1.

0 EXECUTIVE SUMMARY
1.1 BUSINESS DESCRIPTION
The proposed name is BARAKA DAIRY FARMING. It is a business venture aimed at keeping
of rearing of dairy cattle using the modern technology in large scale with the aim of selling milk
to the people living around the area and also to the dairy companies especially to the cooling
plants located around the area to avoid transportation cost and wastage of milk since milk are the
perishable products. Baraka dairy farming will be situated at the Kabianga road. Due to the
pressure of readily available resources, ready market due to the presence of various dairy
companies, cooling plans and high population around the area.
1.2 MARKETING PLAN
Baraka dairy farming has two types of potential customers’ individual customers and commercial
customers. The business has got few competitors that are mazuri dairy, elite dairy farming.
Dairy wishes to offer quality products and services to overcome the competition from the already
existing business. However to avoid competition the management may decide to differentiate its
products from those of other dairy farming by way of advertising, branding and presenting
pricing. The management wishes to use two types of pricing for a start to come up with a basis of
marketing penetration these are.
i) Penetration pricing
The Baraka intend to adopt the price in the initial stage till the product will be finally acceptable
by customers
1.0 EXECUTIVE SUMMARY
1.1 BUSINESS DESCRIPTION
The proposed name is BARAKA DAIRY FARMING. It is a business venture aimed at keeping
of rearing of dairy cattle using the modern technology in large scale with the aim of selling milk
to the people living around the area and also to the dairy companies especially to the cooling
plants located around the area to avoid transportation cost and wastage of milk since milk are the
perishable products. Baraka dairy farming will be situated at the Kabianga road. Due to the
pressure of readily available resources, ready market due to the presence of various dairy
companies, cooling plans and high population around the area.
1.2 MARKETING PLAN
Baraka dairy farming has two types of potential customers’ individual customers and commercial
customers. The business has got few competitors that are mazuri dairy, elite dairy farming.
Dairy wishes to offer quality products and services to overcome the competition from the already
existing business. However to avoid competition the management may decide to differentiate its
products from those of other dairy farming by way of advertising, branding and presenting
pricing. The management wishes to use two types of pricing for a start to come up with a basis of
marketing penetration these are.
i) Penetration pricing
The Baraka intend to adopt the price in the initial stage till the product will be finally acceptable
by customers
PROPOSAL DOCUMENT FOR DAIRY FARMING PROJECT

by Capt. Githinji
Introduction

The Kenya dairy value chain of both formal and informal market is fragmented with a large number
of players at each step, and a low level of vertical integration. In the formal value chain, the milk is
usually transported to chilling and bulking centers, then to a processing facility. Once milk is
processed, agents or distributors deliver it to a point of sale.

Informal market connects producers to consumers normally via a number of brokers. Despite strong
competition for milk between formal and informal market, the farm gate price is on average the
same. The preference for selling into informal market is driven by preference for cash whereas in
formal sector processors usually pay at the end of the month. Considering that milk is often the only
recurrent revenue, the need for cash to cover dairy expenses creates a strong preference for
producers to sell to informal traders. In addition, there is no quality control in the informal market
allowing producers to sell poor quality milk that would be rejected by processors.

Normally, milk needs to be cooled within 2-4 hours from milking. Milk marketed through the
informal market is not cooled at all. Since milk collection is conducted only in the morning,
evening milk in particular is of poor quality when received by processors and hawkers the
following morning.

A poor cold chain also lowers the quality of processed milk and prevents processors from producing
long life products that need the high-quality input. Pricing of milk takes various routes from
producers to the end consumer. The average current farm gate price is 60 ksh per liter. The price to
end-consumer, on the other hand, is on average lower in informal market when compared to the
prices in the formal market. The price of raw milk fluctuates with the season, while the price of
processed milk is relatively stable throughout the year.

There are important drivers of consumer behavior that have more to do with perception and
consumer awareness and less with price, and that will continue to make raw milk more attractive to
a large number of consumers. Most milk is consumed immediately, usually mixed with tea, so most
Kenyans buy milk in small quantities when needed. Most do not have a need for storing milk, and
most do not have refrigerators. A number of consumer studies show taste preference for raw milk,
perceived as creamier and richer. Consumers believe that boiling makes raw milk safe for
consumption, reducing the willingness to pay a premium for pasteurized milk.
Socio-Economic benefit
i. The project will create additional means of employment for skilled, semi-skilled and
casual laborers in the area.
ii. Aside from the increase in income of the partners, the project would activate the
economy especially in the continuous production of milk and milk products. It will also
encourage entrepreneurs in the country to engage in milk processing and milk production.
iii. The expected increase income of the permanent and temporary employees’ beneficiaries
would eventually contribute to good health and nutrition in the family and allow them to
access better education for their children, improve sanitation and provide for the
necessities in the household.
Short term goals
These are goals that should be achieved within a period of not more than one year.
They include
I. Ensures that the employees quiz specialization through training and fieldwork.
II. The enterprise will ensure tools and equipment required are purchased
III. The enterprise will target a profit of 25% in the first months.
Long terms goals
These are goals that can be achieved in a period of more than one year
I. The dairy will increase the number of employees in two years after the business has
published well
II. It will give allowances to the employees
III. The dairy will open new branches after years
Implementation
Phases of implementation

Phase 1
 Establish feedlots,
 Establish and select specific high-quality cattle breeds or breed suitable for high quality
milk production
Phase 2
 The intention is to buy animals as young stock and mature stock
 Financing of the proposed project would be done through donor funds.

The Concept
 The proposed project will be set up in Laikipia Airbase
 The overall goal of the project is to produce milk and milk processing products for local
markets and beyond and to maximize profit so as to sustain the project while still
contributing towards the economic development of KDF.
 This project aims at having a total of 200 dairy cows animals at any given point.
 Total production area: 20,000 Square meters
 Types of investment: Diary Farming and milk processing
 No of dairy cows: 150
 Expected Beneficiaries:
 Permanent employee: 50
 Temporary employee: 30
 The plan is to establish a dairy firm in two phases.
 The first phase entails buying specific dairy cow breed and supporting with young breeds
 There exists a large market gap for dairy and dairy products in Kenya and beyond
 This project will create many employment opportunities in Kenya from farm workers to
high level managers and professionals.
 The project would also greatly contribute to improvement of beef production in Kenya
and beyond
In line with this the following are specific objectives of this project.
 To introduce modern dairying and milk processing technologies to the surrounding
locality.
 To create job opportunity for skilled and unskilled local citizens.
 To create market linkages with small holder farmers in the town and its surroundings and
etc.
 ITEM NUMBER OF ACRES
Pen area, alleys and feed roads 60 Acres
Waste disposal 30 Acres
Feed production 40 Acres
Offices and other farm infrastructure 20 Acres
The total and requirement will be as tabulated below

Project Costs Estimate

The first phase of the project comprising feedlots establishment, feed production establishment,
Class A slaughterhouse establishment and development of the product market is grossly
estimated to cost about Kshs 235 Million considering a slaughterhouse with a daily throughput
of 50 cattle. The table below shows the estimated costs for the various categories of activities.
The estimate shall be validated with a full feasibility study to be carried out during project design
and development. We estimate the full establishment would take between 5 and 7 years based on
continual and rapid scaling up.
 Operational requirements

Water supply
Water is a key input in dairy production.
Milk is, on average, constituted of 88% water, with the exact content being a function of a
combination of seasonal, genetic and dietary factors. Lactating dairy cows require 4.5–5 pounds
of water per pound of milk produced. This equates to roughly one-half gallon of water for every
pound of milk secreted. The ranch will need a dedicated water supply.

Feed
A dairy cow should be given 15-20 kg of chopped forage per day, preferably in two splits i.e.
One in the morning and the other in the evening.
The ranch will have its own feed production capacity because feeds brought in commercially
would be too expensive for the envisaged scale of beef production.
The bulk of the feeds will entail pastures grown on the farm in order to cut down on costs of
acquiring commercial feeds, moreover the farm shall have a high-capacity feed farm to produce
sufficient feeds for the firm

Disease control
Among the stringent measures to control and prevent diseases will include: good hygiene, clean
water and feed supplies, vaccination schedule for each herd or flock, closely and frequently
observing animals for signs of disease, and if a disease problem develops, obtain an early,
reliable diagnosis and apply the best treatment, control, and eradication measures for that
specific disease.
The farm will be managed by a veterinary officer supervised by the Directorate of Veterinary
Services.

Electricity
To ensure seamless operations and especially for the proper preservation of milk there is need for
a stable and constant power supply
The firm will use the electricity provided by the Kenya Power and Lighting Company and also
have provision for back-up generators.

Security
High level of security will be ensured onsite and offsite by the Kenya Defense Forces’ personnel,
use of electronic equipment and thorough regular training of the enterprise’s employees and
suppliers. Animals will be well identified, traced and tracked. The use of military working dogs
on the farm will also be considered.

Transport and Machinery: Various equipment will be purchased and installed for use both
onsite and offsite. Full details will be provided in the project design.

Technical services: The project will require the services of technical specialists as consultants
including animal health and production, project designers, surveyors, architects, engineers
(electrical, mechanical, civil, mechatronics, information/communication/ technology), quantity
surveyors, human resource, business management and economists among others. The University
of Nairobi college of Agriculture and Veterinary Sciences shall be the overall consulting partner.

Human resources: The proposed enterprise will require the whole spectrum of human resources
needed in the diversity of practice disciplines across multiple job sectors. These will include
farm workers, low level to high level skilled workers and managers and top professional staff. A
good human resources planning strategy will be developed and implemented to ensure proper
staffing and continuity planning.

Supply chain management: The enterprise will develop an out-grower system for suppliers of
beef cattle and a strong supplies department for procurement of other inputs.

Product distribution: There will be a strong sales and marketing unit to handle both local and
export distribution.
PROJECT DESCRIPTION
The proposed name is KDF dairy farming
It is a business venture aimed at keeping or rearing of dairy cattle using the modern technology
in large scale with the aim of selling milk to the KDF fraternity and beyond and also to the dairy
companies especially to the cooling plants located around the area.
The farm will be located at Laikipia Airbase, Nanyuki due to readily available resources, a high
population that offers ready market
MARKETING PLAN
Dairy farming has two types of potential customers; individual customers and commercial
customers.
Dairy wishes to offer quality products and services to overcome the gap in demand and supply in
KDF and beyond. Moreover, to avoid competition the management may decide to differentiate
its products from those of other dairy farming by way of advertising, branding and presenting
pricing.
The initial market for the enterprise products shall be the local market in Kenya,
especially the Kenya Defense Forces and large cities. The selling proposition will
be reliably available high quality, traceable beef. Export distribution will follow to
other East African nations, the DRC, GCC and South East Asia. The business will
seek to be a leading global supplier of high quality beef.
2.6 JUSTIFICATION OF BUSINESS OPPORTUNITY
KDF is rapidly growing
There is a large extensive ready market for the business.
In addition, the availability of farm imputes at large in our homes and town is not a menace as
the produce is locally and readily available.
Tomato enterprise is located along the busy kericho route hence encouraged high demand also
due to well-developed infrastructure as encouraged accessibility in terms of transportation of raw
materials and delivery of products to various potential buyers unlike the other enterprises that has
been existing liked q greenhouse enterprises which is in the interior far and of the town is in the
interior far an do the town which is not difficult to access.
1.0 Statement of the Problem

Lack of skills in dairy farming has resulted in heavy losses by the dairy farmers as noted by low
returns from the dairy enterprise. Farmers have not been able to break even since they don’t
undertake dairy farming as a business. Low milk production volumes have resulted in low returns
from dairy farmers.

Fragmented dairy value chain has resulted in inconsistency price fluctuations due to many players
in the chain. As a result, the society is not able to rip maximum returns from the dairy farming
enterprise. Value addition, acquisition of dairy infrastructure and marketing will ensure no milk
wastage since society will be able to produce other by products (such as yoghurt and cheese) which
are long lasting.

Farmers lack skills of integrating dairy farming and Coffee farming which complement each other.
Manure from the cows can be used to enrich soil fertility and Biogas production as source of
energy. Majority of the farmers rely on firewood as a source of energy through cutting down trees
which has long term negative impact on climate change. Biogas technology from dairy cows would
ensure farmers have clean energy for consumption which is environmentally friendly.

Dairy farming would ensure food security to the farmers through milk production and intake and
increased incomes to meet the current food demands.
Future prospects

The project business case:

The profit margin of beef production under feedlots without a slaughterhouse is 15 to 30% based
on the efficiency of production and the percentage of grass feeding involved in the production.
Slaughtering and processing are set aside as stand-alone business units of the enterprise and their
profits are calculated separately. The profit margin will be determined at the feasibility study and
project design/development stage. However, horizontally and vertically integrated meat
enterprises have proven to be profitable in Australia, the global leader in meet exports.

The case of Ethiopia in export beef production is a clear indicator of the demand for high quality
beef. In December 2022, Ethiopia had already earned US$ 41 million from beef exporting 5900
metric tons to the United Arab Emirates and Saudi Arabia in the preceding 5 months. The
demand for meat products will only keep rising due to population growth, increased population
of consumers with purchasing power, reduced land for agriculture and the impact of climate
change.

The full project cost will be rationalized once the consultants have a project design meeting with
the project proponent and fully agree on the scale and order of project establishment.

Project proposal prepared for Kenya defence forces

By Capt. Githinji