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MILK NEPAL EVERYDAY: A HEALTHY DAYPRESENTED BY: Aruna K.C, Jenisha Sthapit, Nirakar Lal Rajbhandari, Prateekshya Shakya, Rikesh Shrestha MBA (Global Business) Fall 2010

BACKGROUND:Nepal as an agriculture oriented country. 65.7% population depending upon agriculture. 80% population rearing livestock. 35% of the total agricultural GDP contributed by livestock sector. 90% of the population consuming milk.

HOLSTEI N COWS:Originated from Europe. Huge in size. Silent in nature. Produces milk (25-30ltrs) everyday throughout the year. Becomes capable of mating within 15 months from birth. Lives on grains. Requires cemented floor to live in. Cost ranges from Rs. 70,000 to Rs. 150,000.

MILK NEPAL EVERYDAY: A HEALTHY DAY:Partnership business with an investment of Rs.2,055,750. Supported by livestock experts. Focus on timely delivery of fresh milk. Meets the demand need of consumers. Maintains quality. Initially focuses on a small area. Pre-schools, schools, hostels, households, vegetarians, bakeries as the target market.

MILK NEPAL EVERYDAY: A HEALTHY DAY:

Missiony

to set world-class standards in the Dairy industry through providing high quality milk to satisfy consumers needs and tastes and serving the society to be a leading industry in producing high quality milk and breeding hybrid cows in Nepal Milk Nepal Everyday: A healthy day

Visiony

Brand statementy

MILK NEPAL EVERYDAY: A HEALTHY DAY:

Objectivesy y y y y y y y y y

To create awareness among the people regarding the need of healthy milk. To increase productivity and encourage individuals to set up a livestock business. To generate steady revenue every year. To create employment opportunities. To access to a variety of local diets. To enhance growth in almost all regions. To create a good image among the general public and earn reputation. To meet the consumers need. To maintain customer relationship by providing quality products. To increase the product variety (for instance: introducing flavored milk)

SWOT ANALYSIS:STRENGTH: WEAKNESS:

Moderate initial investment required. High quality product. Employment opportunities. Environment friendly business. Easy availability of land and labor. Targeted to all level.

New business. Lacks product range. Initially small coverage. Improper veterinary services. Poor technological back-ups.

SWOT CONTDOPPORTUNITIES:

THREATS:

Big and attractive market. Increased demand of high quality hygienic products. High chances of market expansion. Valuable contribution to the livelihood of weaker economic sections of the society.

Political instability. Load shedding. Economic instability. Outbreak of new diseases. Changing government policy.

MAJOR COMPETITION:DDC Milk. Powdered Milk. Local Producers.

MARKETING ACTIVITIES:Market segmentation. Market positioning. Branding. Free sample distribution conducting workshop. Advertisement through local network. Product promotion. - Push Strategy. - Pull Strategy.

OPERATIONAL ACTIVITIES:Location selection. Housing management. Capacity planning. Inventory management. Quality assurance. System of feeding. Water supply. Waste management. Disease control.

LAYOUT:

INITIAL REQUIREMENT:Land on lease. Machinery. Small Building. Livestock. Furniture. Water supply expenses. Feeders. Vessels. Staff salaries. Feeds. Miscellaneous expenses.

SALES & EXPENSES:SALES: EXPENSES:

Milk Sales (66,000 ltrs annually) Manure Sales.

Feeds Purchase (10 sacks per month) Medicine Expenses. Electricity. Paddy Straw.

FINANCIAL ASSUMPTIONS:

Growth in Sales Revenue2nd year - 8% y 3rd year - 15% y 4th year - 50% y 5th year 5%y

Growth in Salary - 20% every 3 year Depreciation - Straight Line Method Tax - 25% Transportation Expenses y

Rise by 50% - 4th year

FINANCIAL ASSUMPTIONS:

Production Expenses2nd year - 6% y 3rd year - 12% y 4th year - 70% y 5th year 5%y

Miscellaneous Expensesy

Rise by Rs. 5000 each year 4th year rise by Rs. 90000

Rent Expensesy

INCOME STATEMENT:

CASH FLOW STATEMENT:

BALANCE SHEET:

NET PRESENT VALUE:YEAR 1 2 3 4 5 Total Present Value Net Cash Outlay Total Net Present Value CASH FLOW 914,150 1,290,868 1,686,931 2,251,486 2,893,046 PVIF 12%, 5yrs PV 0.8929 0.7972 0.7118 0.6355 0.5674 816,245 1,029,080 1,200,757 1,430,820 1,641,514 6,118,416 2,055,750 4,062,666

RATIOS:YEAR FATOR TATOR GPMR NPMR ROA ROE 1 1.62 0.96 0.66 0.13 0.12 0.13 2 1.86 0.90 0.67 0.17 0.15 0.16 3 2.28 0.91 0.67 0.21 0.19 0.21 4 3.68 1.15 0.63 0.22 0.25 0.28 5 4.24 1.04 0.63 0.24 0.24 0.27

FUTURE & EXIT STRATEGY:FUTURE STRATEGY: EXIT STRATEGY:

Going beyond the valley. Increase product line.

Selling the entire business. Selling the assets.

THANK YOU!!!

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