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Dairy Processing Plant Business Introduction
Dairy processing across the world is increasing quickly to satisfy the demand of an ever-growing population for milk and dairy products. Dairy production is an industry that includes collecting or processing milk from milk-producing animals for human consumption. Moreover, the dairy processing industry’s composition ranges from state to state.
Milk is marketed directly to the public in developed nations, while much of the milk is sold on a commercial basis in developing and large milk-producing countries.Milk is a readily digestible and highly nutritious human food that is eaten either directly or in some other form of dairy product on a regular basis. Dairy products include large quantities of various forms of vitamins, proteins, minerals, fat, and sugar. In world milk production, India ranks third after America and Russia.
As among the top milk producers, the supply of milk in the country’s population is insufficient because there are small milk processing plants. In order to meet infants, expectant and nursing mothers across the country, the delivery and availability of processed milk are insufficient. Only by scaling up milk production and establishing dairy processing plants will this be accomplished.
Scientific preparation and layout for the collection and processing of milk at dairy processing plants must be developed in order to sell milk and different dairy products. In urban areas, there are general developments in the selling of milk products such as milk, soft cheeses, and short-lived creams, and in rural regions, there are milk products such as milk powder, butter cheese, and with longer shelf life.
Plan for Dairy Processing Plant- Milk Procurement
15% of the nation’s gross milk supply is distributed by co-operatives and private milk processing plants. These figures provide a wide variety of opportunities for young entrepreneurs to invest in milk processing and in the production of dairy products for both domestic and export purposes. With such a milk temperature of about 37 °C relative to the body temperature of the milch animals, milk drawn from cattle remains nearly sterile. The shelf life of the fresh milk will be roughly 2 to 3 hours and it will begin to sour. Milk is a perishable product that is quickly polluted by air, utensils, and other reasons; as early as possible, the milk should be sent to the milk production plant or milk collection centers.
Most of the milk is produced in rural regions in almost all countries and is shipped to the milk processing plant. Milk is obtained in India, both in the morning and at night, and must be shipped twice a day. Based on the area and availability of collection centers or dairy processing facilities, the procurement of milk is carried out in different ways. Also, at the dairy processing plant, milk is collected using the following methods:
Individuals: Those that are situated near the centers of milk collection; the milk is directly introduced by the individual producers. Individuals deliver the milk to the Dairy Plant on their own transportation and boats.
Contractor: Certain retailers collect milk from private producers of milk. The contractor provides the dairy plant with milk. In this phase, the contractor needs to collect and move the milk, so the contractor buys milk from the individual milk produced at a cheaper cost and retains its share of profit.
To stop intermediaries and contractors; as a cooperative association, some independent milk producers were created. Milk is obtained by a cooperative association brought by private milk producers and is responsible for the delivery of milk to the dairy plant by a cooperative society or organization. For individual producers, this approach is useful since they do not need to share income with contractors or intermediaries.
Milk Collection cum Chilling Centres
In Indian dairy operations in structured sections, this technique is currently more widespread. The milk that appears at the collection centers is measured and checked for fat content by persons from the surrounding rural areas.
Plan for Dairy Processing Plant- Milk Processing:
Milk is a nutritious product with a short shelf-life because it is an incredibly perishable product and an ideal medium for the growth of bacterial pathogens and micro-organisms. By milk processing, the shelf-life of milk can be increased by many days or weeks, helping to reduce the number of pathogenic microorganisms. The milk processing phases are below:
During pasteurization, the raw milk undergoes milk skimming by the typical operation of the centrifugal separator; the milk is moved through a clarifier or separator that spins the milk via a series of conically formed discs. This approach is meant to separate the debris, skim milk, and cream. The clarifier extracts debris and any sediment left in the raw milk. At a temperature of 45 ° and 55 ° C, the separator extracts the heavy milk fat from the lighter milk to produce cream and skim milk.
At this point, skimmed milk can be added with Vitamins A and D. A peristaltic pump allows the necessary volume of vitamin intensify to be dispensed into the milk.
This is an essential step in the milk processing process. Pasteurization is defined as heating any particle of milk at a given temperature for a specified time span. It can typically be transported in two ways; first, for 15 to 17 seconds, the temperature can be 72 ° C or for 30 minutes 63 ° C. The method of pasteurization aims to kill bacteria and other microorganisms that can damage the shelf life of milk and even affect the health of consumers.
The size of the residual milk fat particles is reduced equally in this process. Homogenizing helps avoid the isolation and floating of the milk fat to the surface. The heated milk is pressurized to 2,500 to 3,000 psi by a multiple-cylinder piston pump after pasteurization and then pushed through an adjustable valve to flow through tiny parts. Whenever the fat particles start breaking down uniformly into the right amount, the milk is rapidly cooled to 4 ° C to avoid damaging the flavor.
Packaging is the final stage at the dairy processing facility. In 500ml and 1000ml enclosed packets, the milk is wrapped. The packages are stamped with the packaging date. The milk packets are stored in containers for shipment and are refrigerated. Milk packets are transported to local retail outlets and distribution centers in refrigerated vans and held in refrigerated display cases.
Plan of Dairy Processing Plant-Dairy Products Manufacturing:
Raw milk is now able to begin the butter production process while undergoing the skimming, filtration/clarification, and pasteurization process. Homogenized milk is not ideal for the processing of butter, stopping the process of homogenization. The heavy milk fat that is isolated from raw milk is heat processed and cooled after skimming. It makes for strong churning and whipping. For the ripening of the milk, culture inoculation can be processed at the time of churning. This tends to improve the diacetyl content that is the compound responsible for butter taste.
Production of Cheese:
Milk is heated until it exceeds the ideal temperature when being stirred in the large cheese tank. Adding lactic acid bacteria to the milk along with an enzyme rennet. At this stage, stop stirring, to enable the milk to settle down in a big vat. Resting for 30 to 45 minutes allows the milk to curdle. By dividing it into smaller pieces, the jellylike curdled milk is stirred. This allows the curd and the water content to be isolated. The smaller the pieces, the more complicated the cheese would be. While it is heated up to 57 ° C, the curd is stirred.
The collection of cheese is done in cheesecloth and hard-pressed to extract the substance of whey or water. Based on the size of the cheese, the soft cheese obtained is placed into a saline bath for 30 minutes to 2 days. This processes the moisture content leftover and allows the salt to be absorbed to keep the cheese stable. The last step is ripening and fermentation, which causes holes and scent to shape the cheese dough.
Milk Powder Production:
To produce milk powder, milk that is not pasteurized is used. It may consist of skim milk powder, milk powder filled with fat, or whole milk powder. Based on the particular characteristics of the final powder product and the consistency of the milk’s protein content, milk is preheated at the required or preheated temperature in tubular heat chambers.
Then the warm milk moves into the evaporation chamber, raising the concentration of milk solids by up to 50%. The condensed milk is then placed into the drying chamber, causing the leftover water content to evaporate immediately by spraying the concentrated milk over the hot air current, leaving small amounts of powdered milk solids at the bottom of the chamber to sink. Milk powder is processed and prepared for retail sale in the desired amount.
Project for Dairy Processing Plant- Design and Preparation of Dairy Plants:
When beginning their dairy processing plant project, young entrepreneurs should concentrate on this crucial segment of the dairy plant design and preparation. In order to achieve the goal of taking care of raw milk and its by-products at low cost and its well-being, the calculation of milk capacity, process scheduling, and effective plant configuration is involved. In any event, in order to satisfy such particular criteria, the dairy company and the plant design need to have adequate plans and should work on them, like:
Milk collection from milk tankers and trucks is the first stage in the milk processing layout. In the specially designed milk offloading section, the milk is offloaded. With flow meters verifying the volume of milk, the milk is injected into the milk silos.
In different rooms, the production of milk and milk items such as cheese, butter, and others is carried out. In the dairy processing layout, production, packaging, and storage rooms are included. Before being dispatched to the market, cold rooms help in gathering perishable products.
Labs assist with timely analytics in quality assurance. They are positioned for timely analysis with easy access to raw materials and product sampling. Labs placement for easy oversight should be located near the office of the manager.
The quick administration process is helped by the placement of the concerned departmental office rooms at the plant entrance. To promote the activities of plant administration, it will be available to vendors, visitors, and employees.
A proper design will give adequate space for the boiler, refrigeration system, compressed air and vacuum systems, power generators, and others. The utilities are housed in distinct buildings for safety reasons.
Waste Handling Facility:
The configuration of the milk processing system will assist in the safe handling of toxic waste and other bio-waste produced in the milk processing plant. Proper handling mechanisms will help preserve the environment from toxicity and deterioration.
Plan for Dairy Processing Plant: Bank loans and subsidies
Any PSU or private bank lending for funding may be approached by entrepreneurs. New entrepreneurs shall go through guidance to claim benefits for the promotion of the dairy product industry-sponsored by different state governments. Based on the area of the milk machine, there are diverse benefits. Based on the Agro-Industry Policies of the States, entrants can make the most of these subsidies.
In order to take advantage of different government support programs, a bank loan is suggested. In this respect, entrepreneurs who are willing to benefit from subsidies should adhere to the funding strategies, i.e. the number of bank loans and the margin specified by the subsidy scheme.
The Government of India has initiated the National Food Processing Mission (NMFP) to be executed during the 12th Five Year Plan through State/UT Governments. Under this program, food processing industries will obtain subsidies. GOI named State Nodal Agencies in order to enforce this scheme in various states. One can go via the Ministry of Food Processing Industries’ website for more information on schemes and state nodal offices.
Project for Dairy Processing Plant – Bank Security:
According to RBI guidelines, the loan issuing bank would have to take adequate security. As a protection against a bank loan, entrepreneurs should schedule ventures according to fixed assets. Before issuing loans, banks will analyze three aspects: primary security, hypothecation, and collateral security.
The primary security protects the property and houses which are mortgaged to banks for lending. Fixed assets, like factories, machinery, and other miscellaneous fixed assets, must be mortgaged by the bank.
If the cost of the primary security is not adequate to support the bank loan, the business or entrepreneur’s property or properties will be mortgaged. T
he valuation of the primary assets together with the immovable assets of the borrower would be taken by banks as collateral security to extend loans.
All inventories, stocks, and debtors will be taken by finance banks as security towards the loan taken and will hypothecate such assets.
Dairy Processing Plant Project-Dairy Processing Plant Cost and Benefits / Dairy Processing Plant Economics
Different plants and machinery are required for dairy processing, depending on the form of milk procured and the products proposed. Both the facilities and machinery are consistent with BIS standards. Here is a dairy processing plant with a capacity of 10,000 liters and section-wise machinery required with specifications:
Reception Section of the Project Study for Dairy Processing Plants:
|1.||S.S Weigh Bowl (500 lits) Electronic||1 No.|
|2.||Can Tip Bar||1 No.|
|3.||Can Roller Conveyor (3 mtrs)||1 No.|
|4.||Disc Filter||1 No.|
|5.||S.S Milk Pump (1.5 HP)||1 No.|
|6.||S.S Dump Tank (1000 lits)||1 No.|
|7.||Can Drip Saver (6 cans)||1 No.|
|8.||S.S Can Scrubber 40 ltrs||1 No.|
|9.||Equipment of laboratory:
Milkoscan, Density meter, Milkotester, HPLC, Cryoscope, glassware, Emulsion quality analyzer, etc.
Process Section of the Project Dairy Processing Plant:
|1.||S.S Balance Tank with Float (100 lts)||1 No.|
|2.||S.S Milk Chiller, Cap (3 klph)||1 No.|
|3.||S.S Milk pump (2 HP)||1 No.|
|4.||S.S Remote Control||1 No.|
|5.||S.S Simplex Filter||1 No.|
|6.||S.S Flow Control Valve||1 No.|
|7.||S.S Pipeline & Valves (interconnecting)||1 No.|
|8.||S.S Holding Coil (16 secs)||1 No.|
|9.||Milk Pasteurizer (2.5 klph)||1 Set|
|10.||Cream Tank (1 kl)||1 No.|
|11.||Cream Separator (500 l/hr)||1 No.|
|12.||Flow Diversion Valve||1 No.|
|13.||Ghee Settling Tank (250 ltrs)||1 No.|
|14.||Ghee Boiler (250 ltrs)||1 No.|
|15.||CIP Unit||1 Set|
|16.||Ghee Balance Tank & Pump||1 Set|
Dairy Processing Plant Project Storage and Packaging:
|1.||S.S Milk Pump (1 HP)||1 No.|
|2.||HMST- MS Outer (10 kl – single comp)||1 No.|
|3.||HMST- MS Outer (5 kl – single comp)||1 No.|
|4.||SS Pipes & Valves (interconnecting)||1 Set|
|5.||Packing Machine (5000 pph)||2 No.|
|6.||S.S Overhead Tank (200 litres)||1 No.|
|7.||G.I Pipeline (Driers for air & controls)||1 Set|
|8.||Spare S.S Pump (tanker filling)||1 No.|
|9.||Pouch Packing Machine (stabilizer)||1 No.|
Dairy Processing Plant Project Utilities:
|1.||G.I Pipeline (water pump & valves)||1 No.|
|2.||Water Softener||1 No.|
|3.||Hot Water Generator||1 No.|
|4.||Makeup Water Tank (200 litre)||1 No.|
|5.||Chimney (3 metres)||1 No.|
Dairy Processing Plant Project Segment for Refrigeration:
|1.||Refrigeration/storage machinery||1 Set|
Plan for Dairy Processing Plant Electricals:
|1.||MCCB Control Panel Board||1 No.|
|2.||Cables & Others||1 Set|
|3.||Generator (63 kva)||1 No.|
In this project report, the above numbers are not real but are representative of providing young entrepreneurs with an understanding of essentials in the dairy processing sector project. Dairy entrepreneurs can procure quotes & estimates for particular designs of plant machinery equipment and their installations from suppliers. It is advised that entrepreneurs should enter into maintenance and operation contracts after the acquisition.
Project Report For Dairy Processing Plants-Marketing of Milk and Dairy Products
By installing hoardings or banners at key positions in the cities and shopping centers, the dairy unit should have a marketing department that can sell milk and dairy products. For sales and promotional planning, a comprehensive business study of cities and retail outlets would help.
The main rivals and their latest deals need to be discovered. Higher market growth can be accomplished by constructing or supporting milk brand parlors and distribution retail outlets in large heavily populated regions of cities with door delivery of milk to customers.
Report on the Dairy Processing Plant Project – Statutory / Government Approvals
The dairy processing plant must have licenses and permissions from statutory authorities which are as follows:
- MMPO registration from the respective state government.
- State Food and Drug Department license.
- Strategy approval from Municipality or Gram Panchayat.
- NOC from Fire and Safety Department.
- Registration of ESI, PF, and Labor laws.
- Registration with District Industries Department or Small Industries.
- Certificate of Clearance from Pollution Control Board.
- Local authority clearance for shops and establishment.
- License from Factory Inspector for Boiler Installation.
Project Report Format
In our project report format, we cover technology details, its diagrams, flow chart etc.. as and when required or deemed fit to include. Also, prepare in-depth financial calculations including CMA which is necessary for the Investor/bank.
Key Points Cover in Details Project Report on Milk Dairy
As mentioned above, Milk Dairy Detail Project Report (DPR) is a complete package that contains everything that requires getting funds up to 25 Crores (Twenty Five Crores). Checkout our DPR sample to make your vision more clear. Usually, the Detailed Project Report (DPR) is needed when you apply for a bank loan or Government scheme. Project Report Bank aims to create the reports accurately from the start and make sure that businessmen get the right value and results from the reports.
The following are the key points we generally covers while making DPR, whichever relevant to your business :-
- Introduction to Project and Industry
- Executive Summary
- Profile of the business in the country
- Project Evaluation – Social Angle
- Analysis of basic variables
- Socio- Economic Advantage
- Impact on environment
- Foreign Trade Income
- Value addition
- Import replacement
- Technology assimilation and so on
- Present condition of the business
- Consumer Inclinations
- Market Prerequisites
- Market Portions
- Distribution Channels
- Market Qualities of the Item
- Export Possibilities and Global Market
- Marketing and selling game plans
- SWOT Analysis
- Particulars Of Existing / Proposed Bank Credit Facilities (Form – I)
- Projected Profitability Statement ( Form – II)
- Projected Balance Sheet (Form – III)
- Comparative Operation Statement (Form – IV)
- Maximum Permissible Bank Finance MPBF – (Form – V)
- Cash Flow Statement – (Form – VI)
Monetary Projections Details Contains:
- Cost of Project & Means of Finance
- Details of Raw Materials
- Details of Utilities
- Human Resources Planning
- Technical Manufacturing Business Process
- Assumptions in monetary projections
- Projected Sales & Production
- Cost of Production and Profitability
- Fund Flow Statement
- Working Capital Cycle
- DSCR – Debt Service Coverage Ratio
- BEP – Break Even Point Analysis
- IRR – Internal Rate of Return
- ISCR – Interest Service Coverage Ratio
- Calculation of payback period
- Debt to Equity Ratio
- Working Notes for Monetary Projections
- EBIT – Earnings before interest and taxes
- EBITDA – earnings before interest, taxes, depreciation, and amortization
- Cash Burn Rate
- Discounted Cash Inflow & Outflow
- NPV – Net Present Value
- Net Worth
Report Size : 40 – 50 Pages,
In which, Financial Projections : 18 – 20 Pages
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After reading this article holistically, you must have got a clear insight into starting a Dairy Processing Plant Business. Though the demand for milk products is high in the market, this business is going to flourish in the present as well as in the upcoming future. Don’t delay and start planning.
- Enhanced consumers’ purchasing power.
- Improved transport services for the shipment of milk and milk goods.
- Increased availability of machinery assembled indigenously.
- The industry has a vast pool of highly educated and professional labor available.
- The vast natural resources of the country provide enormous potential for dairy plant processing growth and development.
- An inconsistent source of power.
- Lack of information about the production of clean milk.
- Seasonal variations in the trend of milk production.
- Regional imbalance in the supply of milk.
- Low cattle productivity and arable land.
- Lack of facilities to provide Dairy Business Management programs for the training of dairy workers.
- The export demand for milk products of both western and traditional forms has increased dramatically.
- Demand expansion for traditional dairy products.
- Increasing demand for both fluid milk and products of added value.
- By product use for the replacement of inputs.
- Generating Jobs.
- Expanding demand for milk and dairy products.
- Wide sources of unconventional feed and fodder are available.
- The entry of foreign products into the Indian market.
- Increasing the presence of chemical contaminants and residual milk antibiotics.
- Bad milk consistency in microbiological terms.
- Under the liberalization policy, the export of quality feed ingredients, especially cakes.
- Molasses deficiency, a rich energy supply and binding agent in the feed industry and a mineral lick constituent of urea molasses.
- Extinction of indigenous cattle breeds attributable to the indiscriminate use of a scheme of crossbreeding to maximize milk output.
- How much does a milk processing plant cost?
The cost of capital of a model dairy processing plant with a processing capacity of 10000 liters per day is Rs. 120 lakhs. The cost of the project requires Rs. 5 lakhs for property and land development.
- Is the dairy business profitable?
Dairy farming, for us, is certainly lucrative and worth a go. The milk industry can be profitable from the outset. However, in order to survive in any business, all profits & expenditures must be calculated for analyzing the profit.
- What is the chilling of milk?
Milk chilling ensures that raw milk is quickly chilled to a relatively low temperature to regulate the growth of the micro-organisms found in the milk. The temperature of the milk should be lowered to less than 10 degrees Celsius during the cooling process, preferably 3 – 4 degrees Celsius.