MILK NEPAL “EVERYDAY: A HEALTHY DAY”

PRESENTED 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”:

Mission to set world-class standards in the Dairy industry

through providing high quality milk to satisfy consumer’s needs and tastes and serving the society

Vision to be a leading industry in producing high quality

milk and breeding hybrid cows in Nepal Brand statement

Milk Nepal – “Everyday: A healthy day”

MILK NEPAL – “EVERYDAY: A HEALTHY DAY”: Objectives

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:

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.

STRENGTH: WEAKNESS:

SWOT CONTD……

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.

OPPORTUNITIES: THREATS:

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:

Milk Sales (66,000 ltrs annually)

Manure Sales.

Feeds Purchase (10 sacks per month)

Medicine Expenses. Electricity. Paddy Straw.

SALES: EXPENSES:

FINANCIAL ASSUMPTIONS:

Growth in Sales Revenue 2nd year - 8% 3rd year - 15% 4th year - 50% 5th year – 5%

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

Rise by 50% - 4th year

FINANCIAL ASSUMPTIONS:

Production Expenses 2nd year - 6% 3rd year - 12% 4th year - 70% 5th year – 5%

Miscellaneous Expenses Rise by Rs. 5000 each year

Rent Expenses 4th year – rise by Rs. 90000

INCOME STATEMENT:

CASH FLOW STATEMENT:

BALANCE SHEET:

NET PRESENT VALUE:

YEAR CASH FLOW PVIF 12%, 5yrs PV

1 914,150 0.8929 816,245

2 1,290,868 0.7972 1,029,080

3 1,686,931 0.7118 1,200,757

4 2,251,486 0.6355 1,430,820

5 2,893,046 0.5674 1,641,514

Total Present Value 6,118,416

Net Cash Outlay 2,055,750

Total Net Present Value 4,062,666

RATIOS:

YEAR 1 2 3 4 5

FATOR 1.62 1.86 2.28 3.68 4.24

TATOR 0.96 0.90 0.91 1.15 1.04

GPMR 0.66 0.67 0.67 0.63 0.63

NPMR 0.13 0.17 0.21 0.22 0.24

ROA 0.12 0.15 0.19 0.25 0.24

ROE 0.13 0.16 0.21 0.28 0.27

FUTURE & EXIT STRATEGY:

Going beyond the valley.

Increase product line.

Selling the entire business.

Selling the assets.

FUTURE STRATEGY: EXIT STRATEGY:

THANK YOU!!!