hasan cattle farm

Prepared by:
Innovative Bz Development
OFFICE
Room No: 03, 3rd
Floor, Soleman Plaza
3/3B Purana Paltan
Dhaka-1000 Bangladesh
Contact: 88-02-7176307, 88-01710-962792
Email: seekinvestor2007@yahoo.com
Prepared for:
Limon International (Pvt.) Ltd.
HEAD OFFICE
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Pre-Feasibility Study Dairy Farm (2500 Cattle) PREF-001/Aug, 2011/LI Page 1 of 87
Pre Feasibility Study
Dairy Farm
2500 Cattle

CONTENT: Page No
EXECUTIVE SUMMARY 08
PROJECT GROWTH 09
DISCLAIMER 10
BANGLADESH AT A GLANCE 10
SECTOR SHARE GDP AT CURRENT & CONSTANT PRICE 11
GROSS DOMESTIC PRODUCT BY INDUSTRIAL SECTOR AT CONSTANT PRICE 11
MACRO ECONOMIC INDICATOR 13
CURRENT EXCHANGE RATE 14
CONTRIBUTION OF LIVESTOCK & POULTRY ON NATIONAL ECONOMY 14
LIVESTIOCK & POULTRY POPULATION IN BANGLADESH 14
PRODUCTION OF MILK, MEAT & EGG 15
LIST OF GOVERNMENT DAIRY FARMS AND COMMUNICATION NUMBERS 15
LIVESTOCK DEVELOPMENT POLICY/PROGRAM 16
LIVESTOCK ACT 16
DEVELOPMENT OF INFRASTRUCTURE 16
MAN POWER DEVELOPMENT IN LIVESTOCK SECTOR 16
DEVELOPMENT BUDGET 17
DEPARTMENTAL INSTITUTE 17
MANPOWER OF DEPARTMENT OF LIVESTOCK SERVICES 18
1 INTRODUCTION TO LIMON ENTERPRISE (PVT.) LTD 19
2 PURPOSE OF THE DOCUMENT 19
3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR INVESTMENT/LENDING 20
3.1 STRENGTHS 20

3.2 WEAKNESSES 21
3.3 OPPORTUNITIES 21
3.4 THREATS 21
4 PROJECT DESCRIPTIONS 22
4.1. PROJECT PROFILE 22
BACKGROUND 22
THE HISTORY OF THE SECTOR 24
RECENT DEVELOPMENTS 25
OTHER DEVELOPMENTS SINCE THE 1990s 25
TABLE 1: MILK PROCESSING CAPACITY, 2007 26
DAIRY SECTOR POLICY AND STRATEGY 26
SMALLHOLDER MILK PRODUCERS AND MARKETING MODELS 28
INFORMAL TRADITIONAL MARKETS MODEL 29
FIGURE 1: TRADITIONAL MARKET MODEL 29
MILK VITA COOPERATIVE MODEL 29
FIGURE 2: MILK VITA COOPERATIVE MODEL 30
PRIVATE ENTREPRENEUR MODEL 31
FIGURE 3: PRIVATE ENTREPRENEUR MODE 31
REPORT OF THE HOUSEHOLD-BASED L. STOCK AND POULTRY 2009 33
4.2. OPPORTUNITY RATIONALE 34
4.3. MARKET ENTRY TIMING 35
MILK FLOW CHART FOR BANGLADESH 36
MILK PRICE CHART FOR BANGLADESH 37
4.4. PROPOSED BUSINESS LEGAL STATUS 37

4.5. PROPOSED CAPACITY 37
4.6. PROJECT INVESTMENT 38
PROJECT FINANCING OPTION 39
PROJECT ECONOMICS VIABILITY EQUITY PROJECT 39
4.7. PROPOSED LOCATION 39
4.8. KEY SUCCESS FACTORS/PRACTICAL TIPS FOR SUCCESS 44
5 SECTOR & INDUSTRY ANALYSIS 44
5.1 MAJOR PLAYERS 44
5.2 HUBS OF DAIRY FARMING 45
6 MARKET INFORMATION 45
6.1 SECTOR CHARACTERISTICS 45
6.2 MARKET POTENTIAL 46
MARKET VALUE OF DAIRY & LIVESTOCK IN BANGLADESH 46
6.3 TARGET CUSTOMERS 47
7 FARM INPUTS 47
7.1 LAND 47
7.1.1. LAND REQUIREMENT 47
7.1.2. LAND LEASE 48
7.1.3. SUITABLE LOCATIONS 48
7.1.4. HERD MIX 48
7.3. ANIMAL BREEDING AND MATING SYSTEM 48
7.4. ANIMAL MARKETS 49
7.5. ANIMAL HOUSING 49
7.6. FARM MACHINERY 51

FARM EQUIPMENT 51
MISCELLANEOUS SUPPLIES RATE 51
7.7. FEED 52
7.7.1. RATION FOR DAIRY ANIMALS 52
DETAILS OF FEED INGREDIENTS AS RAW MATERIAL 52
7.7.2. MINERAL MIXTURE 52
7.7.3. FODDER CROP 53
TYPES OF DRY & GREEN ROUGHAGE 54
7.7.4. FODDER PRODUCTION ECONOMICS 54
7.7.5. DAILY FODDER REQUIREMENT 55
7.7.6. RICE STRAW (KHAR) 55
COST FOR GREEN FODDER PER ACRE 55
DAILY FEED REQUIREMENTS 56
7.8. MEDICATION 56
7.8.1. VACCINATION & MEDICINE 56
7.8.2. ARTIFICIAL INSEMINATION (AI) CHARGES 57
7.8.3. MANPOWER / LABOR REQUIREMENT 57
8 FARM OUTPUT 59
8.1. LACTATION PERIOD 59
8.2. MILK COMPOSITION 59
8.3. BREEDING STOCK DEVELOPMENT 60
8.4. INCREASE IN MILK YIELD 60
8.5. SALE PRICE 60
8.6. EVENING MILK 60

8.7. FARM REVENUES 60
8.8. MALE CALVES 61
9 OPERATION & MANAGEMENT 61
10 USEFUL TERMINOLOGY 61
11 FINANCIAL ANALYSIS 63
PROJECT INVESTMENT COST FOR THE FIRST YEAR 63
PROJECT DEPRECIATION COST PER YEAR 64
11.1 INITIAL CAPITAL COST DESCRIPTION 64
11.1.1 LAND 64
11.1.2 BUILDING / INFRASTRUCTURE 65
11.1.3 FURNITURE & FIXTURE 66
11.1.4 ANIMAL COST 67
11.1.5 FARM MACHINERY & EQUIPMENT COST 67
11.1.6 OFFICE VEHICLES 68
11.1.7 PRE OPERATING COST 68
11.2 INITIAL WORKING CAPITAL 69
11.2.1 ADMINISTRATIVE SALARIES FOR THE FIRST YEAR 69
11.2.2 LABOUR SALARIES 70
11.2.3 ELECTRICITY FOR FIRST YEAR 70
11.2.4 GAS CONNECTION 70
11.2.5 FUEL FOR VEHICLE 70
11.2.6 FODDER & MEDICINE INVENTORY 71
11.3 PROJECT REVENUE ASSUMPTION 73
SELLING ASSUMPTIONS FOR THE NEXT 10 YEARS 74

PROJECTED PROFIT / LOSS ACCOUNT FOR NEXT 10 YEARS 75
PROJECT GROWTH 76
INTERNAL RATE OF RETURN 75
11 CONCLUSION 75
12 ANNEXURE: 76
12.1 ANNEX-1: IMPORTANT MEASURE & SOME IDENTIFICATION 76
12.2 ANNEX-2: INFORMATION ABOUT AVAILABLE FOREIGN CATTLE BREEDS 79
12.3 ANNEX-3: DERIVATIVES FROM THIS FARM: YET NOT COMMERCIALLY
CALCULATED WITH THIS PROJECT, WILL GIVE A GREAT RETURN, IF UTILIZE GAS
AS INPUT FOR POWER PLANT 81
Precaution: Beware of Thief
Action: Caught into red handed

Executive Summary:
Asking 100% Finance United States$ Sixty-Six
million only
Project investment cost for the first year:
1 Initial Capital Cost:
1.1 Land 52,607,200.00
1.2 Building / Infrastructure 8,039,000.00
1.3 Furniture & Fixture 57,000.00
1.4 Animals Cost 2,050,000.00
1.5 Machinery & Equipment 285,500.00
1.6 Office Vehicles 166,500.00
1.7 Pre Operating Cost 41,000.00
Total Initial Capital Costs 63,246,200.00
2 Initial Working Capital:
2.1 Administrative Salaries for the first year 150,500.00
2.2 Labor Salaries 283,750.00
2.3 Electricity for 1st year 112,000.00
2.4 Gas Connection 103,600.00
2.5 Fuel for vehicles (Petrol / Diesel / Gas) 13,625.00
2.6 Fodder & Medicine Inventory 1,037,674.00
2.7 Cash in Hand 20% as contingencies fund for sl. 2.1-2.6 340,230.00
Total Initial Working Capital 2,041,379.00
Total Project Cost 65,287,579.00
(in words US$ Sixty-five million Two hundred Eighty-seven
thousand Five hundred Seventy-nine only)
Projected Profit / Loss Account for Next 10 Years
Sl No Particulars Total Amount
1 Sales /Revenue 219,548,003.25
2 Initial Working Capital 10% increase/year 32,534,323.89
(Included admin expenses, financial charges, etc.)
3 Gross Profit 187,013,679.36
4 Less Financial Charges (year end) 19,586,273.70
(3% Max for total project cost)
5 Net Profit Before Tax 167,427,405.66
6 Provision for Income Tax
7 Net Profit/Loss After Taxes 167,427,405.66
8 Savings for Investment return 10%/yr 65,287,579.00

Profit / Loss after Investment return 102,139,826.66
Project Growth:
Sl No Particulars Increase %age
1 Bull as meat production 46%/yr
2 Milk From Heifer 21%/yr
3 Milk From Local Cow 21%/yr
4 Male Calf Sell 50% after 20% Mortality 5%/yr
5 Female Calf Sell 50% after 20% Mortality 5%/yr
6 Compost from Slurry 29%/yr
7 Packing Material (Used) 10%/yr
Internal Rate of Return:
Total Investment US$ 65,287,570.00
Turnover after 10 years ending of the project cycle US$ 219,548,003.25
Average Internal Rate of Return/yr. 15.64%
Fixed asset price will increase 2 times or more, after 10 years as
US$ 130,575,140.00
Pay Back Period (year) 6.39 years

DISCLAIMER
The purpose and scope of this information memorandum is to introduce the
subject matter and provide a general idea and information on the said area.
All the material included in this document is based on data/information
gathered from various sources and is based on certain assumptions.
Although, due care and diligence has been taken to compile this document,
the contained information may vary due to any change in any of the
concerned factors (poor sourcing of feed raw material, selection of cattle
species, market fluctuation of fodder raw materials, political unrest,
environmental disaster, poor operation and management, scarcity of un
recovered diseases. etc.), and the actual results may differ substantially
from the presented information. “Innovative Bz Development” does not
assume any liability for any financial or other loss resulting from this
memorandum in consequence of undertaking this activity. The prospective
user of this memorandum is encouraged to carry out additional diligence and
gather any information he/she feels necessary for making an informed
decision. LIMON ENTERPRISE (PVT.) LTD. is the sole responsible for
success or failure of the project for their skill on administration,
management and operation of the project. In operation period, the
management need to keep in touch with Bangladesh Livestock Research
Institute (BLRI), located at Savar to collect update news in this sector.
DOCUMENT CONTROL
Prepared by Innovative Bz Development, Dhaka 88-01710-962792
Issue Date June, 2011, Revised in June, 2011
Issued By Contacted Consultant
Pre-Feasibility Study Dairy Farm (2500 Cattle)PREF-001/July, 2011/LI
Bangladesh At a Glance:
1.1 GLOBAL POSITION
Location: Between 200
34'
and 260
38'
latitude and between 880
01'
and 920
41east
longitude
Boundary: North: India, West: India, East: India & Myanmar, South: Bay of
Bengal
Total area of Bangladesh:
Area Type Area (Sq Km) 2003-2004 Area (Sq Km) 2004-2005
Total Area 147570 147570
Land Area 36669 36669
Forest Area 6418 6420
River Area N/A N/A
Source : Agriculture Statistics Wing, BBS

Sector Share GDP at Current & Constant price:
Industry Sector 2004 2005
Current
Price
Constant
Price
Current
Price
Constant
Price
1. Agriculture 20.14 22.17 19.50 21.77
1.1 Agri & Forestry 18.80 17.27 15.44 16.91
1.2 Crops and Horticulture 11.67 12.51 11.41 12.19
1.3 Animal Farming 2.44 2.95 2.42 2.93
1.4 Forest & Related Service 1.69 1.82 1.61 1.79
1.5 Fishing 4.35 5.00 4.06 4.86
2 Industry 27.22 28.31 28.05 29.01
2.1 Mining & Quarrying 1.14 1.14 1.14 1.14
2.2 Manufacturing 16.53 16.51 17.19 17.05
2.2.1 Large & Medium Scale 11.68 11.66 12.21 12.11
2.2.2 Small Scale 4.85 4.85 4.98 9.94
2.3 Construction 8.17 9.03 8.38 9.15
2.4 Power, Gas, Water Supply 1.38 1.64 1.35 1.65
3 Services 52.63 49.52 52.44 49.22
3.1 Transport & Storage,
Communication
10.77 9.98 10.81 10.10
3.2 Wholesale & Retail 14.14 14.12 14.25 14.17
3.3 Hotel & Restaurant 0.71 0.68 0.71 0.69
3.4 Financial Intermediation 1.67 1.69 1.64 1.70
3.5 Real Estate, Renting &
Business Activities
8.36 8.12 8.04 7.88
3.6 Public Admin & Defence 2.71 2.68 2.72 2.71
3.7 Education 2.47 2.44 2.46 2.47
3.8 Health & Social Work 2.28 2.25 2.24 2.26
3.9Community, Social &
Personal Service
9.53 7.45 9.57 7.25
Source : National Accounts Wing, BBS.
Gross Domestic Product by Industrial Sector at Constant Price
FY 2005-Fy2006 (1995-96 Price) Million Taka (1US$ =70 Bd. Tk.)
Industrial Sector 2004-2005 2005-2006
Value
added
Sectoral
Growth Rate
Value
added
Sectoral
Growth Rate
I. Agriculture 530367 2.21 596003 4.49
1. Agriculture &
Forestry
442298 1.80 462949 4.67
1.i. Crops & Horticulture 320339 0.15 333822 4.21
1.ii. Animal Farming 75434 7.23 80191 6.31
1.iii. Forest & Related
Services
46525 5.09 48936 5.18

2.Fishing 128069 3.65 133054 3.89
II. Industry 724890 8.28 794192 8.56
3. Mining & Quarrying 29090 8.38 31631 8.73
4. Manufacturing 422690 8.19 466860 10.45
4.i. Large & Medium Scale 298605 8.30 331563 11.04
4.ii Small Scale 124085 7.93 135297 9.04
5. Power, Gas, Water
Supply
41915 8.90 45152 7.72
6. Construction 231195 8.31 250549 8.37
III. Services 1265641 6.36 1347559 6.47
7. Wholesale & Retail
Trade
361552 7.06 387812 7.26
8. Hotel & Restaurant 17509 7.12 18814 7.45
9. Transport 255522 7.92 276596 8.25
10. Financial
Institution
43380 8.92 46469 7.12
11.Real Estate, Renting
& Business Activities
208009 3.65 215684 3.69
12. Pub. Administration
& Defence
68604 8.02 74235 8.21
13. Education 62559 7.90 67552 7.98
14. Health & Social
Work
57682 7.40 61793 7.13
15. Community, Social
& Personal Service
190824 4.05 198603 4.08
GDP @ producer price 2560898 5.93 2737754 6.91
Import Duty 108842 6.47 111225 2.19
GDP @ constant Market
Price
2669740 5.96 2848979 6.71

Macro Economic Indicators:
Categories
Year
2004-2005 2005-2006
GDP Growth Rate (1995-96 Prices) 5.96 6.71
Per Capita GDP (Tk.) 27061 29986
Per Capita GDP (US$) 441 456
Per Capita GDP GNI (Tk.) 28443 31669
Per Capita GDP GNI (US$) 463 482
GDP at current market price (Bill. Tk.) 3707 4162
GDP at constant market price (Bill. Tk.) 2670 2849
GNI at current market price (Bill. Tk.) 3896 4395
Consumption (Billion Tk.) 2965 3318
Private 2760 3087
Public 205 231
Investment of Current Price (Billion Tk.) 909 1039
Private 679 777
Public 230 262
Domestic Saving at Current price (Bill. Tk.) 742 843
National Saving at Current price (Bill. Tk.) 985 1108
Sectoral Share of GDP at Current price %age
Agriculture 2.21 4.49
Industry 8.28 9.56
Service 6.36 6.47
Memo Item: as % of GDP
Domestic Saving as % of GDP 20.01 20.26
National Saving % of GDP 25.84 26.61
Investment as % of GDP 24.53 24.97
Public Investment 6.21 6.30
Private Investment 18.32 18.67
Total Revenue Receipt as % of GDP 10.57 10.99
Tax Revenue 8.62 8.97
Non Tax Revenue 1.96 2.02
Foreign Exchange Reserve (Mllion
US$ Yearly Average)
3023.60 2823.70
Exchange Rate (Tk/US$) 61.39 65.70

Current Exchange Rate:
1 USD = 74.775 BDT DAY RANGE: (74.775 - 74.775)
Exchange Rates Updated: 2011-07-24 16:50 Web: http://usd.fxexchangerate.com/bdt/
Note: The total project already calculated by 70 BD Taka, against 1US$
Table-1. Contribution of Livestock & Poultry on National Economy:
Growth of Livestock in National Economy 7.23%
Contribution of livestock sector in National Economy 2.95%
Role of livestock in Agricultural production 17.32%
Cultivation of Land 75%
Self Employment 25%
Production of Livestock Products (crore) 15000 (Approx)
Foreign exchange earning (only from hides & skins) 2003-
04
4.31%
Rural Transport 50%
Production of Organic Fertilizer 80 MMT
Fuel Supply 25%
Source: Economic Review-2006
According to the last statistics of Livestock and Poultry population for the
year 1993-94, the number was 3 crore 52 lac and 12 crore 28 lac
respectively. In 2006-07 the population of Livestock and Poultry raised to 4
crore 75 lac and 24 crore 60 lac respectively.
Table-2- Livestock & Poultry population in Bangladesh
Number (in million)
Livestock/
Poultry
1993-
94
2000-01 01-02 02-03 03-04 04-05 05-06 06-07
March/07
Cattle 21.88 22.39 22.46 22.58 22.60 22.67 22.80 22.87
Buffalo 0.68 0.92 0.97 1.01 1.06 1.11 1.16 1.21
Goat 12.45 16.27 16.96 17.69 18.41 19.16 19.94 20.75
Sheep 1.51 2.11 2.20 2.29 2.38 2.47 2.57 2.68
Total Livestock 35.52 40.69 41.59 42.52 43.45 44.41 46.47 47.51

Chicken 97.04 142.68 152.24 162.44 172.63 183.45 194.82 206.89
Duck 25.76 33.83 34.67 35.54 36.40 37.28 38.17 39.08
Total Poultry 122.8 176.51 186.91 197.98 209.0 220.73 232.99 245.97
The density of Livestock and Poultry population per unit of land is high in
Bangladesh, compared to other countries of the world. From the year 1998-
99, the production of milk, meat (beef, mutton and chicken) and egg were
increasing on a regular basis with a lower increasing rate which has reached
to a higher rate in the year 2005-06. Table -3 shows the production of
livestock products for the last 9 years in our country.
Table-3- Production of Milk, Meat & Egg.
Production
Product Unit
(ton)
93-
94
98-99 99-00 2000-
01
01-02 02-
03
03-
04
04-
05
05-
06
06-07
March/07
Milk Million T 1.39 1.66 1.70 1.74 1.78 1.82 1.99 2.14 2.27 1.635
Meat Million T 0.49 0.66 0.70 0.75 0.78 0.83 0.91 1.06 1.13 0.7675
Eggs MillionT 2404 3512 3793 4097 4424 4777 4780 5623 5422 3813
In order to continue the previous success it has taken initiative to
strengthen the dairy sector. Taka 100 crore has already been distributed to
15 thousand registered private dairy farms as incentive. In addition to that,
training program has been organized to reduce the feeds and forage
scarcity through Animal Nutrition & Technology Transfer Project
The per capita consumption of milk, meat and egg has been increased
significantly due to augmented production. During the year 2000-01, the per
capita availability of milk, meat and eggs were 36 ml/day, 15 g/day and 31
number/year respectively, which has been increased to 45 ml/day, 22 g/ day
and 39-number/ year in 2005-2006.
List of Government Dairy Farms and communication numbers:
Name of the Govt. Farms Head of the Farm Telephone no
Central cattle Breeding Farm, Savar, DhakaDeputy Director 02-7791766
Govt. Dairy Farm, Tilagorh, Sylhet Assistant Director 0821-760537
Govt. Dairy Farm, Rajabarihat, Rajshahi Manager 01674056323
Govt. Dairy Farm, Talma, Faridpur Manager 01712890056
Govt. Dairy Farm, Kashipur, Barishal Assistant Director 0431-61508
Govt. Dairy Farm, Sherpur, Bogra Assistant Director 01718685552
Govt. Dairy Farm, Hathazari, Ctg. Assistant Director 01830146187

Govt. Buffalo Breeding farm, Fakirhat, Bagerhat Manager 01724132104

Livestock Development Policy/Program:
• Tax holiday for the farmers.
• Rebate in electricity consumption @ 20% for the commercial/private
farms.
• 25% cash incentive to export poultry and poultry products.
• Tax free for equipment, drugs, vaccines used in the farms
• Import restricted for poultry & poultry products from bird flu
affected countries to keep the country free from bird flu.
Livestock Act:
Government has adopted and executed the following act-
• Animal Quarantine Act -2005
• Animal Disease Prevention & Control Act-2005
Development of Infrastructure:
Sixty-four Districts Veterinary Hospital have been established in District
head quarter for the expansion of modern veterinary services to the
farmers. Technical supports are provided to poultry and dairy farm through
evaluation of feeds, besides the modern veterinary services. The activity
also includes determination of aflatoxin in animal feeds. Moreover, 464
Thana Veterinary Dispensary situated at Upazila level have been converted
to Upazila Livestock Development Complex (ULDC). Three hundred twenty
five ULDC are functioning and providing services that include training to
small-scale dairy and poultry farmers and advice to farmers. The
construction of the rest 139 ULDC is going on.
Man power Development in Livestock Sector:
Veterinary College at Chittagong, Sylhet, Barisal & Dinajpur has been
established and educational session has been started. At least 200
veterinary graduates are graduating each year from Veterinary Colleges.

Recently Chittagong Veterinary College has been converted to Veterinary
and Animal Science University. Establishment of educational institution is a
part of strengthening the transfer of livestock technology to the farmers
through skilled manpower development.
Development Budget
Fiscal Year No. of Project Total Amount of Taka
2005-06 12 (investment)
1 (technical) = 13 Nos.
Allocated – 4104 lac
Utilized – 3547.48 lac
(87% of the allocation)
Departmental Institute:

Manpower of
Department of
Livestock Services:
Divisional Livestock Offices 7
District Livestock Offices 64
District Veterinary Hospitals 63
Upazilla Livestock Offices 460
Upazilla Veterinary Dispensary 460
Metropolitan Thana Livestock Office 9
Central Cattle Breeding Station 1
District Artificial Insemination Center 22
Artificial Insemination Sub-center 460
Artificial Insemination Point 634
Cattle Improvement Farm 6
Buffalo Breeding and Development Farm 1
Goat Development Farm 5
Pig Farm 1
Central Poultry Farm 1
Zonal Poultry Farm 2
Poultry Farms 23
Chick Rearing Farm 7
Central Duck Farm 1
Regional Duck Farm 3
Central Veterinary Hospital 1
National Zoo 1
Regional Zoo 1
Livestock Research Institute, Mohakhali 1
Central Disease Investigation Laboratory 1
Field Disease Investigation Laboratory 7
Livestock Nutrition Laboratory 1
Artificial Insemination Laboratory 1
Officers Training Institute 1
Veterinary Training Institute 2
Livestock Training Institute 1
Veterinary Collage 4

Approved Vacant Post
Rem.
Cadre
Non
Cadre
TotalCadre
Non
Cadre
Total
Class-I
Director General 1 - 1 - - - C.C.
Director/Principal
O.T.I.
4+1 - 5 1 - - C.C.
Deputy
Director/Equivalent
46 4 50 5 3 8
District Livestock
Officer/Equivalent
191 6 197 27 5 32
Upazila Livestock
Officer/Equivalent
523 10 533 81 6 87
Veterinary
Surgeon/Equivalent
705 50 755 145 30 175
Total 1471 70 1541 254 44 303
Class-II - - 4 - - 4
Class-III - - 4600 - - 247
Class-IV - - 2279 - - 20
Total Manpower - - 8428 - - 574

1 INTRODUCTION TO LIMON ENTERPRISE (PVT.) LTD:
The Private Sector Entrepreneur, LIMON ENTERPRISE (PVT.) LTD was
established with the objective to provide fresh impetus to the economy
through the launch of an aggressive SME development. Since its inception in
January 2011, LIMON ENTERPRISE (PVT.) LTD had adopted a sectoral
SME development approach. A few priority sectors were selected on the
criterion of SME presence. In depth research was conducted and
comprehensive development plans were formulated after identification of
impediments and retardants. The all-encompassing sectoral development
strategy involved recommending changes in the regulatory environment by
taking into consideration other important aspects including finance,
marketing, technology and industrial development. LIMON ENTERPRISE
(PVT.) LTD has so far successfully formulated strategies for sectors
including, fruits and vegetables, poultry, fishery and dairy. Whereas, the
task of SME development at a broader scale still requires more coverage and
enhanced reach in terms of LIMON ENTERPRISE (PVT.) LTD ’s areas of
operation. Along with the sectoral focus a broad spectrum of business
development services is also offered to the SMEs by LIMON ENTERPRISE
(PVT.) LTD. These services include identification of viable business
opportunities for potential SME investors. In order to facilitate these
investors / lenders, LIMON ENTERPRISE (PVT.) LTD provides business
guidance through its consultant desk services as well as development of
project profile documents. These documents consist of information required
to make well-researched investment decisions. Pre-feasibility studies and
business plan development are some of the services provided to enhance the
capacity of individual SMEs to exploit viable business opportunities in a
better way. This document is in the continuation of this effort to enable
potential investors / lenders to make well-informed investment / lending
decisions.
2 PURPOSE OF THE DOCUMENT:
The objective of the pre-feasibility study is primarily to facilitate potential
entrepreneurs to facilitate investment and provide an overview about dairy
and livestock farming. The project pre-feasibility may form the basis of an
important investment decision and in order to serve this objective, the
document covers various aspects of dairy and livestock concept development,
start-up, production, finance and business management. The document also

provides sectoral information, brief on government policies and international
scenario, which have some bearing on the project itself. This particular pre-
feasibility is regarding “Dairy Farm” which comes under “Livestock and
Agriculture” sector. Before studying the whole document one must consider
following critical aspects, that form the basis of any investment / lending
decision.
3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR
INVESTMENT / LENDING:
Dairy production is all-inclusive activity, related to animal care,
reproduction, feeding, and management. It is defined as all those aspects
and activities relating to rising of dairy animals during their various phases
of life to get wholesome milk. Before making the decision, whether to invest
in the dairy and livestock farming or not, one should carefully analyze the
associated risk factors. A SWOT analysis can help in analyzing these
factors, which can play important role in making the decision.
3.1 STRENGTHS:
• Back bone and main stay of economy. Provides raw material for food &
Leather industry.
• Major source of food, i.e. Milk & Meat, including value added products.
• Source of Farm Yard Manure (FYM) for bio gas plant and organic
fertilizer.
• Sizeable foreign exchanges earning through exports.
• Wide scope of Milk Production, ranking increasing in the world.
• Ample human resource employment sector.
• Stationed, Permanently located secured loaning sector.
• Contended nature. Low cost living standard.
• Full family involvement (directly and or indirectly), Devoted &
Hardworking Sector.
• This could be accompanied by an inventory of strategic public- and
private-sector stakeholders and followed by the development of an
indicative investment program with a focused, time-bound national
action plan containing realistic and measurable targets, such as raising
milk and dairy products consumption from 18 kg to 25 kg by the year
2015

3.2 WEAKNESSES:
• Low or lack of interaction with farmers. Poor information about each
other. Lack of extension services.
• Lack of education and initiative in farmer, traditional approach due to
lack of skills and management.
• Unorganized sector, unaware of basic farm management practices.
• Remote area, lack of farm to market approach & transportation.
• Non-availability of communication services.
• Lack of farm/ market infra structures & marketing information.
• Lack of record keeping on farm.
• No or low application of research work and pedigree record keeping.
• Management of dairy farm is a challenging job.
• Nutrition on raw materials is still a problem hampering the livestock
productivity in general and milk production in particular.
• Enormous production losses due to endemic diseases, like Anthrax,
etc. every year.
3.3 OPPORTUNITIES:
• Ministry of Fisheries and livestock from Govt. of Bangladesh, Board of
Investment (BOI) & Bangladesh Bank Equity Entrepreneurship
Development project priority sector.
• Meat & Dairy products needs are much higher than supply.
• Ample opportunities are available in the Banking Sector.
• Commercially viable sector with great credit potential and absorption
capacity.
• Vast range of area of operation, more needs and scope of
development.
• Value added dairy products are in demand.
• Massive migration of labor to cities can be checked / stopped.
• Corporate financing will become a niche in lending market.
• Cooperatives can play a big role for development in dairy sector like
India, New Zealand and Australia.
3.4 THREATS:
• Implementation of WTO will result in open & competitive commodity
pricing.

• Due to fear of default, banker community has reluctance for lending
loans.
• High risks of diseases in live stock.
• Defective and unorganized markets.
• Imbalance between prices of inputs & outputs.
• Rising trend of cost of production with higher rate of interest as
compared to profit ratio.
• Lack of media projection, non-recognition of problems and monopoly of
multinationals.
• Lack of community organizations and out dated farm practices.
• Lack of coordination towards common causes & goals.
• Lack of awareness about economics, demand & supply in market.
• Low saving, low holding capacity. Increasing level of poverty.
• Non-availability of subsidy.
4 PROJECT DESCRIPTIONS:
4.1. PROJECT PROFILE:
Background
Bangladesh has a population of 140+ million people(BBS) & 160+ million, as per
UNDP/FAO assessment; where, more than 80 percent of them, or
approximately 15 million households, are located in rural areas. An estimated
two-thirds of those households own livestock. Although population growth is
slowing, there are still almost 1 000 people per sq km – the highest density
than any country in the world (excluding small island-nations and city-
states). The dwindling per capita land resource is one of the causes of
persisting poverty in the county, according to contemporary human
development reports from the United Nations Development Program (UNDP):
More than half the population owns less than 0.5 acres; the bottom 40
percent possesses just 3 percent of the total land area; 48 percent live
below the poverty line; and 30 percent consume less than 1 900 calories per
day (the minimum desired level is 2 300 calories).
Agriculture generates two-thirds of total employment, contributes a quarter
of total export earnings and provides food security to the increasing
population. Crop production and animal husbandry are interdependent in the
country’s mixed-farming system, with livestock performing multiple

functions, including the provision of food, nutrition, income, savings, draught
power, manure, transport and other social and cultural functions. With
livestock, people who are poor and landless can still access common property
resources, such as roadsides, open grazing areas and water bodies. Cattle
are by far the most important farm animals; smallholders possess the
majority of them, and they are directly linked to family income, nutrition and
welfare. While animal husbandry is a part of mixed farming, the system of
production is not well integrated, and maximum value is not always gained
from the inputs and outputs. There is scope for basic improvements that can
lead to greater integration and productivity.
In 2006, the livestock sector contributed 3 percent of gross domestic
product (GDP), or about 18 percent of agricultural GDP. When the indirect
benefits of draught power and manure for fuel and fertilizer are added to
the direct economic output of meat, milk and hides, the value added of the
livestock sub sector almost doubles, to about 6 percent of GDP. Livestock
also provide a critical cash reserve and steady cash income for many
marginal farmers who grow crops essentially for subsistence or who have
little or no land at all. The national herd comprises: 23 million cattle, 1.2
million buffalo, 20 million goats and almost 3 million sheep. Milk production
was 2.27 million tons in 2006, mainly produced by cows yielding, on average,
200–300 liters per 160/180-day lactation.
In the few specialized areas where cross-breeding has taken place, yields
range from 1 000 to 3 000 liters over a 210/300-day lactation. Until quite
recently, milk was a by-product of cattle, used largely for making traditional
sweets and in tea. Per capita milk availability currently ranges from 40 to 50
g per day (14–18 kg per year). The gap between supply and demand is largely
met by milk powder imports of about 20,000 tons annually, valued at some
US$70 million. Imports represent 0.16 million tons of liquid milk equivalent
annually, feeding some 6–7 percent of total consumption and accounting for
an estimated 55 percent of the formal dairy market. Although there is no
specific nutritional target in the country for milk consumption, the figure of
250 g per day (90 kg per year) often appears in national plans, implying an
annual milk requirement of 12.8 million tons – more than five times current
production.

The history of the sector
The first dairy plant was set up in 1946 by the National Nutrients Company
in the then Indian subcontinent, at Lahirmonhanpur, now in Sirajganj district
(northern Bangladesh). Following the partition of India in 1947, the Eastern
Milk Products Company took over through an exchange of properties. Milk
and dairy products marketing eventually started in 1952 under the brand
name Milk Vita in the then East Pakistan. The cooperative accumulated huge
losses, as did the only other dairy venture, Asto dairy in Dhaka, which began
in the 1960s. By 1970, both dairies had virtually ceased trading.
Acute scarcity of milk following independence from Pakistan in 1971
prompted the Government to commission two dairy studies, with support
from FAO and the Danish International Development Agency (DANIDA). The
studies’ authors recommended establishing a sustainable cooperative dairy
development program based on buying surplus milk from smallholder
producers and combining the businesses of Asto and Milk Vita into the
Eastern Milk Producers' Cooperative Union Ltd, which became Bangladesh
Milk Producers Cooperative Ltd (BMPCUL) in 1980.
The Milk Vita Cooperative Dairy Complex was established in 1973 and
operated until 1978 under the auspices of the Ministry of Local Government,
Rural Development and Cooperatives, with support from FAO, DANIDA and
UNDP. The cooperative model was largely adapted from the successful
“Anand Pattern” Dairy Cooperative in India. Two dairy plants and three milk
collection centers were built, and milk collection from smallholders started
in 1976. The Government also established a small dairy at Savar in the mid
1970s, close to Dhaka, to provide government employees processed milk
from its Central Cattle Breeding Station.
At Milk Vita, the gap between milk supply and demand was originally met by
recombining butter oil and the skimmed milk powder (that DANIDA and the
European Economic Community provided) into liquid milk. By the end of the
1970s, more and more village cooperatives had been established and annual
milk collection from some 36 000 smallholders had rapidly built up to 15
million liters. But by the mid 1980s, Milk Vita had virtually collapsed, with
less than 3 million liters of milk collected annually. The problem was
attributed to unfair competition from imports flooding in from subsidized

over-production in Europe. At that time, whole milk powder was retailing at
less than 20 percent of its cost price in Europe and one-third of the cost of
milk production in Bangladesh.
By the beginning of the 1990s, import taxes were imposed to counter the
adverse impact of the cheaper imports. Also at that time and following the
recommendations of the FAO technical assistance team, the Government
withdrew from day-to-day management of the dairy cooperative.
Professional managers took over, turning Milk Vita into a profitable business.
Recent developments
Fortuitously, the turnaround at Milk Vita coincided with a growing market
for processed milk as urbanization accelerated. This encouraged other
investors to adopt parts of the Milk Vita smallholder dairy model. The sector
now engages many enterprises, as Table 1 indicates. In 1990, processors
collected just 1 percent of the total milk production of 1.5 million tons (30
000 liters per day); by 2006, this had increased to 7 percent of 2.27 million
tons (384 000 liters/day).
Other developments since the 1990s:
• Government-sponsored investment incentives for a few medium- and
large-scale farmers to purchase improved dairy animals; this initiative
largely failed because the farmers were not well integrated into the
dairy input supply and value chains and were unable to repay their
loans.
• Cheap sweetened condensed milk is being produced from imported
powder milk, sugar and vegetable oil by four large companies: Danish,
Starship, Goalini and Kwality. The condensed milk has captured the
lion’s share of the tea-drinking market, though it is not a dairy
product because it contains vegetable oil. The business model of these
companies is based on the continued availability of cheap (subsidized)
milk powder from developed countries. They have been hugely
profitable because they took advantage of low international
commodity prices. It will be interesting to see how they adapt their
business model to cope with the recent significant increases in prices.

• Foreign investors such as Arla Foods Denmark (Dano brand) and the
New Zealand Dairy Board (Anchor brand) have imported milk powder
in bulk for repacking.
Table 1: Milk processing capacity, 2007
Dairy (establishment year)
Average milk collection
(liters/day)
Smallholder
milk suppliers
1. Milk Vita (1973) 200,000 150,000
2. Amomilk (1996) 10,000 5,000
3. Tulip Dairy(1998) 3,000 2,000
4 Arong–BRAC Dairy (1998) 80,000 7,0000
5. Bikrampur Dairy (1998) 10,000 6,000
6. Ultra–Shelaidah Dairy (1998) 10,000 4,000
7. Aftab (1998) 8,000 4,000
8. Pran (2001) 40,000 30,000
9. Grameen–CLDDP (1999) 7,000 6,000
10. Rangpur Dairy (2007) 8,000 7,000
11. Akij Group (2007) 4,000 500
12. Grameen Danone (2007) 1,000 From CLDDP
13. Savar Dairy (1974) 3,000 From own farm
14. Army Self-consumption From own farm
Total 384,000 284,500

Source: Khan.
Dairy sector policy and strategy
Following the establishment of Milk Vita, two dairy development studies
were initiated in the 1980s as a preface to scaling up cooperative dairying
elsewhere in the country. The Government and UNDP/FAO sponsored both
studies. The first, in 1984, led to the National Cooperative Dairy
Development Plan. The Chairman of the Indian National Dairy Development
Board (NDDB) orchestrated the second study, in 1987, which led to
expanding the earlier plan into a formal strategy for dairy development in
Bangladesh. The strategy proposed a regional approach, based on setting up
four regional dairy cooperatives to collect milk from smallholder village
cooperatives and process and market it safely and affordably to lower-
income urban groups. The regional dairy cooperatives would be enveloped into
a national dairy federation or a dairy development board. Detailed
implementation programs were prepared but have remained shelved for more
than two decades.
Current government policy for agriculture aims to provide an enabling
environment and supportive role in moving from a predominantly state
function to a more diversified and environmentally sustainable commercial
venture. The strategic framework targets non-crop agriculture, such as
fishery, poultry and livestock, for accelerated investment.
After an intensive stakeholder consultation process, the Directorate of
Livestock Services (DLS) and the Ministry of Fisheries and Livestock
(MOFL) drafted the National Livestock Policy in 2005. It was finalized in
2006 under the recently completed Grameen Bank/UNDP/FAO Community
Livestock and Dairy Development Project (CLDDP). Although the DLS and
the MOFL adopted the policy, it has yet to be approved by the Cabinet, due
largely to the succession of interim governments and prevailing civil unrest
since it was prepared. Although the policy contains no separate dairy
component, the Milk Vita and Grameen–CLDDP dairying models are promoted
as “models for early adoption”.
Once approved, the policy will have several more tough challenges:

• implementation of the policy recommendations;
• acceptance of institutional reforms;
• establishment of regulatory frameworks and a legal body;
• enforcement of the laws and regulations;
• quality control assurance;
• collaboration with the private sector for veterinary services and
simple diagnostic facilities.
The Government’s National Strategy of Accelerated Poverty Reduction
(NSAPR, 2005) sets out ways and means for achieving two of the Millennium
Development Goals (MDGs): halving poverty and halving under-nutrition by
2015. The strategy document states that while the livestock sector as a
whole grew 3 percent during the 1990s, poultry has demonstrated the most
impressive growth rate, at around 10 percent per annum since the mid 1970s.
Growth in milk production generally has mirrored the general trend in the
livestock sector, with low productivity a major limitation to sector
development because production remains primarily for subsistence and is
highly dispersed. With rapid urbanization and income increases, the demand
for livestock products, such as meat, milk and eggs, will continue to rise. The
strategy targets local milk production to replace imports, which currently
range between 10 and 20 percent of annual consumption. The strategy
promotes community-based organizations of production, processing and
marketing to overcome the constraints. Smallholder milk producers thus are
expected to play a key role in helping to achieve the target and, in so doing,
helping Bangladesh to achieve the MDGs relating to poverty and nutrition.
The NSAPR includes a school lunch program to improve attendance and
reduce the incidence of malnutrition as well as generating demand for local
produce and catering services through backward and forward links.
Community participation is a key driver. Currently, the United States’
Department of Agriculture funds a small scale milk program in Bangladesh,
for which the US Company Land O’ Lakes imports milk and then recombines
it with its milk powder. Although they enhance the nutrition intake of
school-age children, school milk schemes using imported milk powder have
limited sustainability and are less beneficial to livelihood development as
those using locally produced milk.
Affordable and readily available cattle treatment and other development
support provided by Milk Vita and Grameen-CLDDP have encouraged the

expansion of milk producers. Still, even though the Government now
generally recognizes smallholder milk production in its development strategy,
the absence of a comprehensive national dairy policy may limit the growth of
the sector. What has been achieved so far primarily relates to the influence
of a milk collection system introduced by dairies, which has resulted in a
fairer price system for producers. Initially, a government ministry set Milk
Vita’s prices; but since becoming more independent in the early 1990s, Milk
Vita has decided its own prices, in competition with the other dairies as well
as imports.
Smallholder milk producers and marketing models:
Smallholder milk producers play a key role in dairy markets in Bangladesh.
They supply all the domestic milk for the informal traditional market and
three quarters of the formal processed market (Annex I provides an
illustration of the various smallholder milk producers). Milk Vita and
Grameen–CLDDP institutionally promote the empowerment of smallholder
dairy farmers, both men and women, in the value chain and business
ownership/management process, which encourages their participation. Other
processing dairies tend to focus on milk collection only.
Informal traditional markets model:
Smallholder milk producers sell milk directly to consumers or milk
supplier/middlemen at local markets (Figure 1). The middlemen cater to the
demand of sweetmeat shops, bakeries, consumers, more distant markets and
vendors. They pay producers up to 50 percent less for their milk than other
models, such as those described in the following sections. In many cases, the
middlemen provide loans to smallholders with interest rates of up to 20
percent per month.
Figure 1: Traditional Market Model

Milk Vita Cooperative model:
The Milk Vita Cooperative model was adapted from the world-renowned
Anand Model in India. It modestly started in the mid 1970s by providing 4
300 very poor, often landless, households in remote rural areas with a
complete package of milk production-enhancing technologies, organizational
skills and a milk collection-processing-marketing system. It has since grown
into a successful commercial dairy enterprise, collecting from more than 100
000 smallholder members of some 1 200 primary village cooperatives and
then processing and distributing the milk to all major cities in the country.
In 2006, smallholder milk producers sold 75 million liters of milk surplus.
They also earned patronage dividends from Milk Vita’s profits. The resulting
increase in milking cow numbers and savings generated has helped cushion
them against the devastating effects of severe flooding that regularly
afflicts the country.
A novel aspect of the Milk Vita operation is its urban distributor
cooperatives. These use locally fabricated “milkshaws” – an insulated box
mounted on a traditional three-wheeled-cycle rickshaw chassis – to deliver
affordable pasteurized milk and dairy products to urban shops and
consumers.
The Milk Vita model (Figure 2) created jobs, reduced collection and
distribution costs and improved milk quality by cutting delivery times,
especially in congested city areas. One off-farm job was created for every
35 liters of milk collected, processed and marketed, and more than half
those jobs are in rural areas. Democratically elected milk producer and
distributor cooperative members are now in the majority on Milk Vita’s
board of directors. These achievements encouraged the Government to
withdraw from the day-to-day management, enabling the board to hire
professional managers, which led to improved performance and created a
platform for further expansion to bring more poor people into the dairy
value chain. Since the late 1990s, Milk Vita has invested more than $10
million to expand its milk collection, processing and marketing network and
now delivers safe and affordable milk and dairy products to some 5 million
low-income urban dwellers.

Figure 2: Milk Vita Cooperative Model
The benefits of the Milk Vita Cooperative model:
• The model is a holistic, cow-to-consumer model.
• Milk production and productivity increase.
• Household nutrition and incomes increase.
• Communities are empowered through poor farmers’ participation in
the organized cooperatives and through accountability of the Milk
Vita board and management to its milk producer members.
• Quantity of affordable and safely processed milk and dairy products
for urban consumers is increased while the quality is enhanced.
• Substantial off-farm employment is generated.
Milk Vita continues to be a flourishing venture and has many recent imitators
that have set up similar enterprises to process and market 70 million liters
of milk annually. However, these enterprises do not provide cattle
development or productivity-enhancement support and technology to milk
producers.
Private entrepreneur model:

Private dairies, some owned by non-government organizations (NGOs), such
as the Bangladesh Rural Advancement Committee (BRAC), usually operate
through milk supplier/middlemen (known as ghoshes or dudhwalas) in place of
rural groups or cooperatives (Figure 3). They collect milk for a specific
dairy, however, smallholders involved in the system do not receive any value-
added benefit – only the basic price for their milk.
Figure 3: Private Entrepreneur Model
Livestock production is an integral part of Bangladesh's agriculture sector
and plays a vital role in national economy. At present, livestock is
contributing about 49.1% to the agricultural sector and 11.4 per cent to the
GDP. Its net foreign exchange earnings in 2003-04 were 53 billion, which is
about 11 percent of the overall export earnings of the country. 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/Heifer and 5 to 6 sheep/goats per family deriving 30 to 40 per cent
of income from it.

Report of the Household-based
Livestock and Poultry 2009
Item Figures (in ,000)
Weighted Figures
1. Total number of household 28,712
2. Household reporting cattle 10,399
Percent of total household 36.22
Number of cattle 26,828
Number of male cattle 11,021
Number of female cattle 15,806
Average price per cattle 12,078 Tk.
Household having working cattle 1,570
Number of working cattle 2,720
Average price per working cattle 16,344 Tk.
Household engaged in fattening cattle 965
Number of fattened cattle 1,241
Average price per fattened cattle 15,694 Tk.
Household having milking cattle 3,713
Number of milking cattle 3,874
Average price per milking cattle 19,012 Tk.
Household having improved/cross breed cattle 649
Number of improved/cross breed cattle 1,088
Percent of total cattle 4.06
Average price per improved/cross breed cattle 20,980 Tk.
Household having improved/cross breed milking cattle 180
Number of improved/cross breed milking cattle 200
Ref: Bangladesh Bureau of Statistics http://www.bbs.gov.bd/WebTestApplication/userfiles/Image/Survey
%20reports/Livestock_web.pdf
Dairy farming is an agro-based project, which comprises of two aspects:
dairy production and dairy technology. Dairy production is an all-inclusive
activity, related to dairy animal care, reproduction, feeding, management and
Survey

is defined as all those aspects and activities relating to raising of dairy
animals during their various phases of life to get wholesome milk. Dairy
technology relates to all aspects of processing milk to convert it into various
products. This conversion of milk into product is practicable only if it is
economically viable. Dairy animals, mainly Heifers and cows are purchased
from the animal markets or breeders located in peri-urban areas of cities
like Savar, Sirajganj, Pabna and or making decision to collect from the hi-
breeder from the India, Australia, New Zealand or Pakistan origin . Dairy
animals are fed on protein sources (concentrate) along with plenty of green
fodder. The latest innovation like Urea Molasses or Plant protein
Concentration (PPC) will also be adopt for fattening of indigenous / exotic
species for better production. Animals are milked twice a day i.e. morning
and evening. The milk is sold at the farm or may be directly sold in the urban
market. The milk price varies according to its quality and the season. Heifer
milk is sold at Bangladeshi Taka 45-50 per liter at the farm gate and 55-60
in the urban market.
4.2. OPPORTUNITY RATIONALE:
Milk is among the most important consumable and marketable commodities of
the world with enormous demand in domestic and international market. In
Bangladesh cow is the main source of milk in international market.
Dairy production systems in Bangladesh are similar to those in India and
Pakistan. However, milk production and yields (2.8 million tons ECM from
cows and buffaloes, and 711 kg of ECM per cow/per day, respectively) are
significantly lower than in India and Pakistan.
Most of the milk is consumed by farming households or sold on the informal
market, and less than 20 per cent is delivered to formal milk processors. In
2005, per capita milk consumption stood at only 32 kg/year. Bangladesh is 85
per cent self-sufficient in milk and imports 0.4 million tons per annum.
Dairy sector possess potential of additional 3 billion liters of milk with a
growth rate faster than any other sector of economy. The scope for export
of value added derivatives of milk is also huge especially processed milk
market share has increased considerably. Technologically advanced
production, processing and storage facilities have made it possible to

preserve Milk and its value added products for longer period of time but in
Bangladesh, only below 2% of total milk production is processed and
marketed through formal channels.
Although per animal milk yield in lower than other countries, Bangladesh is
the 3rd largest milk producing under developing country in the world. It is
also required to introduce improved technological methods in dairy farming
industry to increase per animal milk production and attain economies of
scales.
This provides huge opportunity with minimal competition for farmers to
invest in dairy farming and milk processing sectors of the economy.
Ref: http://www.thecattlesite.com/articles/2526/a-summary-of-milk-production-across-the-
world
4.3. MARKET ENTRY TIMING:
The demand of milk in summer is high as compared to winter. That’s why the
animals in summer are sold at a bit higher prices as compared to winter. So
the proposed business can be started before the onset of summer season.
At the commencement of the proposed business, it is important that the
entrepreneur must have good knowledge of the production and have contacts
with the livestock breeders and farmers. The ability to work with people and
animals, and efficient use of resources are important aspects in modern and
commercial dairy farming. The implementation of stocking and rearing of
meat producers bull / calf will be purchased for meat marketing will be
minimum 3-6 months before from the peak time of Kurbani, Eid-ul-Azha, the
prominent festival of Muslim peoples of the world.

Source: FAO Bulletin WEB: http://www.fao.org/docrep/011/i0588e/I0588E03.htm#fn4
Milk Flow Chart for Bangladesh

Milk Flow Chart for Bangladesh
Milk Price Chart for Bangladesh
Note: for the cause of scarcity of the product, present market is too much higher
than the milk price chart, stated as above, in context of the month July & year 2011
4.4. PROPOSED BUSINESS LEGAL STATUS:
The proposed legal structure of the business entity is partnership (Private
limited company, segregated with shares). Although selection totally
depends upon the choice of the entrepreneurs but this financial feasibility is
based on Private Limited Company, will leads to the Public Limited Company.
4.5. PROPOSED CAPACITY:
The feasibility study suggests an initial herd size of 2,500 animals that is
economical to justify the overhead cost. The farm size will increase till
10,000 animals within 10 years. Herds mix of 70% cows and 30% Heifers are

recommended to get the maximum milk production round the year. Heifers
(Among the indigenous some types of cattle in different region of the
country like Red Chittagong, Pabna, North Bengal Grey and Munshiganj
Origin) with second lactation (calving) 8 heads Cows (Crossbred / Local))
with second lactation (calving) 17 heads. A cow, on average, yields 12-14
liters of milk a day over a lactation period of 285 days whereas a Heifer, on
average, yields 10 liters a day over a lactation period of 305 days.
4.6. PROJECT INVESTMENT:
4.5. Project Investment
The total cost of the project is US$ 65,287,579.00 for the first year, out
of which capital cost of the project is US$ 63,246,200.00 for purchasing
the animals and constructing the building and the rest is used to meet the
working capital requirement.
Project Investment Cost for the first year
1 Initial Capital Cost
1.1 Land 52,607,200.00
1.4 Animals Cost 2,050,000.00
2 Initial Working Capital
2.1 Administrative Salaries for the first year 150,500.00
2.7 Cash in Hand
20% as contingencies fund for sl. 2.1-2.6
S-total For 2.7 340,230.00

The proposed pre-feasibility is based on the assumption of 100% debt
and 0% equity. However this composition of debt and equity can be
changed as per the requirement of the lender. The borrower has the
capability to show maximum 20% land cost as equity US$ 10,929,716.00
Project Financing:
Debt 100% financing from the lender US$ 65,287,579.00
& or,
Debt with reducing 20% land cost as US$ 54,357,863.00
Project Economics:
Viability Equity Project
IRR (%) 15.64%
Pay Back Period (year) 6.39
4.7. PROPOSED LOCATION:
The proposed large scale farm is now in operation as small scale farm with
50 cattle / industry’s location is available at Pelaid Mouza, (mouza, a part of
the Union), at Sreepur Upazilla under Gazipur District, adjacent to Dhaka,
the Capital of Bangladesh. For the cause of land crisis, Sreepur also
declared as Industrial Zone.
Sreepur Upazila at a glance: (GAZIPUR district) with an area of 465.24 sq
km, is bounded by BHALUKA and GAFFARGAON upazilas on the north, GAZIPUR
SADAR upazila on the south, KAPASIA upazila on the east, KALIAKAIR and
SAKHIPUR upazilas on the west. Main rivers are Shitalakshya, Banar, Parulia,
Kawraid, Dhaor.
Sreepur (Town) consists of one mouza. The area of the town is 14.61 sq km.
It has a population of 16,766; male 52.86%, female 47.14%; density of
population is 1148 per sq km. Literacy rate among the town people is 41.7%.
It has one dakbungalow (Government Rest House).

Administration Sreepur thana was turn into an upazila in 1984. It consists of
9 union parishads, 81 mouzas and 186 villages.
Archaeological heritage Rajbari (residence) of the Chandal Rajas at
Chinashukhania (c. Vedic period).
Historical events There is an opinion that Sreepur was named after Raja
Sreepal. It is said that the local Bhuiyans fought at Karnapur to resist the
Mughal advancement. Possibly Karnapur Fort and the adjacent tank bear
witness to that incidence.
Marks of the War of Liberation Mass grave 2 (Sreepur College compound
and Satkhamar).
Religious institutions Mosque 600, temple 5, church 2, tomb 4; noted of
which are tomb of Shah Saheb at Sreepur, Satkhamar Darga and
Akandabadi Mosque at Kewa.
Population 320530; male 51.13%, female 48.87%; Muslim 95.43%, Hindu
4.26%, Christian 0.11%, Others 0.20%; ethnic nationals: Santal, Koch,
Rajbanshi and Mandi (50 families).
Literacy and educational institutions Average literacy 44%; male 42.5%,
female 45.9%. Educational institutions: college 7, madrasa 34, secondary
school 45, government primary school 105, non-government primary school
41, NGO operated school 44.
Newspapers and periodicals Sreepur Barta (extinct).
Culture organisations Club 10, public library 1, cinema hall 3, theatre group 6.
Main occupations Agriculture 55.7%, agricultural labourer 16.02%, wag
labourer 2.67%, transport 2.16%, business 9.60%, service 4.22%, others
9.63%.
Land use Cultivable land 31454.27 hectares, fallow land 105.96 hectares,
single crop 44.06%, double crop 49% and triple crop land 6.94%; land under
irrigation 31.62%.

Land control Among the peasants, 33.06% are landless, 22.64% marginal,
31.5% intermediate, 12.8% rich.
Value of land Market value of first grade cultivated land about Tk 12000 per
0.01 hectare.
Main crops Paddy, wheat, potato, jute, mustard seed, ginger, turmeric,
vegetables.
Extinct and nearly extinct crops Betel leaf, indigo.
Main fruits Jackfruit, papaya, pineapple, banana, mango, litchi, guava.
Fisheries, dairies and poultries Fishery 36, dairy 1, poultry 10, hatchery 4.
Communication facilities Roads: pucca 80 km, semi pucca 20 km and mud road
800 km.
Extinct and nearly extinct transports Palanquin, boat, bullock cart.
Manufactories Ice factory 5, saw mill 27.
Cottage industries Goldsmith 2, blacksmith 10, tailoring 50, welding 12.
Hats, bazars and fairs Hats and bazars are 31, most noted of which Sreepur,
Maona, Barmi, Rajbari and Kawraid.

Map Source: LGED
From Wikimapia: http://www.wikimapia.org/#lat=24.2033375&lon=90.5291998&z=17&l=0&m=h
Project
Location

For the cause of reserve forest as national park, plenty of fodder is
available at that point. In addition with this remarkable feed and fodder
mills are available, within 20 KM from the proposed / ongoing project.
Project
location

4.8. KEY SUCCESS FACTORS/PRACTICAL TIPS FOR SUCCESS:
Commercial dairy farmers depend on land, labor and animals as the major
resources. The thrust in modern dairy farming is on the increased use of
capital and management. Successful dairy farming harnesses all available
resources into productive and profitable unit. 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. The low
yielder animals are uneconomical to keep, hence these should be culled. The
over all genetic improvement of all the dairy animals is necessary for
improved milk production. It involves milking records at equal intervals,
selection of bull from high producing mothers, progeny testing of breeding
bull and then making extensive use of these bulls by well-organized Artificial
Insemination (AI) program. Feeding dairy animals on nutritious and high
yielding hybrid varieties of forages can be adopted. The surplus forage
should be preserved as silage or hay. Other farm management practices
include feeding for growth, lactation, pregnancy or maintenance, hygienic
milk production, comfortable and ventilated barns, spraying/ wallowing of
animals in summer, timely detection of heated, mating, with selected bull or
AI service. If animals are bred within the 60-90 days of calving provided
with clean surroundings, drinking water and feed according to the
requirements, the over all performance of herd can be improved.
Timely vaccination against Rinderpest, Black Quarter, Foot and Mouth
Disease, Brucellosis along with the prevention of mastitis and parasitic
control will also improve the over all performance of dairy herd. Hygienic
milk production depends upon healthy animals, clean surroundings, clean
hands of milkman and clean utensils.
5 SECTOR & INDUSTRY ANALYSIS:
5.1 MAJOR PLAYERS:
Dairy farming is not an organized sector in Bangladesh. 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 2% 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.
5.2 HUBS OF DAIRY FARMING:
The development of urban or pert-urban commercial dairy farms is
something new in livestock production. Metropolitan cities like Dhaka,
Rajshahi, Sylhet, Khulna, Chittagong, Barisal, Bogra etc. are the major
markets of milk. Hence, dairy farms established in peri urban areas of these
cities fulfill a very few, the daily need of these cities.
6 MARKET INFORMATION:
6.1 SECTOR CHARACTERISTICS:
The size of this sector is still growing. Commercial Dairy farms have been
set up in peri urban areas. Few of the leading commercial dairy farms are
listed as follows with their establishment year:
1. Milk Vita (1973)
2. Amomilk (1996)
3. Tulip Dairy(1998)
4. Arong–BRAC Dairy (1998)
5. Bikrampur Dairy (1998)
6. Ultra–Shelaidah Dairy (1998)
7. Aftab (1998)
8. Pran (2001)
9. Grameen–CLDDP (1999)

10. Rangpur Dairy (2007)
11. Akij Group (2007)
12. Grameen Danone (2007)
13. Savar Dairy (1974)
14. Army Dairy

6.2 MARKET POTENTIAL:
Bangladesh is the 3rd
largest milk producer now against the FAO Statistics
for under developing countries of the world. Milk production in year 2003-04
was about 27.81 million tons. Raw milk is used for drinking and tea making
purpose. In rural areas, milk is used to make desi ghee, yogurt, whey (lassi)
and butter. Rural as well as the urban households are the major consumers
of milk.
Figure 6-1 Market Value of Dairy & Livestock in Bangladesh
(Source: Agricultural Statistics of Bangladesh, 2003-04)
The daily milk intake of major cities like Dhaka, Chittagong is 2-3 million
liters and 4 million liters respectively. The demand for milk increases during
summers as the consumption of whey (lassi) rises due to hot weather. Ghee
is obtained by heating the milk to evaporate water and removing the curd.
Liquid butter oil with 93% fat content and a much smaller volume results. It
is easy to store and resists spoilage even at tropical temperatures. The ghee
from Heifer milk is white and that from cow milk yellow. Dahi or curd
(similar to yogurt) is another popular product. If not refrigerated it must be
consumed within 24 hours. “Sandesh” is a popular sweet. It is prepared by
condensing the milk through citrus compound, after lifting butter from the
milk. Sugar and some spices are added in order to obtain desirable flavors.
It is a high value product however it also has a relatively short shelf life.
Milk processing companies use milk as a raw material to formulate different
types of milk i.e. pasteurized milk, UHT treated milk, condensed milk, skim
milk, chocolate milk & milk powder, etc. Different value added products like
yogurt, ice cream, butter and cheese are also prepared from the raw milk.
The processed milk market has increased its share in quality conscious
consumers. The processed milk has achieved 4% share in Dhaka’s milk market
during the last two decades. The milk market is growing at a growth rate of
4.5% annually with increase in milk consumption. Metropolitan cities are the
major markets for the sale of milk. Milk can be sold at farms or directly to
milk centers in the urban market. Goala’s collect milk from farmers in
villages and deliver it at the consumer’s doorstep. Milk collection networks
of different processing companies also collect milk directly from the farm
and transport it to the processing facilities.
Note: Sandesh, the sweet desert. Goala, the retailer milkman.
Market Value of Dairy & Livestock Products in Bangladesh (year 2003-
04) Taka 362 Billion
Milk 58% Meat 28% Other Livestock Products 14%

6.3 TARGET CUSTOMERS:
This pre feasibility study suggests that milk will be sold on farm door
through contractors, goalas or people around that area or may be
pasteurized at farm by the farmer and then deliver it to the near by city.
Following are some of the target clients for a dairy farmer.
1. Local people
2. Gawalas
3. Milk collection companies
4. Contractors
The cost of production per liter of raw milk should be lower than its sale
price so that farmer could feel it economical.
7 FARM INPUTS:
7.1 LAND:
7.1.1. Land Requirement:
Initially about 126 acres of land is required for a dairy farm project of
animals starting from 2500 animals to a target herd size of 10000 animals in
a period of 10 years. The area of fodder production can be minimized if
farmer distributes the land in different fodder plots according to different
growing seasons i.e. in a rotation annually. Majority of this land would be
used for growing green fodder for the animals. The other part would be used
for building sheds for the animals to protect them from severity of the
weather.
Table 7.1.1 Land Requirements
Description Area (Acres)
Shed for Cows 6
Open Paddock for Cows 12
Shed for Heifers 3
Open Paddock for Heifers 6
Shed for Calves 4
Open Paddock for Calves 7
Shed for Calves (older than one year) 4
Open Paddock for Calves (older than one year) 6
Stores for fodder, concentrate & machine room 4
Utensils & milk storage 1
Servant Room, Wash room 3

Water Pond 7
Land for fodder 63 acres
Total Land Requirement 126 acres
Note: Though the proposed farm has 100 acres of own land, so, fodder cultivation
practice will not be arranged for the first couple of years. Instead of this integrated
vegetable cultivation will be practiced for better turnover, through over the project
cycle.
7.1.2. Land Lease:
Lease is a better option for a new investor. Land on lease is available in rural
areas for a period of 5-15 years. Advance rent for a few years will be
charged initially. Good high agriculture land is available with an annual rent
of US$450 per acre.
7.1.3. Suitable Locations:
Peri urban and rural areas where water is available to irrigate the crops are
suitable locations for establishing a dairy farm. Sreepur, the proposed land
is very feasible for source of fodder, for the cause of national reserve
forest, is adjacent to this project location
7.1.4. Herd Mix:
The ideal mixed herd should consist of 70% cows and 30% Heifers for the
viability of a farm. The cows are comparatively high yielder as compared to
Heifers. This means that there will be 1700 cows and 800 Heifers in a mixed
herd. Artificial insemination will be applied for the best achievement; will
lead to appoint consultant / expert for this issue.
7.3. ANIMAL BREEDING AND MATING SYSTEM:
Breeds of Cows Local: Red Chittagong, Pabna, North Bengal Grey and
Munshiganj Origin will cross through artificial insemination
Exotic species: Jersey, Holstein Fresien are the sperm donar
The Holstein cow originated in Europe. The major historical development of
this breed occured in Netherland and more specifically in the two northern
provinces of North Holland and Friesland. Holsteins are most quickly
recognized by their distinctive color markings and outstanding milk

production. Holsteins are large, stylish animals with color patterns of black
and white or red and white. Holstein heifers can be bred at 15 months of
age, when they weigh about 325 kgs body weight between 24 and 27 months
of age. Holstein gestation is approximately nine months. The normal
productive life of a Holstein is six years. The Jersey breed originated on the
Island of Jersey, a small British island in the English Channel off the coast
of France. The breed was known in England as early as 1771 and was
regarded very favorably because of its milk and butterfat production.
Adaptable to a wide range of climatic and geographical conditions,
outstanding Jersey herds are found from Denmark to Australia and New
Zealand, from Canada to South America and from South Africa to Japan.
They are excellent grazers and perform well in intensive grazing programs.
They are more tolerant of heat than the larger breeds. With an average
weight of 350kgs, the Jersey produces more milk. per kg of body weight
than any other breed. The color in Jerseys may vary from a very light gray
or mouse color to a very dark fawn or a shade that is almost black. Both the
bulls and females are commonly darker about the hips and about the head
and shoulders than on the body. Australian Friesian breed is being developed
in Australia by the Queensland Government for use in the tropical areas. The
breed was evolved using the Sahiwal from Pakistan, and the Australian
Holstein-Friesian. Since the 1960’s when research work began on this breed,
notable progress has been achieved towards the objective of combining tick
resistance and heat tolerance with reliable milk production and fertility. It
has now been extensively tested in the tropical and sub-tropical areas of
Australia. Milk quality is good - protein level is 3.4 percent and butterfat is
approximately four percent. These animals are available at an average price
of US$ 1500-3000 per animal.
7.4. ANIMAL MARKETS:
Animal markets (Gorur Hat), Government and private livestock farms are the
main sources for purchasing milk animals. Animal markets are situated in
different places in Bangladesh, that includes Gabtali-Dhaka, Khajura &
Patkel Ghata-Jessore, Kalaia-Patuakhali etc. These markets operate on daily
basis, twice in a week, or once in a month. There are different contractors
available in the markets, those help locating the proper animals, called as
“faria”-the broker. These contractors work on commission basis and the
commission rate charged may vary from 1-2% against the animal price.

7.5. ANIMAL HOUSING:
Sheds of the animals should be airy with protection of the animals from
extreme temperatures and strong winds. The animal housing should be
facilitated with drinking water for animals. There should be proper drainage
system to keep hygiene at the farm. It consists of a built up animal shed, a
brick soling paddock for animals, calving pens in which pregnant animals are
kept separated from other animals before calving, one room for milk
storage, one room for storing farm equipment and one for compound feed
storage. The animals can be dehorned, as they are easier to handle in barns
and cause less accidental injury to neighboring animals, handlers, walls and
adjacent trees also.
Space Requirement
Description Sq ft
Shed space for a cow/Heifer 40
Open Paddock for a cow/Heifer 80
Shed for a calf 40
Open paddock for a calf 80
Shed for a calf (older than one year) 26
Open Paddock for a calf (older than one year) 40
Stores for fodder & concentrate plus machine room 3600
Utensils & milk storage 6000
Servant room, wash room 1200
Water pond 400
Table 7-4 Total Infrastructure Cost
Description Sq.ft Rate/Sq.ft Total Cost
Shed for Cows 840 150 126,000
Open Paddock for Cows 1,680 5 8,400
Shed for Heifers 320 150 48,000
Open Paddock for Heifers 640 5 3,200
Shed for Calves 460 150 69,030
Open Paddock for Calves 708 5 3,540
Shed for Calves (older than one year)
275 150 41,278
Open Paddock for Calves (older then one year)
459 5 2,293
Stores for fodder, concentrate & machine room

440 150 65,959
Utensils & milk storage 147 150 21,986
Servant Room, Wash room 366 200 73,288
Water Pond 761 20 15,216
Total Infrastructure Cost 70,966 478,191
7.6. FARM MACHINERY:
The pre-feasibility suggests, hiring tractor for land preparation to grow
fodder crops. Only few farm equipment like fodder chopper, water pumps,
milk utensils will be purchased.
Farm Equipment
Calf feeder, Teat Dip Cup, Toka machine (chef cutter), Water pump,
Generator (Cummins, FGWilson, Energypac, etc), Deep Tube Well (8” Dia)
Miscellaneous Supplies Rate
Freezer, Mule Cart, Ceiling Fans, Exhaust Fans, Miscellaneous farm utensils,
Electrical fixtures(lighting, etc), etc.
Description Quantity
Chains 2600
Milking Buckets 200
Electric Cuffing Machines with Implements 10
Milking Cans 25 liter 800
Deep Freeze 20 CFT 30
Essential Industrial tools & Spares (L.S.) 1
Compressor Water pumps 2HP 6
Deep Tube-well 8" Dia 1
Milk Machine (Vacuum line system) 2
Milk Cooling Unit / Chiller 10000 litre/hour 2
Farm tractor & Trailer 1
Calf feeder 30
Teat Dip Cup 30
Straw / Wheat / Maize Cutter 5
Generator 1200KV (Cummin, FG Wilson, Energypac, Volvo, etc. 1
Heavy Duty Ventilation Fans 2HP 25
Testing lab (L.S.) 1
***Total space requirement has been rounded off.
***As the capital cost will be budgeted for 10 years, therefore the initial machinery and equipment
cost has been calculated on the basis of 10 year machinery requirement.

7.7. FEED:
7.7.1. Ration for Dairy Animals:
The ration is allowance of nutritionally balanced feed in 24 hours. It includes
green fodder and concentrate to increase animal productivity. Wheat straw
is also used as dry roughage along with green fodder. About 1 kg of
concentrate is required for the production of 2.5-3 liters of milk. These
feed ingredients when mixed according to feed formula will provide adequate
energy according to energy and protein requirements of animal in production.
Details of Feed Ingredients as Raw Material
Sl. No. Items Ration/ milch cow Unit
1 Straw 3.00 Kg.
2 Grass 10.00 Kg.
3 Rice Bran 2.00 Kg.
4 Oil Cake 0.45 Kg.
5 Salt 0.05 Kg.
6 Molasses .25 Kg.
7 Wheat Bran 1.00 Kg.
8 Pulses Bran 0.50 Kg.
9 Urea 0.05 Kg.
10 Vitamin Premix 0.05 Kg.
Total for 1-10 17.35 Kg.
11 Medicine 100.00 Tk.
12 Vaccine 100.00 Tk.
13 Packing Material 2.00 Tk.
Total for 11-13 202.00 Tk.
The below estimation is calculated as per yearly requirement/cow-calf-beef basis
The concentrate feed price will be variable at the project operation time, in
context of scarcity and availability in the market. Perhaps, a least cost feed
formulation will be adopted at the time of operation and also change the
formula, as per demand.
7.7.2. Mineral Mixture:
This is used as a feed supplement. It includes a mix of minerals (magnesium,
iron, sodium and salts). Mineral mixtures are good source of energy and
increase the animal productivity to give milk.
7.7.3. Fodder Crop:
0

Fodder is grown at the land, which is acquired on lease or owned by the
entrepreneur. Due to increased demand, improved forage crops such as
multi-cut oats, berseem, lucerne, Sorghum-Sudan grass hybrids, mott grass,
sorghum, maize, Napier and millet have been developed. These have become
very popular in irrigated areas such as Jessore, Kushtia, Magura, Chittagong
Hill area, Sylhet, and Jamuna Rivers Island. Details of fodder cultivars
released by Research Institutions in Bangladesh are given in Annex 3 (Table
13-4). Average forage yields in Bangladesh are extremely low compared to
yields obtained on research institutes and from well-managed farms and
fields. These are very low as compared to their potential, with 22.8 tons per
hectare a recent estimate. (Reference: FAO Statistical Databases)
Although improved varieties and technology are available, they have been
slow to reach the dairy farms. Recent medium scale on-farm work has
indicated that yields can be enhanced two to three fold by using available
improved varieties and appropriate agronomic techniques. In an area where
land and irrigation are the major limiting factors to enhancing fodder
production, intensification is the only way to meet the needs for forage.
Intensive and economical forage production per unit area per season would
be the best choice. Also efforts should be made to produce and provide
sufficient quantities of seed of multicut forage varieties and hybrids like
mott grass to commercial dairy farms. The fodder yield (except multi cut
Mott Grass which yield 100-150 tons/ acre in 4 to 6 cuttings per year) varies
between 10 tons to 40 tons per acre depending upon the fertility of land,
quality of seed and application of fertilizer.
Terms: “Bhusi / Kura / rice bran”, a by-product of rice / wheat harvesting
used as dry roughage for livestock and dairy animals
The available cattle feeds in Bangladesh can be grouped into agro-industrial
by-products which include agricultural crop residues such as straws,
sugarcane tops, bagasse etc; by-products from agro industries e.g. molasses,
oil-cakes, pineapple wastes, shrimp waste, etc; and milling by-products such
as brans. Green roughage include non-cultivated indigenous grasses grown on
road side, embankment, bunds etc; leaves of the jack fruit and mango tree,
ipil ipil, etc; and aquatic plants such as water hyacinths, dhol kalmi, azolla,
duck weed etc. Cultivated fodder includes both perennials, such as Napier,

Para, German, Splendida, Andropogon, and Gamboo grasses; and seasonal
crops such as maize, cowpea, khesari, oat, sunhemp, etc.
Table 7-7 Types of Dry & Green roughage
Principal Fodder: straws, sugarcane tops, bagasse etc;
By-products from agro-industries: molasses, oil-cakes, pineapple wastes,
shrimp waste, etc;
Milling by-products: brans.
Green roughage: include non-cultivated indigenous grasses grown on road
side, embankment, bunds etc; leaves of the jack fruit and mango tree, ipil
ipil, etc;
Aaquatic plants such as water hyacinths, dhol kalmi, azolla, duck weed etc.
Cultivated fodder: includes both perennials, such as Napier, Para, German,
Splendida, Andropogon, and Gamboo grasses;
Seasonal crops such as maize, cowpea, khesari, oat, sunhemp, etc.
(Reference: BLRI, Bangladesh & FAO Statistical Databases)
7.7.4. Fodder Production Economics:
The comparative economic
feasibility of various forage
crops produced under various
farming systems is shown in
following table
Economics of forage
Production under improved
Production system per
hectare in Bangladesh.

Item Forage Crop
Maize Sorghum Napier, Para/German Splendida,
Andropogon Gamboo
grasses
Land preparation 12.31 11.32 11.32 10.17 10.17 8.72
Seed & Sowing 13.95 8.00 23.25 14.53 14.53 14.53
Fertilizer 20.34 20.34 58.13 29.06 29.06 26.16
Irrigation Land 8.72 8.72 11.62 12.79 8.72 5.81
Revenue/rent 20.34 20.34 52.32 72.67 72.67 21.80
Harvesting/TP 21.80 20.34 40.69 34.88 43.60 34.88
Total expenditure 97.46 89.06 197.33 174.10 178.75 111.90
Yield (Kilos) 80,000 79,750 160,000 102,500 103,750 115,000
Price/kg US$ 1.00 1.00 1.00 1.50 1.50 1.25
Variable Costs: Seeds, fertilizers, land preparation, irrigation, harvesting,
Transport etc
Source: FAO Statistical Databases (2002)
7.7.5. Daily Fodder Requirement:
There is no fixed fodder requirement for the animals but a rule of thumb
says that an animal needs daily fodder equal to 9%-10% of its body weight
(3% of live body weight on Dry Matter Basis). According to estimates,
Heifer consumes 50-55 kg fodder daily while cow consumes about 40-45 kg.
7.7.6. Rice Straw (Khar):
Rice straw is major, typical, and very popular dry roughage. It is always
chaffed, and is the main or even only major dry roughage used on almost all
the dairies. Traditional threshing methods break the straw into short
pieces, bhoosa, and modern mechanical threshers have been designed to
break the straw. Often sources of rice straw are far from urban dairies of
rainfed areas, sometimes in other provinces. In all urban dairies visited rice
straw was bought at US$ 1.00 (+/-10% as veriable) per kilo (76 BD tk. per
mound) or even more; in the harvest season, however, in places where it is
produced, it is available at US$ 0.004-0.011 per kilogram. In recent years

baling units have been installed in North Bengal & also southern region of
Bangladesh; bales are transported to major cities, and even to Bagha bari,
Sirajganj, Munshiganj, Trishal, Bhaluka, where the major farms are available.
Cost for Green Fodder per Acre
Practice Cost (US$)
Fertilizer 17.44
Cultivator cost 11.62
Seed 11.62
Irrigation 17.44
Total Cost 58.12
Daily Feed Requirements
Animal Daily Requirement (kg) Cost/kg Amount
Cow
Green Fodder 40.00 0.10 4.00
Dry Roughage 5.00 2.00 10.00
Concentrate 3.18 10.00 31.78
Total 45.78
Heifer
Green Fodder 50 0.10 5.00
Dry 5 2.00 10.00
Concentrate 3 10.00 31.78
Total 46.78
***** This ration is variables; in context of least cost feed formulation,
environmental factor (seasonal change), etc.
**** The fodder cost does not include the land cost it is given in a separate
head of land lease cost / purchase.
7.8. MEDICATION:
7.8.1. Vaccination & Medicine:
Vaccination & medicine is required to prevent any disease outbreak in the
animal herd. Each new animal will be vaccinated before entering into the
farm. It will cost US$5-8, in context of market availability and scarcity for

both cow and Heifer per year. Vaccines are produced at Veterinary Research
Institute, BLRI, Savar. The vaccines are provided to the Government Farms
and Hospitals on payment. Farmers can also obtain these vaccines on
payment according to prescribed schedule from the registered vaternary
doctors. Technical guidance is also provided to the farmers. Farmers can
have their animals vaccinated from the field Veterinary Hospitals and
Centers.
The Government of Bangladesh have been producing twelve different types
of livestock and poultry vaccine to immune them so that they can be able to
resist some diseases. From the year 2001-2002 to 2005-06 a total dose of
112.38 crore vaccine were produced and distributed. At present (Upto
March/07) the stock of vaccine is 1.57 crore doses.
7.8.2. Artificial Insemination (AI) Charges:
Artificial Insemination is an important and successful program for Livestock
Improvement. Semen is collected from the bulls reared in the Central Cattle
Breeding Station at Savar and other 22 Districts Artificial Centers, where
the semen is processed as diluted and frozen semen for the use to run the
extension work on Artificial Insemination Program. A total number of 1670
A.I. Sub-Centers and A.I. points are in operation to run the Artificial
Insemination Program by using both diluted and frozen semen. Table-3 shows
the number of cows inseminated from the year 2002-03 to 2006-07 (upto
March/ 07).
Year Number of cows (in lac)
2002-2003 12.28
2003-2004 13.18
2004-05 14.33
2005-06 16.09
2006-07 (upto March/07) 12.47
Artificial Insemination (AI) charges will be US$0.50-1.00 per animal for
both cow and Heifer. There are three Semen Production Units (SPU) in
Bangladesh, which works under Directorate of Fisheries and Livestock,
Dhaka, Bangladesh. For A.I. Services is available on 64 districts of

Bangladesh, the farmers are charged US$0.50/per insemination for local
cattle and Heifer and US$1.00 for imported breed. Besides use of semen at
the local level, it is also supplied to the sister concerns and abroad, the third
world countries of the world. Semen of various breeds is also available with
the Private entrepreneurs and veterinary doctors.
7.8.3. Manpower / Labor Requirement:
For a large scale dairy enterprise, manpower is required for performing
different animal husbandry practices at the farm e.g. feeding, watering,
milking and care of animals etc.
One skilled & experienced person can handle eight- fifteen milk animals
easily. 100 skilled and 50 day labors are recommended for handling 2500+
animals. Well experienced Director Finance, General Manager, Asst. General
Manager, Farm Manager, Deputy Farm Manager, Marketing Manager, Sales
Executive, Assistant Manager, Chief Accountant, Store Keeper, Accountant
Assistant, Veterinary Doctor, Veterinary Assistant, Farm Supervisor post
also created for the smooth operation of the proposed farm. Farm manager
can be hired to monitor & supervise all the farm activities. The FM will be
well educated as M. Sc. with B.Sc. (Honors) degree in Animal Husbandry
(AH), so that he can handle the total farm administration & account matters
at the proposed dairy farm.
Proposed Manpower & Labor Requirements is stated as follows
Designation Person/s
Managing Director 1
Director Finance 1
General Manager 1
Asst. General Manager 1
Farm Manager 1
Deputy Farm Manager 1
Marketing Manager 1
Sales Executive 6
Assistant Manager 1
Chief Accountant 1
P.S. to MD 1
Receptionist 1

Computer Operator 1
Store Keeper 1
Accountant Assistant 1
Veterinary Doctor 1
Veterinary Assistant 1
Farm Supervisor 25
Skilled Labour 100
Day Labour 50
Office Peon 2
Total Manpower 199
8 FARM OUTPUT:
8.1. LACTATION PERIOD:
The lactation period is the period during which the animals yield milk. These
animals are called wet animals. Generally the lactation period of cows is 280
days and that of Heifers is 305 days. For calculation, the feasibility has
taken 80% of the total number of cows as wet cows and 70% of the total
number of Heifers as wet Heifers. The calving interval (The interval
between two calvings) in a Heifer is about 18-20 months, while cow has15-16
months. The average milk yield of Heifers is estimated at 1500 to 2300
liters per lactation.
8.2. MILK COMPOSITION:
Heifer milk contains less water, more total solids, more fat, slightly more
lactose, and more protein than cow's milk. It seems thicker than cow's milk
because it generally contains more than 16% total solids compared with 12-
14% for cow's milk. The butterfat content is usually 6-8%. Cow's milk
butterfat content is usually between 3% and 5%. Because of its high
butterfat content, Heifer milk has considerably higher energy value than
cow's milk. Phospholipids are lower but cholesterol and saturated fatty acids
are higher in Heifer milk. Studies have shown that this does not adversely
affect the digestibility. Because of the high fat content, the Heifer's total
fat yield per lactation compares favorably with that of improved breeds of
dairy cattle. Normally the protein in Heifer's milk contains more casein and
slightly more albumin and globulin than cow's milk. The mineral content of
Heifer milk is nearly the same as that of cow's milk except for phosphorus,
which occurs in roughly twice the amount in Heifer milk. Heifer milk tends to

be lower in salt. Heifer milk lacks the yellow pigment carotene, precursor for
vitamin A, and its whiteness is frequently used to differentiate it from
cow's milk in the market. Despite the absence of carotene, the vitamin A
content in Heifer milk is almost as high as that of cow's milk. Apparently the
Heifer converts the carotene in it's diet directly to vitamin A. The two milks
are similar in B complex vitamins and vitamin C, but Heifer milk tends to be
lower in riboflavin.
8.3. BREEDING STOCK DEVELOPMENT:
The proposed farmer will raise breeding stock, both future breeding bull and
future dairy animals at his own farm by selecting good offsprings of high
producers. The first generation (F1) will be capable of giving milk after 3
years in case of cows and 4 years in case of Heifers.
8.4. INCREASE IN MILK YIELD:
The milk yield will be improved as a
Result of appropriate breeding
systems discussed earlier. Low
yielding animals are sold in the
market. On an average, cows are
productive for 7 to 8 years while
Heifers are productive for 8 to 9
years.
8.5. SALE PRICE:
Near the urban market, the selling price of Heifer’s & Cows milk will be
Bangladeshi Taka 50 in wholesale market and retail as 52. ( as on date 01
August, 2011)
8.6. EVENING MILK:
Milk must be stored in a freezer with a capacity of 25000 liters at the farm
premises, if milk distribution is not possible at the evening and after, it will
be preserved through chilling system, till morning.
8.7. FARM REVENUES:

Farm revenue will increase with the passage of time, as the milk production
& beef fattening, will increase with the growth in herd size as well as its
quality.

8.8. MALE CALVES:
Male calves will be sold (50%) at the
farm sooner after birth against US$
150 to 200 per animal. Rest of them
also will be reared in separately for
meat / beef production. (first
couple of years, before farm, already
compacted by the milk producing cows.
9 OPERATION & MANAGEMENT:
Will be finalize, after approval of the loan amount for set up of this
project, within the grace period.
10 USEFUL TERMINOLOGY:
Breed
Animals that, through selection and breeding, have come to resemble one
another and pass those traits uniformly to their offspring.
Compound feed
Any ground mixture of ingredients intended for feeding the animals. It
includes a concentrate mixture accordingly to formula.
Dehorning
The process of removal of horns (in adult animal) or horn buds (in young
calves). The process may be done by mechanical or chemical means.
Feedstuffs
Any substance of nutritive and biological value used in production of
compound feed.
Heifer
The term refers to young female bovine that reaches puberty age and is
ready to breed.
Home Mixed Feed
Feed prepared on farm.

Oil seed Cake
Mass resulting from the processing of seeds, which is rich in protein and is
used as a source of feed for livestock, e.g. cottonseed cake, maize oil cake
etc.
Ration
Amount of balance feed supplied to the cattle, within 24 hours
11 FINANCIAL ANALYSIS:
Project Investment Cost for the first year
1 Initial Capital Cost Total Amount
1.1 Land 52,607,200.00
1.4 Animals Cost 2,050,000.00
2 Initial Working Capital
2.1 Administrative Salaries for the first
year
150,500.00
2.7 Cash in Hand 20% as contingencies fund
for sl. 2.1-2.6
340,230.00

Project Depreciation Cost per year
1 Initial Fixed & Working
Capital
Total Amount Depreciation
%
Amount
1.1 Land 52,607,200.00 5 2,630,360.0
0
1.2 Building / Infrastructure 8,039,000.00 10 803,900.0
0
1.3 Furniture & Fixture 57,000.00 20 11,400.00
1.5 Machinery & Equipment 285,500.00 20 57,100.0
0
1.6 Office Vehicles 166,500.00 20 33,300.0
0
2.1 Administrative Salaries
for the first year
150,500.00 5 7,525.0
0
2.2 Labor Salaries 283,750.00 5 14,187.50
2.5 Fuel for vehicles
(Petrol / Diesel / Gas)
13,625.00 5 681.2
5
2.6 Fodder & Medicine
Inventory
1,037,674.00 5 51,883.7
0
Depreciation Cost (1st
year end)
3,610,337.45
1 Initial Capital Cost
1.1 Land
Description Unit (Acre) Unit Cost Total Amount in
US$
Land requirement
for 2500 Cattle
400.00 131,518.00 52,607,200.00
With Partial Fodder production land, Bio Gas Plant,
Administrative Building, Fodder Store, Milk Store
S-total For 1.1 52,607,200.00

1.2 Building / Infrastructure
ConstructionDetail
Space/animal
Animalunit
TotalSpace
Rate/sftinUS$
TotalAmountinUS$
Administrativ
eOffice
1
6,000.00
20.00
120,000.00
GuestHouse
&temporary
staffmedical
checking
center
1
3,000.00
25.00
75,000.00
Cattle
Medical
Center25
individual
chamber
1
2,500.00
20.00
50,000.00
Shedspace
fora
cow/Heifer
40
1750
70,000.00
15.00
1,050,000
Open
Paddockfora
cow/Heifer
80
1750
140,000.00
15.00
2,100,000
Shedfora
calf
40
1400
56,000.00
15.00
840,000.00
Open
paddockfora
calf
80
1400
112,000.00
15.00
1680000.0
Shedfora
calf(older
thanone
year)
26
500
13,000.00
18.00
234,000.00
Open
Paddockfora
calf(older
thanone
year)
40
500
20,000.00
18.00
360,000.00

1.2 Building / Infrastructure (Cont.)
Construction Detail Space/
animal
Ani
mal
unit
Total
Space
Rate/sft
inUS$
Total
Amount
In US$
Storesfor
fodder&
concentrate
plusmachine
room
12000
1
12,000
15.00
180,000
Utensils&
milkstorage
withfulltiles
20000
1
20,000
30.00
600,000
Servant
room,wash
room
20000
1
20,000
30.00
600,000
Waterpond
15000
1
15,000
10.00
150,000
S-totalFor
1.2
489,500
8,039,000
1.3 Furniture & Fixture Figure in US$
Description Budget Unit Total Amount
Note: Decoration with all modern equipment & facilities
Managing Director 15,000.00 1.00 15,000.00
Director Finance 10,000.00 1.00 10,000.00
General Manager 5,000.00 1.00 5,000.00
Asst. General Manager 2,000.00 1.00 2,000.00
Farm Manager 2,000.00 1.00 2,000.00
Deputy Farm Manager 1,500.00 1.00 1,500.00
Marketing Manager 1,500.00 1.00 1,500.00
Human Medical Doctor's
room
2,000.00 1.00 2,000.00
Sales Executive 500.00 6.00 3,000.00
Assistant Manager 1,000.00 1.00 1,000.00

Chief Accountant 1,500.00 1.00 1,500.00
P.S. to MD 3,000.00 1.00 3,000.00
Receptionist 2,000.00 1.00 2,000.00
Computer Operator 1,000.00 1.00 1,000.00
Store Keeper 500.00 1.00 500.00
Accountant Assistant 1,000.00 1.00 1,000.00
Veterinary Doctor 2,000.00 1.00 2,000.00
Veterinary Assistant 500.00 1.00 500.00
Farm Supervisor 100.00 25.00 2,500.00
S-total For 1.3 57,000.00
1.4 Animals Cost
Initial Animal Cost is given in the table below:
Type Quantity Per Unit
Cost in
US$
Total Amount
Calf (1 year) for meat
production
750 400.00 300,000.00
Gravid Heifer for milk
production
875 1,200.00 1,050,000.00
Gravid Local Cow for
cross breed
875 800.00 700,000.00
S-total For 1.4 2,050,000.00
1.5 Machinery & Equipment
Furniture & equipment required for the project is given in tables below.
Farm Machinery & Equipment Cost
Farm Supplies Rate(US$) Capacity
(No. of
Animal)
Qty Total Cost
(US$)
Chains 10.00 2600 26,000.00
Milking Buckets 12.00 200 2,400.00
Electric Caffing Machines
with Implements
500.00 10 5,000.00
Milking Cans 25 liter 20.00 800 16,000.00
Deep Freeze 20 CFT 1,000.00 30 30,000.00
Essential Industrial tools &
Spares L.S.
5,000.00 1 5,000.00

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