Milk Processing Plant - Business Essentials, Planning, and Setup Cost 2

Milk Processing Plant – Business Essentials, Planning, and Setup Cost

Dairy Industry due to its high demand and rapid expansion makes a profitable business idea for the ones who are actively looking for possible startup opportunities in the business world. To meet with the increasing need for dairy products in various sectors, the Milk Processing business have established itself as a lucrative business plan.

In simple words, milk processing can be defined as the harvesting or processing of milk from the milk-producing animals that will later be packaged and sold for human consumption. The commercial unit where the processing of milk takes place is called the milk processing plant.

India being the second-largest producer of milk in the world after United States of America offer great scope for a flourishing business of Milk Producing plants. Milk is either consumed directly or in the form of a variety of dairy products, such as cheese, butter, milk powder, cottage cheese, curd, etc.

Each country has a different standard whenever it comes to setting up a milk processing business. The various steps of business essentials, planning, and execution related to setting up a milk processing plant in India is discussed in the article below.

milk cans


Machinery Required For The Processing Of Milk

The procedure of milk processing is carried out through different steps that range from skimming to packaging. Each of these steps requires the involvement of a specific kind of machine to carry out the process.  As soon as the milk is collected from the milk-producing animals, the procedure is to be started immediately.

The life of milk is very shot and it needs to be clarified, fortified, pasteurized, homogenized, packaged and distributed within its expiry period. The machinery required for the processing of milk is discussed below:

1. Milk Skimming Machine

Milk skimming machine is the first thing that you will need in the procedure of milk processing. The machine consist of a common centrifugal separator, it also has a number of conical disks through which the milk spins and gets clarified in the process.

The skimming machine is essential in the milk processing as it helps in separating the cream, skim milk and debris. The unwanted substances get removed in the process through filtration. The milk is heated at a temperature of 45 degrees to 55 degrees for the production of cream and skim milk.

The price of the milk skimming machine could range from 20,000 Rs. To 40,000 Rs. They are available online or even in your local market.

2. Peristaltic Pump

Peristaltic Pump is required in the fortifying step of the milk processing. The process of milk fortification can be defined as the addition of vitamins in skimmed milk. Generally, vitamin A and vitamin D are added in this process with the help of a peristaltic pump. With the help of a peristaltic pump, the vitamin concentration is balanced in the milk.

There are various websites where you will get the peristaltic pump online, such as Indiamart. You may get this equipment within the range of 20,000 Rs. to 40,000 Rs.

3. Milk Pasteurizing Machine

The process of pasteurizing is defined as the heating of milk for a specific amount of time in a specific container. This process is important in order to kill all the bacterias present in the milk. For this process, the milk pasteurizer is used. The heating of milk is carried out at 72 degrees or 63 degrees.

You can buy this equipment from a machine dealer, a local market, or even online. The price range for milk pasteurizing is from Rs. 1.5 lakhs to Rs. 7.5 lakhs.

4. Milk Homogenizer

Milk Homogenizer is used to evenly reduce the fat particles in milk. This process helps in mixing of milk fat in the milk properly so that the fat particles do not float on the surface. With the help of milk homogenizer, milk is pressurized at 2500 to 3500 psi, and it gets quickly cooled down to 4-degree Celcius so that the milk doesn’t experience any variation in taste.

Milk Homogenizer can be purchased through dealers, local markets of your area, and even online. Indiamart provides a great platform for directly contacting the dealers. The cost of the machines ranges from Rs. 1.20 Lakhs to Rs. 4.5 Lakhs.

5. Milk Packaging Machine

After everything is done, now it is time for the packaging of the product. The milk is packed and sealed in the two different packages of 500ml and 1 Litre. In this process, the expiry date of the milk is also determined. You can explore various options of buying milk packaging machines online or you can also visit the local market. The amount of milk packaging machines ranges from Rs. 1.75 lakhs to Rs. 4.5 lakhs.

6. Refrigerated Vans

Now that milk is packaged, now its time for the distribution of milk at various retail outlets and distribution centers. For this process, refrigerated vans are used. The use of refrigerated vans is to ensure that the milk remains safe. To explore the options of buying a refrigerated van, click here. The price ranges from Rs. 1.5 lakhs to Rs. 7 lakhs.

milk collecting machine

 Milk Processing Plant Layout

Having a strategic business layout for your Milk Processing Plant is an important aspect of running a business. An impressive layout has the ability to lift the whole business idea on its own shoulder and on the other hand if the layout of your milk processing plant is not impressive enough, then it could not only increase the chances of having many lives at risk but it will also result in the failure of your business.

The layout is basically the structure of your whole business plan. When it comes to milk processing plants, the common sections are:

1. Reception

Reception is the first sector of your layout, this where the loading and unloading of milk are done. As soon as the milk is transported through various sources, it is collected through trucks and tankers. Then it is offloaded to a specific area that is assigned for that task.

At this stage, the quantity of milk is also checked in determined with the help of milk silos with flow meters.

2. Processing Rooms

Processing rooms are required for the procedure of milk processing from skimming to packaging. If your milk processing plant also carries out the manufacturing of different milk products such as butter, cheese, etc. Then you are going to need different processing rooms for different manufacturing processes.

Apart from the manufacturing units, the milk processing plants also consist of packaging and storage units where the further steps take place.

3. Laboratory

Laboratory in the milk processing plants is necessary for testing and quality assurance of the products. The laboratory should be at the place where it is near to the cabin of the manager so that the supervision is easy at the time of need. This will also enhance the attention paying.

In order to ensure timely analysis of the products, it is advised to keep the laboratory in the near distance of the availability of raw materials.

4. Administration Office

In order to facilitate the plant administration activities, it is advised to place the administration offices at a place where it is easily accessible to visitors and customers.  The ideal location for the placing of office rooms of the various departments is at the entrance.

The different kinds of departments that exist in the milk-processing plant include manager, accountants, human resource and management, laboratory assistants, etc.

5. Utility Rooms

Utility Rooms are basically rooms which are equipped with appliances that are essential for the business plan. When it comes to Milk processing plants, the basic utilities for the utility room would be vacuum machines, power generators, refrigerators, air compressors, boilers, etc.

It is advised to keep a safe amount of distance between the different utilities in order to ensure the safety of the workplace.

6. Waste Handling Facilities

The waste management system of the milk processing plant is discussed here. Every product based industry has to manage toxic waste and biodegradable waste at their organization. There should proper mechanisms available for waste management. This process is important through the environmental perspective.

milk in a glass

Setup Cost Of Milk Processing Plant in India

Every business type requires a certain amount of investment. The cost of setting up a milk processing plant os different in different countries. However it also depends on the machinery used, salaries provided, the number of employees, and type of processing plant. But a fair estimation of the setup cost of milk processing plant in India is given below.

This table is divided into three parts. The first part contains the setup cost of the milk processing plant for 10,000 liters capacity and the machinery required. The second part consists of techno-economical parameters of the milk processing plant and the last section consist of revenue generated.

1. Capital Cost of Setting Up A Dairy Processing Plant for 10,000 LPD

Capital Cost of Setting Up A Dairy Processing Plant

2. Techno-Economic Parameters

Techno-Economic Parameters


3. Revenue Generated

Revenue Generated

Bank Loans and Subsidies

The business owners can approach various investment sources for their idea but it is advised to take the bank loans in order to avail various subsidies and schemes provided by the government to the entrepreneurs. Business loans are provided by both government and private banks, the interest rates and schemes will differ from bank to bank.

As an entrepreneur, if you are starting a milk processing plant then there are various incentives provided by various state governments in order to promote the Dairy Product Industry. You can take advantage of these incentives promoted by the government by going through the guidelines.

The newcomers in the Dairy Product industries are highly in luck as there are a number of incentives provided by the government. This depends on the location of your commercial unit because the Agro-Industry Policy of different states differs from each other.

Therefore it is suggested to take a business from the bank because that is the only way you could avail of all these schemes and subsidies. The implementation of NMFP which is known as the National Mission on Food Processing in different states of India has also made various schemes available for the entrepreneur in the dairy sector. This mission was implemented as part of the 12th five-year plan of government.

Licenses and Permits

The milk processing plant has to obtain various licenses for legal acceptance of their business plan. Below mentioned is the list of various licenses, approvals, and permits that one needs in order to run a milk processing unit.

  • MMPO registration with Commissioner, Dairy Development, concerned state or relevant authority under the Food Safety and Standards Act.
  • FSSAI registration should be done in order to acquire the Food safety license.
  • NOC from the fire services Department located in your area. In order to know the local fire service department of your place, click on this link.
  • Approval of the plan by gram panchayat/municipality. Various state municipalities are listed here.
  • Clearance from Pollution Control Board. To acquire this permit, visit the Central Pollution Board of India website.
  • Registration with District Industries Centre or small industries department. This department is different for different industries.
  • License from Factory inspector for installation of the boiler. And you will have to get a permit from the labor department. 

milk processing plant


Setting up the milk processing business could be quite a task and it could also involve a big investment in the beginning. But once you start running the commercial business with efficiency, the revenue generated by your business will reach the financial heights.

The above given is the strategic plan and layout of the business plan of setting up a milk processing plant. Every aspect of the industry is discussed thoroughly in the article to assist the entrepreneurs who are entering this field as a beginner.

Do let us know how you liked this article in the comment section below. We really appreciate the outcomes of our readers for the betterment of our content.

Scroll to Top