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1. Entrepreneurship idea and Business
plan
INTRODUCTION
Project Brief:
Dairy farming is an agro-based project. Buffaloes & cows are
raised for milk production purpose. High milk yielding animals are purchased from
the animal markets or breeders located in Sahiwal, Multan and Faisalabad etc.
Dairy animals are fed on a high protein diet (concentrate) along with green
fodder. Animals give milk twice a day i.e. morning and evening. The milk is sold at
the farm or may be directly sold in the urban market. The milk price varies
according to its quality and the season. Buffalo milk is sold at Rs 55-65 per liter at
the farm gate and Rs 65-70 in the urban market. Cow milk is sold at Rs 45-50 per
liter at the farm gate and Rs 5o-55 urban market. Milk prices are lower in the
winter and higher in the summer.
Opportunity Rationale:
Dairy farming is a profitable business for small
landholders. More than 70% farmers hold less than 5 acres of land. Fodder can be
grown on this land to feed the dairy animals. Land is cultivated and irrigated at
appropriate times and inputs like seed and fertilizer are used to maximize
production. Dairy farming is one of the best ways to effectively utilize land and
human resource. Land used for growing fodder yields higher returns as compared
to land used for traditional cropping.
Ideology:
Our ideology is developed as Dairy Farming consist on (milking cows) one
of the best generation of cows through across the world (freisan ,cholistani
,sahiwal,jersey and Australian cross).

2. Name of business:
Khan dairy farm is located at kahror pacca (lodhran) south Punjab Pakistan.
khan dairy farm wants to improve Quality and purity of dairy farming and dairy
products in kahror pacca.
Product:
Product variety:
Khan dairy farm will have to produced different dairy products
for local markets as well as multinational companies. Products list is design by
khan dairy farm which are manufactured in khan organization.
Main products:
1 Milk
2 Dairy Animals
Supported products:
Khan dairy farm gives most
1 Waste dairy product(Gobber)
2 Bio gas
3 Electricity
priority on dairy pure milk and best cow’s
generation. There is a grand problem in Arban as
well as Rural areas is availability of pure milking to
fulfill people requirement on time and best
pricing. So khan dairy farm wants to provide pure
dairy milk in market and household on time.

3. Khan dairy farm as a supplier:
Target Market:
Khan farm want to provides manufacturing and services in
dairy product (Dairy Animals , Bio gas , goober waste products ,Milk , electricity
and Butter ) in Rural areas , nearest cities as well as Nestle Pakistan and Engro pak
dairy organization in Pakistan.
Local market:
Khan dairy farm provides pure dairy milk to local market of kahror
pacca as well as to multinational organizations. Khan dairy farm makes his own
milking point for saving pure milk. Milk provided by khan farm through milking
van to local market and house to house contracts. Khan dairy farm also provide
calling services to market to market as well as house to house on time with some
extra charges of providing service. khan dairy sell out extra animals(dairy cows
and bulls) to farmers and bulls are sold for every EID and local farmer’s needs.
Butter provided to local market and local store through marketing planning. Bio
gas produces by khan dairy farm to fulfill his farm requirement and Electricity
manufacturing. Khan farm produce electricity to fulfill his farm requirement as
well as extra electricity provided to nearest community. Remaining waste
products after production of bio gas provide to agriculture farmers in kahror
pacca.
Package for local markets:
Milk:
Khan farm sell out his dairy milk to local market and
household system arrange by management of farm on every
“Evening” through his Khan milk point in kahror pacca by
milking van service and by hand selling system.

4. Dairy Animals:
Khan dairy farm will sell his extra Dairy animals to
local as well as others farmers to promote their dairy productions
and maintains his dairy animals as Quantity.
Mega Market:
Khan dairy farm also provide dairy milk to mega or multinational
companies like Nestle (pvt) and Engro Pakistan.
Nestle.Pakistan:
An agreement creates between khan dairy farm and Nestle Pakistan
is that khan dairy farm provides milk to Nestle Pakistan first three
days of “morning” milking stock. Khan dairy farm provides good stock
of milk to Nestle Pakistan and Nestle Pakistan provides good
payment per litter on weekly base and also provide doctorate and
wanda facilities to khan dairy farm.
Engro Pakistan:
Khan dairy farm makes an agreement with Engro
Pakistan to provide milking stock on last four days of every week
“morning” with good payment per litter on weekly base received
with wanda and machinery packages mention by Engro Pakistan.
khan farm also received advance from engro foods for his farm and
marketing.
It is most honorable for khan farm that engro foods developed big
Bio gas plant for khan farm to makes contract with Engro foods. This
bio plant control khan farm electricity needs and extra electricity
provide to nearest village with standard bill.
Khan dairy farm as a customer:

5. Khan dairy farm busy some of basic equipments
and dairy animals feeds. These needs buy from different sources and companies.
Engro and Nestle Pakistan provide some basic needs for khan farm.
ICI Pakistan:
khan dairy farm buys most of his farm needs
for dairy animals wanda from ICI Pakistan(PVT). Khan
dairy farm made direct contract with ICI Pakistan with
concession basis. Due to that contract khan dairy farm
decrease his dairy feed expenses.
Seeds:
Khan dairy farm buys best and multi cut seeds of sergodha company.
Because Sergodha co has better quality of all winter and summer seeds whose
give high average of production of fodder and gives more energy to animals
finally produce better production of milk for all time.
Summer Winter
Makai (SG-2002) Barsaim (SG-2001)
Sada Bahar (SG-2002) Jawi (SG-2011)
Lucern (SG-2001) Also used Lucern (SG-2001)
Business Capacity:
The feasibility khan dairy farm herd size of 50 dairy
animals, which is economical to justify the overhead cost. The farm size will
increase to 180 animals within 5 years. Khan dair farm has cows is recommended

6. as jerrsey and local bread milk has more fat (4-5%) and Freisen and australian
cross cow milk (3.5%).khan farm has friesen, australian and jerrsey cross with
(calving) 37 heads Cows. (Cholistani /Sahiwal) with second lactation (calving) 13
heads. A cow on average, yields 16 liters of milk a day over a lactation period of
305 days.
Total Project Cost:
The total cost of the project is Rs 6 million, out of which
capital cost of the project is Rs 5 million for purchasing the animals and
constructing the building and the rest is used to meet the working capital
requirement. It is a flexible project which can be enhanced and developed with
change in market situation.
Description Total cost
Shed for cows 400,000
Shed for calves 50,000
Mixed cross cows (50*80,000)Average 4,000,000
Machinery 500,000
Other infrastructure 100,000
Food & servant saved 450,000
total 6,000,000
CURRENT INDUSTRY STRUCTURE:
Dairy farming is not an organized sector in
Pakistan. There are about four million dairy farmers in Punjab province only.
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% of thetotal milk market. Processed milk is not the
consumer's preference due to high price differential. There are 28 milk-processing

7. 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.
Marketing Strategy:
Khan dairy farm tried to make one of the best marketing
plans and strategies to developed his ideology and business improvement in
effectiveness as well as profitability. Metropolitan khan farm is ti makes the major
markets for the sale of milk. Milk can be sold at khan farm is directly to milk
centers in the urban market like nestle and engro food .khan farm delivers milk
from his farm in villages ,kahror pacca city and deliver it at the consumer’s
doorstep. The selling price of milk varies according to its demand and supply.
Price of cow milk is normally sold at Rs 45-55 per liter at the farm.
Total Market Size and Growth:
Pakistan is the fifth largest milk producer in the world.
Milk production is 25 million tons from 8 million animal heads. Raw milk is used
for drinking and tea making purpose. In rural areas, milk is used to make desi
ghee, yogurt, curd milk (lasi) and butter. Rural as well as the urban households
are themajor consumers of milk. Milk is also used to make Khaoya and different
types of sweets. The demand for milk is increased during summers as the
consumption of cured milk (lasi) rises due to hot weather Milk processing
companies use milk as a raw material to formulate different types of milk i.e.
pasteurized milk, UHT milk, condensed milk, skimmed milk, milk powder, etc.
Different value added products like yogurt, ice cream, butter and cheese are also
produced from the raw milk. The processed milk market has increased its share in
quality conscious consumers. The milk market is growing at a growth rate of 4.5%
annually with increase in milk consumption. So khan farm can be increase in

8. business for future because dairy progress and growth increase in future and
demand also increase.
FARM INPUTS:
Land:
Land Requirement
About 10 acres of land is required for a khan dairy farm
project of 50 animals. Majority of this land would be used for growing fodder for
the animals. The other part would be used for building a shed for the animals for
protecting them from hostilities of the weather.
Description A r ea (Acres)
Shed for Cows 0.05
Open area for Cows 0.45
Shed for Calves 0.02
Open area for Calves 0.08
Shed for Calves (older less than one year) 0.01
Stores for fodder, sailage & machine room 0.50
Utensils & milk storage 0.02
Servant Room, Wash room 0.87
Land for fodder 08
Total Land Requirement 10
Land:
Khan farm has his own land in kahror pakka at Rind jada. This personal land will

9. be used for khan dairy farm project. This agriculture land is available for lease
acccording to market for annual rent is Rs 30,000-35,000 per acre.
Suitable Locations:
Suburban and rural areas, where sweet ground water is
available to irrigate crops are suitable locations for a dairy farm and it create
positively impact on dairy animals. So khan dairy farm select Suburban area like
kahror pacca.
Animals:
Cow Breeds:
khan dairy farm wants to improve his dairy milk per litter
production so farm has to decided buy pure sahiwal and cholistani cows as well as
best cross breeds of freisan, australian and jersey with average prices of Rs 80,000
per cow.
Animal Breeding:
Animal breeding is done to improve progeny. This can also
be used for reducing calving intervals. Animal breeding through artificial
insemination (AI) like (freisan, australian and jersey) will result in better herd
management, which in turn, would lead to higher milk yields. Cost of AI is Rs. 300
per animal for cows.
Animal Markets:
Animal markets (mandies), Government and private livestock
farms are the main sources for purchasing milk animals. Animal markets are
situated in different places in Punjab, which includes Sheikupura, Okara, Sahiwal,
Arifwala, Muridke and Jhelum. These markets operate on rotational basis in a
week, or once a month. There are different contractors available in the market

10. who help locating the proper animals. These contractors work on commission
Description Sq/ft
Shed space for a cow 39
Open Paddock for a cow 80
Shed for a calf 26
Open paddock for a calf 40
Shed for a calf (older less than one year) 36
Open Paddock for a calf (older less than one year) 60
Stores for fodder & sailage plus machine room 12
Utensils & milk storage 04
Servant room, wash room 10
Water pond 14
basis and the commission rate charged may vary from 1-2% of the animal price.
Animal Housing:
There is no hard and fast rule for the designing of sheds for
animals. It 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. It consists of a built up animal shed, a brick soling
waking area for animals, one room for milk storage and another for storing farm
equipment.
Total Infrastructure Cost:
Description Sq.ft Rate/Sq.ft Total Cost
Shed space for a cow 800 250 200,000
Open Paddock for a cow 1100 5 5,500
Shed for a calf 400 150 60,000
Open paddock for a calf 550 5 2,750
Shed for a calf (older less than one year) 200 150 30,000
Open Paddock for a calf (older less than one year) 300 5 1,500
Stores for fodder & sailage plus machine room 500 150 75,000

11. Utensils & milk storage 200 180 36,000
Servant room, wash room 400 110 44,000
Water pond 1200 20 24,000
Mix infrastructure cost 71,250
Total Infrastructure Cost 550,000
Farm Equipment:
Farm supplies No. Rs
Toka machine (fodder cutter) 1 15,000
Water pump 1 12,000
Generator (Peter engine–20HP) 1 50,000
Loading pickup (van) 1 350,000
Freezer 1 45,000
Ceiling Fans 10 8,000
Calf feeder 10 2,000
Additional investment required 18,000
Total cost 500,000
Feed:
Feed Ration
This is given along with fodder to increase animal productivity. This
ration feed includes cotton seed cakes, corn gluten, wheat bran, molasses, choker
and the best for animals is combination of these things like wanda. About 1 kg of
wanda is required for the production of 3 liters of milk. The concentrate feed
price is Rs 30 per kg. How much wanda is given to dairy animals you get more
ratio of liters of milk.

12. Mineral Mixture:
This is used as a feed supplement. It includes a mix of minerals (magnesium, iron,
sodium and salts). Mineral mixtures are good source of energy and increase the
animal productivity to give milk. These mixtures are very useful for animals in
summer.
Fodder Crop
Fodder is grown at the land, which is acquired on lease or owned
by the entrepreneur. Only good nutritional fodder crops are suggested to be
grown. Fodder corps of berseem, millet, and lucern are grown in winter season,
while maize, makai and multi cut sadabahar are sown in summer. The fodder yield
varies between 600 tons to 1,100 tons per acre depending upon the fertility of
land.
Daily Fodder Requirement:
There is no fixed fodder requirement for the
animals but a rule of thumb says that an animal needs daily fodder equal to 9%-
10% of its body weight. According to estimates, buffalo consumes 40-55 kg fodder
daily while cow consumes about 30-40 kg.
Wheat Straw/Turi:
This is used as the roughage component of animal feed. Its
price varies between Rs 70-90 per 40 kg throughout the year, the lowest being
during the wheat-threshing season in early May. Wheat straw is used during
winter season.
Daily Feed Requirement:
Animal Daily Requirement (kg) Cost/kg Amount
Green Fodder 50 1.05 52.5

13. Dry(winter) 4 2 8
Wanda 2(av) 30 60
Total 120.5
Vaccination & Medicine:
Vaccination & medicine is required to prevent any
disease outbreak in the animal herd. Each new animal will be vaccinated before
entering into the farm. It will cost approximately Rs. 250 for both cow and buffalo
per year.
Labor Requirement:
For a dairy enterprise, manpower is required for
performing different activities at the farm e.g. feeding, milking, etc. One mature
person can handle eight milk animals easily. Six farm workers are recommended
for handling 50-animals. A supervisor cum farm manager can be hired to look
after all the farm activities. The supervisor should have passed the primary level
of education so that he can handle the administration & account matters at the
dairy farm.
Description No. Salary/month Annual Salary
Farm Manager(S.worker) 1 7,000 7000
Workers 5 5,000 25,000
Doctor 5,000
Total Labor Cost 37,000
FARM OUTPUT:
The lactation period is the period during which the animals
provide milk. These animals are called wet animals. Generally the lactation days
of cows are 305 days. For calculation, the feasibility has taken 77% of the total

14. number of cows as wet cows. The calving interval in a cow has 15-18 months. But
it depends on feed available to dairy animals in a farm.
10000
8000
6000
4000
2000
0
2013 2014 2015 2016
Milk Composition:
Productivity
Cow milk is relatively lower in fat contents, which is 3-4%
and is higher in solids i.e. 7.5%.
Progeny Development:
The proposed farmer will develop his own progeny for
quality animals. The first progeny will be capable of giving milk after 3 years in
case of sahiwal and cholistani cows while Quality of cross breeds capable of giving
milk after 2 years. But it depends on feed which is given to dairy animals.
Increase in Milk Yield:
The milk yield will be improved as a result of controlled
breeding. The feasibility has taken this increase as 12% in cows for the first four
progenies. After that, it remains constant in the later years. Low yielding animals
are sold in the market. On an average, cows are productive for 7 to 8 years while.
Khan dairy farm improved milk yield from Animals due to providing best and
standard feeds and environment.

15. Sale Price:
Milking increasing yield
Khan dairy farm provides milk to different market on different rates.
Because khan dairy farm provides different services to different markets,
household and mega markets.
Sale Market Rate/Per kg
Nestle & Engro food 45-50
Near Markets 50
Van sevices 55-60
Evening Milk:
Milk can be stored in a freezer
with a capacity of 500 liters at the farm if milk is
not sale in the evening. Remaining evening milk is
store in freezer than provide to mega market as
Nestle and Engro Pakistan.
Farm Revenues:
Khan dairy Farm revenue will increase with the passage of
time, as the milk production will increase with the growth in herd size.
year 1
year 2
year 3
year 4

16. Male Calves and cows:
Male calves will be sold at the end of year for Rs 35,000-45,000
per animal. They can also be reared in separately for beef production. khan farm
also sale pregnancy cows for Rs 80,000-130,000.
Financial Analysis:
Income Statement:
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue on sale of milk
Other revenue
12,680,739
1,190,000
13,394,881
1,309,000
15,343,694
1,439,900
16,878,063
1,583,890
18,565,869
1,742,279
Total Revenues 13,870,739 15,257,812 16,783,594 18,461,953 20,308,148
Cost of sale
Cost of goods sold
Medicine, Vaccination Charges
Direct electricity & fuel charges
3,190,000
30,000
275,000
3,445,200
31,500
275,000
3,720,816
33,075
275,000
3,981,273
34,728
275,000
4,259,962
36,465
275,000
Total cost of sale 3,495,000 3,751,700 4,028,891 4,291,001 4,571,427
Gross Profits 10,375,739 11,506,112 12,754,703 14,170,952 15,736721
General administration & selling
expenses
Salary expenses
Land expenses
Depreciation expenses
Maintenance expenses
490,000
400,000
200,000
320,000
539,000
480,000
200,000
345,600
592,900
576,000
200,000
373,248
652,190
691,200
200,000
403,107
717,409
829,440
200,000
435,356

17. Wanda expenses 200,500 230,575 265,161 304,935 350,675
Profit 8,765,239 9,710,937 10,747,394 11,919,520 13,203,841
Other Mix expenses 1200,000 1,320,000 1,452,000 1,597,200 1,756,920
Tax 0 0 0 0 0
Net Profit 7,565,239 8,390,937 9,295,384 10,322,320 11,446,921
Projected Balance Sheet:
Year 1 Year 2 Year 3
Assets:
Current assets:
Cash & Bank
Raw material inventory
Prepaid annual land lease
Total current assets
450,000
250,000
300,000
1,000,000
950,000
300,000
300,000
1,550,000
1,350,000
350,000
400,000
2,100,000
Fixed assets:
Building
Animals
Monitory loss
Net Animals values
Machinery & Equipments
550,000
4,000,000
(175,000)
3,825,000
500,000
540,000
5,500,000
(305,000)
5,195,000
545,000
515,000
7,000,000
(250,000)
6,750,000
545,000

18. Total Fixed assets: 4,875,000 6,280,000 7,810,000
Intangible assets 50,000 100,000 120,000
Total assets: 5,925,000 7,973,000 10,030,000
Liabilities & Shareholders' Equity:
Long term debt
2000,000
1500,000
500,000
Shareholder equity
Paid up capital
Mortality loss
Retained earning
2000,000
(175,000)
4,100,000
2000,000
(305,000)
6,278,000
2000,000
(250,000)
8,280,000
Total liabilities & Equity 5,925,000 7,973,000 10,030,000
Our vision:
Our vision is to improve purity of milk and quality of dairy farming in
kahror pacca. Our broad vision to makes khan dairy farm one of the best private
dairy farm in Punjab Pakistan.
References:
1. Small and Medium Enterprise Development Authority Government of
Pakistan of dairy farming.
2. Environmental controlled poultry farm by SMEDA.