Business Proposal

Himalaya Krishi Tatha Pasupalan Farm

Integrated Dairy, Feed Plant, Dairy Processing, and Vegetable Farming Project

Executive Summary

Himalaya Krishi Tatha Pasupalan Farm is an integrated agriculture and livestock enterprise located at Manahari-5, Dillipur, Makawanpur, Nepal. The project is designed to operate as a modern, commercially scalable farm combining dairy buffalo and cattle farming, dairy processing, feed production, vegetable cultivation, and organic manure utilization.

The proposed project includes dairy buffaloes and cattle, a dairy processing plant with a capacity of 2,000 liters per hour, a feed plant with a capacity of 1,000 kilograms per hour, and vegetable farming across 25 ropani of land. The project aims to create a sustainable agribusiness model by integrating production, processing, value addition, and market supply under one farm ecosystem.

The total estimated project cost is NPR 86,344,902, consisting of NPR 78,440,200 in fixed capital and NPR 7,904,702 in working capital. The financing structure includes 65% bank finance and 35% equity contribution. At full capacity, the project is expected to generate annual sales revenue of NPR 190,920,342 with strong profitability, a projected IRR of approximately 27%, and a simple payback period of around 40 months.

Business Information

Business Name: Himalaya Krishi Tatha Pasupalan Farm
Proprietor: Kedar Prasad Adhikari
Project Coordinator: Abhisek Adhikari, Farm Manager
Location: Manahari-5, Dillipur, Makawanpur
Project Site: Manahari-5, Dillipur, Makawanpur
Business Type: Integrated Dairy, Feed Plant, Dairy Processing, and Vegetable Farming
Prepared Date: 2078 Shrawan 20

Project Concept

The project is built around a modern integrated farming model where dairy production, feed production, dairy processing, vegetable farming, and manure management work together as one value chain. This approach reduces dependency on external inputs, improves operational efficiency, and increases the revenue potential of the farm.

The farm will focus on:

Dairy buffalo and cattle farming
Milk production and collection
Dairy product processing and packaging
Feed production for internal use and external sales
Vegetable production using open field, tunnels, and polyhouse systems
Organic manure production and sales
Use of modern equipment for quality control, processing, storage, and farm monitoring

Project Capacity

At full operational capacity, the project is planned with the following major components:

Dairy buffaloes and cattle farming
Dairy processing plant with 2,000 liters per hour capacity
Daily dairy processing capacity of approximately 5,000 liters
Feed plant with 1,000 kilograms per hour capacity
Vegetable farming over 25 ropani
Forage production and livestock support over a large land area
Organic manure production from livestock waste

This integrated structure allows the farm to generate income from multiple product categories, including milk, yogurt, ghee, paneer, cream, ice cream, feed, vegetables, buffalo meat, and manure.

Investment Plan

The total project investment is estimated at NPR 86,344,902.

Fixed Capital Investment

The fixed capital investment is NPR 78,440,200 and includes:

Seed animals and livestock investment
Existing and new farm infrastructure
Buffalo and cattle sheds
Quarantine and isolation sheds
Dairy plant building
Feed plant and warehouse
Vegetable post-harvest and grading section
Polyhouse and nursery structures
Water supply infrastructure
Machinery, vehicles, and dairy processing equipment
Office furniture and pre-operating expenses

Working Capital Investment

The working capital requirement is NPR 7,904,702. This covers raw materials, inventory, work-in-process, marketable products, accounts receivable, and cash balance requirements for smooth operation.

Source of Funds

The project will be financed through a combination of owner’s equity and bank loan.

Total project cost: NPR 86,344,902
Bank finance: NPR 56,124,186
Equity finance: NPR 30,220,716

The financing structure is planned as:

Bank finance: 65%
Equity contribution: 35%

This balanced financing model allows the project to maintain reasonable debt support while ensuring strong owner participation.

Products and Revenue Streams

The farm will generate revenue from multiple products and services. Major revenue streams include:

Readymade feed sales
Milk sales
Cream production
Yogurt production
Ice cream production
Ghee production
Paneer production
Buffalo sales for meat purpose
Vegetable sales including cauliflower, tomato, cucumber, beans, bitter gourd, bottle gourd, broccoli, cabbage, chili, rayo saag, and okra
Organic manure sales

At 100% capacity, the total annual revenue is projected at NPR 190,920,342.

Operating Cost

The annual operating cost includes raw materials, livestock feed, forage production, raw milk purchase, labor, utilities, repair and maintenance, transportation, marketing, land rent, and financial costs.

At first-year capacity utilization, the annual operating cost is estimated at NPR 93,276,767. At full capacity, the operating cost is projected at NPR 152,442,947.

The project’s cost structure is directly connected to production capacity, allowing better efficiency as the project moves from 60% capacity utilization in the first year to 100% capacity utilization from the fourth year onward.

Profitability Projection

The project shows strong profit potential. In the first year, the projected sales revenue is NPR 114,552,205, with a net profit of NPR 11,530,359. At full capacity, annual sales revenue is projected at NPR 190,920,342, with net profit reaching above NPR 31 million to NPR 34 million in later years.

Projected financial performance includes:

First-year net profit: NPR 11,530,359
Annual revenue at 100% capacity: NPR 190,920,342
Gross operating profit at 100% capacity: NPR 38,477,395
Net profit margin improves from approximately 10% in the first year to around 18% in later years

This shows that the project becomes more profitable as capacity utilization increases and financial costs reduce over time.

Financial Indicators

The project demonstrates attractive financial performance based on the available projections.

Return on Investment in the first year: 13.35%
Return on Investment at 100% capacity: approximately 34.44%
Return on Equity in the first year: 38.15%
Debt Service Coverage Ratio in the first year: 1.35
Simple payback period: approximately 3.4 years, or 40 months
Internal Rate of Return: approximately 27%
Net Present Value: NPR 119,274,024
Benefit-Cost Ratio: 1.14

These indicators suggest that the project is financially viable and capable of generating sustainable returns.

Loan Repayment Plan

The proposed bank loan is divided into fixed capital loan and working capital loan. The medium-term loan is planned for repayment over five years at an interest rate of 10%. The loan repayment schedule shows that the project can service its debt through operating cash flows.

The Debt Service Coverage Ratio starts at 1.35 in the first year and improves in the following years, reaching above 2.00 from the third year onward. This indicates a strengthening repayment capacity as the business reaches higher production levels.

Market Opportunity

The demand for dairy products, processed milk products, animal feed, fresh vegetables, and organic manure remains strong in Nepal’s growing food and agriculture market. The project is positioned to serve both local and regional markets by offering fresh, value-added, and farm-based products.

The integrated model provides a competitive advantage because the farm can control multiple stages of the value chain, from livestock feed and milk production to processing and final product sales. This improves quality control, reduces external dependency, and supports long-term sustainability.

Operational Strengths

The project has several operational strengths:

Integrated dairy, feed, and vegetable farming model
Multiple revenue streams from one farm system
Use of dairy processing and packaging equipment
Capacity for value-added products such as yogurt, ghee, paneer, cream, and ice cream
Internal feed production support
Organic manure utilization
Large land requirement planned for forage and production
Use of modern tools including dairy testing equipment, chilling systems, pasteurizer, packaging machine, generator, and farm monitoring equipment

These strengths support operational efficiency, product diversification, and long-term business growth.

Sustainability and Impact

The project supports sustainable agriculture by connecting livestock farming, crop production, feed production, and organic waste utilization. Manure from livestock will be converted into organic fertilizer, supporting vegetable and forage production while creating an additional revenue stream.

The project is also expected to create employment opportunities for farm workers, technical staff, drivers, accountants, and seasonal laborers. It can contribute to local economic development by improving agricultural productivity, supporting rural employment, and increasing the supply of dairy and farm products.

Risk Considerations

The project includes sensitivity analysis for changes in variable costs and sales prices. Like any agribusiness, major risks include feed price increases, livestock disease, milk price fluctuation, market competition, production loss, climate-related challenges, and working capital pressure.

To reduce these risks, the farm should maintain proper livestock health management, insurance, feed cost control, quality testing, diversified sales channels, professional accounting, and active market development.

Conclusion

Himalaya Krishi Tatha Pasupalan Farm is a financially viable and strategically strong agribusiness project. Its integrated model combines dairy farming, dairy processing, feed production, vegetable farming, and organic manure production into one scalable farm system.

With a total project cost of NPR 86,344,902, projected annual revenue of NPR 190,920,342 at full capacity, an IRR of approximately 27%, and a payback period of around 40 months, the project demonstrates strong commercial potential.

The proposal is suitable for bank financing because it shows diversified income sources, structured investment planning, positive cash flow projections, reasonable debt repayment capacity, and long-term sustainability. With proper implementation, professional management, and market expansion, the project can become a high-value model for modern integrated farming in Nepal.