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Milk – The white gold
23

Jakon dairy farms

Apr 10, 2015

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Madhur Singhal

We have a dairy farm in Jaipur and are looking for equity finance for establishing a 1000 cows organic dairy farm.

The business has low risk and very high stability with daily/weekly cash inflows. Please have a look at the proposed pitchbook.
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Page 1: Jakon dairy farms

Milk – The white gold

Page 2: Jakon dairy farms

To establish an integrated dairy farm known for its purity and quality of dairy products

Page 3: Jakon dairy farms

Chitale daiy farm (Maharashtra)Rajpura diary farm (Punjab)Rajnandgaon dairy farm (Chhattisgarh)

Huge dairy farms in Israel, Australia and Newzealand

Page 4: Jakon dairy farms

Dairy farming Milk collection &

& Production Processing

Our focus area Other’s focus area

Page 5: Jakon dairy farms

A total of 50 animals on the farmShed of 100 animals22 bigha farm on main Jaipur-Ajmer

expressway with 300 ft. highway frontageSupplying raw milk locally - wholesale Total capital invested = 6 cr. + Lot of sweat

equity!!!Capital required for expansion to 1000

animals = 6 cr.

Page 6: Jakon dairy farms

Milk and dairy products produced at the farm itself Superior quality control Consumer trustworthiness Premium for the product

None of the established dairies in the country have milk exclusively from one particular farm

Can’t guarantee pure cow milk/products Quality control starts after milk from all sources is collected and mixed Can’t produce organic milk Infact, most of the processing plants have

unhygienic conditions

Page 7: Jakon dairy farms
Page 8: Jakon dairy farms

Unmatched demand of milk in NCRPricing – Fat content/fixed value – 16 Rs./literNo botheration of sales – Milk container filled

at the farm itselfProfit/liter = 8 Rs./liter (approx.)Expected project returns – 18-24% per annum

over 12 cr.

Page 9: Jakon dairy farms

Unorganized market for farm fresh milkHealth conscious consumer – Farm fresh milk has

more nutritive value1st mover advantagePositive response from the survey conductedMarketing and sales expensesNeed to establish dealer network and supply chain

Fatless cow milk – 22 Rs./literFresh cow milk – 25 Rs./liter

Milk value realization: 20-21 Rs./liter Expected project returns: 27-36% per annum over

12 cr.

Page 10: Jakon dairy farms

Installing a processing and packaging unitEasier transportation of productsEstablishment of a national brandCertification from agenciesHigher value realized for products in NCR &

other high end marketsExpected returns – Above 35%

Page 11: Jakon dairy farms

Strong demand in middle east, south east asia and other countries with land-labor issues

Need to establish a worldwide brandCertifications required from international

agenciesExpected returns – Above 40%

Page 12: Jakon dairy farms

Good animal selection proceduresHigh yielding cows at reasonable price

Breeding programRegular lactation cycleMore number of female calfs

Proactive animal health careLow calf mortality rateMinimization of productivity loss due to diseases

Feed managementBalanced feed at all times in lactation cycle

Computerized data keepingAnalysis of animal milk yield, heat detection,

disease symptoms, overall animal pedigree

Page 13: Jakon dairy farms

Initially 10,000 lpd from 1000 cowsCulling of 10% herd each year40-75% female calf into young heifers after

2.5-3 yearsExponentially increasing herd size after 3

years3rd year – 1300-1500 cows4th year – 1800-2000 cows5th year – 2300-2500 cows…

Page 14: Jakon dairy farms

Expense Per unit cost Total expense

1000 cows + 2.5% insurance 40000/- 4.0 cr.

4 cow sheds and 1 hiefer section

16,000,00/- 0.80 cr.

Feed warehouse 20,000,00/- 0.20 cr.

Milking parlour 50,000,00/- 0.50 cr.

TMR wagon 15,000,00/- 0.15 cr.

Tractor, herd management software, RO plant etc.

20,000,00/- 0.20 cr.

Bio gas plant 15,000,00/- 0.15 cr.

Total 6.0 cr.

Page 15: Jakon dairy farms

3,00,000 liters per month production@ 16 Rs./liter = 48 lakh/month

Feed cost/animal per day = 75 Rs.Monthly feed cost = 22.5 lakh

Medical expenses/animal/month = 150 Rs.Monthly medical expense = 1.5 lakh

Fixed costs: Salaries, electricity, maintenance, fuel etc.Monthly fixed costs = 4 lakh

Total costs = 28 lakh/monthNet cash inflow = 20 lakh/month

Page 16: Jakon dairy farms

Ever increasing demand of milk due to increasing population

Minimum external impact No impact of economic cycles or downturns – Milk would

be required in worst economic conditions as well No impact of Political environment – Milk would needed

during war also No impact of catastrophic disasters – Milk needed then as

wellProvides diversification across all investment classesHigh returns & high liquidityOnce established, guaranteed lifetime incomeNo impact of inflation on profitability

As inflation increases, dairies pass on the cost increase to the consumers

Page 17: Jakon dairy farms

Livestock covered by insurance – minimal riskFurther diversification with various product

rangeDiversified markets - Local, national and

international marketsEasiest option of supplying to other dairies

always open

Page 18: Jakon dairy farms

Returns 20-40%

Risks Covered by insurance

Liquidity Daily/weekly cashflow

Capital deployment

Over 6 months

Returns starting Day the cattle is procured

Diversification Low correlation with other investment options

Page 19: Jakon dairy farms

Excreta managementCow urine: Being used as a pesticide and in

ayurvedic medicinesCow dung:

Generation of bio-gasSlurry from bio-gas plant being used as fertilizerVermicompost being made from cow dung

Kanpur gaushala society is buying cow dung for Rs. 3/kg and cow urine for Rs. 5/liter

Additional income of 10-15%

Page 20: Jakon dairy farms

2000 existing trees on the farm10,000 more trees would be planted for

cooling the micro-climateAdditional carbon credits from

Conversion of methane & CO2 generating cow dung into bio-gas and slurry

Electricity generation from bio-gas generator

Page 21: Jakon dairy farms

Minimizing cattle feed costs by cultivating fodder

Agriculture income is tax free

Page 22: Jakon dairy farms

Modern and integrated organic farm on main NH8 – Busiest highway in India

Company’s flagship store on main expressway – A symbol of pride and a medium for national / international branding Falls on the tourist belt due to Ajmer/ GujaratJaipur a popular international tourist center

Potential of opening an organic village for tourists

Potential of starting an educational institute focusing on agri-preneurship

Page 23: Jakon dairy farms

Mr. Madhur Singhal (B.Tech, M.Tech – Comp. Sc. – IIT

Delhi) (FRM, CFA level II)

Mr. Ghanshyam Singhal (B.E. Elec. - BITS Ranchi) Singhal Exports, Jaipur Residency

Contact : [email protected], +91-9351393054