Cattle Feed Manufacturing and Processing Unit
Cattle Feed Manufacturing and Processing Unit
Cattle Feed Manufacturing and Processing Unit
Project Concept 3
Market Potential 7
Growth Drivers 8
Gujarat – Competitive Advantage 9
Project Information 10
- Location/ Size
- Infrastructure Availability/ Connectivity
- Machinery suppliers/ Manpower
- Plant & Machinery/ Raw Materials
- Leading Players/ Key Considerations
- Potential Collaboration Opportunities
Project Financials 16
Approvals & Incentives 18
Key Department Contacts 20
Page 2
Project Concept
The concept
The project aims to establish a manufacturing and processing unit for Cattle Feed in Gujarat. Given
abundance in terms of dairy processing unit in Gujarat there is high demand for the quality product.
Livestock
. and poultry sector in India
Livestock production and agriculture are intrinsically linked, each being dependent on the other, and
crucial for overall food security. According to estimates of the Central Statistics Office (CSO), the
gross value added from livestock sector at current prices was about INR4 trillion during 2013-14
which is about 21.58% of the gross value added from total agriculture, forestry and fishing sector at
current prices and 22.75% at constant prices (2011-12). The livestock sector is contributing about
3.88% of total gross value added of the country at current prices and about 3.92% at constant prices
(2011-12).
India has vast resource of livestock and poultry, which pay a vital role in improving the socio-
economic conditions of rural masses. There are about 300.00 million bovines, 65.07 million sheep,
135.2 million goats and about 10.3 million pigs as per 19th Livestock Census in the country. The
species wise population of animals in Livestock and Poultry population during the 2012 Censuses is
given in the table below.
Livestock and Poultry Population
SN Species Livestock Census Livestock Census Growth Rate (%)
2003 (million) 2012 (million) 2003-12
1 Cattle 79.75 99.83 25.17%
2 Buffalo 87.73 103.85 14.14%
3 Yaks 0.1 0.1 0.0%
4 Mithuns 0.3 0.3 0.0%
5 Total Bovines 283.4 300 5.9%
6 Sheep 61.5 65.0 5.8%
7 Goat 124.4 135.2 8.7%
8 Pigs 13.5 10.3 -23.7%
9 Other animals 2.2 1.48 -32.7%
10 Total Livestock 485 512.0 5.6%
11 Poultry 489 729.2 49.1%
Page 3 *principal status plus subsidiaries status irrespective their principal activity status
Project Concept
$
countries
400 billion ► Employs over 25%
of a million
professionals
2014 2015
Source: Alltech 2015 Global Feed Survey
► The UN Food and Agricultural Organisation (FAO) estimates that the world will have to produce
60% more food by 2050 and that animal protein production will grow even more – meats will
double, as well as dairy, and fish production will almost triple by 2050.
► Market size: According to the report — The Indian Feed Industry – Revitalising Nutritional
Security Knowledge — publishes by Yes Bank in 2015, India’s animal feed industry, which
includes poultry, aqua and meat, is expected to double to reach US$30 billion in the next five
years from the current US$15 billion in order to meet the growing feed and fodder requirement
of the country.
► Current consumption: As per the report, in India, cattle currently accounts for 7.5 million
tonnes of the feed, aqua industry consumes 1 MT, while the poultry industry consumes around
13 MT, with soy meal and corn being the prime consumables.
Page 4
Market Potential
Type Requirement
Market Potential:
► India has witnessed a 10% increase in feed production to 29.4 million tons over 2013 tonnage,
essentially due to good weather conditions and improving farming methods and technology.
► However, the current feed requirement in the country is huge at nearly 80 MT per year, so
there’s a severe shortage. The demand for animal protein and dairy products in expected to
increase the compound feed consumption to 28 million tonnes by FY18.
3 Concentrate 53 23 30 (57%)
Source: Annual Report - Department of Animal Husbandry, Dairying & Fisheries (14-15)
Page 5
Market Potential
Scope for feed industry in India primarily stems for its shortage and
high demand
Domestic demand
for compound feed Shortage due to
is more than 70 MT overgrazing in the
and is growing Severe limited area under
nearly at 25% fodder crops, lack
CAGR annually,
shortage
of quality seeds of
which is
and high improved varieties
substantially demand for and hybrids
higher than the concentrate
supply feed
Page 6
Growth drivers
► Poultry feed accounts for about 60% of the total feed market
High demand in India with an estimated demand of 21-23 million tonnes
and is forecasted to grow at a CAGR of around 15% during
in poultry feed 2015–2020.
sector ► Entry of more organized players, higher integration and
stable feed prices are driving the demand for poultry feed.
Page 7
Gujarat - Competitive
Advantage
► Strong push by the Government of Gujarat (GoG) in the agri and animal
husbandry sector and related services
► Gujarat has a remarkable position in the country as far as livestock wealth and development
concerned. Central programs like National Dairy Plan, National Dairy Mission, ASCAD, FMD-
CP, Fodder Development Programs, NADRES are also contributing significantly in the Animal
Husbandry sector of State.
► Gujarat’s leading organization in dairy industry, Gujarat Co-operative Milk Marketing Federation
Ltd. (GCMMF) is the largest producer of cattle feed in India with 12 cattle feed plants and a
combined production capacity of more than 7000 MT per day.
Project at a Glance
Project Name Cattle feed manufacturing unit
Focus Sector Feed, fodder, agriculture & allied activities, food processing
Mehsana
282,945 cows
Ahmedabad
538,269 buffaloes
102,697 goats
► Located in North Gujarat, about 75 km from Ahmedabad, and is divided into nine talukas.
► Major crops of Mehsana are wheat, cotton, castor seeds, brinjal, potatoes, tomatoes, okra,
mango, citrus, sapota, fennel seed, psyllium and cumin.
► Asia’s second largest dairy ‘Dudhsagar Milk Cooperative Dairy’ and largest market yard
‘Unjha’ is located in Mehsana.
► There is a huge potential of new MSMEs in
► Agro based industries: cotton, mini oil mill, cotton ginning & pressing, cattle feed and
poultry farm, groundnut farming & processing, cotton seed & absorbent cotton and
surgical cotton bandage.
► Livestock based industries: leather footwear and leather good, bone meal, cattle, poultry,
garments and sports good, leather tanning and dairy.
Sources: Development Commissioner Ministry of Micro, Small & Medium Enterprises; Global Gujarat
Page 9
Project Information
Infrastructure availability
Rail Road
• The total length of railway lines in the • Out of the total road length of 79,755
State as on 31st March 2014 was kilometres., the length of surfaced roads
5,258.49 route kilometres (~9% of India) was 77,725 kilometres. (97.45%) in 2015
• India’s first bullet train to run between • National Highways – 3,884 kilometre
Mumbai and Ahmedabad by 2023 • State Highways – 18,017 kilometre
• IRI (International Roughness Index) for
Gujarat is less than 4 meters/kilometre,
Air Port
Utilities
Water Power
• An extensive water grid network of 75,000 • 2nd largest state in terms of installed
kilometre for irrigation and drinking power capacity after Maharashtra
• Currently, the Gujarat Water Supply and • Power generation capacity : 29,431.13
Sewerage Board (GWSSB) is providing MW
water to 490 villages in 22 districts • Per capita power consumption was 1,839
units in 2014-15 against the national
average of 1010 units
Gujarat has the longest surfaced road network in the country and is a power surplus state
with the longest coastline and the largest number of air strips in the country
Page 10
Page 11
Feed Ingredients Precision Weighing
Feed-mix Packing
Labelling
Project Information
Manpower requirement
Responsibility Number
Manager 1
Accounts Officer 1
Maintenance Engineer 1
Sales Officer 1
Chemists 2
Floor supervisors 3
Operators 3
Stores Supervisor 1
Assistant Accountants 1
Electrical Supervisor 1
Mechanical Supervisor 1
Skilled workers 21
Total 37
Incentives and Perks (30% of the salary) -
Total monthly payments -
Sources: NABARD
Page 12
Project Information
1 Cereals 42.67 119.26 2795 44.08 131.89 2992 45.58 145.70 3197
2 Pulses 9.84 9.90 1006 10.12 10.74 1061 10.40 11.63 1118
Total food
52.51 129.16 2460 54.20 142.63 2632 55.98 157.33 2810
Grains
3 Oilseed 33.88 63.69 1880 34.71 67.75 1952 35.57 72.21 2030
Tri-annum Average
2013-14
(2010-11 to 2012-13)
Crop
Area Prod. Yield Area Prod. Yield
(000 ha) (000 MT) (kg/ha) (000 ha) (000 MT) (kg/ha)
Rice 782 1666 2131 787 1616 2054
Wheat 1321 4010 3035 1500 4800 3200
Bajara 779 1386 1778 693 1295 1868
Jowar 110 129 1172 128 165 1293
Maize 513 852 1660 461 692 1502
Ragi 17 14 821 14 14 984
Mung 210 100 477 183 103 564
Math 27 13 491 30 18 595
Udad 102 67 660 91 60 655
Tur 250 267 1068 210 239 1137
Gram 184 202 1099 247 284 1150
Page 13
Project Information
Sources: NABARD
Page 14
Project Information
Leading players
Avanti Feeds Ltd. Gujarat Ambuja Exports Ltd Godrej Agrovet Ltd.
Kerala Solvent Extractions SKM Animal Feeds & Foods Gujarat Co-operative Milk
Ltd. (India) Ltd Marketing Federation Ltd
Uninterrupt Good
Low energy quality raw
ed power
costs materials
supply
Key
considerations
Higher Reduction
degree of Price in
technical sensitivity operating
skill wastages
Page 15
Project Financials
S. Total cost
Cost parameters Quantity Unit Unit cost
No (INR Crore)
1 Land 7 acres 50,000/acre 0.035
Land and site
2
development
a. Land levelling 70,000 cuft 2/cuft 0.014
b. Barbed wire fencing 850 r.mts. 1000/r.mts. 0.0128
c. Internal roads 300,000 lumpsum - 0.030
d. Gate 50 r.mts. 1000 r.mts. 0.005
e. Security cabin 30 Sq.mts. 3,000/sq.mts. 0.009
Sub total 0.106
3 Civil structures 1.343
4 Plant and Machinery 0.454
5 Misc. fixed assets 0.225
6 Vehicles 0.080
7 Electricals (including generator, transformer, and external lighting etc.) 0.200
8 Water supply system 0.025
Total 2.539
9 Preliminary and pre-operative expenses
Company formation
a. 2.5% of item no.1-8 0.152
expenses
b. Capitalisation of interest 0
Margin money on 25 % of total working capital
10 0
working capital requirement
TOTAL PROJECT COST 2.621
MARGIN MONEY 25 % of the project cost 0.400
BANK LOAN 2.221
Page 16
Project Financials
Year
Cost (INR/t
Particulars Period 1* 2 3 4
on)
Capacity Utilisation --- --- 70 80 90 100
Raw materials
consumption including
70.7 80.8 90.9 101
wastage (tonnes per
day)
Margin money on
55.77 63.74 71.7 79.67
working capital
Incremental margin on
7.97 7.96 7.97
working capital
* During first year the plant will be operated for 6 months only
Page 17
Approvals &
Incentives
Approvals
► For approvals, the project report should be submitted to respective District Industries Centres
(DICs). DIC will forward the proposal to Industries Commissioner who will submit the report to
State Level Approver Committee (SLAC) for final approval.
► Additionally, The proposed unit will have to register itself with Secretariat of Industrial Approvals
(SIA), Ministry of Industries and Government of India, by filing Industrial Entrepreneur’s
Memorandum (IEM), as it will have plant and machinery investment of more than INR 10 million.
► Since it will be an export oriented unit, the peanut butter needs to be approved by food
authorities of exporting countries, apart from registration with Indian and state food
administration.
► Bureau of Indian Standards has laid the quality norms in their standards and it is obligatory to
meet provisions under the PFA act for all ingredients and quality aspects for marketing the
product in the Indian market.
Gujarat government announced its Agri Business Policy – 2016 with emphasis on promoting
agro and food processing industry by developing the entire value chain of exporting locally grown
farm produces.
► Capital investment subsidy at 25% of eligible project cost subject to maximum INR50 million for
cold chain, food irradiation processing plants and packaging houses
► Back ended interest subsidy at 7.5% on term loan with maximum amount of INR40 million for a
period of 5 years for setting up infrastructure project in Agro & Food Processing sector (including
packaging houses)
PROPOSED: The Government of Gujarat is proposing to establish Agri Export Zones (AEZ) for
Groundnut, and few other agricultural products. The main objective of AEZ is to provide higher
returns to the farmers by enhancing their accessibility to export and extending their capacity to
produce export specific quality products.
Page 18
Approvals &
Incentives
Incentives from Government of India
The National Livestock Mission was launched in FY15
with an approved outlay of INR28 billion during the 12th Five Year Plan.
Under the National Livestock Mission there are Eight Regional Fodder Stations
located in different agro-climatic zones of the country, including one in Gujarat. These stations
have produced 315.28 tonnes of fodder seeds, conducted 9,660 demonstrations, and organized
149 training programmes and 139 farmers fairs/field days during FY14.
The GoI is in the process of formulating a National Policy on Feed and Fodder to increase feed
and fodder production in various parts the country by providing financial assistance to the States
and UTs
A special allocation of INR75 crore has been approved for providing free-of-cost seeds and
fertiliser kits to the farmers with 2 acres of land.
Page 19
Department of Animal Husbandry, Dairying and Fisheries
http://dahd.nic.in/
Gujarat Livestock Development Board
https://gldb.gujarat.gov.in/index.htm
National Rainfed Area Authority (NRAA)
http://nraa.gov.in/index.php
Agriculture and Co-operation Department
www.agri.gujarat.gov.in/index.htm
Industries Commissionerate
www.ic.gujarat.gov.in
This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope.
It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.