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FEASIBILITY OF ESTABLISHING A FROZEN BULL SEMEN STATION

BY RAMAN JAIN (24063) Organisational Traineeship Segment PRM 24

Submitted to Prof. K.V. Raju AUGUST, 2004

INSTITUTE OF RURAL MANAGEMENT, ANAND

ACKNOWLEDGEMENTS

I am thankful to my reporting officer Mr. Srikant Despande for the support offered to me in doing this project. My thanks to the other officials of JK Trust including Dr. Shyam Zawar, Captain Wadia and Mr. BG Reddy. Dr. VC Anooj was the guiding star of my project without whom the journey would have been difficult. My heartfelt thanks to him. I would also thank Dr. M.R. Bhosrekar (consultant NDDB) who took out time from his busy schedule and guided me. Thanks are due to all the other officials who with their immense help made this project possible. They include the Directors and Managers of the 8 Semen Stations visited and the various other officials I met there. I truly appreciate the time they took out of their busy schedule for guiding me. In spite of his busy schedule Prof. K.V. Raju took his time out for discussions with me and I am really greatful to him. I thank the organizations IRMA and JK Trust Gram Vikas Yojana for all the help rendered for making this experience a memorable one.

Raman Jain

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Students name Organization Reporting officer Faculty guide Project title

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EXECUTIVE SUMMARY Raman Jain JK Trust Gram Vikas Yojana Mr. Srikant Deshpande Prof. K.V. Raju Feasibility of Establishing a Frozen Bull Semen Station.

CONTEXT: India boasts of one of the largest cattle population in the world but if we see at the milk yield per cattle then it is one of the lowest in the world. In this context there is increased awareness and spending towards Artificial Insemination programme. Hence, the demand for Frozen Semen Straws is increasing exponentially. JK Trust GVY an NGO which is primarily into AI programme is now expanding and hence is looking to have in house production of Frozen Semen straws not only to cut down costs but also decrease its reliance on external agencies for the supply of Frozen Semen Straws. OBJECTIVES: To study the feasibility of setting up a Frozen Semen Station. METHODOLOGY: A survey of a few frozen semen stations was carried out across the country and interviews of a few of the eminent people in this industry was conducted. Financial indicators like Internal Rate of Return, Net Present value, Payback period, breakeven level of production etc, were calculated. FINDINGS: Majority of the Semen stations presently in India have their own captive market and only sell outside if some surplus exists. Emphasis more on pedigree of the bulls rather than on the cost of the semen straws. No active marketing done for the sale of semen straws. Majority of the semen stations selling the semen at cost or at a nominal profit and do not treat it as a business venture (treated more as a social venture). The financial viability is more if the number of bulls initially inducted is 50. Investment in equipments necessary for Research and development and production of sexed embryos is more desirable. All of the semen stations have internal generation of bulls and it is advisable to do so because of unavailability of quality bulls in India and import restrictions on import of bulls. It is more financially feasible and economies of scale work if the total bulls in semen collection are between 80 to 100 rather than limiting production level to 10 lakh semen doses per annum. There is not much difference between internal generation of bulls through sexed embryos or semen straws however, the option of sexed embryos is more desirable. CONCLUSIONS AND RECOMMENDATION:  Start with the semen station with 50 bulls initially and build up the herd size to 100 bulls.  Have internal generation of bulls.  Try to increase internal demand of semen straws in JKT-GVY.  Invest in quality equipments and have stringent quality control measures.

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Try for aggressive marketing of Frozen semen straws outside the organization also.

TABLE of CONTENTS ACKNOWLEDGEMENT………………………………………………………………ii EXECUTIVE SUMMARY……………………………………………………………..iii TABLE of CONTENTS……………………………………………………………..….iv LIST of TABLES…………………………………………………………………….….vi LIST of FIGURES……………………………………………………………..……….vii LIST of ANNEXURES...................................................................................................viii

FEASIBILITY OF ESTABLISHING ......................................................................................................................I A .....................................................................................................................................................................................I FROZEN BULL SEMEN STATION.........................................................................................................................I BY................................................................................................................................................................................I RAMAN JAIN (24063)...........................................................................................................................................i ORGANISATIONAL TRAINEESHIP SEGMENT...........................................................................................................................I Prof. K.V. Raju........................................................................................................................................................i

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LIST of TABLES

Table 1 : Milk Production in India…………….... …………………………………………...…..1 Table 2 : Performance of leading Semen Stations …………………………………………...…..6 Table 3 : Internal Demand……………………………………………………………………......9 Table 4 : Productivity of Bulls per annum……………………………………………………....11 Table 5 : Rejection rate year-wise……………………………………………………………….11 Table 6 : Breed Mix…………………………………………………………………………...…12 Table 7 : Productivity per bull (according to breed mix)…………………………………..…….12 Table 8 : List of equipments and expected cost.............................................................................13 Table 9 : Area requirements…………………………………………………………………..….15 Table 10 : Miscellaneous initial investments to be made………………………………..…...….16 Table 11 : Initial investment under different scenarios………..…………………………….…..16 Table 12 : Staff and salary structure…………………………………………………………..…19 Table 13 : Depreciation schedule…………………………………………………………….…..21 Table 14 : Expected Sale price of Frozen Semen doses over the years………………….………21 Table 15 : Summary of the financial indicators for the scenarios and the sub-scenarios………..25

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LIST of FIGURES Figure 1: Milk production of India………………………………………………………………..1 Figure 2 :- Forecasted demand for JK Trust Gram Vikas Yojana………………………………...9

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LIST of ANNEXURES Annexure I – List of People Interviewed Annexure II - Internal Demand forecast for JK Trust Gram Vikas Yojana Annexure III – Depreciation Schedule for the first 10 years. Annexure IV – Graphic representation of the various Scenarios and Sub-scenarios. Annexure V – Cash Flows for the first ten years Annexure VI – P&L and Breakeven level for first ten years Annexure VII – Sale plans for first ten years Annexure VIII – References

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