Business in DAIRY Sector

Small or medium sized business in Dairy sector offers many opportunities in Pakistan. But it is important that those who want to select & pursue such business should have some knowledge, experience and most importantly passion for the Dairy sector. Otherwise, the probability for failure may be high.

Below are some of the selected businesses in dairy sector.  SMEDA has also made very good pre-feasibility studies on this sector.

For the complete detailed pre-feasibility reports, you will first have to register with SMEDA and then you can download it FREE.

For registration, you may click the link:  SMEDA Registration

Below are the summarized versions of the pre-feasibility reports by SMEDA on Business in Dairy sector for you to get an idea before you download the full version.

1 - Dairy Farm (100 animals)

Region: Punjab
Investment Size: PKR Between 20-50 Million

Over the years, the livestock sector has emerged as a leading sub-sector of the agriculture sector in Pakistan. It is important to note that livestock accounts for 52.2 percent of agricultural value added, contributes 11 percent to GDP and affects the lives of 30 – 35 million people in rural areas. Livestock registered a strong growth of 4.30 percent over the last year’s impressive growth of 7.5 percent due to increase in the livestock and poultry products. Besides its importance and share in the national economy, the history of livestock rising is embedded in the rural life since inception of our civilization. It is still a sign of prestige for the people associated with agriculture sector. It is an integral part of socio-economic activities of the rural areas and plays a very supportive role in mitigating the effects of poverty by providing essential items of daily use.

2 - Dairy Farm (200 Animal)

Region: Punjab
Investment Size: PKR More and Above 50 Million

Livestock plays an important role in the economy of the country. Livestock sector contributed approximately 51.8 percent of the agriculture value added and 11.3 percent to national GDP during 2008-09.Gross value addition of livestock at current cost factor has increased form Rs. 1052 billion (2007-08) to Rs. 1287 billion (2008-09) showing an increase of 22.3 %. The value of livestock is 6.1% more than the combined value of major and minor crops. Government gives high priority to its development and is focused on private sector led development of livestock. Underpinning the importance of livestock, the government has placed livestock on national development agenda. It has formulated “Livestock Development Policy” and “Poultry Development Policy”. Both policies are aimed at private sector led development of livestock with Government providing enabling environment. The policies would provide a frame work for accelerated development of livestock. To spearhead the development efforts through private sector, fully autonomous private sector-led, “Livestock and Dairy Development Board” and “Pakistan Dairy Development Company” have been established. These companies are serving as platform for investment in livestock sector. Apart form provincial Government programs, the federal government has substantially increased public sector investment in livestock sector and has initiated mega projects to the tune of Rs. 7.1 billion for strengthening livestock services for improved disease diagnosis & control; milk and meat production; breed improvement; animal husbandry and management practices in the country.

3 - Dairy Farm (25 Animal) 

Region: Punjab
Investment Size: PKR Between 5-10 Million

Livestock production is an integral part of Pakistan's agriculture sector and plays a vital role in national economy. At present, livestock is contributing about 52.2% to the agricultural sector and 11 per cent to the GDP. Pakistan is geographically located close to the Middle East and South-East Asia. Both of these regions are deficient in livestock products and depend upon import from other countries. The livestock industry in most of the developed world is highly subsidized. With reduction of subsidies in the wake of WTO, the local livestock sector should have better opportunities to compete. Livestock registered a strong growth of 4.30 percent over the last year’s impressive growth of 7.5 percent due to increase in the livestock and poultry products. The role of livestock in rural economy may be assessed by the fact that 30 to 35 million of the total rural population is engaged in livestock farming, having 2 to 3 cattle/buffalo and 5 to 6 sheep/goats per family deriving 30 to 40 per cent of income from it.

4 - Environmentally Controlled Dairy Farm (50 American Cows) 

Region: Punjab
Investment Size: PKR Between 20-50 Million

The Environmental Controlled dairy Farm is a project of livestock sector, in which, the 50 American Holstein are raised on specific feed to produce milk on high efficiency in order to serve the milk industry of Pakistan. The entire specific requirement will be met by operations of temperature control through heavy duty ventilation fans, good feeding and animal milking processes, which will be monitored by the concerned staff. Dairy farming in controlled environment is a profitable business due to continuous increasing demand of milk in the market. Dairy farming is not an organized sector in Pakistan. More than 90% of farming is done on subsistence level. There are very few progressive farmers, which are running the business of dairy farming in a professional manner. Milk processing was started in late 1970s, which is still facing challenges due to competition with the unprocessed milk. The processed milk has captured only 4% of the total milk market. Processed milk is not the consumer's preference due to high price differential. There are 28 milk-processing plants in the country, which were installed in mid 1980s to promote usage of processed milk. Most of these milk plants are closed due to lack of professional management, inadequate milk supply and poor marketing campaign of the processed milk. Dairy farming is highly complex as it includes breeding, management, feeding, housing, disease control and hygienic production of milk on farm. The judicial use of means and resources to achieve clearly defined goals is the key success factor in modern dairy farming i.e. the art of maximization and optimal utilization of resources and means for maximizing productivity and profits. An Environmentally Controlled dairy House with a population of 50 American Holsteins need a total investment estimated at Rs. 24,436,042 out of which the capital cost of the project is Rs. 23,128,267 for purchasing the animals and constructing the building and the rest is used to meet the working capital requirement. Projected IRR and Payback of this project are 52% and 3.19 years respectively

 


For the detailed pre-feasibility reports, you will first have to register with SMEDA and then you can download it FREE.

For registration, you may click the link:  SMEDA Registration



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