BMU Lebanese French University - Faculty of Business

Administration - Masters in Business Administration

PROFESSIONAL PROJECT
4MILK COMPANY
(For producing powder milk &liquid milk)



Presented by:
FARSAT BASS MUSTAFA
Student number (916)
Prepared under the supervision of:
Ms. FLORENCE FOUQUER


Academic year (2011-2012)



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List of Contents Pages
Table of Contents 2-3
Acknowledgement 4
Introduction 5
1.Executive Summary
1.1.The Idea of project 4Milk (companyoverview) 6-7
1.2.Vision 7
1.3.Mission 7
1.4.Objective of the project 8
1.5.The SWOT analysis for 4Milk 8
1.5.1.Strenght 8
1.5.2.Weakness 9
1.5.3.Opportunities 9
1.5.4.Threats 9
2.Legal Requirement 10-11
3.Production Management 12
3.1.Manufacturing progress 12-13
3.2.The manufacturing process of 4Milk 13-14
3.3.layout of factory 15
3.4.Raw material used 16
3.5.Size of the factory 16
4.Marketing analysis 16
4.1.Macroeconomic analysis
4.1.1.Kurdistan region demography 16-17
4.1.2.External environment 18
4.1.3.Socio-culture 18
4.1.4.Political situation 18
4.1.5.Economical 19-21
4.1.6.Technological 21-22
4.2.Microeconomic analysis
4.2.1.Government regulation and policy 22-23
4.2.2.Customers 24
4.2.3.Supplier 24-25
4.2.4.Demand 25
4.2.5.Competitors 26
4.2.6.Price 27
4.3. Marketing Mix and marketing strategies 27-29
5-Using E-Tools in 4Milk Project 29
5.1.Use of Internet, Intranet and E-mails 29-30
5.2.Internet in Marketing and Advertising 30-31
5.3.Online advertising purposes 31-32
5.4.Managing Information flow in 4Milk 33
5.5.Strategic Importance of Information
management in 4Milk
33
5.6.From data to knowledge 34

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5.7.Knowledge Management 35
5.8.Website 35-37
6.The Financial plan 38
6.1.Start-up funds 39
6.2.Salaries and Wages 39
6.3.Fixed operation expenses 40
6.4.Project Sales forecast 40
6.5.Income Statement and Balance sheet 41-42
6.6.Important Assumptions 43
7.Human resources management 43-45
7.1.Organization Chart 46
7.2.Job Description 47-54
8.Conclusion 55
9.Bibliography 56
10.Annexes 57-64
11.Index of tables, charts 65

















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Acknowledgement
I would like express my heartfelt gratitude to my supervisors Ms.
FLORENCEFOUQUERwho supervised and provided me with essential guideline
and information and to finalize and accomplish this project.
I would like a special thankful to Professor Alfredo Suarez who has given me his
opinion and information and suggestion on this project.
I highly appreciate all teachers and professors for their contribution in advancing
my abilities, their advice and help were valuable.
I would always like to thanks to Lebanese French University BMU-Faculty of
Business Administration for the opportunity given to me to complete my master
degree in Business Administration.
Finally, I would like thank my family, especially my Mother who has always
unconditionally supported my dreams.
















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Introduction
The dairy industry is one of the most important components of the world food system,
and is undergoing dramatic change at the current time. Currently processes of change
are being driven by a wide range of forces including shifts to the regulatory environment
for dairy production and trade, technological changes to the production of milk and milk-
products, rapidly shifting consumption trends, and the restructuring of transnational
corporate strategies with regard to this sector. It is highly probable that within ten years,
the global dairy industry will be scarcely recognizable from its current from. This project
describes overall situation of milk production, consumption and marketing in Kurdistan.
Special emphasis has been given to the processing and marketing of fresh milk. Milk
products have been consumed by people all over the word throughout history. Milk is
the secretion of the mammary glands of mammals and is intended for nutrition. However
the milk of cow, sheep and goat and on a smaller scale also milk of camel, is also used
by man as a nutritional source. This project focuses on bovine milk producing powder
milk and liquid milk. For microbiological safety all the milk is heat treated before use, but
that also changes the functional properties of the products. Different temperature
treatments are required for the different products that can be made from milk. That
developing certain agricultural sectors in Kurdistan to meet demand more efficiently and
economically than todays imported production should be done as quickly as possible.
Failing allocation of a huge percentage of petroleum revenue to finance massive imports
of basic foodstuffs, Kurdistan will experience a food crisis within one generation. Our
analysis will deal with the poultry, dairy, edible oil, aquaculture and small ruminant
sectors. These sectors and sub-sectors should be given priority in Kurdistan, not only for
the size of the opportunity they represent, but because of their potential to create jobs.
Both milk formulas are okay and safe to use. However, there are advantages of using
powdered milk versus liquid milk. Powdered milk is much easier to store and convenient
since it has longer shelf-life compared to its liquid from. At the same time, it is readily
available source of protein and vitamin D and also high in calcium that is good for
pregnant, nursing and those people suffering from osteoporosis. Powdered milk
contains no fat and is low in calories and cholesterol-free. It has a far longer shelf life
than liquid milk and does not need to be refrigerated, due to its low moisture content.
Also it helps reduce its bulk for economy of transportation. Available as dry whole milk, it
is most commonly produced as non-fat dry milk, also know dried skin milk. On the other
hand, non-fat dry milk can go rancid anytime since it contains fat. Liquid milk tastes
much better than its counterparts. Others still prefer drinking fresh milk because of its
flavor, quality and freshness. It is Important to note that whether it is a powder milk or
liquid milk, still they have pretty much the same amount of vitamins A and D, as well as
calcium. All of them will provide us our need for continued growth and strengthening of.
Dry milk is made by removing the water from standard liquid milk. While most people
prefer the taste of liquid milk over the dry version, values differ.

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1. ExecutiveSummary
1.1. The Idea of project 4Milk (company overview)
4Milk Company establish in Erbil 2012, for producing powder milk and liquid milk.4milk
meaning four piece Kurdistan (South,North,East,and West). Weare distribution product
for markets four piece Kurdistan. 4Milk Company is an e-commerce and action company
for providing product and product services to consumer in whole of Kurdistanregion. We
as a 4Milk company decided to start our business in food industrial because Kurdistan
region in food sectors do not depend to himself and Kurdistan people consume products
that import from neighbor countries so that is not good for our economy, we have to
develop our country by improve economic in all industries.4Milk company choices
industrial factor especially in food sector, we have established an powder milk and liquid
milk factory in Erbil. The projects aim is to investigate the competitive forces which
influence the buyer-seller relationships between supermarkets, processors and farmers;
to measure and understand the level of market power that exists at each stage in the
supply chain; and to understand the effects of this market power on the main players in
the supply chain. The demand for milk in milk processing plants has further stimulated
animal production. Most farmers have adopted modern farming techniques at various
level of production. Milk production is extensive and low-cost thanks favorable climatic
conditions. Dairy products are highly competitive on the international market and the
large part of the production is exported. Must for any investment diction proposal, the
study on the subject in which all technical supplies and economic and financial for the
purpose of the marketing sure of its economic feasibility and financial discovery of
investment opportunities. Should not be based on the wishes of the party personal, but
there are many indicators that can be inferred to become directing investment to words.
A particular economic unit without others, an account for exceptional importance
particularly in developing countries, there is number of indicators and methods that can
be relied for the purpose of the discovery investment and most important of these
indicators are; analysis of source of raw material. Study of workforce and skill levels
available, technological development. Note the industrial development experiences in
other countries that have similar circumstances to the circumstances of the country. Iraq
is importing 80% of its basic food requirement from outside, especially from the
neighboring countries. 4Milk Company established in Erbil- Kurdistan region. Thus
decision made to start up with this factory because food business has good chance to
be one of the lead businesses that will participate in countrys economic growth. Since
the beginning and as attempt to penetrate the market with its new local made products;
4Milk adopted new methods of marketing, adding value, collect feedback from the
customers to fulfill market needs- were the key success to penetrate the market and
gain market share. However, 4Milk has quickly built loyal customers through sakes
demand on dairy products, the company has targeted most segments in population by

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offering premium quality of products, taking into consideration the prices and purchasing
power of the people.4Milk has established a distribution network inside the region,
providing the fresh products cool trucks to the retailer shops and supermarkets. We are
aiming to increase the capacity of yogurt machines from one to two shifts, also one
production line to be bought for packaging and producing fresh milks with many different
flavors. Our goal is to build our own data in way to study our customers who are all Erbil
populations. This project will content many issues, production management starting from
collection raw material processing in different stages to get finished products will
studying the feedback of people idea about our products, to be the best in the market.

Key words: Dairy Industry, Influential Factory, Increasing Efficiency, Automatic Milking
System, Automatic Milking Unit, Behaviors, Feeding.

1.2. Vision
A Dynamic dairy industry that will redefine the standard of rural living and drives the
national economy by providing for healthy food security, export opportunities and
permanent employment, Our vision milk products are driven to be a recognized leader in
delivering problem-free experiences and product solutions, growing a vital, sustainable
and prosperous dairy industry. Our vision tells the world our employees, customers and
the communities where we make and sell our products.

1.3. Mission
To provide high quality customer driven services that will enhance the development of
all sectors of the dairy industry through healthy farm production to consumers.
Technology Mission on the dairy industry development was launched to support and
supplement the efforts of operation flood program and to enhance rural employment
opportunities and income generation through dairying. Our corporate philosophy focuses
on promoting buyers confidence through. Our mission is to provide modern consumers
with natural milk-based products that create inspiration, confidence and well-being. The
sustain market leadership in the production and marketing of a variety of liquid milk
products with assured quality at an affordable price, covering all market segments and
to maintain the growth, prosperity and unity of all our internal and external customers.
We will achieve this within a business culture of dignity and respect for our employees,
facilities and long term partnership with our suppliers.


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1.4. Objective of the project
The objectives of the project are the following:-
1- To project the distribution channel in the retail chain of 4Milk
2- Gain market share of 15% within the next three years
3- To project 4Milk positioning in the mind of the consumers vis--vis competitors
4- To find out the factors that affect consumers decision to purchase milk
5- To review and document existing milk production and marketing systems
(informal and formal) of milk and milk products in Kurdistan
6- To project the forward and backward linkages in collection, processing,
packaging and marketing fresh milk
7- Protecting the rural marginal milk producing farmers from exploitation of profit
earning middlemen
8- We shall provide regular and timely supply of milk and milk products at
convenient distribution points under clear and hygienic conditions for different
segments of consumers
9- We shall provide remunerative returns to milk producers and associates
10- We shall promote innovations, continuous learning and improvement

1.5. The SWOT analysis for 4Milk
SWOT analysis is a strategic planning method used to evaluate the Strengths,
Weakness, Opportunity, and Threats involved in a project or in a business venture. The
previously agreed industry strategy for future profitability was a focus on: innovation and
marketing development. Supply chain relationship. Supply chain efficiency. It is possible
for the industry to address, manage or exploit the SWOT elements above using the
strategies. They also need a fair marketplace with analysis of structural issues and the
provision of information for policy formulation, income generating activity, source of
mass employment in rural areas.
1.5.1. Strength
Cooperative dairying has increased milk production
High levels of production efficiency on some units
A wide range of market opportunities for farmers
Competitive price
Multi-purpose production lines
Concentrated production
Good milk quality


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1.5.2. Weakness
Variable production performance
High production costs
Low levels of bulk feed production
Poor management level in quite a few cases
High labor costs
Dairy producers in remote areas are neglected
Changing in consumer demand
Low domestic consumption
Limited investment or delay in the availability of funds in setting up or expansion
of milk procurement
1.5.3. Opportunities
Better returns because of increased awareness in consumers about quality
We can focus more on advertising and marketing strategies
Strong provenance opportunities
Growing and fluent population
Reliable climatic condition
Global growing in dairy consumption
Diverse technological backgrounds
New and innovative products and new routes to market
1.5.4. Threats
Competency between organized and un-organized sectors resulting in unhealthy
business practices / lowering values(quality/service/ethics)
Weak labor regulations(law)
Reduction in government support
Fluctuation in raw material price
Presence of advanced technology
Weak banking system
Risk of infections and disease

Conclusion: SWOT analysis, indicate if the strengths and opportunities are understood
the weaknesses and threats can be managed to make 4Milk into a profit oriented
business.


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2. LegalRequirement
Company legal profile: Corporate name: 4MILKCompany / industrial are a
partnership.The name of company came from famous Kurdish tradition fresh milk. The
selection of this name had made good influence of the customers and its difference than
the competitors names. Company foundation contact in accordance with Iraqi laws, the
factory built in Erbil.Factory address: Iraq-Kurdistan-Erbil.For any projects must striating
under the law and take permission to bawl the project form in investment it is the import
at point to start a projects. Under this law the investor should do the departments
concerned shall coordinate with the board to specify and allocate the plots of land
needed by the project within the initial layout inside and outside the cities, either by
lease or by land usufruct, at a promotional price,which is applicable in the Region so
coordinate with the board to specify and allocate the plots of land needed by the project
within the initial layout inside and outside the cities.Company Ownership: For legally is
limited liability Company owned by4Investors, which is share between 4participants with
equal liability and divide share, the company financially is capable to fully finance the
project and meets its obligation with all of the capital we owns, the company established
with 4 shareholders:
Shareholder share
Investor 1 25%
Investor 2 25%
Investor 3 25%
Investor 4 25%
Total Shares 100%
Law of Investment in Kurdistan Region-Iraq Law No (4) of 2006 about tax customs
exemptions, Investors Obligations, and procedures of project licensing:
Article (5)
1-A Project shall be exempt from all non-custom taxes and duties for 10 years starting
from the data of providing services by project, or the data of actual production2-Raw
materials imported for production shall be exempt from customs duties for 5 years,
provided that the types and quantities of such materials are specified by the board, with
the priority given to using the locally available raw materials which are suitable in quality
and quantity for the investment project3-An Investor may, under the provisions of this
Law, import all his Projects needs, including the equipment and machinery. Such

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imports shall be exempt from all customs duties as they cross the Regions borders,
provided that they are used exclusively for the projects purposes
Article (8)
An Investor shall comply with the following:
1-To specify the area of his investment regarding the projects implemented by him, and
to reveal his financial statements/balance sheets and the contracts that he implemented.
2-To inform the Board about the completion of the project, and when it starts in providing
services or in actual production
3-To provide the facilities and needed by the Boards personnelenabling them to collect
and acquire the necessary information about various aspects the project, for the
purposes of the Board
4-To keep special records of the projects imported materials which are exempt from
customs duties under the provisions of the Law
5-To safeguard the environment, maintain public health and safety, and comply with
standardization and quality control systems, in accordance with international standards.
6-To offer training and qualification to the Projects local members of staff
Article (16)
1-In order to benefit from the exemptions and privileges mentioned in this Law, an
Investor should obtain a license issued by the Board for setting up the Project.2-The
Board shall give the license for setting up the Project pursuant to an application
submitted by the Investor in accordance with the conditions set by the Board. The Board
will have to decide on the application within 30 days from the date of fulfillment of the
technical, legal and economic conditions and requirements, in accordance with the
provisions of this Law, and without prejudice to the standards and controls set by the
Board.3-The Board shall consult Competent Authorities on the advantages of issuing the
License, and such authorities will have to give their viewpoint for the acceptance,
rejection or amendment request, within thirty days from the date of the Boards referral
of the application to them. Failure to reply shall be considered as an acceptance, and in
the event of rejection, the decision will have to be justified.4-When an application is
rejected; the applicant may raise an objection to the President of the Council within 15
days from the date of notification of the rejection decision. The President of the
Councilwill have to decide on the objection within 30 days, and his decision on this
matter shall be conclusive.


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3. Production management
Production is an organized activity of transforming raw materials into finished products.
It is an intentional act of producing something useful. In production systems we have
different resources as input. Theinputs are processed in a series of operations. The
sequence, number, and type of operations (mechanical, chemical, electrical, assembly,
inspection, and transportation)arespecified for each input. The output of the system will
be complete parts products. Production function shows the relationship between the
input and the output of an organization. By the study of production function the
maximum output which can be achieved with given inputs, or say resources with given
state of technology is determined. The production function can be represented by the
simple mathematical equation which relates the output as the function of
inputs.Productivity:It is very comprehensive concept, both in its aim and also in its
operational content. It is a matter of common knowledge that higher productivity leads to
a reduction in cost of production, reduces the sale price of an item, expands markets,
and enables the goods to compete effectively in the world market. It yields more wages
to the workers, shorter working hours and greater leisure time for the employees. In fact
the strength of a country, prosperity of its economy, standard of living of the people and
wealth of the nation are very largely determined by the extent and measure of its
production and productivity. By enabling an increase in the outputof goods or services
for existing resources, productivity decreases the cost of goods per unit, and makes it
possible to sell them at lower prices, thus benefiting the consumers while at the same
time leaving a margin for increase in the wages of the workers.
3.1. Manufacturing progress
In any manufacturing system, the job of an Operations Manager is to manage the
process of converting input into the desired outputs. Therefore, Operations Management
can be defined as the management of the conversion process, which converts land,
labor, capital, and management input into desired outputs of goods and services. It is
also concerned with the design and the operation of systems for manufacture, transport,
supply or service.Some of the related issues of Operations management are production
function, productivity, productivity measurements, types of production systems,
production modeling. Milk is readily and easily available in a variety of forms. Milk is part
of food and drink that is loved by everyone. Manufacturing cost of milk products, the
manufacturing cost comprises cost of raw material and total processing cost of dairy
products. The total processing cost of dairy products comprises expenditures on
electricity, water, steam, refrigeration, maintenance and repairs, stationery and stores,
labor, packing materials, detergents, besides quality control expenditure, salaries and
administrative expenses, depreciation on buildings, equipments and machinery, interest
on investment in buildings.Processing and Manufacturing levels: The dairy should utilize
the full milk capacity to reduce costs on processing and manufacturing of their

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products.The old machinery and equipments should be replaced to reduce cost on
repairs and maintenance.Qualified and technical persons should be recruited.Control of
dairy products should be evolved.The product mix should be reoriented as per the
changing market environment and superfluous expenses should be avoided.
3.2. The manufacturing process of 4 Milk
The process manufacturing raw milk istwo productions, powder milk and liquid
milk.Powder Milk Processing: Raw milk on arrival at the factory is rapid tested for
temperature, hygiene, antibiotics, water addition and adulteration. On acceptance the
milk is pumped into a silo storage tank at the processing and held at temperatures below
7C and usually below 5C. Raw whole milk has varying fat and solids not fat (SNF)
content and typical between 3.5% and 4.5% fat and 8% to 9% SNF giving typical total
solids of 12.5%. Developing countries are milk solids usually lower and care should be
taken in ensuring that costs/yields are calculated accurately for any planned high
volume dairy manufacturing. The microbial quality of milk powder is very important and it
is possible at this early stage of processing to take out 99.9% of the spore-farming
bacteria either microfiltration prior to heat treatment. The skimmed milk heat treatment
temperature coupled with the holding time determines the heat classification of the
powder produced. For skim milk powder classified as low- heat, the milk is low
temperature pasteurized with little or no holding required, while heat treatment for a
high-heat method requires heating milk to 85-88 C and holding at this temperature for 15
to 30 seconds. There is not requirement to homogenize skimmed milk for powder
production because of its low fat content.High heat, heat stable powders are also
produced by varying the evaporation conditions. Homogenization is not a mandatory
step in whole milk or buttermilk processing, but is usually applied in order to decrease
the free fat content. Two stages homogenization is usually used as single stage can
result in fat globules coalescing into larger globules more readily.This is considered
important for infant formula manufacturing. Two stages homogenizing is preferable to
ensure minimal re-coalescing of globules take place. Fat globules with damaged
protective membranes reduce milk powder solubility and increase the risk of oxidative
rancidity. Milk powder heat treatment varies depending on the finished product
specification. Infant formula milk powder treatment is higher than most other
powder.Milk powder Pressure:A high pressure pump feeds the liquid to the dryer
chamber. Typically produce a powder with a high bulk density, a narrow particle size
distribution and, in the case of fat containing powders low free-fat contentdue to the
homogenizing effect. The bulk density of the milk powder is mostly affected by the
density of the concentrate. A good process control system is essential to ensure a
consistent product. Milk powder production concentrate flow rate: The flow rate of liquid
into the spray dryer is used to control the dryer outlet temperature and the powder
moisture. Reduced solids content of the feed results in wasted energy and reduced

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powder throughput coupled with high bulk density.Outlet temperature and powder
moisture: The outlet temperature is controlled by adjusting the feed rate and this also
controls the powder moisture based upon a consistent temperature of inlet, feed solids
content and humidity of inlet air.Liquid Milk Processing:Raw milk is collected from farms
daily or very other day and taken to dairies by tanker for processing. On arrival, the milk
is tested for appearance, small and temperature, and a sample is taken for analysis in
laboratories at the dairy. A series of tests are carried out relating to the compositional
and hygienic qualityof the milk. Products hygiene require that milk processing factory
must cool raw intake milk to a temperature of 6 C or less into silo storage prior to being
processed into heat treated drinking milks. The heat treatment that is then applied to
milk can take a number of forms, including pasteurization. Sterilization:For sterilization,
milk is first preheated to around 50C, separated and standardized to produce either
standardized whole milk, semi-skimmed or skimmed milk, homogenized and filled into
bottles which are closed with a hermetic seal. There is no legally defined process for
sterilizing milk but, commonly, filled bottles are carried on a conveyor belt through a
steam pressure chamber and emerge after 10 to 30 minutes having been subjected to
temperatures of between 110C and 130C. Cooling takes place using a cold water take,
sprays or, in typically heated to temperatures of 110C to 130C for 10 to 30
minutes.Packaging Milk: Milk can be bought in many different types of packaging
material including glass bottles, cartons, plastic bottle and cans. A major form of
packaging for milk has always been glass bottles but these are now restricted largely to
doorstep delivery. Although expensive to produce in comparison with most other forms
of milk packaging, the glass bottle has the major advantage of being reusable with an
average. Packaging should not represent any significant constraints in Iraq, and
especially in Kurdistan: new pack is widely accepted for liquid milk and for flavored milk
imported. For powdered milk, cheap flow pack pouches are common and are distributed,
while the leading nestle brand is only available in expensive cartons. Plastic bottles are
for most part not available in Iraq, accept Kurdistan. With the reduction in the proportion
of milk delivered via the doorstep and the increase in milk purchased from
supermarkets, glass has surrendered some of its popularity to other packaging
materials. Another advantage that glass has always had is the ability to be filled at high
speed. No expansion has been made just we added one extra machine for milk
packaging, plus increasing the working shifts to 2 shifts with 8 hours each. Storage and
keeping quality: Pasteurized milk has a relatively short life (seven to ten days)and
should either be used immediately or stores in a refrigerator operating ideally below 6C
and consumed by its use-by or best before date. Sterilizedmilk will keep unopened for
several: once opened the milk must be kept refrigerated and used within four to five
days. Milks can be purchased as a longer-term emergency supply, taken on holiday,
picnics, situations where refrigeration is limited or not available. However, once opened,
the same storage requirements as pasteurized milks apply.

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3.3. Layout of factory
The milk will be constructed according to the decided line layout as minimum time will be
taken in order to handle the equipment, raw materials and finished goods powder milk
and liquid milk.Land:The 4Milk factory is built on the land 5,000 square meters, located
Pirmam area, 20KM north Erbil. This is situated in one of the milk production region of
Kurdistan.We have selected this region due to the milk production as milk is the major
raw material that is used in manufacturing powder milk& liquid milk. In order to save our
transportation cost, we have selected Erbil factory. The factory is near from the highway
which will help us in delivering our finished goods to the other areas.Raw material: The
principal raw material is milk. The extent of milk shed area, milch animal population,
average milk yield, percentage of animal is milk, market surplus, will determine the size
of the plant. The method of procurement,transportation of milk and input supply to the
farmers is required to be highlighted. The availability of other inputs such as packing
materials, disinfectants and consumable should be ascertained. The basic raw
materialmilk is available in abundance in the area and also we will import milk from Iran
& Turkey. And using water, however the milk prices are increasing day by day. Labor:
Due to one of the main reason that is unemployment in the country, there are many
unskilled labors that are readily available in the region. On the other side, we will hire
skilled labor to our factory.Transport facility: Transportation facilities will be used in order
to bring the raw material milk. On the other side, in house transportation facility will also
be used in order to carry the material from onehardener machine to the store
room.Utilities: For the manufacturing production of 4Milk, a large amount of water as
well as energy is required, due to the shortage of electricity.Power: Normally a three
phase electricity supply is required of milk processing, depending upon the position of
power supply, standby generators may be considered for connecting the essential
sections.Water: A milk processing plant requires the water in the ratio of 2:1 (2 liters of
water for 1 liter of milk processing) for cleaning of equipment, cold storage and drinking
purpose.Steam: The steam requirement (kg/hr.) depends upon the processes involved
and the source of steam may be met by coal/oil/gas fired/electric boiler. Fuel: Coal/gas
requirement and the availability to be ascertained. Compressed Air: It will be required for
various pneumatic operations flow control operations as well as for cleaning purposes.
The total requirement of compressed air and capacity of the compressors is required to
be furnished. Vehicles: The vehicles required for procurement and distribution of the
milk depends on the quantity of milk to be handled.The number of vehicles required,
source of supply, rental charges etc. needs to be furnished. Depending upon the need,
the requirement of vehicles may be considered in the project cost. Other Services:
Although a maintenance workshop is an integral part of milk processing for carrying out
repairs and maintenance of equipment.


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3.4. Raw material used
Raw material required to manufacture 4Milk varies from raw milk to powder milk and
liquid milk. Milk is main ingredients in production of powder milk and liquid milk, Milk of
cows, milk of sheep, and milk of goats.
3.5. Size of the factory
The size of plant will be large as the size depends on the manufacturing process, a large
size unit will be more ecumenical than a small size plant. The machineries equipment
used in manufacturing of milk production are listed below:
Storage units
Filling milk machine
Hardening milk machines
Milk packaging machines
Milk freezing machines
Milk ageing machine
Brine tank

4. Marketing analysis
The marketing: Marketing is defined as the total system which includes 4P viz. product,
price, promotion, and place (distribution). The term distribution is a part of marketing and
an important aspect of marketing. To analysis market share, distribution channels,
demand and supply, sales and marketing development. The mentioned functions are
accomplished by conducting market surveys and participation in commissioned studies.
In general, the activities of this part involve data collection, analysis and dissemination of
research findings.
4.1. Macroeconomic analysis
4.1.1. Kurdistan region demography
Demography is the study of the characteristics of human population, such as size,
growth, density, distribution, and vital statistics. Why do we need demographic
information? In the last century many countries in the world have adopted development
strategies to use as the core guideline for their government program. The developmental
program fits their demographic, socio-economic, educational, health and cultural.
Population as a main aspect of development must be considered to pursue the trends of
transformation and modernization and design the development planning. The real
wealth of a nation is its people, and the purpose of development is to create an enabling

17


environment for people to enjoy long, healthy and creative life. This is as indication of
how important it is for any nation especially for Kurdish Nation and its leaders to pay
attention to population, socio-economic and educational development in their Region
and may understand the development paradigm that may reveal impacts of
characteristics such as ethnicity, religion, and gender on quality of life and may lead to
sources of discrimination against groups. The demographic changes represented by an
increase in population and higher life expectancy. Due to the absence of proper
population census, the exact population of Kurdistan as well as the rest of Iraq is
unknown. However Iraq is a large country of almost30 million people with a huge,
booming young population. Kurdistan Region within the three governorates of Duhok,
Erbil and suleimaniah the population is estimated to be as low as 4million and as high as
5million.These numbers exclude the Kurdish living in the disputed provinces such as
Ninewah, Kirkuk and Diyala as well as Kurdish living in Arab Iraq. Kurdistan has a young
population with an estimated 35% to 40%of the population being under the age of 16.
Traditionally, the majority of people in the Kurdistan Region lived in villages and survived
on farming and animal husbandry of mainly sheep, goat and cows tothe lands fertile
soil. The Region was known as the breadbasket of Iraq. Today this has reversed,with
the majority living and working in the large cities of Erbil, Duhok and suleimaniah and
working in the government, construction, and trade. The ethnic make-up of Kurdistan is
diverse and includes Assyrian Christians, Iraqi Turkmens and Arabs next to the Kurdish
majority. The Kurdish make up around 95% of Kurdistan with the remaining 5%
including the minority groups.The effect of population growth and demographic transition
on economic development has been well documented. The population in Iraqi Kurdistan
is passing through a critical stage of demographic transition. It is, fact, extremely likely
that the Region will fail to efficiently move through the demographic transition and will
experience a long period in the demographic trap, the population will grow steadily and
rapidly owing to the high fertility and low mortality rates.Milk Consumer Markets by
Demographic Characteristic. - Market Maker allows the user tomap potential target
markets by characteristics that are most likely to influence milk consumption patterns.
For example, a producer of organic milk is seeking consumer markets inErbil that have a
customer base willing to pay the extra cost of organic milk. Marketresearch would tell us
that consumers of organic products tend to have higher income and moreeducation that
the general population. Market Maker will allow the producer wanting to sell tothis target
market to create a map showing the greatest concentration of upper incomehouseholds
and households by level of educational attainment. Complete demographic profilesof
selected neighborhoods can also be requested. This is the kind of information required
in mostbusiness plans, but it is also useful in determining a feasible target market. Retail
Establishments Serving Target Markets- Maps of retail establishments can
besuperimposed over the demographic maps to identify retailers in the neighborhoods
where aproducer wishes to sell. In the example of the organic milk producer, he can

18


create a new mapthat places the location of local grocery stores over the map of high-
income well-educatedconsumers.
4.1.2. External environment
The external environments relatively are stable and expected to better even in the future
because the relative stability is expected in the Middle East.
4.1.3. Socio-Culture
What make it so easy to open a dairy industry is the social interactive and change of
behavior of Kurdish toward every new in the market place especially toward food and
milk products.Iraqi Kurdistan or Kurdistan Region also referred as Southern Kurdistan as
part of Greater Kurdistan is an autonomous, federally recognized Region of Iraq. It
borders Iran to the east, Turkey to the north, Syria to the west and the rest of Iraq to the
south. It capital is the city of Erbil, known in Kurdish as Erbil. Duhok, Suleimaniah and
areas of from Kirkuk are the main cities of the Region. Those are suffered regionally,
ethical and civil wars. Furthermore, there are many dovetailed cases or better to say,
having great number of disputed fields with central government making the situation
even more difficult.
4.1.4. Political situation
The Kurdish people are one of the world largest ethnic minorities without a state of their
own. Kurds form a significant part of the population in Iraq. After Iraqi Kurdish revolution
in March 1991, Iranian, Turkish and some of other Regional countries like Syria and
Lebanon have established good trade relations in various fields including food industry
and particularly in dairy with the new political Region, Kurdistan Regional
Government.Kurdistan is not independent and it belongs to federal Iraq government and
it has a parliament and ministries of council and presidency of Region as well. The
government could provide the secure heaven of its area being a fundamental condition
of making business. Due to ruining of all Iraq infrastructures after 3 wars that Iraq
became a part of, these country products have grown to be the best resources to Iraqis
especially before 2003, when the petrol-dollar law has passed. And there have often
been calls for the formation of an official Kurdish nation. The closest the Kurdish actually
gets to this though, is in the semi-autonomous state of Iraqi Kurdistan, which has its own
Government and military even though it is still part of Iraq.An estimate 6 million lives in
Iraqi Kurdistan, making up 20 percent of the total population of Iraq. Since early in 2011,
discussion about an official and independent Kurdish state has grown louder and more
demanding. As the various Arab Spring uprisings have an impact around the Region,
and as the political map of the Arab world has evolved, there has been talk about the
importance of changing the geo-political map of Iraq too,and more specifically Iraqi
Kurdistan.

19


4.1.5. Economical
Kurdistan of Iraq economically prosperous with a civilized society that is scientifically,
culturally and socially developed. The Kurdistan Regions economy is dominated by the
oil industry, agriculture and tourism.Due to relative peace in the Region it has a more
developed economy in comparison to other parts of Iraq. The government continues to
receive a portion of the revenue from Iraqs oil exports, and the government will soon
implement a unified foreign Investment Law. The Kurdistan Regional Government also
has plans to build a media city,opening global exchanges in Erbilfree trade zones near
the borders of Turkey and Iran. Since 2003, the stronger economy of Kurdistan has
attracted around 25,000 workers from other parts of Iraq. Today the peoples life in
Kurdistan become easier due to growing economy and increasing income which enable
customers seek for better quality products, trying to get goods that satisfy their needs.
Growing income gives them the opportunity to taste differently and experience the
newest in the market. With the development of infrastructure roads, buildings,
commercial premises and shopping malls has come the enhancement of the civil
society, the new airport terminal in Erbil being a key cornerstone to this transformation of
the Region. The new terminal building in Erbil has one of the largest runways in the
Middle East. The airport is not the only new development project in the Region; there
are many real estate developments and numerous shopping malls popping up across
the Region. The Kurdistan Regional Government role should not be overseen on this
matter. With the most liberal investment laws in the Middle East the regional government
has created incentives for the arrival of foreign companies with a lot of expertise and
capacity, furthermore creating jobs and opportunities for local Kurdish citizens.
Construction is the key industry in the Region. However this most of the private
companies and the government have been devoting the efforts to construction projects,
other sectors. The tendency for companies to invest in quick profit construction projects
has led in this respect to slow growth in other sectors, especially agriculture. Health and
banking have been left behind too, less emphasis being given to long term projects
beneficial for the Region. The milk industry is one of the major regional economic
activities of northern region of Iraq. Due to market competitions, there is a strong need
to find a decision tool to manage the milk-manufacturing plan in order to maximize total
profit. In milk industry, the planner must manage whole raw milk available and find the
best production-mix plan. In this research, mathematical model of milk production
industrys problem is developed. The integer linear programming model has been
formulated to determine the optimal solutions for each case study. The integer linear
programming model is tested using industrial cases and solved by using standard
software packages. The results showed that the total profit can be increased about 4%
by using production plan from the model compared with the manual plan.Kurdistan's
wealth of high-grade pasture lands has long made it suitable for a pastoralist economy,
but it is equally suitable in many areas for intensive agriculture. Unlike the woodlands

20


and the heavy damage they have sustained, the pasture lands have remained in
reasonably good condition and continue to be a productive source of animal feed (see
Flora & Fauna). The rich pastures have always ensured that in all historical
periods,regardless of how dominant the agricultural sector, there have been nomadic
herdsmen exploiting this economic niche to its fullest.Although many pasture lands are
suitable for agriculture, in many others, especially on the steep slopes and hard-to-reach
plateaus, pastoralist herding is the only viable use of the resources. In many areas,
various other elements, such as high elevation (hence, short growing seasons), in
availability of suitable sources of water, unsuitable soil properties, etc., can make
impossible the conversion of a given pasture land into agricultural land. Even terracing
of the slopes, which has been practiced there since the 8th millennium BC, is limited by
the availability of deep top soil. These pastures would produce nothing if not used by the
pastoralist nomads and/or for seasonal shepherding by otherwise settled farmers. Even
today there are some Kurds who practice pastoral life, tapping a valuable resource (see
Nomadic Economy). The range of such seasonal shepherding operations remains by
necessity quite limited. The herd remains within a few days walking distance of their
home base, and the more remote and inaccessible pastures are slowly forced out of
production. The pre-modern nomads before them had no such limitations.Large and
fertile mountain valleys, on the other hand, provide ample space for agriculture. Despite
its mountainous nature, Kurdistan has more arable land proportionately (28% of its total
surface area) than the majority of Middle Eastern countries. Expansive river valleys
create a lattice work of fertile fields in Kurdistan, except in the region of the central
massif. This may very well explain the fact that agriculture was almost surely invented in
Kurdistan, as was the domestication of almost all basic cereals and livestock; with the
notable exceptions of cows and rice (see Prehistory & Early Technological
Development). Since then, the economy has always had an agricultural base, albeit with
varying degrees of importance.A great variety of cereals and vegetables have
traditionally been grown in Kurdistan, but wheat and barley are the most common. Rice
has more recently been given growing preference, and it is displacing bread as the basic
food of choice of the Kurdish middle class. Cash crops like tobacco, sugar beets, and
cotton are playing a growing role in the local economy. The tobacco is of good quality,
with pipe tobacco (also the tobacco of choice for water pipes) of the region being in
great demand throughout the Middle East.The wool used for local weaving now supports
a growing mechanized textile industry. Sheep have always been the most import source
of wool and continue to be even more so at present. Cows and bulls are found in
moderate numbers in the villages, supplying milk and meat, but also pulling power. As
mechanical motors replace them, the trend for drinking cow's milk instead of sheep's
should prevent any drastic drop in the bovine population, if not actually increase it. The
traditional excellence ascribed to Kurdish dairy products in medieval reports; however,
pertain only to the sheep products. Local cheeses, yoghurt, curds, buttermilk, butter, and
clarified butter (rowan, used exclusively for cooking) have a distinctly pleasant flower-

21


like scent that has been the traditional hallmark of the Kurdish dairies, but more in the
past than now.Increasing numbers of livestock are fed by farm byproducts hay, stalks,
and the like-and no longer graze the wild flower beds that naturally imparted the
distinctive scent of dairy products. Wild pigs and boars are very common, but are
shunned in the meat market, as ham is forbidden by the Islamic dietary laws, and the
non-Muslim Kurds have been reluctant to add one more point of friction to their delicate
relationship with the Muslims. In the more remote areas, boars and pigs are consumed
by hunters of all religious affiliations. They are not however sold in the market. Even
though there is a good potential for the export of pork products to nearby Europe, it is
doubtful that there is much future for this industry in Kurdistan.While the prospects for
expanding the economic output of the pastures are at the end limited, the farm lands
and orchards have vast potential to meet local dietary needs and as exportable
commodities. Great tracts of fallow pasture lands can be brought under intensive
agriculture using the rich surface, subsurface, and precipitant water resources.
4.1.6. Technological
Recently the technology has made it simpler for people to find new recipe and every
latest thing in the world market. Internet and satellite are extremely helpful to shrink the
world into a small town and to teach and show the people simultaneously the same. In
Kurdistan, technology opened peoples eye in a way that they desire to get every most
recent in the market.It is very easy to see that no houses, even in the villages, are
without having TV and satellite. In addition, the educated people mostly are using
Internet and accessing to it in their own homes. Southern Kurdistan, may suffer a
setback in its attempt to realize the full potential of IT by the rapid evolution and high
costs of new technologies, however, there are particular strategies and technologies
which can reduce these costs greatly. The most essential component of such a strategy
is targeted investment in the training of network administrators with a view to reducing
the long term costs and excessive dependency on commercial products, consumers in
to a regular and frequent expensive upgrades and high maintenance costs. Iraq is
expected to need a significant amount of technology, software, and hardware to create
the new digital infrastructure that the Government seeks to develop.Over the millennia,
traditional milk products of India have enriched the cuisine of this vast subcontinent.
These products constitute a large array of sweet, tempting, indulging confections. They
have added color, taste and flavor to life and have become synonymous with feasts,
festivals and celebrations. More and more of these milk delicacies have become
commercially significant for the organized sector. A large number of them continue to be
made on a cottage scale in the traditional way. Many milk-based delicacies are also
prepared at home. In this section, the technological aspects of a wide range of Kurdistan
milk products are presented fewer than five broad categories, listed above.Although
information available on these products is inadequate, an effort has been made to focus

22


on their technologies, including their preparation, physicochemical attributes, shelf life
behavior, packaging and the like. Wherever possible, the scope for process
modernization has also been dealt with. Avenues for the induction of technology have
been indicated for the large-scale production of those traditional milk products that lend
themselves to such an approach. Due weightage has been given to their quality and
safety, while preserving their freshness, taste and nutrition.The making of traditional milk
products has essentially been a cottage scale enterprise. Within the basic process for
their production, variations exist from one unit to another that give products their
distinctive touch, taste and flavor. Now, technologies for industrial manufacture of these
products are being standardized to meet different situations and conditions. Process
details for various milk products are given in this section that focus on practices that are
largely followed or are under development.

4.2. Microeconomic analysis
4.2.1. Government regulation and policy
In industry and manufacturing the Kurdistan region needs cement, steel, food
processing, canning and packaging factories and plants. There are also good
opportunities for cutting of marble, which the Kurdistan Region has in abundance. In
agro industry, there are good opportunities to establish joint stock companies with the
government. The industrial sector in general and food industry specifically is executed
byprivate sectors in Kurdistan region. The government has plans to controland detect
the sector in broad-spectrum in the other hand the market is notfree of products that are
not up to standard. By the new investment law thegovernment gives support to the
investors who want to invest in industrial.In addition to these positive factors the
government has to realizeimportance of this industry in Kurdistan and legalize proper
regulations toprotect the domestic production against the flow of products that
areimported without any control or standard tests in the result of these factorsKurdistan
dairy factory faces difficulties of products imported from theof Iran and Turkey of which
some of them are not up to standard. The Kurdistan Region is safe, stable and
prospering area in north eastern Iraq. The Kurdistan Region of Iraq is blessed with
plentiful water, fertile land, forests, oil and gas and many other energy and mineral
resources, energetic petrol, stunning energy and historical sites that have always
attracted visitors and are beginning toattract regional and international tourists once
again. In terms of trade, Kurdistan Region is also geographically well placed between
the potentially growing markets of Iraq, Iran, Turkey and Syria.The Kurdistan Regional
Government is governed by a democratic system. It has an elected parliament
andgovernment. It enjoys free press, free flow of information, and open boarders forfree
flow of goods and Services, the Region enjoys also peace and stability.There is a lack of

23


regulatory standards for food or basic food safety standards. Regulatory standards are
needed for fair competition in the marketplace. This absence of standards has resulted
in local government taking its matters into their own hands by banning certain products
entering the region this has helped increase the quality of goods in the region. Exports
from the Kurdistan Region involve 5% of trade activities. While there are some
agricultural exports from the Region, currently much of the export trade in the Region
involves the re-export of alcohol and tobacco from Turkey to other countries such as
Iran.Foreign Direct Investment (FDI) in the Region has been predominantly sourced
from Turkey and, to a much lesser extent, Iran. The two countries with the largest
economic stake in the Kurdistan Region and are also the closest geographically.
Under the assumption that ongoing exploration activities will uncover significant new oil
deposits in the Kurdistan Region, it is believed oil companies will dominate FDI of the
RegionUnlike the trade, the industrial and manufacturing sector is small and
underdeveloped. The Kurdistan Region is faced by a multitude of internal and external
hurdles that impede industrial capacity development. An array of essential requirements
are absent: a coherent trade and industry policy; telecommunications; sustainable
production; relevant technologies; energy facilities; entrepreneurial, managerial, and
technical skills; business/trade support institutions; efficient, transparent government
agencies; and a business-oriented legal framework.External hurdles include rules-based
non-tariff barriers to trade, the high cost of technology transfer, increasing protection of
agriculture production in developed countries, and limited access to international supply
chains and external market information.The KRG has worked hard to promote the
Region as a superior business location in the Middle East. To create acompetitive
environment where they are able to compete on prices, cost of labor, manufacturing cost
to cement itself as a regional force.The role of the Ministry of Trade and Industry,
Ensure food security for the inhabitants of the Kurdistan Region and become, self-
sufficient in critical areas. Reform trade policies and regulations to bring them further
into line with good international practices, and to ensure efficient trade with Kurdistan
Regions neighboring countries. Work with in the private sector to rehabilitate the
Kurdistan Regions industrial infrastructure. Issue new laws and amend previous laws to
facilitate commerce and industry.Strengthen commercial ties with other parts of the
world.Industrial opportunities and priorities, in industry and manufacturing, the Kurdistan
Region needs cement, steel, food processing, canning and packaging factories and
plants. There are also good opportunities for cutting of marble, which the Kurdistan
Region has in abundance. In agro industry, there are good opportunities to establish
joint stock companies with the government. As part of the five-year strategic plan to
revive agriculture, the Kurdistan Region needs more wheat silos. An agreement has
been signed this year to build one silo, and we look forward to collaborating with foreign
companies on eight more similar projects. Ministry of Trade and Industry has in its plan
to establish a Free Trade andIndustrial Zone near the Turkish border, this project is

24


going to be implemented with the cooperation of Foreign Private Firms and Enterprises
specialized in the sector.
4.2.2. Customers
Kurdistan 4Milk is selling its production to wholesaler in KurdistanRegion. It has
authorized agents are found in the all cities of Iraq although this shows that most of the
region is covered withthe product but still we fill that the demand of opening new
distributioncenter is a must since the imports still have their market which shows thatthe
production is not sufficient to satisfy consumers demands. The customers can rely on
the high quality of the products and the reliable supply. The products will be sold at a
reasonable price.The manufacturing is characterized by tangible outputs products,
outputs thatcustomers consume over time, jobs that use less labor and more equipment,
little customer contact, nocustomer participation in the conversion process in production,
and sophisticated methods for measuringproduction activities and resource consumption
as products are made.Service, on the other hand, is characterized by intangible outputs,
outputs that customers consume, jobs that use more labor and less equipment, direct
customer contact, frequent customerparticipation in the conversion process, and
elementary methods for measuring conversion activitiesand resource consumption. To
provide high quality customer driven services that will enhance the development of all
sectors of the 4Milk Industry through healthy farm production to consumers. The results
of the study have revealed that private small scale units are realizing higher returns for
their products due to high demand from the customers due to high quality and good
services. The units may be provided with additional funds to produce more processed
products to meet the future demands.

4.2.3. Supplier
The raw material that are used in the production of 4Milk is depends into two Suppliers,
some of raw materials are local but others are imported inIran and Turkey for producing
Milk. The best qualities of the raw material are usein the production. The Company
intends to sell only processed milk, powder milk and liquid milk. The Company is not
selling raw milk because of legal restrictions and health risks. The strategy of the
Company will be to produce and sell reliable high quality dairy products. Because of the
high quality standards that have been put in practice, the company will be the only
supplier who is capable to produce these reliable high quality dairy products, suppliers
from different production areas of the country. Suppliers negotiate with supermarkets
over only a subset of the profits of the supply chain. The highest price suppliers can
secure is constrained by the buyers ability to source from the next closest market. In the
case of milk this would mean sourcing abroad. Suppliers to develop technologies
yielding greater economies of scale, such technologies further improve input prices for
the largest buyers and damage them for the smallest buyers. Bargaining Power of
Suppliers, In the case of major players bargaining power of suppliers is very low as they
dictate the prices, supplied by free market in which the prices are fluctuating due to

25


suppliers behavior. Suppliers the raw milk will be supplied by individual farmers. The
individual farmers sell the milk to the Company villages in relatively small quantities.
The payment will be made direct to the farmer. They have checked and collected the
milk before selling to The Company in larger amounts. The farmers will receive a higher
price form The Company in comparison to the smaller deliveries by individual farmers
due to handling costs for The Company.

4.2.4. Demand
Milk is the easily available product in the market but when we analyze its growth in the
current market, we can see the upward trend which shows that there is a place in the
market for expansion of existing companies andentrance of new companies. Production
of milk usually depends on the need, demand of the particular product. In Kurdistan, the
demand of milk in Kurdistan province varies. Also Population is growing rapidly high,
rate of tourism is growing more people come to Kurdistan and seeing the tourist places
this will increase demand of milk. There is a high and growing demand for milk in the
Kurdistan District and especially in Erbil. In the villages there is also a demand for
processed milk instead of raw milk taken directly from the farmers.The demand for milk
in Kurdistan and Iraq comes from households, schools, hospitals, cateringinstitutions,
Ministry of Trades Iraq, food and dairy processing plants.The demand for milk from
processing plants andother consumers is expected to increase. Probably the most
significant factor in growth of demand at this time is the dramatic increase in populations
and their cultural familiarity and desire for milk products.Trends:Erbil is situated
Kurdistan. This situation implies a growth of international trade of Erbil and therefore the
city is growing very rapidly. Increasing demand is to be expected for the wholesale of
dairy products, consumption in hotels and restaurants and sales in milk shops and in the
malls.There is also a growing demand from Erbil. The demand for dairy produce in
Kurdistan is growing faster than the dairy production. The company expects growing
sales to Kurdistan via Erbil of powder milk and liquid milk. The availability of quality dairy
products in Iraq is limited not only by to low consumer purchasing power, but also by
lack of marketing-oriented manufactures, the lack of efficient clod chain distribution, by
faulty electricity supply, and by the limited production of quality raw materials fresh milk.
The demand for dairy is likely to experience double digit increase, not only in the short to
medium term but over the long term. Competition is limited, and no brand or multination
company is firmly established in the country. A brand can establish easily and cheaply,
creating strong consumer and trade awareness, preference, and loyalty.



26


4.2.5. Competitors
After the physical survey that have been conducted by members of the group we figured
out that the Kurdistan milk have just one localcompetitor in the region, its 4Milk and
other competitors are fromneighbor countries the bellow table shows the market share
from ourcompetitors: our share 25%local, Iran share 30%import, Turkey
share35%import, other share 10% import.We as Kurdistan 4Milk factory should provide
high quality and lowprice to have good market share also to compete with other
companies.Most of consumers are children so we can focus on them and produce
powder milk and liquid milk in funny style to attract them.The project's aim is to
investigate the competitive forces which influence the buyer sellerrelationships between
supermarkets, processors and farmers; to measure andunderstand the level of market
power that exists at each stage in the supply chain; and tounderstand the effects of this
market power on the main players in the supply chain.In conducting the research we
have interviewed industry executives at all stages in thesupply chain for liquid milk, from
the supermarket right up the supply chain to farmers representatives. We have
constructed a theoretical model of the bargaining and pricesetting which occurs at all
levels in the industry. Finally we have conducted anempirical estimation of the model
using publicly available financial data and furtherdata provided by the Milk Development
Council. The main competitors on the market are the local farmers and the street
vendors who sell raw milk.Need of fund considerably is very huge for manufacturing,
advertising, and distribution. As a short term strategy the products will be distributed
within Kurdistan and then expanding within Iraq as a long term mission. Also the
advertisement does not need extremely capital that is required for an international
business advertisement, because of low cost of commercials in the region and also the
transportation. The ingredients can also be provided easily by internal suppliers unless
for some accessories and cake decoration. Our staff is very up skilled people that can
record as an extreme differentiation to our competitors. This gives us the opportunity to
enter the market professionally and confidently. Simultaneously, our industry will face a
heavy competition from major players. Lack of technology will be another weakness we
have to pay attention to because it will not be easy thing to find equipments that is
essential for the business in the market. During the year the marketing aspects will be
elaborated in a detailed marketing plan by the manager. The outcome may lead to
adjustments in the business plan. There are owned enterprises for dairy products in Iraq
in general, but they are not real competitors, since at the moment they lie idle, due to a
lack of functioning machinery, working capital, and input especially milk. Therefore,
4Milk has selected most premium, highly demanded products, and wide range of
products that is satisfy segments of customers tend to have a competitive edge within
Kurdistan and Iraqinational marker alike. 4Milk will be the freshest product exists in the
local market,with modern packing and different writing languages.

27


4.2.6. Price
The price of the Milk produced by the company is competitive compared to other local
producers and also compared to the imported ones coming from the neighboring
countries. Though the company has lower price but it has not compromised on quality
thereby is still a prominent market player. The products are at present sold through
wholesalers who distribute it geographically in various regions. The product is made
available to the distributors through company cars. Value proposition the customers can
rely on the high quality of the products and the reliable supply. The products will be sold
at a reasonable price. The sales prices in the business plan are based on the average
prevailing market prices in locality adjusted for inflation. While current milk prices might
not give rise to much enthusiasm for expansion, it is important for farmers to look
beyond the current market gloom and plan for a viable future in milk production.
4.3. Marketing Mix and Strategic marketing
Marketing mix (Price, Place, Promotion, Product)
When marketing their products firms need to create a successful mix of:
1. The right product
2. Sold at the right price
3. in the right place
4. Using the most suitable promotion.
To create the right marketing mix, businesses have to meet the following conditions:
The product has to have the right features - for example, it must look good and work
well. The price must be right. Consumer will need to buy in large numbers to produce a
healthy profit. The goods must be in the right place at the right time. Making sure that
the goods arrive when and where they are wanted is an important operation. The target
group needs to be made aware of the existence and availability of the product through
promotion. Successful promotion helps a firm to spread costs over a larger output. For
example, a company like Kellogg's is constantly developing new breakfast cereals - the
product element is the new product itself, getting the price right involves examining
customer perceptions and rival products as well as costs of manufacture, promotion
involves engaging in a range of promotional activities e.g. competitions, product tasting
etc., and place involves using the best possible channels of distribution such as leading
supermarket chains. The product is the central point on which marketing energy must
focus,finding out how to make the product, setting up the production line, providing the
finance and manufacturing the product are not the responsibility of the marketing
function. However, it is concerned with what the product means to the customer.
Marketing therefore plays a key role in determining such aspects as:The appearance of
the product - in line with the requirements of the market. The function of the product -
products must address the needs of customers as identified through market research.
The product range and how it is used is a function of the marketing mix. The range may
be broadened or a brand may be extended for tactical reasons, such as matching
competition or catering for seasonal fluctuations. Alternatively, a product may be
repositioned to make it more acceptable for a new group of consumers as part of a long-

28


term plan.The price: Of all the aspects of the marketing mix, price is the one, which
creates sales revenue - all the others are costs. The price of an item is clearly an
important determinant of the value of sales made. In theory, price is really determined by
the discovery of what customers perceive is the value of the item on sale. Researching
consumers' opinions about pricing is important as it indicates how they value what they
are looking for as well as what they want to pay. An organization's pricing policy will vary
according to time and circumstances. Crudely speaking, thevalue of water in the Lake
District will be considerably different from the value of water in the desert. The place:
Although figures vary widely from product to product, roughly a fifth of the cost of a
product goes on getting it to the customer. 'Place' is concerned with various methods of
transporting and storing goods, and then making them available for the customer.
Getting the right product to the right place at the right time involves the distribution
system. The choice of distribution method will depend on a variety of circumstances. It
will be more convenient for some manufacturers to sell to wholesalers who then sell to
retailers, while others will prefer to sell directly to retailers or customers.The promotion:
Promotion is the business of communicating with customers. It will provide information
that will assist them in making a decision to purchase a product or service. The
razzmatazz, pace and creativity of some promotional activities are almost alien to
normal business activities. The cost associated with promotion or advertising goods and
services often represents a sizeable proportion of the overall cost of producing an item.
However, successful promotion increases sales so that advertising and other costs are
spread over a larger output. Though increased promotional activity is often a sign of a
response to a problem such as competitive activity, it enables an organization to
develop and build up a succession of messages and can be extremely cost-effective.
Marketing Strategies: Milk marketing truly came into the public's consciousnesswith the
introduction of the 4Milk"The basic dairy product became associated with a
memorableand catchy slogan that helped drives sales. There are manyother strategies,
though, to market all types of dairy products.These include promotion of nutritional
value, appeal to theorganic market, and use of social media networks anddevelopment
of new milk products.According to Iraqi Marketing Association marketingas "the process
of planning and executing the conception,pricing, promotion, and distribution of ideas,
goods, andservices to create exchanges that satisfy individual and organizational
objectives, Marketers use an assortment ofstrategies to guide how, when, and where
productinformation is presented to consumers. Their goal is toconvince consumers to
buy a particular brand or product.Successful marketing strategies create a desire for
aproduct. A marketer, therefore, needs to understandconsumer likes and dislikes. In
addition, marketers mustknow what information will convince consumers to buy
theirproduct, and whom consumers perceive as a credible sourceof information. Some
marketing strategies use fictionalcharacters, celebrities, or experts (such as doctors) to
sellproducts, while other strategies use specific statements or"health claims" that state
the benefits of using a particularproduct or eating a particular food.Impact and
InfluenceMarketing strategies directly impact milk purchasing andnecessarily mean zero
grams of fat. Milk labeling standardsdefine low-fat foods as those containing less than

29


0.5 gram offat per serving. Therefore, consuming several servings maymean consuming
one or two grams of fat, and people areoften unaware of what amount of a food
constitutes a"serving." In addition, foods low in fat may be high in sugar,adding
additional calories to one's daily caloric intake. Toooften, consumers mistakenly
translate a claim of "no fat" intoone of "no calories."It is also important for consumers to
recognize their role inevaluating health claims and product comparisons.
Whileadvertisers are aware of the need for truth in advertising,sometimes their desire to
sell products over-shadows anaccurate disclosure of product attributes. Advertisers
shouldbear in mind that inaccurate or vague health claims have thepotential to cause
economic hardship, illness, and even death.Lastly, marketing strategies used in
developing nationsshould be subjected to the highest standards of truth inadvertising. In
4Milk dairy processors market milk and milk products under the regulation of the 4Milk
Marketing board, but within the marketing system, producers make marketing choices
regarding the quota they may hold and components of milk they plan to ship. They may
have specialty or niche market opportunities. The markets for breeding stock, custom
heifer rearing or feeding out of bull calves may also be considered. The marketing
strategies adopted by a dairy farm should address both the market trends and the
response to customer preferences noted previously. You should study and understand
the market you are facing.
5. Using E-Tools in 4Milk Project
Within the era of technology, all businesses nowadays con not survive if abandon
Internet and E-Tools: even these are not electronic businesses. Internet has entered
peopleslives from all directions and the numbers of population who using Internet are
increasing day by day, yet the older generations. Mapping our business, namely 4Milk
Dairy business and bearing in mind how the Internet as a tool could be integrated into
different aspects of our business. This would be outlined in the following characteristics:
5.1. Use of Internet, Intranet and E-mails
In fact, 4Milk Dairy activities to use and apply knowledge can benefit from the disciplines
of knowledge management, and that covers most managerial and professional activities.
The key technologies are communication and collaboration technologies that are web
based for Internet and intranet usage, as well as mobile technologies such as PDAs,
PCs, telephone and videoconferencing. New technologies are rapidly emerging that act
as intelligent agents and assistants to search, summaries, conceptualize and recognize
patterns of information and knowledge. As a general rule the adoption of information and
communication technology (ICT) by companies has grown considerably over the past
few years, with more and more firms connecting to the Internet. Firms use ICT to
automate internal office and production processes, for customer relations and supply
chain management, or for the management of the distribution and logistics

30


networks.4Milk Dairybusiness as mid types firm it will be not easy to full utilize ICT, large
technologically advanced multinational companies have,and the result has been
creation of big industrial groups operating interconnected networks. The main factors
that motivate a mid-sizecompany like 4Milk Dairy to use ICT solutions include greater
efficiency in internal processes productive administrative, delivery of orders, and
integration of internal processes with external organizations to improve logistics and
reduce costs.This policy addresses a new paradigm that is challenging organizations all
over the world. E-Mail and Internet opens up many opportunities, but it also presents
many threats. The purpose of having and adhering to a policy is to obtain the best value
from this technology at the lowest acceptable risk. There is ample evidence from other
organizations that failure to have a policy and monitor its effectiveness leads to
unproductive practices within the organization be they deliberate or simply through
ignorance of how best to use the technology. The introduction of a policy before the
access is opened up gives time for discussion, consultation with key people and
consideration of all the issues. The policy cannot be all things to all people, but its key
principle will be that it addresses Councils core needs as a customer orientated service
organization.Intranet: An unregulated, worldwide, network, linking thousands of
computers and millions of people. It makes it possible to rapidly share information
around the world. E-mail: A system that provides a convenient and effective means of
communication between divisions, departments, branches, and individual staff in
Council. Where installed, the additional capability of using the Internet for external e-mail
extends this convenience to any other group or organization with an Internet mail
address. World Wide Web (WWW): Is an application that runs on the Internet. It gives
the ability to easily search interconnected computers and jump to any of those
computers at the click of a mouse button. The applications most common interface is
the graphical browser; the application selected by council for its WEB browser is
Microsoft Explorer.
5.2. Internet in Marketing and Advertising
4Milk Dairy project isnt an E-business, but the Internet could be a tool contributing in
increasing the numbers of the customers and the revenues, as well as we will better
gauge the reaction of the local market. In addition to that, the use of Internet can
increase the supply chain management and add value to our business. In our project we
are intending to advertise our dairy product though Internet on the website to attract
Internet users and introduce our products and business. We plan to spend 15-18% of
total revenue on advertising. Two factors make Internet marketing and advertising
superior in the world of advertising: first it connects the business to global markets,
especially dairy products. And second it produces a global environment for the business
to earn huge financial rewards.Internet Advertising helps the business to make money
advertising online.4Milk Dairy project will adopt B2B as a major, and 2 partially: Internet

31


will be a tool to distribute our products to both companies and customers through
Internet. The Internet will play a role in increasing the use for sells and advertising.
Marketing of dairy products over the Internet is on ongoing process of planning and
executing a comprehensive strategy for positioning of products. Whereas, Internet
Advertising is: the presentation and promotion of ideas. Thereforthe goal of Internet
marketing and advertising is to basically make our products known and create an
exchange between individuals and organizations, and can use several types of Internet
marketing advertising such as: Banner ads and Pop ups.Through advertising 4Milk Dairy
products on the Internet, we could deliver the mankinds most extraordinarymerchandise
but if we dont advertise on the World Wide Web, nobody will be capable to discover our
the least bit.
5.3. Online advertising purposes
Internet advertising actually dishes out two main functions. First is says the cyber-world
that we actually have a real dairy product and what exactly it is. Therefore, it tells the
world how to find us, our Internet site and our product. The purpose of this marketing on
the internet is that Web site is to provide an overview of the dramatic way that the
Internet is impacting all aspects of marketing. Internet marketing activities are organized
according to the five categories outlined in the table below. These categories represent
the full scope of marketing as the discipline is most commonly defined. How marketers
research and gather information about customers: How marketers make strategic
decisions about each of the four elements of the marketing mix. The product is much
more than just the physical good that becomes the possession of the customer. It is
everything about the purchase experience that a customer finds satisfying. When a
customer buys a new computer, for example, the product consists of not only the
tangible computer, monitor and cables, but also the information provided by the
computer salesperson, the instruction manual, the warranty, the follow-up technical
service, etc. The Internet provides organizations with ways to greatly enhance the extent
to which a given product satisfies customers. Clearly, online firms can engage in
marketing activities and services that enhance their product-offerings in ways that
traditional, in-store organizations cannot. The Internet will have a huge impact on how
products are distributed to customers especially on the distribution of those products
that can be digitized. This is because when online shoppers enter their credit card
number and purchase a digital product, that product can be sent to them directly and
immediately over the Internet. Of course, all computer software is in a digital format, and
thus could be sold and distributed to people directly on the Internet. Finally, computer
software is not the only type of product that can be distributed via the Internet. Of
course, words and pictures lend themselves to digitization; and most major newspapers
and magazines already are distributed to online customers every day. Most of these are
free. Internet advertising is especially powerful in its ability to target specific, appropriate

32


segments of customers. The Internet and related technology have already demonstrated
a profound effect on the personal selling process. Salespeople today carry around
laptop computers that connect them to their own company's databases when they are
out on sales calls. This provides them with the ability to provide the customer with
extensive, relevant information almost immediately. Via the Internet, individuals can
obtain free, printable coupons from a wide variety of companies. The Internet can
potentially have a dramatic impact on the price of goods and services; however, it is
debatable whether the end result will be lower or higher prices. Links to two conflicting
arguments are presented below. The Internet is a communication medium that efficiently
brings parties together, and thus can and does provide buyers with access to a larger
number of selling firms. This should foster competition among firms and drive prices
down. Because of the Internet, firms will now have to compete against other firms that
were once not competitors -- perhaps because these other firms were thousands of
miles away. It is true that a firm's geographic location is practically irrelevant in cyber
shopping. First, firms realize mutual dependencies, and are unlikely to engage in
destructive pricing behavior. Further, consumers are willing to pay higher prices for
increased selection and shopping convenience, which on-line shopping clearly provides.
An important point, however, is that on-line seller generally had not yet been able to
charge a premium for the differentiated goods they sell via the Internet. At the present
time, prices of products bought on-line are about the same as those purchased at
conventional retail stores. The chances of an individual person who would curious
enough to purchase whatever we are offering and marketing just by unintentionally
stumbling across 4Milk Dairy website are believably approximately one billion to
zero.4Milk Dairy factory is the only factory in Erbil and Kurdistan Region that produce
different types of fresh milk, powder milk and liquid milk we do not have competitors
inside the Region, and therefore we are aiming to introduce our fresh healthy products
to the distributors and customers by increasing the range of advertising. Through
advertising we want to send a message to all Internet users telling them :( By our
healthy and fresh products).We needs to figure out the native advertising formats for
online media. Rolling cameras on the voice talent creating radio commercials, scripts in
hand, wouldnt make a compelling TV spot, right? We generally turn on the television to
watch comedies or dramas starring beautiful people. Great TV commercials are also
comedies or dramas starring beautiful people, only shorter. If we log on to the Internet
for news, entertainment and information made better by theconversation around it,
online advertisers needs to figure out how to do the same tell their brand stories like
the best online publishers do, with content made better by the conversation.




33


5.4. Managing Information flow in 4Milk
Organizations of all sizes and kinds are challenged by the needs of information
management. Some larger enterprises have developed their approach to economic
intelligence to meet this need. The concept to intelligence comes from military circles
and dates back to roman times. Throughout the history of civilized societies there has
been a requirement to research information, and the question of the protection of
sensitive information against undesirable disclosure has been ever present.
Globalization, the spread of information and communication technologies, the
construction of formal and informal networks, the acceleration of economic change, the
evolution of relationships between the makers of finished products and their suppliers,
the introduction of customer relationship management, and the shortening of product life
cycles, among other things, has led to permanent changes in the day-to-day
management of the enterprises. These challenges are the same for a large company as
for small and medium companies. 4Milk Dairy considered as a medium company aiming
improving its product to be stringers in the food industry, in addition of that it should
adapt with the changing of environment and always be able to compete with other
companies in the food industry.
5.5. Strategic Importance of Information management in 4Milk
The analysis of the Internet situation informs the decision maker about the current
situation of the company on the bases of explicit or tangible knowledge: machine and
equipment capacity, the financial situation, organization, stocks and tacit or intangible
knowledge, know-how, human resources, customer relationships etc. the internal
analysis helped 4Milk Dairy to have internally company over view , so it can evaluate the
factory, and find the strength and weak points based on analysis outcomes. The main
problems of 4Milk Dairy is lack of know-how and limited experience of cadres as a result
this problems leads to bad information flow. The external landscape provides other
types of information technology, regulations, market issues (products and processes,
customers, competitors, mergers), and a vision of the future technology and market
predictions, political and social trends. We can notes the lack of modern technology in
the agriculture field, this will has a negative impact on the 4Milk Dairy Company, this
problem should be solved through adopting new technologies and using new methods to
insure the food security of Kurdistan Region.





34


5.6. From data to knowledge
The consistent demand of the economic intelligence user is needs for the right
information and when we need it.But consistently getting the right information at the right
moment can only be the result of apermanent intelligence process and policy
established at the highest level of the organization. Economic intelligent is a permanent
and iterative process, following the steps shown below in what we call the intelligence
cycle. No step can be by-passed without consequence.

Once the objectives and the 4Milk dairys information requirements have been
established, the process of gathering, storage and analysis of the available information
is focused on supplying the answers needed to facilitate decisions and then action.
During the cycle, feedback helps to fine-tune the intelligence process. Economic
intelligent methods and tools can help in qualifying and validating the data collected from
sources considered as reliable and builds an information framework adapted to
company processes and needs. Our analysis of the literature suggests that IT can lead
to a greater breadth and depth of knowledge creation, storage, transfer, and application
in organizations. While these suppositions in general can be applied to most IT designed
to provide information and could form the subject of research in themselves, an
interesting line of research would consider the subsequent question of whether and how
having knowledge available from more vertical and horizontal sources in the
organization in a more timely manner may enhance individual and organizational
performance. Does an increase in the breadth and depth of knowledge result in greater
use of a knowledge management system and greater use of available knowledge, or
contrarily, does such an expanded availability discourage usage as the potential search
and absorption time for needed knowledge might simultaneously increase? Does an
increase in the breadth, depth, quality, and timeliness of organizational knowledge result
in improved decision making, reduced product cycles, greater productivity, or better
customer service? In general, what are the consequences of increasing the breadth,
depth, quality, and timeliness of organizational knowledge?

Storage
Analysis
Action
Objective
Collection

35


5.7. Knowledge Management
Since I started my quest a few years ago searching for the ultimate knowledge
management tool, Ive discovered a number of interesting applications that help people
efficiently organize information. There certainly is no shortage of solutions for this
problem domain. Many tools exist that offer the ability to discover, save, organize,
search, and retrieve information. However, Ive noticed a trend in recent years, and
some newer applications are focusing more on the visual representation and
relationship of knowledge. I believe this is in part due to the wider adoption of mind
mapping (and concept mapping), and leveraging concepts and advances in the
semantic web community. On the other hand, knowledge Management focuses on the
existing knowledge inside the organization, and always of capturing it in a collaborative
framework.Other intelligence techniques and methods, such as defense and lobbying,
are sometimes called strategic intelligence. To improve the productionand productivity of
livestock particularly dairy production in the study area, vital knowledge has to be
created and utilized via appropriate partnerships. Transforming the subsistence dairy
production system into modern and commercial production system, knowledge-based
dairy production required knowledge based dairy production. Knowledge and the
management of knowledge are recognized as becoming more important to modern
organizations. No agricultural development project can be fostered other than going
through agricultural knowledge management system. Knowledge management systems
(KMS) refer to a class of information systems applied to managing organizational
knowledge. That is, they are IT-based systems developed to support and enhance the
organizational processes of knowledge creation, storage/retrieval, transfer, and
application. While not all KM initiatives involve an implementation of IT, and admonitions
against an emphasis on IT at the expense of the social and cultural facets of KM are not
uncommon.
5.8. Website
Website helps as expand your market. Long ago when a market was a certain
geographical area restricted to a town, city, state or country. Today, the whole world is
your marketplace and one of the major advantages of having your website is that you
can reach out to potential customers beyond national and international boundaries.
Going online could give a great boost to your business, especially if you are selling
products that have a market outside your immediate geographical area. A web site can
do a lot for the business and the clients having website will enable the business to make
available information to customers and find out what is their need. It can enable
customers to find out all the information they need about your product such as:
- The service we provide.
- The product we offer.
- Your products images with specs & prices.
- Special offers to your clients.

36


In today's business environment and to beat the competition large or small companies
definitely need to develop a good website. Many business owners use the excuse that
their business is "word-of mouth" and they do not need a website. But a great way to
reinforce the personal recommendations of other clients is through professional website
development. Web development services help your company to increase product
knowledge, maintain communication between you and potential clients, sell your
products or services, generate leads for the business, and increase the popularity of
your company and much more.Our website is fully e-commerce functional and could
easily become a significant revenue source.We will eventually sell the following items
online:
Powder and liquid milk
Gift baskets
Gift items
Furnishings
A monthly newsletter
Interesting information about the Dairy industry
A map to our store
Store hours
Special events
Milk recipes
Most of these functions are already up and running. Although we've projected modest
sales because of the difficulty in predicting online sales activity, we believe the potential
exists for Internet sales to become a substantial percentage of our revenue. Special
downloadable offers good at the retail stores will be posted from time to time on the
website. We will host online "events" for our customers. For example, a visiting author
may go online to chat with visitors to our website. Or we may support charities' fund-
raising activities. This will provide us with opportunities for media coverage. Eventually,
when more stores are opened, the website will function as a means of internal
communication through a password-protected area. Here, company rules, health
department regulations, news, chat, "live" internal announcements and virtual meetings
will take place. The Internet stations enable customers to check their email or access
websites for business, study or travel information.Take homemessages A new online
marketing tool developed by University of Illinois Extension will give theIllinois dairy
industry access to a powerful source of marketing information. Market Maker is an
interactive website designed to locate producers, buyers, sellers anddistributors of
Illinois food products and to improve knowledge of where food consumersare located
and how they make food related purchasing decisions.Market Maker, funded by The
Council on Food and Agricultural Research and The Illinoiswebsites, is a one-stop shop
for strategic marketing information for producersand food retailers alike. There is an
abundance of marketing data available via the Internet andthrough various trade
magazines, but to a novice user it can be overwhelming. This site attemptsto distill and
organize that information into an easy-to-use interactive site. State-of-the-artmapping
tools let users visualize strategic marketing information.


37


www.4Milk.net

Figure (1)
The site offers the following features:
Data Base of Milk Related Businesses- , Milk processors, wholesalers,grocery stores,
restaurants and farmers markets are included on the site. Business can be
queriedbytype of business or, in the case of producers, type of product raised. Each
business recordincludes contact information and an abbreviated profile of the business
or farm. Every queryallows a mapping option so that all records requested can be
viewed on a map. For example, auser can request lists of federally inspected milk plants
along with a map that identifies theirlocations. If you are a grocery store owner or
manager looking for the closest producer of locallyproduced Milk, you can query the
website to find the names and contact information of thoseproducers. The grocer also
has the option of requesting a map that shows where each producer islocated. The next
phase of the project is to expand the list of milk producers on the site. Sincethere is no
complete list of farmers producing and marketing milk-related products, University of
Extension educators are reaching out to producers statewide to include theirventures in
Market Maker. There is no charge associated with having a business listed on the
sitenor is there a charge to access any of the information on the site.The goal is to make
the site a resource for all businesses in the food supply chain Site.All of these online
resources are intended to improve the users' understanding of milk marketingand
provide better access to regional milk markets. Businesses can be added to the
database bycompleting the online form provided on the site.

38


6. The Financial plan
A financial plan is a breakdown of operating expenses a business will incur over the
years for Dairy operation. A financial plan helps a business forecast expenses the
company will take on dairy, monthly and yearly. The breakdown of operating expenses
reflects how much is spent on equipment, staff, rent and training, and the financial plan
lets a business track how money is being generated from its product or service and how
it is being spent to maintain operations. A financial plan is part of a business plan
proposal, which defines the business and states the businesss objective and goals,
along with identifying competitors and strategies for overcoming market competition. It
summarizes how a business will spend money on business operations. When writing a
financial plan, a business should reflect on how money will be spent in the first year to
run the business and how the money will be allocated to different segments of the
business. First-year business expenses include projected sales, start-up costs and
monthly expenses. A financial plan will include start-up costs, which are expenses used
to get the business open to the public. Based on the product, a business should have an
idea of its monthly expenses, which, generally, are reoccurring expenses that keep a
business operational, such as rent and staff salary. A financial plan should also include
a contingency plan, which is 15 percent of the money a business has set aside for
emergency use. Businesses can meet their expense needs by using a financial plan to
seek funds from venture capitalists, organizations or investors. Businesses can also
take out a small business loans through organizations and banks using a solid financial
plan. The break down the financial plan of 4Milk Dairy includes start-up capital,
expenses, revenues, and investor income and disbursements. Other portions of a
complete feasibility study will also contribute data to your basic financial study.After
calculating the estimated required expenses from the different points view, the required
assets, the estimated expenses, salaries, and required end of year cash on hand etc.,
the total required fund for 4Milk Dairy product is estimated ($ 2,000,000), so with tough
financial plan the financial goals will be full realized when all aspects of the project are in
place and the projected net income (Profit) will be ($93,900) at the end of the first year,
so at the second year we will increase the number of customer andbecause we will take
care of marketing by increasing the number of advertising and increasing salaries,so at
third year increasing products we will to get big market in Kurdistan Regional and Iraq.
The following tables and charts show the detail of the financial plan:





39


Year One
6.1. Start-up funds
Required start-up funds Amount Total
Fixed assets $
Buildings
Equipment 1,120,000
Furniture and Fixtures 5,000
Vehicles 50,000
Other Fixed Assets 10,000
Total Fixed Assets 1,185,000
Operating Capital
Per-Opening Salaries and Wages 170,000
Wages Water and Electricity 10,000
Maintenance and Services 6,000
Advertising and Promotions 120,000
Cash on hand 150,000
Internet and Phones 6,000
Inventory 88,000
Supplies 130,000
Legal and Accounting Fees 125,000
License 10,000
Total Operating Capital 815,000
Total Required Funds 2,000,000
Table (1)
6.2. Salaries and Wages
Salaries and Related Expenses assumptions Salaries per monthly yearly
Managers 8 12,000 144,000
Employee(Public Relation) 4 2,000 24,000
Employee (HR) 10 6,000 72,000
Accountant 4 2,800 33,600
Employee operation management 25 7,500 90,000
Employee marketing management 5 2,000 24,000
Total Salaries and Related Expenses 387,600
Payroll Taxes and Benefits
Social Security (56*50) 2,800
Medicare (56*50) 2,800
Total Payroll Taxes and Benefits 5,600
Total Payroll Taxes and Benefits and Related Expenses 393,200
Table (2)


40


6.3 .Fixed operation expenses
Expenses Monthly Yearly
Advertising 6,000 72,000
Car and Truck Expenses 1,000 12,000
Bank and Merchant Fees 100 1,200
Refunds 1,000 12,000
Miscellaneous 1,000 12,000
Postage and Delivery 100 1,200
Office Expenses and Supplies 7,000 84,000
Sales and Marketing 7,000 84,000
Communications 600 7,200
Repair and Maintenance 500 6,000
Utilities 3,000 36,000
Total Expenses 327,600
Depreciation 3,600
Total Fixed Operation Expenses 330,000
Table (3)

6.4. Project Sales forecast
Products and services Assumptions Unit Monthly Yearly
Powder Milk
Price Per Unit For each Ton($500) 15 225,000 2,700,000
Variable Cost Per Unit For each Ton($350) 15 157,500 1,890,000
Gross Margin Per Unit 15 67,500 810,000
Projected Unit Sales 15

Products and services Assumptions Unit Monthly Yearly
Liquid Milk
Price Per Unit For each Liter(cent$ 70) 50 1,050 12,600
Variable Cost Per Unit For each Liter(cent$55) 50 825 9,900
Gross Margin Per Unit 50 225 2,700
Projected Unit Sales 50
Table (4)





41




6.5 .Income statement
Projected Income Statement 2013
Income Monthly Yearly
Powder Milk 225,000 2,700,000
Liquid Milk 1,050 12,600
Total Income 226,050 2,712,600
Cost of Sales
Powder Milk 157,500 1,890,000
Liquid Milk 825 9,900
Total Cost of Sales 158,325 1,899,900
Gross Margin 67,725 812,700
Total Salaries and Wages 32,300 387,600
Fixed Business Expenses
Advertising 6,000 72,000
Car and Truck Expenses 1,000 12,000
Bank and Merchant Fees 100 1,200
Refunds 1,000 12,000
Miscellaneous 1,000 12,000
Postage and Delivery 100 1,200
Office Expenses and Supplies 7,000 84,000
Sales and Marketing 7,000 84,000
Communications 600 7,200
Repair and Maintenance 500 6,000
Utilities 3,000 36,000

Total Fixed Business Expenses 27,300 327,600
Other Expenses
Depreciation 300 3,600

Net Income 7,825 93,900
Table (5)






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Balance Sheet Year One
Assets
Current Assets Base Period
Cash 150,000
Accounts Receivable
Inventory 88,000
Prepaid Expenses 577,000
Other Current
Total Current Assets 815,000
Fixed Assets
Equipment 1,120,000
Furniture and Fixtures 5,000
Vehicles 50,000
Other Fixed Assets 10,000
Total Fixed Assets 1,185,000
Less: Accumulated Depreciation
Total Assets 2,000,000
Liabilities and stockholder's Equity
Liabilities
Accounts Payable
Other Payable
Total Liabilities
stockholder's Equity
Capital 2,000,000
Net Income
Total Stockholder's Equity 2,000,000
Total Liabilities and Stockholder's Equity 2,000,000
Table (6) (Assets =Liabilities + Capital)








43


The Net Income chart:

Chart (1)

6.6. Important Assumptions
1-The number of customers will increase day by day.
2-Current business, banking, and economic trends continue to be stable.
3-Because the fixed cost will not rise with revenue, the profit will increase.

7. Human resources management
Developed Human resource plays significant role in overall developmentof the
organization. It helps organization to sustain incutthroat competition. It is the only
organizational internal sourcethat is available in cheap and can be effectively used up to
theirfullest extent of potential for organization development.Human resource
development programs enable HR to increaseproductivity, through creative thinking,
team building, buildingpositive attitude etc. it enables to minimize wastages,
enhancequality, and increase external customers satisfaction to maximumextent
which helps to build up a brand image in the market.Milk processing organizations are
being involved in food and fooditems need to be very conscious about hygiene and
sanitation andthereby avoid any ill effects on consumers health and
healthproblems.4milk and Milk Products milk, Ltd was started in 2013 at 4milk
Company. Near Erbil city in Kurdistan Iraq, initially it was operating on small-scale basis.
Today, it has verybig, modern and well-structured milk processing plant with 100liters
liquid milk and 20 Tons powder milk per day milk handling capacity. The job design and
internalarrangements of the department are very systematic and it is insuch a way as to
Projected
Revenue, $2,71
2,600
Variable
Cost, $1,899,90
0
Gross
Margin, $812,7
00
Fixed
Expenses, $71
8,800
Profit, $93,900

44


minimize the workers efforts, maximize the work doneand increase the job satisfaction
of the employees. Managementhas paid enough attention towards the automation in
thedairy to expedite the work process. The various machineries in theplant such as,
pasteurizer with 12,5 liters per hour harmonizerwith 12,5 liters per hour capacity; milk
storage tanks with100 liters and cold storage with for day capacity. The collectedraw
milk is processed, pasteurized. The packedmilk is sold under the trade name of 4 Milk
in the Kurdistan Regional Iraqand Thane market.Human Resource Management
includes the processes required to make themost effective use of the people involved
with the project. It includes the entire projectStakeholdersa sponsor, customers,
individual contributors, provides an overview of the following major processes:
Organizational Planningidentifying, documenting, and assigning project roles,
responsibilities, and reporting relationships. Staff Acquisitiongetting the human
resources needed assigned to and working on the project. Team Development
developing individual and group skills to enhance project performance, these processes
interact with each other and with the processes in the other knowledge areas as well.
Each process may involve effort from one or more individuals or groups of individuals
based on the needs of the project. Although the processes are presented here as
discrete elements with well-defined interfaces, in practice they may overlap and interact
in ways not detailed here. Project Management Processes. There is a substantial body
of literature about dealing with people in an operational, ongoing context. Some of the
many topics include: Leading, communicating, negotiating, and others discussed in
General Management Skills. Delegating, motivating, coaching, mentoring, and other
subjects related to dealing with individuals. Team building, dealing with conflict, and
other subjects related to dealing with groups. Performance appraisal, recruitment,
retention, labor relations, health and safety regulations, and other subjects related to
administering the human resource function. Most of this material is directly applicable to
leading and managing people on projects, and the project manager and project
management team should be familiar with it. However, they must also be sensitive as to
how this knowledge is applied on the project.The temporary nature of projects means
that the personal and organizationalrelationships will generally be both temporary and
new. The project managementteam must take care to select techniques that are
appropriate for suchtransient relationships.
ORGANIZATIONAL PLANNING: Organizational planning involves identifying,
documenting, and assigning project roles, responsibilities, and reporting relationships.
Roles, responsibilities, and reporting relationships may be assigned to individuals or to
groups. The individuals and groups may be part of the organization performing the
project or they may be external to it. Internal groups are often associated with a specific
functional department such as engineering, marketing, or accounting. On most projects,
the majority of organizational planning is done as part of the earliest project phases.
However, the results of this process should be reviewed regularly throughout the project
to ensure continued applicability. If the initial organization is no longer effective, it should

45


be revised promptly. Organizational planning is often tightly linked with communications
planning since the projects organizational structure will have a major effect on the
projects communications requirements.
STAFF ACQUISITION: Staff acquisition involves getting the human resources needed
(individuals or groups) assigned to and working on the project. In most environments,
the best resources may not be available, and the project management team must take
care to ensure that the resources which are available will meet project requirements.
TEAM DEVELOPMENT: Team development includes both enhancing the ability of
stakeholders to contribute asindividuals as well as enhancing the ability of the team to
function as a team. Individualdevelopment (managerial and technical) is the foundation
necessary to develop theteam. Development as a team is critical to the projects ability
to meet its objectives.Team development on a project is often complicated when
individual team membersare accountable to both a functional manager and to the
project manager. Effective managementof this dual reporting relationship is often a
critical success factor for the projectand is generally the responsibility of the project
manager.A human resourcesplan, the business plan will drive threeparts of your human
resources plan:
The nature of the work
The nature of the worker
The nature of the workplace
The human resources needed to provide an efficient commercial operation including
succession planning for key roles, will be determined when the outcomes of the product
and operation reviews are known. At this time a review of the management and
administration structure of the Dairy will be conducted to analyze the most efficient
staffing model required to sustain the Dairys needs. Meanwhile, dairy staffing will be
maintained at a level commensurate with providing a hygienic and safe working
environment.





















46



7.1. Organization Chart
The Organization Chart of 4Milk Project

















Chart (2)





Direct Manager
Chairman
Deputy Direct
Manager
Developing
&Planning
Marketing
Manager
Production
Manager
Operation
Manager
Administration
Manager
Financial
Manager
Accountant Cashier

Legal
Manager
HR
Manager
Sales
Manager
Advertising
Manager
IT
Manager
Technical
Manager
Warehouse
Manager
Procurement
Manager
Laboratory
Manger

47


7.2. Job Description
We have eight jobs main in the 4Milk project, the following jobs description:
1. Job Description-Chief Executive Officer
Personal Information (Name, Contract, Functions: CEO)
Minimum Required Qualifications:
Advance university degree in a relevant field
5-9years experience in project management in Dairy/ relevant field
Excellent organizational development, interpersonal, marketing, communication,
administration and personnel management skills
Proven leadership and analytical skills
Exceptional interpersonal skills
Experience managing a complex budget
Ability to develop short and long term strategies, and to address complex issues
Ability to raise visibility of 4Milk Dairy project through successful marketing
including expansion of the memberships base
Duties and Responsibilities:
A CEO is responsible for planning strategic, executing these plans to obtain
additional resources as well as source for revenues that would greatly benefit the
company
Oversees design, marketing, promotion, delivery and quality of dairy products
Approves guidelines and procedures that will produce efficient staff members
Represent the company in several meetings such as functional and committee
meetings. Through these meetings, they gain the ability to obtain acquisitions and
implement business related activities that would promote partnership within the
company
Identify, develop and direct the implementation 4Milk Dairy business strategy
Plan and direct the 4Milk Dairy activities to achieve stated/agreed targets and
standards for financial and trading performance, quality, culture and legislative
adherence
Recruit, select and develop executive team members
Direct functions and performance via the executive team
Maintain and develop 4Milk Dairy culture, values and reputation in its markets
and with all staff, customers, suppliers, partners and regulatory/ official bodies



48


2. Job Description-Administration Manager
Personal Information (Name, Contract, Functions: Administration Manager)
Minimum Required Qualifications:
University degree in a Business or Accounting, or equivalent experience
6 years administrative experience
Professional demeanor and excellent customer service skills
Professional in Microsoft office software including (Word, Excel, Power Point, and
Outlook)
Ability to prioritize, multi-task and be detail oriented in a deadline-driven
environment
Excellent verbal and written communication skills
Ability to give directions both orally and in written format
Duties and Responsibilities:
Closing on monthly accounts for the various entities
Review of trade plans and event profitability
Monthly balance sheet reconciliations
Preparation and distribution of monthly accounts summaries to division
management
Participation in monthly business reviews with division management
Monthly forecasting including midyear review
Annual budgeting
Analyze and tracking capital projects
Maintain integrity of accounting controls and systems
Coordinate annual audit of the financial records with internal audit and
independent auditors
Supervises the maintenance of project, contract and vendor files











49


3. Job Description-Financial Manager
Personal Information (Name, Contract, Functions: Financial Manager)
Minimum Required Qualifications:
Bachelor's degree in Accounting or Finance, MBA certification considered a plus
7-9 years experience in Finance and Accounting
Proficient In Microsoft office (Excel, Power Point, and Word)
Demonstrate solid business judgment and decision make skills
Maintain confidentiality of information
Provide honest and constructive feedback
Duties and Responsibilities:
Maintain day-t0-day financial control of the service within budget heads agreed
by the CEO
Business and financial strategy and planning, monitoring, management and
reporting, including management and development of policies, systems,
processes and personnel involved
Reporting and accounting as per regulatory and legal requirements including
taxation, dividends, annual report and accounts
Contributing to strategic planning and development as a member of executive
team, and probably keeping and distribution notes and records, reports to
executive and management team
Company insurance, import/export administration, licensing, contracts and
agreements, legal areas and activities
Corporate level negotiations (e.g. premises, plant, trading, acquisitions and
divestments, disposals), major supplier/ customer/ partner relationships,
regulatory bodies relationships and strategies, approvals and accreditations
Ensure that all finances are properly administered and monitored, including credit
control
Support the CEO the provision of information of the estimates
Advise on proper allocation of resources
Ensure that appropriate financial regulations and controls are in place and in use
at all times
Prepare and review detailed budgets for approval by the CEO
Make regular reports to the CEO on income, expenditure and any variations from
budgets



50


4.Job Description-Human Resource Manager
Personal Information (Name, Contract, Functions: Human Resource Manager)
Minimum Required Qualifications:
Bachelors degree in Human Resource, Business Administration or related field
Minimum 5 years human resource experience in food manufacturing
environment, with good experience in a HR management role
Experience in recruiting, employee relations, strategic planning, and corporate
compliance programs including legal and regulatory compliance
Experience with Microsoft Office applications (MS Word, document
creation/editing, Excel-spreadsheet creation/ editing. Data entry and analysis,
and Power Point-presentation creation/editing)
Strong communication skills
Duties and Responsibilities:
Responsible for managing, enhancing and delivering on HR programs such as
employee relations, compensation, recruitment and selection policy/practices,
discipline, pay conditions, contracts, training and development performance
appraisals and quality management, etc.
Establish and maintain appropriate systems for measuring necessary aspects of
HR development
Strategically work with first line supervisors and leadership to proactively identify
and implement HR plans and priorities that enhance overall site performance
Liaise with other functional/departmental managers so as to understand all
necessary aspects and needs of HR development, and to ensure they are fully
informed of HR objectives, purposes and achievements
Contribute to the evaluation and development of HR strategy and performance in
cooperation with executive team
Monitor, measure and report on HR issues, opportunities and development plans
and achievements within agreed formats and timescales
Ensure activities meet with and integrate with organizational requirements for
quality management, health and safety, stipulations, environmental policies and
general duty of care





51


5. Job Description-Operation Manager
Personal Information (Name, Contract, Functions: operation Manager)
Minimum Required Qualifications:
University/Master degree in Business Administration/ or related discipline
5 years experience in supervisory, management experience
Excellent communication, presentation and interpersonal skills
Strong leadership skills
Knowledge of relevant software applications including Microsoft Office
Experienced in pricing, pricing strategy, and developing methodologies to achieve
price to win
Duties and Responsibilities:
Develops and ensures the implementation of short term and long range business
plans for the operation
Oversees the preparation of annual business and operational plans. Ensures
effective financial controls and that financial objective are achieved
Plans and leads the directions of the operation in order grow and expand.
Anticipates and effectively deals with market trends and customer needs
Represents the operation in key relationships
Provides clear and effective leadership to the operation. Mentors, guides, and
coaches staff in order to expand their capabilities. Ensures appropriate and
qualified staffing is in place to develop and execute strategies and meet business
objectives
Ensures the establishment and implementation of effective operating systems,
policies and procedures that achieve the directives and strategies set by the CEO
and the senior members
Establishes the mission, values, philosophy and culture of the operation and
ensures consistency with overall 4Milk Dairy culture
Establishes goals and evaluates the performance of the operation against these
goals. Provides direction for changes in plans as appropriate
Develops forecasts regarding sales, finance, human resource needs,
organizational plans and monitors performance
Develops and oversees the operation budget




52


6.Job Description-Production Manager
Personal Information (Name, Contract, Functions: Production Manager)
Minimum Required Qualifications:
University degree in related field
5 years prior experience in Dairy operations
Excellent communication skills, both written and verbal for internal/external
relations: comprehension of complex verbal or written instructions
Proficiency in math
Required high degree of concentration and attention to direct department
managers and management group
Working knowledge Microsoft Office programs
Duties and Responsibilities:
Use periods of high concentration and knowledge of plant processing and
production to develop and maintain department structure, which effectively
groups production functions and establishes area of responsibility to satisfy
production department's needs and objectives
Direct, coordinate and visually monitor performance of production supervisors to
ensure maximum production at lowest cost consistent with established quality
and quantity specifications
Make appropriate recommendations concerning policies, procedures, techniques,
facilities, production planning and any other matter relative to the effective
operation of production department or overall Dairy factory
Monitor performance of all departments and coordinate with plant objectives
Plan and future expansion and development of plant operations
Maintain current awareness of Dairy industry trends, including new
developments in equipment, ingredients and customer needs
Prepare production portion of operating budgets: implement and control approved
budgets
Communicate and quality defects to all levels of organization for prompt
evaluation: involves use of written and verbal communication
Support and participate in the plant safety process
Ensure that all laboratory results and quality control recommendations are
handled correctly and efficiently. Maintain accurate records pertaining to
production standards
Maintain close contract with sales and marketing function, keeping abreast of all
sales and marketing activities that will affect production distribution
Develop personnel to the maximum extent of their ability

53


7.Job Description-Marketing Manager
Personal Information (Name, Contract, Functions: Marketing Manager)
Minimum Required Qualifications:
University degree, MBA is preferred
5-7 years of brand experience
Comprehensive knowledge of the law firm and law school marketplace, and sales
force structure as appropriate
Highly developed oral written communication/presentation skills
Strong board room presence communication skills in order to interact with all
levels of internal and external customers
Proven strategic planning, project management and analytical skills
Budget management skills
Team and individual leadership skills
Experience in the legal, publishing or advertising agency industry in marketing a
plus
Duties and Responsibilities:
Develop strategic market specific programs based on in-depth knowledge and
identified opportunities to drive stated objectives
Manage the drafting and implementation of go-to-marketing planning for the
assigned planning team's initiatives
Serve as a primary contract with their respective planning 4P, including the
teammates working with the same planning team and propose strategy to
positively impact the plan
Define measurement criteria for all marketing activities
Measure and analyze marketing activities using appropriate tools. Communicate
measurements and performance against the criteria
Adjust plans and programs as appropriate based upon analysis of market,
segment, or competition
Develop strategy and manage cross product, pricing, and promotional and
channel programs as appropriate
Communicate standard correspondence/messages, product and program
launches and specialized events and programs as defined by market plans
Participate in and lead, where needed, team meetings with the librarian relations
consultants and other internal groups to accomplish all marketing and sales
communication/support activities
Report regularly to management


54


8.Job Description-Development and Planning Officer
Personal Information (Name, Contract, Functions: Development and Planning)
Minimum Required Qualifications:
University degree in relevant field
Demonstrate experience in data analysis techniques and evaluative methods
Knowledge of system development techniques in a client or Internet environment
Ability to communicate effectively orally and in writing to support system training
and technical assistance
Duties and Responsibilities:
Develops and refines project plans specifying goals, strategy, and staffing,
scheduling, identification of risks, contingency plans, and allocation of available
resources
Executes the tasks as defined in the project plan in order to achieve the project
goals
Manages changes to the project scope, schedule, and costs using appropriate
verification techniques in order to keep the project plan accurate, updated, and
reflective of authorized project changes
Ensures a common understanding by setting expectations in accordance with the
project plan, in order to align the stakeholders and team members
Records detailed stakeholder requirements, constraints, and assumptions in
order to establish the project deliverables, using requirement-gathering
techniques (e.g., planning sessions, brainstorming, focus groups) and the project
charter
Measures project performance using appropriate tools and techniques in order to
monitor the progress of the project, identify and quantify any variances, perform
any required corrective actions, and communicate to all stakeholders
Document high-level risks, assumptions, and constraints using historical data and
expert judgment in order to understand project limitations
Implements approved actions and workarounds to mitigate project risk events in
order to minimize the impact of the risks on the project
Establishes relationships with other departments and organizations by
recognizing dependencies in order to assess potential partnership and
commitment to the project
Motivates the team using appropriate tools and techniques in order to increase
commitment to the program objective. Assists in the preparation of statements of
work and proposals for vendors and potential customers in conjunction with
business development and corporate development

55


8. Conclusion
Following are the concluding points taken into consideration after the conduct of the
Industry Dairy Analysis
More attention to values and beliefs.
Adding new production line.
Furthermore the flexibility of the production could be increased and due to the
excellent.
Continues training to the staff and employees as new systems are installing.
More attention to promotions and defining the agents.
The high quality and safety of milk and milk products in the Kurdistan result from
stringent government regulations and dairy industry programs, along with
continued vigilance at every stage of production, processing, pasteurization, and
distribution. The dairy industry, by taking a proactive approach such as adopting
new technologies and working with government agencies, can effectively meet
new food safety challenges as they may arise and continue to provide consumers
with safe, high quality dairy products.
The evidence presented suggests that there is a substantial demand for milk and
milk products in Kurdistan Regional and Iraq nearly half of which is currently
being met by imports. There appear to be considerable differences in the nature
and scale of milk consumption between rural and urban areas, moist and dry
zones, and low and high income groups. Due to the variety of environmental and
socio-economic conditions prevailing in the region, no single strategy for
increasing milk consumption in the whole area can be envisaged. .However, in
the face of present day economic developments and of the food crisis observed
in many areas there is a need to identify areas in Kurdistan Regional where
conditions are favorable to the promotion and improvement of domestic milk
production. Increasing milk production in such areas might not only increase milk
consumption but also ensure increased incomes to already existing and potential
milk producers in Iraq.
Moderate evidence suggests that there is not a relationship between intake of
calcium and/or dairy (milk and milk products) and adiposity in children and
adolescents.
We important a marketing by increase the advertising.





56


9. Bibliography
Lectures of Professor Mr. Alfredo Suarez in professional project and international
marketing.
Kurdistan Ministry of Agriculture website
Kurdistan Ministry of Planning website
www.KRG.org
www.kurdistaninvestment.org
www.scribd.com
www.wdga.org
www.attra.ncat.org
www.fullwood.com
Dr. Sardar Osman,Erbil 2011, the Book (History of Economic Thought).
Mr. Ayub Anwar,Erbil 2011, the Book (Microeconomics).
Robinson, Lyn (2009) The Goat Milk project. The timing of lacto genesis phase.
Masters thesis, Durham University. Available at Durham E-Theses
Anand, A. (1979) Marketing costs and consumers opinion for milk and milk
products of milk plant in Ambala, M.Sc. dissertation (unpublished), Kurukshetra
University, Kurukshetra, and Haryana.
Howard Smith and John (2008), The Milk Supply ChainProject, Department of
Economics, UK
H.H. Oostra (2005) Technical and Management Tools inDairy Production,
Doctoral thesis, Swedish University of Agricultural Sciences.
FAO(2009) Milk Dairy Products, handbook , Italy















57


10. Annexes
Financial plan Two Year and Three Year
Year Two

Operating Capital Total
Per-Opening Salaries and Wages 185,000
Wages Water and Electricity 16,000
Maintenance and Services 8,000
Advertising and Promotions 130,000
Cash on hand 202,500
Internet and Phones 8,000
Inventory 88,000
Supplies 135,000
Legal and Accounting Fees 125,000
License 15,000
Total Operating Capital 912,500
Total Required Funds 912,500




Salaries and Wages
Salaries and Related Expenses assumptions Salaries per monthly yearly
Managers 8 13,600 163,200
Employee(Public Relation) 4 2,800 33,600
Employee (HR) 10 8,000 96,000
Accountant 4 3,600 43,200
Employee operation management 25 12,500 150,000
Employee marketing management 5 3,000 36,000
Total Salaries and Related Expenses 522,000
Payroll Taxes and Benefits
Social Security (56*50) 2,800
Medicare (56*50) 2,800
Total Payroll Taxes and Benefits 5,600
Total Payroll Taxes and Benefits and Related Expenses 527,600



58




Fixed operation expenses
Expenses Monthly Yearly
Advertising 10,000 120,000
Car and Truck Expenses 1,000 12,000
Bank and Merchant Fees 100 1,200
Refunds 1,000 12,000
Miscellaneous 1,000 12,000
Postage and Delivery 100 1,200
Office Expenses and Supplies 7,000 84,000
Sales and Marketing 7,000 84,000
Communications 600 7,200
Repair and Maintenance 500 6,000
Utilities 3,000 36,000
Total Expenses 375,600
Depreciation 9,600
Total Fixed Operation Expenses 385,200


Project Sales forecast
Products and services Assumptions Unit Monthly Yearly
Powder Milk
Price Per Unit For each Ton($500) 20 300,000 3,600,000
Variable Cost Per Unit For each Ton($350) 20 210,000 2,520,000
Gross Margin Per Unit 20 90,000 1,080,000
Projected Unit Sales 20

Project Sales forecast
Products and services Assumptions Unit Monthly Yearly
Liquid Milk
Price Per Unit For each Liter(cent$ 70) 100 2,100 25,200
Variable Cost Per Unit For each Liter(cent$55) 100 1,650 19,800
Gross Margin Per Unit 100 450 5,400
Projected Unit Sales 100




59





Income statement
Projected Income Statement 2014
Income Monthly Yearly
Powder Milk 300,000 3,600,000
Liquid Milk 2,100 25,200
Total Income 302,100 3,625,200
Cost of Sales
Powder Milk 210,000 2,520,000
Liquid Milk 1,650 19,800
Total Cost of Sales 211,650 2,539,800
Gross Margin 90,450 1,085,400
Total Salaries and Wages 43,500 522,000
Fixed Business Expenses
Advertising 10,000 120,000
Car and Truck Expenses 1,000 12,000
Bank and Merchant Fees 100 1,200
Refunds 1,000 12,000
Miscellaneous 1,000 12,000
Postage and Delivery 100 1,200
Office Expenses and Supplies 7,000 84,000
Sales and Marketing 7,000 84,000
Communications 600 7,200
Repair and Maintenance 500 6,000
Utilities 3,000 36,000

Total Fixed Business Expenses 31,300 375,600
Other Expenses
Depreciation 800 9,600

Net Income 14,850 178,200






60




Balance Sheet Year Two

Current Assets
Cash 202,500
Accounts Receivable
Inventory 88,000
Prepaid Expenses 622,000
Other Current
Total Current Assets 912,500
Fixed Assets
Equipment 1,120,000
Furniture and Fixtures 5,000
Vehicles 50,000
Other Fixed Assets 10,000
Total Fixed Assets 1,185,000
Less: Accumulated Depreciation 3,600
Total Assets 2,093,900
Liabilities and stockholder's Equity
Liabilities
Accounts Payable
Other Payable
Total Liabilities
stockholder's Equity
Capital 2,000,000
Net Income 93,900
Total Stockholder's Equity 2,093,900
Total Liabilities and Stockholder's Equity 2,093,900








61




Year Three

Operating Capital Total
Per-Opening Salaries and Wages 200,000
Wages Water and Electricity 19,000
Maintenance and Services 8,000
Advertising and Promotions 170,000
Cash on hand 310,700
Internet and Phones 9,000
Inventory 88,000
Supplies 140,000
Legal and Accounting Fees 135,000
License 17,000
Total Operating Capital 1,096,700
Total Required Funds 1,096,700



Salaries and Wages
Salaries and Related Expenses assumptions Salaries per monthly yearly
Managers 8 16,000 192,000
Employee(Public Relation) 4 3,200 38,400
Employee (HR) 10 8,000 108,000
Accountant 4 4,800 57,600
Employee operation management 25 15,000 180,000
Employee marketing management 5 3,500 42,000
Total Salaries and Related Expenses 618,000
Payroll Taxes and Benefits
Social Security (56*50) 2,800
Medicare (56*50) 2,800
Total Payroll Taxes and Benefits 5,600
Total Payroll Taxes and Benefits and Related Expenses 623,600




62




Fixed operation expenses
Expenses Monthly Yearly
Advertising 15,000 180,000
Car and Truck Expenses 2,000 24,000
Bank and Merchant Fees 500 6,000
Refunds 1,200 14,400
Miscellaneous 1,100 13,200
Postage and Delivery 200 2,400
Office Expenses and Supplies 8,000 96,000
Sales and Marketing 7,500 90,000
Communications 1,500 18,000
Repair and Maintenance 700 8,400
Utilities 3,500 42,000
Total Expenses 494,400
Depreciation 10,200
Total Fixed Operation Expenses 504,600



Project Sales forecast
Products and services Assumptions Unit Monthly Yearly
Powder Milk
Price Per Unit For each Ton($500) 25 375,000 4,500,000
Variable Cost Per Unit For each Ton($350) 25 262,500 3,150,000
Gross Margin Per Unit 25 112,500 1,350,000
Projected Unit Sales 25

Project Sales forecast
Products and services Assumptions Unit Monthly Yearly
Liquid Milk
Price Per Unit For each Liter(cent$ 70) 105 2,205 26,460
Variable Cost Per Unit For each Liter(cent$55) 105 1,732.5 20,790
Gross Margin Per Unit 105 472.5 5,670
Projected Unit Sales 105



63




Income statement
Projected Income Statement 2015
Income Monthly Yearly
Powder Milk 375,000 4,500,000
Liquid Milk 2,205 26,460
Total Income 377,205 4,526,460
Cost of Sales
Powder Milk 262,500 3,150,000
Liquid Milk 1,732.5 20,790
Total Cost of Sales 264,232.5 3,170,790
Gross Margin 112,972.5 1,355,670
Total Salaries and Wages 51,500 618,000
Fixed Business Expenses
Advertising 15,000 180,000
Car and Truck Expenses 2,000 24,000
Bank and Merchant Fees 500 6,000
Refunds 1,200 14,400
Miscellaneous 1,100 13,200
Postage and Delivery 200 2,400
Office Expenses and Supplies 8,000 96,000
Sales and Marketing 7,500 90,000
Communications 1,500 18,000
Repair and Maintenance 700 8,400
Utilities 3,500 42,000

Total Fixed Business Expenses 41,200 494,400
Other Expenses
Depreciation 850 10,200

Net Income 19,422.5 233,070







64




Balance Sheet Year Three

Current Assets
Cash 310,700
Accounts Receivable
Inventory 88,000
Prepaid Expenses 698,000
Other Current
Total Current Assets 1,096,700
Fixed Assets
Equipment 1,120,000
Furniture and Fixtures 5,000
Vehicles 50,000
Other Fixed Assets 10,000
Total Fixed Assets 1,185,000
Less: Accumulated Depreciation 9,600
Total Assets 2,272,100
Liabilities and stockholder's Equity
Liabilities
Accounts Payable
Other Payable
Total Liabilities
stockholder's Equity
Capital 2,093,900
Net Income 178,200
Total Stockholder's Equity 2,272,100
Total Liabilities and Stockholder's Equity 2,272,100








65




11-Index of tables, charts
Tables and charts pages
1. Figure (1) the Website.37
2. Table (1) Startup Funds..39
3. Table (2) Salaries and Wages 39
4. Table (3) Fixed Operating Experience...... 40
5. Table (4) Projected Sales Forecast... 40
6. Table (5) Income Statement... 41
7. Table (6) Balance sheet.. 42
8. Chart (1) The Net income 43
9. Chart (2) The Organization chart ...... 46