Project Brief

Project Description

The objective was to do a feasibility study for the dairy subsector and find out the market viability. In addition, ALC Indi had to develop a capacity building plan and build institutions. Based on the survey conducted for 20 villages (covering 10 farmers in each village), the surplus milk available in the area was estimated at 14557 litres.
Parag is a dairy unit in Uttar Pradesh run by government of India and the only organized player in the field supplying liquid milk to Hirdoi Market, Parag procures milk from villagers through vendors and after chilling in their chilling plants sells milk to the processing plant at Lucknow. Parag later bought the processed product from Lucknow at Rs. 21.50/L. Parag uses its agents to distribute the milk in market. Agents charge a commission of 80 paise per litre. Transportation cost of milk from Hirdoi to Lucknow was borne by Parag Dairy, Hirdoi. This cost was normally Rs. 2.5-3/L and in the lean season, Rs. 4/L.
The main issue being faced by Parag was that it had been running in loss for 15 years. The main reasons were inability to pay a high price and make payments on time.
As per the study, the projected milk potential (surplus milk) in Hirdoi block was about 14,557 litres. At least 40% of the total projected milk could be easily tapped by the proposed unit (about 5800 litres). So, 5000-ltr capacity bulk cooler could be established. However, to minimise the operational costs in the initial period, it was suggested to start with 3000 litre BCU with scope for 2000 litre expansion. So, the plant could be designed to accommodate another bulk cooler so as to ensure optimum utilization of the plant capacity.