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Establishing a Dairy Farm
- 1. NEPSHIRE A NEPALI BARN Himosh
- 2. INDEX • Company Introduction • Environment • Changes in Environment • Opportunity Due to the changes • Business concept • Marketing Strategy • SWOT • Feasibility
- 3. COMPANY INTRODUCTION • Name: NepShire (The Nepali Barn) • Location: Dhading, Nepal • Industry: Organic Dairy industry • Philosophy: Work to Excel. • Mission: Work, Maximize and Grow. • Vision: Reputed name and happy stakeholders.
- 4. ENVIRONMENT • Co-operative collection of milk. • Not much verity of dairy products. • No breeders of Holstein Cows • Pipeline milking system not used.
- 5. CHANGE IN ENVIRONMENT • Consumers seek verity in dairy products (high demand but low supply) • Seek replacements for Jersey cows. • Government have increased subsidies for farmers. • Electricity is a problem and people seek cheap Electricity. • Milking pipelines are available that would increase the milking speed.
- 6. OPPORTUNITIES • A new market: Due to the lack of verity in dairy products. • Cheaper to import Holstein Cows: Government subsidies made it cheaper to import from Germany. • Market for Holstein Cows: Quantity of milk produced by Holstein cows attract farmers. • Electricity is a problem and bio electricity with a locality could be a good start. • Milking pipelines increase the production and assist in achieving economies of scale.
- 7. BUSINESS CONCEPT • It is simply dairy farming along with breeding and providing bio electricity. • Comparatively low investment. • Change the traditional cattle farming method. • Use the best breed of Dairy cows- better production • Managing is comparatively easier.
- 8. • We provide new verities of dairy products. • Have our own distribution channels and retail outlets (elimination of the middle men) • We consume and provide electricity which is produced by the waste from our cattle.
- 9. TARGET MARKET Market Segment Selection Product Age NA NA Gender NA NA Location Kathmandu, Pokhara, NA Chitwan, Bhairawa, Butwal, Birgunj, Mahendranagar, Biratnagar Income Level NA NA Social Class and NA NA Occupation
- 10. B TO B CUSTOMERS (DEALERS WILL NOT BE INVOLVED WITH NEPSHIRE) Particulars Deals Industry Food oriented: 4-10% discount depending upon order and location. Firm Café: 5% discount on yogurts Firm Functions: 5% on all products. Retailers: 10- 15% depending upon the quantity and location. Location Metro and Sub-Metro: 15% for retailers, 5% for Food oriented businesses. Villages: 10.5% for retailers, 8% for Food oriented business. Size of the firm Larger the firm, larger the discounts (according to order)
- 11. SWOT (STRENGTH) • Livestock products i.e. Milk & Meat are major source of food. • Dairy sector has enormous potential for sizeable earnings • Dairy sector in Nepal has a really low cost of production compare to competitive milk producing countries • Plenty of human resource and manpower availability in dairy farming
- 12. STRENGTH • The villagers do have long tradition of cattle and livestock rearing • Large base of cattle for milk production • Use of different breed of cow, the Holstein • Introduction of new product in Nepali market • Introduction of new technologies in the market
- 13. WEAKNESS • Relatively small dairy cattle milk production market • Unorganized sector, unaware of basic farm management practices including sanitary practices. • Nutrition is still a problem and would increase the cost if the cow is sick.
- 14. WEAKNESS • Enormous production losses due to endemic diseases every year (according to the research) • Farmers lack education, technical skills, initiative and experience in modern dairy farming
- 15. OPPORTUNITIES • Increasing demand of value added dairy products • Local and global dairy products needs are much higher than supply • Govt. of Nepal provides subsidies and tax cuts in dairy farming • Commercially viable sector with great credit potential and absorption capacity
- 16. OPPORTUNITIES • Cooperatives can play a big role for development of dairy sector in Nepal • Dairy sector provides raw material for food industries • Government provides technical support for the government
- 17. THREATS • Implementation of WTO will result in open & competitive commodity pricing • High risks of diseases in live stock • Unorganized sector in Nepal, needs a lot of cleaning
- 18. THREATS • Lack of media projection, non-recognition of problems and the stand of the government company-DDC • Lack of coordination towards common causes & goals • Lack of understanding of the farmers can make the farmers lose track of what they are doing.
- 19. FEASIBILITY • Competition: Currently, there are not many dairy processing plants operating in the country. The major market players are as follows: DDC Sitaram Kathmandu Dairy
- 20. SUPPLY FOR MILK IN GLOBAL MARKET RANK COUNTRY PRODUCTION (BILLION KG/Y) 1 India 114.4 2 United States 79.3 3 Pakistan 36 4 China 32.5 5 Germany 28.5
- 21. THE PRICE • In Nepal, price of milk increases by one rupee per liter at every stage of production. • Growing demand for dairy products in Asia is driving global milk prices. • Before 2009 the milk prices went up to 46 US$/100 kg.
- 22. THE PRICE • Market price dropped to below 20 US$/100 kg at the beginning of 2009. • The milk price varies according to its quality and the season. • In an average, it is sold at NRS. 48 per liter in the direct consumption, but varies at the Business to Business levels.
- 23. SALARY PLAN/ MONTH • Total of 11 employees • 3Managers: NRS 30, 000 • 4Production Staffs: NRS 15, 000 • 5Sales/Distribution: NRS 10, 000 • 2Care Takers: NRS 5,000
- 24. PRODUCTION • Production Technique Farmer-Storage-Test-Purification-Package • Quality control Lab test/ISO standards for dairy products to be followed • Inventory control Load cold storage wagon and transport to respective warehouses immediately.
- 25. PROFITABILITY • Milk price in Nepal per liter is NRS 48 in an average. The estimated sales of 10,000L/Month will generate NRS 480,000 • The sales of the other products at the rate of NRS 50 (average selling price) for estimated sales of 6,000 units would add NRS 300,000 • Purchase of milk NRS 15/unit, workforce: 14/unit, transportation: 4.2/unit, others: 2.2/unit= NRS 35.4/unit • GP forecast at given scenario: NRS12.6/unit (avg)