Project Appraisal of Dairy Firm

As the need for milk is constantly increasing, this gives easy access to the market. This milk is made available to the common people at a comparably low cost and also providing them with good quality. As people are becoming health conscious, the need for vitaminized milk is increasing. Product proposed to be manufactured: Shroud is a milk dairy which is aimed to supply pure milk to the people at a comparably low cost. The following different types of milk are produced in the dairy. Standardized milk- This is made by combining buffalo milk and skimmed milk. The fat percentage is maintained at 4. 5%.
Whole milk: Whole milk must contain at least 3. 25% milk fat and 8. 25% milk solids by weight—which means it derives about 50% of its calories from fat. Because of this relatively high-fat content, whole milk is best used only for infants and young children up to age 2. Reduced-fat milk (2%): This milk contains 2% milk fat. The percentage of milk fat refers to the percentage of fat by weight, and much of milk’s weight is water. Once you subtract the water from 2% milk, for example, you’re left with a product that contains 20% fat by weight; such milk actually derives 35% of its calories from fat. Drinking 2% milk is a good way to wean oneself from whole milk at first, but is too high in fat as a permanent choice unless your diet is otherwise very low in fat. Low-fat milk (1%): One-percent milk gets 23% of its calories from fat. Many people find low-fat milk more appealing and a good compromise. Skimmed milk/non-fat milk: This type of milk has as much fat removed as possible. It may not contain more than 0.
5% milkfat by weight, and usually contains less than 0. 5 gm of fat per cup, deriving just 5% of its calories from fat. Skimmed milk has about half the calories of whole milk. It is the best choice for adults and is the only type of milk that should be consumed by people on strict low-fat diets. Unfortunately, skim milk has a very “thin” flavor and an unappealing bluish cast. Vitaminized or Irradiated Milk Vitaminized milk is milk to which one or more vitamins are added. Irradiated milk is milk in which the vitamin D content has been increased by exposure to ultraviolet rays. The addition of vitamins (and minerals) to milk is called fortification and such milk is called fortified milk. The vitamins and minerals may be added singly or in combination as multi-vitamin and mineral milk preparations. It also produces Curd but mainly concentrates on milk. As milk is a dairy product and everyone drinks daily, everyone who drinks milk are our customers. The main differentiated factor is vitamin milk or multivitamin milk which gives the company a competitive edge. Marketing will be the key for this company because there are many competitors from many years who have a strong foot fold in the state. So it is necessary for the company to show differentiation and campaigning is very important.

Market Feasibility Study typically involves testing geographic locations for a real estate development project and usually involves parcels of real estate land. Developers often conduct market studies to determine the best location within a jurisdiction, and to test alternative land uses for given parcels. Jurisdictions often require developers to complete feasibility studies before they will approve a permit application for retail, commercial, industrial, manufacturing, housing, office or mixed-use project. Market Feasibility takes into account the importance of the business in the selected area. Market share: As per 2009 survey the population in around Rajahmundry is 15 lacs. According to the data, the market share of vishaka is 22%, the market share of Vijaya is 18%, the market share of heritage is 6% and the market share of the jersey is 4% and local milk vendors are dominating the market by holding a market share of 40%. We can grab a market share of 0.06% market share. Unit Market Share (%) =Unit Sales (#)/Total Market Unit Sales (#) = 10000/ 1500000 = 0. 06 There is a huge population of 15 lacs in and around Rajahmundry. So, we can easily sell the 10000 liters of milk every day. It’s easy to grab the market.

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a) MAJOR CUSTOMERS: As milk is a commodity and mostly every one drink daily, we have a more customer base. As our capacity for the processing of milk is small we can serve only to Rajahmundry.
b) Region: As we want to serve the market of Rajahmundry, we have located our plant close to it. There are benefits we can incur such as a reduction in transportation cost, better availability, etc.
c) Major players already in the field: the market is presently dominated by key players like vishaka, jersey, heritage, and Vijaya.
d) Competitive advantage enjoyed by the proposed venture: Our main competitive edge is low pricing, easy availability. This can be achieved, as the plant is located at the center of 40 villages and the milk can be easily procured. Another advantage is as the plant is near to the Rajahmundry we serve the market well, the cost can reduce in terms of transportation and we can offer at a low price compared to competitors.
e) Sales channels and methods: in this type of industry, distributors play a vital role. So we have selected this as a channel as it offers a good step into the market. This helps in the penetration of the market. As milk is a commodity and we are offering a high margin for distributors we are not advertising or promoting the product.
f) Market tie-up: A good tie-up gives a competitive edge in this type of industry. As our business is complete of procuring the milk, processing, and supplying to the customers, a trusted tie-up with the villagers is very essential. So we are concentrating on building relationships with the farmers, which will enhance productivity and leads to better profits.

The average composition of cow’s milk is 87. 2% water, 3. 7% milk fat, 3. 5% protein, 4. 9% lactose, and 0.7% ash. This composition varies from cow to cow and breed to breed. For example, Jersey cows have an average of 85. 6% water and 5. 15% milk fat. These figures also vary by the season of the year, the animal feed content, and many other factors. Vitamin D concentrate may be added to milk in the amount of 400 international units (IU) per quart. Most low fat and skim milk also has 2,000 IU of Vitamin A added.

a) Raw materials required: Milk and water in ratio 1:2 and packing materials
b) Sources of supply: Local vendors Nearby villages Own cattle farms
c) Minimum purchase quantity, lead time, seasonality; Minimum purchase quantity from a local vendor is 2 liters Lead time is 1-day Minimum Seasonality variations as milk is commonly used commodity at any period of time.
d) Arrangements made for the regular supply of the required quantity of raw materials Vans are provided at our cattle firm to transfer milk from firm to production place. Vans are provided in the morning times every day in the villages for collecting milk.

Manufacturing Process
Milk is a perishable commodity. For this reason, it is usually processed locally within a few hours of being collected. In the United States, there are several hundred thousand dairy farms and several thousand milk processing plants. Some plants produce only fluid milk, while others also produce butter, cheese, and other milk products. Dairy cows are milked twice a day using mechanical vacuum milking machines. The raw milk flows through stainless steel or glass pipes to a refrigerated bulk milk tank.
Dairy cows are milked twice a day using mechanical vacuum milking machines. The raw milk flows through stainless steel or glass pipes to a refrigerated bulk milk tank where it is cooled to about 40° F (4. 4° C). A refrigerated bulk tank truck makes collections from dairy farms in the area within a few hours. Before pumping the milk from each farm’s tank, the driver collects a sample and checks the flavor and temperature and records the volume.  At the milk processing plant, the milk in the truck is weighed and is pumped into refrigerated tanks in the plant through flexible stainless steel or plastic hoses. Separating The cold raw milk passes through either a clarifier or a separator, which spins the milk through a series of conical disks inside an enclosure. A clarifier removes debris, some bacteria, and any sediment that may be present in the raw milk. A separator performs the same task, but also separates the heavier milk fat from the lighter milk to produce both cream and skim milk. Some processing plants use a standardizer-clarifier, which regulates the amount of milk fat content in the milk by removing only the excess fat. The excess milk fat is drawn off and processed into cream or butter. Fortifying Vitamins A and D may be added to the milk at this time by a peristaltic pump A clarifier removes debris, some bacteria, and any sediment that may be present in the raw milk. The milk is then fortified and pasteurized. which automatically dispenses the correct amount of vitamin concentrate into the flow of milk.
The milk—either whole milk, skim milk, or standardized milk—is piped into a pasteurizer to kill any bacteria. There are several methods used to pasteurize milk. The most common is called the high-temperature, short-time (HTST) process in which the milk is heated as it flows through the pasteurizer continuously. Whole milk, skim milk, and standardized milk must be heated to 161° F (72° C) for 15 seconds. Other milk products have different time and temperature requirements. The hot milk passes through a long pipe whose length and diameter is sized so that it takes the liquid exactly 15 seconds to pass from one end to the other. A temperature sensor at the end of the pipe diverts the milk back to the inlet for reprocessing if the temperature has fallen below the required standard.
Most milk is homogenized to reduce the size of the remaining milk fat particles. This prevents the milk fat from separating and floating to the surface like cream. It also ensures that the milk fat will be evenly distributed through the milk. The hot milk from the pasteurizer is pressurized to 2,500-3,000 psi (17,200-20,700 kPa) by a multiple-cylinder piston pump and is forced through very small passages in an adjustable valve. The shearing effect of being forced through the tiny openings breaks down the fat particles into the proper size. * The milk is then quickly cooled to 40° F (4. 4° C) to avoid harming its taste.
The milk is pumped into coated paper cartons or plastic bottles and is sealed. In the United States, most milk destined for retail sales in grocery stores is packaged in one-gallon (3. 8-liter) plastic bottles. The bottles or cartons are stamped with a “sell by” date to ensure that the retailers do not allow the milk to stay on their shelves longer than it can be safely stored.  The milk cartons or bottles are placed in protective shipping containers and kept refrigerated. They are shipped to distribution warehouses in refrigerated trailers and then on to the individual markets, where they are kept in refrigerated display cases.
To ensure sanitary conditions, the inner surfaces of the process equipment and piping system are cleaned once a day. Almost all the equipment and piping used in the processing plant and on the farm are made from stainless steel. Highly automated clean-in-place systems are incorporated into this equipment that allows solvents to be run through the system and then flushed clean. This is done at a time between the normal influx of milk from the farms.
Quality Control 
The federal Food and Drug Administration (FDA) publishes the Grade AMilk Ordinance which sets sanitation standards for milk production in most states and for all interstate milk shippers. Testing of milk products includes tests for fat content, total solids, pasteurization efficiency, presence of antibiotics used to control cow disease, and many others. The Future The trend to low-fat dairy products over the last 20 years is expected to continue in the future. Sales of butter are expected to decline, while sales of low-fat yogurt and low-or reduced-fat milk are expected to increase. Overall consumption of liquid milk is expected to increase as the population increases.

a) Transport facilities: The vehicles required for procurement and distribution of milk depends on the quantity of milk to be handled. The number of vehicles required, source of supply, rental charges, etc. need to be furnished. Depending upon the need, the requirement of vehicles may be considered in the project cost. Vehicles provided are vans.
b) Utilities: Power: Normally a three-phase electricity supply is required for milk processing plants. The power requirement depends upon the load to be connected and the necessary approval from SEB should be obtained for connection. Depending upon the position of power supply, standby generators may be considered for connecting the essential sections.

Water: A milk processing plant requires the water in the ratio of 2:1 (2 liters of water for 1 liter of milk processed) for cleaning of equipment, cold storage, and drinking purposes (source of water supply, quantity available and suitability for the purpose has to be mentioned). Accordingly, the size of the well is required to be designed and depends on the quality of water, the water softening plant may be considered.
 Compressed Air: It will be required for various pneumatic operations flow control operations as well as for cleaning purposes. The total requirement of compressed air and the capacity of the compressors is required to be furnished.
Vehicles: The vehicles required for procurement and distribution of milk depends on the quantity of milk to be handled. The number of vehicles required, source of supply, rental charges, etc. need to be furnished. Depending upon the need, the requirement of vehicles may be considered in the project cost.
Other Services: Although a maintenance workshop is an integral part of milk processing for carrying out repairs and maintenance of equipment.

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