Partner Sought for a Dairy Farming Business in Gujarat, India

Opportunity Snapshot

  • Country: India India
  • Industry: Agriculture
  • Stage: Seed
  • Investment size: $55,000 / min. $45,000
  • ROI: 13% in 10 years
  • Type of investment: Debt, Equity

Investment Opportunity

We are planning to start a Dairy Farming business in Gujarat, India. We aim to get 30-40% return on sales. We are looking for funding and offering two options to the Investor: to provide us with a loan and get the amount paid back at an interest in 10 years, or to join as a Partner.

Dairy Farming is the fastest Growing Business in the world and is on high demand in Inia. The cattle to be bred in our farm are Cows and Buffalos. We will sell milk and cattle by-products.

Rationale for the deal

The dairy industry is of crucial importance to India. The country is the world’s largest milk producer, accounting for more than 13% of world’s total milk production. It is also the world’s largest consumer of dairy products, consuming almost 100% of its own milk production. Dairy products are a major source of cheap and nutritious food to millions of people in India and the only acceptable source of animal protein for large vegetarian segment of Indian population, particularly among the landless, small and marginal farmers and women.

Dairying has been considered as one of the activities aimed at alleviating the poverty and unemployment especially in the rural areas in the rain-fed and drought-prone regions. In India, about three-fourth of the population live in rural areas and about 38% of them are poor. In 1986-87, about 73% of the rural households own livestock. Small and marginal farmers account for three-quarters of these households owning livestock, raising 56% of the bovine and 66% of the sheep population. According to the National Sample Survey of 1993-94, livestock sector produces regular employment to about 9.8 million persons in principal status and 8.6 million in subsidiary status, which constitute about 5% of the total work force. The progress in this sector will result in a more balanced development of the rural economy.

There is no doubt that there is tremendous scope for the growth of the dairy industry in the new millennium. The product mix of world dairy trade is likely to shift further towards cheese. This has been developed in the world markets. As the market opens up, consumption trends associated with these markets will have increasing influence on the world trade. Whole milk powder is likely to continue to be a substantial beneficiary and to grow substantially in the Middle Eastern countries.
As standards of living in the importing country rises, exporting countries will increasingly concentrate on whole milk powder and cheese with the assistance of butter and skimmed milk powder. There is vast potential for the export of dairy products, the cost of milk production in India being the lowest. The major factor influencing production of bye products is the newer uses that may be developed through R&D support. Milk proteins are being utilized increasingly replacing animal and vegetable proteins in special bakery products and instant foods. Through the application of membrane proven process, milk proteins isolates are being produced. These are being utilized for ice milk mixes and other such applications.

Use of financing

Finance will be distributed on:
• Purchase of Cattle
• Cattle's Insurance + Medical expenses
• Dairy Equipment
• Fodder

Opportunity for the investor

The deal will be very lucrative for the Investor. Here are the 2 options for investor's participation in more detail:
(1) If X is Investing Rs 25 Lac in our business we will give Rs 55 Lac after 10 years
(2) If X is Investing Rs 25 Lac in our Business we will give return in following installment schedule:

Invest Interest
----X----------%---------Y-------Z=10%of X------Y+Z----
2500000 13 325000 250000 575000
2250000 13 292500 250000 542500
2000000 13 260000 250000 510000
1750000 13 227500 250000 477500
1500000 13 195000 250000 445000
1250000 13 162500 250000 412500
1000000 13 130000 250000 380000
750000 13 97500 250000 347500
500000 13 65000 250000 315000
250000 13 32500 250000 282500

Year 1:
2500000 x 13% =325000 = Y
2500000 x 10% =250000 = Z
So 1st Year Return = 325000 + 250000 = 575000

Year 2:
225000 x 13% = 292500 = Y
225000 x 10% = 225000 = Z
So 2nd Year Return = 292500 + 250000 = 542500

The above rate of interest is preferable but not final.

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