Milk Pasteurization Unit Research Proposal Example | Topics and Well Written Essays - 4500 words

Milk Pasteurization Unit - Research Proposal Example UHT treated milk is beyond the reach of ordinary consumers due to exorbitant prices charged by the UHT milk producers. Additionally, UHT treated milk is heated up to 135'C, due to which all the lactobacillus in milk are killed: this has a perverse effect on the milk in that, once contaminated; it spoils much more rapidly than pasteurized milk which caused increased wastage of milk. Most importantly, however, Milk dairy is an economically and financially viable project in the Pakistani market. According to Remy Montavon, in his book "Nestle in Pakistan", Pakistanis have been big milk drinkers with a per capita milk consumption of 200 kg per capita in 2004. Therefore, we believe that setting up a milk-pasteurization unit would be a viable and profitable option, as the consumption of milk is enormous in the Pakistani market, and all the customers in the milk market want to consume high quality and hygienic milk at reasonable prices. The project would be a small scale milk pasteurization unit with facilities for plastic pouch packaging. Our intended dairy unit would constitute a 3000 litres milk intake capacity per hour which is a distinctly economical size for setting up a milk processing business. However, due to the time required for installation and running of the unit, it is expected that the plant would achieve 100 percent efficiency in the 2nd / 3rd year of operations. Horizontal growth in the market is initially considered the next step in the project, as the demand for milk is expected to rise with time; increasing capacity or increased number of pasteurization units are considered the immediate growth steps. However, horizontal or vertical integration are not ruled out, and all favorable partnership and/or merger deals shall be given due consideration. INDUSRTY ANALYSIS The demand for processed milk industry depends on these factors: GDP growth and increase in per capita income. Population. Degree of Rural-Urban Migration. Degree of dissatisfaction with local milk men or gowallas During the last three years, Pakistan's economy has witnessed an average real GDP growth rate of almost 7.5 percent (See Exhibit 1 for real GDP growth rate). This had made Pakistan one of the fastest growing economies in the Asian region. This massive growth is backed by massive progress in the industrial and agricultural sector. Moreover, there has been this emergence of a new investment cycle with investment rate reaching new height at 20.0 percent of GDP. Thus time is ripe for investing in the country. GDP shows the total purchasing power of consumers. The higher the GDP, the greater would be the demand of goods and services; thus a greater demand for pasteurized milk that our company would be producing. Furthermore, the per capita income of the people in Pakistan has undergone a 13.6 percent increase (See Exhibit 2). This has led to an increase in the spending of the people. A factor which may hamper consumer spending in light of increasing GDP Growth is inflation. Inflation pres ented an increasing trend during the fiscal year 2004-05 and reached a high of 11.1 percent April 2005. However the state