Kaisa Farm Business Plan

KAISA FARM BUSINESS PLAN
BUSINESS PLAN
KAISA BAMULANGEYO AND SONS LTD.
Date: December, 2009
Author: Joseph Kaisa
Address: P. O. Box 16
Jinja
Uganda
Tel : +256(0)-755-489171
E-mail : jkaisa@yahoo.com
Confidential & Copyrights © 2009 – Request permission to share or copy from the author 1
CONTENTS
0. Executive Summary............................................................................................3
1. THE BUSINESS..................................................................................................4
2. THE ENTREPRENEUR........................................................................................37
3. THE FINANCIAL PLAN.......................................................................................39
4. THE DEVELOPMENT IMPACT..............................................................................45
0. Executive Summary
Concept
The Dairy industry in Uganda has to date in general, not adopted the improved
managerial and technological advances available world wide, which would have resulted
in improved, efficient and profitable production of milk and other dairy products for the
majority of Ugandans. Through this business plan, Kaisa Bamulangeyo and Sons Ltd., a
Ugandan Company and part of a breeders association will use leading dairy management
and technology to improve milk production levels, efficiency and profitability.
Promoter
Kaisa Bamulangeyo and Sons Ltd. is a Ugandan company with over 25 years experience
in dairy farming. The company is a family business with eleven shareholders.
The Market
The national milk market is estimated to be 660 million litres per annum, valued at Ug.
Shs. 330 billion. The current supply, as estimated by the annual report on Development
of Animal Production and Marketing by the Ministry of Agriculture, Animal Industry and
Fisheries, is 625 million litres. The market therefore is not satisfied by the current
supply.
Management
Kaisa Bamulangeyo and Sons management has long and substantial experience in dairy
farming. The company has in addition to its experience established a strategic alliance
with a dairy production and reproduction expert.
Operations
The operations will centre around the goals of achieving the production of 3,295 litres of
milk per day and the starting of production of cream and butter. To achieve this
production, high yielding cows will be purchased to add to the existing stock. There will
also be improved nutrition and improved farm operations. Appropriate technologies and
work processes will be adopted to achieve these objectives.
Financials
The projected sales revenue is in USD 512,816 for the first year; 725,699 for the second
year; and 1,054,417 for the third year.
The net profit is projected in USD to be 143,076 for the first year; 154,244 for the
second year; and 291,597 for the third year.
Overall, therefore, the financial basis for the concept to produce and sell dairy products
in Uganda is promising.
Investment
The total investment in plant and equipment is estimated at USD 662,170. Kaisa
Bamulangeyo and Sons. Ltd. expects to raise this through a combination of debt, equity,
retained earnings and own contribution.
Conclusion
The final conclusion to be drawn is that the promoters and partners have the required
technical capacity and are committed to running an efficient and profitable dairy
enterprise, the business concept and ideas are realistic, the macro economic and political
conditions are acceptable, the market potential is there, the human resource situation at
Kaisa Bamulangeyo and sons Ltd. can be improved adequately, the risks and negative
environmental impacts can be remedied, the financial viability of the project is
commendable and the farm’s impact on Uganda’s society overall will be positive. The
business plan is therefore technically and economically viable.
1. THE BUSINESS
1.1 Business model and value proposition
Kaisa Bamulangeyo and Sons Ltd., hereinafter referred to as the Kaisa Farm, is a
Ugandan company whose principle business and subject of this business plan is milk
production and processing. Milk produced by the farm is sold both as raw and processed
milk. The farm is a member and leading organiser of the Kamuli Breeders Association
and the East African Association of Dairy Stakeholders. The farm is also currently
mobilizing small milk producers into an association for purpose of collecting and selling
milk.
The raw milk is sold to price and quality conscious households with relatively lower
incomes, in suburban towns / trading centres on the Kamuli – Jinja highway; around
Jinja town; on the Jinja – Iganga highway and around Iganga town. The Kaisa Farm
targets to increase its customer base in this market segment and gain loyalty from these
customers, to whom the biggest milk suppliers in the country do not sale too, given that
they are not in the main urban centres where the biggest milk suppliers target. To do
this, the farm will offer: (1) High quality milk sold in permanently established farm
outlets within the proximity of the customers residences, with refrigerators to keep the
milk at 4 degrees centigrade that is not adulterated as per normal practice of raw milk
vendors. (2) A relatively lower price for the milk, given that middlemen have been
eliminated and that the farm enjoys economies of scale given its production facilities that
are relatively larger than most of the competitors in this market segment. (3) Delivery of
appropriate quantities very early in the morning, to ensure availability of milk throughout
the entire day till late at night when customers stop purchasing.
The processed milk is sold mainly to middle and high income class household consumers
that prefer a richer taste of milk (i.e. no fat/cream removed). These are mainly in urban
centres. The processed milk is sold through primarily retail outlets (shops, kiosks, and
supermarkets/groceries), secondarily through institutions (universities, colleges, schools
and eating places) and thirdly hotels (e.g. The Nile resort hotel in Jinja). Like the raw
milk, Kaisa Farm targets to increase its customer base in this market segment and to
gain loyalty from these customers through emphasis on: (1) The quality of the milk
with a rich taste. In comparison, some processors adulterate their milk to get more
revenue from increased volumes, or sale milk with reduced fat. (2) Attractive packaging
(3) Delivery of appropriate quantities very early in the morning to ensure availability of
milk at the retail outlets.
The Kaisa Farm customers therefore should expect value for money with the knowledge
and satisfaction that they have received their worth for the money they would have spent
– that is - high quality nutritious milk to enhance the health of their households.
The Kaisa Farm production facilities are located 65km outside Jinja, the second largest
town in Uganda. The farm is comprised of four separate units (Namisambya- 95 acres;
Naminage – 185 acres; Namasagali-233.5 acres; and Nakavule-700 acres) with a total of
1,214 acres of land. The main unit, Namisambya, holds the farm’s dairy processing and
milling equipment. The dairy processing plant can pasteurise, homogenise and package
up to 1,000 litres of milk per hour. The cooling storage facilities have a capacity of 5,000
litres. The distance between the four farming units are considerable. The distance
measured from the main unit, Namisambya (95 acres) to other units are as follows: 4km
to Naminage (185 acres); 30km to Namasagali (233.5 acres) and 15-20 km to Nakavule
(700 acres). The roads connecting the four farming units are mostly dust roads.
Namisambya, Naminage and Namasagali have reasonable infrastructure in form of
buildings, roads and fencing, whereas Nakavule, was acquired recently and is yet to be
fully developed.
To produce the milk, the farm breeds the cattle which

are used for milk production. Breeding of the animals is mostly through Artificial
Insemination (AI) and over the next
three years also through Multiple Ovary Embryo Transplant (MOET) for accelerated
increase in high yielding animals. The farm has established a strategic alliance with a
livestock production expert who has extensive experience in animal production and
reproduction, to assist with this effort. He will be responsible for breeding of the animals
on the farm and backstopping all farm activities.
Within the three year timeframe of this business plan, Kaisa Farm envisages to achieve
production, processing and sale of processed and raw milk as follows. At the end of the
three year period the farm would process and sell 3,900 litres of milk per day and sell an
average 1,000 litre of raw milk per day.
Kaisa Farm will expand the current product range of raw and processed milk half-way
through the first year to include cream and butter.
To achieve the above production it is anticipated to cost the Kaisa Farm US $. 662,170 in
extra investment in fixed assets over the three year period of this Business plan. The
farm however hopes to make total sales of US $ 512,816 in the first year, US $ 725,699
in the second year and US $ 1,054,417 in the third year. With total operating costs of
US $ 308,939; US $ 391,254 and US $ 472,649 for the first, second and third year
respectively. The farm therefore hopes to realise a total income from operations
(EBITDA) of US $ 203,877; US $ 334,445 and US $ 580,568 for the first second and third
years respectively over the period of this business plan.
1.2 Products
The Kaisa farm will sale both raw and processed whole milk. The whole milk has a higher
fat content than the competitors’ milk and a richer taste. The processed milk will be sold
under the brand name “Kaisa Fresh Milk” and will be packaged in ¼, ½, and 1 litre
plastic pouches bearing red and blue colours. The raw milk will be sold from established
farm outlets established near the residences of the customers. It will be stored at 4
degrees centigrade to ensure that it maintains its quality at the point when bought by the
customers.
The Kaisa Farm focus is on quality – both for the processed and the raw milk. In
comparison, most vendors of raw milk and some processors adulterate their milk to get
more revenue from increased volumes. The Kaisa milk selling slogan “NO ADDITIONS
NO SUBTRACTIONS – WHOLE FARM MILK” puts emphasis on the quality of the product
sold by the Kaisa Farm.
1.3 Market structure and analysis
1.3.1 Target market and customer base
The Kaisa Farm operates in its home region with emphasis on the nearest big towns –
Jinja and Iganga. Sales in the greater Kampala area and Entebbe were suspended due
to high overheads given the level of production.
The Kaisa Farm targets low income class households in suburban / trading centres for the
raw milk and middle and high income class household consumers in urban centres for the
processed milk. In the below tables (1, 2, 3 and 4) the Kaisa Farm has listed key
characteristics of the buyers of the various products marketed by the Kaisa Farm.
TABLE 1 – 1 litre packs

Sold where: Urban areas. Mostly Jinja (centre) has
been sold in Kampala (centre).
Sold through: Supermarkets and Hotels.
Person buying: Mostly men.
Characteristics: Age 40+, mainly middle and high income
bracket, Business persons, formal dressing
(long sleeves and tie).
Reasons for buying: (1) Convenience (one litre pack). (2)
Quality. Probably not focused on price.
Consumer (end-user): Families.
Table 2 – ½ litre packs

Sold where: Urban areas, with some few in suburban
areas, Mainly in Jinja and Iganga. Has
been sold in Kampala in the suburbs.
Sold through: Grocery stores and kiosks.
Person buying: Men and women.
Characteristics: Younger people, mostly middle income
bracket, small-scale business people.
“Individuals who take it directly.”
Reasons for buying: (1) Price (2) Taste and (3) Quality
Consumer (end-user): Families
Table 3 – ¼ litre packs

Sold where: Mostly University and secondary school
canteens
Sold through: Universities and schools: Directly to
canteens. Some Kiosks (small shops).
Person buying: Universities, Schools and students. Other:
Mostly children, young adults and blue
collar workers.
Characteristics: Business people, “the man on the street”,
children, All age and social groups. “They
take it directly as a substitute to other
products.”
Reasons for buying: (1) Price (2) its nutritious
Consumer (end-user): Universities and schools: Young people age
group 12 – 25.
Other: See: person buying.
Table 4 – raw milk

Sold where: Suburban and small trading centres.
Sold through: Kaisa Farm outlets – stored in containers in
refrigerators.
Person buying: Men and women mainly of the lower
income bracket.
Characteristics: Mostly employed in the informal sector, or
micro business owners. They purchase it
for taking at home boiled as tea and/or as
part of the children’s nutrition.
Reasons for buying: (1) Availability (2) Quality (3) Price
Consumer (end-user): Families
It can be concluded from the above that the Kaisa Farm reaches quite different
segments, in different areas, with different incomes and backgrounds. Likewise the
reasons for buying the various milk products differ. The reasons why these segments are
served by the Kaisa farm is to reach a wide range of segments with the various products,
thus increasing its customer base. There is also a tendency, especially for the raw milk
consumers to develop loyalty thus repeated sales over a long period of time.
1.3.2 Market size and potential
According to the Dairy Development Authority (DDA) publication – Dairy industry at a

glance, the average per capita consumption of milk (raw and processed) in Uganda is 30
litres per year (0.08 litres/day). This is only 15% of the per capita consumption level
recommended by World Health Organization equal to 200 litres per year (0.5 litres/day).
Given the total population of 22 million people, the estimated consumption of milk in the
country stands at 660 million litres per annum (22 million X 30 litres/capita). This equals
to Ushs. 330 billion if based on the lowest market cost of Ushs. 500/litre.
When looking at the demand for / the consumption of milk in Uganda, certain patterns
emerge, e.g.:
 Apart from direct consumption by children, most of the purchased milk is used for
making beverages such as tea and coffee. There has lately, however, been a
change in adult consumption, where direct taking of milk is increasing.
 Farm families consume 50 – 70% of the production directly at home. Of the

remaining 30 – 50%, farmers and traders sell 90% in the informal market, and
rest, 10%, is processed and sold in the formal market.
 Consumption of unprocessed milk increases substantially during the wet season

because of increased supplies and depressed prices, and likewise declines in the
dry season when supply is low and prices are high (author’s field
survey/experience).
 There are clear differences between the low, middle and high-income groups’
consumption patterns. E.g. a survey carried out by the International Livestock
Research Institute revealed the following (see table 5 below)
Table 5 - consumption patterns for low, Middle and High Income groups.
HOUSE HOLD INCOME CATEGORY
Type of milk consumed Low Income Middle Income High Income
(%) (%) (%)
Pasteurized Milk 23.4 83.4 73.3
Fresh whole milk 56.7 16.7 13.3
UHT milk 6.7 0.0 6.7
Any type 13.3 0.0 6.6
Total (%) 100 100 100
Avg. quantity of milk consumed per day 1.4 2.4 3.5
MAIN REASON FOR CHOICE OF MILK TYPE (%)
Cheapest type 50.0 13.3 6.7
Most preferred 26.7 56.7 73.3
Only type available 3.3 13.3 13.3
Natural flavour 13.3 6.7 3.3
High quality 6.7 10.0 3.3
Total 100
100 100
It can be concluded from the above that:
Low-income households:
-Mostly consume fresh whole milk (raw/loose milk), being very price sensitive. These
two findings support each other, as the fresh whole milk usually is the cheapest type of
milk.
-The average consumption per day per household is 1.4 litres.
Middle and High Income households:

-Predominantly consume pasteurised milk and are not price sensitive. These income
groups choose what they prefer the most, which is pasteurised milk.
-The average consumption per day per household is 3.5 litres for the high – income
groups – much higher than for the low and middle – income groups.
There are clear differences between the low, middle and high income groups
consumption of milk in urban areas. (See table 6)
Table 6 - consumption patterns for low, middle and high income groups.
Urban population Low Income Middle Income High Income
Proportion of population 61% 29% 10%
Consumption 20% 43% 37%
Furthermore it should be noted that urban consumption of milk per day per capita is
estimated to be around 39 litres. This is considerably higher than the national average.
This is estimated to be 30 litres.
It can be concluded from the above that in urban centres, low income groups, in spite of
their relatively bigger numbers, consume less than the high income groups.
Of the above information, the following is relevant to the Kaisa Farm:
The biggest household consumption of milk can be found in the middle and high-income
households in urban areas. The Kaisa farm will target these promising markets with the
pasteurized milk and will target low income households with the raw / loose milk.
Given a choice and ability to pay, there exists a general preference for pasteurised milk.
As Uganda is enjoying considerable economic growth the demand for pasteurised milk is
likely to grow. This increases the Kaisa Farm’s sales potential.
3 year out look

It can be predicted that the demand for milk in Uganda, overall, will increase over the
next three years for the following reasons:
 The Uganda economy is estimated to grow by approximately 6% per year in the

next three years. Growth in the national economy will result in increased demand
for milk.
 The steadily improving levels of education and spreading of health clinics are both
seen as factors that are likely to increase the population’s awareness of the
benefits of milk.
 The Land O’ Lakes, USAID sponsored program seeks to create a higher awareness
about the values of milk. Through the yearly June dairy month celebration,
extensive coverage of milk promotion is carried

out in newspapers and television,
 Schools are visited and free milk provided and exhibitions are carried out in
different towns all over Uganda. As a result, consumption of milk on the whole
has increased especially in schools.
 There are efforts to introduce school milk programmes, whereby every child in
Primary schools drinks a quarter of a litre of milk per day. The same programme
could be implemented in the army.
Market potential for Kaisa Milk in target Market.

The predictions above for the national level are also seemingly valid for the geographical
areas, which the Kaisa Farm serves:
The Uganda National Housing Survey estimates that the consumption in the Kaisa Farm’s
main markets Jinja/Iganga, Kampala and Entebbe will increase by 10%, 14% and 15%
for 2010, 2011 and 2012 respectively.
Based on this survey’s percentage estimates, a forecast has been made for the potential
market for the coming years for the Kaisa Farm’s main markets (and added a
conservative 10% for 2013). – (See table 7 below)
Table 7 – potential Kaisa Farm sales per day

Area Potential Sales per day (Litres)
2010 2011 2012 2013
Kampala Market
Central zone 450 513 590 649
Nakulabye-Kasubi-Kawala 120 137 157 173
Bakuli – Mengo-Rubaga-Kisenyi 130 148 170 187
Kalerwe –Bwaise-Kawempe-Bombo 310 353 406 447
Bweyogerere-Banda-Nakawa-Luzira-Makindye-Gaba 410 467 538 591
Ntinda-Bukoto-Kyebando-Bahai 150 171 197 216
Mbalala-Lugazi-Mbiko-Nyenga 110 125 144 159
Sub Total 1680 1915 2202 2423
Entebee Market
Entebbe Town 280 319 367 404
Kampala-Entebbe 485 553 636 699
Sub Total 765 872 1003 1103
Jinja Market
Central 650 741 852 937
Suburbs 83 95 109 120
Sub Total 733 836 961 1057
Iganga Market
Central 390 445 511 562
Suburbs 61 70 80 88
Sub Total 451 514 591 650
Grand Total
3629
Kaisa Farm Planned Production 1500 2700 3740 4900
The above figures are encouraging as they indicate that the demand is likely to increase
and faster than the growth in the Kaisa Farm production. This, however, is no guarantee
that the Kaisa farm can sell its products. Whether the Kaisa Farm can sell it products will
depend on a number of factors, the most important being the market strategy adopted
by the Kaisa Farm and how it positions itself in the market to effectively compete with
other processors/producers.
1.3.3 Competitor analysis

Competition in the Uganda dairy industry exists in four different forms:
Competition from milk processors – formal sector

Competition from raw/loose milk vendors/suppliers – informal sector
Competition from imported milk
Competition from substitutes
The four forms of competition are analysed below.
Milk processors characteristics

By talking to six operating processors (although most were not willing to give much
information) and by researching various published sources some characteristics that bear
mentioning about processors are:
 A number of dairy plants have closed down operations. Another dairy plant (White
Nile) was about to close, but was taken over by new management.
 Nearly all processors are producing below the installed capacities, with production
ranging between 20% - 35% of the installed capacity.
 It was not possible to establish the exact profits or losses of each processor. It
was, however, generally agreed that processors who are vertically integrated
and/or having value added products are making a profit.
 There does not seem to be any particular correlation between performance and
number of years in business.
 There does not seem to be any particular correlation between performance and
the size (installed capacity) of the processors. The processors with a higher
installed capacity however, have a bigger market share.
 Most of the processors purchase milk from Mbarara and sell it in Kampala. A
difference in distance of about 320 kilometres, which implies high transport costs.
 The Kaisa Farm has three main competitors in its main markets Jinja and Iganga,
Namely Dairy fresh, GBK and White Nile.
 Only White Nile purchases raw milk, in the same area as Kaisa Farm. This means
that the competition on the Kaisa Farm’s supply side for raw milk is low.
Raw / loose milk vendors / suppliers

Vendors / suppliers of raw / loose milk are
predominantly operating in the informal sector. As such there are no recorded statistics
of their operations as individuals. They, however, are the majority nationally and even in
the urban areas which is the focus of the formal (processed) milk market. As mentioned
earlier, they take about 90% of the milk market share and predominantly serve low –
income households.
Raw Milk supply includes:
1. Direct raw milk sales to consumers by farm house holds. House holds with small
herds often sell their surplus milk in surrounding local markets.
2. Milk collected by milking agents and then sold to individuals or to retailers. Large
farms usually use marketing agents who collect milk from a number of farms and
then sell in the urban centres to urban households, hotels, restaurants and other
food outlets, institutions such as schools and army barracks, hospitals etc.
3. Milk collected by dairy associations, which is then sold either directly to
individuals/institutions or to marketing agents. There are a number of dairy co-
operatives, farmers’ associations that are actively involved in supplying urban
milk markets. From discussions with key informants it is estimated that in
Kampala and Jinja alone these distribute approximately 50,000 litres of milk daily.
The dominant associations/co-operatives include: Nakasongola co-operative union
in Kampala; Equator Katwe Dairy in Luwero district; Kibuye Diary; Nabuka Diary
co-operative society in Mukono district; and Kungu Dairy co-operative in Mpigi
district.
In Jinja, where the Kaisa Farm sells raw / loose milk, the biggest percentage of milk
comes from milk agents, transporting milk from Kamuli district. There are some
suppliers/farmers who bring in milk from in and around Jinja. The supply from these is,
however, small and non-consequential. One major retailer – Pevinta Fresh Dairy, has
two outlets in Jinja. It is estimated Pevinta sells a total of about 600 litres of milk daily.
It can be concluded that the competition in the raw / loose milk sector is strong. Large
proportions of the consumers are highly price sensitive which will make them opt for the
raw / loose milk. Moreover, there are many suppliers without significant barriers to enter
the market.
Imported Milk
According to the Master plan of the Dairy sector, imports of milk and other diary products
is insignificant on the Uganda Market. This is further supported by the quantities
imported as per data provided by the Department of statitistics in Entebbe. As indicated
in the table 8 below, the volumes are too small to have any impact/effect on the market.
Table 8 – Imports of Dairy products by year

2008 2007 2006 2005
Milk and Cream of = <1% fat (Skimmed) – 713 7,984 650 17,907
(Kgs.)
Milk and Cream of > 1% but < 6% fat – (Kgs.) 355 865 1,700 86,069
Milk and Cream of > 6% fat (Kgs.) 7,644 10,082 267 1,495
Milk and Cream in solid forms = < 1.5% 877,720 319,218 625,994 159,784
(Powder milk) (Kgs.)
Source: Department of Statistics - Entebbe
Milk Substitutes
Instead of taking milk 80% of consumers interviewed

by Kaisa Farm mentioned that they would take the
following products.
Table 9 – Substitute Products

Substitutes Price per Unit Quantity per day Amount (Ushs.)
Soda (280ml) 500 1 500
Fruit Juice (300ml) 200 3 600
Porridge (500ml) 300 1 300
Dry Tea (500ml) 100 2 200
Mineral Water (500ml) 500 1 500
Source: Kaisa Farm field survey September 2009
Three out of five of the common substitutes mentioned above are priced between 100 –
300 Ushs. Per Unit. This indicates that the majority of the interviewed are not ready to
spend Ushs 500 or more on non-basic items.
In response to these findings indicating that price is a key determining factor for
consumers and that substitute products such as soft drinks are likely to become more
competitive in price, it might be interesting for the Kaisa Farm to further test the new
small ¼ package in all its markets.
1.3.4 Competitive advantage

 Competitive Forward – Backward Linkage: The Kaisa Farm will have a competitive
forward – backward linkage (vertical integration). Whereas with the exception of
Jesa Dairy Farm all processors depend on purchasing milk, the Kaisa Farm,
through its vertical integration will be able to control the whole process from
breeding, feeding, milking and delivery of the final products to the consumers.
The vertical integration further will avoid the Kaisa Farm from having to buy most
of the raw milk for its production, thereby making savings and so increasing its
competitive strengths
 Planned/Synchronised milk production: Given that the price of milk is high during
the dry season and low during the wet season, the Kaisa Farm will synchronise its
production to initially have a constant production during all seasons and at a later
stage have the highest production during the dry season. This will enable the
Kaisa Farm to maximise its profits by having its highest production when milk
supply is low and prices are high thus competing favourably against other milk
sellers / processors.
 High Quality: The Kaisa Farm will be in control of production of its milk, right from
the stage of feeding the animals (vertical integration). Milking machines to be
purchased will further guarantee that the milk received is of the best quality. In
comparison most processors and vendors depend on purchasing of milk that is
transported in unhygienic conditions.
 Pricing: The Kaisa Farm will offer more competitive prices to the retailers through
a discount of Ushs. 20 for any purchase of 20 litres and above. This will be
possible by taking advantage of the higher margins enjoyed due to the forward
and backward linkages.
1.4 Marketing and distribution
1.4.1 Marketing & Communication

The Kaisa Farm marketing strategy’s sales objectives will be to attain the sale of Kaisa
fresh milk of 4,900 litres per day (about 6% market share) within the period of this
business plan. In the long run, the Kaisa Farm hopes to achieve a market share of about
15%.
Overall strategy
The stated objective of the marketing strategy will be achieved through first and
foremost ensuring that the existing customers of Kaisa Fresh Milk are retained and
secondly through stimulation of selective demand by acquiring new customers who
currently buy other brands.
In the target market, the majority of milk consumers have access to milk in one form or
another – either processed or raw, as such there will be little room for developing
primary demand (development of new markets), as the demand already exists. The
Kaisa Farm will therefore concentrate on:
1. Retention of current consumers through:

 Maintaining satisfaction – Due to the excellent feedback on its products as
demonstrated in a survey the Kaisa Farm carried out, Kaisa Farm will maintain the
quality of the Kaisa Fresh milk and advertise an image of quality for its milk.
 Simplifying and improving on the buying process – Milk will be delivered to the
customers premises and conveniently packaged in ¼, ½, and 1 litre pouches, to
enable various customers purchase what suits their consumption. Kaisa Fresh
milk will also be delivered very early in the morning preferably, before any other
processor/supplier, as this increases the likely hood of the customers to stock
Kaisa fresh milk when the milk stocks are low.
 Reducing attractiveness of or opportunities to switching – This will be achieved
mainly through a pricing strategy, where the retailers if they purchase more than
20 litres, will be given a discount, such that the money they derive from the sale
of Kaisa fresh milk will be higher than other brands.
2. Acquisition of new customers through clearly differentiating Kaisa Fresh Milk from
other brands in areas such as packaging, price and customer service. In this regard
the Kaisa Fresh Milk packaging will differentiate it from other brands, and sold at a
competitive price. In addition the marketing manager and/or the Managing Director,
will carry out routine visits to potential customers promoting the Kaisa Fresh Milk,
open new outlets, listen to grievances/complaints etc.
Marketing Programs
Various marketing programs will be put in place to achieve/implement the market
strategies outlined above. The total cost of the various marketing programs outlined
below will be covered by a special allocation in the budget equal to 1% of the total sales
in the first year, 2% in the second year and 3% in the third year.
Following below are the programs to be implemented.
Pricing program
The price of the Kaisa Fresh Milk will be set to achieve four main objectives:
 Sales growth
 Earning an acceptable profit
 Gaining a competitive advantage
 Creating a positive consumer perception of quality and value for money
At the point of entry into the market, the Kaisa Farm adopted a penetration-pricing
strategy, where the Kaisa Fresh Milk was sold at a lower price than the major
competitors in order to stimulate an increase in demand.
A lower price, however, can at times be interpreted as

a reflection of lower quality. Such perceptions of low
quality should not be promoted as customers of the Kaisa Farm products were found to
focus on quality.
The Kaisa Farm will therefore adopt parity pricing to the final consumer, where the
consumer price shall be set at a level similar with Dairy Fresh Milk, the leading brand on
the market. It is envisaged that this will send a message to the consumers that the
Kaisa Farm Milk is of the same quality as the leading brand.
In order to gain a competitive advantage, however, a slightly lower price than Dairy
Fresh Milk will be offered to the retailers who stock more than 20 litres a day. As such
they would be encouraged to stock Kaisa Fresh Milk. It is anticipated that the above
illustrated pricing will lead to increased sales growth, while at the same time increasing
the product profitability and creating a positive consumer perception of the Kaisa Farm
Products.
The pricing of the individual products (¼, ½, and 1 litre pouches) will be set to reflect the
cost of producing and marketing the products. This means that the smaller pouches will
be priced higher per litre than the bigger pouches. On the open market (whole sale
price), the ¼ litre pouch will be priced at Ushs. 700; the ½ litre pouch that is also
relatively expensive to package and market will be priced at Ushs. 680 and the 1 litre
pouch that is less expensive to package will be priced at Ushs. 650.
Please note that Dairy Fresh Milk’s current wholesale price is Ushs 700 per litre. By
selling its 1 litre pouches at Ushs. 650 to the retailer, the retailer is likely to make a
higher profit selling the Kaisa Farm Milk. The Kaisa Farm thereby creates a strong
incentive to the retailer to stock and promote Kaisa Farm Milk.
Advertising program
The objectives of the advertising program will initially be:
 To increase awareness and/or brand name recognition of the Kaisa Farm Products
by targeting currently serviced segments as well as new segments.
 To project an image of the Kaisa Farm as a producer of quality products.
The survey carried out by Kaisa Farm revealed that the awareness level of the Kaisa
Fresh Milk was 27%. During the time frame of this Business Plan the Kaisa Farm will aim
to increase awareness and / or brand recognition of the Kaisa Farm Products from the
current 27% to around 70 – 80% in the target markets.
In addition the Kaisa Farm must, to attract the consumers it wishes to target, create an
image, which appeals to these consumers. As the consumers are focused on quality,
taste and price, the Kaisa Farm will work to create an image which projects the Kaisa
Farm as a producer of well tasting quality products giving value for money.
Such an image could be built around or on the following statements about the Kaisa
Farm. The Kaisa Farm:
 Is committed and strives to produce competitively priced, high quality, fresh dairy
products, which are highly appreciated by the consumer.
 Because of its vertically integrated mode of production, is able to promote and
control high quality form the breeding of the cows’ right up until the consumer
opens the pouch.
 Has long and strong traditions and uses the

latest technology with milk being produced on
the farm.
 Can ensure that prices are kept low because of few middlemen.
 Cares for the environment in its production.
The Kaisa Farm next will create messages and slogans based on the above statements
and select media to efficiently and effectively communicate these messages and slogans.
Ideas for slogans, which could promote an image of quality and good price, might be:
“The whole milk from Kaisa Farm – a whole lot more – for the same price” OR “So much
more for the same price”. This will be supported by information e.g.: “The Kaisa Farm is
Quality – The farm you can trust. 30 years of dairy farming has taught us to use only
our own milk from the best breeds – processed with the best equipment, under the
strictest hygienic condition.”
Provided there is room on the package the Kaisa Farm might include a short history of
the farm, from when it was started up to today – mentioning long experience, the farm’s
vast green lush pastures etc.
Provided there is room on the package, the Kaisa Farm might include health tips –
targeted towards families and children -, as they are one of the main consumer groups.
The promoted quality image will be supported by a guarantee for a refund of money to
the consumer in case the product does not meet the stated quality.
The image of a hygienic production and attention to detail will be promoted by having all
staff wearing clean uniforms with the company logo.
When creating slogans it should be taken into consideration that the Kaisa Farm will also
be selling cream and butter. The Kaisa Farm will therefore use slogans that do not refer
to one particular product (e.g. Whole Milk).
The above suggested image has been created to appeal to buyers of all the Kaisa Farm’s
products. It should be noted, however, that there exists some groups of consumers,
which may not fall directly within the above groups:
 The consumers of the ¼ pack pouches seem to buy this product not only because
of the low price and stability. To them, the main reasons appear to be the low
price and the possibility of taking the milk instantly – as you go. These
consumers also seem to have the lowest average age.
 The Kaisa Farm envisages targeting younger consumers directly – in schools and
universities.
 Though adults often buy milk, children mainly consume it. This and the previous
observation indicate that children are involved in the purchasing processes. The
importance of targeting children must therefore be emphasised. Moreover,
children grow up to be adults and can as such become lifelong consumers. One
marketing shilling spent on children may generate more income than if spent on
an adult.
The above points to the fact that the Kaisa Farm may wish to create special marketing
initiatives, which target these important groups. The ¼ litre pouches could be designed
specifically for these take-it-as-you-go customers.

Special packages and posters will be created for
children.
The two objectives stated above are planned to be achieved as follows during the three
years of this Business Plan:
In the first year, by:
1. Liaising with a marketing agency to create slogans, marketing messages and

design marketing materials, primarily posters and flyers. The posters will be
placed in appropriate locations like supermarkets, grocery stores, kiosks and any
outlet where the Kaisa Farm Milk is sold and stocked. Based on the potential
market, it is estimated that 1,000 posters will be used. It is estimated that a
considerable number of people will view these posters.
2. In addition during the first year, rain proof posters and/or paintings of Kaisa Fresh
Milk will be put on the delivery truck and the delivery bicycles, to increase
awareness in the areas that the trucks reach.
3. The Kaisa Farm will also have manufactured uniforms with the farm’s logo printed
on for use by its sales and delivery staff.
During the second year, the Kaisa Farm will intensify its advertisement efforts by:
1. Maintaining the advertisement on the delivery trucks
2. Replacing torn posters at the supermarkets, grocery stores etc.
3. Carry out weekly classified advertisements in the New Vision, Monitor and
Bukedde News papers. These newspapers have respectively 400,000, 220,000
and 200,000 number of readers per day.
During the third year, besides the initial objective of increasing awareness and/or brand
recognition, the Kaisa Farm will also have the objective of:
 Targeting consumers to change beliefs about brands
A good number of consumers develop buying habits and/or loyalty to certain milk brands.
An advertising agency will therefore be hired to design appropriate messages and
appropriate presentation on radio. During the third year, therefore, the Kaisa Farm will:
1. Maintain the advertisement on the delivery truck
2. Replace torn posters at supermarkets, grocery stores etc.
3. Carry out weekly classified advertisements in the New Vision, Monitor and
Bukedde News papers.
4. Take up a monthly package for a total of four months (one month per quarter)
with the Central Broadcasting Service Radio (CBS) which is most widely listened
to radio in the target market. 4 daily 30 seconds spots during each of the four
months.
At the end of each year the Kaisa Farm will carry out an evaluation of the advertising
program interviewing consumers randomly in the target markets of their knowledge /
perceptions of the Kaisa Farm Products. The purpose of this evaluation will be to get
feedback on the advertising program enabling the Kaisa Farm to constantly improve its
advertising efforts.
The evaluation will be carried out in a way that allows the Kaisa Farm to obtain results
per geographical area. The evaluation results from the various geographical areas
served will be compared to the sales statistics per geographical area.
Promotion program
The objective of the promotion program will be:
 To encourage customer trial of the Kaisa Fresh Milk. It is anticipated that trial
will lead to satisfaction with the Kaisa Fresh Milk, leading to conversion from
other milk brands or from product substitutes.
 To encourage inventory building by retailers within acceptable limits – in order
to reduce retailer stock-outs and thus maximise the availability of Kaisa Fresh
Milk to consumers. Reducing stock-outs will enable retailers to avoid losing
customers who otherwise would stick to Dairy Fresh Milk – the market leader,
but who might try an alternative in Kaisa Fresh Milk and find it acceptable if
the leading brand is not available. Caution will, however be taken – in
encouraging inventory building – retailers will be chosen selectively among
those who have enough facilities to store milk at 4 degrees centigrade in order
to avoid sourage of milk.
The Kaisa Farm during the time frame of this Business Plan will be involved in three
types of sales promotion namely:
 Exhibiting and carrying out promotional sales during the June Dairy month,
National Agriculture and trade show and the Uganda Manufacturers International
Trade Show.
 Offering free samples in targeted supermarkets, grocery stores and institutions
(such as schools and universities) and big work places.
 Carrying out promotions among retailers where discounts will be given to
encourage the retailers stock the Kaisa Fresh Milk.
During the first year, the Kaisa Farm will:

1. Exhibit during the June Dairy Month. This is a yearly event by Land O’ Lakes
aimed at creating awareness about the values of milk with a view to increasing
milk and milk products consumption. During the exhibits, Land O’ Lake Purchases
processed milk like Kaisa Fresh Milk and distributes it for free to invited guests,
school children etc. Schools are also visited and teachers and children are
informed of the benefits of milk and free samples are given to the children.
2. Offer free samples once every month in selected shops, institutions and big work
places and briefly interview the consumers what they currently consume and how
often, if they have heard about Kaisa Farm before, solicit their opinion on the
taste of the Kaisa Milk and assess whether they might be buying Kaisa Milk in the
future. The free samples shall be accompanied by a company flyer explaining
about the Kaisa Farm, its commitment to quality, unique production set-up
(control of the whole process), its long traditions, pricing as the major brands (in
spite of higher quality), the products it offers and where they can be bought. Also
future products. Information about the health benefits of consuming milk.
3. Offer discount to retailers who stock 20 litres or more.
During the second year, the Kaisa Farm will:

1. Exhibit during the June Dairy Month.
2. Offer free samples once every month in selected shops, institutions and big work
places (see year one point 2 for more detail).
3. Offer discount to retailers who stock 20 litres or more.
4. Exhibit during the July National Agriculture and Trade Show – This is a yearly
event at the source of the Nile in Jinja. The show attracts about 75,000 visitors
among whom are retailers, college students, heads of institutions etc.
During the third year, the Kaisa Farm will:

1. Exhibit during the June Dairy Month.
2. Offer free samples once every month in selected

shops, institutions and big work places. (see
year one point 2 form more details).
3. Offer discounts to retailers who stock 20 litres or more.
4. Exhibit during the July National Agriculture and Trade Show.
5. Exhibit during the October Uganda Manufacturers Association International Trade
Show – This is the biggest yearly trade show in Uganda, that attracts over
150,000 people.
The effect of the above initiatives should be captured by the yearly evaluations
performed in connection to advertising program (see advertising program section).
1.4.2 Sales and Distribution

The objectives of the Sales and Distribution Program are to:
 Promote a perception with the retailers and consumers of the Kaisa Farm Products
as being always available, fresh, of good quality and competitively priced.
 Promoting a perception with the retailers and consumers of the Kaisa Farm
delivery and sales staff as being knowledgeable about the products they sell,
 Ensure that the major retail outlets / customers always have Kaisa Farm Products
in stock.
 Ensure that the Kaisa Farm Products always are well displayed and easily spotted.
A short distribution channel will be adopted, to ensure that the milk is delivered quickly
when it is still fresh. Deliveries will be made very early in the morning, starting from
about 7.00 am, if possible earlier than competing brands, therefore ensuring that the
Kaisa Farm succeeds in having the retailers stock more of its milk.
A truck and/or bicycle will deliver to established retail outlets in all the target markets.
The Kaisa Farm will also deliver directly to institutions such as universities and schools
and hotels among others. During the second year a refrigerated delivery truck will be
purchased to deliver the milk.
The staff will be divided into two groups. One group will be responsible for delivering the
milk, while the other group, the sales staff, will be responsible for customer relations,
negotiating with the retailers, receiving feed-back from the retailers and customers,
ensuring that the products are well displayed (eye catching), and promoting the Kaisa
Farm Products.
Three people will initially be employed in the first year as sales staff for the Jinja, Iganga
and Kampala markets. These three staff will pay regular visits to the current retail
customers and establish and maintain a personal and effective relationship with the
customers. In this regard the sales person will face the same buyer/customer over and
over, and become a major link between Kaisa Farm and its customers.
The sales person will therefore not only become the Kaisa Farm representative to the
customers but will also become the customer representative to Kaisa Farm where any
needs, communication from the customer will be delivered to Kaisa Farm through the
sales person.
Sales calls will also be made to potential customers, institutions, and hotels by the sales
people and regularly by the marketing manager or Managing Director to promote Kaisa
Milk.
Considering the above, there is clear need for training

the sales people in interpersonal skills and customer
service.
A questionnaire / form shall be prepared to monitor the quantitative aspects of the sales
on a daily basis. The delivery person will record number of pouches delivered to the
individual retailers / distribution points, pouches returned and total sales. The sales staff
will aggregate these figures on a weekly basis and report back to the Kaisa Farm. The
Kaisa Farm will enter the sales figures into statistical software, which will enable the farm
to reveal positive / negative trends in the market. In addition, these statistics will be
used for comparing performance of the different sales personnel, which again will be
used for awarding bonuses creating incentives for the sales personnel, further stimulating
competition among the staff and increasing sales.
Another questionnaire shall be prepared to monitor the qualitative aspects of the sales.
The sales staff will be responsible for obtaining the information required to complete
these questionnaires, such as: The retailers’ perceptions of the reasons of low / high
sales, feed-back on customers’ perception of the Kaisa Milk and marketing, problems
encountered in the marketing / sales of the milk, suggestions for improvement in
delivery, storage, display, sales, packaging, taste of the Kaisa Farm Products.
During the first year of this Business Plan, the Kaisa Farm will concentrate its sales
efforts within Jinja and Iganga, but will also need to include Makerere University and
some parts of Kampala to achieve its planned targets of 2700 litres per day.
At a planned sales level of 3,300 litres per day in the second year of operation, Kaisa
Farm will need to increase its distribution efforts to fully cover the Kampala market.
In the third year of operations, the estimated sales are planned to be 3,660 litres per
day. Current efforts in the local markets, Jinja and Iganga, will be intensified as well as
in Kampala. In addition an extra sales person will be employed to cover the Entebbe
Market.
Staffing and Training

 A senior Manager/Marketing Manager will actively handle the drive to retain the
current customers and increase the customer base beginning first with the retail
outlets such as supermarkets and grocery stores in Jinja and Iganga, in addition
to selected institutions, schools and colleges. The Marketing Manger will be
responsible for all the sales and marketing functions.
 Three sales people will be responsible for the Jinja, Iganga and Kampala markets.
An extra sales person will be employed for the Entebbe market in the third year.
 All sales personnel will undergo a rapid on the job training to equip themselves
with the appropriate skills in salesmanship, customer service and interpersonal
skills.
 The sales person in Jinja (the home market) will oversee activities of all the sales
assistants who make bicycle deliveries to the retailers. The Jinja sales person will
be expected to spend 70% of his/her time in the field making market visits,
sourcing new clients as well as taking down consumer complaints. 30% of his
time will be devoted to making plans and administration.
 An agent will be appointed for the Kampala market to reduce on the
transportation costs and other overheads in the initial stages when the sales are
low in Kampala. The agent will be responsible for distribution of milk to
consumers; however, he/she will be offered a discount to be agreed with
management in order to entice him/her to stock Kaisa Milk.
 The delivery staff (the drivers) delivering Kaisa

Milk will in the market place report directly to
the sales people.
 The “turn boy” on the truck will directly be under the driver.
1.5 Production process & development
Short Term Strategy – Years 0-3

During the next three years, Kaisa Farm wish to expand, streamline and consolidate
the operations of the farm centred around the production and marketing of the
following products: Raw milk; processed milk; cream and butter. The products are to
be promoted in a limited number of markets. The expansion and streamlining of the
operations are necessary to reduce the operating unit cost, which will ensure a
comfortable profit. The major objectives are:
 To achieve the output of raw milk produced of 3,295 litres/day by the end of
this business plan period. This will be achieved by an initial purchase of 100
high yielding milking cows (HYMC) in the first year to add to the existing
stock.
 To process raw milk from the farm and sell the processed milk.
 Mid way through the fist year, to start up production of cream and butter and
market these two by-products.
 To improve the farm operations as described below.
 To implement changes in the organizational structure and the human

resources management as suggested in this business plan.
 To undertake training of the employees’ of the farm for purpose of increasing
the efficiency of the employees and ensuring a smooth introduction of new
technology – as suggested in this business plan.
 To implement activities aimed at improving the internal and external
environment on the farm, as suggested in this business plan.
 To renovate and upscale the dairy plant.
 To renovate the maize / feed mill.
 To improve the financial reporting as suggested in this business plan.
 To re-invest all profit from the farm – in the farm during the first year of this
business plan.
 Half way through year three undertake a new market analysis to be completed
1-2 months before year four starts. The purpose is to gauge the future
demand for the Kaisa Farm products – revising the current marketing
strategy. It is assumed that the farm must expand to new markets and
segments to continue to increase sales. The Kaisa Farm may also consider
investing in/taking over other dairy producers to widen their reach and build
the Kaisa Farm brand name.
Planned Activities Required Achieving Planned Objectives: Year 0-3
Below are listed activities in the production area which are deemed necessary to
achieve the above mentioned planned objectives.
As mentioned above the future farm operations will centre on the goals to:
1. Achieve the production of milk on the farm of 3,295 at the end of the three
year period of this business plan and
2. To start up production of cream and butter mid-year one.
This is envisaged achieved mainly by:
Sub-Objective 1: Increasing the farm’s

herd size and quality through purchasing High yielding parent breeding cows in
the first year for breeding through artificial insemination. In order to accelerate
the increase in number of high yield milking cows the Kaisa Farm will also
purchase well structured local cows as recipient mothers for multiple ovary
embryo transplanting.
Sub-Objective 2: Increasing the farm’s production of milk through applying

dairy production best practices as described in this business plan and increasing
the buying of raw milk from out-growers/external producers to achieve the target
output.
Sub-Objective 3: Purchasing a separator to produce cream and butter.
Ad. Sub- Objective 1: Increasing the farm’s herd size and quality will be
achieved through a breeding program as described below:
The main objectives of the reproductive health / breeding program for the Kaisa
Farm are:
 Every cow is to produce one calf per year so as to have an accelerated
increase of the total number of animals.
 Improve the physical structure of the animals.
 Improve on the quality of the milk produced.
In order to achieve the above, the farm will use artificial insemination from a
variety of selected bulls as well as using semen from selected bulls from its own
farms. An annual review as regards the bulls to be used will be made and if need
be changes made. The farm also hopes to introduce reproduction through embryo
transfer technique, it is hoped that this will assist in accelerated production of
High yielding cows.
Three breeds of animals will be kept on the farm namely: Friesian, Jersey and
Ayrshire breeds. Cows will be served with semen from similar breeds.
Due to the difficulty in detecting heat among the heifers, a bull will be kept for
servicing the heifers (i.e. artificial insemination will not be used on the heifers).
The bull will also be used in cases where a cow fails to conceive for two
consecutive artificial insemination services, a bull will be introduced to service it.
After a cow has calved, it will not be serviced for 45 days even if it comes on heat.
However, in cases where the cow fails to come on heat three months after
calving, an investigation by veterinary personnel will be carried out and if
necessary the cow will be given hormonal treatment, to induce it to come on heat
and be serviced thereafter.
Ad. Sub-Objective 2: Increasing the production of milk will be achieved

by:
Improving the animal’s nutrition. The improvement in the animals’ nutrition will
come partly from new and better types of grasses and crops to be grown on the
farm’s pastures (see below), partly through the buying and feeding mixtures
preferably in the wet season for use in the dry season. The animals are assumed
to have a constant intake of feeding mixtures throughout the year. The feeding
mix will be composed as indicated in table 11 below.
Table 10
Ingredients % of total
Maize Bran 32.667
Wheat Bran 32.7
Cotton Seed Cake 32.7
Bone Meal 1.6
Urea 0.003
Premix 0.13
Salt 0.2
Total 100
An ambitious programme for replanting the major pastures has been suggested.
By 15th April 2014 the combined 280 acres of Namisambya and Naminage would
have been planted with improved grasses including Rhodes grass. By the same
date, the entire 233.5 acres of Namasagali farm would have been planted with
improved grasses including Rhodes grass. This will be accomplished by planting
40 acres of each unit every rainy season. The first part of planting programme will
be finalized by 15th April 2010. Finally, the Nakavule unit would be cleared to
make room for making hay and growing maize. No time schedule has been
provided for the Nakavule unit.
1. Investing in the first half of 2010 in a tractor, a plough, a planter, a harrow, a

baler, a trailer to: Till the soil, plant seeds and harvest the grasses and the crops.
The grasses will be used to improve the fodder for the cows as just mentioned.
2. Investing in the second half of 2010 in a hay barn for storage of the hay from the
newly cultivated fields.
3. Investing in the first half of 2010 in a manure spreader, a urine sprayer and a
front loader to: Collect and spread the manure, which will improve the output
from the fields and as a result the general fodder situation. These investments
will be supplemented in the second half of 2010 by construction of concrete
manure pits and urine tanks at Naminage and Namisambya.
4. Investing in the first half of 2010 in 47 kilometres of electrical fencing to be

supplied by solar power. The new fence will replace the current barbed wire
fencing. Electrical fencing is proven to be less damaging to cattle.
5. Investing in the first half of 2010 in the construction of a milking parlour for which
a pipe milking machine, which can accommodate 40 high yielding cows at
Naminage, will be procured in the second half of 2010.
6. The construction of a better water distribution system for the cows will commence
in the second half of 2010. Kaisa Farm will improve the distribution of water by
laying down plastic pipes through which water will be pumped to water troughs at
Naminage, Namisambya and Namasagali.
7. The milk will still be processed on the farm as the current plant easily can handle
the increased volume. There is, however need to carry out thorough renovations
and a need to purchase a new packing machine, separator and equipment for
making butter.
8. Improving the farm operations as follows:
Improving management – training:

 A qualified farm manager trained and highly experienced in
animal production and husbandry will be hired. The farm
manager will be in charge of farming operations at
operational and
managerial levels. The
farm manager will to a great extent, be responsible for and
carry out the training to be provided to the farm staff
although Kaisa Farm will outsource extra know how for
training as needed.
 An expatriate Dairy technician will visit the farm once during
the first year and once during the second year. The dairy
technician will spend a total of 3.5 months on the farm to
facilitate the start-up of the production of cream and butter.
 An expatriate experienced veterinarian will visit the farm
twice during the three year period to assess the herd and
the feed mixes.
 Dr. Jackson Mubiru, responsible for backstopping all farm
operations will visit the farm on a quarterly basis to hold
management meetings with the Kaisa Farm management.
Milking: Milking will be done by milking machines on two of the farms (i.e. Naminage
and Namisambya farm). The animals will be milked twice a day, in the morning starting
at 6.00 am and in the evening starting at 5.00 pm. The animals will be collected 30
minutes prior to the milking time.
To ensure hygiene during milking time, the udders of the animals will be cleaned with a
piece of cloth (one piece per animal) kept in a solution of chlorine for disinfecting. The
pieces of clothes will have to be replaced monthly depending on their durability. Before
the milking is done every animal will be checked for any traces of mastitis. Milk
produced per animal will be recorded at every milking.
The milking machines will be cleaned / disinfected with a solution of chlorine or any other
available disinfectant and a strong commercial detergent. The milking machines will
further be given a thorough cleaning once a month, preferably every last day of the
month, where the rubbers will be removed and cleaned.
It will be the responsibility of the farm manager to oversee and provide proper training
for milking. The farm manager will further ensure proper maintenance of the milking
machines and ensure that proper milking procedures are kept and proper milking
environment is provided for the animals and that these skills are passed on to the farm
workers.
Health Control: The health control program for the farms will mainly be comprised of:
Spraying of animals: This will be done in the already established spray races, using a
solution of decatex or any other accaricide recommended by the veterinary staff. The
spraying will take place once a week during the dry season and every fourth day during
the wet season. At the time of spraying, it is important to ensure that every animal goes
through the spray race, as such an inventory of all animals will be carried out at every
time of spraying. The veterinary personnel will from time to time advise management as
to the need to change the accaricide.
De-worming: The Adult herd will be de-wormed once every four months and the calves
will be de-wormed every month.
Tripanosmiosis treatment/control: As long as there is a threat of tripanosmiosis on the
animals they will be covered with a curative drug (Berenil) and after three months they
will be covered with a preventive drug (Samorin), to repeat the curative drug after six
months.
Vaccinations: Vaccinations will be carried out depending on the disease threat in the
area/neighbouring districts. It will therefore be the responsibility of the veterinary
assistant/doctor to advice the farm every year of what

vaccinations if any that should be carried out.
Sick animals identification: The herds-men have daily contact with the animals, they will
therefore be trained and have the responsibility of looking out for signs/symptoms of any
sick animals. These have to immediately be reported to management for either
treatment or carrying out any preventive measures to the rest of the herd.
Branding: For the purpose of identification and registration, the farm will freeze brand all
animals. A branding program with the oldest animal branded no. 1 and the youngest
having the “highest” number will be adopted. Freeze branding will be done once every
four months. Before being branded the calves will be identified by piercing the ears
following punch numbers for each spot.
De-Horning: In order to avoid the animals from causing injury to each other all heifer
calves will be de-horned. This will be carried out once every four months.
De-Hoofing: De-hoofing will be carried out as necessary on an individual cow basis.

However, if it is found that this needs to be done regularly, it will be carried out twice a
year.
Castration: All bull calves will be castrated and kept at Namasagali farm for a beginning
as long as the total number allows this. To be later kept in Nakavule for fattening and
later sold off for beef. Castration will be carried out once every four months. There will,
however, be a selection of some bull calves that will not be castrated, but kept for
breeding purposes as earlier mentioned or for sale to the National Animal Genetic
Resource Centre & Data Bank (NAGRC & DB) in Entebbe.
Pasture Maintenance: A permanent work force will be established to carry out pasture
maintenance, where these will on a daily basis remove pasture weeds i.e. grasses/shrubs
that are not eaten by the cows. In the future, equipment will need to be purchased for
cutting overgrown grasses.
Culling: Regular culling will be carried out in accordance with established targets of the
Kaisa Farm.
Ad. Sub-Objective 3: Purchasing a separator to produce cream and butter will

be achieved by:
 Purchasing a second-hand separator for cream and butter in by the end of the 1 st
half of 2010.
 Selected staff of the dairy plant will be trained by the dairy technician to allow for
commercial production by the start during the second half of 2010.
Miscellaneous:
Working conditions influence operations. The Kaisa Farm plans to invest in the
construction of new staff housing during 2011 and in other working environment friendly
minor initiatives in the first half of 2010.
Medium Term Strategy – Years 4-6
Assuming the objectives for the first period have been achieved, Kaisa Farm during
the next three year period wishes to:
Depending on the new marketing strategy (see

short term-strategy for years 0-3) further increase
the production and processing of milk on the farm aiming for a raw milk output of
6,500 litres per day in year 6. This will be achieved by:
 A steady increase in the number of High yielding milking cows and further
increase in yield.
 The Namasagali farm unit may be opened up to accommodate 200 cows for
milking.
 The Kaisa Farm during this time frame will continue to use reliable quality
conscious out-growers for an approximate 10-20% of its milk supply. This
way, the Kaisa Farm will create a supply buffer. The advantage is that when
demand is low, the farm will not waste its own milk but instead reduce the
intake from out-growers.
 Depending on the new marketing strategy, further increase the sales of cream
and butter.
 Start Yoghurt production in year 5
 Test production of ice cream in year 6. This will require further training of
personnel.
 Human resource management will continue to be strengthened as will financial
reporting systems and administrative functions.
 Half way through year six undertake a new market analysis to completed 1-2
months before year seven starts. The purpose is to gauge the future demand
for the Kaisa Farm products – revising the current market strategy. It is
assumed that the farm must expand to new markets and segments to
continue to increase its sales. Kaisa Farm may also consider investing
in/taking over other dairy producers to widen its reach and build the Kaisa
Farm Brand name.
Long Term Strategy – Years 7-10
Assuming that the medium term objectives have been achieved, the Kaisa Farm
during the next four years may consider to:
Depending on the new marketing strategy (see medium term – strategy for years 3 –
6 above) further increase the production and processing of milk on the farm. This will
be achieved by:
 A steady increase in the number of High yielding milking cows, a further
increase in their yield and an improvement in the quality of milk produced.
 A possible acquisition of neighbouring farms bordering the Naminage and
Namisambya units or acquisition of farm units closer to the Kaisa Farm main
markets to reduce transport costs.
 Moreover, the farm wishes to increase its purchasing of milk from out-
growers. By combining the farm’s and the out-growers efforts, the farm hopes
to reach a raw milk base of 12,000 litres/day in year 10. The use of milk from
out-growers should be limited to out-growers, who are quality conscious as
the Kaisa Farm so as to safeguard the Kaisa Farm’s relatively high product
quality – around which its marketing efforts are centred.
1.6 Company structure
1.6.1 Management
The Kaisa Farm Board of Directors are:
Mr. S. B. Kaisa
Mr. S. B. Kaisa has over 30 years experience in the dairy and poultry business. Positions
he has held include General Manager, Namulesa Coffee Factory; Member of the Board of
Directors of then Uganda Commercial Bank; member of National Animal Breeding Policy
task force committee; member of the governing council of the Church of Uganda
province; Chairman Land Commission, Kamuli District and Chairman animal breeding
association, Kamuli District. He has won several prizes in the dairy and poultry farming,
including the 3rd prize in dairy competitions of the Ministry of Agriculture, Animal Industry
and fisheries. Mr. S. B. Kaisa is the Chairman Board of Directors.
Mr. Joseph Kaisa

After graduating from Makerere University with a bachelors degree in social sciences
(social administration and political science), Mr. Joseph Kaisa assisted with the general
management of the Kaisa Farm and day to day operations before proceeding to the USA
for his MBA studies. In the USA he held various management positions first as finance
manager and later as operations manager with the North America Association of
Christians in Social Work. He also worked as a consultant for the Global Partners
Investments based in Pennsylvania, USA. Mr. Joseph Kaisa has served as the Chairman
Board of Directors of the National Animal Genetic Resources Centre and Data Bank
(NAGRC & DB) an organization that is responsible for the improvement of livestock in
Uganda through animal breeding and regulation of importation of livestock and genetic
material. Mr. Kaisa is also a member of the executive committee of the Eastern African
Association of Dairy Stakeholders (EADAS). Mr. Joseph Kaisa is also a resource person
with Enterprise Uganda, where he trains Entrepreneurship and Finance for Non-Finance
Managers. He is also a business management systems adviser with the International
Trade Centre (ITC). Mr. Joseph Kaisa is the vice chairman Board of Directors and the
Managing Director.
Other company Directors are:
Mrs. E. B. Kaisa – Treasurer

Dr. M.K Kisenyi – Member
Mrs. Dorothy Nuwamanya – Member
Dr. Grace Kaisa – Member
Management
Mr. S. B. Kaisa and Mr. Joseph Kaisa above are directly involved in the management of
the company. Dr. Jackson Mubiru, a veterinary doctor and a specialist in assisted
reproductive technologies and animal breeding provides technical backstopping on all
operations of the farm. Other key people involved with the day to day operations are
Mr. Siraje Katuntu and Mr. Joshua Biko. Mr. Katuntu is a trained artificial inseminator
and Para-Vet, Mr. Katuntu has one of the best records in artificial insemination with non-
repeat service of about 80%. Mr. Biko is a supervisor on the farm; he is trained in
forage management and animal husbandry. The company is in the process of recruiting
a farm manager; the desired candidate will have experience in animal production and
dairy processing.
In view of the planned future expansion of the production and sales at the Kaisa Farm, it
will necessitate to recruit additional staff and training of the current and new staff. The
Kaisa Farm has therefore reviewed / formalized its organisational structure. In the
organizational plan, related activities have been clustered and middle-managers have
been inserted to be responsible for individual areas such as finances, production and
sales. The middle managers would, in consultation with the Managing Director, assume
responsibility for establishing clear targets for their individual area, managing their own
area, monitor progress and report to the Managing

Director.
In order for the staff to perform fully, it will be necessary to specify what exactly each
staff member is expected to do and ensure that they are aware of this. Therefore, it is
required to:
 Prepare job descriptions for all employees which clearly define each employee:
-Responsibilities
-Duties
-Daily activities
-Daily or monthly targets
These job descriptions will be kept short – with simple, accurate and easily
measurable targets.
 Have contracts for all staff to which the job description would be attached
specifying the conditions of service and, importantly, the consequences in case of
non-performance.
 Clearly define who reports what to whom and when.
 Review all employees’ skills against their job descriptions and ensure that all staff
have either adequate skills or will be trained.
 Have the remuneration reflect: the complexity of the job / current market price
for the job – adjusted for the employees’ current level of skills.
 Keep attendance records – and pay staff according to the days they report to
work.
 Keep a roster for the various staff categories – to ensure that the farm can always
quickly recruit replacements for non-performing staff.
It is expected that the above will improve the efficiency on the Kaisa Farm. The Kaisa
Farm also hopes to further increase efficiency by improving on the working conditions for
the middle-managers by the construction of staff housing on the farm.
Once the above improvements have been implemented and are working satisfactorily the
Kaisa Farm will establish a simple performance evaluation system. A performance
management system is basically a tool that will seek to ensure that all employees agree
to pull the Kaisa Farm in the right direction by:
 Ensuring that the farm always has updated objectives and strategies
 Increasing the involvement of all staff as they negotiate and agree on their job
descriptions and output targets (derived from the farm’s objectives)
 Implementing an incentive structure to support these efforts – monetary and
career wise
 Improving the planning and monitoring by regularly reviewing in detail each
employee’s performance
A performance evaluation system will take its point of departure in the strategies,
objectives and concrete activities derived from the Farms mission statement. Through a
farm wide negotiation process staff will be involved in setting targets for the farm
(ideally) and for their own work areas (more realistic in this case).
At a yearly negotiation the employee to the extent possible will set his/her own targets
for the next year / each month. The involvement of the employee in the planning
process will ideally create greater commitment to the farm’s overall goals or at least the
employee’s own goals. The remuneration will initially be set according to the level of
work that the employee has committed him/herself to complete. The employee’s job
description would be revised to reflect the change in responsibilities.
The performance evaluation system will also allow for

discussing the employee’s career aspirations, if any, and how to achieve them, which
would create additional incentives for the employees and might enable the management
on the farm to identify staff that aspires for higher positions in the future.
At least twice a year, the employer would review the employee’s performance with the
employee to detect under or over compliance. This will allow the manager to constantly
adjust the work areas of the individual employees to ensure that work is accomplished
according to the targets set – and possibly adjusting salary to ensure that the incentive
structure is fair. It also will force management to regularly review the staff’s skills and
training requirements.
Another positive outcome of the performance appraisal system will be that it will force
management to regularly set targets for the organization including management itself,
based on a rolling strategy planning, making it more likely that the Farm, from top to
bottom, is focused in its undertakings.
Training program
A training program has been designed for the Kaisa farm in line with the current / future
technology and work processed to be applied on the Kaisa Farm.
Training objective
The training objective for the staff at the Kaisa Farm is to improve the skills of the
individual staff member in his/her function, and thereby enable the Kaisa Farm to
maximize the operational output of the investments.
Training assumptions
Kaisa Farm’s present organizational structure, where there is a supervisor who
supervises the daily operations, has formed the basis for the training model.
The present level of training of the farm staff is not adequate to achieve the goals and
values of the Kaisa Farm.
In general the training will be designed as follows:
 On-the-job training, to be implemented by the Farm Manager to be recruited

 External training to be implemented in another country – (African or abroad)
The training considered for the Kaisa Farm is primarily meant for the production staff at
the farm. However, training of the assistant farm manager in skills in animal and field
farm management is required.
The sales staff (especially the sales / marketing manager) will also participate in some of
the training – e.g. for the dairy plant – on hygiene, how the milk is handled – to make
them fully acquainted with the product they are promoting and its delicacy. This will
enable them to better handle the milk – and they would be better able at instructing the
retailers on correct storing of milk, to ensure that the product the consumer drinks is
always fresh. The sales personnel would also be better equipped for answering questions
and for projecting the quality image the Kaisa Farm seeks to promote.
Training of the foremen in the two separate sections of the milking parlour and fields is
considered important and will therefore be included in the detailed training plan.
External training will mainly be for the Managing Director in an established training
programme to be sourced.
On-the-job training will be by far the largest input, as it

will be implemented continuously during the three year
period of this business plan. This part of the training will be reviewed periodically and
the Farm Manager together with the Managing Director will work out and update the
training plans continuously based on the reviews with 3-4 months intervals.
However, on-the-job training of various staff members in their functions will be

concentrated on the management and foremen levels to ensure that further training of
staff is implemented by these individuals.
It is assumed that the qualification of the Farm Manager will strengthen the applied
structure of the on-the-job training. On-the-job training will consist of two major parts.
 Cattle-management training and

 Field-management training
Cattle management training
The following areas will be covered during the practical “on-the-job” cattle-management
training (see table below).
Area for training What is to be covered

1. Cattle Feed and Fodder Control  Quality and composition of animal
feeds.
 Feed intake control.
 Farmers’ yield control.
 Budgeting animal feeds.
2. Cattle Reproduction Management  Monitoring heat.
 Heat control.
 Controlling gestation.
 Cattle replacement management.
 Calving and breed control.
3. Health Management  Feed hygiene control.
 Livestock building hygiene.
 Treatment of animals.
 Hygiene in connection with calving.
 Type of service personnel.
 Other animals in livestock building.
 Purchase / selling of animals.
4. Disease Management  Digestive diseases due to wrong
feeding.
 Metabolic diseases in cows,
including calving fever ketose, grass
tetany and fat lever.

Disease in the udders, mastitis control,
hygiene in the cow boxes.
 Disease problems in calves,
bronchial infection.
 Tail injury / necroses.
 Diarrhoea.
5. Milking Management  Milking techniques.

 Milking hygiene.
 Milking machine and milking tank
management.
 Procedures for inspecting the
milking plant.
6. Production Control  Recording the milk production.
 One-day feed control exercise.
 Periodic feed control measures.
7. Livestock building management  Working environment training.
 Daily routines in the barn.
 Cattle nursing and care taking.
 Ventilation in the barn.
 Climate.
8. Calves Management  Feeding with raw milk.
 Feed supplements and course of
feed.
 Drinking control / water.
 Hygiene of calves.
 Accommodation of calves.
The above practical training will be implemented continuously during the 36 month of
this Business plan.
All levels of staff at the farm will be covered.
The above trainings are basically routines, which must be repeated continuously until
they are a part of the staff’s way of working. Consequently, there will be no time limits
involved in this type of training.
The other part of the cattle-management training will constitute a theoretical “on-the-
job” training. This training will cover the following areas.
Area for Training What is to be covered

9. Records Management and Registration  Registration of the herd.
 Registration of the breeding and
insemination.
 Registration of the feed
composition.
 Recording health and diseases.
 Recording the milk production.
 Cost control and planning.
10. Feed Management  Quality and composition of feeds.
 Feed rations.
 Factors determining the feed for
dairy cattle.

The
stomach’s feed requirements.
 Recommended max. allocation of
feeds.
 Minerals and Vitamins.
 Complete feed analysis.
 Feed budgets and feed systems.
11. Reproductive Techniques  Reproductive organs.
 Hormone system.
 Observing heat.
 Heat control and gestation
percentage.
 Replacement percentage.
 Heat cycle.
12. Breeding Strategies  Breeding Strategy.
 Selecting the bulls.
 Planning and insemination.
13. Health and Diseases  Immunity and immunity status.
 Protection against infections.
 Livestock building hygiene.
 Treatment of animals.
 Hygiene in connection with calving.
 Service personnel.
 Other animals in the livestock
building.
 Purchase of animals.
 Digestive diseases in cows.
 Metabolic diseases in cows.
 Diseases of the udders.
 Infectious diseases.
 Diseases of the skin.
 Limbs and hooves.
 Intestinal parasites / mastitis
 General disease problems in calves.
 Bronchial infection.
 Tail injury / necroses.
14. Milking Management  Milking techniques.

 Milking hygiene.
 Classification.
 Bacterial control and counting.
 Cell counting.
15. Production Control  Goal for re-production.
 Milk and beef production.
 Milk recording.
 Feed control.
16. Livestock Building  Arrangement of cattle-houses.
 Animal environment.
 Animal handling and management.
17. Meat Production  Feed control.
 Load factors.
18. Economy  Gross proceeds.
 Unit costs.
 Contribution margin.
 Book depreciation.

Result
of capital payback and shareholders
return.
 Financial costs.
 Results from farming.
19. Calves  Raw milk.
 Feed supplements and course feeds.
 Water and drinking.
 Hygiene and calves’ housing.
The theoretical training will be implemented at foreman level. The total number of
people who will be trained is approximately 10. The theoretical training will commence
beginning of 2010. The duration of each section of the theoretical training is estimated
approximately three weeks.
Field-Management Training
The following areas will be covered during the practical “on-the-job” field-management
training.
Area for Training What is to be covered

20. Choosing the crops  Seed change and management.
 Climate and watering.
21. Fertilising  Trade fertilizers.
 Organic fertilizers.
 Fertilizer planning.
 Distribution methods.
22. Soil Treatment  Preparing and sowing place.
 Sowing depth.
 Sowing methods.
23. Planting Protection  The use of commodities for planting
protection.
 The use and adjustment of the field
spraying.
24. Disease and Pest Control  Bacteria.
 Fungi.
 Pest and germ control.
 Viruses and deficiency diseases.
25. Harvesting  Levels of ripeness.
 Waste and products from
harvesting.
 Germination.
 Water content.
 Storing and treatment of the field
after harvesting.
26. Vegetation and Flora  Through practical education on-site.
27. Techniques for taking notes  Through practical education on-site.
28. Machines  Driving techniques.
 Safety of machines.
 Maintenance of machines.
The above practical training will be implemented continuously during the 36 months of
this Business Plan. All levels of staff at the farm will be covered.
The other part of the field-management training will constitute a theoretical “on-the-job”
training. This will cover the following areas.
Area for Training What is

29. Type of Crops 
 Soil types.
 Watering options.
 Green fields – disease from change
of seed and grain.
 Contribution to profitability.
30. The Crop’s need for fertilisers  Fertilisers.
 Organic fertilisers.
 Type of crops.
 Rainfall patterns and pre-ripping.
 Types of soils.
 Expected yield from fertilisation.
 Reaction numbers, phosphorus and
calcium count.
 Change in seed and grain planning.
31. Soil types  Texture analysis.
 Sowing bed.
 Soil treatment.
 Sowing and sowing methods.
 Germination.
32. Means of plant - protection  Treatment of leaves.
 Treatment of soil, including
systematic treatment.
 Means of cohesion.
 Selective means / non – selective
means.
 Poisoning of humans and animals.
 Damage to crops.
 Pollution from out-washing and
dewatering.
 Protective means and dosing.
 Climatic conditions.
 Storing plant-protection
commodities.
33. Diseases and pest control  Bacteria.

 Fungi.
 Pest.
 Virus diseases.
 Macro/micro fertilisers.
34. Harvest  Level of ripeness.
 Weight of dry matter.
 Air humidity.
 Storage density.
35. Ecological Farming  Conditions for production.
 Ecological planting and cultivation.
 Weed control and round-up.
 Timing and planning the treatment.
 Field covering and control.
 Manuring and soil-structure.
36. Notes and Records Management.  Planting and cultivation.
 Field-leaves for fodder-crops.
 Field-leaves for fodder sale.
 Seed change planning.
 Fertiliser planning.

Water
balance account and water
accounting.
The time schedule for the field-management training will be the same as for cattle
management training as described above.
Safety training and training in Good working practice and Environment.

In addition to the above training, special training tailored for the purpose of training in
safety procedures, and procedures to ensure a good working environment will be
undertaking. The following areas will be covered.
Area to be Trained What is to be covered

37. Accidents and Machines  Power and transmission exchange.
 Covering chains and straps.
 Coupling de-coupling machines.
 Children and other traffic.
 Driving safety.
38. Accidents involving animals  Removing animals.
 Mechanical milking of animals.
39. Dust Control  Soil treatment.
 Artificial fertilising.
 Products for treatment of diseases.
40. Noise  Noise control.

 Noise from machines and tractors.
41. Falling Accidents  Stairs and ladders.
 Hand-railing.
42. Lifting and Pushing Techniques  Practical education on site.
The farm manager will be responsible for the overall training and the sourcing of the
training materials/content, where necessary expertise will be out-sourced to conduct the
training. Dr. Jackson Mubiru responsible for backstopping all farm activities will also play
an active role in the training.
1.7 Risks
The Kaisa Farm’s greatest risk lies in the area of achieving the targeted productivity of its
cows and its farm labourers. Care must be taken to ensure good genetic animals are
purchased right from the beginning and that the cows receive a sufficient and steady
supply of good food and water. In addition the staff needs to learn how to become more
productive and to use the correct techniques in caring for the herd.
The Kaisa Farm must also be certain to expand its markets as forecast. Special attention
will need to be paid to the third year when the target market will need to be moved
aggressively to absorb the quantities of milk that are going to be supplied by the farm.
Also, marketing efforts will need to focus on moving cream and butter sales. These sales
are pivotal in maintaining a healthy bottom line. Without them the business plan as
presented will be hampered.
Other risks related to scheduling of the implementation of the various activities needed
to achieve the planned objectives for year one. Quite a number of activities have been
scheduled for execution during the first year. These activities involve procurement of
Livestock and equipment, construction of fencing, milking parlours, manure pits and
urine tanks, a barn, installation of new milking

machines, clearing land, planting of new pastures and
harvesting which requires training. To ensure a successful and timely implementation of
these numerous activities will require careful work and financial planning as well as
minute monitoring. The Kaisa Farm will at an early stage develop a work plan format
which includes all outputs within a production year, related activities and assign
responsibilities and state deadlines.
The Kaisa Farm will also closely monitor the developments related to the production and
sales, updating the financial schedules. The Kaisa Farm on a monthly basis will compare
actual developments with the projections made, constantly analysing the reasons for
deviations and recommending remedial actions in case of negative developments.
There are also environmental risks (external and internal) due to expanded production
which have been analyzed and mitigation measures put in place. These are indicated in
table below
Key issues Potential / actual Mitigation measures to be Objectively

negative impacts implemented verifiable
indicators
Waste water from Pollution of nearby bore Analyze the water for organic Bacteria in
the dairy hole and inorganic pollution in the analysis samples
short term
Waste water, Pollution of the soil, Construction of two concrete Cleaner and
manure and urine soft hooves and soil on collection areas for the cows, two healthier cows
from the milking the udder urine tanks and two storage and better milk
parlour areas for manure - one set at quality. Fertiliser
each milking parlour. Spreading spread on the
of urine / waste water and fields
manure by use of respectively a
urine spreader and a manure
spreader mounted on a front
loader and pulled by a tractor
Manure and urine Pollution of ground Construct more water holes for Tests of ground
concentrated water the herd on three of the farm water immediately
around water hole units. Water holes to be below – before
supplied by pumps through pipes and after
from distant water source construction
Pasture fencing The barbed wires give Electric wire fencing powered by Lesser wounds on
wounds on the animals. solar energy the animals and
The current fencing lesser use of wire
requires too much wire and poles
and too many poles.
Chemicals from The spray chemicals Ceiling to ground polyethylene Interviews with
the spraying race present a health hazard flap doors for the in – and outlet the workers –
to the staff and may of the spray race. Spreading of before and after
pollute the soil. the chemical waste from the race
over a huge area by using the Surface soil tests
urine spreader. Gloves and gum
boots for the staff.
Carrying of milk in Working environment Construction of new milking Interviews with
the main milking related: The carrying of parlour at Naminage, with the workers –
parlour, manure / milk is potentially pump / pipe milking machine to before and after
urine inside the strenuous to the staff avoid the staff to carry the milk.
milking parlour Will also improve on the hygiene
The manure and urine in relation to the handling / Test of the milk
create unhygienic storing of the milk in the parlour. quality (bacteria)
working conditions Will improve

the ability to
easily and swiftly remove the
manure and urine in the parlour.
General working Inadequate housing / Construction of 4 houses for Easier to recruit
environment long transport (65 km main supervisors on each of the and retain
from the Kaisa Farm to farms. qualified
Hygiene in Jinja) deters qualified management staff
production staff from working on
the farm.
Distance of work
Contamination of the
milk due to inadequate
hygiene
Out - growers Use of plastic jerry cans The Kaisa Farm to rent or sell Better milk quality
which cannot be Stainless milk churns to the out - (tests)
properly cleaned growers
1.8 SWOT analysis
STRENGTHS WEAKNESSES
 Experience in the dairy sector  Few trained personnel
 Arable and large acreage of land  Poor production equipment
 competitive forward and Back ward
linkage
OPPORTUNITIES THREATS
 Growing economy  Strong and versatile competition
 Increasing demand of milk  Relatively long distance from market
 Appropriate climate for milk production  Fluctuating demand for milk – (i.e. high
 Relatively stable country – politically during dry and low during wet season)
and economically and Friendly  Perishability of the product
government policies encouraging
investment in dairy sector
 Name recognition and consumer
satisfaction with Kaisa Farm products in
primary market
 Availability of specialized human
resources – production and
reproduction experts
1.9 Investment Plan
A - Finance needed
Fixed assets by area of improvement: Amount (USD)
Livestock
Breeding cows 109,299
Equipment
Milking facilities and equipment
Improve parlour 69,000
Concrete cow yard, (Nge.) 33,000
Concrete Cow yard (Nbya) 16,506
Milk pipelines and pump (Nbya) 4,138
Milking machines (Nbya) 10,759

Dairy plant renovations 50,000
Drinking water for cows

Nge water piping and pump 4,138
Nbya water piping 1,954
Ngali water piping and pump 2,989
Distribution Equipment
Truck 3-ton, refrigerated 13,218
Fences
Fencing Nge/Nbya/Ngali w solar gens 22,874
Housing
Housing – Manager 16,500
Housing - Staff 37,500
Pasture: Equipment, seeds and storage

Baler 17,483
Harrow 4,713
Planter 6,989
Plough 13,586
Sprayer 298
Tractor 40,345
Trailer 8,069
Seeds 6,898
Barn Hay storage 73,505
Waste Management – facilities & Equipment

Front loader 4,713
Manure Spreader 10,195
Urine sprayer 11,494
Concrete Manure pit – Nge 46,506
Concrete Manure pit – Nbya 23,253
Urine tank – Nge 1,506
Urine tank - Nbya 747
Working capital: Amount (USD)
Working Capital – Animal Feeds & Milk 40,000
Purchase
TOTAL INVESTMENT still NEEDED (USD): 702,170
The above stated capital is expected to be raised through a combination of debt, equity,
own contributions and retained earnings/reinvestment of profits. Kaisa Farm has to date
invested USD 1,062,443 into the farm. The majority of which went into purchase of land,
buildings and some limited equipment. The farm does not have any current outstanding
loans. It hopes to raise USD 400,000 from equity; USD 40,000 for working capital from
a loan, USD 20,000 as own contribution and the balance will be raised from
reinvestments of the company income.
2. THE ENTREPRENEUR
2.1 Personal motivation & individual qualities
For the majority of his work experience, Mr. Kaisa has been in private Agribusiness
having grown up on a farm. He is engaged in farming out of personal belief that this is
his contribution to the development of Uganda. He believes that Africa in general and
Uganda in particular will never develop, until people can meet their basic needs
especially in terms of feeding themselves. Given the vast natural resources in the
country. Mr. Kaisa believes that he can positively contribute to the sustainable
development of his local community and make a contribution to the overall economic
development of Uganda while earning good profit for himself and other shareholders.
Over the next three years therefore Mr. Kaisa would like to set up one of Uganda’s most
productive and efficient dairy enterprise, utilising leading and appropriate dairy practices
so that the highest market returns will reward the farm shareholders, the employees and
the local community. Mr. Kaisa has excellent team building and interpersonal skills. He
is highly motivated and self driven.
2.2 Experience
Mr. Kaisa is a graduate of Makerere University, Kampala, Uganda. Where he obtained a

Bachelor of social science degree in social administration and political science. He also
has a Masters degree in Business Administration – Economic Development from Eastern
College, Pennsylvania, USA. He has carried out various short trainings in dairy production
and processing. His work experience spreads across 20 years working in Agribusiness,
specifically dairy, poultry and commercial maize growing. He has served as a Board
Chairman of the National Animal Genetics Resource Centre and Data bank, a government
agency responsible for development of livestock in the country. He is also an executive
member of the East Africa Association of Dairy Stakeholders. He has travelled and visited
various dairy enterprises in the region which in addition to the above has tremendously
prepared him to build up a successful dairy enterprise.
2.3 Personal role
Mr. Kaisa as managing director – will be the main driving force of in the execution of the
business plan for the Kaisa Farm. He however has set up strategic alliances with an
expert in dairy production and reproduction Dr. Jackson Mubiru who will back stop most
of the activities on the farm.
2.4 References
Dr. Mwanja
Commissioner
Ministry of Agriculture Animal Industry and Fisheries
P. O. Box 4
Entebbe
Email: wwmwanja@yahoo.com
Office Tel: +256-414-320563
Mobile Tel: +256-772-594923
Mr. Charles Ocici

Executive Director
Enterprise Uganda
P. O. Box 24581
Kampala
Email: ocici@enterprise.co.ug
Office Tel: +256-312-261900
Mobile Tel: +256-772-699808
Personal details for Joseph Kaisa

Passport number: B0635143
Nationality: Ugandan
Date of Birth: March 17, 1966
Place of Birth: Namisambya
3. THE FINANCIAL PLAN

3.1 Budgeting Sheet
3.2 Fixed Asset Purchases (P.T.O)
3.3 Cash Flows
3.4 Profit and Loss Statement
3.5 Balance Sheet
4. THE DEVELOPMENT IMPACT
This section includes information on the Kaisa Farms impact on the economic and social
development of Uganda.
4.1 Economic Impact
Impact on Employment:
Over the three years the employment on the Kaisa Farm is projected to increase by 36
staff, in the production and in sales.
In addition, the various construction projects (milking parlour, concrete cow yards,
manure pits, urine tanks, and staff housing), to be carried out by external contractors,
will create extra employment in the construction industry as well as in the industries
supplying them with materials.
Impact on the consumption of Raw materials, Electricity, Water….

With increases in the production, processing and selling of milk and the cultivation of
fields there will be a continuing increase in the consumption of the various inputs
required to sustain these activities.
The milking machines and the dairy plant, including the storage fridge, will consume
more electricity. The supplying of still higher quantities of milk to the local market as
well as the cultivation of the fields will require an increased use of transport and petrol /
diesel – a non – renewable resource. More packing material will be needed for the
processed milk. The consumption of water will increase significantly.
The various construction projects (hay barn, milking parlour, staff housing) will
temporarily necessitate an increased use of various raw materials – cement, iron, bricks.
A positive environmental initiative is the collection of manure from the milking cows for
use as fertiliser on the fields.
Overall, the project will increase the use of raw materials / inputs. The increased
requirement for material / inputs, however, can be described as reasonable seen from
perspective: They are indispensable to the implementation of the project, they are
common in this kind of production, they cannot easily be replaced or reduced.
4.2 Local social impact of the business’s products or services
Besides the economic impact described above, the Kaisa Farm will also have positive
social impact described below:
Impact on Health:
Milk is highly recommended for consumption due to its positive health impacts. As
mentioned in the market analysis, however, the consumption of milk in Uganda is far
below WHO’s recommended levels. The Kaisa Farm through this business plan is likely to
increase both the quantity and the quality of consumed milk in Uganda.
Quantity
A major part of the reason for the low consumption of milk is the low income levels in the
country. To increase the consumption of milk in the country it is therefore essential to
reduce the cost of milk. This can be achieved by

stimulating the competition in the sector forcing the producers to lower their prices.
The Kaisa Farm is stimulating the competition in the sector in two ways. First by
increasing the supply of milk. Secondly by stimulating an efficient production on the
Kaisa Farm. An efficient production may not necessary mean lower prices for the
consumers, however, according to the Kaisa Farm’s mission statement, the farm’s
objective is exactly to lower the price of milk through more efficient production and lower
unit cost.
Quality
Raw milk needs to be boiled before consumption, however, it is likely that not all
consumers of raw milk actually do boil the milk. To avoid these consumers from falling
sick from drinking the raw milk, the raw milk must be produced under hygienic
production as it is the Kaisa Farm’s objective to make quality products. With the
technical assistance from the strategic alliance with an expert, this should be very
feasible.
The Kaisa Farm will also benefit the local community through production of quality
processed milk. The business plan has shown that there is room for additional
improvement in the handling and processing of the milk and the Kaisa Farm is committed
to carrying out such improvements.
Impact on Technical Capacity

The Kaisa Farm business plan includes a significant component of training to be provided
through a strategic alliance with a specialist in livestock production. The training provided
by the specialist falls within the areas of cattle management, field management and
safety.
This initiative will build the Kaisa Farm’s professional capacity and benefit the farm
operations. It is also likely that there will be a spill-over to the neighbouring farms.
In the long term, as the Kaisa Farm hopefully expands its operations and / or as the staff
change employment and / or the staff interact with peers, the effects of the capacity
building will gradually seep out into still wider parts of the Ugandan agricultural sector.

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KAISA FARM BUSINESS PLAN

KAISA BAMULANGEYO AND SONS LTD.

Date: December, 2009

Author: Joseph Kaisa

3. THE FINANCIAL PLAN.......................................................................................39

4. THE DEVELOPMENT IMPACT..............................................................................45

To produce the milk, the farm breeds the cattle which

1.3 Market structure and analysis

1.3.1 Target market and customer base

TABLE 1 – 1 litre packs

Table 2 – ½ litre packs

Table 3 – ¼ litre packs

Table 4 – raw milk

1.3.2 Market size and potential

According to the Dairy Development Authority (DDA) publication – Dairy industry at a

 Farm families consume 50 – 70% of the production directly at home. Of the

 Consumption of unprocessed milk increases substantially during the wet season

It can be concluded from the above that:

Middle and High Income households:

Of the above information, the following is relevant to the Kaisa Farm:

3 year out look

 The Uganda economy is estimated to grow by approximately 6% per year in the

extensive coverage of milk promotion is carried

Market potential for Kaisa Milk in target Market.

Table 7 – potential Kaisa Farm sales per day

1.3.3 Competitor analysis

Competition from milk processors – formal sector

The four forms of competition are analysed below.

Milk processors characteristics

Raw / loose milk vendors / suppliers

Raw Milk supply includes:

Table 8 – Imports of Dairy products by year

Instead of taking milk 80% of consumers interviewed

Table 9 – Substitute Products

1.3.4 Competitive advantage

1.4 Marketing and distribution

1.4.1 Marketing & Communication

1. Retention of current consumers through:

Following below are the programs to be implemented.

A lower price, however, can at times be interpreted as

 Has long and strong traditions and uses the

specifically for these take-it-as-you-go customers.

In the first year, by:

1. Liaising with a marketing agency to create slogans, marketing messages and

 Targeting consumers to change beliefs about brands

During the first year, the Kaisa Farm will:

During the second year, the Kaisa Farm will:

During the third year, the Kaisa Farm will:

2. Offer free samples once every month in selected

1.4.2 Sales and Distribution

Considering the above, there is clear need for training

Staffing and Training

 The delivery staff (the drivers) delivering Kaisa

1.5 Production process & development

Short Term Strategy – Years 0-3

 To implement changes in the organizational structure and the human

Planned Activities Required Achieving Planned Objectives: Year 0-3

This is envisaged achieved mainly by:

Sub-Objective 1: Increasing the farm’s

Sub-Objective 2: Increasing the farm’s production of milk through applying

Sub-Objective 3: Purchasing a separator to produce cream and butter.

Ad. Sub-Objective 2: Increasing the production of milk will be achieved

1. Investing in the first half of 2010 in a tractor, a plough, a planter, a harrow, a

4. Investing in the first half of 2010 in 47 kilometres of electrical fencing to be