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Dairy Training Institute Naivasha
Dairy Training Institute Naivasha
Business Plan
December 2013
ACKNOWLEDGEMENTS The team that carried out this business planning study for the Dairy Training Institute in Naivasha (DTI), comprising SNV, The Friesian, PTC+ and DTI staff, would like to express its appreciation for all the inputs and support it received. In particular the team would like to thank the staff of DTI and DTI’s steering committee, who have been very supportive during the entire study, staff of the Ministry of Agriculture, Livestock and Fisheries, the Rift Valley Institute of Technology, Kenya Dairy Processors’ Association, Egerton University, Happy Cow, Brookside Dairy Ltd, New Kenya Cooperative Creameries, Githunguri Dairy, Eldoret Dairy Farmers’ Association, and all other institutes, farms, organizations and projects visited. The team is also grateful and appreciates the inputs and advice of Mr Hezekiah Muriuki who took part in this mission on behalf of the Kenya Dairy Processors Association. Last but not least the team is grateful for the support it received from the staff of the Kenya Market-led Dairy Program (KMDP) that commissioned this study, and the Embassy of the Kingdom of the Netherlands, which is funding KMDP. The business planning team: Jurjen Draaijer (SNV) Dick Harting (DTC/the Friesian) Joseph Langat (SNV) Hezekiah Muriuki (KDPA) Janet Riunga (DTI) Piet Tesselaar (DTC/PTC+)
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TABLE OF CONTENTS ACKNOWLEDGEMENTS .................................................................................. II LIST OF TABLES ............................................................................................. V LIST OF FIGURES ........................................................................................... V ACRONYMS AND ABBREVIATIONS ................................................................ VI EXECUTIVE SUMMARY ............................................................................... VIII CHAPTER 1: 1.1 1.2 1.3
OBJECTIVES AND SCOPE OF THE ASSIGNMENT ..................................................... 1 BACKGROUND AND JUSTIFICATION ................................................................... 1 OUTLINE OF THE REPORT .............................................................................. 2
CHAPTER 2: 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10
INTRODUCTION ........................................................................ 1
ANALYSIS OF CURRENT DTI ..................................................... 3
INTRODUCTION ......................................................................................... 3 ORGANISATIONAL SETUP OF DTI .................................................................... 3 CURRENT TRAINING PROGRAM AND FACILITIES .................................................... 5 CURRENT LINKAGES WITH OTHER ORGANIZATIONS ................................................ 6 FINANCIAL MANAGEMENT .............................................................................. 6 POLICY REVIEW AND LEGAL STATUS OF DTI ....................................................... 8 DAIRY LABOUR-MARKET NEEDS ASSESSMENT .....................................................10 VIEWS OF DAIRY PROCESSORS ON DTI ............................................................13 SWOT ANALYSIS......................................................................................14 ALTERNATIVE SCENARIOS ...........................................................................16
CHAPTER 3:
PROPOSED BUSINESS SCENARIO ........................................... 17
3.1 INTRODUCTION ........................................................................................17 3.2 DTI’S MANDATE .......................................................................................17 3.3 LEGAL STATUS .........................................................................................18 3.4 LAND OWNERSHIP .....................................................................................20 3.5 ORGANISATIONAL STRUCTURE AND HUMAN RESOURCE MANAGEMENT .........................20 3.6 TRAINING PROGRAMME AND METHODOLOGY .......................................................24 3.6.1. Proposed Training Program ..............................................................24 3.6.2. Accreditation and Certification ..........................................................27 3.6.3. Training Methodology ......................................................................28 3.6.4. Staff Development ..........................................................................29 3.6.5. Target Groups for Training ...............................................................30 3.6.6. Training Facilities and Locations .......................................................30 3.7 PROPOSED PARTNERSHIPS ...........................................................................31 3.7.1. Partnerships in the Netherlands ........................................................31 3.7.2. Regional and National Partnerships ...................................................33 3.8 MONITORING, EVALUATION AND MARKETING OF DTI PRODUCTS...............................33 CHAPTER 4:
BUSINESS UNITS – FINANCIAL ANALYSIS ............................. 35
4.1 INTRODUCTION ........................................................................................35 4.2 DAIRY TRAINING UNIT (DTU) .......................................................................36 4.3 DAIRY FARM UNIT (DFU) ............................................................................42 4.3.1. Introduction ...................................................................................42 4.3.2. The Dairy Farm ..............................................................................42
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4.3.3. Forage Production ..........................................................................47 4.3.4. Smallholder Demonstration Farm .....................................................49 4.4 CONFERENCE HALL UNIT (CHU) ....................................................................50 4.5 LUCERNE PRODUCTION UNIT (LPU) ................................................................52 4.6 CONSOLIDATION OF FINANCIAL ANALYSIS .........................................................54 CHAPTER 5: 5.1 5.2
CONCLUSIONS AND RECOMMENDATIONS .............................. 56
CONCLUSIONS .........................................................................................56 RECOMMENDATIONS ...................................................................................57
ANNEX 1: WORK PLAN .................................................................................. 61 ANNEX 2: STAFFING / REMUNERATION ....................................................... 62 ANNEX 3: FINANCIAL PROJECTION .............................................................. 63 ANNEX 4: SITE SURVEY PLAN DTI ................................................................ 64 ANNEX 5: TOPOGRAPHICAL DIAGRAM DTI BUILDINGS ................................ 65 ANNEX 6: DAIRY PROCESSORS’ QUESTIONNAIRE ........................................ 66 ANNEX 7: LABORATORY EQUIPMENT ............................................................ 68 ANNEX 8: LAY-OUT DAIRY FARM .................................................................. 71 ANNEX 9: LAY-OUT MINI DAIRY AND LABORATORIES ................................. 72 ANNEX 10: LAYOUT DTU DORMITORY .......................................................... 73 ANNEX 11: LAYOUT CHU GUESTHOUSE ......................................................... 74 ANNEX 12: DFU MILK PRODUCTION FORECAST ............................................ 76 ANNEX 13: DFU FEED REQUIREMENTS ......................................................... 79
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LIST OF TABLES Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37.
Current DTI Staff Qualifications ................................................. 5 Student Enrolment 2008-2012 .................................................. 6 DTI SWOT Analysis ................................................................. 15 Job Categories and Gross Salaries ............................................ 23 Staff Requirements ................................................................. 23 Land Allocation to Business Units .............................................. 35 DTU Training Fee Structure (in KES) ......................................... 36 DTU Number of Students - Long Term Courses ........................... 37 DTU Investments .................................................................... 37 DTU Costs of Civil Works ........................................................ 38 DTU Civil Works Mini Dairy and Laboratories ............................ 38 DTU Laboratory Equipment - Summary .................................... 39 DTU Investments Mini Dairy ................................................... 39 DTU Operating Costs ............................................................. 40 DTU Training Fee Structure .................................................... 41 DTU Revenues at Full Operation .............................................. 41 DFU Milk Production Assumptions............................................ 43 DFU Assumptions for Culling Rates and Calf Mortality ................ 43 DFU Animal Feed Requirements .............................................. 44 DFU Herd Development ......................................................... 44 DFU Investments .................................................................. 45 DFU Civil Works .................................................................... 46 DFU Operating Costs ............................................................. 46 DFU Animal Sales Revenues ................................................... 46 DFU Forage Production - Land Required ................................... 48 DFU Forage Production - Total Feed Requirements .................... 48 DFU Forage Production - Investments...................................... 48 DFU Forage Production - Operating Costs ................................. 49 CHU Revenues Assumptions ................................................... 50 CHU Investments .................................................................. 50 CHU Guesthouse Civil works ................................................... 51 CHU Operating Costs ............................................................. 51 CHU Rates per Day ............................................................... 51 LPU Investments ................................................................... 53 LPU Operating Costs .............................................................. 53 Consolidated Investments and Working Capital ......................... 54 Consolidated Internal Rate of Return ....................................... 55
LIST OF FIGURES Figure Figure Figure Figure
1. 2. 3. 4.
DTI’s Current Organizational Structure ...................................... 4 DTI’s Income and Expenditure (KES) ........................................ 7 Proposed Organizational Structure ........................................... 22 Hear-See-Do-Discover ........................................................... 28
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ACRONYMS AND ABBREVIATIONS °C AHITI AI AIE ATC CBL CDAAC CDM CHU CIP DFO DFU DST DTC DTI DTU EAAPP EAC EDFA EGU ESL EUR FAO FTC GDP Ha HACCP HF ICT IFAD ILRI IRR ISO IT KAPAP KARI KDB KDPA KES KIE KMDP KNEC kW LNA LPD LPO LPU Lt LTO M m2 MALF MoU MT NKCC
Degrees Celsius Animal Health and Industry Training Institutions Artificial Insemination Authority to Incur Expenditure Agricultural Training Centre Competence Based Learning Curriculum Development Assessment Accreditation and Certification Certificate in Dairy Management Conference Hall Unit of DTI Cleaning In Place District Finance Officer Dairy Farm Unit of DTI Dairy Science and Technology Dairy Training Centre, the Netherlands Dairy Training Institute Dairy Training Unit of DTI Eastern Africa Agricultural Productivity Project East African Community Eldoret Dairy Farmers’ Association Egerton University Extended Shelf Life Euro, 1 Euro = KES 116 (Oct 2013) Food and Agriculture Organization of the United Nations Farmers’ Training Centre Gross Domestic Product Hectare Hazard Analysis Critical Control Point Holstein-Friesian Information and Communications Technology International Fund for Agricultural Development International Livestock Research Institute Internal Rate of Return International Organisation for Standardization Information Technology Kenya Agricultural Productivity and Agribusiness Project Kenya Agricultural Research Institute Kenya Dairy Board Kenya Dairy Processors’ Association Kenyan Shillings, 1 KES is 0.00862 EUR (October 2013) Kenya Institute of Education Kenya Market-led Dairy Programme Kenya National Examinations Council Kilowatt Labour-Market Needs Assessment Litre Per Day Local Purchase Order Lucerne Production Unit of DTI Litre Agriculture and Horticulture Organisation (Netherlands) Million Square meter Ministry of Agriculture, Livestock and Fisheries Memorandum of Understanding Metric Tons New Kenya Cooperative Creameries Ltd
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NUFFIC PTC+ RVIST SAGA SDCP SNV SOP SWOT TIVETA ToT TPC TVET UHT WUR
Netherlands Universities Foundation for International Cooperation Practical Training Centre, the Netherlands Rift Valley Institute of Science and Technology Semi-Autonomous Government Agency Smallholder Dairy Commercialization Programme Netherlands Development Organization Standard Operating Procedures Strengths Weakness Opportunities and Threats analysis Technical and Vocational Education and Training Authority Training of Trainers Total Plate Count Technical Vocational Education and Training Ultra High Temperature Wageningen University and Research Centre
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EXECUTIVE SUMMARY According to the recent Kenya Dairy Labour-market Needs Assessment carried out by SNV and partners in 2013, there is a strong need for practically skilled labour in the dairy sector, not only in Kenya but in neighbouring countries as well. Technical skills needed include dairy farm management, milk collection, bulking and testing, dairy processing and marketing. Additional skills are required in communication, IT and business skills. The Dairy Training Institute in Naivasha (DTI) is mandated to carry out technical dairy training and has been providing this training since the 1960s. DTI currently falls under the Department of Livestock Production of the Ministry of Agriculture, Livestock and Fisheries. As such it is constrained by not being able to receive direct external funding or to invest revenues back into the institute, to manage the institute in commercial manner, to employ its own staff and to develop a training portfolio based on market needs. For this reason, the parent ministry and the DTI steering committee have embarked on establishing a more commercially oriented and (semi-) autonomous DTI. In order to assist DTI’s transition, a business planning team was fielded, comprising The Friesian, SNV, DTI, DTC staff, and a consultant representing the Kenya Dairy Processors Association; this report is the outcome of the mission. The current status of DTI is summarized in the report, a policy review was done and the team received feedback regarding the state of affairs on dairy training in the country from stakeholders in the sector, including other training institutions, the Kenya Dairy Board and dairy processors. The business plan focuses on the key mandate of DTI, e.g. practical dairy training, and proposes to structure DTI around four business units: the Dairy Training Unit, the Dairy Farm Unit, the Conference Hall Unit and the Lucerne Production Unit. The Dairy Training Unit, which will cater for 420 students from year 5 onwards, will comprise a laboratory and a milk processing facility, which will be used for training purposes only and will not run as commercial entities. This unit will offer a one-year course focusing on all aspects of the dairy value chain, and a two-year course with specializations in either dairy farm management or dairy processing. Next to these longer-term courses, DTI will offer a range of short courses, from standard residential courses to tailormade external courses. These short courses will form an important revenue stream for DTI.
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The Dairy Farm Unit has been designed for fifty milking cows as well as young stock. The unit has been designed in a modern way, including a state-of-theart milking parlour, a fodder-growing sub-unit, and a smallholder demonstration farm. The farm will be run as a separate commercial unit. The Conference Hall Unit comprises a conference facility and a guesthouse. The conference facility is currently under construction with funding from IFAD, and is not included as an investment in this business plan. The guesthouse for the conference facility could also be used as accommodation for trainees following short courses at DTI. The Lucerne Production Unit will be run on a purely commercial basis, separate from the training unit and the farm unit. Linkages are proposed with the Dairy Campus and the Dairy Training Centre in the Netherlands, as well as other training institutes, in order to obtain internationally recognised standards for DTI. By complying with these international standards, DTI will be an accredited state-of-the-art training centre that can serve the whole East African region. This business plan includes substantial investments in infrastructure and equipment for all four units. Renovations are proposed for the existing administration blocks, classrooms, dormitories and restaurant. In order to cater for the proposed in-house population of 420 students, new classrooms, dormitories and staff houses will be constructed. In addition, it is proposed to construct a guesthouse for the conference centre. The business plan involves a total required investment in infrastructure, working capital and equipment of around EUR 5,331,000 for all four business units, at current exchange rates and unit costs. Under the proposed business plan, financial calculations indicate that DTI can operate on a profit-making basis, with an internal rate of return of 15% after interest and tax. The financial projections include a continued government funding for at least a period of five years and a contribution from the dairy industry of KES 0.128 per kg processed milk as a training levy. It is proposed that the training levy will be administered in a Dairy Training Fund owned and controlled by the Kenya Dairy Processors Association or any other body as proposed and agreed by the industry. Attached to this business plan is a financial projection for each DTI business unit and other proposed public and private income streams. The financial evaluation is presented in chapter 4 of this report.
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CHAPTER 1: INTRODUCTION 1.1
Objectives and Scope of the Assignment
The work carried out under this assignment has been funded by SNV Kenya through its Kenya Market-led Dairy Program (KMDP), a five-year program financed by the Netherlands embassy in Nairobi. The assignment for the preparation of a business and investment plan for the Dairy Training Institute (DTI), was carried out by The Friesian Dairy Development Company and the Dairy Training Centre (formerly PTC+) from the Netherlands, in collaboration with SNV and DTI staff and a local consultant representing the Kenya Dairy Processors Association (KDPA). The Friesian and DTC bring cutting edge international livestock and dairy training expertise and business knowledge, while SNV adds its local presence, networks and knowledge of the dairy value chain in Kenya. SNV Kenya, DTI and the (former) Ministry of Livestock Development signed a Memorandum of Understanding (MoU), focusing on SNV support for assisting and facilitating the transition of DTI in a commercially oriented and industry-driven training institute. The potential for DTI to operate in a more commercial manner and to be successful in providing market-conform skilled labour for the dairy sector is high. The institute however needs to undergo a fundamental transformation in its legal structure, human resources, management and governance structure, and in its facilities like buildings, practical training equipment, course portfolio, course fees, marketing strategy, revenue streams and business centres. To facilitate this process of transformation, the DTI steering committee recommended in July 2013 to engage a qualified team with experience in setting up and managing dairy training institutes, to prepare a business and investment plan for the renewal of DTI, with a reduced dependence on the Government.
1.2
Background and Justification
Dairy is the single largest agricultural sub-sector in Kenya, and the development goals as outlined in Vision 2030 have identified agriculture in general and dairy in specific as key drivers for economic growth. To realize this growth, there is need to transform the predominant informal milk production and trade into a commercially oriented and competitive industry. In order to accelerate the development of the dairy industry, there is an urgent need to develop appropriate human skills, from skills in farm management, milk production, collection and bulking, transporting and Dairy Training Institute Naivasha – Business Plan, Dec 2013
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processing, to skills in marketing and distribution. The Dairy Master Plan, the draft Dairy Industry Policy and the corresponding Dairy Bill, all Government of Kenya documents, acknowledge the shortcomings in human resources and the need for quality technical training. DTI has a national (and even regional) mandate and offers practical training of one- and two-year certificates in Dairy Management and Dairy Science and Technology, as well as shorter practical courses on demand, covering animal husbandry, milk quality control, value addition and technology transfer, business development and entrepreneurship and marketing. In order to respond to the market needs, the (then) Ministry of Livestock Development prepared a strategic plan in 2012 for the renewal of DTI, and its transformation into a Semi-Autonomous Government Agency (SAGA). The objective of this transformation is to establish a sustainable commercially oriented and industry-driven DTI, which meets the needs of the dairy industry.
1.3
Outline of the Report
Following this introduction (chapter 1), a brief summary of the current situation of DTI is given in chapter 2. A more comprehensive overview of the diagnostics of the current DTI can be found in the DTI Transition - Status Report. Chapter 3 provides an overview of the proposed business scenario, while chapter 4 summarizes the financial projections for each business unit, which are attached to this report as annex 3. Lastly, chapter 5 highlights the main conclusions and recommendations.
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CHAPTER 2: ANALYSIS OF CURRENT DTI 2.1
Introduction
This chapter provides a brief summary of the current status of the Dairy Training Institute (DTI). For the full diagnostics of DTI, reference is made to the DTI Transition - Status Report of July 2013, a report prepared and financed under KMDP’s MoU between SNV, DTI and the Ministry of Livestock. An additional report was prepared under KMDP, the dairy Labour-market Needs Assessment (LNA). The main findings, conclusions and recommendations of these two reports have been incorporated in the business plan for DTI. DTI was founded in 1963 as a dairy training school and has since operated as a government institution, providing trained personnel for the dairy industry. The institute was established with assistance from the United Nations Children's Fund (UNICEF), under the milk conservation programme, to provide trained personnel to promote and strengthen small-scale farmer milk production, processing and marketing in the rural areas. From 1963 to 1990, DTI was the regional Dairy Development and Training Centre for the English speaking countries in East and Central Africa under the Food and Agriculture Organization (FAO). Currently, DTI is offering practical oriented, hands on training in Dairy Science Technology and Dairy Management in the East African region. DTI is located on a 1,308-acre piece of land in Naivasha district of Nakuru county, 100 kilometres North West of Nairobi, off the Nairobi-Nakuru highway. SNV recently facilitated DTI in carrying out a topographical survey (see annex 4 and 5), including the re-establishment of the beacons for land marking. The maps that are part of this survey provide an overview of the land, existing infrastructure, as well as the conference facility under construction (land reference number LR5210). With these documents, DTI or the ministry should be able to apply for a title deed.
2.2
Organisational Setup of DTI
DTI currently has a staff capacity of 41 of which 30 are male and 11 are female; all are employed by the government. The teaching section has 32 members of staff while the rest are in support services. With a student population of 214 (2012), the teacher to student ratio is 1:5. There are five technical departments within DTI, with a departmental head for each:
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animal health dairy technology animal production economics and extension basic science.
There are only three classes for the two courses, which means that at any particular point of time, only three lecturers are in class. It is however important to note that the same lecturers also act as technicians in providing practical training. The figure below illustrates DTI’s current organizational structure. Figure 1.
DTI’s Current Organizational Structure
Principal
Deputy Principal
Registrar
Sections: Accounts Procurement Security Kitchen Students Accommodation Personnel
Director of Studies
Heads of Deparments: -Animal Health -Dairy Technology -Animal Production -Economics & Extension -Basic Science
Farm Manager
Farm Workers
Lecturers
DTI’s principal is the head of the management team and is in charge of running the institute, reporting directly to Ministry of Agriculture, Livestock and Fisheries (MALF). The registrar is in-charge of administrative issues in the institute including accounts, procurement, security, students’ accommodation, catering as well as personnel matters. The director of studies is responsible for the implementation and administration of all aspects of the academic programme, including the management of the teaching team and their performance.
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As government employees, DTI staff is entitled to a basic salary and allowances as stipulated by civil service terms. The civil service salary structure is based on grading levels, which take into consideration economic performance, availability of funds and productivity level of members of staff. The government Code of Regulations requires staff performance appraisals to be done every quarter, as well as an end-of-year appraisal covering the period 1st July to 30th June of the following year. Currently, only the principal has a performance contract and his performance appraisal is based on the following skills and work attributes: a. b. c. d. e. f. g.
leadership planning and organizing training and development of staff accountability and resource management judgment and objectivity performance management promotion of the use of ICT.
Education and Skills Levels of Staff The minimum level of education required for teaching staff within an institute like DTI is an undergraduate Bachelors degree. For non-teaching and support staff, Certificate and Diploma level qualifications may be considered. The management team and other selected senior members of staff at DTI possess Masters degree qualifications. More than half (68%) of the staff have a Bachelors degree and above, as illustrated in the table below. Table 1.
Current DTI Staff Qualifications
Level of Education Number of staff Masters degree 11 Bachelors degree 17 Diploma 6 Certificate 7 Total 41 Source: DTI Management
2.3
Percentage (%) 27 41 15 17
Current Training Program and Facilities
DTI is offering two long-term courses in Dairy Management and Dairy Science and Technology with a duration of one- and two-years respectively for around 140 students, as well as a series of short-term technical courses on demand. Most of the training is done in-house, but the training facilities and other infrastructure, including student and staff accommodation, laboratories and training grounds, are all out-dated and in poor condition.
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The table below shows the admission of students in the period from 2008 to 2012. The certificate course in Dairy Science and Technology (DST) attracted a higher admission rate during four consecutive years as compared to the Dairy Management (CDM) course, with the exception of 2012 enrolments. Table 2. Student Enrolment 2008-2012 Year
Dairy management (1y) 2008 44 2009 50 2010 52 2011 72 2012 80 Source: DTI Management
Dairy science and technology (2y) 54 52 53 70 64
To assist the practical training, the institute runs a farm and operates an outof-date and non-functional dairy plant. DTI also offers consultancy and business development services and is engaged in collaborative research.
2.4
Current Linkages with other Organizations
DTI currently has a number of linkages with other organizations: it is operating under the Department of Livestock Production under the ministry of Agriculture, Livestock and Fisheries (MALF), and there are a few donor-funded programs under the ministry that have links with DTI. These programs include EAAPP (funded by the World Bank) and SDCP funded by IFAD, which is establishing a conference facility. SNV’s engagement with DTI has been referred to above: to support the SAGA transition process, the establishment of a steering committee, the preparation of the dairy Labour-market Needs Assessment, the DTI Transition - Status report, a land and boundary survey and this business plan. Other organizations are linked to DTI on a more incidental basis, including FAO, which has developed interactive radio programs in cooperation with DTI focusing on dairy farming. Other links are with KDB, the World Bank funded KAPAP, NUFFIC, and others.
2.5
Financial Management
The accounts of DTI, being a government institution, are kept at the district accountant’s office. The District Finance Officer (DFO) manages the financial records of DTI, releasing funds to the institute using the authority to spend vouchers provided. The finance clerk of DTI records the income and expenditure in a ledger, no detailed financial records or statements are kept at the institution. This method of financial management is quite inefficient. Dairy Training Institute Naivasha – Business Plan, Dec 2013
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Currently, DTI has two main sources of income: the central government funds and student fees. Any additional income from other sources is charged based on a cost recovery basis. The table below illustrates DTI’s income and expenditure for the period 2008 to 2013. Figure 2.
DTI’s Income and Expenditure (KES) 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 -
2008/9
2009/10
2010/11
2011/12
2012/13
Government Allocation
5,144,584
15,433,842
23,654,902
23,366,763
26,572,996
Student Fees & Levies
2,831,000
3,172,600
4,401,600
5,862,000
5,633,650
Total Income
7,975,584
18,606,442
28,056,502
29,228,763
32,206,646
Total Expenditure
7,932,084
18,182,992
27,241,362
28,186,525
30,417,028
Source: Authority to Incur Expenditure provided by DTI management
The institute receives the government funds every quarter through the District Treasury, the custodian of the government accounts. There is an elaborate process in place before any funds are released by the District Accountant; first an application to DTI’s accounts clerk is presented with details of the expenditure to be incurred. The clerk then raises a Local Purchase Order (LPO) that is forwarded to the principal for approval. An imprest warrant is then prepared and presented to the District Treasury for release of the funds. DTI operates a petty cash amount of KES 100,000 per week and for its release, a receipt as proof of expenditure is needed. The institution has to spend the money as per the Authority to Incur Expenditure (AIE) as the ministry does not encourage any deviations from the budget. Any balances that occur as a result of under-spending are returned to the treasury. Suppliers are paid directly from the District Treasury after approval of the LPO by the institute. The student fee for the one-year course is KES 45,250, and KES 68,250 for the two-year course. The student fees and levies have been on an upward trend, but the cumulative growth for the last five years has been only 12%, against an annual inflation in Kenya of approximately 12% per year.
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2.6
Policy Review and Legal Status of DTI
Since its establishment, DTI has been under the management of the Ministry of Livestock, which now falls under the Ministry of Agriculture, Livestock and Fisheries. There is no specific legal framework establishing or guiding the operations of DTI, and DTI is entirely dependent on the parent ministry for direction and funding. This means that currently it is not possible for DTI to develop its own course portfolio and curricula based on the needs of the market, apply market conform course fees, receive directly funding from donors and the private sector, develop business centres to generate revenues for investments and operations, and put in place performance based human resource policies. A policy review was carried out in order to determine the most appropriate policies and regulations. Some of these legislations that impact on the dairy industry, are listed below:
Dairy Industry Act (Cap 336) Standards Act (Cap 496) Public Health Act (Cap 242) Food, Drugs and Chemical Substances Act (Cap 254) Animal Diseases Act (Cap 364) Veterinary Surgeons Act (Cap 366) – revised as “The Veterinary Surgeons and Para-Professionals Bill”, 2010 Pharmacy and Poisons Act (Cap 244) Fertilizer an Animal Foodstuffs Act (Cap 345) Agriculture Act (Cap 318) and the Agriculture, Fisheries and Food Authority Act Co-operative Societies Act (Cap 490) Land Act (Cap 280) Factories Act (Cap 514) Companies Act (Cap 486) Trade and Licensing Act (Cap 497) State Corporations Act Environmental Management Act.
The Dairy Industry Act states the following in relation to DTI: ”Capacity building is crucial (…). The Naivasha Dairy Training Institute, Animal Health Training Institutes (AHITIs) and the FTCs have been mandated by the government to offer this service through formal and on-the-job training. However, these institutions have been underutilized due to severe reduction in their funding levels. In addition, the respective curricula have remained unresponsive over time and cannot cope with the dynamic needs of the dairy industry. Although there exists a relatively liberalized dairy industry, the institutions continue to depend on the limited government resources to build human capacity”. Dairy Training Institute Naivasha – Business Plan, Dec 2013
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The policy commits the government through the following statement: “In order for the dairy industry to have an adequate and competent human capacity to address the current and future challenges, the government will empower agricultural colleges and universities to provide updated formal and on-the-job training. In this regard, the Naivasha Dairy Training Institute, the AHITIs and the FTCs will be restructured and granted semi-autonomous status to enable commercialization of their training services. Further, stakeholders will be encouraged to contribute to capacity building by setting up their own training institutions, which will be vetted and licensed by the government to ensure conformity to the set high standards of such training institutions.” Other policies of relevance to the DTI transformation are:
Agriculture, Fisheries and Food Authority bill Kenya Agricultural Research bill The Sessional (policy) paper of 2012 by the then Ministries of Education and of Higher Education, Science and Technology – a policy framework for education and training (reforming education and training in Kenya) TVET Act of 2013 Industrial Training Act.
Specifically the TVET Act has far reaching impact because it establishes a Technical and Vocational Education and Training Authority with the following functions: a. Regulate and coordinate training under this act. b. Accredit and inspect programs and courses. c. Advise and make recommendations to the Cabinet Secretary on all matters related to training. d. Determine the national technical and vocational training objectives. e. Promote access and relevance of training programs within the framework of the overall national socio-economic development plans and policies. f. Prescribe the minimum criteria for admission to training institutions and programs in order to promote access, equity and gender parity. g. Recognize and equate qualifications awarded by local or foreign technical and vocational education institutions in accordance with the standards and guidelines set out by the Authority from time to time. h. Develop plans, and guidelines for the effective implementation of the provisions of this act. i. Establish a training system that meets the needs of both the formal and informal sectors as provided under this act. j. Collect, examine and publish information relating to training. k. Inspect, license, register and accredit training institutions. l. Advise on the development of schemes of service for trainers. m. Assure quality and relevance in programs of training. Dairy Training Institute Naivasha – Business Plan, Dec 2013
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n. Liaise with the national and county governments and with the public and the private sector on matters relating to training. o. Undertake, or cause to be undertaken, regular monitoring, evaluation and inspection of training and institutions to ensure compliance with set standards and guidelines. p. Mobilize resources for development of training. q. Ensure the maintenance of standards, quality and relevance in all aspects of training, including training by or through open, distance and electronic learning. r. Approve the process of introduction of new training programs and review existing programs in Technical and Vocational Education and Training Board institutions. From the above the impact of the TVET Act on DTI is clear. No person or institution shall offer training in Kenya unless the person or institution has been accredited, licensed and registered under this act to offer such training. Those institutions and trainers already offering training at the commencement of this act, shall, within six months from the date of such commencement, submit an application to the Board for accreditation, registration and licensing under this act. From the discussions above, it is safe to note here that the legal and policy framework in Kenya is in support of the transformation of DTI to a SAGA. It is however necessary to be cautious as there are on-going policy change processes with the newly established government. The overarching policy direction is pro-liberalization and privatisation, and there is a willingness of the government to engage in public-private partnerships.
2.7
Dairy Labour-market Needs Assessment
As mentioned above, KMDP facilitated a dairy Labour-market Needs Assessment (LNA), carried out by KMDP staff and PKF consulting. The team worked closely with various knowledge institutes from the Netherlands, Egerton University, DTI Naivasha, and Bukura Agricultural College. The overall objective of this study was to assess the demand and supply of skills and competences for the dairy sector in Kenya and to give recommendations to the institutions to bridge the gaps identified. Data was collected from graduates of several training institutes and from dairy industry players. This chapter contains a short summary of the findings of the needs assessment in relation to DTI, further information can be found in the full LNA report. Market Analysis The DTI Transition - Status Report and the LNA give a comprehensive overview of the demand side and the supply side of the market. The conclusions of these studies are that the supply of skilled labour for the dairy Dairy Training Institute Naivasha – Business Plan, Dec 2013
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industry is very limited and almost solely confined to DTI. There is a high and increasing demand for skilled labour in the dairy value chain, which is not surprising considering the following indicators: Dairy is the largest agricultural sub-sector, contributing 14% to the agricultural GDP. Milk volumes have grown from 2.8 billion kilograms in 2002 to 4.2 billion kilograms in 2012. Processed milk has grown from 140 million kilograms 2002 to 500 million kilograms 2012. There are currently an estimated 800,000 smallholder dairy farmers. There are 250 dairy cooperatives and registered producer groups. There are around 3,500 medium and large-scale commercial dairy farms. The number of operational registered milk processors is 32. The dairy sector employs an estimated 841,000 full time jobs (2008). Every 1,000 litres of milk produced creates 23 full-time jobs for the selfemployed, 50 permanent jobs for employees, and 3 full time casual labour jobs, resulting in a total of 77 direct jobs in the dairy value chain (Source: Staal, Pratt and Jabbar, “Dairy Development for the Resource Poor”, ILRI, 2008). Milk consumption in Kenya is estimated at 100 litres per capita per year. The prognosis for 2015 – 2030 is that demand for milk will out pass supply. Market Drivers Major drivers for the skilled dairy labour market are:
General growth in demand for milk and milk products. Growth of the formal market and investments in the value chain and into value addition by dairy societies and processors. Growing number of farmers and farm managers that see dairy farming as a business and preparedness to invest in skills and knowledge. Growing number and professionalism of service and input suppliers, all looking for appropriate skills and skilled staff. High interest from development partners in the dairy sector and in vocational training as opposed to academic courses.
Remarks made by DTI graduates The following are remarks made by DTI graduates:
DTI attracts a relatively high percentage of female students compared to other institutes. DTI attracts mainly young people (majority between 20 and 25 years of age) coming from high school, not many mid career professionals. Certificate level graduates receive a low salary.
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High employability of graduates (over 75 % within one year after graduation). 53 % of interviewed graduates have supervision duties, but management and leadership is not part of curriculum. DTI should shift focus from training for government to training for the industry. High level of interest for self-employment due to low salaries, however just 23 % of interviewed candidates were interested in general or dairy farming. Practical training facilities at DTI are in a dilapidated state.
Remarks regarding curriculum development from employers Milk processors recommended including the following subjects curriculum:
in the
agribusiness and business research franchise management staff management, training and leadership financial management and entrepreneurship record keeping, monitoring and evaluation and impact assessment communication including report writing product development work ethics ICT value addition, looking at emerging trends in terms of future consumer demands (new cheeses, etc.) marketing, analytical, laboratory and life skills. In order to cover the gaps in the DTI curricula, milk processors are also organising the following in-house courses:
HIV awareness/ safety training/ gender training team building annual refresher on quality assurance and extension financial management production and operational training practical training in new/ innovative skills herd handling ISO certification marketing and sales specialized cheese making employability skills.
Dairy farmer associations recommended including the following topics in the curricula: Dairy Training Institute Naivasha – Business Plan, Dec 2013
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2.8
dairy business training including farm administration, accounting, bookkeeping and basic business mathematics general practical farm management and hygiene.
Views of Dairy Processors on DTI
Questionnaires were developed (see annex 6) to gather views on DTI from the main dairy processors in Kenya. The team received feedback from processors like NKCC, Sameer, Happy Cow, Githunguri and Brookside. A summary of these filled-out questionnaires can be found below. Location of DTI There is divided opinion on whether the current DTI location is suitable for practical dairy training, with the main concern being the semi-arid climatic conditions. However, many processors acknowledge that dairy farming has been successful in the area (e.g. at KARI, Delamere and other farms), when irrigation was used to produce fodder. The area is known for the potential to grow high quality lucerne under irrigation. Suggestions were made that DTI can serve as a training base for the theoretical and food technology part of the curriculum while the institute makes arrangement with commercial dairy farms, other institution like RVIST and processors to offer training venues to be used by DTI students during practical sessions. Training There is a general consensus that current short and long-term courses should continue, however they need to be improved and aligned with (international) best practices and the latest technology. Training should include ICT applications for the dairy industry and management training, whereas the exposure and experience of the students needs to be enhanced. An additional remark made by processors was that the current curriculum is biased towards post milking, with little attention for milk production. There is a need to create a better balance between dairy farming, quality assurance along the value chain and processing. These areas should be the trainees’ specialisation after going through the initial general courses. It is also suggested that DTI should develop a training program for small-scale dairy farmers, with a focus on youth. It is observed that these new farmers have very minimal understanding of dairying and that is why productivity seems to be on the decline. This has been emphasized as very important. DTI should also address the issue of offering refresher and specialized courses for those already working in the dairy industry so as to enable them keep up with the new developments.
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Processors’ role and potential contribution to DTI The commercialization and attainment of (semi-) autonomy of DTI are the main preconditions for processors to fully participate in the development and management of DTI. Once this is assured, the processors seem willing to take up a leading role in the governance of DTI and, for example, be part of the management board, and set aside a training levy to co-finance the institute. Land issue While the processors are willing to participate and play a role in the DTI transformation process, there is still the land issue that needs to be resolved. The land currently does not have a title deed and falls under MALF. More critical is that the land ownership (or use) is disputed by squatters who have entered part of the farmland that is under DTI for grazing their animals. This issue is elaborated upon in more detail in paragraph 3.4 below.
2.9
SWOT Analysis
The Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis in the figure below is a compilation of findings of the team, combined with information from the SWOT analysis in the DTI Transition - Status report.
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Table 3.
DTI SWOT Analysis
Strengths The brand name of the institute (DTI – Naivasha) in Kenya and in the East Africa region is widely known DTI is one of the very few institutes in Kenya with the mandate to carry out dairy vocational training DTI’s curricula have a practical approach to training DTI students are highly employable DTI has existing infrastructure which can be utilized (e.g. land, buildings) There is on-going Government and donor support (e.g. IFAD/World bank) There is a conference facility that is currently being constructed DTI is centrally located and relatively close to Nairobi
Opportunities Former Ministry of Agriculture and Ministry of Livestock now one ministry, providing opportunities for collaboration Vision 2030 includes a clear government vision for dairy sector High Demand for practical dairy training (farm management and processing) Large demand for short courses Relative strength of Kenya dairy sector within the East Africa region Growth of Kenyan dairy sector Devolution of government to counties Development of Naivasha town Donor interest in investment (if SAGA) Private sector interest (if SAGA) Proven potential for irrigated fodder production Training levies can be reimbursed TVET development, new TVET Act
Weaknesses Current low organizational capacity Prone to a high level of bureaucracy Current staff capacity and motivation Current facilities/utilities are dilapidated Low quality of access road DTI is situated in a semi-arid area Few existing linkages with private sector and other training institutions Quality of curricula can be improved Low level of incorporation of ICT Low level of product marketing Staff time shortages for short courses No official curricula for short courses No official accreditation of courses No existing credit transfer for student transfer to other institutes No ISO certification No commercial/market driven approach Little ability/drive to attract investors Threats Issue of land ownership and land dispute SAGA status might take some time Competition from other training institutes - upcoming Turnover of staff Devolution of government to counties
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2.10
Alternative Scenarios
Part of the Terms of Reference of the study team was to look at alternative scenarios or locations for dairy training, in case the pre-conditions for revival of DTI Naivasha cannot be met within a reasonable time span. Although this part was only briefly looked into, the business plan as such – or elements thereof – can be used and adapted in case the dairy stakeholders would opt for a different location or institution to partner with. The first alternative scenario, in case the land issue cannot be resolved, has already been discussed above. The practical training can be outsourced to commercial dairy farms and processors and partnerships can be sought for this part of the training with KARI Naivasha, Technology Farm (RVIST) or EGU’s farm. In this scenario, DTI itself will host the more theoretical parts of the training portfolio and the students. Although it is not the preferred option for this business plan, a second alternative scenario could be to engage with other existing training institutes. Some candidates for this scenario are:
Rift Valley Institute of Technology (RVIST) Egerton University (EGU) Moi University others.
It must be noted that in this business plan the cost of land is not included, as DTI already has access to the land. For any other scenario, which requires lease or purchase of land, the investment will be substantially higher.
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CHAPTER 3: PROPOSED BUSINESS SCENARIO 3.1
Introduction
The potential for DTI to operate more commercially and be successful in providing the required quality and mix of skilled labour for the dairy sector is high. The institute however needs to undergo a fundamental transformation in its legal structure, management and governance structure, improve on its facilities, practical training equipment and infrastructure, course portfolio, course fees, marketing strategy, revenue streams and profit centres. What follows is a proposed business scenario for DTI, as suggested by the business-planning team. The business plan distinguishes several business units within DTI; from an organisational point of view each business unit is organised as a department under the managing director. The following four business units are identified, which will be described in detail later in this chapter:
3.2
DTU: Dairy Training Unit DFU: Dairy Farm Unit (including a forage production sub-unit) CHU: Conference Hall Unit LPU: Lucerne Production Unit.
DTI’s Mandate
In order to be focused and successful as a practical dairy training institute, the mandate of DTI will have to be clear. The proposed mandate for DTI is the following: a. To provide technical training in dairy farm management and milk collection, bulking, processing and marketing with a focus on practical training for graduates from basic education institutes to enable them to be employed within the dairy value chain. b. To provide practical short-term market-driven training and refresher courses in dairy farm management, milk collection, bulking, processing and marketing to people already in employment. c. To design tailor-made courses based on emerging training needs in the dairy value chain. d. To provide continuing education and further training through part-time or distance learning modules or any other appropriate mode. e. To establish and run income-generating business units for the purpose of the financial support to DTI as well as provide facilities for practical training. f. To provide technical support in the form of consultancies for the dairy industry. Dairy Training Institute Naivasha – Business Plan, Dec 2013
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DTI focuses on providing practical skills, sound work attitudes, communication and entrepreneurial skills, based on competency-based learning. DTI will have a mandate to provide practical training not only in Kenya, but also in neighbouring countries.
3.3
Legal Status
The process of transformation of DTI into a Semi-Autonomous Government Agency (SAGA) has been initiated by MALF, as per the Dairy Policy mentioned in chapter 2. The (then) Ministry of Livestock Development prepared a cabinet memo that was sent for review and approval to the Ministry of Finance. Meanwhile the new government initiated a Taskforce on Parastatal Reforms, the result of which might be policy changes that impact the on-going DTI transformation process, and therefore delay the process. However, the study team was informed that the Minister for Agriculture, Livestock and Fisheries strongly supports the SAGA status of DTI and is willing to sort out the land issue. The perceived benefits of DTI’s transformation into a SAGA are the following: a) Mobilization of resources: the transformation will automatically give the institution an incentive to collect additional financial resources, as DTI will have the authority to utilize the resources itself. b) Specialization and efficiency: it is envisaged that the creation of an (semi-) autonomous DTI will promote efficiency in its operations, especially if the oversight of the Management Board is effective and if performance contracts are used that will ensure that the leadership delivers according to the signed contract. c) Better skilled manpower: Once the transformation has been completed, DTI will have the ability to instil major changes in its human resource department, where the focus will be to attract and retain strong skilled manpower in management, human resource management, curriculum development and training, through better terms and conditions of service and performance contracts. d) Commercial orientation: Under SAGA status, DTI can charge fees for services delivered at market conform rates and develop business units for creation of additional revenue for the institute. e) Industry-driven products and services: After attaining SAGA status DTI has more opportunities and ability to develop training modules and curricula that are required by the market, especially short courses and training. After the transformation of DTI, there will be two different legal frameworks that will govern the institution. In its intended SAGA status, DTI may have to Dairy Training Institute Naivasha – Business Plan, Dec 2013
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wear two hats; one being a SAGA governed by the State Corporations Act and the second as a middle level training college under the TVET Act (for details reference is made to the DTI Transformation - Status Report). State Corporation Act As a SAGA, DTI will be guided by the State Corporation’s Act, which regulates the formation of state corporations and specifically guides the formation of management boards that manage the institutions as well as the control of finances. Strict adherence to the set provisions will go a long way into helping DTI set up a commercialization plan and consequently implement it. The TVET Act Educational reforms in Kenya have led to the Technical Vocational Education and Training (TVET) Act, focusing on skills development programs for youth and adults. The bill has implications for all training institutes in the country, including DTI. The act is defined as “an act of parliament to provide for”: Establishment of a technical and vocational education and training system. To provide for governance and management of institutions offering technical and vocational education and training. To provide for coordinated assessment, examinations and certification. To institute a mechanism for promoting access and equity in training. To assure standards, quality and relevance. The guiding principles of the Act state that training shall be availed to all qualified Kenyans without discrimination and that all appropriate mechanisms will be instituted to promote access, equity, quality and relevance in training to ensure adequate human capital for economic, social and political development. The training programmes will also be designed to operate within a framework that leads to lifelong education and training, which facilitates innovativeness and creativity and complementary education for those receiving technical and vocational training in the form of “on the job training’’. The Technical and Vocational Education and Training Authority (TIVETA) was set up to play a regulatory role with the mandate that includes the following functions:
To regulate and coordinate training under the Act. Accredit and inspect TVET programs and courses. To establish minimum criteria for admission to institutions and programs in order to promote access, equity and gender parity. To recognise and equate qualifications awarded in local institutions on foreign TVET institutions in accordance with the standards and guidelines. Collect, examine and publish information relating to training. Inspect, licence, register and accredit training institutions.
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Register and licence trainers. Advise on the development of schemes of service for trainers. Mobilise resources for training. Promote private sector investment and participation in training. Maintain a register of all institutions accredited under this act.
The TVET Act has put in place strict requirements for licensing, registration and accreditation of trainers. Article 17, chapter one of the Act, states that no person or institution shall offer training in Kenya unless it has been accredited, licensed and registered under the Act. No program or course of training shall be mounted in an institution without prior approval by the management board and any academic award or qualification issued by an institution not yet accredited, registered and licensed in accordance with the Act. Any person/institution that contravenes this requirement is liable to a fine of KES one million or jail term for three years.
3.4
Land Ownership
The size of the land on which the institution is located (Land Reference number: LR5210) is estimated at 1,308 acres (see Annex 4) and is shared with the Kenya Agriculture Research Institute (KARI), the Sheep and Goat Station, and the Livestock Recording Centre. KARI is the custodian of the documentation regarding the ownership of the land, and until now the government has agreed for DTI to use the land. The issue of land ownership will need to be addressed and it is presented in this business plan as a precondition for further investment. It would need a government intervention to enable DTI to acquire the title deeds for the land. The current arrangement of ownership doesn’t refrain DTI from utilizing the land. SNV Kenya assisted DTI in carrying out a topographical survey, including the renewal of beacons demarcating the land, which will facilitate the process of acquiring the title deeds. The maps produced under this survey can be found in annex 4 and 5. In addition to the issue of land ownership, there is also a court case on-going regarding squatters, which also affects part of the land of LR5210. It is expected that under the new land laws this will not be a major issue, as the squatters have not been using the land long enough to claim land rights.
3.5 Organisational Structure and Human Resource Management In this section the proposed staff requirements and the management structure are summarised. The proposed organisational structure for DTI can be found in figure 3.
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Management Board As per State Corporations Act, a Management Board of a SAGA should include the following members:
a chairman appointed by the President the chief executive the Permanent Secretary of the parent Ministry the Permanent Secretary to the Treasury.
In addition, the Act states that not ,more than seven other members, not being employees of the state corporation can be included in the Board, of whom not more than three shall be public officers, appointed by the Minister. Board members are appointed for a renewable period of three years or shorter. The Management Board should meet at least four times every financial year and not more than four months can elapse between meetings. It is recommended under this business plan that members of the most important dairy value chain stakeholders are included in the DTI Management Board, including the Kenya Dairy Board, the Kenya Dairy Processors’ Association, and others. Business Units This DTI business plan distinguishes several business units and from an organisational point of view, each business unit is organised as a department under the managing director. Each department is headed by a manager who is accountable for the department’s day-to-day operations, achievements, financial results and budget. The following business units are identified: 1. DTU: Dairy Training Unit a. Administrative department: Logistics, Human Recourses, Marketing, Accounting, Procurement, ICT, Catering etc. b. Training Department: Dairy Farming, Dairy Processing, Basic sciences, Mini Dairy and Laboratories 2. DFU: Dairy Farm Unit (including the forage production sub-unit) a. Farm Operations b. Forage Production c. Smallholder Dairy Farm 3. CHU: Conference Hall Unit a. Administration / Logistics b. Guesthouse Rental 4. LPU: Lucerne Production Unit a. Administration / Sales / Logistics b. Operations. These business units will be described in detail in chapter four. Dairy Training Institute Naivasha – Business Plan, Dec 2013
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Figure 3.
Proposed Organizational Structure
Board of Management
Managing Director (1)
DTU - Adm.
DTU- Dean of Studies & Students (1)
Manager (1)
HR
Logistics
Marketing PR
Officer (1)
Officer (1)
Officer I (1)
Drivers (2)
Accountant (1)
Procurement
ICT-Comm
Officer (1)
PR Officer (1)
Clerc (1)
IT Technician (1) (also for CHU)
Dairy Farm Management (12)
DFU -
CHU -
Manager (1)
Manager (1)
Dairy Farm
Forage Production
Supervisor (1)
Supervisor (1)
Dairy Processing Management (12)
Tractor Driver (1)
Basic Sciences (6)
Casual labour (4)
Maintenance (outsoured)
Security (5) Tractor driver (1)
LPU - Manager (1)
Ass Mng (1)
Cleaners/ Cooks /servants (15)
Security (3)
Admin OH (2)
Hd Operations (2) Tractor Drives / Mechanic (5)
Security (15)
Utilities Cooks / Cleaners (8)
Support staff Lab Tech (1)
Casual Labour (5)
Casual Labour (15)
Milk Processor (1) Maintenance (outsourced)
Store keeper (1)
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Staff Requirements The Managing Director reports to the Management Board and is represented by the Dean of Studies during his/her absence. Based on the proposed business structure, the job groups and gross salaries are summarised in the table below. Table 4.
Job Categories and Gross Salaries
Title Managing Director Sr Department Manager / Ast. Director Department Manager Section Manager / Principal Lecturer Senior Lecturer / Technician Supervisor / Lecturer level I Senior Operator / Lecturer II Operator (driver / security) Clerical Officer I Clerical Officer II Skilled Labour Casual Labour
Job Group S Q P N M L K H G F E D
Gross Salary (KES/month) 337,608 224,755 194,152 152,513 130,439 97,152 77,865 46,087 39,812 30,050 24,917 21,248
Gross Salary (EUR/month) 2,910 1,938 1,674 1,135 1,124 838 671 397 343 259 215 183
The proposed gross salary for DTI staff is based on the realignment of the salary structure for civil servants, which has been issued by the Ministry of State for Public Service in July 2012. In order to be competitive for the labour market, 15% of the gross salary amount is added to the annual gross salary, as well as an additional 25% for job groups N, M, L and K and one extra month of salary for all job groups. The table below summarizes the total staff requirements based on the job groups. Table 5.
Staff Requirements
Designation / cadre Managing Director Senior Dept. Manager / Assistant Director Department Manager Section Manager / Principal Lecturer Senior Lecturer / Technician Supervisor / Lecturer level I Senior Operator* / Lecturer II Operator (driver / security) Clerical officer I Clerical officer II Skilled labour Casual labour Totals *ICT technician shared by DTU and CHU
Job Group S Q P N M L K H G F E D
DTU
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1 1 1 36 1 0.5 10 1 8 59.5
DFU 1 2 2 6 11
CHU 1 1 0.5 3 15 20.5
LPU
Total
1 2 2 15 5 15 40
1 1 4 38 1 5 1 30 6 23 0 21 131
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3.6
Training Programme and Methodology
3.6.1. Proposed Training Program Under this section, first the long-term courses are described, followed by a description of the shorter courses. The Ministry of Education states in the new TVET Act 2013 (see section 2.6 for details) that curricula should be developed by the concerned training institutions in close collaboration with the private sector, which is something that should be followed by DTI as well. There will be two long-term courses, a one-year and a two-year course. One-Year Certificate Course The curriculum for the one-year course currently in use will be adjusted in line with recommendations made in the LNA report and recent meetings with the main dairy processors in Kenya. In the adjusted curriculum, an equal amount of time will be allocated to dairy farm management and milk collection and bulking, processing and marketing subjects. This course will allow students to get a general insight in the dairy value chain in Kenya. It will equip them with basic skills and competences required for the existing jobs in the dairy value chain. Participants applying for both the one-year course as well as those applying for the two-year course will participate in this curriculum. Two-Year Certificate/Diploma Course After completion of the one-year certificate course, those candidates that applied for the two-year course will have to choose between these two specializations: 1. Dairy Farm Management 2. Milk Collection, Processing and Marketing. The curricula for these two specializations will be newly developed, in line with Competence Based Learning (CBL) principles (see 3.6.3), and also in line with the new TVET Policy of the Ministry of Education. Profession profiles will be elaborated for all jobs in the dairy sector, in cooperation with representatives from the private sector. These profiles will form the basis for the course modules and assessments for both specializations, which will increase the employability of the graduates. Initially the two-year specialization courses will be offered as certificate programs. Over time, when the private sector will need higher qualified staff, the two-year course will be developed into a diploma course. Training Modules The second year specialization courses will have a curriculum with a modular set up. Modules will be developed as much as possible in line with the
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profession profiles that have been developed. These training modules will be reflected in the annual training calendar and these modules can be advertised as short courses for outsiders. The following crosscutting issues will be included in these modules:
economics management HIV and gender animal welfare (dairy farm management specialization) environmental issues, including impact of climate change communication innovation and creativity.
Potential Short Courses In this section a draft list is proposed of potential short courses to be given at DTI, based on market needs and profession profiles. The development of curricula for these courses should take place in close cooperation with industry actors. The following categories of short courses are distinguished: 1. residential standard courses a. at DTI premises b. standard courses with a duration of 3 days, 1 week or 2 weeks c. courses can be modules under the certificate / diploma courses 2. residential tailor-made courses a. at DTI premises b. flexible timing and content c. higher fees as tailor-made curriculum is required 3. external courses a. by DTI trainers outside DTI premises b. higher fees as DTI staff has to travel c. could either be a standard or tailor-made curriculum. It is expected that the demand for short courses will increase considerably once the new DTI infrastructure has been completed and marketing of these short courses has been optimized. It is also expected that the variation of the training demand in terms of topics, level, location, duration, etc., will be considerable. Expertise required for the implementation of short courses that is not available within the DTI team, should be hired from outside. These are potential short courses in Dairy Farm Management:
Dairy Farm Management (basic): using CowSignals principles, stable design, animal health, hoof trimming, calf management, etc. Dairy Farm Management (advanced): setting objectives, action plans, monitoring, evaluation and analysis through the use of key performance indicators, etc.
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Dairy Farming as a Business (advanced): focusing on business principles, calculating key indicators for business success, financial management, etc. Dairy Record Keeping Housing of Dairy Animals Young Stock Rearing: including calf management, feeding, growth standards, etc. Dairy Animal Nutrition: including supplementation strategies, use of crop residues, feed formulation and rations for calves, dry cows, lactating cows, etc. Forage Production: including pasture management, growing fodder crops, fodder harvesting, preservation and storage, including hay and silage making Laboratory Feed Testing: sample taking, interpretation of results and use in ration calculation, etc. Dairy Herd Reproductive Management: Breeding systems, fertility organs, heat cycle, detecting and recording heat signals, determining optimum moment for insemination, use of AI and pregnancy diagnosis, fertility performance indicators, etc. Dairy Farm Mechanization Milking: hand and machine milking techniques, maintenance of milking machines, etc. Dairy Farm Extension: including use of ICT technology, communication methods.
Potential short courses in Milk Collection and Bulking, Processing and Marketing are the following:
Dairy Cooperative Management: including bookkeeping Milk Testing and Quality Control at collection level Laboratory Milk Testing: microbiological, compositional Quality-based Milk Payment Systems: for cooperatives and/or processors, including practical work on designing a payment system Milk Hygiene in the Value Chain: all aspects of milk hygiene, at farmlevel, collection, transport and processing level Milk Processing: cheese, butter and buttermilk, ghee, cream, yoghurt and fermented milk, ice cream, liquid milk products, milk powder, UHT/ESL milk Maintenance of Milk Processing Equipment Dairy Product Quality Assurance Milk Processing as a Business: management, key indicators, making of business plans, etc. ISO/HACCP/SOP ICT in the Dairy Industry Marketing of Milk and Milk Products.
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DTI and the Kenya Dairy Board should collaborate in designing specialized courses for milk testers, transporters, personnel of milk collection centres and other key personnel in the dairy value chain. KDB could make these courses a prerequisite for licensing skilled personnel, which would include mandatory refresher courses. Mandatory refresher courses could also be introduced for other professions in the dairy value chain (AI technicians, food safety and hygiene for milk collectors, etc.). This would provide additional revenue for DTI.
3.6.2. Accreditation and Certification Once the curriculum has been worked out, it should be submitted for approval to the accrediting body CDAAC (Curriculum Development Assessment Accreditation and Certification). DTI will also have to apply to the TVET board for accreditation and licensing, and the trainers will have to be licensed under the 2013 TVET Act. According to the Ministry of Education, CDAAC is currently not functional. Therefore for the moment, all stakeholders should be involved in curriculum development, including professional bodies like KDPA, to regulate and monitor the curricula and students’ assessments. Once the new training program commences, guidance should be sought from the ministry in regard to the state of affairs of CDAAC and the implementation of the TVET Act. Currently many training programs in Kenya are accredited by the KIE (Kenya Institute of Education) and examined and certified under KNEC (Kenya National Examinations Council). Training programs that are not accredited by KIE and certified by KNEC, are certified by other professional bodies. Given the above situation, a pragmatic approach should be adopted for accreditation of DTI, its staff and training programs. Given the CBL approach, professional bodies will already be involved in curriculum development and assessments. Their role could be expanded if it appears that CDAAC is still not operational. DTI should also look for a partnership with an international reputable dairy training centre, which could accredit DTI’s training programs (see also 3.7). ISO Certification Most of the professional organizations in the dairy value chain in Kenya are ISO certified. It is essential for these organizations that parties from which they derive their inputs and services, including skilled personnel, are also ISOcertified. It is therefore important for DTI to obtain ISO certification.
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3.6.3. Training Methodology The most important aspects of a successful curriculum are communication and adaptation to a caring professional culture. Research has shown that training methodology and student activity have a major impact on the so-called attention curve, which governs a student’s recall of what has been taught. The traditional method of lecturing in a classroom is the least effective (over time only 20 % will be reproduced). Lessons including demonstrations are only a little more effective (over time around 50 % will be reproduced by students). Practical lessons which include hands-on exercises and which allow students to explore situations are the most effective (over time 90 % will be reproduced). This does not imply that traditional lecturing is a wrong training tool; it can still be used to introduce the specific topic, as long as lectures are part of a package of training tools that also allow for hands-on training. The figure below illustrates the different training methods and their effectiveness. Figure 4.
Hear-See-Do-Discover
Hear See Do Discover “What people discover they hardly forget!” DTI will move away from the traditional way of teaching as much as possible and will use the following range of training methods:
lectures to introduce topics lectures given by external experts case studies practical / hands-on lessons traineeships/ attachments and applied management periods excursions to dairy farms, collection centres, processors, etc. report writing and presentation implementing various tasks/ assignments individually or in groups e-learning using ICT.
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One of the important changes in the way the learning processes will take place at DTI will be the introduction of Competency Based Learning (CBL). CBL is a learner-focused approach to teaching that is often used in learning concrete skills. It uses an individual skill or learning outcome (known as a competency) as a starting point. If students can demonstrate they already master certain learning modules, these can be skipped altogether. Students can learn specific individual skills at their own pace and learning can therefore be more effective. Use of ICT Learning to learn is an important principle in the CBL approach and essential for students to realize that learning does not stop once their studies are completed. For this “life-long-learning” - attitude the internet has become an essential tool in order to access new developments, latest manuals, instructional movies, etc. The DTI website will be used to update and store all training materials. It will be possible for students to download and use all this material as per the instruction of their trainers. Trainers and students will be able to send assignments through email. This DTI virtual library makes the real library at DTI obsolete in a few years time. The internet also makes it possible to link up with expertise worldwide; through video links it will be possible to invite international experts to contribute to the certificate and short courses. For this, as well as for the elearning programs, a reliable and stable internet connection is needed. No computer rooms will be established, as students will be obliged to have their own laptop/ tablet computer in order to be admitted.
3.6.4. Staff Development Once DTI is up and running under the proposed changes, a structural program should be developed for in-service staff training. Given the above new approaches in the curriculum, training methods and the use of ICT in training programs quite some time and effort will be required to bring the staff up to date with the new e-learning system. Staff will also need coaching in order to help them implement the training programs during the first 2 to 3 years. To remain competitive it will be important to have up to date knowledge and expertise, which will require a substantial investment in staff training every year (equal to 4% of the annual DTU salary costs). A budget allocation should therefore be made available for each staff to select those staff development activities that suit her/his specific needs best. Activities can include the participation in training programs, on-line subscriptions, excursions, voluntary attachments, etc.
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3.6.5. Target Groups for Training The following target groups have been identified for long-term training courses at DTI:
high school graduates (O-level grades D+, C-, A levels) mid-career professionals.
All dairy value chain actors can in principle apply for the standard courses and requests can be sent to DTI to organize tailor-made training programs, for the following target groups:
dairy cooperatives farmers and farmer groups milk testers and graders milk traders and transporters extension staff milk processors dairy entrepreneurs including personnel of milk bars hoteliers retirees and school leavers students government employees other mid-career professionals.
3.6.6. Training Facilities and Locations The business plan proposes to have all training facilities in one specific location, both for theoretical and practical training. To outsource part or all of the practical training of the certificate and diploma courses is logistically and organisationally not feasible. This of course does not apply to attachments, internships, demonstrations and excursions. For these elements of the curriculum, collaboration will be sought with cooperatives, processors, dairy farms, research institutions, feed manufacturers, AI service providers, farm mechanisation companies, slaughter houses, etc. The short standard and tailor-made residential courses will also be organized mainly at the DTI premises. Outreach programs will be organized at the clients’ premises and selected satellite training centres like ATCs and dairy training farms. In order to carry out the full training program, the existing classrooms and dormitories at DTI require renovations and expansion with new classrooms
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and dormitories, to cater for 420 in-house students. The costs for these renovations and constructions are included in the financial analysis in section 4.2.
3.7
Proposed Partnerships
The ambition of DTI, as stated in its mandate, is to become the leading knowledge and innovation centre for the dairy value chain for Kenya and neighbouring countries such as Uganda, Tanzania, Rwanda, and South Sudan. To capitalize on its mandate and the need for skilled staff in the dairy sector in the neighbouring countries, DTI should be able to offer training programs, which are accredited not only by the Kenyan authorities but also by reputed international dairy training institutes. Establishing strong partnerships at international, regional and national level is key for the success of DTI.
3.7.1. Partnerships in the Netherlands The dairy sector in the Netherlands is internationally reputed for its high level of technical performance, sector governance, organization, its innovations and quality and variety of its dairy products. Below follows a summary of potential partners in the Netherlands. Dairy Campus The Dairy Campus is located in Leeuwarden in the Netherlands, in the province of Friesland, which is the heart of the Dutch dairy sector. It is the centre for innovation, education and research for the Netherlands dairy sector, and the result of the collaboration between dairy stakeholders like the Dairy Training Centre (DTC), Wageningen UR (WUR) Livestock Research, Van Hall – Larenstein Agricultural College, the National Farmer Organization “LTO” and commercial enterprises active in the dairy value chain in the Netherlands as well as abroad. The ambition of the Dairy Campus is to integrate research with education and knowledge dissemination to the entire Netherlands dairy industry. As such the Dairy Campus is set to become the focal point for the innovative and dynamic development of the dairy sector in the Netherlands as well as abroad. Dairy Training Centre (DTC) DTC is the leading practical dairy training centre in the Netherlands in all aspects of the dairy value chain. DTC is a collaboration between the (former) PTC+ in Oenkerk, The Friesian Dairy Development Company and AB Vakwerk. Its ambition is to become the national and international centre of excellence for practical training in dairy farming and dairy processing.
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DTC is officially accredited by NUFFIC as a training centre for the organization of certificate and diploma courses in dairy farm management and milk processing. It is very important for DTC to keep up to date with all aspects in the dairy value chain, since knowledge and techniques change faster than ever before requiring new skills and adjusted training programs. DTC organizes once a year a NUFFIC sponsored fellowship training program called: “From a competence profile to a competence based training program”. DTC is a very interesting partner for DTI because of its guaranteed up to date training programs, training material and expertise. It is recommended that DTI develops partnerships with DTC and other related organizations in the Netherlands. DTC could accredit DTI’s training programs in order to give an international appeal. DTC can offer a so-called franchise arrangement, in which another institute can be liaised to DTC, and be allowed to offer and organize training programs under full DTC accreditation, using DTC hand-outs, manuals, presentations, software and assignments. Members can also utilize DTC staff (on-site or via video link) for training or consultancies, organize part of their training in the Netherlands, use the DTC brand name for marketing and quality assurance, and issue certificates with the DTC logo. Under this franchise model, trainers will have to be trained by DTC, have to demonstrate their competence before being accredited, and they will be monitored regularly. Training facilities and training programs should meet DTC quality standards and CBL principles, and make use of the latest teaching methods and ICT applications. In addition, DTC will participate in the assessments of students of certificate- and/ or diploma courses. DTC is in the process of developing a fee structure for the provision of the above service package. For DTI specifically, in order to meet the DTC requirements, curricula will need to be updated, teaching methods modernized and brought in line with CBL approaches. DTC can assist DTI in the process of official accreditation of the institute, its trainers and curricula through the relevant Kenyan authorities. DTC can also assist in the analysis of knowledge and skill gaps of DTI’s trainers, and develop tailor-made Training of Trainers (ToT) programs and modules for coaching DTI trainers during the implementation of the training program. Vetvice / CowSignals Vetvice is a Netherlands based private enterprise that develops practical training material for dairy farmers, farm managers, training institutions and training and extension workers worldwide, in the form of handbooks and manuals for optimal cow housing, cow comfort and cow management.
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CowSignals, one of Vetvice’s key programs, is a training company active in more than 35 countries worldwide, which organizes training based on the concept of information the cows give. How to interpret these “cow signals” is key to the welfare of the animals, and good welfare of the animals leads to higher milk production and fertility, which in turn leads a profitable business to the farmer. For its trainings, CowSignals has a range of highly practical and innovative training materials and books. It is recommended that DTI explores future partnerships with Vetvice, and includes their innovative approach in dairy farm management.
3.7.2. Regional and National Partnerships Once the curricula countries Students should be
DTI infrastructure is completed, DTI trainers are trained and new developed, DTI should start marketing itself in neighbouring as the regional “practical dairy training centre of excellence”. from countries such as Tanzania, Uganda, Rwanda, and others able to enrol in the DTI courses.
In the short term, DTI could already advise practical dairy training centres in Kenya and neighbouring countries on the development of short courses, provide accreditation for these courses and possibly help in implementation. DTI could for example assist Agriculture Training Centres (ATC) and successful commercial dairy farms that have already started organising dairy training at their farms. DTI could help to structure these training programs and develop short courses that are accredited by DTI. There are many partnerships to be established at national level and throughout the business plan suggestions for these partnerships are mentioned. Partnerships will be with the following institutions: the Ministry of Agriculture, Livestock and Fisheries, the Ministry of Education, the Kenya Dairy Board, TVETA, Kenya Dairy Processors’ Association, dairy processors, KARI, RVIST, Egerton University, farmers’ organizations, and many others.
3.8
Monitoring, Evaluation and Marketing of DTI Products
DTI should work towards an embedded system of monitoring and evaluation of their products, for long-term as well as short-term courses. Traceability of students is important, and an alumni organization could be set up to guide the operations of DTI. Once the facilities are in place, DTI will develop plans for a marketing and promotion campaign and strategy for its training programs and consultancy services including the following methods:
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DTI website emails followed by telephone calls newspaper/ agricultural magazine advertisem*nts newsletters, new training programs, yearly calendar of events farmer field days, agricultural show, trade fairs, farmer field schools radio/ television programs on dairy development.
Alumni form an important target group for this marketing, as well as key companies and stakeholders of DTI, e.g. Kenyan embassies of neighbouring countries, KDB, EDFA, KDPA, Ministry of Education, and the Ministry of Agriculture Livestock and Fisheries.
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CHAPTER 4: BUSINESS UNITS – FINANCIAL ANALYSIS 4.1
Introduction
Under this business plan, it is proposed that DTI operates as an independent entity with the following four operational business units:
Dairy Training Unit (DTU) Dairy Farm Unit (DFU, including a forage production sub-unit) Conference Hall Unit (CHU) Lucerne Production Unit (LPU).
Financial data and assumptions of the four units are given in the sections 4.2 through to 4.5 while the consolidated data are presented in section 4.6. Financial projections have been made for a period of 16 years from year 0, the pre-operational year, to the final year 15. These projections include residual values for working capital and fixed assets, with a linear depreciation and lifetimes of 5, 8, 10, 15 and 25 years. Furthermore salvage values of 10% of the investments have been taken into account for buildings and part of the installed equipment, while land is not depreciated. The herd value of DFU has been valued on the basis of opportunity costs. Land is not included in the investments because it is assumed that DTI will be able to obtain title deeds for the land that is currently in use. Land is however included in the residual values. The size of land required for the four business units is presented in the table below. Table 6.
Land Allocation to Business Units
Business Unit DTU – Training DFU – Farm CHU – Conference LPU – Lucerne Total
Acres 12 56 7 1,273 1,349
Hectares 5 23 3 515 546
The proposed investments include costs for civil works for renovating and constructing buildings and facilities for students, a guesthouse for the conference facility and staff houses. Financial projections (see annex 3) are in constant accounting terms; all amounts are in Euros unless stated otherwise and exchange rates used are: 1 EUR = KES 116 and 1 KES = 0,00862 EUR. The business plan costing does not include the upgrading of the access road to DTI. Ideally this road should be upgraded, which would increase investments considerably. As there other businesses using the same road, the road could be improved as a joint effort, which is something that can be explored.
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In order to achieve better insight in the costs, benefits and profitability of the DFU, internal supply prices have been set for animal feed from the forage production sub-unit to the overall DFU. In the Consolidated Projection these internal supply prices are excluded. Most of the overhead and administration costs are included in the Dairy Training Unit.
4.2
Dairy Training Unit (DTU)
The training programme and methodology have already been described in detail in 3.6. In this section the focus is on the financial analysis of DTU, and the business and financial details are elaborated for all the training courses, management overhead, mini dairy, laboratories, as well as the dormitories, classrooms, staff houses and catering for students and lecturers. For detailed financial projections of the DTU, see annex 3. Practical training facilities need to be located nearby the student’s facilities, without the need for students to travel to facilities elsewhere. As part of the investments proposed, there are two practical training facilities identified: a dairy farm (see 4.3) and a mini dairy plant (500 litres per day), including laboratories. The mini dairy will not operate as a commercial dairy processing unit because this may be conflicting with the training needs and the commercial interest of the processing industry, which is an important stakeholder. The dairy products produced by the mini dairy will be used only for internal consumption. The table below gives an indication of the different training courses and the fees proposed. Table 7.
DTU Training Fee Structure (in KES)
Type of Course Fees / Student One Year Certificate 90,000 Two Year Certificate/ Diploma 140,000 Short Courses (20 students) 3 day Residential standard courses 10,000 Tailor made residential 15,000 External standard courses* 8,000 External tailor-made* 12,000 * teachers’ subsistence allowance not included
Remarks Incl. Accommodation Incl. Accommodation 5 day 15,000 22,000 12,000 18,000
10 days 28,000 42,000 22,000 33,000
Incl. Accommodation Incl. Accommodation Excl. Accommodation Excl. Accommodation
The table below illustrates the projections for the students’ numbers for the next 5 years, with year 0 being the base year:
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Table 8.
DTU Number of Students - Long Term Courses Year 0
One year1 Two Years 1
140 56
Year 1 140 56
Year 2 220 56
Year 3
Year 4
260 88
300 104
Year 5 & onwards 300 120
This number includes the first year students of the two-year course
The increase in student numbers are projected based on the history of the number of applicants over the last 3 years. Once the DTI has been renewed, state of the art practical training facilities are available, ICT infrastructure is in place, courses are officially accredited and DTI has its marketing and promotion campaign up and running, the student numbers are expected to increase considerably. Considering the size of the dairy industry and the huge skilled labour gap as identified in the LNA, the growth estimate in student numbers is conservative. Investments The total initial investment for the DTU is EUR 2.2 million. The table below shows a breakdown of the major elements. Table 9.
DTU Investments
Item Land Civil Works (including project engineering) Inventory buildings Equipment mini dairy + laboratory Transportation Others Total
Investment (EUR) 1,233,668 355,810 434,803 113,000 68,550 2,205,832
All required transportation is included in the DTU and covers student transportation (busses) and transportation needed for procurement and staff, both in terms of investments (vehicles) and fuel and maintenance costs. To accommodate the increase in students to around 420, new dormitories and classrooms will be constructed for an additional 320 students (see annex 10), whilst the existing dormitory will be rehabilitated to cater for around 100 students. In addition, the existing kitchen, catering and recreational facilities will be renovated. Construction will commence in year 0, while rehabilitation of existing facilities is scheduled in year 1.
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Table 10. Building
DTU Costs of Civil Works m2/ unit
Tot m2
New dormitory A. Dormitory Male students (150) 12 B. Dormitory Female students (150) 12 Renovation existing dormitory C. Dormitory Male Students (50) D. Dormitory Female Students (50) Staff houses E. 2 bedroom (3) 80 F. 3 bedroom (3) 100 Classrooms G. Renovation classrooms (5) 96 H. New classrooms (3) 96 Kitchen/Recreation (Renovation) J. Kitchen (1) 800 K. Recreation (1) 375 Total Note: Renovation of existing administration block
3,636 1,818 1,818 1,300 950 350 540 240 300
Cost Cost KES/m2 EUR/m2 14,906 129
8,000
69
25,000
216
480 288
8,000 15,000
69 129
800 375
8,000 8,000
69 69
Total KES
Total EUR
54,200,000 27,100,000 27,100,000 10,400,000 7,600,000 2,800,000 13,500,000
467,241 233,621 233,621 89,655 65,517 24,138 116,379
8,160,000 3,840,000 4,320,000 9,400,000 6,400,000 3,000,000 95,660,000
70,345 33,103 37,241 81,034 55,172 25,862 824,654
is not included
In addition to these costs, a total of EUR 355,810 will be invested in year 0 and 1 in inventory, which includes the all furniture, teaching equipment, kitchen, canteen and office hardware. Six new staff houses are included that can be rented out to lecturers who reside at the campus. The rent paid by the occupants is accounted as revenue (see section on DTU revenues). A mini dairy, including laboratories, will be established in a single building complex (see annex 9) for training purposes. The mini dairy has a limited capacity of 500 to 1,000 kilogram of milk per day, and activities include the reception of raw milk, processing of pasteurised milk, butter, cheese, ice cream and yoghurt. The mini dairy is only operational on training days (150 200 days per years). The investment cost of the mini dairy is shown in table 13. Table 11.
DTU Civil Works Mini Dairy and Laboratories
Item Surface area (m2) Total Costs (EUR)* Mini dairy 1,239 Offices 108 Feed Laboratory 120 Training Laboratory 120 Training Laboratory 120 Milk Testing Laboratory 120 Lecture / Demonstration Room 168 Entry / Dressing Room 80 Microbiological Laboratory 390 Veranda 423 Septic Tank (2) 188 Total 3,076 397,795 Note: Costs used are EUR 129 / m2 (KES 15,000 per m2)
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The investment for laboratory equipment is approximately EUR 86,000 and this includes equipment for milk testing, microbiological analysis and feed analysis (see table below, for details reference is made to annex 7). Table 12.
DTU Laboratory Equipment - Summary
Item Milk testing Microbiological testing Feed analysis Total
Table 13.
Total Costs (EUR) 21,861 30,806 39,700 92,367
DTU Investments Mini Dairy
Description Milk Reception Electronic receiving unit Dump Tank Milk pump 0.75kW Milk filter Milk plate cooler Milk storage tank 1000l Milk pump C. F. Pasteuriser 1000l/hr Cream separator 1000l/hr hom*ogenizer 1000l/hr Buffer tank 500l Milk pump 0.75kw Pouch filler 400p/hr Ageing vat 500l Cream pump Butter churn Butter forming machine Packing table Butter trolley Ageing vat 500l Positive pump Yoghurt cup filler 1000cph hom*ogenizer 100l Ageing vat 500l Continuous freezer 180l Candy lolly tank Chocolate dip tank Hardening cabinet Cheese vat Vacuum packing machine Ice accumulator Steam boiler C.I.P. (manual) Turnkey operation Total
KES 590,000 650,000 180,000 130,000 105,000 120,000 933,498 110,000 2,803,385 2,200,370 2,127,965 655,785 110,000 850,000 1,807,232 423,030 1,138,045 873,230 230,690 242,254 2,198,340 352,820 1,990,687 1,053,893 695,687 1,405,191 1,391,490 655,990 1,073,800 1,213,705 205,751 2,400,641 1,565,000 840,329 3,998,860 37,322,668
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EUR 5,086 5,603 1,552 1,121 905 1,034 8,047 948 24,167 18,969 18,345 5,653 948 7,328 15,580 3,647 9,811 7,528 1,989 2,088 18,951 3,042 17,161 9,085 5,997 12,114 11,996 5,655 9,257 10,463 1,774 20,695 13,491 7,244 34,473 321,747
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Operating costs At full operation (year 6), the total annual operating costs of the DTU are estimated at around EUR 1.60 million (see table below). Table 14.
DTU Operating Costs
Item Operating Costs (EUR) Salaries and Wages 736,982 Staff Development 29,479 Catering 688,966 Consumables and Raw materials 54,372 ICT (website, training modules, radio) 22,121 Others 67,680 Total 1,599,754 Note: These are the operating costs at full operation (year 6).
Percentage 46 2 43 3 1 4
Catering accounts are approximately 43% of the operational costs, based on the assumption that on average 480 people use the canteen (including students, staff and visitors) for 200 days in a year, with a cost of KES 800 per meal per person. Fifty per cent of these costs are charged to the students. Salaries and wages account for approximately 46% of the operating costs, and the proposed 30 lecturers account for 60% of these costs. Working capital Working capital requirements are based on operational costs of the DTU. One month of operational cost has been calculated as working capital, and at full operation EUR 133,313 is required. Residual value All investments are linearly depreciated in 5, 8, 12, 15, 20 or 25 years (see consolidated projection in section 4.6), with investments in year 0 and 1 depreciated as from year 1. For milk processing equipment, civil works and construction as well as for major equipment salvage, values of 10% of the original investment have been incorporated. After the 16 years projection, residual values have been calculated for the remaining fixed assets not yet depreciated and include, when applicable, the pertaining salvage values. Furthermore, accumulated working capital at the end of the projected period is included in the total residual value. Total residual value at the end of the last year is almost EUR 815,400. This amount consists of EUR 682,000 for fixed assets, and around EUR 133,000 for accumulated working capital. Revenues The training fees applied are shown in the table below. The number of students for the annual courses is 300 for the one-year course and 120
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students for the two-year course, totalling 420 students on average at the campus (at full operation year 6). The standard and tailor-made courses have an attendance rate of 20 students for each course. Table 15.
DTU Training Fee Structure KES / Student
Certificate / Diploma Courses 1 year 2 year Short Standard Residential courses 3 days 1 week / 5 days 2 weeks / 10 days Short Tailor-Made Residential Courses - 3 days - 1 week (5 days) - 2 weeks (10 days) Short Standard External Courses - 3 days - 1 week (5 days) - 2 weeks (10 days) Short Tailor-made External Courses - 3 days - 1 week (5 days) - 2 weeks (10 days)
90,000 140,000 10,000 15,000 28,000 15,000 22,000 42,000 8,000 12,000 22,000 12,000 18,000 33,000
The total DTU revenues are shown in the table below. Table 16.
DTU Revenues at Full Operation
Item Training Fees Dairy Training Fund Catering Fees Staff House Rental Government Funding Donor Contribution Total
Revenue (EUR) 651,034 561,879 344,483 15,517 0 0 1,572,931
Percentage 41 36 22 1 0 0
Training fees contribute 41% of the total revenue, and non-training revenues are generated by a Dairy Training Fund (41%), which is based the assumption that the dairy industry is prepared to put a training levy on processed milk of KES 0.128 per kilogram. The amount of processed milk at national level is set at 500 million kilograms in year 0, with an 3% annual increase. Catering is charged at 50% of the costs to students, staff and visitors. Dairy products produced by the mini dairy are provided to the canteen, and serve no commercial purpose. During the first five years (year 0 – 4), it is assumed that the DTI receives government funding totalling EUR 1.9 million after the
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SAGA status has been obtained. Furthermore it is envisaged that during the start-up phase of the project, donors will fund the large investments in infrastructure, equipment and machineries. Cash Flow and IRR The net cash flow per year before interest and taxes by the end of the forecast period is positive at EUR 60,000. Treated as a separate entity the DTU is projected to have an Internal Rate of Return (IRR) of 43%. It must be noted however that without the expected government funding the IRR over the forecast period will be minus 1.6%.
4.3
Dairy Farm Unit (DFU)
4.3.1. Introduction The Dairy Farm Unit (DFU) comprises the dairy farm, a forage production subunit and a smallholder demonstration farm. These are presented below in the sections 4.3.2, 4.3.3 and 4.3.4. The forage production sub-unit is designed to supply animal feed to the DFU only and will not be used for commercial purposes. For a detailed financial projection of the DFU see annex 3.
4.3.2. The Dairy Farm The dairy farm is an important instrument for practical training, and will have to be located close to the campus. The farm must be able to facilitate training for several groups of students at the same time. The farm is designed for around 50 milking cows plus young stock. The stable design is based on zero grazing, with cattle kept in free walking stables with individual cubicles (see layout in annex 8). It is proposed to start with 50 pregnant pedigree Holstein Friesian (HF) heifers, procured locally. Assumptions for culling rates and calf mortality can be found in the table below. Based on the assumptions shown in the table below, a milk production forecast is presented in annex 12, averaging 375,000 kilogram of milk in the sixth year.
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Table 17.
DFU Milk Production Assumptions
Average calving interval (days) Average days in milk Milk spoilage percentage Milk Yield (kg) 1st lactation 2nd lactation 3rd lactation
Table 18.
390 320 1.5 7,011 7,410 8,279
DFU Assumptions for Culling Rates and Calf Mortality Percentage
No. pregnant heifers imported Abortions Abortion % - during transport Abortion % - within 3m of arrival Culling rates Lactation 1 Lactation 2 Lactation 3 Lactation 4 Lactation 5 Lactation 6 Lactation 7 Lactation 8 Calf mortality 0-3 months* 3-6 months 6-12 months 12-16 months Pregnant – 27 months * Inclusive of abortions
Head 50
1 3
1 2
7 9 16 22 26 18 10 8
3 4 7 9 10 7 4 4
5 1 1 1 1
6 1 1 1 1
The table below presents the total animal feed requirements, specified in forage and raw materials for production of dairy concentrate feed.
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Table 19.
DFU Animal Feed Requirements Lactating
Feed Type Alfalfa Maize silage Rhodes grass hay Napier grass hay Oats straw Total Fodder Maize grain Wheat Bran Wheat Pollard Soya bean meal Sunflower cake Lupine seed meal Limestone Sodium Bicarbonate Mineral Mix Tot Concentrates
1.95 7.80 1.95 0.50 12.20 3.40 1.70 1.70 0.90 0.90 0.06 0.12 0.19 8.97
Feed Requirement Kg Dry Matter / head Dry Calves Calves Calves Heifers Heifers 0-3m 4-6m 7-12m 13-15m pregnant 0.00 0.40 1.00 1.00 1.00 3.40 1.00 1.00 1.00 2.10 1.70 1.00 0.40 1.00 1.00 1.00 5.00 0.00 10.10 1.00 1.80 3.00 3.00 4.10 0.00 0.75 1.00 1.00 1.50 1.00 1.70 0.00 1.00 1.00 1.00 0.00 0.00 1.70
0.75
0.20 3.60
1.50
1.00
0.03 2.03
1.00
0.03 3.03
0.50 0.50
1.00
0.05 3.55
0.07 3.07
Milking will be carried out in a 2-row herringbone-type milking parlour, with a total capacity of 12 cows, with 2 rows for 6 cows each. The parlour will have an automated cluster removal system to avoid “blind milking”, and milk is cooled at site in a separate milk storage room, which includes a hot water system for the Cleaning In Place (CIP) equipment. Milking is done twice daily and high yielding milk cows can be kept separate in the stable. All female young stock is kept at the farm for replacement of the lactating herd. Surplus heifers are sold at market prices (see table below), and bullcalves are sold within a week after birth. Table 20.
DFU Herd Development
Cows in Lactation Dry Cows Lactating + Dry Cows Total Culling Sales Pregnant Heifers 0-3 months 4-6 months 7-12 months 13-15 months Pregnant – 27 months Total Young Stock Total Herd
Yr1 47 0 47 3 0 1 6 16 0 0 23 70
Yr2 42 2 44 4 0 0 10 10 1 21 43 87
Yr3 47 2 49 6 11 1 17 6 0 21 45 93
Yr4 51 0 51 9 10 8 16 1 1 22 49 99
Yr5 51 0 51 11 11 15 9 2 8 18 51 102
Yr6 44 9 52 12 4 17 2 3 15 18 54 107
The site where the farm is located includes storage for fodder and feed ingredients for the preparation of dairy concentrates. Manure is collected
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manually and stored in the underground pit. The manure is mixed with rainwater and collected with a vacuum-tanker, which transports it to the agricultural fields for fertilization. The dairy farm employs five staff, including a farm manager who is also accountable for the forage production sub-unit. The number of employees is kept low, with the assumption that students will participate in the day-to-day activities as part of the vocational training programme. Investments The total investment for the DFU, including the forage production sub-unit, is shown in the table below. The costs for stables and other facilities (feed store etc.) are significant for a dairy farm with 50 milk cows plus young stock. However, consideration is given to the key purposes of the farm design, e.g. training and the demonstration of good dairy farming practices to several groups at the same time. Table 21.
DFU Investments
Item Land Civil Works (including engineering) Procurement of Heifers Equipment Farm Machinery Others Total
Investment (EUR) 329,970 107,759 98,418 51,724 13,534 601,405
The Holstein-Friesian heifers will be procured locally, each valued at EUR 2,155. The costs of equipment include a milking parlour, milk cooling, a water-well and feed mixing equipment. Investments for farm machinery include a tractor, trailers and manure handling equipment. Costs of the civil works for the DFU are shown in the table below.
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Table 22.
DFU Civil Works M
Milk Cow Stable Young stock Stable Walkway and Handling Area Utility Buildings Milking Area Hay Storage Feed Store and mixing area Manure storage Manure digester Manure effluent Fencing stables Fencing cubicles Engineering Total Dairy Farm
EUR/m
1,041 644
m2 475 475 222 360 432 200 200 84 60 47
KES/m2 13,000 13,000 7,000 18,000 15,000 13,000 13,000 7,000 7,000 7,000
EUR/m2 112 112 60 155 129 112 112 60 60 60
20 20
EUR Total 53,233 53,233 13,397 55,862 55.862 22,414 22,414 5,069 3,621 2,836 20,529 12,880 8,621 329,970
Operating costs At full operation from year 6 onwards, around 70% of the operating costs are animal feed costs, see table below. Animal feed is supplied by the forage subunit at an imaginary cost. Table 23.
DFU Operating Costs
Item Animal Feed Salaries and Wages Others Total
Operating Costs (EUR) 139,336 40,058 21,620 201,013
Percentage 69 20 11
Revenues The DFU revenues consist of milk and livestock sales. Based on the assumptions mentioned above a six-year milk production forecast is shown in annex 12. The price for fresh milk is set on KES 34 per kilogram. At full production capacity the total revenue reaches EUR 131,000 in year 6. Table 24.
DFU Animal Sales Revenues EUR/Hd
Yr 1
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
2,759
0 0
0 0
11 30,345
10 27,586
11 30,345
4 11,034
3
4
6
9
11
12
1,195
1,668
2,769
4,049
5,137
5,702
25
25
25
25
25
25
3,772
3,772
3,772
3,772
3,772
3,772
5,440 36,885 35,407 39,253
20,508
Pregnant heifers Culled cows 474 Bull calves 151 Total Animal Sales
4,966
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Working capital Working capital requirements of the DFU have been calculated as one month of operational costs. At full operation approximately EUR 16,800 is required as working capital. Residual value All investments are linearly depreciated in 5, 8, 12, 15 or 20 years. The value of the herd is in general not depreciated but is based on numbers of animals and current market prices. Due to the fact that opportunity costs for cattle and especially for pregnant heifers differ in value of the pregnant heifers, the herd is re-valued conform the current opportunity costs for high quality cattle. This re-valuation incorporates a book value loss of almost EUR 25,000 in year 1, the year the heifers arrive on site (see also annex 3). Investments in year 0 and 1 are depreciated as from year 1. For farm machinery, civil works and construction as well as for major equipment salvage values of 10% of the original investment have been incorporated. After the 16 years projection, residual values have been calculated for the remaining fixed assets not yet depreciated and include when applicable, the pertaining salvage values. Furthermore, accumulated working capital as well as the herd value at the end of the projected period is included in the total residual value. Total residual value at the end of the projected period is almost EUR 410,000, including EUR 271,000 for fixed assets, EUR 122,000 for herd value and almost EUR 16,500 for accumulated working capital. Cash Flow and IRR The net cash flow before interest and tax remains negative for the entire forecast period. This is mainly due to the high costs of feeding. Treated as a separate entity the cash flow of the DFU is projected to have an IRR of -17 % before interest and taxes (the net cash flow is minus EUR 67,000 by the end of the forecast period).
4.3.3. Forage Production Based on the calculated feed requirements and production levels per hectare, the total area needed for the production of roughage is approximately 17 hectares (43 acres) at full production. The assumptions for forage production and the crop plan are presented in the tables below. For detailed financial projections see annex 3.
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Table 25.
DFU Forage Production - Land Required
Land areas (ha) Land cleared Ready for cultivation Alfalfa Maize silage Rhodes grass Napier grass Oats straw Total cultivated
Table 26.
0 10.1 10.1 1.6 3.2 4.2 0.0 0.6 9.6
1 4.1 14.7 2.2 4.5 6.3 1.0 0.8 14.7
2 1.2 15.9 2.5 4.8 6.9 0.9 0.8 15.9
Year 3 4 0.7 0.3 16.6 16.9 2.6 2.6 5.0 5.0 7.2 7.4 0.9 1.0 0.9 0.9 16.6 16.9
5 0.8 17.7 2.8 5.2 7.8 1.0 0.9 17.7
6 0.0 17.7 2.8 5.2 7.8 1.0 0.9 17.7
DFU Forage Production - Total Feed Requirements
Crop Alfalfa (2.2 MT DM/cut) Maize silage (15.0 MT DM/cut) Rhodes grass hay (7.0 MT DM) Napier grass hay (14.0 MT DM) Oats straw (14.7 MT DM Total MT
Yr0 0 0 0 0 0 0
Min. Requirements (MT Dry Matter) Yr1 Yr2 Yr3 Yr4 Yr5 Yr6 28 38 43 45 46 49 96 134 144 150 151 156 29 44 49 51 51 55 0 14 13 13 14 13 6 7 7 8 8 8 159 237 255 266 270 281
The annual production level is set by the demand of the DFU; in the financial projection an imaginary price is charged to the DFU. The forage unit includes a sprinkler irrigation system with aluminium pipes. Investments A total investment of almost EUR 288,724 is required for establishing the forage production sub-unit, the largest part is taken up by the procurement of tractors and irrigation system. The total investment per category is shown in the table below. Table 27.
DFU Forage Production - Investments
Item Land Civil Works Irrigation Set Complete Farm Machinery Others Total
EUR 31,034 39,655 218,034 288,724
Operating costs Most of the operating costs consist of salaries and wages, see table below. In total 6 fulltime employees are assigned to the fodder production sub-unit, including a supervisor and tractor driver. It is assumed that both the DFU and
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the fodder production sub-unit share much of the labour peaks together with the labour resources assigned to them (including students, as part of their vocational training programme). Table 28.
DFU Forage Production - Operating Costs
Item Salaries and Wages Fuel irrigation pumps Others Total
Operating Costs (EUR) 21,600 11,492 14,749 47,841
Percentage 45 24 31
Revenues The revenues consist of forage sales to the Dairy Farm Unit, which are set at an imaginary price. The price is on average EUR 220 per tonne dry matter for lucerne, maize silage and grass hay. Working capital Working capital requirements are based on operational costs for the sub-unit, which is on average EUR 3,986 per month. Residual value All investments are linearly depreciated in 5, 8, 9, 10, 12, 15 or 20 years. For civil works and construction, back-up generator and company car salvage values of 10% have been incorporated. Total residual value at the end of the projected period is about EUR 270,125, consisting of EUR 266,445 for fixed assets and EUR 3,986 for accumulated working capital. Cash flow and IRR The net cash flow of the FPU is positive as from the second year. In the 10th and 11th year it shows a negative flow due to reinvestments. During the last years of the projection, the net cash flow is almost EUR 15,000. If the forage production sub-unit is treated as a separate entity, the IRR is 0.7%.
4.3.4. Smallholder Demonstration Farm It is proposed that the current farm buildings of DTI will be leased out at a nominal fee to a farmer, to operate as a smallholder farm on a commercial basis. This sub-unit will play a significant role in the practical dairy training as a smallholder demonstration unit. The farmer will be free to operate the farm on commercial terms as his own dairy enterprise, but will have to comply with the standards imposed by DTI. In return, the farmer will receive practical training and on-the-job coaching by DTI on best practices in smallholder dairy farming, and is required to make
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the premises available for demonstration and practical training for DTI’s students.
4.4
Conference Hall Unit (CHU)
The Conference Hall Unit (CHU) will run commercially as a separate unit, with its own commercial manager. The conference hall, which includes an office, kitchen and dining facilities is currently under construction (financed by an IFAD project), and has an estimated capacity of 100 people. In order to be able to run the conference facility on a commercial basis, it is proposed to build guesthouse facilities, something that is not foreseen under the current project. It is proposed to build accommodation for 70 people, in two quality standards: 30 single rooms and 20 double rooms. See details in the table below. Table 29.
CHU Revenues Assumptions
Conference Hall (100 persons) Single Room Accommodation Double Room Accommodation
Rent/day (EUR) 1,034 52 78
Occupancy (%) 50 70 60
Investments The total investments for the Conference Hall Unit are shown in the table below. The inventory of buildings includes conference and guesthouse furniture, kitchen hardware and office hardware. Table 30.
CHU Investments
Item Investment (EUR) Land Civil Works * 269,952 Civil Works - engineering 3,017 Inventory Buildings 136,700 Transportation 20,000 Total 429,669 *not including the investments in the conference hall
The inventory of the buildings includes conference and guesthouse furniture, kitchen hardware and office hardware.
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Table 31.
CHU Guesthouse Civil works
Single Room Double Room Total
No. 30 20
Total m2 1,074 831 1,905
KES/m2 EUR/m2 16,450 16,425 16,439 142
Total KES 17,661,178 13,653,217 31,314,396
Tot. EUR 152,252 117,700 269,952
Operating Costs Most of the operating cost for the guesthouse is allocated to consumables, including laundry and other consumables. This is largely based on the assumption of a cost of EUR 20 per person for 100 guests per year times 150 days/yr. This amount may vary as there is no information available to verify this data. Table 32.
CHU Operating Costs
Item Salaries and Wages Consumables (bed linen, consumables) Catering Others Total
Operating Costs (EUR) 98,537 300,000 162,000 22,586 583,105
Percentage 17 51 28 4
The total numbers of employees is 20, and includes a fulltime manager, assistant manager, ICT, cleaning, catering and maintenance staff and security. It is assumed that administrative tasks are carried out by the administration under the DTU. Catering costs are based on EUR 8 per meal for an average of 100 guests for 180 days per year. In addition, costs for kitchen utensils are included as well. Working capital Working capital requirements are based on operational cost of the CHU, which is on average EUR 48,592 per month (at full operation). Revenues The main revenues for CHU derive from renting out the conference hall and guesthouse as shown in the table below. The occupancy percentages are estimations, with the remark that the guesthouse can be rented out to attendees of short courses organized at DTI, if available. Table 33.
CHU Rates per Day
Description Conference Hall Single Room Double Room
No. 1 30 20
Occupancy rate 50% 70% 60%
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KES 120,000 6,000 9,000
EUR 1,034 52 78
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It is assumed that the CHU generates revenues of approximately EUR 925,000 per year at full operation. Of this amount, 20% is generated by the conference hall, while 80% is generated by the guesthouse. Residual value The total residual value of the CHU is around EUR 264,000. This amount consists of EUR 215,500 for fixed assets (including land) and EUR 48,600 for working capital. Cash flow and IRR As from the second year of the business plan the CHU shows a positive cash flow, which is EUR 340,000 by the end of the forecast period. Treated as a separate business unit the IRR is 71% before interest and tax, which is not considering the investments made in the conference facility itself.
4.5
Lucerne Production Unit (LPU)
The forage production sub-unit of the DFU will not require all of the available agricultural land to grow fodder crops. In order to utilise the remaining land, it is suggested to establish a commercial lucerne farm. Lucerne (Latin name: Medicago Sativa), also called Alfalfa, is a perennial plant cultivated as a highprotein fodder crop due to its nitrogen-fixing ability. Lucerne has proven to be a good commercial crop to be grown in the area around Naivasha. There are several large-scale lucerne farms in the direct vicinity of DTI under pivot irrigation. The demand for lucerne is high, both in the domestic market and internationally. Therefore the production of lucerne is expected to be a lucrative business. Although not part of the core (training) business of DTI, the establishment of the LPU is an appealing option to create an additional revenue stream for DTI. The Lucerne Production Unit (LPU) is integrated in this proposal as a separate business unit of DTI, but ideally the whole enterprise is outsourced to a professional commercial party that is familiar with cultivating lucerne, on a lease or profit sharing basis. A total of 264 hectares (652 acres) is proposed in to be used under the lucerne production plan. The irrigation system includes 5 pivot systems, with water supplied by a nearby stream. A dam and pump stations will be established to pump the water to the pivots, which are electrically driven; generators provide electricity backup. Investments The total investment for the LPU is shown in the table below. A total of 5 centre irrigation pivots will provide irrigation during the dry season, and the
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total area is under cultivation is 264 hectares (3 plots of 66 ha and 2 plots of 33 ha). This requires an investment of EUR 841,213 in hardware such as centre pivots, boreholes, pumps and pipes. Investments for civil works consist of a fodder store and roads. Table 34.
LPU Investments
Item Land Civil Works Dam (for Irrigation) Irrigation Equipment Farm Machinery Generators Total
Investment (EUR) 150,000 29,630 841,213 480,241 44,444 1,545,529
Operating Costs The largest percentage of the operating costs is for fuel needed to operate the irrigation machinery (42%), and is based on the assumption the irrigation system operates 180 days per year, for 8 hours a day, using 15 litres fuel per hour on average. Salaries and wages consist of 28% of the total operational costs. The LPU will need 40 employees and most of them (30) are casual labourers and security guards. Table 35.
LPU Operating Costs
Item Salaries and Wages Fuel for irrigation Seeds, fertilizer, etc. Others Total
Operating Costs (EUR) 192,179 287,299 143,880 56,619 684,615
Percentage 28 42 21 8
Working capital Working capital requirements are based on operational cost of the lucerne production, which is on average around EUR 57,051 per month (as from year 6 onwards). Residual value The residual value of the LPU is almost EUR 5.2 million, which is mainly land value of EUR 4.9 million; the remainder consist of fixed assets of machinery and working capital. Revenues The sale price of lucerne is set at EUR 227 per tonne dry matter, which is based on a farm gate price of KES 350 /18kg bale of 85% dry matter, plus a 15% price increase (due to increasing market demand). Harvest yields of
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lucerne are assumed to be 2.2 tonnes of dry matter per cut, multiplied by an estimated 8 cuttings per year. At full operation the annual revenue is approximately EUR 1 million (year 6 onwards). Cash flow and IRR In the third year the LPU shows a positive net cash flow of almost EUR 360,000 before interest and tax, and remains positive the remaining forecast period. The IRR for the LPU, treated as a separate business unit, is 17% before interest and tax.
4.6
Consolidation of Financial Analysis
In this section, the financial projections for each business unit are consolidated to provide an overall picture of investments, operational costs, profitability and cost recovery. Detailed consolidated financial projections can be found in annex 3. Consolidated cash flow Investments of the individual units were discussed in the previous sections. In the table below a summary of investments and working capital requirements are presented. Table 36.
Consolidated Investments and Working Capital
Business Unit Investments Working Capital1 DTU 2,205,832 133,313 2 DFU 890,129 20,738 CHU 429,669 48,592 LPU 1,545,529 57,051 Total 5,071,159 259,694 1 Working capital at full operation (year 6) 2 DFU including the forage production sub-unit
Total 2,339,145 910,867 478,261 1,602,580 5,330,853
Funding It is assumed that funds required during the first two years, in the start-up period, will be covered by equity and long-term loans on a 70/30 % ratio. It is projected that the loan is used to finance the LPU (EUR 1.5 million). For this loan an interest rate of 10% per annum in constant terms has been applied with a grace period of one year and full repayment of the loan in year three. Profit and loss and flow of funds As from year 0 a profit of EUR 592,000 is projected before interest and tax, while the profit for year 1 is projected at EUR 1.5 million. In subsequent years the profit is on average EUR 650,000. Government corporate income tax is calculated at 0% of the profit.
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Consolidated Cash Flow and IRR Together with the proposed funding, the consolidated cash flow before interest and tax, results in a positive flow of funds in year 2. Surplus in the accumulated cash flow after interest and tax is only registered in year 8 of the forecast period. The consolidated cash flow yields a positive IRR of 21%. The IRR after interest and taxes is 15%. Cash flow deficits only occur in year 0, after which they remain zero in the second year, due to the maximum repayment that is applied. In the third year the loan is fully repaid and a positive cash flow of approximately EUR 220,000 remains. The cash flow to equity is projected at 31%. It has to be noted that this IRR has been calculated under the assumption that the Government will continue funding DTI for a period of at least five years, and that a training levy is applied to the milk that is processed in the country. Without these funding sources, DTI will be able to operate at a cost-recovery basis, with an IRR of +2% after interest and tax. Table 37.
Consolidated Internal Rate of Return
Business Unit DTU DFU DFU – fodder sub-unit CHU LPU Total before Interest and Tax Total after Interest and Tax
IRR 43% -17% 1% 73% 17% 20% 15%
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CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 5.1
Conclusions
General C1. The dairy sector is the largest agricultural sub-sector in Kenya in terms of contribution to GDP and employment. The Kenya Government’s Vision 2030 recognises the dairy sector as one of the key sectors for economic growth, food security and nutrition. C2. The dairy industry in Kenya is private sector driven, dynamic and on a strong growth path with large investments across the value chain. C3. There is a strong need for practically skilled labour in the dairy sector, not only in Kenya but in the neighbouring countries as well. C4. Skilled labour needs include well-trained technical staff for dairy farm management as well as milk collection, bulking, testing, processing and marketing. C5. The Dairy Training Institute in Naivasha has a well-known name for practical dairy training in East Africa; this reputation can be build upon. DTI is one of very few institutes in Kenya with the mandate to carry out technical dairy training, and the employability of DTI graduates is high. C6. Under the current institutional setup, DTI is part of the government, and as such is restrained in operating in an efficient and effective manner. To alter this, DTI will have to become less dependent on the Government, either as a semi-autonomous or as a fully autonomous institute. C7. The legal and policy framework in Kenya is in support of the transformation of DTI into a more autonomous institute. C8. Under the condition that DTI reduces its dependence on the government, and has a transparent and effective governance and management structure, dairy processors are willing to participate and invest in a national dairy training institute. DTI’s Training Program and Facilities C9. In order to provide quality training and deliver highly skilled graduates, the DTI facilities and training curricula need to be improved. C10. The conference facility could be an important asset to DTI, but no guesthouse has been included in the building plans financed by the IFAD project. C11. The assessment of the labour needs in the dairy sector showed a gap between competences provided in the certificate courses at DTI and current labour market needs, with skills in communication, IT, and business lacking. C12. The main dairy processors emphasize the need for improved dairy farm management skills; the current long-term training program in DTI focuses mainly on milk processing rather than milk production.
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C13. Training programs are currently not in line with competency and ICT based learning approaches. C14. The land around DTI is expansive, has high agricultural potential, and is currently not in use. The land ownership issue and current land disputes make it difficult to utilize all available land. This needs to be resolved by the ministry as soon as possible. Financial C15. Under the proposed business plan, financial calculations indicate that DTI can operate in a profitable manner. C16. In total EUR 5.3 million investment is needed for all four business units, of which the Dairy Training Unit requires EUR 2.3 million, the Dairy Farm Unit EUR 0.9 million, the Conference Hall Unit EUR 0.5 million, and the Lucerne Production Unit EUR 1.6 million. C17. A Dairy Training Fund, financed through a levy of KES 0.128 per kg of raw milk processed, would yield to EUR 0.6 million per year at an estimated total annual processed milk volume of 500 million kilogram. This is a very important instrument through which dairy training could be funded in Kenya. C18. The estimated government contribution to the Dairy Training Unit during the 5-year transition period totals EUR 1.9 million. C19. The consolidated IRR for all four business units is 21% (before interest and tax), with the IRR for the DTU 43%, the DFU -17%, the CHU 73% and the LPU 17%. C20. The consolidated IRR will drop to +2% without both the Dairy Training Fund and the government contribution. C21. The IRR of the Dairy Farm Unit is negative 17%, which is mainly due to the high costs of feed, which is an area that needs careful consideration. C22. The revenue of the Conference Hall Unit is generated for 80% from rent of the guesthouse, the remaining 20% from rent of the conference hall. C23. Lucerne production under irrigation promises to be a very profitable business opportunity, due to increasing demand locally as well internationally.
5.2
Recommendations
General R1. Before the business plan can be implemented, the legal transformation of DTI into a (semi) autonomous institute will have to be completed. The on-going application process for the SAGA status should be finalized as soon as possible; it should be explored whether the application has to be renewed because of the newly appointed cabinet (see page 18). R2. Before land-dependent business units like the dairy farm or the lucerne production unit can be implemented, the land disputes will have to be resolved (see page 20).
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R3.
R4.
R5.
R6.
R7.
R8. R9. R10.
R11.
R12.
R13.
A management board should be established as per SAGA / TVET guidelines, which would include key stakeholders like the Ministries, Kenya Dairy Board, farmers’ organizations and dairy processors. The management board should review and approve this business plan if in agreement, after which fundraising can be initiated for the business plan. The proposed organogram (see page 22) should be a guide for new staff recruitment, and so is the proposed number of staff and remuneration on page 23. Some of the current staff will need additional training and new staff might need to be hired (see page 29). An interim manager with international experience and networks in practical dairy training should be appointed for two years to support DTI with both international and local fundraising, establishment of international linkages and implementation of the business plan. DTI should have a regional mandate for dairy technical training, targeting neighbouring countries like Tanzania, Uganda and Rwanda (page 17). Units like the conference facility and the dairy farm should be operated as commercial units, separate from the training unit DTI should be operated under the conditions stipulated in the TVET Act. DTI should seek partnership with a range of national and international stakeholders, e.g. internationally with the Dairy Campus, Dairy Training Centre and CowSignals in the Netherlands and at national level with future employers in the dairy industry like processors, dairy societies, farmers, input suppliers and service providers. Dairy Training Centre Netherlands could play an important role in quality assurance and development of internationally recognized training programs and approaches (see page 31), possibly in a franchise model. It is recommended to establish four DTI business units: the Dairy Training Unit, the Dairy Farm Unit, the Conference Hall Unit and the Lucerne Production Unit, to be operated as separate business centres. The maps produced under a topographical survey which was recently carried out (see pages 64 and 65) should be used for planning purposes as well as for initiation of the application of the title deeds.
Training Program R14. The long-term training should include a general one-year certificate course, including topics from across the dairy value chain; this general first year should be the first year of the two-year certificate course offered (see page 24). R15. The second year of the two-year course should have two specializations: dairy farm management and milk collection, processing and marketing. The two-year certificate course can potentially be transformed to a diploma course in the near future (see page 24).
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R16. Curricula should be developed in close collaboration with all stakeholders, in particular with the dairy processors and other future employers of DTI graduates; the curricula will aim to work towards certain market-conform job profiles (see page 24). R17. The curriculum will have a modular approach, especially in the second year. These modules can be used for the short courses as well (see page 24). R18. A major focus of DTI’s training should be on standard and tailor-made short courses, responding to market needs (see page 24). R19. DTI and the Kenya Dairy Board should collaborate in designing specialized courses for milk testers, transporters, personnel of milk collection centres and other key personnel in the dairy value chain. KDB could make this course a prerequisite for licensing skilled personnel, including mandatory refresher courses (see page 27). R20. Innovative training methodologies, with a focus on ‘learning by doing’, competency based learning and an ICT-based approach will be adopted (see page 28). R21. A monitoring and evaluation framework should be set up to monitor the quality of training, and an alumni organization will facilitate the traceability of graduates. R22. A detailed marketing plan for DTI’s products should be elaborated. Training Facilities R23. The existing classrooms and dormitory should be renovated and new additional dormitory facilities should be established to cater for a total of around 420 students in the regular long-term courses (see page 36). R24. A new dairy processing facility, including laboratory facilities should be established (see 36). R25. The dairy processing facility should be operated as a training unit and not run on a commercial basis. Dairy Farm R26. A new dairy farm should be constructed (see page 42), inclusive of a forage production sub-unit. R27. The dairy farm and the forage production sub-unit should be operated as separate business centres. R28. A dairy entrepreneur will run the smallholder demonstration farm as a commercial entity. In return of having access to practical training and the use of the existing DTI farm infrastructure, the farmer will provide access to the smallholder dairy enterprise for training of DTI students. Conference Hall Unit R29. The conference facility, currently under construction, operated commercially as a separate business centre.
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be
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R30. Investments need to be made in a guesthouse in order to make the Conference Hall Unit more marketable and profitable. The guesthouse can be used for short courses at DTI as well. R31. The conference facility will be marketed for seminars and workshops to other organisations. R32. CHU rental prices and occupancy rates as applied in this business plan are based on assumptions that need further market research for validations. Lucerne Production Unit R33. The Lucerne Production Unit should be entirely operated as a separate commercial entity, or leased to a private investor, with or without a profit sharing arrangement.
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ANNEX 1: WORK PLAN Below follows a summary of the steps for implementation of the business plan, which do not necessarily have to be taken in this order: 0. Precondition 1: SAGA / TVET status resolved Precondition 2: Land ownership resolved 1. 2. 3. 4.
Establish Management Board Review / approval business plan Fund Raising Establish organizational structure Accept and implement new organizational structure. Accept new charter for staff terms and conditions of service. Recruit Staff. 5. Establish partnerships International, e.g. DTC Netherlands. Regional, e.g. East Africa. National: ministry, KDB, processors and other employers, KARI, other training institutes, farmers’ training centres. 6. Curriculum development Develop profession and skill profiles. Develop demand-driven competence based training program in cooperation with major stakeholders, in particular with the private sector. Establish certification and accreditation procedures for training courses. 7. Improve and develop Dairy Training Unit Building new dormitory and renovation of existing dormitory Renovation of staff houses / lecture halls Build milk processing and laboratory facilities and procure equipment 8. Set up and implement marketing plan 9. Develop Dairy Farm Unit Contracting and construction of buildings. Explore leasing option. Procure equipment. 10. Build a guesthouse for Conference Hall Unit Contracting and construction. 11. Develop Lucerne Production Unit 12. Explore other potential revenues
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ANNEX 2: STAFFING / REMUNERATION Remuneration New DTI Position in New DTI
15% Job Nr of Gross Salary Additional % group employees KES / mnth
New DTI Avg Gross sall / month plus 1 mnth leave allowance and % correction Total Gross Sal gross KES KES KES EUR /mnth KES sal/mnth KES 6 7 +25% 8 5 311,638.50 337,608.38 337,608.38 2,910.42 337,608.38 207,465.75 224,754.56 224,754.56 1,937.54 224,754.56 179,217.15 194,151.91 194,151.91 1,673.72 194,151.91 112,625.25 122,010.69 30,502.67 152,513.36 1,314.77 152,513.36 112,625.25 122,010.69 30,502.67 152,513.36 1,314.77 152,513.36 112,625.25 122,010.69 30,502.67 152,513.36 1,314.77 152,513.36 112,625.25 122,010.69 30,502.67 152,513.36 1,314.77 152,513.36 112,625.25 122,010.69 30,502.67 152,513.36 1,314.77 1,830,160.31 112,625.25 122,010.69 30,502.67 152,513.36 1,314.77 1,830,160.31 112,625.25 122,010.69 30,502.67 152,513.36 1,314.77 915,080.16 112,625.25 122,010.69 30,502.67 152,513.36 1,314.77 152,513.36 112,625.25 122,010.69 30,502.67 152,513.36 1,314.77 152,513.36 71,742.75 77,721.31 19,430.33 97,151.64 837.51 97,151.64 42,541.95 46,087.11 46,087.11 397.30 46,087.11 42,541.95 46,087.11 46,087.11 397.30 92,174.23 42,541.95 46,087.11 46,087.11 397.30 230,435.56 42,541.95 46,087.11 46,087.11 397.30 92,174.23 36,749.40 39,811.85 39,811.85 343.21 39,811.85 57,500.00 62,291.67 15,572.92 77,864.58 671.25 38,932.29 27,738.00 30,049.50 30,049.50 259.05 240,396.00 7,124,158.69 € 61,415.16
Dairy Training Unit (DTU) Managing Director Dean of Studies & Students Adminstrative Manager Hd Accountant ICT/Communication/ PR Officer HR Officer Procurement Officer Lecturers Dairy Farm Management Lecturers Dairy Processing Management Lecturers Basic Sciences Logistics Officer Marketing Officer Store Keeper Laboratory Technician Milk Processing Operator/Chief Driver Security (incl DFU & FPU) Driver Clerical officer I IT Technician (also assigned to CHU) Cleaner/ Cooks
1 S Q P N N N N N N N N N L H H H H G K F
2 1 1 1 1 1 1 1 12 12 6 1 1 1 1 2 5 2 1 0.5 8 59.5
3 270,990.00 180,405.00 155,841.00 97,935.00 97,935.00 97,935.00 97,935.00 97,935.00 97,935.00 97,935.00 97,935.00 97,935.00 62,385.00 36,993.00 36,993.00 36,993.00 36,993.00 31,956.00 50,000.00 24,120.00
4 40,648.50 27,060.75 23,376.15 14,690.25 14,690.25 14,690.25 14,690.25 14,690.25 14,690.25 14,690.25 14,690.25 14,690.25 9,357.75 5,548.95 5,548.95 5,548.95 5,548.95 4,793.40 7,500.00 3,618.00
Dairy Farm Unit (DFU) Farm Manager Head of Operations Tractor Driver Skilled Labour (milker/ feed preparation)
P L H E
1 1 1 2 5
155,841.00 62,385.00 36,993.00 20,000.00
23,376.15 9,357.75 5,548.95 3,000.00
179,217.15 71,742.75 42,541.95 23,000.00
194,151.91 77,721.31 46,087.11 24,916.67
Forage Production Unit (FCU) Head of Operations Tractor Driver Mechanic Casual Labour
L H H D
1 1 0 4 6
62,385.00 36,993.00 36,993.00 17,055.00
9,357.75 5,548.95 5,548.95 2,558.25
71,742.75 42,541.95 42,541.95 19,613.25
77,721.31 46,087.11 46,087.11 21,247.69
Conference Hall Unit (CHU) Conference hall Manager Ass Mng IT Technician (also assigned to DTU) Cleaners / cooks / servants Security
P M K F H
1 1 0.5 15 3 20.5
155,841.00 83,760.00 50,000.00 24,120.00 36,993.00
23,376.15 12,564.00 7,500.00 3,618.00 5,548.95
179,217.15 96,324.00 57,500.00 27,738.00 42,541.95
194,151.91 104,351.00 62,291.67 30,049.50 46,087.11
Lucerne Production Unit Production Manager Admin manager Head of Operations Tractor driver Mechanic Security Casual labour
P N L G G H D
1 2 2 4 1 15 15 40
155,841 97,935 62,385 31,956 31,956 36,993 17,055
23,376.15 14,690.25 9,357.75 4,793.40 4,793.40 5,548.95 2,558.25
179,217.15 112,625.25 71,742.75 36,749.40 36,749.40 42,541.95 19,613.25
194,151.91 122,010.69 77,721.31 39,811.85 39,811.85 46,087.11 21,247.69
19,430.33
19,430.33
26,087.75 15,572.92
30,502.67 19,430.33
194,151.91 97,151.64 46,087.11 24,916.67
1,673.72 837.51 397.30 214.80
194,151.91 97,151.64 46,087.11 49,833.33 387,224.00 € 3,338.14
97,151.64 46,087.11 46,087.11 21,247.69
837.51 397.30 397.30 183.17
97,151.64 46,087.11 84,990.75 228,229.50 € 1,967.50
194,151.91 130,438.75 77,864.58 30,049.50 46,087.11
1,673.72 1,124.47 671.25 259.05 397.30
194,151.91 130,438.75 38,932.29 450,742.50 138,261.34 952,526.79 € 8,211.44
194,151.91 152,513.36 97,151.64 39,811.85 39,811.85 46,087.11 21,247.69
1,673.72 1,314.77 837.51 343.21 343.21 397.30 183.17
194,151.91 305,026.72 194,303.28 159,247.40 39,811.85 691,306.69 318,715.31 1,902,563 € 16,401.41
131
Dairy Training Institute Naivasha – Business Plan, Dec 2013
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ANNEX 3: FINANCIAL PROJECTION The following annexes are attached to this report in pdf: Annex Annex Annex Annex Annex Annex
3-1 3-2 3-3 3-4 3-5 3-6
DTU Financial Projection DFU Financial Projection DFU Forage Production sub-Unit Financial Projection CHU Financial Projection LPU Financial Projection Overall Consolidated Projection
Dairy Training Institute Naivasha – Business Plan, Dec 2013
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ANNEX 4: SITE SURVEY PLAN DTI
Dairy Training Institute Naivasha – Business Plan, Dec 2013
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ANNEX 5: TOPOGRAPHICAL DIAGRAM DTI BUILDINGS
Dairy Training Institute Naivasha – Business Plan, Dec 2013
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ANNEX 6: DAIRY PROCESSORS’ QUESTIONNAIRE A. 1. 2.
BACKGROUND INFORMATION Business Name: Respondent
3.
Owners name (if not same with respondent)
4. 5. 6. 7. 8. B. 9.
Size of business (milk intake per day) Areas where the firm operate Processed/marketed Products Locations of Business Membership to KDPA LABOUR OUTLAY (Professionals and Technical) Source of hired labour – List
10.
Professions requirement – Number, level and skills
11.
Those currently employed
PhD/MSc
BSc
Diploma
Certificate
12.
Future requirement – next 5 years or other plan
PhD/MSc
BSc
Diploma
Certificate
13.
How many other (non-professional/ technical) workers and in what areas
14.
Which institutes in Kenya and outside offers Dairy processing/technology and or Animal production related training (list) How often do you recruit new technical staff (staff turn-around) Do new recruits straight from training meet your need or they require internship/on the job training What would you recommend to be done at training for the recruits to be ready for the job on hiring Do you recruit DTI trained staff TRAINING NEEDS Are you familiar with Dairy professional/technical training institutes in Kenya Which ones do you know and what level of training do they offer Are you familiar with DTI and its training curriculum? Are you satisfied with what they offer or would you want some changes. If so what changes Indicate your priorities on the skills you require for your facility/business Are there skills you or the industry would require but are not available from the current training institutes Does your firm/business participate in offering internship to trainees from DTI and other training institutions How often do you have interns and do you have future plans on how you would want to deal with interns Any general comments on the current skills training and suggestions DTI CURRENT OWNERSHIP, MANAGEMENT STRUCTURE, CAPITALIZATION AND FUNDING Who owns and runs DTI and how is it managed?
15. 16. 17. 18. C. 19. 20. 21. 22. 23. 24. 25. 26. 27. D. 28. 29.
Name
Gender
Name
Gender
Are you familiar with the current DTI status and would you want changes
Dairy Training Institute Naivasha – Business Plan, Dec 2013
Page 66
30. 31.
What management structure and changes would you want to see happen Are you familiar with any Semi Autonomous Government Agency in Kenya and would you want DTI to be modelled around that
32.
Would you support changes that would make the restructured DTI be managed by the main stakeholders (mainly Processors)
33.
Do you think the changes you would like can happen to DTI or you would rather there is established a new/private dairy training institution
34.
Are you or your firm willing and ready to contribute – time and finance – for the management of new DTI
35.
Any suggestion on how the structure and how you would want new DTI managed Any suggestion on how DTI can be managed as a business – i.e. be able to generate its own self sustaining resources Should DTI target training needs for Kenya dairy industry only or should it position itself to serve needs beyond the borders
36.
37.
38.
If it has to position to serve needs beyond the borders, should it target East Africa, the whole of African or what is your opinion?
39.
Any other comment(s)
Interviewer’s name: Notes (observations and comments) by the interviewer/enumerator
Dairy Training Institute Naivasha – Business Plan, Dec 2013
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ANNEX 7: LABORATORY EQUIPMENT No EQUIPMENT & REAGENTS Milk testing 1 LactoScope (LactoScope filter) 2 Specific gravity - Lactodensimeter (calibrated 20 °C) - Measure glass 500 ml 3 pH: a. pH meter b. Probe electrode c. Sampling bottle @ 150 ml d. Buffer pH 7.0 @ 250 ml e. Buffer pH 4.0 @ 250 ml f. KCL (KCl 3M) 4 Total Solid (Dry matter) Krus Porselin 5 Protein (backup & calibration) Kjeldahl Destruction & Distillation unit Flask kjehldahl 250 ml Erlenmeyer 250 ml Tablet kjehldahl Boric Acid H2SO4 95% Indicator Metil Red: 1.Bromocresoll Green 2. Methylene blue HCL 35% (for HCl 0,1 N) Burette 25 ml 6 Fat (backup system & calibration) 1. Centrifuge Gerber 2. Isoamyl Alcohol 3. Test tube Butyrometer 5. Rubber Butyrometer 6. Pipet 10.75 ml 7. Pipet Volume 10 ml 8. Pipet Skala 5 ml
Dairy Training Institute Naivasha – Business Plan, Dec 2013
Unit
Qty
Unit
2
-
4,200
Unit Pcs
400
1,100 -
8 5 30 Set Set Set
6,914 950
Litre
75 13 13 18
20
Pcs
440
-
2 30 40 Set Set Set
Unit Unit Unit
245 74 34 101 28 20 20 12 25 350 90 1,333 113 354 105 169
4,100 -
20 20 Mettler Toledo 7 easy pH kit type s20K Mettler toledo inlab expert ME51343101 Merck 109439.1000 Merck 109435.1000
Set Set Set Set
Iwaki Iwaki Iwaki Iwaki Iwaki
Totals (EUR)
1 Set 100 100 50 50 50
Pcs Litre Pcs Pcs Pcs Pcs Pcs
Page 68
7
9. Test tube rack Butyrometer Antibiotic Residue - Rapid milk beta-lactam Detection - Delvotest
Microbiology 1 Equipment: Autoclave Incubator (30oC, 35oC, & 55oC) Oven Sterile Water Bath Thermolyne Gas burner Bunsen Fume hood/cupboard 2 Media Agar: TPC; PCA (Plate Count Agar) Yeast & Mould - Oxytetracycline-Glucose Yeast Extract Agar - OGYE Selective Supplement Bacillus: Glucose-Caseinpepton-Agar Transferpette 1 ml Blue tube 500pcs/pack Tube Sterile 4 ml (100 pc/ pack) Sterikon (for testing autoclave) 3 Consumables & EQUIPMENT Petridish 80x15mm Laminar Air Flow (LAF) Magnet Stirrer Reign tube 15 ml Erlenmeyer bottle 500 ml Aluminium Foil Alcohol 96% Alcohol 70% Test tube racks Vial sterile for sampling Pipet Tetes (Pasteur 2.5 ml) @ 1Pack (100 pcs) Bottle sampling 150 ml Salmonella (XLD Media Agar) oxoid CM 0469
Dairy Training Institute Naivasha – Business Plan, Dec 2013
10
Unit
Set Set
Unit Unit Total
1 1 2 3 1 10 1 Merck 1.05463.0500 Oxoid CM0545 Oxoid CM0546 Merck 1.10860.0500 Brand Brand 702521
OxoidCM 0469
Unit Unit Unit Unit Unit Pcs Set
104 208 254 4,597 170
Set Set Set Set Set 10 100 4 Set
Litre Litre Litre Litre Litre Litre Litre Litre
46 85 96 99 947 1,000 75 4
200 1 20 300 40 Set Set Set 10 Set 20 200 Set
Pcs Pcs Unit Pcs Pcs Pcs Litre Litre Litre Pcs Pcs Pcs Litre
225 60 375 525 3 8 33 29 10 183 300 77
17,264
21,861
3,750 2,083 8,333 1,200 450 8,000 -
-
2,500 -
-
Page 69
Staphylococcus (Vogel Jonsen Agar)oxoidCM 0641 Potassium tellurite solution 3.5 % oxoid SR030J
OxoidCM 0641 Oxoid SR030J
Set Set
Litre Total
Feed 1 2 3 4 5 6
analysis Kjeldahl analysis for crude protein Soxhlet analysis for crude Fat Crude Fibre analysis Dry Matter / Dry oven Microscopes Laboratory utilities / miscellaneous
GRAND TOTAL Indicative budget prices
Dairy Training Institute Naivasha – Business Plan, Dec 2013
2 2 1 2 10 1
Unit Unit Unit Unit Unit Set Total
96 42 4,489
26,317
4,000 7,600 11,600 7,500 4,000 5,000 39,700
30,806
39,700 92,367
Page 70
Cow treatment area
Feed Alley
Feed Alley Lactating Cows Low Yield
Lactating Cows High Yield
Individual boxes soil saw-dust
Individual boxes soil saw-dust
39 400 12 350
5 000
8 250
11 600
Fence
Individual boxes soil saw-dust
3 600
14 000
4 200
14 000
3 600
Fence
12 500
5 000
water
1 150
B: Young stock Stable 3 600
Far off dry Cows
water
1 150
1 250
water
1 050
Individual boxes soil saw-dust
A: Cow Stable
Pregnant Heifers
water
water
950
water
650
Extension area 235,0 m2
Feed Rail
Fence
Young St age: 13 - 18 m
water
Young St age: 7 - 12 m
4 000
Feed Rail Calves age: 3-6m
Cow Stable
Biogas Generator
1 000
Milk Room
Fence
2 500
2500
New DTI DAIRY FARM PROPOSED CONSEPT CAPASITY 50 MILK COWS WITH YOUNG STOCK
3 500
ANNEX 8: LAY-OUT DAIRY FARM
3 600
Fence
Fence
Fence
30 000
Manure -Srorage -Handling area 60,0 m2
C: Catle Walkway Biogas Generator 35,0 m2
Biogas 60,0 m2
Cow treatment area
Fence
Fence
46 800
Fence
D: Milking Parlour Building
D: Utility Building
Maternity 47,5 m2
Fence H=1,5 m
Calf Rearing
Attention box 61,0 m2 - cripple - retained AB etc.
Dairy Training Institute Naivasha – Business Plan, Dec 2013
Feed store 21,5 m2
Waiting area with Fan 66,5 m2
Vet store 21,5 m2
- Milk replacer - Medicines/ - Calf starter equip - Al storage
Milking Parlour 2x6 herringbone
Wc Dress 3,0 m2 5,0 m2
+0.10
- Cooling
+0.10
Fence
Fence H=1,5 m
Fence H=1,5 m
Close up (calving) 39,0 m2
Feeding fence Fence H=1,5 m
Feeding fence
+0.10
Wc Dress Lobby Lecture /demonstration facility 3,0 m2 5,0 m2 18,0 m2 64,0 m2 +0.10
+0.10
-1.25
Milk room 63,0 m2
Machine room 32,5 m2
Office + store 26,5 m2
+0.10
Page 71
9 000
Effluent 48,0 m2
Septic tank 35,0 m2
ANNEX 9: LAY-OUT MINI DAIRY AND LABORATORIES 4 000
2 500
3 000
5 000
New DTI MINI DAIRY & LABORATORIES PROPOSED CONCEPT FOR TRAINING PURPOSES ONLY
Milk Reception Area 47,5 m2
Machine Room 91,5 m2 - Hot water / Stearn Prod. - ice bank / compressers
Office Dairy Plant and Laborat. 116,0 m2 - Utility Store
Biochemical laboratory 118,5 m2
Lab Training Room 118,5 m2 Cap. 24 students
Mini Dairy Entrance 38,5 m2
Milk Cooling & Storage 106,0 m2
Septic Tank
Toilets 21,0 m2
Veranda 479,0 m2
Lab Training Room 118,5 m2 Cap. 24 students
Lab Testing 118,5 m2
Lecture / Demonstration Room 146,0 m2
12 000
Milk Reception Platform 30,5 m2
- Milk Composition - Acceptation testing - Sensory avaluation etc.
Microbiological Laboratory Entrance 31,5 m2
Toilets 25,5 m2
Septic Tank
Dressing / Washing Room 22,5 m2
Dressing Room 25,0 m2
Testing Laboratory 56,0 m2 Prosessing Area 125,0 m2
Media Preparation Room 35,0 m2
Corridor 119,0 m2
Packing Area 53,0 m2
Corridor 71,5 m2
Incubation Room 35,0 m2
- Cheese
Packing Area 66,5 m2
47 000
Corridor 57,5 m2
Reference Culture Room 34,0 m2
- Pasteurised Milk
Packing Area 92,0 m2
Decontamination Room 33,0 m2
- Yoghurt / Mala - Ice Cream
Reference Culture Room 28,5 m2 Maintenance Room
Packing Area 27,5 m2 - Butter
Sample receipt Room 23,5 m2
Material Store 36,5 m2
Test Sample Store 25,5 m2
Ripening Room 21,5 m2
Store room media 25,5 m2
Cold Store 27,5 m2
Cold Store 105,0 m2
Dispatch
21 000
Dairy Training Institute Naivasha – Business Plan, Dec 2013
48 000
13 000
Page 72
ANNEX 10: LAYOUT DTU DORMITORY
Dairy Training Institute Naivasha – Business Plan, Dec 2013
Page 73
ANNEX 11: LAYOUT CHU GUESTHOUSE
Dairy Training Institute Naivasha – Business Plan, Dec 2013
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Dairy Training Institute Naivasha – Business Plan, Dec 2013
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ANNEX 12: DFU MILK PRODUCTION FORECAST COWS IN PRODUCTION Year Yr1
-
-
12
23
35
47
47
46
46
46
47
COWS IN PRODUCTION Yr2 J F M 1 2 3 2 2 2 11 11 11 11 11 11 11 11 11 11 11 11 47 47 35
-
-
5,259 5,259 5,180 173
5,259 6,954 12,214 12,031 388
5,259 6,954 8,912 21,125 20,809 694
5,259 6,954 8,912 11,420 32,545 32,057 1,034
6,954 8,912 11,420 11,433 38,719 38,138 1,230
8,912 11,420 11,433 9,545 41,309 40,689 1,356
11,420 11,433 9,545 7,968 40,365 39,760 1,283
11,433 9,545 7,968 11,147 40,092 39,491 1,316
898 9,311 7,968 11,147 5,553 34,876 34,353 1,108
MILK PRODUCTION (Kg.) 1,187 1,521 1,949 7,773 11,147 10,874 5,553 5,553 5,417 4,522 4,522 4,522 2,592 2,592 30,182 25,062 14,480 29,729 24,686 14,263 959 882 460
J 1 Calvings
1 2 3 4 Pregnant 5 6 7 8 9 10 11 Dry 12 13 Cows in lactation
-
MILK PRODUCTION (Kg.) 1 2 3 4 5 6 7 8 9 10 11 Total (kg) Minus 1.5.% loss* Day production -
F 2
DIM=
320
CI=
390
A 4 12
M 5 12 12
J 6 12 12 12
J 7 12 12 12 12
M 3
-
-
-
A 8 12 12 12 11 -
S 9 12 12 11 11 -
O 10 12 11 11 11 -
N 11 11 11 11 11 -
11 11 11 11 -
Volume per year
Vol avg per day Max (as from yr 2) Min (as from yr 2)
D 12 2
A 4 2 -
M 5 11 2
11 11 11 11 24
1,999 4,522 2,592 9,113 8,976 299
-
J 6 11 11 2
11 11 11 24
4,943 1,669 2,592 9,203 9,065 292
-
J 7 11 11 11 2
11 11 24
4,943 6,606 1,393 12,942 12,748 425
-
A 8 11 11 11 11 2
11 34
4,943 6,606 8,592 1,949 22,090 21,758 702
-
S 9 11 11 11 10 2 -
O 10 11 11 10 10 2 -
N 11 11 10 10 10 2 -
1,707 287
MILK DELIVERY (Lt.) Monthly production Day production -
kg/day kg/day
-
Yr 6 M2 Yr3 M3
-
1.50
5,034 168
11,692 377
955
38,378 1,279
33,385 1,077
10 10 10 10 -
45
45
45
42
2 42
4,943 6,606 8,592 11,175 971 32,286 31,802 1,026
6,606 8,592 11,175 11,184 810 38,367 37,792 1,260
8,592 11,175 11,184 9,337 464 40,752 40,141 1,295
11,175 11,184 9,337 7,794 39,490 38,898 1,297
11,184 9,337 7,794 10,829 39,144 38,557 1,244
262,508
Avg day
D 12
308,414
Avg day
845
37,801 1,260
37,470 1,209
% * = Milk loss (incl Mastitis)
20,222 674
31,153 1,005
37,063 1,196
Volume per year
Dairy Training Institute Naivasha – Business Plan, Dec 2013
39,543 1,318
38,639 1,246
255,110
28,891 963
23,990 857
13,861 447
8,723 291
8,810 284
12,389 413
21,145 682
30,906 997
36,727 1,224
39,009 1,258
299,722
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COWS IN PRODUCTION Yr3 J F M 1 2 3 2 2 2 10 10 10 10 10 10 10 10 10 10 10 10 44 43 43 MILK PRODUCTION (Kg.) 913 1,220 1,587 9,337 7,794 7,794 10,829 10,829 10,829 5,259 5,259 5,259 4,390 4,390 2,516 34,132 29,493 24,581 33,620 29,050 24,213 1,085 1,038 781
A 4 2 -
M 5 2
10 10 10 10
-
2
32
10 10 10 10 22
2,065 5,259 4,390 2,516 14,229 14,016 467
2,132 4,390 2,516 9,038 8,903 287
-
J 6 10
-
J 7 13 10 2
10 10 10 22
4,789 1,780 2,516 9,085 8,949 298
-
5,985 6,554 1,486 14,025 13,814 446
48
50
49
47
5,536 7,529 10,769 11,086 1,036 35,956 35,416 1,181
1,024 7,529 10,009 13,604 11,607 865 44,637 43,967 1,418
1,354 10,009 12,630 14,109 9,690 495 48,286 47,562 1,585
1,735 12,630 13,110 11,779 8,089 47,342 46,632 1,504
MILK PRODUCTION (Kg.) 943 384 1,291 2,223 13,110 2,214 10,944 10,944 1,849 9,833 9,136 9,136 13,932 16,156 15,182 5,292 6,475 4,418 50,043 44,686 38,734 49,292 44,016 38,153 1,590 1,572 1,231
A 8 12 13 10 2
10 10 25
COWS IN PRODUCTION Yr4 J F M 1 2 3 2 1 2 2 11 2 11 11 2 12 11 11 9 12 11 9 12 9 2 46 47 47
-
S 9 12 12 13 10 2
10 37
5,536 8,122 8,781 2,065 24,504 24,137 779
-
O 10 2 12 12 12 10 2 -
N 11 2 12 11 12 10 2 -
D 12 2 11 11 12 10 2 -
A 4 1 2 2 11 11 12 9
M 5 1 2 2 11 11 12 8
J 6 1 2 -
47
38
2 11 11 12 8 26
508 1,729 1,543 15,182 5,990 5,406 2,532 32,889 32,396 1,080
591 2,317 2,159 5,990 5,000 3,098 19,155 18,868 609
757 2,426 1,043 5,000 2,866 12,093 11,911 397
-
-
J 7 8 1 2 2 11 10 12 24
3,959 776 2,025 871 2,866 10,498 10,340 334
A 8 13 8 1 2 2 10 10 27
6,204 5,418 648 1,691 499 14,460 14,243 459
S 9 12 13 8 1 2 2 10 35
5,393 8,406 6,610 541 3,102 24,053 23,692 790
O 10 13 12 13 8 1 2 2 47
5,842 7,311 10,475 8,857 757 1,178 34,420 33,904 1,094
N 11 5 13 11 13 8 1 2 -
32,673 1,089
28,232 1,008
23,530 759
13,621 454
8,652 279
8,696 290
13,425 433
23,456 757
34,418 1,147
42,728 1,378
905
46,222 1,541
45,318 1,462 320,971
Dairy Training Institute Naivasha – Business Plan, Dec 2013
5 12 11 13 8 1 2 -
51
51
2,237 7,905 9,032 13,856 9,273 377 984 43,663 43,008 1,434
2,971 9,792 11,893 14,339 7,741 315 564 47,615 46,901 1,513
330,279
Avg day
D 12
366,725
47,903 1,597
42,775 1,528
37,078 1,196
31,483 1,049
18,336 591
11,576 386
10,049 324
13,842 447
23,024 767
32,948 1,063
Avg day
1,005
41,796 1,393
45,579 1,470 356,389
Page 77
COWS IN PRODUCTION Yr5 J F M 1 2 3 2 5 12 5 11 12 5 12 11 12 7 12 10 7 12 7 1 2 1 2 1 48 46 47 MILK PRODUCTION (Kg.) 943 3,831 12,928 4,941 12,300 13,361 4,999 11,918 10,268 11,154 5,828 9,272 7,894 10,693 15,489 4,062 180 46,986 48,535 44,541 46,281 47,807 43,873 1,493 1,707 1,415
A 4 2 2 5 11 10 12 7
M 5 2 2 5 11 10 11 6
J 6 2 2 5 11 10 11 6
J 7 2 2 -
48
47
40
5 11 10 11 6 29
736 1,291 4,173 8,634 13,292 6,421 3,391 37,937 37,368 1,246
979 1,729 3,484 14,327 5,317 5,335 1,732 32,903 32,409 1,045
1,263 2,317 4,860 5,833 4,533 2,846 21,652 21,327 711
1,631 2,426 2,244 4,964 2,598 13,862 13,654 440
-
-
-
A 8 6 2 2 5 10 10 11 25
2,897 1,678 2,025 1,993 2,607 11,200 11,032 356
S 9 12 5 2 2 5 10 10 26
5,656 3,419 1,401 1,691 1,142 13,309 13,110 437
O 10 12 11 5 2 2 5 10 33
5,724 7,139 4,581 1,169 3,102 21,715 21,390 690
51
COWS IN PRODUCTION Yr6 J F M 1 2 3 1 8 1 11 8 1 11 11 8 11 11 11 4 10 10 4 10 4 2 2 2 2 2 2 51 48 45
3,613 7,038 9,520 12,570 6,427 413 984 40,564 39,955 1,289
MILK PRODUCTION (Kg.) 454 4,834 600 9,285 6,294 769 12,504 12,177 8,197 12,891 12,770 12,634 4,510 9,907 9,805 3,765 8,067 6,908 680 564 390 45,723 45,903 46,380 45,037 45,214 45,685 1,453 1,615 1,474
N 11 12 11 11 5 2 2 5 44
5,606 7,206 9,471 6,138 1,631 1,178 31,230 30,762 1,025
D 12 8 11 11 11 5 2 2 -
A 4 2 1 8 10 10 10 4 2 46
943 986 8,275 9,692 8,297 13,836 2,624 44,653 43,983 1,466
M 5 2 2 1 8 10 10 10 4
J 6 0 2 2 1 8 10 10 9 4
J 7 0 2 2 1 8 10 9 9 4
A 8 0 2 2 -
47
46
41
1 8 10 9 9 4 32
1,045 1,291 982 6,908 8,023 13,362 5,622 1,775 39,008 38,423 1,239
162 1,401 1,729 820 5,816 12,811 6,122 4,210 1,017 34,089 33,577 1,119
214 1,828 2,317 820 8,393 5,815 4,804 2,394 26,586 26,187 845
275 2,387 2,426 820 4,278 4,900 3,223 18,307 18,033 582
-
-
-
S 9 4 0 2 2 1 8 10 9 9 27
1,811 352 2,469 2,025 795 3,702 3,148 14,303 14,088 470
O 10 11 4 0 2 2 1 8 10 9 28
4,925 2,460 361 2,061 1,691 795 2,461 14,755 14,534 469
N 11 11 11 4 0 2 2 1 8 10 31
5,155 6,664 3,267 301 1,721 3,102 795 21,006 20,691 690
358,968
44,977 1,499
46,460 1,659
42,636 1,375
36,315 1,211
31,496 1,016
20,726 691
13,269 428
10,721 346
12,740 425
20,787 671
Avg day
983
29,895 996
38,829 1,253 348,851
Dairy Training Institute Naivasha – Business Plan, Dec 2013
D 12 14 11 11 4 0 2 2 1 8 44
5,684 6,954 8,804 4,323 301 2,637 1,178 29,882 29,434 949 374,885
43,767 1,459
43,940 1,569
44,397 1,432
42,744 1,425
37,340 1,205
32,631 1,088
25,449 821
17,525 565
13,691 456
14,124 456
Avg day
1,027
20,108 670
28,604 923 364,320
Page 78
ANNEX 13: DFU FEED REQUIREMENTS ANNUAL DAIRY FEED REQUIREMENT Total feed ration kg (DM) Project year:
Herd count FORAGES Alfalfa Maize silage Rhodes grass hay Napier grass hay Oats straw GROUND MATERIALS Maize grain Wheat bran Wheat pollard Soya bean meal Sunflower cake Lupin seed meal limestone sodiumBicarbo Mineral mix Total concentrates
Dairy cows Lactation 29
1 Dry cows Dry period 0
57 227 57 15
-
99 49
-
49 26 26 6 256
Total feed ration kg (DM) Project year:
0-3m Calves
4-6m Calves
7-12m Calves
13-15m heifers
6
6
3
6
2 6 2
3 3 3
-
-
-
4 -
6 -
-
4 -
3 3
6 -
3 -
0 11
8
0 8
pregnant Heifers 11
-
Ton/year Totals in DM
% loss feeding
% loss ensiling/conserv
ton dm to be Harvested/Procured:
% DM
ton product gross weight to purchase
0.04 0.02 0.02 0.02 0.05
0 0 0 0 0
28 96 29 0 6
86 32 90 90 33
32 301 32 0 17
% loss milling 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02
46 24 0 23 14 10 0 0 2
89 89 91 89 89 88 88 88 95
51 26 0 26 16 11 0 0 3 133
11 23 11
73 258 78 0 15
27 94 29 0 5
11 11
122 63 0 62 37 26 0 0 7 318
45 23 0 23 14 10 0 0 2 116
-
-
Requirements: kg per day: Totals in DM
11 1 34
2
Yield/cut ton dm/ha
nr of cuttings
2.17 8 15.00 2 7.00 1 14.00 1 9.00 1 Total area needed to cultivate forages:
Total Acres needed
total hectare needed:
4 8 10 0 2 25
1.6 3.2 4.2 0.0 0.6 10.1
Requirements:
Dairy cows
Dry cows
0-3m
4-6m
7-12m
13-15m
pregnant
kg per day:
Ton/year
% loss
% loss
ton dm to be
%
ton product gross
Yield/cut
nr of
Total Acres
total hectare
Lactation
Dry period
Calves
Calves
Calves
heifers
Heifers
Totals in DM
Totals in DM
feeding
ensiling/conserv
Procured:
DM
weight to purchase
ton dm/ha
cuttings
needed
needed:
Herd count
38
8
5
5
10
5
8
-
2
10
5
8
99
36
4%
0%
38
86
44
2.17
8
5
2.2
-
5
10
5
17
359
131
2%
0%
134
32
418
15.00
2
11
4.5
2
10
5
8
118
43
2%
0%
44
90
49
7.00
1
15
6.3 1.0
FORAGES Alfalfa Maize silage
74
26
74
13
Rhodes grass hay Napier grass hay
-
296 -
Oats straw
39 19
-
5 -
-
-
-
-
39
14
2%
0%
14
90
16
14.00
1
3
-
-
-
-
-
19
7
5%
0%
7
33
22
9.00
1
2
0.8
36
14.7
Total area needed to cultivate forages: GROUND MATERIALS
% loss milling
Maize grain
129
Wheat bran
64
Wheat pollard
-
-
4 13
-
Soya bean meal
64
-
Sunflower cake
34
-
Lupin seed meal
34
5
-
-
-
4
8
8
164
60
2%
61
89
69
10
5
8
101
37
2%
38
89
42
2%
91
86
31
2%
32
89
36
45
16
2%
17
89
19
5
10
-
-
-
3
-
3
8
-
-
-
-
-
47
17
2%
18
88
20
limestone
2
-
-
-
-
-
-
2
1
2%
1
88
1
sodiumBicarbo
5
-
-
-
-
-
-
5
2
2%
2
88
2
Mineral mix
7
2
-
9
3
2%
4
95
340
28
460
168
Total concentrates
13
10
8
10
30
19
Dairy Training Institute Naivasha – Business Plan, Dec 2013
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Page 79
Total feed ration kg (DM) Project year:
3
Requirements:
Dairy cows
Dry cows
0-3m
4-6m
7-12m
13-15m
pregnant
kg per day:
Ton/year
% loss
% loss
ton dm to be
%
ton product gross
Yield/cut
nr of
Total Acres
total hectare
Lactation
Dry period
Calves
Calves
Calves
heifers
Heifers
Totals in DM
Totals in DM
feeding
ensiling/conserv
Harvested/Procured:
DM
weight to purchase
ton dm/ha
cuttings
needed
needed:
Herd count
39
7
6
5
10
6
20
-
2
10
6
20
113
41
4%
0%
43
86
50
2.17
8
6
2.5
-
5
10
6
42
386
141
2%
0%
144
32
449
15.00
2
12
4.8
2
10
6
20
130
48
2%
0%
49
90
54
7.00
1
17
6.9 0.9
FORAGES Alfalfa Maize silage
75
23
75
12
Rhodes grass hay Napier grass hay
-
301 -
Oats straw
34 19
-
6 -
-
-
-
-
34
12
2%
0%
13
90
14
14.00
1
2
-
-
-
-
-
19
7
5%
0%
7
33
22
9.00
1
2
0.8
39
15.9
Total area needed to cultivate forages: GROUND MATERIALS
% loss milling
Maize grain
131
Wheat bran
66
Wheat pollard
-
5 12
-
-
Soya bean meal
66
-
Sunflower cake
35
-
Lupin seed meal
35
5
-
-
-
-
9
20
179
65
2%
67
89
75
10
6
20
113
41
2%
42
89
47
-
2%
91
-
88
32
2%
33
89
37
-
5 12
10
5
10
3
-
-
-
58
21
2%
21
89
24
-
-
-
-
3 -
20
46
17
2%
17
88
20
limestone
2
-
-
-
-
-
-
2
1
2%
1
88
1
sodiumBicarbo
5
-
-
-
-
-
-
5
2
2%
2
88
2
Mineral mix
7
1
2%
4
95
346
24
Total concentrates Total feed ration kg (DM) Project year:
9
1
11
4
10
29
22
61
501
183
4
4 210
Requirements:
Dairy cows
Dry cows
0-3m
4-6m
7-12m
13-15m
pregnant
kg per day:
Ton/year
% loss
% loss
ton dm to be
%
ton product gross
Yield/cut
nr of
Total Acres
total hectare
Lactation
Dry period
Calves
Calves
Calves
heifers
Heifers
Totals in DM
Totals in DM
feeding
ensiling/conserv
Harvested/Procured:
DM
weight to purchase
ton dm/ha
cuttings
needed
needed:
Herd count
41
7
6
4
12
6
19
-
2
12
6
19
117
43
4%
0%
45
86
52
2.17
8
6
2.6
-
4
12
6
40
403
147
2%
0%
150
32
469
15.00
2
12
5.0
2
12
6
19
136
50
2%
0%
51
90
56
7.00
1
18
7.2 0.9
FORAGES Alfalfa Maize silage
79
24
79
12
Rhodes grass hay Napier grass hay
-
316 -
Oats straw
36 20
-
6 -
-
-
-
-
36
13
2%
0%
13
90
15
14.00
1
2
-
-
-
-
-
20
7
5%
0%
8
33
24
9.00
1
2
0.9
41
16.6
Total area needed to cultivate forages: GROUND MATERIALS
% loss milling
Maize grain
138
Wheat bran
69
Wheat pollard
-
-
5 12
-
Soya bean meal
69
-
Sunflower cake
36
-
Lupin seed meal
36
4
-
-
-
5
12
12
9
19
187
68
2%
69
89
78
12
6
19
118
43
2%
44
89
49
-
2%
91
-
93
34
2%
34
89
39
4
12
3
-
-
-
59
21
2%
22
89
25
-
-
-
-
3 -
19
49
18
2%
18
88
21
limestone
2
-
-
-
-
-
-
2
1
2%
1
88
1
sodiumBicarbo
5
-
-
-
-
-
-
5
2
2%
2
88
2
Mineral mix
8
1
2%
4
95
364
26
Total concentrates
9
1
11
4
9
35
21
59
522
191
Dairy Training Institute Naivasha – Business Plan, Dec 2013
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Page 80
Total feed ration kg (DM) Project year:
5
Requirements:
Dairy cows
Dry cows
0-3m
4-6m
7-12m
13-15m
pregnant
kg per day:
Ton/year
% loss
% loss
ton dm to be
%
ton product gross
Yield/cut
nr of
Total Acres
total hectare
Lactation
Dry period
Calves
Calves
Calves
heifers
Heifers
Totals in DM
Totals in DM
feeding
ensiling/conserv
Harvested/Procured:
DM
weight to purchase
ton dm/ha
cuttings
needed
needed:
Herd count
40
7
6
5
12
6
21
-
2
12
6
21
120
44
4%
0%
46
86
53
2.17
8
6
2.6
-
5
12
6
45
407
148
2%
0%
151
32
473
15.00
2
12
5.0
2
12
6
21
138
50
2%
0%
51
90
57
7.00
1
18
7.4 1.0
FORAGES Alfalfa Maize silage
78
25
78
13
Rhodes grass hay Napier grass hay
-
313 -
Oats straw
37 20
-
6 -
-
-
-
-
37
13
2%
0%
14
90
15
14.00
1
2
-
-
-
-
-
20
7
5%
0%
8
33
23
9.00
1
2
0.9
42
16.9
Total area needed to cultivate forages: GROUND MATERIALS
% loss milling
Maize grain
136
Wheat bran
68
Wheat pollard
-
4 13
-
-
Soya bean meal
68
-
Sunflower cake
36
-
Lupin seed meal
36
5
-
-
-
-
9
21
188
69
2%
70
89
79
12
6
21
121
44
2%
45
89
51
-
2%
91
-
93
34
2%
35
89
39
-
4 13
12
5
12
3
-
-
-
61
22
2%
23
89
25
-
-
-
-
3 -
21
49
18
2%
18
88
21
limestone
2
-
-
-
-
-
-
2
1
2%
1
88
1
sodiumBicarbo
5
-
-
-
-
-
-
5
2
2%
2
88
2
Mineral mix
8
1
2%
4
95
360
27
Total concentrates Total feed ration kg (DM) Project year:
8
2
11
4
10
38
21
66
530
193
6
4 222
Requirements:
Dairy cows
Dry cows
0-3m
4-6m
7-12m
13-15m
pregnant
kg per day:
Ton/year
% loss
% loss
ton dm to be
%
ton product gross
Yield/cut
nr of
Total Acres
total hectare
Lactation
Dry period
Calves
Calves
Calves
heifers
Heifers
Totals in DM
Totals in DM
feeding
ensiling/conserv
Harvested/Procured:
DM
weight to purchase
ton dm/ha
cuttings
needed
needed:
Herd count
40
7
5
6
13
13
23
-
2
13
13
23
130
47
4%
0%
49
86
57
2.17
8
7
2.8
-
6
13
13
48
419
153
2%
0%
156
32
488
15.00
2
13
5.2
2
13
13
23
147
54
2%
0%
55
90
61
7.00
1
19
7.8 1.0
FORAGES Alfalfa Maize silage
79
24
79
12
Rhodes grass hay Napier grass hay
-
315 -
Oats straw
36 20
-
5 -
-
-
-
-
36
13
2%
0%
13
90
15
14.00
1
2
-
-
-
-
-
20
7
5%
0%
8
33
24
9.00
1
2
0.9
44
17.7
Total area needed to cultivate forages: GROUND MATERIALS
% loss milling
Maize grain
137
Wheat bran
69
Wheat pollard
-
-
4 12
-
Soya bean meal
69
-
Sunflower cake
36
-
Lupin seed meal
36
6
-
-
-
4
12
13
19
23
202
74
2%
75
89
84
13
13
23
129
47
2%
48
89
54
-
2%
91
-
97
36
2%
36
89
41
6
13
6
-
-
-
66
24
2%
24
89
27
-
-
-
-
6 -
23
49
18
2%
18
88
21
limestone
2
-
-
-
-
-
-
2
1
2%
1
88
1
sodiumBicarbo
5
-
-
-
-
-
-
5
2
2%
2
88
2
Mineral mix
8
1
2%
4
95
363
26
Total concentrates
7
1
2
12
4
12
39
45
70
562
205
Dairy Training Institute Naivasha – Business Plan, Dec 2013
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