Professional Documents
Culture Documents
Proposal On Far
Proposal On Far
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5.16. Milk Market Linkage..................................................................................................10
5.17. Technology Transition................................................................................................10
5.18. Implementation Plan...................................................................................................11
6. PRODUCTION AND SALES PLAN.....................................................................................11
7. Human Resources....................................................................................................................12
8. PROJECT SITE/ GEOGRAPHICAL LOCATION................................................................13
9. PROPOSED BUDGET AND TIME FRAME OF THE PROJECT PROPOSAL..................13
9.1. INVESTMENT COST....................................................................................................13
9.2. Source of Finance............................................................................................................14
9.3. Project Duration..............................................................................................................14
9.4. Financial Analysis...........................................................................................................14
9.5. Key assumptions.............................................................................................................15
9.5.1. Production Related Assumptions.........................................................................15
9.5.2. Cost Related Assumption.....................................................................................15
9.5.3. Revenue estimates.................................................................................................15
9.6. Proposed Sales Budget....................................................................................................16
9.7. Proposed Cost and Expense............................................................................................16
10. PROJECT MONITORING AND EVALUATION............................................................16
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1. EXECUTIVE SUMMARY
1.1. Project Title: Dairy farm and Milk Processing Project
1.2. Promoter’s Profile: The anticipated Dairy Farming and Milk Processing
Project” is initiated and owned by Family Dairy Farming Partnership plc.
Family Dairy Farming Partnership (plc) was formed in accordance with
the commercial code of Ethiopia. The members of the organization were
from One Family and all of them are well educated. The composition of
sex is four members were male and one is female. Though the partnership
is newly formed, the experience of members is outstanding one of them is
PHD candidate, one other have MA in Business Administration the other
two of them are graduated from University with associate degree in
Agribusiness and value chain management, the experience they have
given a position that significantly increases the chance of success.
1.3. Location of the Project The proposed project can be setup in Southern
Nation, Nationalities and people Regional State (SNNPRS) Tepi, Zone in
Bulki Town Administration.
1.4. Project Goal and Purpose The overall goal of the project is to
contribute towards the economic development of Ethiopia through using
the existing investment opportunities in the Country and taking advantage
of the expressed policy incentives that emphasize on greater
commercialization of agriculture and enhancing private sector
development. The main objective of the said project is to produce milk
and milk processing products for local markets and to maximize profit so
as to sustain the project. In line with this the following are specific
objects of the project.
To introduce modern dairying and milk processing technologies to the surrounding
locality.
To create job opportunity for skilled and unskilled local citizens.
To create market linkages with small holder farmers in the town and its surroundings
and etc.
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1.5. Estimated Cost of the Project: At the beginning of the production year
the project will have the following costs
Capital 2,587,500
Working Capital 1,471,128.88
Total cost : 4,058,624.88
1.6. Project Component
Total production area: 20,000 Square meters
Types of investment: Diary Farming and milk processing
1.7. Expected Beneficiaries:
Permanent employee: 15
Temporary employee: 20
1.8. Socio-Economic benefit
The project will create additional means of employment for skilled, semi-skilled
and casual laborers in the area.
Aside from the increase in income of the partners, the project would activate the
economy especially in the continuous production of milk and milk products. It
will also encourage entrepreneurs in the country to engage in milk processing and
milk production.
The expected increase income of the permanent and temporary employees’
beneficiaries would eventually contribute to good health and nutrition in the
family and allow them to access better education for their children, improve
sanitation and provide for the necessities in the household.
2. INTRODUCTION
Animal husbandry and agriculture are synergistically involved and are the important
source of income and employment in rural areas. Among them, dairying provides security
to farmers, especially when agriculture fails. Dairy farming is essential to millions of
poor households across the country not only as a source of income but also as a major
source of protein, supplementary nutrition, fertilizer, fuel and a store of wealth.
Enhancement in milk processing has necessitated the increased demand for milk and
this triggered the setting up of many commercial dairy units in medium and small scale in
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different parts of the country. Introduction of improved technologies, availability of
compounded feed are the other factors responsible for this shift from traditional mixed
farming production to specialized dairy production system. Dairying with high yielding
breeds has generated ample scope for developing the dairy farming on commercial lines
as a business enterprise.
Despite its potential for dairy development, productivity of indigenous livestock genetic
resources in general is low. The annual rate of increase in milk yield (estimated to be
1.2%) lags behind the increment in human population (estimated to be about 4.8% per
annum) (Gofa zone plan and development department annual statistic data 2020) and this
resulted in large supply–demand variance for fresh milk. The FAO recommends the
consumption of 200 liters of milk per person per year. The annual socio-economic
statistical abstract of Gofa zone Plan and Development department report shows that the
average consumption of Bulki Town was only 16 liters per year. Demand for milk and
milk product is already higher than supply across Gofa Zone Bulki Town and there is
only Two Milk processing cooperative association and it is not producing at full capacity.
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On the other hand, the potential of dairy development in Bulki Town is very huge. The
existence of suitable agro-ecologies for dairy production, increasing domestic demand for
milk and milk products, and better market opportunity indicate the potential and
opportunities for dairy development in the Town.
The Project proposal of Family Dairy Farming Considering the important of dairy
farming to sustainable food value chain, and employment opportunities to the society, can
contribute immensely to poverty alleviation and improved nutrition in the Gofa Zone
Bulki town.
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critical issue to expand its business and to run day to day operation with enough
working capital.
Generally, the above mentioned actors have a great roll towards facilitating effective and
smooth implementation of the project. Furthermore, Zonal Agriculture and Wereda office
will give technical advice on dairy and milk processing technologies and control the
quality of milk processed.
At present the low level of raw milk supply is critical at Gofa zone. Family Dairy
farming will supply raw milk and milk products to the society.
There are different private small scale farm and household farm competitor in bulki
town. At city level one small scales dairy farm and 2 cooperatives that collects raw
milk from member. But this farm unit not actively produced milk at sufficient
quantity and quality. Due to this reason there no strong completion between them. We
distinguish ourselves from them by providing better quality milk at reasonable prices,
and delivering both fresh and special package refrigerated milk to the customer door.
Possible interventions on the supply side could be strengthening of raw milk supply,
improving milk collection centers, provision of feed, logistics and breed
improvement. In the processing chain quality improvement, business linkages,
training, and technology transfer are important activities to be considered
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4.2. THE MAIN AND SPECIFIC OBJECTIVES
The main objectives of the Organization is to provide various types of product that dairy
farming can produce for the local society of Bulki Town in short run and in the long run
for the people of Gofa zone overall and to maximize profit so as to sustain the project .
To create market linkages with small holder farmers in the town and its surroundings
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course of activity is focuses on milk production and processing involving a range of
value addition on the main product.
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5.6. Milk Processing Equipment
According to the Performa invoices submitted from local suppliers, the aggregate cost of
the machinery and equipment is summed up to Birr 400,000 and other milk equipment is
estimated to be Br. 220,000.
5.7. Vehicles
The farm would utilize an Isuzu (milk tankers installed) as a farm vehicle. According to
the Performa invoices submitted from local suppliers, the aggregate cost of the vehicles is
summed up to Birr 800,000.
Land is one of the important resources for dairy farming. Dairy Farm has extensive
facility requirements. The basic dairy facility requirements are a milking parlor, open
area, feed storage, waste storage, Calves and heifer development facilities. Cows spend
most of their time in the pasture or in free. Feed storage facilities are another requirement
for dairy operations because of the large amount of feed fed to each cow. The partnership
holds 20,000 square meters land at bulki town mindire site; which is suitable for dairy
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farming with moderate climate. Since the land is owned by the partners, we have zero
cost of land acquisition.
5.12. Building
Dairy animals are often housed at night and the type of housing provided varied
depending upon the classes of dairy animals, agro-ecology, production system,
physiological stage of dairy animals. The types of houses provided, in general, varied
from roofed to simple corral with no roof. Since the site of the farm is located at
highland, the housing should be well constructed for adult cows, adult calves, milk house
and water tanker.
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access to different telephone services, such as, mobile telephone service, and
wireless.
v. Educational Services; Bulki Town Administration has good access to educational
services especially from kinder Garden to high school and TVT College.
vi. Financial Institutions; There are government and private banks in the project area
and surrounding. Hence, the project can get bank services nearby.
vii. Health Services; the project area can access health service nearby Hospitals and
Health center which is 14 k. meter and 1 k. meter far from project area.
The total investment cost of the project Birr 4,058,624.88 will be financed from two
sources: equity of the owner and a loan from Development Bank of Ethiopia. By this,
about 80% of the project cost (3,246,900 Birr) will be financed from the Bank.
In Gofa zone, milk and milk products are marketed through both informal marketing
systems. In this marketing system, producers sell to consumers directly or to unlicensed
traders or retailers. Price is usually set through negotiation between the producer (seller)
and the buyer; this system is predominant in the rural dairy production system. Our
organization will use the formal marketing system, which there are cooperatives and
private milk collecting and processing plants that receive milk from us and channel to
consumers, and the informal marketing system.
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complementary feeding as well as management technology adopted by family dairy
farming, we can share the experience and provide adult calves for reasonable price to the
local farmers. By doing this practice we can accelerate the adaptation of effective
breeding alternative technologies of artificial insemination and management technology.
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The actual raw milk production will therefore begin at 133,500 litters in the first year of
production and the milk production will increase with the growth in herd size in
subsequent years.
7. Human Resources
Our management is expected to use resource wisely, operate profitably and abide by
law and regulations. We will have manager of farm whom graduated from University
with associate degree in Agribusiness and value chain management. The manager
oversees the total dairy farming operation, with daily responsibilities for managing
milking, milk house work, and fieldwork. Other assists with all farm responsibilities, with
daily responsibilities for maintaining herd health records, heifer raising, and fieldwork.
To manage the finance we appointed one partner from the family who has graduated from
university with Accounting and finance BA Degree controls the overall financial
activities of the organization. There will be contract/temporary employee’s work on the
farm on daily work for hygiene of the cows, harvest feed and manage available feeds,
transport milk to formal linked market and process milk further accordingly. The
personal plan reflect the need to booster our capability to match our position project farm,
will have the following staff
I. Dairy farm manager → BSc
II. Barn worker skilled - Contract
III. Veterinarian → diploma
IV. Pasture and worker→ skilled - Contract
The ultimate goal of all our employees is to meet or exceed our customers' expectations.
They are all empowered to take any reasonable action to avoid a customer leaving our
premises dissatisfied. Our continuous improvement policy encourages all employees to
continually look for ways to keep updated with the latest technology, to improve
processes, reduce costs and save time. This approach serves the goal of reducing costs
and delivery times, and increasing the service quality and customer satisfaction.
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Table 2 Manpower Requirement and Labor Costs
No Job Description Vacant position Monthly salary Annually salary
required
1 General Manager 1 8,017 96,204
2 Farm Manager 1 6,000 72,000
3 Finance and Administrative 1 6,000 72,000
manager
4 Veterinarian 1 5,200 62,400
5 Accountant 1 5,200 62,400
6 Milk processing plant worker 1 4,667 56,004
7 Barn Worker 5 3,882 46,596
8 Marketing and sales man 1 4,667 56,004
9 Store keeper 1 3,000 36,000
10 Guard 2 3,000 36,000
Sub – total 15 49,633 595,608
11 Pension contribution (11%) 65,516.88
12 Grand total 661,124.88
The geographical location of the project is SNNPR, GOFA ZONE, BULKI Town
administration, which is located west of Sawla town and 16 kilo meter distance far ways.
The project site is at “Mindre” site and we selected it because of the criteria its altitude
from see level is recommendable for the dairy farming – which is highland, the land of 2
hectare are owned by the partner (by the family) and there are Kalehiwot church dairy
farming near to our site by which we can share the experience of their farm work.
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Table 3 Initial Investment Cost
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show an increasing trend during the life time of the project. The projected financial
statement shows that the project will remain profitable throughout its life.
The project will initiate with 15 pregnant cows in single production year. Over the years
the size of the project will increase gradually reaching the limit of 80 cows in production
year. Dairy animals will be fed 3 kilogram of concentrate along with 7 kilogram of
roughage per head per day. The cost of concentrate and roughage feed per kilogram is
estimated to be 5 and 3 birr respectively.
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9.6. Proposed Sales Budget
Item Year 1 Year 2 Year 3 Year4 Year 5
Sales of milk 5,340,000 9,600,000 14,400,000 19,200,000 24,000,000
Sales of Cheese 1,250,000 2,300,000 3,000,000 4,200,000 5,000,000
Sales of Better 250,000 650,000 850,000 960,000 1,050,000
Sales of Adult Calves - 600,000 600,000 600,000 600,000
Total 6,840,000 13,150,000 18,850,000 24,960,000 30,650,000
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