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1.        Introduction

Raw milk will be processed to produce pasteurized milk, and other milk products such as yogurt, cheese, ghee butter, fat- free milk.  The benefit of milk and its products as nutrition is too known to repeat.


2. Background

The Amhara Region has about 26 percent of the population and 29.1 percent of the cattle resources of the country.  Looking at these magnitudes, one could have expected to find many modern and commercially oriented dairy farms and milk processing plants at least around the major urban centers of the Region.  Unfortunately this is not the case.  There is no any urban center in the whole Region where there is a commercial supply of pasteurized milk and other processed milk products.  Small quantities of raw milk are supplied to consumers in some urban centers by people who keep two three cows in their yard.  The main problem for the near-absence of any commercial milk production and processing entities in the Region is that the market is not properly explored and exploited.  We should be aware that the Amhara society is a very traditional society.  As such the introduction of “new” products to the market, no matter how the products are useful, need concerted efforts to convince people to use these new products. 

What is a common consumption item when it is produced at home becomes a strange product when it is offered for sale in the market.  It is common to consume milk and milk products when they are produced at home, but uncommon when they are produced commercially and offered for sale.  Probably this is why there are no milk production and processing commercial enterprises in the Region. In any hotel in the Region, a guest can not find a bottle of pasteurized milk, cheese, yogurt or butter.  Is this not strange?  Provided that the product is useful, the market should be created using the principle “supply should create its own demand”.  At any rate with proper market strategy, there will be enough market for at least small milk production and processing enterprises in the major urban centers of the Region.


3.       Market Potential: As explained above the major urban centers of the Amhara Region like Bahir Dar, Dessie, Combolcha, Gondar, Debre Markos, Woldiya can have enough markets to absorb the production of small milk production and processing enterprises.


4.       Source of Raw Material: The main raw material is raw milk.  Raw milk can be obtained from (a) own dairy farms, (b) farmers around the enterprises which raise livestock or (c) both sources.  Which source is dependable and least expensive will depend on the specific characteristics of each urban center and this will be determined when feasibility studies are undertaken.  In most cases, sources of raw milk is own dairy farm and farmers of the surrounding areas.   


5.       Production Process and Technology: The process of producing pasteurized milk is as follows.  Collection and weighing of raw milk, removal of microscopic impurities, cooling and homogenizing, re-sterilizing, cooling (by chilled water) and storing and finally filling in packs or packages- machinery and equipment for pasteurization includes module of milk pasteurization, refrigeration and homogenizer, purification and treatment equipment, boiler, filling and weighing machines.  Additional machines will be needed for producing other products.


6.       Estimated Investment: Building 300m2 at Birr 1500/m2 =450,000 plus Birr 900,000 for machinery= Birr 1,350,000.


7.       Benefits to the Regions Economy: Creates direct and indirect employment, increases the income of farmers who supply raw milk to the factory, stimulates agricultural economic activities and above all –improves the health, physical and mental well- being of consumers.


8.       Location: Bahir Dar, Dessie, Gondar, Debre Markos, Debre Birhan.