Precisely looking at the basic production features and core operations, dairy plants could be categorized as liquid milk processing plants, products manufacturing plants or combination of these two (Composite Dairy Plants).
a) Liquid milk Processing Plant: In such dairy plant raw milk received at dock,is chilled, processed (pasteurized) and packed for sale. These plant directly procure milk from identified milk sheds or other sources. This type of plant has low value addition but the liquidity of money is very high. The liquidity is better because payment for raw milk is done after 7 or 10 days, whereas realization is either in advance or on the same day. Secondly, the realization money is circulated on daily basis creating an edge for low requirement of working capital.
b) Product Manufacturing Dairy Plants: Raw milk is transformed into value added milk and milk products by employing suitable technologies and using proper equipment. Manufacture of value added products improve the profitability of the overall milk business. Other advantage lies in the conversion of perishable milk into long shelf life products. This aspect has high impact due to perishable and seasonal nature of milk production. Long shelf life products are also suitable for distant marketing.
c) Composite Dairy Plant: Most of the dairy plants do have facilities for processing and packing of liquid milk and milk products. In this way, dairy plant can be benefited for high liquidity along with the advantage of increased shelf life and value addition. Such milk plants are more viable and sustainable.
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