door step.

How they use product

Our product will be used for their end consumption after boiling or before boiling.

How to reach them

We will be visiting them personally and promoting through leaflets and pamphlets. We
will buy a van for the distribution of our product. Thus we will be the producers and
distributors at the same time.

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Price sensitivity

We will be pricing our product according to the customers needs. We have done a
research over the sector and our price will be according to the demand of the customers
as the customers of this market belongs to middle class and are price sensitive. As stated
above, almost 85% of the people are willing to pay more then Rs. 70 per liter for pure
milk.

FARM INPUTS
Land

About 2 Acre require.

Herd Mix

The ideal mixed herd should consist of 6 Buffalo for the viability of a farm. The Buffalo
(Neeli Ravi & Kundi) are comparatively high yield as compared to other buffaloes. This
means that there will be 6 Buffalo in the herd to start with this project.

Breeds of Buffalo

In local breeds, Sahiwal Kundi & Neeli Ravi cattle are suitable to start a dairy farm. The
Sahiwal is one of the best dairy breeds in Pakistan. It is tick-resistant, heat-tolerant and
noted for its high resistance to parasites, both internal and external.

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Animal Housing

Sheds of the animals should be airy with protection of the animals from extreme
temperatures and strong winds. The animal housing should be facilitated with drinking
water for animals. There should be proper drainage system to keep hygiene at the farm. It
consists of a built up animal shed, a brick soling paddock for animals, calving pens in
which pregnant animals are kept separated from other animals before calving, one room
for milk storage, one room for storing farm equipment and one for compound feed
storage.

Feed

 Best milk yield

 High fat content
 Dry fodder

FINANCIAL FORECAST
Shafqat Dairy farm
Income statement
For the month end
Description 1st Rs 2nd Rs 3rd Rs 4th Rs 5th Rs 6th Rs 7th Rs 8th Rs

Sale 200,000 230,000 230,000 190,000 180,000 210,000 230,000 235,000

Cost of sale 30,000 35,000 30,000 30,000 32,000 34,000 28,000 28,000
G.p 17,0000 195000 200000 160000 148000 176000 202000 202000
Less exp
Petrol 9000 10000 10000 10000 10000 10000 10000 9000
Vehicle exp 5000 5000 6000 3000 4000 45000 4000 4000
Feed 45000 45000 45000 45000 45000 5000 45000 45000
Utility 4000 42000 4500 4500 4000 4000 5000 5000
Medical 5000 5000 5000 4000 5000 5000 5000 4000
Advertisement 2500 1500 1000 500 0 2500 3000 2500
Salary 32000 32000 32000 32000 32000 48000 48000 48000
Net income 67500 92300 96500 610000 48000 56500 82000 84500

Description 9th Rs 10th Rs 11th Rs 12th Rs

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Sale 235000 230000 250000 285000
Cost of sale 28000 28000 28000 40000
G.p 207000 202000 222000 245000
Less exp
Petrol 9000 10000 10000 10000
Vehicle exp 5000 4000 40000 6000
Feed 45000 45000 45000 50000
Utility 4000 5000 5000 9000
Medical 5000 5000 5000 4000
Advertisement 2400 3000 3000 1000
Salary 48000 48000 48000 48000
Net income 88600 82000 102000 117000

Shafqat Dairy farm

Income Statement
At the end of 1st year

Description Rs Rs
Sale 24,00,000
Cost of sale 360,000
G.p 20,40,000
Less Expenses
Petrol 108,000
Vehicle exp 60,000
Feed 540,000
Utility 48,000
Medical 60,000
Advertisement 30,000
Salary 384,000
Net income 810,000

Shafqat Dairy farm

Balance sheet

At the end of the year 1st

Asset Rs Liability Rs

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Cash 60,000 A/P 200,000
A/R 210,000 Salary payable 96000
Building 677,000 N/P 400,000
Land( 100000/10) 600,000 O.E
Machinery (100000-5000) 95,000 Capital 856,000
Vehicle (200000/10) 180,000 R.Earning 810,000
Total 23,62,000 Total 23,62,000

Shafqat Dairy farm

Income Statement

At the end of second year

Description Rs Rs
Sale 2760,000
Cost of sale 38,40,000
G.p 3,84,000
Less Expenses
Petrol 108,000
Vehicle exp 60,000
Feed 560,000
Utility 60,000
Medical 60,000
Advertisement 15,000
Salary 400,000
Net income 11,13,000

Shafqat Dairy farm

Balance Sheet

At the end of second year

Asset Rs Liability Rs
Cash 745000 A/P 170,000
A/R 368000 Salary payable 120,000
Building N/P 300,000
Land( 600000+50000) 650,000 Unearned Revenue 24,000
Machinery (95000-5000) 90,000 Capital 940,000

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 Vehicle 180,000-20000 160,000 R.Earning 1113000
Total 2667000 Total 2667000

Ratio Analysis

Year 1st Year 2nd

Current Ratio 1.16 % 1.81 %

Cash Ratio 1.070 0.9771

Average collection Period 31.93 48.66

Total Asset Turnover 1.016 1.034

Gross profit margin 85 86

Net profit margin 33 40

Working

Formula

Current ratio=C.A/C.L 1. 810,000/696000= 1.16 N.P.M=N.I/T.Sale 810000/2400000=33

1. 1113000/614000= 1.81 1113000/2760000=40

Cash ratio= Cash+market security/C.L G.P.M=G.P/Sale×100, 85%, 86%

745000/696000= 1.07

600000/614000=0.09771

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 LOAN INVESTMENT PROPOSAL

 Amount request

My father will invest the money 20,00,000

Family member (Cousin) As a help 400,000

 Purpose and use of fund

We use money in the dairy farm to earn profit.

 Repayment

After five month we will return all the amount.

 Time table of implement

When Dr Ibn-E Hassan approved this business plan and then we will implement
this business plan into original form.

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