Important Notice and Basis of Preparation

Jump to section

• Overview & contents
• i. Important Notice and Basis of Preparation
• 1. Executive Summary
• 2. Market and Opportunity
• 3. Why the Fodder Block Is the Business
• 4. The Production Model
• 5. SWOT and Competitive Position
• 6. Housing, Water and Equipment
• 7. Regulatory and Compliance Framework
• 8. Management and Organisation
• 9. Financial Plan
• 10. Break-Even and Debt Service
• 11. Investment Analysis
• 12. Sensitivity and Scenario Analysis
• 13. Risk Analysis
• 14. Implementation Roadmap
• 15. Key Performance Indicators
• 16. Key Assumptions
• 17. Conclusion and Recommendation
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Capital and Herd Schedules
• C. Appendix C: Funding and Debt Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

This business plan has been prepared for Premier Quality Kenya Dairy Limited, a proposed commercial zero-grazing dairy enterprise producing chilled raw milk, breeding heifers and composted manure on 12 acres of leased family land, in support of KES 17 345 000 of promoter equity alongside a KES 10 000 000 agricultural term facility.

Basis of the figures. The model is built bottom-up from a herd roll-forward. Milk volume is derived from the average milking herd, lactation-adjusted yield and days in milk. Feed is costed per head per day. Rearing costs for replacement heifers are reported separately from the cost of producing this year’s milk, because conflating them overstates the cost per litre. The income statement, balance sheet and cash flow statement are fully articulated: the balance sheet is derived rather than plugged and balances to the shilling in every year, and the closing cash position reconciles exactly to the cash flow statement.

Published benchmarks. The Kenya Dairy Board estimates national milk production at around 4.6 billion litres, and the dairy value chain contributes approximately 4.5 per cent of national GDP, 14 per cent of agricultural GDP and 44 per cent of livestock sub-sector GDP. Formal sector consumption reached a record 810.76 million litres in 2023, up 7.3 per cent on 2022. New KCC raised its farmgate price to KES 50 a litre in March 2024, and the government announced a farmgate price of KES 52 a litre effective 1 August 2026 alongside the commissioning of the Meru Maziwa Millers feed mill. The Kenya Dairy Board puts the cost of producing a litre at between KES 30 and KES 37 depending on system and scale, with margins of KES 10 to 14 a litre described as a good outcome. In-calf heifers command roughly KES 140 000 to 260 000. These are cited where used.

The herd on the balance sheet. Biological assets are carried at cost and are not depreciated; cull and surplus stock sales are recognised in revenue as they arise. Depreciation of KES 742 500 a year is charged on fixed assets only, over lives of five to twenty years. This is why the depreciation charge is materially lower than a straight-line write-down of the whole project cost would give.

Prices and volatility. Announced farmgate prices are not always realised uniformly across counties and cooperatives, so the model uses KES 50 a litre with a 4 per cent cooperative deduction, giving a net realised price of KES 48. Kenyan input and output prices, farmgate milk prices, regulatory requirements and licensing procedures change frequently and vary by county and by cooperative, and must be verified directly with the Kenya Dairy Board, the relevant county government and the intended offtaker before any capital is committed.

Land and security. The plan assumes 12 acres of family land contributed under a registered 15-year lease at KES 300 000 a year. A lender cannot take security over land it cannot register, and the lease must be registered before drawdown rather than after.

Confidentiality. This document is delivered in confidence to the named recipient. It may not be reproduced or circulated in whole or in part without prior written consent.