First MilkFirst Milk

MUISTD EveningMUISTD Evening

Paras Sheeraz AbroParas Sheeraz Abro

S. Aijaz ShahS. Aijaz Shah

S. Ashiq ShahS. Ashiq Shah

Khurram A. ShaikhKhurram A. Shaikh

• Higher demands & Lesser suppliesHigher demands & Lesser supplies

• Milk Availability trendsMilk Availability trends

• Ice Addition & Lack of chillersIce Addition & Lack of chillers

• Conceptual gap about hygienic impactsConceptual gap about hygienic impacts

• Shortage of Skilled & trained human resources Shortage of Skilled & trained human resources

• Pure & Hygienic milk is the utmost Pure & Hygienic milk is the utmost requirement in every walk of life. requirement in every walk of life.

• purity as prime condition for test in all purity as prime condition for test in all type of milk products.type of milk products.

• Hygienic milk as prime requirement of all Hygienic milk as prime requirement of all Humans.Humans.

• pure milk as pre condition for nutrition.pure milk as pre condition for nutrition.

• Hence all time availability of pure and Hence all time availability of pure and hygienic milk is Value creation of hygienic milk is Value creation of First First milk milk productproduct

• Out of total production only 5 percent milk is Out of total production only 5 percent milk is

processed on hygienic lines whereas shelf life processed on hygienic lines whereas shelf life

of the remaining 95 percent un-processed milk of the remaining 95 percent un-processed milk

is very short and due to unavailability of is very short and due to unavailability of

proper storage facilities most of milk produced proper storage facilities most of milk produced

goes waste there are very few chillers goes waste there are very few chillers

available that can store milk properlyavailable that can store milk properly . .

• Milk producers:Milk producers: Dairy farmers, Dairy farmers,

• Chill HouseChill House: : Cold Storage (To increase Cold Storage (To increase shelf life) shelf life)

• End user:End user: Sweet Manufacturers, Sweet Manufacturers, Hotels, Bakeries, Hotels, Bakeries,

Household Household cusumers, cusumers,

Milk Statistics - Pakistan

50 mio Animals

26 mio Buffalo 24 mio Cows14 mio Farming Families

33 Billion Litres of Milk annually

(4th Largest producing country)

Pakistan Milk Production 31 bio. liters

Urban 8.2 bio liters

Rural 19 bio liters

1 Total milk production ~33 bio liters with 27 bio liters available for human consumption

30%70%

1.00 1.20

5.00

1.00

0.001.002.003.004.005.006.007.00

Processed & Packaged Sweets & Khoya Gowalla Milk Unprocessed Milk Shops

88% Loose Milk + sweets

Demand Growing @

10-15%

Supply Growing @

2-4%

Target area for first milk

Volume Evolution

From direct Ice addition

to

modern cooling

1998

2011

in million kg / year

Punjab 50% 16.50 Billion litersSindh 40% 13.20NWFP 07% 02.31 Baluchistan 03% 00.99Total 100% 33.00

• Milk collection

• Quality milk / check

• Storage

• Chilling

• Sale

Fresh Milk Quality Checks

At Field Level: Village, Chiller, Main Center; Rapid screening testsAt Field Level: Village, Chiller, Main Center; Rapid screening tests

Organolaptic

APTCOBpH

AcidityMBRT

FatDensity

Total SolidProteinSodium

Physico- chemical

Test

AdulterationTest

SugarStarch

GlucoseSorbitol

Ref. Index

UreaYoghurt

CO3/HCO3Formalin

Am. Sulphate

CHILLERS CHILLERS

BULK MILK COOLER

Standard chillers Standard chillers Standard chillers Standard chillers

• Eco friendly profitable business. Eco friendly profitable business. (go Green)(go Green)

• Quality milk.Quality milk.

• Reduce layers of supply chain management.Reduce layers of supply chain management.

Enhanced shelf life. (Enhanced shelf life. (Reduce pressure of buyer and Reduce pressure of buyer and

seller to utilize instantly or waste)seller to utilize instantly or waste)

• All time availabilityAll time availability

Incentive for milk producers to produce more.Incentive for milk producers to produce more.

• Reduce wasteReduce waste

• Initially 03 cold milk centers in lower Sindh each at Jamshoro, T.M.Khan, & Hyderabad districts.

• Equipped with Quality & Quantity check instruments

• With 1000 liters capacity each.

• Chilling temperature 4 dec. centigrade

• Own transportation system to collect / deliver milk.• Milk procurement as per fat content at given rates.

• Near to farmers

• Near to market

• Own transportation

• ERP system for centers connectivity

and feed back

• In time cash to the farmers

• Flexible in accommodating quantity

variation orders

• Gawals collect 60-70 % of the total milk

from dairy farmers in vicinity of urban

areas.

• 70 % of milk collected from them are

distributed to end user as home delivery.

• The milk produced from periphery near Big

towns are unable to fulfill the demand of

civic population.

• Insufficient availability .• Unawareness of milk producers on:

– Commercial value of their product.– Hygienic aspects.– planning for balance of lean–flush

inequalities.– Insufficiency of latest and modern approved

milk utensils.– Traditional approach rather than innovative.– Lack of professional approach – Cost effectiveness– Microbial effect on milk quality

• To improve & maintain Milk Supplies

• Quality & Hygienic Orientation.

• Increase shelf life.

• Store milk for longer time when needed.

CHILLER’S ROLE

• Lack of Modern and commercial dairy farms,

• Lack of dairy related education.

• Lack of financial and infrastructure facilities.

• Lack of quality check (most neglected aspect of

the whole system.)

• High open milk demand as compare to processed

milk.

• An opportunity to the business to provide them

pure milk for better dairy business

• To manage waste of milk and proper awareness about Supply management of milk. ( From producers to end user)

• To provide on time cash and purchase facility to dairy farmers.

• All time Quality milk availability for end user.• Availability of professional and skilled

manpower.• Information and communication system for

connectivity between centers

Operational Plan

Project Details:

• Components:  The major components of Bulk Milk Cooling Unit comprises of bulk cooling tank of varying capacities (500 to 5000 litres), DG set and accessories such as water heater, water storage tanks etc.

• Capacity :The capacity of Bulk Milk Cooling Units is ranging from 500 to 5000 litres.

• Equipment suppliers: The machinery should be as per BIS standards and are presently manufactured in the country by De Laval, Fabtech, IDMC, PRAJ, etc. Besides this many local fabricators are also manufacturing good quality BMCUs at reasonable rates.

• Processing: The operations involve collection and chilling of milk to a temperature of 4oC

Operational Plan-Plant Setup

Operation Plan- ERP Design

• The management comprises of 4 partners having a share according to their investment, they also take key responsibilities in financial and marketing and production matters.

• A total employees of center managers, chiller operators, marketing and financial assistants, guards, keeper and drivers.

Partners Profile• Paras Sheeraz Abra• Syed Ashiq Shah• Syed Aijaz Shah• Khurram Aziz ShaikhMBA (SZABIST),

Certified Supply Chain Management (APICS)Project Management

The following are considered regular customer of

the product (Chilled milk) subject to

agreement

• Sweet Manufacturers

• Hotels, clubs / Gymkhanas

• Bakeries

• Milk retail shops / General store

• Milk Suppliers for home delivery

Above the Line (ATL)• Electronic and Print Advertisements (Through Media Partners on TV, News papers and FM)• Billboards, Pamphlets• Website Promotions and Marketing

Direct Marketing• Personal contacts / Visits• Incentives • Assurance of quality and regular supply.Below The Line (BTL)• Kiosk Setup in different places (Hyper market, • Industrial Areas)• Events for brand promotion (future plans)

• Billboard & StreamersInitially, about 6 hoardings to be placed in the city of Hyderabad, T.M, Khan and Kotri on prime locations.

• Hoardings & Streamers at Hyderabad supermarkets such as Zain, Saakrani, Hamid Delton, Garrison etc.

• The First milk is looking forward to enhance business units.

• To provide incentives, small loans to dairy farmers to meet routine requirements.

• To arrange trainings, awareness programs for dairy farmers to increase cattle farming and curing cattle's in unpredictable weather conditions/diseases.

• The First milk also anticipate for establishing dairy spots and other value added or by products by milk holders.

The unpredicted situations of the country

may lead to business limitation, like strikes

and other political influences.

The floods and other natural calamities

might hinder production and business

revenues in return.

Energy crises of the state might increase

operational expenses.

• The chill centers could be converted in The chill centers could be converted in

to dairy business or processors.to dairy business or processors.

• The plan b includes the dairy product The plan b includes the dairy product

launch through its bulk milk storage.launch through its bulk milk storage.

• The dairy product launch through its The dairy product launch through its

bulk milk storage or bottle milk.bulk milk storage or bottle milk.

An Estimate of milk collection from near by 08 villages, average no of buffalos at each form house or diary form

Name of Village / place

Avrg No of Buflos, at mdm

size d.form / house

No of dairy forms / form houses, Milk

Producers

Average production / buffalo /day

Total milk collected /

day Kilo/liters

we purchase

Price / kilo or liter Total Amount

Siddiqe shoro 5 5 44 1100 300 52 15600Village 1 4 6 38 912 250 52 13000Village 2 6 3 49 882 250 52 13000Village 3 7 5 60 2100 400 52 20800Village 4 3 8 23 552 250 52 13000Village 5 8 4 30 960 300 52 15600Village 6 9 3 45 1215 300 52 15600Village 7 10 2 40 800 350 52 18200

8521 2400 52.00 124800

Invetment cost Rs /day 124,800 Sale price / kilo or lit 61

First Milk Cold Milk Centers

Profarma Income Statement yr 2012

.. year 1 year 2 year 3

sales 52,704,000 54,432,000 56,160,000

cost of goods sold 44,928,000 45,792,000 46,656,000

gross profit 7,776,000 8,640,000 9,504,000

operating expenses:

salaries 1,692,000 1,752,000 1,956,000

diesal 600,000 650,000 700,000

h.rent 400,000 450,000 438,000

utilities 450,000 480,000 510,000

Marketing Exp 300,000 200,000 150,000

depreciation vehicle 200,000 200,000 200,000 depreciation tanker fitter

sh. 400,000 400,000 400,000

fuel.exp 200,000 180,000 250,000

maintenance exp 90,000 100,000 100,000

misc exp 100,000 90,000 110,000

total Op cost 4,432,000 4,502,000 4,814,000 Operating Profit 3,344,000 4,138,000 4,690,000 interes 131,963 510,888 480,901 tax 117,040 144,830 164,150 net income 3,094,997 3,482,282 4,044,949 less salaries to partners(6% on cap) 864,000 864,000 864,000 Division of Net Income 2,230,997 2,618,282 3,180,949 To paras 557,749 654,570 795,237 To S.Ashiq shah 557,749 654,570 795,237 To S.Aijaz ali shah 557,749 654,570 795,237 To Khuram 557,749 654,570 795,237

First Milk Profarma Statement of Partner's Equity

year 1 year 2 year 3Balances 1,200,000 1,200,000 1,200,000 Add.Net Income for the Year 2,230,997 2,618,282 3,180,949 total balance 3,430,997 3,818,282 4,380,949 Less: Drawings 1,115,498 1,309,141 1,590,474 Balances at Year End 2,315,498 2,509,141 2,790,474

First Milk Cold Milk Centers

Profarma Balance Sheet

Balance Sheet

year 1 year 2 year 3

Asset

cash 120,200 300,800 413,440

A/c Recievable 150,000 129,000 219,960

inventory 124,800 120,200 151,600

chillers 3,145,000 3,145,000 3,145,000

furniture n fixture 100,000 100,000 100,000

Generators 600,000 600,000 600,000 tools and equipments 250,000 250,000 250,000

vehical 1000000 less dep. 200000 (str.m) 800,000 600,000 400,000 tanker fitted shahzor 2000000 less dep. 400000 (str.) 1,600,000 1,200,000 800,000

Total assets 5,290,000 5,245,000 5,280,000

Liabilities

a/c Payable 90,000 45,000 80,000

bank loan 4,000,000 4,000,000 4,000,000

total liabilities 4,090,000 4,045,000 4,080,000

Partner's Capital

Paras Sheeraz 300,000 300,000 300,000

S.Aijaz Ali Shah 300,000 300,000 300,000

S.Ashiq Shah 300,000 300,000 300,000

khurram 300,000 300,000 300,000

Retained Earnings 1,115,498 1,309,141 1,590,474 total partner's capital 2,315,498 2,509,141 2,790,474

less drawings 1,115,498 1,309,141 1,590,474 total liabilities & paid in capital 5,290,000 5,245,000 5,280,000

Amortization ScheduleAmortization Schedule

Date Interest Principal Balance

2012 $131,963.10 $48,983.60 $3,951,016.40

2013 $510,888.04 $212,898.76 $3,738,117.64

2014 $480,901.19 $242,885.61 $3,495,232.03

2015 $446,690.69 $277,096.11 $3,218,135.92

2016 $407,661.63 $316,125.17 $2,902,010.75

2017 $363,135.31 $360,651.48 $2,541,359.27

2018 $312,337.46 $411,449.34 $2,129,909.93

2019 $254,384.71 $469,402.09 $1,660,507.84

2020 $188,269.30 $535,517.50 $1,124,990.35

2021 $112,841.52 $610,945.28 $514,045.07

2022 $28,795.02 $514,045.07 $0.00