Lyashkovsky community, Dnepropetrovsk Region dairy farm Lyashkovsky community, Dnepropetrovsk Region

Lyashkovsky community Administrative center: Lyashkovka Ukrainian name: Ляшківка (Lyashkivka) EDRPOU code: 40206834 COATSU (Classifier of Objects of administrative-territorial system of Ukraine) : 1225683001 Address: Dnipropetrovsk region, Tsarichansky district, Lyashkovka village, Tsentralnaya street, 1 Postcode : 51012 E-Mail address: lsilr@ukr.net Contact phone: +3805690-62610 Chairperson(head): Omelian Julia Victorovna Web- site : lyashkivska.gromada.org.ua

About the project The project stipulate creation of agricultural sector and receives investment capital in an amount of 1444,4 thousand UAH. The main type of farming activity is dairy production. Planned total number of milk herds – 50 items. Agricultural sector will work at regional dairy sale market. According to economic calculations and with abilities of premises for keeping animals, it would be useful to procure 50 heifers, by price 20 UAH. per 1 kg.of live weight , with weight 350 kg., which in monetary terms will be 350,00 thousand. UAH. Enterprise will realize milk at an average annual cost 298,00 UAH. for 1 cistern and it will receive 849,3 thousand UAH., in case of full load it will provide 108,7% of profitableness for enterprise. These calculations shows that investment capital, in an amount of 1444,4 thousand UAH. will be recouped in the fourth year of project.

Market and competitors There are some manufacturers which produce similar products at the market of agriculture products in the Dnipropetrovsk Region. That is why, it is very necessary to know, who and in which volume produces similar products, at what prices it is sold и and what demand it has. The main task of research, both for competitors and the market, in general is the identification of measures, which should be taken to win the competitions and to keep high competitiveness. There are enough number sources of information about competing companies: advertising, annual reports, reviews of commercial publications, trade exhibitions, fairs. Besides, researching about activities of competitors should be based on operational / primary sources of information, including data collected directly from consumers, from industry experts, and from state and commercial structures. One of the key methods of obtaining data on the activities of competitors - consumer survey. Similar projects and existing processing capacities: The project «Cooperative dairy farm and services»  implemented by Danone Ukraine e.danone.com/) and by CIDA/SOCODEVI (http://www.socodevi.org/). Demonstration-training farm for 60 cows(with possible expansion to 120 cows). Dairy plant «Pridneprovskyi» is based in Dnepropetrovsk Urban Dairy Factory №2. Company includes 4 milk processing enterprises. Everyday they process more than 250 tons of milk, which comes from 5 different farms, what are situated in Dnepropetrovsk Region. This plant is in top-4 among the biggest producers of child dairy nutrition with 16% market share. Lasunka is the second in volume ice-cream producer in Ukraine with 19% market share. Company includes 4 enterprises. The main office situated in Dnepr-city.

Planning activities The recommended list of technological equipment for providing complex mechanization and automation for keeping 50 heads of dairy herd Procedure Name of technological equipment Mark Price, UAH. Number, items. Loafing Boxes ОС 00.000 20800 2 Cleaning excrements Scraper setting up УСГ-4 30600 Preparation of feed, mixing and feed distribution Loader,agitator, feed distributor ИСРК-12Г 263000 1 Milking in milking parlor Milking machine (2x4) УДЕ-16 126000 3 Milk cooling and storage Thermo tank-cooler РПО-1,5 94500   Refrigeration unit МХУ-8С 54000 Milk cleaning, separation Separator-cleaner Г9-ОСП 30000 Scales РП-150Ц 13 Т 1100 Dairy pump НМУ-6 2000 Water pump ВКС - 2/6 1990

Core financial and operational indicators Need for financing Calculation of the current costs of the project, thousand UAH Expenditures The amount of quarterly expenses for 1 year Expenses for 2 years Expenses for 3 years Expenses for 4 years Expenses for 5 years 1 2 3 4 Feed 61,5 44,7 35,8 203,5 Energy carriers 5,1 3,7 3,3 17,2 Works and services 4,5 4,6 18,2 Other material costs 3,6 14,5 Salary 28,7 114,8 General production expenses 9,6 9,5 10,1 38,8 в т.ч. амортизация 7,4 7,3 8,1 30,2 ВСЕГО 113 94,8 86,2 407,0 Calculation of financial costs, ths. UAH. Index Amount for 1 year Amount for 2 year Amount for 3 year Amount for 4 year 1 2 3 4 Loan repayment 19,5 78 Payment of interest on the loan 9,35 32,8 28,1 23,4 18,7 TOTAL financial expenses 28,85 110,8 106,1 101,4 96,7

Core financial and operational indicators Need for financing (continuation) Calculation of net cash flows, ths. UAH. Index Initial period Amount for 1 year Amount for 2 year Amount for 3 year Amount for 4 year Amount for 5 year 1 2 3 4 Investments for purchasing an equipment 929,4 - Repair of premises 115 Investments for the purchase of dairy herd 400 Operating costs 113 94,8 86,2 407,0 Financing costs 28,85 110,8 106,1 101,4 96,7 TOTAL expenses 1444,4 141,85 123,65 115,05 517,8 513,1 508,4 503,7 Profit from sales of milk 159,3 219,8 321,9 148,2 849,3 Profit from the sale of offspring 33,6 TOTAL receipts 882,9 Net cash flow -1444,4 17,45 96,15 206,85 6,35 365,1 369,8 374,5 379,2 Discount coefficient 0,9809 0,9622 0,9439 0,9259 0,8573 0,7938 0,735 0,6806 Discounted net cash flow 17,1 92,5 195,2 5,9 313,0 293,5 275,3 258,1 In t. h. cumulatively -1427,3 -1334,8 -1139,5 -1133,6 -820,6 -527,1 -251,8 6,2

Core reasons for investing Solve problems Providing quality dairy products for region, for consumers as well as for dairy processing plants. Creating work places for the community. Providing an additional source of financing social and infrastructure projects of the community.

Business model Due to small amount of herd and raw specialization of the farm, distribution of products will be basically carried out by selling of raw materials to wholesale buyers. I.e., the main channels of distribution of products will be: Enterprise - manufacturer –> wholesale. Enterprise- manufacturer –> consumer (members of the community). Enterprise- manufacturer –> consumer (milk processing enterprise). Enterprise- manufacturer –> export (as the perspective direction).