Dairy cattle farm presentation

MODERN DAIRY CATTLE FARM
FEASIBILITY STUDY IN
MALAYSIA
(100, 1000 AND 20,000)
By: Dr. Hamed Faghiri (Charley)
Date: 2016
1

INTRODUCTION
• Milk
• Primary source of humanbeings nutrition,
• Important for all ages,
• Contains plenty of different types of the important and necessaries nutrition,
• Dairy productions have different types.
• Malaysia dairy production and consumption
• Annual per capita milk consumption: 19.23 kg milk in Malaysia. (DVS., 2014).
• Malaysia is an importer country for dairy products. (DVS., 2014).
• Malaysian governments and farmers have afforded to develop the dairy industry. (DVS.,
2014).
• This Presentation is demanding the business and economic factors affecting the
dairy cattle industry in Malaysia and trying to find an appropriate economic model to
address the problems and develop milk and dairy production.
2
© 2016 HAMED FAGHIRI (CHARLEY) ALL RIGHTS RESERVED.

PART 1
MALAYSIAN
DAIRY INDUSTRY
3

THE GLOBAL MILK AND MILK PRODUCTS IMPORTS
THE GLOBAL MAJOR TOTAL MILK IMPORTER
THE GLOBAL MAJOR SMP IMPORTER COUNTRIES
Source:“Milk and milk products,” (2015, December).
4

MILK PRODUCTION IN MALAYSIA
Source: DVS, (2014).
MILK SELF-SUFFICIENCY IN MALAYSIA
MALAYSIA LIVESTOCK POPULATION
Livestock Type 2010 2011 2012 2013 2014
Buffalo 129,878 128,205 124,985 123,646 122,943
Cattle 838,859 768,710 744,377 751,497 760,997
Goat 498,385 479,444 4652,510 434,202 455,737
Sheep 123,475 126,412 131,923 141,918 139,670
Swine 1,931,207 1,816,557 1,81,842 1,842,953 1,828,142
MILK CONSUMPTION PER CAPITA IN MALAYSIA
5

MILK AND DAIRY PRODUCTS NUTRITIONAL IMPORTANCE
• One of the most important source of the human nutrition and food at every part of the
human life. (Ceylan, 2010).
• The natural resources of protein, vitamin A, vitamin B12, riboflavin, phosphorus,
calcium, zinc, potassium, and iodine. (Wells, 2000).
• The mineral content and density of the bone. (Department of Health, 1998).
• The children should minimum drink 350 ml milk or two serving any kinds of dairy
products per day. (Department of Health, 1994).
• Teeth health and strength. (Pitts, 1999).
• Protect the body from many types of the cancers. (Amna, 2008).
• The more milk and dairy products intake should be encouraged for the older
generation to achieving an adequate level of calcium. (Department of Health, 1998b).6

MILK AND DAIRY PRODUCT CONSUMPTION
Source: Boelling, (2015).
7
MILK CONSUMPTION IN MALAYSIA

MALAYSIAN GOVERNMENTS PLANS
• Support for dairy cattle farming since 1974.
• National Dairy Development Program (NDDP), aim to help the smallholder dairy farmers.
• 19 Milk Collection Centers (MCC). MCCs developed to 43, the milk production from 8.3 to
28.9 million liters.
• Focused more on trading, privatization, and industrialization during the 1980s.
• Priority of agriculture shifted to the high-value crops such as palm oil and rubber tree in
the 1990s.
• Third National Agrofood Policy (NAP3):
• The development of dairy industry became one of the main concern again.
• Increase the Malaysia’s Self-Sufficiency Level (SSL) from 1998 to 2010.
• The Ministry of Agriculture’s agencies did not have any clear strategy or plan to
develop milk and dairy products and increase the SSL.
• Fourth National Agrofood Policy (2011-2020)
• Focus more on the SSL, food safety, and security.
• EPP13: Partnering with a large foreign dairy company to establish dairy clusters in
Malaysia.This project aims to increase SSL of milk, improve consumer perception of
the local dairy sector and ensuring a steady purchaser.
• EPP16: Investing in foreign cattle farms.This project aims to ensure a steady supply
of dairy animals
MALAYSIA MILK SUPPLY CHAIN SYSTEM
8

DAIRY COWS BREEDING IN MALAYSIA
• The initial main dairy cattle in Malaysia
• 19th century
• Mixture of Indian zebu cow breeds. (Sivarajasingam, S., & Wan Zahar, M., 1985; Raymond,
A.K., & Ratnakumar, D., 1997, Sivarajasingam,S., et al., 1983).
• Purebred dairy cattle such as Jersey and Holstein Friesian. (Osman, A., 1984).
• Crossbreeding
• Between LID and Red Sindhi from India and Sahiwal from Pakistan in the 1950s. (Osman, A.,
1984).
• Between Bos taurus and zebu was performed the best. (Panandam, J.M., & Raymond, A.K.,
2005).
• Finally, Holstein Friesian and Jersey to improve the LID in the 1960s. (Panandam, J.M., &
Raymond, A.K., 2005).
9

FACTORS CAUSING WEAKNESS OF DAIRY
CATTLE INDUSTRY IN MALAYSIA
• Lack of technology and knowledge
• Wrong management
• Lack of trained supervisors and workers
• Inappropriate food formulation, foods and feeding system
• Lack of biosecurity system
• Lack of breeding management
• Lack of genetically pure species
• Climate
10

PART 2
TEAM
CHARACTERISTIC
11

VISION
To be the leader in Modern agro industry among South East Asian countries.
MISSION
To be the main dairy product supplier
To manufacture different types of the dairy products such as yogurt, cheese and so on.
MOTTO
TRANSFER RISK INTO OPPORTIUNITY 12

TEAM CHARACTERISTIC
• 50 years experience
• Well-known globally
• Turnkey projects
• Variation of different plans and projects
• Corporation capacity to transfer technology and know-how
• Formation and training in Malaysia and overseas
13

14
WELL-KNOWN GLOBALLY

TURNKEY PROJECTS
15

16
VARIATION OF DIFFERENT PLANS AND
PROJECTS

CORPORATION CAPACITY TO TRANSFER
TECHNOLOGY AND KNOW-HOW
17

FORMATION AND TRAINING IN
MALAYSIA AND OVERSEAS
18

PART 3
PLAN
CHARACTERISTIC
19

FRAMEWORK
Knowledge
&
Know-how
Machinery,
Equipment
&
Construction
Operation
&
Performance
Result
20

PLAN OBJECTIVES
• High quality and healthy source of dairy products,
• Reducing farming operation risks and minimize production damage risk,
• Guiding the financial organization and funder,
• Developing the country independence level,
• Supporting the country food security stage,
• Increasing the efficiency and productivity level,
• Export capacity and potential,
• Many direct and indirect job opportunities,
• Modernizing the dairy products’ industry and
• Adequate internal and external resources
• Maximize the profit,
• Secured market
21

PLAN DEVELOPMENT
• Build up the first turnkey modern dairy cattle farm
• Training and transferring the technology
• Expand the capacity of the farm to 20,000 dairy cattle
• Build up the turn key dairy products factory and branding the
product
22

SUITABLE LAND
• Flat
• Minimum: 2 acres for 100 cows, 3-4 acres for 1000 cows and 60 to 80
acres for 20,000 cows (To develop your project in the future, it is better
to buy a bigger land)
• Easy Access (Near the road)
• Climate: temperature and level of the humidity must be low as much as
possible
• Cheep
• Near source of water and electricity
23

1- Receiving the lands information
2- Visit and choose a land
3- Send the draft of the consultancy contract and Sing the
consultancy contract
4-Prepare prefeasibility study for that particular land and Answer all
questions and explain about the plan in detail
5- Buy the land
6- Signing the contract with overseas companies (Initial payment is
around 5% of contract value amount for visit by foreigner expert,
final design, final technical plan, final feasibility study, Performa
Invoice, Invoice).Takes around 2 months to all documents become
ready
24
TIME TABLE:
1000 DAIRY CATTLE

7-Opening the LC for construction and equipment
8- Takes 5, 0 months order & produce the equipment
9-Takes 3, 0 months for loading & shipment
10-Takes 12, 0 months installation and construction
11-Starting formation and training during the installation &
construction period.
12-Chose the cattle in Australia , Iran and France two months before
finishing the construction activities.
13-Opening the LC for cattle one month before finishing the
construction (Forth payment)
25
TIME TABLE:
1000 DAIRY CATTLE

TIME TABLE:
1000 DAIRY CATTLE
14- Ordering the food and finalizing the whole things
15- Shipment of the animals to the farm
16- Start producing the milk and other products (In this period just need
working capital before start producing the milk)
17- ±2, 0 months tolerance
18- 22, 0 months total preparation time
Note:
The time table for 100 cows have the same steps but the duration is
around 1 year.We cannot give any time table for 20,000 dairy farm in this
stage because we need more information about the land, climate, and
also should combine our experience in the pilot plan to come up with
the more details.
26

PART 4
FINANCIAL PLAN
27

FINANCIAL PLAN
100 DAIRY CATTLE
Fix cost (RM)
NO Comment Cost
1 Land 500,000
2 Initial payments 81,000
3 Working capital 500,000
4 Building and construction 686,000
5 Tools, equipment and
machinery
978,000
6 Heifers and Bulls 2,255,000
7 Total 5,000,000 28

FINANCIAL PLAN
100 DAIRY CATTLE
Total Variable Costs (RM)
Milk production (Litter)
Year
1 2 3 4 5 6
1,136,671 1,098,742 1,163,104 1,173,844 1,184,492 1,195,140
Year
1 2 3 4 5 6
713,700 661,850 747,250 762,500 777,750 793,000
29

FINANCIAL PLAN
100 DAIRY CATTLE
Total income and total net income (RM)
comment
Year
1 2 3 4 5 6
Milk 1,784,250 1,654,625 1,686,125 1,906,205 1,944,375 1,982,500
Manure 120,000 120,000 120,000 120,000 120,000 120,000
Animals 232,000 610,400 639,200 724,000 724,000 724,000
Total income 2,136,250 2,385,025 2,445,325 2,750,20 2,788,375 2,826,500
Min Costs 1,136,671 1,098,742 1,163,104 1,173,844 1,184,492 1,195,140
Total Net Income 999,579 1,286,283 1,282,221 1,576,406 1,603,883 1,631,360
30

FINANCIAL PLAN
100 DAIRY CATTLE
Time table:
3,0 Months order the equipment
3,0 Months loading & shipment
6,0 Months installation and construction + Introducing
heifers and start operation
ROI:
3-4 years based on the site climate and other factors.
Net profit in the year 6th: 32% 31

FINANCIAL PLAN
1000 DAIRY CATTLE
Fix costs
1- Building and equipment and the rest of the fix costRM 10,000,000
2- Land RM 5,000,000
3- FOR 1000 dairy imported heifers RM 13,000,000
4- Total amount RM 28,000,000
32

FINANCIAL PLAN
1000 DAIRY CATTLE
Income
Expected income at least around 910,000 RM per month
1- Milk 7,000,000 liters x 2.5 = RM 17,500,000
2-Cattle for sale 117,000 kg x 7 = RM 819,000
3-Heifers for sell 150 x 10,000 = RM 1,500,000
4-Male Calves for sell 160,000 kg x 10 = RM 1,600,000
Total incomes = RM 21,419,000
Mines all variable cost = RM 10,500,000
Net Profit per Year = RM 10,919,000
33

FINANCIAL PLAN
1000 DAIRY CATTLE
ROI
3-4 years depend on the SITE CLIMATE and other factors after
starting the production. As mentioned before the preparation time is
about 22 months.
Net profit in the year 6th = 39%
Note
Above calculation is not accurate and it has around ± 10% tolerance
because we do not have specific details about land, climates and
other factors.
34

FINANCIAL PLAN
20,000 DAIRY CATTLE
Fix costs
1- Building and equipment and the rest of the fix costRM 150,000,000
2- Land RM 20,000,000
3- FOR 1000 dairy imported heifers RM 200,000,000
4- Total amount RM 370,000,000
35

FINANCIAL PLAN
20,000 DAIRY CATTLE
Income
Expected income at least around 910,000 RM per month
1- Milk = RM 350,000,000
2-Cattle for sale = RM 16,380,000
3-Heifers for sell = RM 30,000,000
4-Male Calves for sell = RM 32,000,000
Total incomes = RM
428,380,000
Mines all variable cost = RM 210,000,000
Net Profit per Year = RM
218,380,000
36

FINANCIAL PLAN
20000 DAIRY CATTLE
ROI
2 years depend on the site climate and other factors after start of
production.
Net profit in the year 6th = 59%
Note
Above calculation is not accurate and it has around ± 15% tolerance
because we do not have specific details about land, climates and
other factors.
37

MILKING MASHIN
38

MILKING MASHIN
39

FLOOR
40

ROOF COVER
41

CAPACITY
42

SALON
43

SALON
44

SALON
45

SALON
46

SALON
47

SALON
48

SALON
49

SALON
50

SALON
51

FREE STAL SYSTEM
52

MANURE STORAGE TANK
53

OTHER SECTIONS
54

55

THANK YOU AGAIN FOR
YOUR
PRESENCE
AND
ATTENTION..
56

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