ECONOMIC VIABILITY ANALYSIS OF THE ADAPTATION OF A PROCESSING PLANT FOR PRODUCTION OF MILK AND OTHER DAIRY PRODUCTS IN ROSÁRIO DO SUL

Abstract

This technical study concerns the adaptation of a production line for the processing of milk and its derivatives at a plant in Rosario do Sul, RS, Brazil. The technical project analyzed existing equipment at a small-scale plant, considering its modification for production lines of whole milk, cheese, and milk drinks, with operation at 30% 60%, and 100% of total capacity during the first, second, and third years, respectively. The proposed adaptations of the plant layout were demonstrated to be effective for the production line processes, and would provide income from high quality and safe products for farmers of Divisa, in Rosário do Sul, which does not currently possess a plant of this type. Evaluation was made of the likelihood of the proposed project being successful. Scenario 1, which used the current milk price paid to producers, showed that the investment would be recouped after four years, with IRR of 32% and MIRR of 23%. These rates were higher than the ARR (10%), showing that the modifications were economically viable. Scenario 2 included sensitivity to fluctuations in the purchase price of raw materials, which made the project unfeasible. Scenario 3 was an optimistic situation in which the milk price paid to producers was R$ 0.45 per liter, resulting in repayment of the investment after two years, with 84% IRR and 37% MIRR, well above the ARR considered. The proposed project has a social aspect, since it would increase the social inclusion of farmers and provide sources of income, leading to better living conditions for the producers delivering quality dairy goods to local markets. The processing of milk will improve food security in a region that does not have a micro-dairy plant.