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M/S Gulshyam Dairy Products 

Name Of Business : M/S Gulshyam Dairy Products Address: Plot No. B/71, Talasari, Thane District, Maharashtra Telephone # 079- 40198776, 079-32323455

Name Of Promoters
Abdul Gulsha Aditya Churiwala Tehseen Chauhan Nidhi Desai Varun Jain

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Gulshyam Dairy Products

Table Of Contents

Sr.No.
1 2 3 4 5 6 7 8

Topic
Statement of Purpose Marketing Plan Marketing Mix Financial Statements Break Even Analysis Capital Equipments Organisation Plan Annexure

Pg. No.
02 05 08 24 27 28 33

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Statement of Purpose
Milk is a basic household need. It is consumed by almost everyone in one form or the other. The dairy industry is one of the fastest growing industries and so because of constantly rising demand for milk and milk products. Milk, cheese, ghee and butter are the most popular and highest demanded products of milk. (Co. Name) aims to fulfil these needs. It aims to provide milk, ghee and butter and contribute towards the fulfilment of these demands. The company will buy 25 acres of land at Talasari at the rate of Rs.5 lac/acre. This land will then be developed which includes building of sheds, fences, a building and development of open areas of land. The buffaloes will be always in their sheds but cows will be allowed to roam freely in the open lands when they are not in use. Application for electrical connection and water supply will be made. 2 borewells will be dug which will provide most of the water supply. All the paperwork will be taken care of in the most appropriate manner. An agent will be hired who will be taking care of all the paperwork as well as the development of the land. We will be having 500 buffaloes and 300 cows. Each animal is capable of giving milk for about 9 months every year and this continues for about 7-8 years in the livestock’s life. This makes it very expensive to purchase livestock as each buffalo costs about Rs. 50000 and each cow costs about Rs. 30000. Also, since the livestock can give milk only for 9 months at a time it is not feasible to buy livestock. An option to be considered is to maintain 2 lots of livestock but it makes the initial investment too high which is not exactly feasible. To solve this problem, we have entered into a contract with an agency that is into rearing of livestock. Every year, the co. will pay Rs.2 crore to the agency which will provide livestock all round the year. If at a point of time an animal stops giving milk the agency will replace the animal.

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A cow is capable of giving about 25 litres of milk everyday and a buffalo is capable of giving 13 litres of milk a day. The difference in the costs of a cow and a buffalo is because of the fact that buffalo’s milk contains about 9% fat whereas cow’s milk contains only 3%. Also buffalo milk is more popular due to this fact which drives up the demand for buffalo milk leading to higher buffalo prices. In open market cow’s milk is sold at about Rs.21/litre and buffalo milk is sold at Rs.28/litre. Also we will be selling skimmed milk which is beneficial to health conscious consumers. We will be milking the cows and passing the milk through various processes to reach our final products which we will be supplying to 2 agencies which will distribute our products over various places. These agencies are located at Bhivandi and the company has to transport the finished product to this place. The company will be a partnership firm where there will be 5 partners who will contribute in equal ratio. The PSR for Ms. Tehseen, Mr. Aditya, Ms. Nidhi, Mr. Abdul and Mr. Varun will be 1:1:1:1:1. The proprietors will thus share 20% of the profits each and wil get additional 12% interest on capital. Co. will be taking a loan of Rs. 8 crore mainly because eof need for cash at hand because of large expenses over the year. This loan in addition to the capital contributed will take the total initial investment to Rs. 11 crore. These funds will be used for purchase of land, development of land, purchase of machinery, contract with supplier of livestock, etc. For more information check financial statements. The loan will gradually paid off along with an annual interest at 12% which is equal to Rs. 1 crore. This loan will gradually be paid off in about 4 years. For more details refer Break Even Analysis. In the first year 1 crore loan will be paid off. In the second year 2 crore loan will be paid off. In the third year 3 crore loan will be paid off and in the 4 th year 2 crore loan will be paid off. Every year an interest of Rs. 1 crore will be paid. So over 4 years 8 crore principal amount + 4 crore interest will be paid. An amount of Rs. 2 lakhs will be maintained as working capital.

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LOAN REQUIRED
Loan Required : Rs. 8,00,00,000 This loan is required for starting the business. The annual revenue in the first year being Rs. 11,00,00,000, it can be said that the loan is being taken because of requirements of cash in hand to get the project underway and to have cash to conduct the daily activities and pay for various expenses. The amounts are recovered each year because of which cash inflow is always more.

REPAYMENT
The loan will be repaid in the following manner: 1st Year: Rs. 1,00,00,000 2nd Year: Rs. 4,00,00,000 3rd Year: Rs. 3,00,00,000 In the first year Rs. 1 crore of the loan amount will be repaid. In the second year Rs. 4 crore of the loan amount will be paid. This is because the company will be saving on spendings on livestock, it wont have to spend on land and machinery. Because of this, a lot of money will be spared which will be used to repay the loan. The company will be saving Rs.1.5 crore every year on livestock, 1.25 crore on land, and certain amount on machinery. In addition to this the revenue will begin to rise because the company will be on its way to establish itself as a brand. In the third year Rs. 3 crore of the loan amount will be repaid. This is because of continuing profits and lack of expenditure on land, livestock and machinery. This way the entire loan will be repaid in 3 years. However in addition to the loan amount, every year Rs. 1 crore will be spent as interest on loan which is charged at 12.5% per annum.
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Marketing Plan
DAIRY FARMING INDUSTRY IN INDIA
Dairy farming is the single largest contributor to India's GDP. Today, more than four hundred dairy plants exist in the public, cooperative and private sectors in India. The liberalization of the Indian economy in 1991 has attracted multinational dairy enterprises like Heinz, Nestle, SmithKline Beecham, Nutricia, Baskin Robbins and hundreds more. India is the world's highest milk producer and all set to become the world's largest food factory. It has emerged as the biggest producer of milk with an output of 81 million tonnes in 2000-01. Milk production has been growing at about 3-4% per annum, a trend which looks likely to continue. 60% of the milk comes from buffalos where India has some 95 million of these animals or 57% of the world’s total. The rest comes from other breeds of dairy cattle of which India has many different breeds. The total cattle population is in excess of 260 million. Dairy production in India is carried out by some 70 million households or one in two of rural households in 130,000 villages across the country. It gives employment to 90 million people of whom 75 million are women. 46% of the milk is consumed in a liquid form and 47% into processed cottage (consumer) products and 7% processed industrially.

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COMPETITORS
We have a number of competitors in the dairy industry, probably in hundreds! But the market leaders that are among the top five dairies in India are: AMUL: Amul was formally registered on December 14, 1946 , is a dairy cooperative movement in India. It is a brand name managed by an apex cooperative organisation, Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.6 million milk producers in Gujarat, India[1]. It is based in Anand town of Gujarat. It is also the world's biggest vegetarian cheese brand. Amul's product range includes milk powders, milk, butter, ghee, cheese, curd, chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, basundi, Nutramul brand and others. MOTHER DAIRY: Mother Dairy's range of products include the brands Mother Dairy (milk, milk products, curd, ice cream, butter, dairy whitener etc), Dhara (range of edible oils) and Safal (range of fresh fruits and vegetables, frozen vegetables, fruit juices). Mother Dairy was set up under the Operation Flood Programme in Delhi. It later expanded in Mumbai, Punjab and eastern India. Future plans include expansion to South India. AAREY: Aarey Milk Colony (established in 1949) is situated in Goregaon East, a suburb of Mumbai. On an average 16,000 cattle are reared on 1287 hectares of land, and 32 cattle farms. MAHANANDA: THE Maharashtra Government-owned Aarey dairy — a well-known brand in Mumbai — will now be managed by Mahananda, a State-backed milk co-operative. This was announced by Mr Jayant Patil, Maharashtra's Finance Minister on the 30th of March, 2008.
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FUTURE OPPORTUNITIES
   India progressing very fast, one of the world’s fastest growing economy. GDP growth 8.5%. Progress leading to more economic development which means more purchasing power. Per capita Milk consumption is still very low in our country (due to poverty). So, tremendous growth potential.    Due development, demand for quality product will also grow so we need to organise our business as compared to being carried out presently on old conventional system. Modernisation will be the need of the hour, both production facility and packaging. Must look into branding productlike organised companies (amul and mother dairy, ect) and developing more efficient distribution network.

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Marketing Mix
PRODUCT
Whole Milk Fresh Milk from which no cream has been removed. Amul Gold contains 5% fat and 9% SNF minimum and is ideal for making sweet dishes (like kheer, payasam etc.) and for setting curds. It is also ideal for drinking straight from the pack for kids and adolescents who simply love the creamy taste of milk without the inconvenient cream layer. Production: 2500 litres/day

Standardised Milk A mixture of whole and toned milk to attain 3.5% fat and 8.5% SNF minimum. It is the ideal multipurpose milk. Growing children will love its taste while benefiting from its comprehensive nutrition. Production: 2400 litres/day (Buffallo) + 2400 litres/day (cow)

Toned Milk It is milk processed so as to remove a percentage of cream. It contains 1.5% fat and 9% SNF minimum and is ideal for tea and coffee whitening and for setting curds. It is also just right for drinking straight from the pack for those who would like to enjoy the taste the goodness of natural while avoiding the hazards of too much fat. Production: 1000 litres/day (Buffallo) + 1500 litres/day (cow)

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Double Toned Milk It is milk for the health conscious milk lovers. With virtually zero fat content, nil cholesterol and 8.7% SNF minimum, it gives you all the proteins, vitamins and minerals of natural milk without your having to take in unnecessary fat in the deal. Production: 500 litres/day (Buffallo) + 1000 litres/day (cow)

Butter It is a dairy product made by churning fresh or fermented cream or milk. Butter is used as a spread and a condiment, as well as in cooking applications such as baking, sauce making, and frying. Butter consists of butterfat surrounding minuscule droplets consisting mostly of water and milk proteins. Production: 60 kgs/day

Ghee It is made by melting butter and removing all forms of not fat solids, moisture and other impurities from it so as to get up to 98% pure fat. In India Ghee is liked more than butter and hence has a larger market potential. Our preparation methods ensure that the best quality is served without losing the ‘Desi Ghee’ aspect. Production: 100 kgs/day

Fresh Cream It is the cream layer which settles on milk and contains high percentage of fat. Some like it plain, some use it on deserts. Our fresh cream can be used in any form of cooking without much hassle as it is ready to serve right from the packet and so fresh that one will not be able to distinguish it from fresh milk cream. Production: 60 kgs/day

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PRODUCT QUALITY
Treatment of Milk All the products go through Ultra Heat Treatment (UHT), which has been adopted by the leaders in the business like Amul and Nestle, to provide bacteria-free milk to its consumers and help maintain a long shelf life of up to 150 days with or without refrigeration. The product also goes through stringent quality checks and can be consumed straight from the pack and no boiling is required. Also the milk is homogenised before processing so that the milk can be enjoyed without the cream layer settling on the milk even after a prolonged time.

Anti-adulteration Practice Adulteration of milk has become a major concern among the households today. In order to protect the milk from getting adulterated during retail we seal our packets with a specially designed seal that is not possible to replicate from ordinary sealing machines. Also the milk is directly transported from the dairy to the processing plant so that there can be no adulteration during transportation.

Quality Certifications The entire dairy is so installed so as to maintain high levels of hygiene and quality required to meet the AGMARK and ISO 9000 certification. All the machines are pre equipped with milk quality testers so that any stage the quality of milk can be checked. ISO 9000: Quality Management and Quality Assurance Standards - Guidelines for selection and use AGMARK: Promotion of Grading and Standardisation of agricultural and allied commodities under Agricultural Produce (Grading & Marking) Act, 1937.
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PRICE
Taking advantage of the benefits of a small scale industry and economies of scale, our products are competitively priced without sacrificing on quality. The following is the price list of our products as compared to the existing price trends in the market For Retail: Existing Price (Rs) 30 28 26 29 90 87 190

Variety Whole milk Standardised milk Toned milk Double toned milk Fresh Cream (1 kg) Butter (500gms) Pure Ghee (1 litre)

Fat (%) 5 3.5 1.5 Nil 60 80 100

SNF (%)* 9 8.5 9 8.7 4 2 0

Our Price(Rs) 28 26 24 26 85 83 180

For Distributors: Existing Price (Rs) 26 25 23 25 84 83 175

Variety Whole milk Standardised milk Toned milk Double toned milk Fresh Cream (1 kg) Butter (500gms) Pure Ghee (1 litre)

Fat (%) 5 3.5 1.5 Nil 60 80 100

SNF (%)* 9 8.5 9 8.7 4 2 0

Our Price(Rs) 25 24 22 23 79 78 167

*Every 100 parts of SNF (Solids Not Fat) contains 56 parts of carbohydrates, 34 parts of protein and 9 parts of minerals.
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Place
Plant for Production and Processing: Talasari, Maharashtra (150 kms from Mumbai)

Advantages of Plant Location    Cheap availability of huge stretches of land at just Rs 5,00,000 per acre as compared to above Rs 30,00,000 per acre in and around Mumbai A well developed network of transportation for quick transportation. The National highway is only 3 kms away from the plant Incentive are given by the Government for industrial development in the area like availability of a soft loan up to 15 % of the total borrowed funds for setting new industries in the area Cheap availability of electricity and water required to run the plant and machinery Availability of huge stretches of pasture land which is required to feed the cattle Availability of cheap unskilled labour from nearby villages and skilled labour from cities like Mumbai and Surat and Nasik.

  

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DISTRIBUTION

Distributors: Kasturi Foods: Bhiwandi, Thane West National Dairy: Ulhasnagar No 4, Thane The above distributors are located around 70-80 kms from Talasari and 70 kms from Mumbai. Also these are the major distributors of their respective areas and have a wide customer base. In order to eshtablish a goodwill before expanding to cities like Mumbai and Surat these distributors will help build goodwill in surroundindg villages and smaller cities like Nasik by promoting our products in exchange of better margins for the products. Also these distributors own small stores where they sell dairy products other than door to door delivery of milk. Milk will be supplied twice to these distributors once early in the morning around 5 o’clock and in the afternoon around 4.30 p.m.

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PROMOTION STRATEGY
Being a small scale industry we will be promoting our products well as our brand name on a small scale. We can’t afford to promote our products on a large scale by incurring heavy expenditures i.e. advertising on televisions, radios, etc. Though we won’t be promoting our product on a large scale we will try to promote it in a more effective way such that the people will notice our brand. Basically we will be following a low budget promotion strategy:

1. We will have our hoardings with our brand name and slogan printed on it placed at different appropriate locations throughout Mumbai, Thane, Navi Mumbai, Bhiwandi, Ulhasnagar, the places where we will be conducting our business. The hoardings will also be placed at different locations throughout the National Highway no.8 between Talasari and Mumbai. This is a PUSH STRATEGY to attract prospective customers. We will be giving this contract to Kapole Hoarding Agency in Mumbai at a cost of around Rs20,00,000 excluding the fees charged.

2.

The other promotion strategy we will be undertaking is distribution of pamplets giving complete information about our products and brand. We will be distributing pamplets through news paper agencies located throughout the areas where we will be conducting our business. Besides that we will be distributing our pamplets at the retail shops who will be selling our product. This is a PUSH STRATEGY to attract prospective customers. The promotional activity will cost us around Rs10,00,000.

3.

We will be undertaking an event which will be notified in news papers in our advertisements. For this event we will be finalizing 6 locations (2 in mumbai and 1 in each of the cities) where we will carry on the event on the given date. In this event we will be holding a Milk Drinking Competition. The person who will win this event i.e. who will drink the highest quantity of milk within 100 seconds will get 1 whole years supply of milk for free
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by us. (Max. 2 liters of milk daily). By this event we are trying to create a taste for our milk in the people. This will indirectly lead to our brand by evoking recall for our brand. This will indirectly increase the awareness of our brand and products. It will even help us to know about the perception that consumers have about particular brands in dairy products as the participants will even fill up feedback forms. This event will take place twice in the first year. This is a PULL STRATEGY to attract prospective customers. The expenses incurred in carrying out this whole event including right from the advertisements in paper will cost us around Rs7,00,000.

4.

We will be promoting our products in selected schools throughout the given cities. Here we will try to create a relation with the entire family through their children. The basic idea behind this is that children are the one who are being pampered in the family and its their health which is taken care of and nothing else than milk can be considered as the best health product for them as it provides them with the complete nutrients and energy. Here we will be giving them a brief lecture on how to take care of health, what to eat and what not to, importance of drinking milk and its benefits, the various milk products right from icecreams to sweets as per the products preferred by them and the scenario of dairy industry in India. After the brief lecture we will be providing them with 250ml of milk packets and advising them how they can drink it by adding different flavors to it and making it more delicious. This is a PULL STRATEGY to attract prospective customers. The entire cost of operating this event will be around Rs8,00,000.

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SWOT ANALYSIS
STRENGTHS: 1. Demand scenario India has quadrupled its milk output in forty years, becoming the world’s largest milkproducing nation, with a gross output of 94.6 million tons in 2006. The supply of milk in India is increasing daily in correspondence to increasing demand. Thus giving a lot of scope to people engaged in this field. India’s production is likely to continue to grow at about 4% per annum and production will exceed 100 million tons in next few years. 2. Changing the face of ‘tabela’ in India Despite this achievement, India’s dairy industry is relatively inefficient and unproductive, with yields per cow less than one-fifth those of foreign producers. Moreover, much of India’s milk products are of relatively poor quality, a consequence of poor animal health, a polluted and unclean environment, and manual handling delays. The resulting poor quality prohibits Indian milk from being exported. We will be ‘tabela’ a new meaning in India by trying to adopt western culture for rearing cows and providing them with more nature friendly and pollution free environment. Cows will be reared in 6 acres of open lawn where they will roam around freely and will feel close to nature. Buffaloes being a lazy animal wont be reared in the lawn but will be kept in clean and hygienic conditions. There will be soft music played in the background. All this will help us to increase the productivity as well as quality. 3. Location Talasari is located in Nationl highway no.8 thus giving it an easy access to most of the location. There are many developed as well as developing areas situated nearby or connected through Highway thus beimg in our reach we have an easy access to such places in order to expand our business in future.

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4. Anti-adulteration Attempt We will be selling milk in packets which will be sealed in packets having our brand name this will provide guarantee for non-adulterated milk by our side. The packaging material provided by us will be of certain quality so that it does not affect the quality of the product. The milk will meet all PFA (prevention of food adulteration) guidelines.

5. High Quality with Competitive Prices. We will be proving our high quality products at competitive prices in order generate demand for the product by the people by providing it to them at affordable and usual prices. We will use the best machinery available in the market. We plan to also apply for AGMARK and ISO certification, giving a guarantee for the quality of products provided by us. For eg Products Cow Milk Buffalo Milk Ghee Our Price (Rs/lt) 21 28 185 Ongoing Market Price (Rs) 20-25 27-30 175-190

6. Capacity to expand range of products. Dairy industry is a industry where wide range of products can be manufactured. Products range extends from barfi to kulfi, shrikhand to kalkhand , ghee, cheese, butter, milk powder are only few to be named. Thus there’s lot of scope to expand business by expanding the product range

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WEAKNESS: 1. No control over yield. The production of milk or the yielding capacity is an uncontrollable factor. In an average a cow gives about 25 liters of milk daily while a buffalo gives about 13 liters of milk daily. We can just try to improve the yielding capacity by providing them with more favorable conditions but still the yielding capacity is not within our control sometimes the cattle may yield less and sometimes more than it usually does. 2. Perishability of milk. The shelf life of a fresh milk is 8-10 hours only. This is a major problem faced by many dairy industries as the milk needs to be consumed within the specified time. This created lots of time constraint with respect to delivery of milk and its consumption. However by using the technique of pasteurization we can avoid this problem to some extent i.e. it will increase the shelf life of milk by another 48 hours but still this too is a major concern. 3. Rising cattle prices and other costs but comparatively stable selling prices. The prices of cattle are increasing day by day even the costs incurred on their maintenance and development is also increasing daily. The maintenance of per cattle per day costs about Rs110 this cost increases as time passes by but the selling price increases comparatively at a very slow rate. This becomes a major concern the profit margin decreases. 4. Business of a small scale. It’s always been trend since the Industrial Revolution as the big fish feeds on small one similarly large industry takes over the business of small scale industries. Here in dairy industries also large scale industries like Amul, Aarey, Mother Dairy have already built their brand name which operates on large scale and has larger capacity of production which tends to be a serious threat as they face the benefit of working on a large scale. 5. Competition As said earlier in this industry there’s a lot of competition faced due to large scale industries and not only that there’s also competition from local vendors who distribute their milk at a stall near the residential areas in fact they are the major competitors in developing cities.
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The other competitors as usual include big brand names like Amul, Aarey, and Mother Dairy etc. As said earlier the supply is increasing day by day thus suplementing increase in demand and increasing the competition further.

OPPORTUNITIES: 1. Rising demand for milk and milk products As every day passes by the demand for milk and milk product also increases. India ranks 1 st in the whole world in production of milk it produced about 94.6 mn tones of milk in the year 2006. With the increase in demand it’s soon to cross 100mn tones nargin. Dairy industry is a industry where wide range of products can be manufactured. Products range extends from barfi to kulfi, shrikhand to kalkhand , ghee, cheese, butter, milk powder, ice creams are only few to be named. People in India consume milk daily as a result about 60% of the milk produced over here is consumed directly while the remaining 40% is used for producing other milk products. 2. Increasing no. of health conscious population Now-a-days people are becoming more health conscious and milk is a drink which provides them with nutrients, proteins as well as fats. Previously people over here liked to consume whole creamed milk but now-a-days due to increasing health consciousness people prefer to drink skimmed which is low fattening thus we can see even though there’s rise in health consciousness milk is a part of their daily diet as it provides them with energy they need. 3. Rising standard of living As the standard of living of the people increases their purchasing power also increases and they tend to consume more. Here most of the people who used to drink milk one time daily will start drinking milk twice a day due to increase in their purchasing power. They will consume more of products like sweets, ice creams etc. which in a way or other requires milk. Thus with the rise in the standard of living of a common man the demand for milk and milk products will also increase.

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4. Capacity to expand to other cities due to proximity We have selected a location in Talasari which is located on National Highway No.8 that connects Mumbai-Ahemdabad-delhi and is near Maharashtra Gujarat border. As we are now concentrating on only few cities and that too within Maharashtra in future we have a scope to other major cities in Maharashtra and also in Gujarat. 5. Low transportation costs We have the benefit of low transportation cost as we will not be doing the job of retailing. We will be supplying goods up to Bhiwandi from where it will be carried forward to other small retailers in the given cities. We will be supplying to the wholesalers at lower price than the given MRP so that they can have their profit margin. 6. Incentives provided by government Being a small scale industry the government promotes us by giving several incentives and cash concessions. We have selected the location in Talsari as over here we get the benefit of soft loan in which we get loans at relatively low interest rate i.e. between 3%-5% depending on the project. After the White Revolution Dairy industry in India has gained the position of leader in dairy industry now after the second stage it’s said to become a global giant. 7. Value Addition There is a phenomenal scope for innovations in product development, packaging and presentation. Here the over all package and the brand name can do wonders by creating an identity for the company. This an industry where with the help of one raw material(milk) we can manufacture variety of products there’s only a need for innovation with respect to increasing number of product listing under the category of dairy industry. 8. Export Potential In the long term we plan to export our product to countries like Sri Lanka, Bangladesh, Middle East where Amul one of the Indian brands has already made a mark by providing high quality milk at competitive prices.

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THREATS: 1. Competition form large scale firms like Amul, Aarey, Gokul etc Competition from huge co-operatives like Amul and Aarey and competing in the same area as them will be a huge challenge looking at their huge capacities of over 1 lakh litres of milk everyday, well eshtablished goodwill in the market and competing against their experience is one of the biggest threat to any small scale industry. 2. Adulteration at selling points We supply our milk to the wholesalers and not directly to the consumers or retailers thus there’s great scope of adulteration by the middle man. But in order to avoid such adulteration we provide our products in sealed packages which will minimize the risk of adulteration but still it’s just a precaution and not a cure for this problem. 3. Less land available for cattle rearing The availability of land is a major problem as most of the land available in our country is used for urbanization and industrialization. Now a days the problem is not only the availability of land but also the cost of land which proves to be a major hurdle for acquiring land and increasing the production capacity and expanding the business. The current rate of land in Talasari is 4 lacks per acre but is said to shoot by another 50% within next 5 years.

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FUTURE PLANS
   We plan to expand our current capacity from the current 13,000 litres to 25,000 litres per day by early 2010 in 2 phases of 6,000 litres expansion each. We also plan to produce cheese after the first phase of expansion expected in Mid 2009. Along with the cheese plant we plan to set up a plant for Whey Proteins, a byproduct during the production of cheese. It is currently not produced in India by any dairy and therefore can be a big step towards the health care industry.    After the second phase of expansion in 2010, flavoured milks, butter milk (sweet and salted), and other products will be introduced. A technological upgrade is planned in mid 2014 so as to compete with the best in the industry as far as quality of production is concerned. We plan to enter the Gujrat market after the first phase of expansion after having captured a good market share in Maharashtra and having developed a goodwill among the consumers.

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Financial Statements
TRADING ACCOUNT
Dr. Cr.

Particulars Livestock Wages

Rs. 35000000 3500000

Particulars Sales

Rs. 100000000

Gross profit c/d

61500000 100000000 100000000

PROFIT & LOSS ACCOUNT
Dr. Cr.

Particulars Advertising Transport Costs Bank Charges Audit Depreciation Electricity/Water Sundry Expenses Interest on Loan Interest on Capital @ 12% Maintenance of Livestock Rates and Taxes Net Profit

Rs. 5000000 1100000 5000 200000 100000 500000 100000 10000000 3600000 29200000 10000000 295000 61500000

Particulars Gross Profit b/d

Rs. 61500000

61500000

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CASH FLOW SUMMARY

Inflow Capital Account: Varun Abdul Tehseen Nidhi Aditya 6000000 6000000 6000000 6000000 6000000

Rs.

Outflow Fixed Assets: Land 12500000

Rs.

Machinery 8000000 Livestock Building/Land Development 30000000 Expenses: 80000000 100000000 Advertising Transport Bank Chs. Audit 5000000 1100000 5000 200000

20500000 35000000 2000000

Loan from SIDBI Sales

Depreciation 1000000 Elec./Water 500000

Sundry Expenses 100000 Interest on Cap.3600000 Rates and Taxes 10000000 Labour Maintenance of Livestock Loan Repay 21505000 3500000 29200000 30000000

220000000

141705000

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BALANCE SHEET

Liabilities Capital Account:

Rs.

Assets Land 12500000

Rs. 16000000

Add: Development 3500000 Varun Abdul Tehseen Nidhi Aditya 6000000 6000000 6000000 6000000 6000000 30000000 Machinery Less: Depn. Bank Livestock Less:c/f 35000000 10000000 25000000 8000000 800000 7200000 55695000

Loan 80000000 Less: paid off.10000000 Net Profit Interest on Capital 70000000 295000 3600000

103895000

103895000

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BREAK EVEN ANALYSIS
SCALE
X AXIS : 1 UNIT = 2250 CUSTOMERS | Y AXIS : 1UNIT =50 LAKHS

12 10 8 6 4
TOTAL REVENUE

FIXED COST

VARIABLE COST

2
0 0 5 10 15 20 25 30 35 40 45 50 55
CUSTOMERS (UNITS)
Total Revenue = Rs 10,00,00,000 Fixed Cost = Rs 8,42,05,000 Milk in litres(output) = 51,10,000 Unit Price = Variable Cost/ unit = 21.52 2.94

BEP =

Fixed Cost Unit price – Variable cost/unit

= 8,42,05,000 21.52 - 2.94

= 45,32,024 litres

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CAPITAL EQUIPMENTS
Cow Milker
Description: An apparatus for milking cows. It consists of a glass receiver, having a cover which may be closed air-tight. Through this cover extend four rubber tubes, which terminate in metal tubes attached to teates. Air is exhausted from the receiver by the pumps shown, and the milk thus drawn down. Each milker can milk up to 15 litres in 2 minutes. Quantity: 10 Milkers of 15 Litres capacity each Cost: Rs 3,50,000 Each Total 10 x 3.5 = Rs 35,00,000 Supplier: Goma Engineering Pvt Ltd, Thane

Stainless Steel Cream Can / Milk Can
Description: Stainless Steel container to store or transport processed/unprocessed milk or cream for a short period without affecting the quality and taste of milk and protecting it from the outer conditions. Quantity: 200 Cans of 50 litres capacity each Cost: Rs 3,000 each Total: 200 x 3,000 = Rs 6,00,000 Supplier: Bishan Steel Industries, Navi Mumbai

Milk Tanker
Description: Used in transportation of milk over long distances. It contains facilities of cooling milk to preserve even raw unprocessed milk for a short period of time without

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making the milk curdle in the process. Also used to distribute milk to various distributors or taking the milk for processing. Quantity: 1 Tanker of 10,000 Litres capacity Cost: Rs 7,50,000 Supplier: Bharat Earth Movers Ltd

Ultra High Treatment Plant
The decisive factors in the selection of the appropriate Heat Treatment process for thermal product treatment are product quality, production safety and efficiency. The UHT plants allows for thermal and aseptic treatment of products with portions of fibres and particles. Along with correct cooling, UHT is one of the most important safety measures in milk processing. It destroys unwanted or diseasecausing bacteria without reducing the nutritional quality of milk. The UHT technology is a step ahead of the Short Time Heating Plant (STHT plant) a.k.a. Pasteurizer in maintaining high levels of product quality to maintain a shelf life of up to 150 days. Quantity: The capacity of UHT plants range from 50 – 5,000 litres/hour for the treatment of low and medium viscosity products. Cost: Rs 15,00,000 for 5,000 litres/hour capacity plant Supplier: Larsen & ToubroLtd. / Alfa Laval (India) Ltd

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Homogeniser
Description: Homogenised milk is produced by mechanically forcing milk through a small passage at high velocity. This breaks down the fat globules in milk into much smaller ones and creates a stabile fat emulsion. Homogenisation diminishes the tendency of the fat globules to clump together and coalesce into cream. Quantity: 1 Plant of 3,000 litres/hour capacity Cost: Rs 3,50,000 Supplier: SSP India Pvt Ltd

Butter Churn
Description: Used to convert cream to butter by electronically churning, melting and filtering the cream and attaining the desired fat , moisture and SNF percentage. Also converts churned butter into the purer form – Ghee by melting butter and removing all moisture and SNF. Quantity: 1 Unit of 100 litres/hour capacity Cost: Rs 2,50,000 Supplier: Alfa Laval (India) Ltd

Standardiser
Description: Milk standardisation ensures that different milk products - such as full fat, skimmed and semi-skimmed - have the right level of fat concentration. The system uses a centrifuge to separate the raw milk into standardised milk and cream, which are drawn off. Another device is installed on the inlet feed to the centrifuge and measures the flow of raw
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milk into the separator. A signal is taken from the instrument and used to control a pump which regulates the flow of raw milk into the separator. Quantity : 1 plant of 3,000 litres per hour capacity Cost: Rs 5,00,000 Supplier: HMT Limited, Dairy Udyog India Ltd

Bag Filling and Packing Machine
Filling of processed milk into bags in a aseptic way so as to maintain a long shelf life with or without refrigeration and to ensure novelty of seal to prevent resealing of packet and prevent adulteration. Also used for stamping packets with details like price, date of expiry & manufacture. Quantity: 1 machine packing 120 (30 x 4) packets per minute Cost: Rs 2,50,000
Supplier: Tetra Pak India Ltd

Liquid Transfer Pump
Description: Pumping milk through hoses over a distance of one plant to another. Quantity: 2 Pumps of 1 H.P. each

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Cost: Rs 30,000 each Total: 2 x 30,000 = Rs 60,000 Supplier: M A N Industries

Milk Hose
Description: Hose for pumping milk safely and hygienically. Quantity: 2 hoses of 100 feet each Cost: Rs 2,000 each Total: 2 x 3,000 = Rs 6,000 Supplier: Goma Engineering Pvt Ltd, Thane

Milk Check Teat Wipes
Description: A cleansing wipe impregnated with 0.5% chlorhexidine gluconate and 9.0% isopropyl alcohol for premilking teat preparation. Wipes are thick, durable and gentle Quantity: Stock for 6 months Cost: Rs 7,000 Supplier: Goma Engineering Pvt Ltd, Thane

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Organisation Plan
ORGANISATIONAL STRUCTURE

Abdul

Aditya

Tehseen

Nidhi

Varun

Supervisor 1

Supervisor 2

Dairy Farming

Milk Processing

Functions of the Partners: The promoters are responsible for the way the consumers look at our brand and the way it is projected at them. Also it is their responsibility to maintain to look at future prospects for expansion, select new means to reach the consumers, expanding capacity to meet market demand, altering the products according to the changing needs of consumers, handling professional services like finance, accounting and legalities of various decisions. Also it is their responsibility to check the functioning of the works assigned to the Dairy Farming Supervisor and the Milk Processing Supervisor. They are the ones who ensure that the CSR activities promised by them are met. They form the management personnel of the business.

Functions of the Supervisors: They are the ones actually responsible for handling the day to day work of handling the entire process given to them. They are responsible for allocating the work to the skilled and unskilled labourers and make sure both, the dairy farming unit as well as the milk
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processing unit work in co-ordination. They are also responsible towards keeping the management informed about the problems faced and implement the decisions taken by the management. It is their responsibility to ensure that the production meets the ISO and AGMARK standard and that no type of adulteration takes place in the production process. They are the link between the labourers and the top management and hence it is their responsibility to ensure the smooth functioning and co-ordination of both the levels. They are a part of the management personnel of the business.

Functions of the Dairy Farming Team: They are the labourers actually responsible for milking the cows and buffalos, feeding them, and maintaining hygiene in the farm, supplying milk to the milk processing unit. They have to follow the directions of their supervisor. They are also responsible for delivering the milk to the various distributors and make sure that no adulteration takes place during the production as well as during delivery. They are responsible for keeping the cattle in the best of health and informing their supervisors when the cattle need medical attention. They are the non-management personnel involved in the functioning of the business.

Functions of the Milk Processing Team: They are the ones responsible for processing the milk, removing cream from it, maintaining different levels of fat in it, ensuring that milk has a long shelf life, meeting the norms of the PFA (Prevention of Food Adulteration Act) and the international certifications, checking for adulteration at each and every process, making butter and ghee, packing and making the products ready for transportation and delivery. They are trained to run their machineries in the most effective manner and getting the most out of it. They are responsible to their supervisor and must therefore follow all his instructions. They are the non-management personnel involved in the functioning of the business.

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STAFFING
Unskilled Labour
Sweepers, Cleaners, Operators (Cow Milker), Driver : 50 Cost of labour: Rs 4,000 p.m. Total : 50 x 12 x 4000 = Rs 24,00,000

Supervisors : 1 Cost of labour : Rs 10,000 p.m. Total : 2 x 12 x 10,000 = Rs 2,40,000

Skilled Labour UHT : 2 Salary : Rs 10,000 p.m. Total : 2 x 12 x 10,000 =Rs 2,40,000

Supervisors : 1 Cost of labour : Rs 10,000 p.m. Total : 2 x 12 x 10,000 = Rs 2,40,000

Standardiser, Butter Churn, Homogeniser, Packaging : 6 Salary : Rs 9,000 p.m. Total : 6 x 12 x 9,000 = Rs 6,48,000

Veterinarian (Visiting) : 1 Salary : Rs 5,000 p.m. Total : 12 x 5000 = Rs 60,000
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PRODUCTION PROCESS MILK

Raw Milk from Farm

Milk Skimming

Quality Checks

Distribution

Heat Treatment

Homogenis ed Milk

Packaging

Transpor taion

FRESH CREAM

Raw Milk

Quality Checks

Packaging

Raw Cream

Pasteurized Cream

Transportat ion

Distribution

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BUTTER AND GHEE

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