1.

Executive Summary

Dairy Farming is one of the branches of agriculture concerned with

production and use of milk and milk products. Dairy husbandry
includes the management of dairy cows, the cultivation of crops for
feed, the production of milk and cream, and the manufacture of
butter, cheese, and ice cream.

The proposed dairy farm investment will be executed on our land in

which my mother has owned. The farm site is located in
S/N/N/P/R/S, at Halaba Zone, Kulito Town.  

The vision of the business is in relation to the agricultural

development is "being a model agricultural investment of the
region  and seeing improved economic level & well being of the
people in the surrounding  through enhanced agricultural
development". Its goal is ‘’Making an exemplary and profitable
dairy farm investment in the region’’. The project aims at
producing and selling of Dairy products mainly raw milk, butter,
cheese, and fermented products like yogurt, which are highly
demanded in the area.

The main objective of the project is to create profitable and socially

feasible dairy farm in Halaba Zone, Kulito Town.  Some of the specific
objectives of the 2022/23 production season are:-

 To produce 8,640 liters of milk, which may be processed to butter,

cheese, and yogurt or sold as raw milk accordingly.  

 To earn sales revenue of 518,400.00 ETB during the year

2022/23.

 To Supply quality dairy products for Kulito town & the

surroundings.

 To earn 416,400.00 ETB of Net-profit for 2022/23 production

season.

1
The annual production cost, which includes investment, production,
and marketing and management/running costs, of the products for
the 2022/23 production year is estimated to be ETB 342,000.00.  In
the meanwhile, the investment has projected to earn sales revenue or
production income of birr 518,400.00 and a net profit of birr
416,400.00 during the 2022/23 production year.

2.     Background Information

2.1.    The Project Area  

The project is located in S/N/N/P Regional State, Halaba Zone, Kulito

Town. The capital town of Halaba Zone is situated around 245 Km
from Addis Ababa Via Butajura-Wulbarag Road and 315km trough
Mojo-Shahemene Road; with an elevation of 1,726 metres above sea
level with an estimated total population of 270,000. The town sits on
the left bank of Bilate River with different amenities including digital
telephone access, postal, banks’, water and electrical services.

Agriculture is the main economic activity where farmers practice

various crop production and animal rearing which are going in line
with the climate. As regard to the project, enough land in which my
mother has allowed me to use it for such kind of agricultural
investment. The land is suitable for dairy farm and different
agricultural activities. The weather condition of the project site is very
good for the farm.

2.2.        Profile of the Business  

The proposed business is Dairy Farming, which is the branch of

agriculture concerned with production and use of milk and milk
products. Dairy husbandry includes the management of dairy cows,
the cultivation of crops for feed, the production of milk and cream,
and the manufacture of butter, cheese, and ice cream. On a properly
managed dairy farm, many of the nutrients taken from the soil by

2
crops may be replaced by the supply of manure provided by the dairy
herd.

The business has planned to produce milk and other products like
butter, cheese, yogurt, and others step by step. The business will
expand its production and cover the supply of the region while the
current consumers of the products are Hotels, Retailers and
Individuals of Kulito Town and the surroundings where there is a high
shortage of the products.

The farm will be organized and structured to perform better

competitive marketing activity and being profitable at maximum level
and with this, the business exerts maximum effort in every dimension
and will operate in a good manner.

3.     The Business Target

3.1.    Vision  

"Being a model agricultural investment of the region and seeing

improved economic lever & well being of the people in the surrounding
through enhanced agricultural development"

3.2.   Goal 

‘’Making an exemplary and profitable dairy farm investment in the

region’’.

3.3        Short-term Objectives  

The main objective of the project is to create profitable and socially

feasible dairy farm investment in Kulito Town. Some of the specific
objectives for the production season 2022/23 are:-

 To produce 8,640 liters of milk, which may be processed to butter,

cheese, and yogurt or sold as raw milk accordingly.  

 To earn sales revenue of 518,400.00 birr during the year 2022/23.

3
 To Supply quality dairy products for Kulito town & the
surroundings.

 To earn 416,400.00birr of Net-profit for 2022/23 production

season.

4.   Justification of the Project  

The project aims at producing and selling of dairy products mainly

raw milk, butter, cheese, and fermented products like yogurt, which
are highly demanded in the area. In addition, the project area has got
a transport accesses that connect to Kulito Town. The farm area will
be established in a place where my mother gave me for better
utilization of the land. The land is sufficient to carry out integrated
agricultural production in diverse ways. In addition to the products
mentioned, the borne calves being born by the cows gave a big
opportunity for the expansion and sustainability of the business. The
situated area as well as the nearby town i.e. Kulito Town and the
surrounding where there is a high demand of the products has
created conducive environment for marketing of the products. While
there are no competitive market as well as such kind of business in
the Zone. Likewise, the basic socio-economic services around the area
also contribute a lot for the successful achievement of the investment
in diverse ways.  

As regard to my commitment towards farm development, it is also very

encouraging. I am very accustomed of such farming activities. My
family and I are also ready to devote our time and resources (material,
financial and human) to make the farm more profitable and meet the
ultimate goal of the business. On top of this, the favorability of the
land for dairy farming and our ownership (secured/private land)  are
also core measures and justifiable points that assure profitability and
sustainability of the project. In general, it is not questionable that the
project is viable and feasible by any type of social and financial
parameters. 

4
5.     Business Management

Business management in its simple meaning is the creation, direction

and flow of orders which allows streaming procedures and establishes
clear-cut responsibility for decisions making and assignment of
duties. Therefore, to manage and control a project effectively and
efficiently, it is necessary to have a formal organizational structure
and to assign functions and responsibilities.

Regarding the proposed business, all the business management

structures will be developed in line with the expansion and dimension
of the business in the future. In the initial phase, as the project is
small and has little personnel, the project will be managed as to where
the owner makes basic decisions and sets rules in managing the
business.

As the farm is at infantile stage, there are no well-educated and

experienced personnel recruited now. Relatively, one sell person will
be recruited to sell the produces in Kulito’s shop. The others like
keeper, processor, supplier etc… will be covered by our families. In
addition, I will act as managing the business and give technical
supports in all dimensions. The business will also use laborers as
needed. In the long run the business will create a job opportunity for
other people too.

6.      Production Plan of 2022/23

The business has planned to produce milk and other products like
butter, cheese, yogurt for the time being and others step by step. The
production processes of the farm are land preparation, Construction
of mini processing house in the farm cite Purchase of milk cows and
processing materials, feeding and milking, and marketing.

5
The milk cows to be purchased are hybrid cows, which are very
productive i.e. they produce 24 liters/day; this indicates that one cow
produces up to 2,160 liters of milk a year. Generally, the total amount
of milk to be produced and processed is 8,640 liters.

7.     Financial Plan of 2022/23

7.1. Project Costs

Unit Cost Total cost

S/N Activity Unit Qty Birr Ct Birr Ct Re
1 Investment costs
Construction of mini
1.1 processing house at the site No 1 40,000 00 40,000 00
1.2 Purchase of milk cows No 4 50,000 00 200,000 00
Sub-total 240,000 00
2 Production costs
2.1 Forage (200 Birr/day) Month 12 6,000 00 72,000 00
2.2 Miscellaneous for
Sum xx 5,000 00 5,000 00
production
Sub-total 77,000 00
Marketing & management
3 costs
Transport and promotional
Sum xx 7,000 00 7,000 00
3.1 activities
3.2 Rent of selling Shop in
Month 12 1,000 00    12,000 00
Kulito
Utility Costs (water,electric,
Month 12 500 00 6,000 00
3.3 Telephone etc..1,250/month
Sub-total 25,000 00
Total Cost 342,000 00
The required costs of the whole production and marketing process are
categorizing in to three major parts. These are:- Investment,
production and marketing and management activities. 

6
 7.2. Revenue  (Production Income)

The milk cows to be purchased are hybrid cows, which are very
productive i.e. they produce 24 liters/day; this indicates that one cow
produces up to 2,160 liters of milk a year. Generally, the total amount
of milk to be produced and processed is 8,640 liters.

S/N Description Sale/day Sale/Month Sale/Year Remark

Production Income
1
From 4 Milking Cows 1,440 ETB 43,200 ETB 518,400 ETB
Total Sales 518,400 ETB

7.3.   Profit /Loss Projection

S/N Description Total Income Total Expense Net/Loss Remark

1 Income Fixed
518,400
Assets
2 Expense 102,000 won’t be
Net Income 416,400 included

8.     Fund Request

S/N Description Omo Micro-Finance Own Contribution

1 Fund/Loan 342,000 Land for the project

Total Budget 342,000

7
NB:- The project will be able to be minimized and expanded…