Project Paper (Draft)

Dairy & Calf Fattening

Milk Meat
Submitted to:
Dr. Dhiman Kumar Chowdhury
Professor
Faculty of Business Administration
University of Dhaka

Submitted by:
 CHAPTER 1

OVERVIEW OF THE AGRO FARMING IN BANGLADESH

1.1 PURPOSE OF THE DOCUMENT

The objective of this pre-feasibility study is primarily to facilitate potential entrepreneurs to

facilitate investment and provide an overview about dairy and livestock farming. The project pre-

feasibility may form the basis of an important investment decision and in order to serve this

objective, the document covers various aspects of dairy and livestock concept development, start-

up, production, finance and business management. The document also provides sectoral

information, brief on government policies and international scenario, which have some bearing on

the project itself. This pre-feasibility is regarding both “Dairy Farm” & “Calf Fattening Farm”

which comes under “Livestock and Agriculture” sector. Before studying the whole document one

must consider following critical aspects, which form the basis of any investment decision.

1.2 EXECUTIVE SUMMARY

The milk & meat are a rich source of protein and its demand is growing with every passing year.

Both rural and semi-urban areas are suitable for this business. Agro farm management as per

husbandry practices is the key success factor in this business. After breeding and rearing period,

cattles will be sold at local markets ‘Live Body Weight’ basis to traders or transported to market.

The local market price of live cattle and milk is determined on daily basis.

A dairy and calf fattening farm of 30 cattle is suggested in this pre-feasibility study as a viable

economic size to enter this business. The proposed business will start in a personally owned land

and four persons will be employed. This project is proposed to be started financing around 2.5

million. The farm size is targeted to increase to 150 animals within 10 years.
1.3 INTRODUCTION TO THE PROJECT:
Name of the project: Farmvill Agro Farm

Objective of the Project: The proposed project is intended for setting up of a Modern Dairy

& Calf Fattening Farm for producing Milk, Meat, Energy (BioGas)

and Bio-Manure.

Location of the project: The Farmvill Agro Farm will be located at Daulatpur one of the

bigest thana with huge deemand for the respective products, under

Kushtia Districts, Bangladesh.

Capacity: The project is for 30 cows among which 5 milking cow & 25 cattle

for fattening.

Projects life cycle: The project will be run on the basis of 4 months cycle for fattening
and yearly basis for dairy production

1.4 PRESENT SCENARIO OF LIVESTOCK FARMING IN BANGLADESH

Bangladesh has a livestock crisis. This is because the country would depend heavily on Indian beef
for its protein intake. With the last Indian crackdown on cattle trade, the problem has become dire
as the price of cattle meat spiked over 40 per cent recently. Domestic supply, according to one
recent estimate, only meets roughly 50 per cent of the country’s demand. Policy analysts claim
that the issue can be resolved by boosting indigenous production. To put into perspective,
Bangladesh is one of the lowest meat consuming countries with an annual consumption of only
3.2 kg per person (www.dls.bd). Bangladesh’s meat consumption is lower than other countries in
the region, including India and Pakistan (www.fao.org). The highest meat consumption is by
Australia, which is 90 kg per person. Bangladesh’s low consumption is due to the reality that 80
per cent of the population consists of poor and middleclass, with a per capita income of $1314,
who consume meat occasionally. With increasing incomes, the demand for meat is set to rise.
Currently the demand for meat hitted more than 6.7 million tones in whereas the supply barely
reached 1.04 million tones. Hence, this underlines an existing crisis.
The production, need, demand, deficit of milk, meat in Bangladesh has been estimated as
follows:
Products Production (Million Need per capita Demand Deficit (Million
m ton) (gram) (Million m ton) m ton)
Milk 2.28 250 12.82 10.54
Meat 1.04 120 6.16 5.78

1.5 IMPORTANCE OF DAIRY AND CATTLE REARING IN BANGLADESH

The livestock sector lies in its contribution to the Bangladesh economy. Its contribution, according
to Bangladesh Bureau of Statistics (BBS), has fallen by 0.6 per cent, from approximately 2.4 to
1.8 per cent, in past eight years. The sector contributes 12 per cent of the total agricultural output.
It is a labor-intensive sector. According to the latest Labor Force Survey (LFS) of 2014 the sector
employs 6.4 million people. Thereby, the sector accounts for more than 10 per cent of the country’s
total employment. Hides, a byproduct of the cattle industry, contributes over 3.0 per cent of the
country’s exports, in the form of leather products. The livestock sector contributes heavily to
meeting Bangladesh’s protein demands. The protein supply is in meat forms, along with poultry,
eggs and milk.
Another issue within the sector that deserves attention is milk. Does Bangladesh have a milk crisis?
The answer depends on how important milk is considered in the nation’s protein or nutritional mix.
In spite of successful strives in public health measures, the country remains persistently
malnourished. In Bangladesh, 25 per cent of the population are undernourished and 36 per cent of
children are stunted (www.bbs.gov.bd). According to World Health Organization (WHO,
Bangladesh is on the lower end of the global protein consumption, especially that of milk. With
such striking deficiencies, milk can provide the much-needed protein for the nation.
The reality is, the Bangladeshis consume very little milk. According to FAO the per capita milk
consumption in Bangladesh is 18 kg per year, significantly lower than other countries in the region.
In comparison, India and Pakistan consume 90 kg and 190 kg of milk per capita respectively. It is
primarily because of the availability of cows. Unlike India and Pakistan, the problem in
Bangladesh is land shortage. Due to high population density and problems of soil erosion, its arable
and pastoral lands are declining. A noteworthy fact is that Bangladesh has one of the highest cattle
densities, i.e. number of cattle heads per hectare, in the world. However, the country’s milk yield
is one of the lowest. It is because the majority of the cows are low yielding local breeds, rather
than crossbreeds which can yield two to three times more milk. Since the past decade, the
crossbreed cows have been growing in numbers.
However Bangladesh experienced a 3.6 per cent growth in milk production in the decade since the
beginning of the century. During the same time, consumption increased by 4.0 per cent. The
demand is therefore fulfilled by imported milk, which is in the form of powdered milk or baby
formula. As a result of population growth, urbanization and rise in income, the demand for milk is
expected to surge in the future. Unlike India and Pakistan, it is common to find processed powered
milk, rather than liquid milk, across Bangladesh. This is due to a myriad reason, but primarily
because of immature markets and poor transporting infrastructure. Tea stallers popularly use
condensed milk to make the most common drink in the nation, milktea. The share of imported milk
and milk derivatives, which are significantly cheaper, would sharply increase if the tariffs, which
ranges from 35–90 per cent, are reduced. Milk is largely imported from three advanced economies:
Denmark, Holland and New Zealand.
As for domestic production, the dairy sector in Bangladesh consists of smallholders. The milk is
usually supplied via traditional informal markets. In traditional markets, smallholders sell their
milk, mostly directly but at times through middlemen, to sweetshops, tea stalls or consumers,
without any formal contract. Farmers from remote areas get 60 per cent lower prices than their
urban counterparts. The formal dairy market is in form of cooperatives, comprising 20 per cent of
the market. Milk Vita, a public entity, is the first and the largest agro processing cooperative. Milk
Vita paved the route for many private enterprises such as Aarong and Pran to adopt the cooperative
model.

1.6 PROJECT PROFILE

1.6.1 Opportunity Rationale

Livestock production is an integral part of Bangladesh’s agriculture sector and plays a vital role in
national economy. At present, livestock is contributing much to the agricultural sector and 11 per
cent to the GDP. Bangladesh is geographically located close to the Middle East and south-East
Asia. Both of these regions are deficient in livestock products and depend upon import from other
countries. The livestock industry in most of the developed world is highly subsidized. With
reduction of subsidies in the wake of WTO, the local livestock sector should have better
opportunities to compete. Livestock registered a strong growth of 4.30 percent over the last year’s
impressive growth of 7.5 percent due to increase in the livestock and poultry products. The role of
livestock in rural economy may be assessed by the fact that 30 to 35 million of the total rural
population is engaged in livestock farming, having 2 to 3 cattle/buffalo and 5 to 6 sheep/goats per
family deriving 30 to 40 per cent of income from it. The livestock population for the last three
years is given below:
Table 1: Population of Livestock(million)’1.
Production
Species 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16*
Cow 230.51 231.95 233.41 234.88 236.36 237.35
Buffalo 13.49 14.43 14.50 14.57 14.64 14.69
Goat 241.49 251.16 252.76 254.39 256.02 257.11
Sheep 30.02 30.82 31.43 32.06 32.70 33.13
Total 516.66 528.36 532.11 535.90 539.72 542.27
livestock
*Till Feb-2016
Table 2: Production of Milk & Meat(Lakh tones)’2
Production
Item 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16*
Milk 29.47 34.63 50.67 60.90 69.70 52.30
Meat 19.86 23.32 36.20 45.20 58.60 46.59
*Till Feb-2016
Dairy animals, mainly cows will purchased from the animal markets or breeders located in peri
urban areas of cities like Kushtia, Pabna, Meherpur, Chittagong, and Dhaka. Dairy animals will be
fed on protein sources (concentrate) along with plenty of green fodder. Animals are milked twice
a day i.e. morning and evening. The milk will be sold at the farm or may be directly sold in the
urban market. The milk price varies according to its quality and the season. Cow milk would be
sold to the milk collection companies like milk vita and Pran and Aarong at Rs. 35-37 per liter.
1.7 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT

Dairy production & calf fattening is all-inclusive activity, related to animal care, reproduction,
feeding, and management. It is defined as all those aspects and activities relating to rising of dairy

1
Department of Livestock Services, Ministry of Fisheries and Livestock
2
Department of Livestock Services, Ministry of Fisheries and Livestock
animals during their various phases of life to get wholesome milk. Before making the decision,
whether to invest in the dairy and livestock farming or not, one should carefully analyze the
associated risk factors. A SWOT analysis can help in analyzing these factors, which can play
important role in making the decision to come to this industry.

1.7.1 Strengths

 High domestic consumption

 Major source of food, i.e. Milk& Meat
 Back bone and main stay of economy.
 Provides raw material for food & Leather industry.
 Ample human resource employment sector.
 Stationed, permanently located secured loaning sector.

1.7.2 Weaknesses

 Management of livestock farm is a challenging job.

 Nutrition is still a problem hampering the livestock productivity in general and meat
production in particular
 Unorganized sector, unaware of basic farm management practices.
 Socially not recognized sector to choose as profession.
 Lack of education and initiative in farmer, traditional approach in and management.
 Lack of farm/ market infrastructures & marketing information.

1.7.3 Opportunities

 Vast range of area of operation, more needs and scope of development.

 Commercially viable sector with great credit potential and absorption capacity.
 Meat and Milk products needs are much higher than supply.
 Value added dairy products are in demand.
 Massive migration of labor to cities can be checked / stopped.

1.7.4 Threats

 Rising trend of cost of production with high food cost as compared to profit ratio.
  Threatend with diseases and exposure to natural calamities.
 Imbalance between prices of inputs & outputs.
 Defective and unorganized markets.
 Lack of media projection, non-recognition of problems and monopoly of big producers.
 Non-availability of subsidy & tax holidays.

CHAPTER 2

UNDERSTANDING OF THE FEASIBILITY STUDY

2. What is a Feasibility Study?

As the name implies, a feasibility study is an analysis of the viability of an idea. The feasibility
study focuses on helping answer the essential question of “should we proceed with the proposed
project idea?” All activities of the study are directed toward helping answer this question.
Feasibility studies can be used in many ways but primarily focus on proposed business ventures.
Farmers and others with a business idea should conduct a feasibility study to determine the
viability of their idea before proceeding with the development of a business. Determining early
that a business idea will not work saves time, money and heartache later.
A feasible business venture is one where the business will generate adequate cash-flow and profits,
withstand the risks it will encounter, remain viable in the long-term and meet the goals of the
founders. The venture can be either a start-up business, the purchase of an existing business, an
expansion of current business operations or a new enterprise for an existing business.
Feasibility Study Outline is provided to give you guidance on how to proceed with the study and
what to include. Also, How to Use and When to Do a Feasibility Study will help you through
the process and help you get the most out of your study. A feasibility study is only one step in the
business idea assessment and business development process. Reviewing this process and reading
the information below will help put the role of the feasibility study in perspective.
2.1 Evaluate Alternatives
A feasibility study is usually conducted after producers have discussed a series of business ideas
or scenarios. The feasibility study helps to “frame” and “flesh-out” specific business scenarios so
they can be studied in-depth. During this process the number of business alternatives under
consideration is usually quickly reduced.
During the feasibility process you may investigate a variety of ways of organizing the business
and positioning your product in the marketplace. It is like an exploratory journey and you may
take several paths before you reach your destination. Just because the initial analysis is negative
does not mean that the proposal does not have merit. Sometimes limitations or flaws in the proposal
can be corrected.
2.2 Pre-Feasibility Study
A pre-feasibility study may be conducted first to help sort out relevant scenarios. Before
proceeding with a full-blown feasibility study, you may want to do some pre-feasibility analysis
of your own. If you find out early-on that the proposed business idea is not feasible, it will save
you time and money. If the findings lead you to proceed with the feasibility study, your work may
have resolved some basic issues.
2.3 Market Assessment
Also, a market assessment may be conducted that will help determine the viability of a proposed
product in the marketplace. The market assessment will help to identify opportunities in a market
or market segment. If no opportunities are found, there may be no reason to proceed with a
feasibility study. If opportunities are found, the market assessment can give focus and direction to
the construction of business scenarios to investigate in the feasibility study. A market assessment
will provide much of the information for the marketing feasibility section of the feasibility study.
2.4 Results and Conclusions
The conclusions of the feasibility study should outline in depth the various scenarios examined
and the implications, strengths and weaknesses of each. The project leaders need to study the
feasibility study and challenge its underlying assumptions. This is the time to be skeptical. Don’t
expect one alternative to “jump off the page” as being the best scenario. Feasibility studies do not
suddenly become positive or negative. As you accumulate information and investigate alternatives,
neither a positive nor negative outcome may emerge. The decision of whether to proceed is often
not clear cut. Major stumbling blocks may emerge that negate the project. Sometimes these
weaknesses can be overcome. Rarely does the analysis come out overwhelmingly positive. The
study will help you assess the tradeoff between the risks and rewards of moving forward with the
business project. Remember, it is not the purpose of the feasibility study or the role of the
consultant to decide whether or not to proceed with a business idea. It is the role of the project
leaders to make this decision, using information from the feasibility study and input from
consultants.
2.5 Feasibility Study vs. Business Plan
A feasibility study is not a business plan. The separate roles of the feasibility study and the business
plan are frequently misunderstood. The feasibility study provides an investigating function. It
addresses the question of “Is this a viable business venture?” The business plan provides a planning
function. The business plan outlines the actions needed to take the proposal from “idea” to
“reality.” The feasibility study outlines and analyzes several alternatives or methods of achieving
business success. The feasibility study helps to narrow the scope of the project to identify the best
business scenario(s). The business plan deals with only one alternative or scenario. The feasibility
study helps to narrow the scope of the project to identify and define two or three scenarios or
alternatives. The person or business conducting the feasibility study may work with the group to
identify the “best” alternative for their situation. This becomes the basis for the business plan.
The feasibility study is conducted before the business plan. A business plan is prepared only after
the business venture has been deemed to be feasible. If a proposed business venture is considered
to be feasible, a business plan is usually constructed next that provides a “roadmap” of how the
business will be created and developed. The business plan provides the “blueprint” for project
implementation. If the venture is deemed not to be feasible, efforts may be made to correct its
deficiencies, other alternatives may be explored, or the idea is dropped.
2.6 Reasons Given Not to Do a Feasibility Study
Project leaders may find themselves under pressure to skip the “feasibility analysis” step and go
directly to building a business. Individuals from within and outside of the project may push to skip
this step. Reasons given for not doing a feasibility analysis include:
• We know it’s feasible. An existing business is already doing it.
• Why do another feasibility study when one was done just a few years ago?
• Feasibility studies are just a way for consultants to make money.
• The market analysis has already been done by the business that is going to sell us the
equipment.
• Why not just hire a general manager who can do the study?
Feasibility studies are a waste of time. We need to buy the building, tie up the site and bid on the
equipment. The reasons given above should not dissuade you from conducting a meaningful and
accurate feasibility study. Once decisions have been made about proceeding with a proposed
business, they are often very difficult to change. You may need to live with these decisions for a
long time.
2.7 Reasons to Do a Feasibility Study
Conducting a feasibility study is a good business practice. If you examine successful businesses,
you will find that they did not go into a new business venture without first thoroughly examining
all of the issues and assessing the probability of business success. Below are other reasons to
conduct a feasibility study.
 Gives focus to the project and outline alternatives.
 Narrows business alternatives
 Identifies new opportunities through the investigative process.
 Identifies reasons not to proceed.
 Enhances the probability of success by addressing and mitigating factors early on that could
affect the project.
 Provides quality information for decision making.
 Provides documentation that the business venture was thoroughly investigated.
 Helps in securing funding from lending institutions and other monetary sources.
 Helps to attract equity investment.
The feasibility study is a critical step in the business assessment process. If properly conducted, it
may be the best investment you ever made.

2.8 THE FEASIBILITY STUDY CAN BE SUMMARIZED INTO SIX CATEGORIES:

1) Market feasibility
2) Managerial feasibility
3) Technical feasibility
4) Economic Feasibility
5) Financial feasibility
6) Social/Environmental feasibility
 CHAPTER 3

FEASIBILITY ANALYSIS OF THE FIRMVILL AGRO

3.1 MARKET FEASIBILITY:

3.1.1 What is the product?
1) Meat (Cattle)
2) Milk
3.1.2 Market Demand & Entry Timing
There is enough demand for the product all over the country as the production of both the milk
and meat is in deficit. The demand of milk in summer is high as compared to winter. That’s why
the animals in summer are sold at a bit higher prices as compared to winter. So, the proposed
business can be started before the onset of summer season.

3.1.3 Who are the competitors?

 Local farmers
 Importers of milk powder

Existing
Market Demand/Supply
Survey/Study Future
Demand/Supply

Calculate Gap =
Formulation of
Demand -
Market Strategy
Supply
3.1.4 Milk Collection Hubs

The development of urban or pre-urban commercial dairy farms is something new in livestock
production. At preseent different companies like Milk Vita , Pran Aarong etc. have set up milk
collection Hubs in almost all the Metropolitan cities like Dhaka, Chittagong, Rangpur, Natore,
Pabna, Shirajgonj, etc are the major markets of milk. Hence, dairy farms established in pre-urban
areas of these cities fulfill the daily need of these cities. There is an ongoing project of setting up
a Milk Hub at Pragpur in Kushtia which will be very close to our projected area.

Gawalas collect milk from farmers in villages and deliver it at the consumer’s doorstep. Milk
collection networks of different processing companies also collect milk directly from the farm and
transport it to the processing facilities.

3.1.5 Target Customers

The pre-feasibility suggests selling the animals in the urban market. The buyers for milk could be
mainly the local Gawalas and the corporate buyers like Milk Vita, and the buyer for cattle will be
the local business people. The animal mandies of big metropolitan cities like Dhaka, Rajshahi and
Khulna can also be considered for selling the animals in bulk. The animals will be sold on live
weight basis. The price of fattened calves varies between Rs 370-440 kg depending upon the
supply and demand of meat in the market. The feasibility has taken Rs 390 per kg live body weight
as the selling price. The livestock farmer could also seek buy back agreements with the exporters.
Following are some of the target clients for a milk and calf- fattening farmer:

• Local people
• Butchers
• Slaughter house owners
• Contractors
This pre-feasibility study suggests that milk will be sold on farm door through contractors,
Gawalas or people around that area or may be pasteurized at farm by the farmer and then deliver
it to the near by city. The price for the fresh milk varies from Rs 50-70 Litter depending on the
supply and demand of milk in the market. Following are some of the target clients for a dairy
farmer.

• Local people
 • Gawalas
• Milk collection companies
• Contractors
3.2 MANAGERIAL FEASIBILITY:
3.2.1 Proposed Business Legal Status

The proposed legal structure of the business entity is either sole proprietorship or partnership.
Although selection totally depends upon the choice of the entrepreneur but this financial feasibility
is based on Sole Proprietorship.

3.2.2. Manpower requirements/qualifications

The proposed business will generate employement of 6 people initially among which 5 as blue
color employe and 1 for supervising them.
3.2.3 Proposed Capacity
The feasibility study suggests an initial herd size of 30 animals, which is economical to justify the
overhead cost. This size has been fixed mainly based on financing capacity and various overhead
cost like shed, labour requirment per cattle, land requirment to produce grass, machinary cost etc.
which will be discussed latter in details. Herds mix of 80% Bull and 20% cows are recommended
to get the maximum meat & milk production around the year. To run the farm smoothly it is
required enough working capital. To avoid holding idle cash 5 milking cow has been selected that
will supply working capital by giving milk during the period of calf fattening on the other hand
during the dry season of milking cow the profit from selling the fattened cow will be used to cover
the current cost of production like foof & medicine.

3.3 TECHNICAL FEASIBILITY:

3.3.1 Key Success Factors/Practical Tips for Success

At the commencement of the proposed business, it is important that the entrepreneur must have
good knowledge of the production and have contacts with the livestock breeders and farmers.
The ability to work with people and animals, and efficient use of resources are important aspects
in modern and commercial dairy farming.

Commercial dairy farming depends on land, labor and animals as the major resources. The thrust
in modern dairy farming is on the increased use of capital and management. Successful dairy
farming harnesses all available resources into productive and profitable unit. Dairy farming is
highly complex as it includes breeding, management, feeding, housing, disease control and
hygienic production of milk on farm. The judicial use of means and resources to achieve clearly
defined goals is the key success factor in modern dairy farming i.e. the art of maximization and
optimal utilization of resources and means for maximizing productivity and profits.

The low yielder animals are uneconomical to keep; hence these should be culled. The overall
genetic improvement of all the dairy animals is necessary for improved milk production. It
involves milking records at equal intervals, selection of bull from high producing mothers, progeny
testing of breeding bull and then making extensive use of these bulls by well-organized Artificial
Insemination (AI) program.

Feeding dairy animals on nutritious and high yielding hybrid varieties of forages can be adopted.
The surplus forage should be preserved as silage or hay. Other farm management practices include
feeding for growth, lactation, pregnancy or maintenance, hygienic milk production, comfortable
and ventilated barns, spraying/ wallowing of animals in summer, timely detection of heated,
mating, with selected bull or AI service. If animals are bred within the 60-90 days of calving
provided with clean surroundings, drinking water and feed according to the requirements, the
overall performance of herd can be improved.

Timely vaccination against Rinderpest, Black Quarter, Foot and Mouth Disease, Brucellosis along
with the prevention of mastitis and parasitic control will also improve the overall performance of
dairy herd. Hygienic milk production depends upon healthy animals, clean surroundings, clean
hands of milkman and clean utensils

Healthy house is the essential for the success af an agro farm. Keeping the Environment neat and
clean is obligatory to maintain healthy home. Shed shoud be placed in the open space to get fresh
air.
Machine for cutting and mixing the food for the cattle reduces the labor cost sharply and makes
the process faster. So in this project a machine will be required to run the farm in a competetive
way. Except this to make smooth supply water and electricity other required machines like
generator, pump etc. will be used to make the farm modernized.
The proposed project location is furnished with electricity but no gas that is why there is an
opportunity to use the cow dung for producing the biogas that can be used as the supplimentary to
the power shortage during the loadshedding.
3.4 ECONOMIC FEASIBILITY:
3.4.1 MAJOR PLAYERS

Dairy farming is not an organized sector in Bangladesh. More than 90% of farming is done on
subsistence level. There are very few progressive farmers, which are running the business of dairy
farming in a professional manner. Milk processing was started in late 1970s, which is still facing
challenges due to competition with the unprocessed milk. The processed milk has captured only
2-4 percent of the total milk market. Processed milk is not the consumer's preference due to high
price differential. There are 28 milk-processing plants in the country, which were installed in mid
1980s to promote usage of processed milk. Most of these milk plants are closed due to lack of
professional management, inadequate milk supply and poor marketing campaign of the processed
milk. Presently there are some big milk processors who are buying the raw milk through hubs,
from the farmers and processosing them in different milk products.

Major Milk Processing Plants currently in operation

Project Product Per Day Milk

Processing

Milk Vita Milk Vita Milk (Pasteurized / Fresh Milk), Sweets, Ice 150,000-170,000 liters
Cream, Cakes

Aarong Aarong Milk (UHT), Butter, Cream, Ghee, Cheese 102,559 liters

Pran Milk Vita Milk (Pasteurized / Fresh Milk), Sweets, Ice 100,000 liters
Cream, Cakes

Nahar Agro Organic Milk, Sweets 35,000 litres

3.4.2 Market Potential

Bangladesh is not in the good position in milk producer in the world. Also, there is shortage of
meat production near to 50% of total demand which is mainly covered by the import of Cattle from
neighbor countries. Bangladesh is densly populated mid income country and their living standard
is improving day by day with the increase of income level. As a result people have the capability
to purchase the required milk and meat but the production is not sufficient to cover the demand.
Being neighbour to the India this customer was highly dependent on Indian cow which is barred
by decision of the Indian government that has been created a huge opportunity to meet the demand
domestically produced cattle and milk.

Milk production in year 2015-16 was about 6.09 million tons. Raw milk is used for drinking and
tea making purpose. In rural areas, milk is used to make desi ghee, yogurt, whey (lassi) and butter.
Rural as well as the urban households are the major consumers of milk.

The daily milk intake of major cities of Dhaka & Chittagong is 4 million liters and 2.3 million
liters respectively. The demand for milk increases during summers as the consumption of whey
(lassi) rises due to hot weather. Ghee is obtained by heating the milk to evaporate water and
removing the curd. Liquid butter oil with 93% fat content and a much smaller volume results. It is
easy to store and resists spoilage even at tropical temperatures.

Dahi or curd (similar to yogurt) is another popular product. If not refrigerated it must be consumed
within 24 hours. There are lots of popular sweet. It is prepared by condensing the milk to about
20% fat. Sugar and some spices are added in order to obtain desirable flavors. It is a high value
product however it also has a relatively short shelf life. Milk processing companies use milk as a
raw material to formulate different types of milk i.e. pasteurized milk, UHT treated milk,
condensed milk, skim milk & milk powder, etc. Different value added products like yogurt, ice
cream, butter and cheese are also prepared from the raw milk. The processed milk market has
increased its share in quality conscious consumers. The processed milk has achieved 4% share in
milk market during the last two decades. The milk market is growing at a growth rate of 4.5%
annually with increase in milk consumption. Metropolitan cities are the major markets for the sale
of milk. Milk can be sold at farms or directly to milk centers in the urban market.