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Chapter III
TECHNICAL STUDY

This chapter presents the objectives of the study, product description,

facts and benefits, manufacturing process, plant location and layout, costs of

factory equipment, tools and materials, maintenance supplies, furniture and

fixtures, production and labor salary/wages and proper waste disposal. The

details covered include study and process design on the production of Fruit

Selection Yogurt produced by Nestlé Philippines in Lipa City, Batangas.

Objectives of the Study

The general objective of the study is to determine the process overview

and technical specifications for the production of Fruit Selection Yogurt. The

objectives are as follow:

1. To illustrate the manufacturing process by presenting the process flow

chart in the production of yogurt.;

2. To determine the necessary equipment, facilities, materials, labor and

other requirements to manufacture and sell the product;

3. To determine the annual production capacity; and

4. To identify the appropriate location, size and layout for the business.

5. To describe the product and its health benefits.

Description of the Product

Yogurt or sometimes spelled yoghurt, yogourt, or yoghourt is a food

produced by bacterial fermentation of milk. It works as a substitute ingredient in

all sorts of recipes. Yogurt has been consumed by humans for hundreds of

years. It is very nutritious and eating it regularly may boost several aspects of

your health. Nestle Fruit Selection Yogurt comes in a variety of fruit flavors with

real fruit bits - Strawberry, Mango, Melon-Nata, Buco-Nata, Raspberry Apple,

Berry Mix Medley, Almond-Lychee, and Ube-Langka. Each flavored yogurt

contains 125g serving suggestion and energy contains 105 kcal packed by

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Nestlé, the dairy expert, it guarantees to complement the everyday meals with its

best taste, hygienically packed with consistent quality and traditional taste. Each

ingredient in the product contains no preservatives or chemical that are harmful

for the health.

Nutrition Facts:

For a serving size of 1 serving (125g)

Energy 118kcal-499kg
Protein 5.4g
Carbohydrates 19.6g
Sugars 19.0g
Fats 0.2g
Saturates 1.3g
Fiber 0.1g
Sodium 0.1g
Calcium 208mg

Yogurt is a dairy product made by fermenting milk with a yogurt culture. It

provides protein and calcium, and it may enhance healthy gut bacteria. Health

benefits range from protecting against osteoporosis to relieving irritable bowel

disease and aiding digestion, but these depend on the type of yogurt consumed.

Added sugar and processing can make some yogurt products unhealthy.

Yogurt starts as fresh milk or cream. It is often first pasteurized, then

fermented with various live bacteria cultures, and incubated at a specific

temperature to encourage bacteria growth.

The culture ferments the lactose, the natural sugar found in milk. This

produces lactic acid, which gives yogurt its distinctive flavor. However, there are

plenty of different yogurts, and some are more healthful than others.

There are many types of yogurt that provide varying levels of nutritional

benefit. Whether yogurt is a healthful choice depends on the person consuming it

and the type of yogurt.

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Yogurts can be high in protein, calcium, vitamins, and live culture, or

probiotics, which can enhance the gut micro-biota. These can offer protection for

bones and teeth and help prevent digestive problems. Low-fat yogurt can be a

useful source of protein on a weight-loss diet. Probiotics may boost the immune

system.

Some argue that they could also impact brain functioning, too, although

more research is necessary to confirm some of these claims.

In 2014, researchers found that consuming yogurt may help protect

against type 2 diabetes. Other types of dairy product did not appear to impact the

likelihood of developing the condition.

Other scientists have suggested that yogurt containing probiotic bacteria

successfully protects children and pregnant women against the effects of heavy

metal exposure. It is also a nutritious option when people find it difficult to chew

their food.

Non-dairy yogurts offer an alternative for people who do not consume

dairy animal products or have allergies or intolerances. Yogurt contains less

lactose than milk because the lactose is used up in the fermentation process.

Not all yogurts are healthful. Those without added sugar or unnecessary

additives can be a healthful addition to the diet, but some products have high

quantities of added sugar and other ingredients that may not be beneficial.

Natural yogurt can be a low-calorie, high-nutrient food packed with protein.

However, many manufacturers add sugar, artificial sweeteners, and other

ingredients that are not healthful.

All yogurts contain some natural sugars, but consumers are advised to

look for a product with less than 15 grams of sugar per serving. The lower the

sugar, the better, as long as it does not contain any artificial sweeteners.

Some studies have refuted the view that yogurt consumption is linked to

good health, causing authorities to question whether health claims can be made

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for commercial purposes. However, people who eat yogurt are more likely to

have an otherwise healthy diet.

Uses of the Product

Nestle Fruit Selection Yogurt provides a dietary source of calcium and

protein, as well as folic acid, magnesium, and zinc. There is limited clinical

information regarding its benefits in lipid regulation and cardiovascular disease.

Despite debate regarding the role of exogenous calcium in the prevention of

osteoporosis, yogurt remains a recommended source of calcium. It is commonly

used as a source of probiotics. Nowadays, people need nutritious food which

they can afford.

Manufacturing Process

Heat Exchanger 1
Design Temperature 70°C

Heat Exchanger 2 (Pasteurizer)

Design Temperature 90-95°C Process

Homogenizer
Design Temperature 65-70°C
Design Pressure 20-25 MPa
Viscosity 32

Holding Tank
Design Temperature 40-46°C

Bioreactor
Design Temperature 40-46°C
pH 4.5

Heat Exchanger 3
Design Temperature 15-22°C

Buffer Tank
Design Temperature 15-22°C
Description as per Process Flow Diagram

Yogurt is the best known of all cultured-milk products, and most popular

almost all over the world. It is produced using milk as its main raw material. The

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process includes the following major operations: mixing, pasteurizing and

homogenizing the milk, cooling, addition of cultures, fermenting, flavouring and

coloring, cup filing, incubating and the packaging. The layout for Nestlé Fruit

Selection Yogurt production is detailed in Figure 3.1.

Figure 3.1 Nestlé Fruit Selection Yogurt Process Flow Diagram

Initially, milk composition will be adjusted to achieve the desired fat and

solids content. Other ingredients will be mixed and a sample will be taken in

order to verify the absence of hormones or antibiotics. After which, the milk will

then undergo pasteurization at 158 oF (70oC) then at 203oF (95oC). The blend is

then be homogenized (20 to 25 MPa) to mix all ingredients thoroughly and

improve yogurt consistency. After the milk is cooled to 108 oF (40oC) to bring the

yogurt to the ideal growth temperature for the starter culture. After the addition of

culture, the milk is held at 104oF (40oC) until a pH 4.5 is reached for the

fermentation to progress. Then the process will be stopped by cooling the milk up

to 15-22oC. Finally, fruit and flavour are added then packed the yogurts and

refrigerate.

Mixing Process

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The milk intended for the fruit selection yogurt production must be of the

highest bacteriological quality. It must have a low content of bacteria and

substances which may impede the development of the yogurt culture.

In the first process, the composition of milk that will be used is to be

adjusted to achieve the desired fat and solid content. According to the FAO/WHO

code and principles, the fat and dry solids contents of milk are normally

standardized. The fat content is reduced by using centrifugation to separate fat

from milk. From the separator, the milk is placed in a storage tank and tested for

fat and solids content. Yogurt may have a fat content of 0 to 10%. However, the

most usual fat content is 0.5% to 3.5%. Often dry milk is added to increase the

amount of whey protein to provide a desirable texture, which according to

FAO/WHO code has a minimum MNSF content of 8.2%. The solids content of

yogurt is often adjusted above the 8.25% minimum to provide a better body and

texture to the finished yogurt. Ingredients stabilizers are added at this time.

Stabilizers are used in yogurt to improve the body and texture by

increasing firmness, preventing whey separation in it (syneresis), and helping to

keep the fruit uniformly mixed in the yogurt. Stabilizers also increase the viscosity

of the yogurt. Commonly used stabilizers for yogurt (0.1-0.5%) are gelatin, pectin,

agar-agar and starch.

After blending all the ingredients and adjusting the milk composition, the

milk is pumped to the heat exchanger, where it is preheated to about 70-75 oC

and then heated to 90-95oC in the second section.

From the heat exchanger the hot milk flows to vacuum steel, where 10-

20% of the water in the milk is evaporated. The proportion depends on the

required dry matter content (DM) of the milk. If 10-20% of the milk is evaporated,

the total DM content will be increased by about 1.5-3.0%. The degree of

evaporation is controlled by the temperature of the milk at the inlet to the vacuum

vessel, the circulation rate through the vessel and the vacuum in the vessel.

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Some of the water evaporated from the product is used to preheat the incoming

milk. This improves the thermal economy of the plant.

The milk temperature drops from 90oC to about 70oC during evaporation.

Pasteurization Process

The milk flows through the pasteurization section of the heat exchanger

and is reheated to 90-95 oC. The milk them flows to the homogenization section

then to a holding section dimensioned for a holding time of 5 minutes.

A high heat treatment is used to denature the whey (serum) proteins. This

allows the proteins to form a more stable gel, which prevents separation of the

water during storage. The high heat treatment also further reduces the number of

spoilage organisms in the milk to provide a better environment for the starter

cultures to grow. Yogurt is pasteurized before the starter cultures are added to

ensure that the cultures remain active in the yogurt after fermentation to act as

probiotics; if yogurt is pasteurized after fermentation the cultures will be

inactivated.

Homogenization Process

The main motives for homogenizing the milk intended for cultured milk

production are to prevent creaming during the incubation period and to assure

uniform distribution of the milk fat.

Homogenization also improves the stability and consistency of cultured

milks, even those with low fat contents. Homogenization with subsequent heating

at high temperature, usually 90-95oC for about 5 minutes, has a very good

influence on the viscosity.

Homogenization is accomplished using a homogenizer or viscolizer. In this

machine, the milk is forced through small openings at a high pressure and fat

globules are broken up due to shearing forces.

As a general recommendation, the milk should be homogenized cultured

milk at 20-25 MPa and 65-70oC to obtain optimum physical properties in the

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product. Homogenization is frequently utilized even in production of low-fat

cultured milk.

Cooling the Milk Process

After homogenization, the milk is cooled. The milk is cooled to bring the

yogurt to the ideal growth temperature for the starter culture. This is usually done

between the temperatures 40-46oC. The milk is heat treated before being

inoculated with the starter in order to: (1) improve the properties of the milk as a

substrate for the bacteria culture, (2) ensure that the coagulum of the finished

yogurt will be firm, and (3) reduce the risk of whey separation in the end product.

Fermentation Process

After cooling the milk, the starter culture is added in a concentration of

about 2%. The milk is held at 40-46 oC until a pH 4.5 is reached, usually for about

3-5 hours. This allows the fermentation to progress to form a soft gel and the

characteristic flavor of yogurt.

The main (starter) cultures in yogurt are Lactobacillus Bulgaricus and

Steptococcus thermophilus. The function of the starter cultures is to ferment

lactose (milk sugar) to produce lactic acid. The increase in lactic acid decreases

pH and causes the milk to clot, or form the soft gel that is characteristic of yogurt.

The fermentation of lactose also produces the flavor compounds that are

characteristic of yogurt. Lactobacillus Bulgaricus and Steptococcus thermophilus

are the only 2 cultures required by law (CFR) to be present in yogurt.

Other bacterial cultures, such as Lactobacillus acidophilus, Lactobacillus

subsp. casei, and Bifido-bacteria may be added to yogurt as probiotic cultures.

Probiotic cultures benefit human health by improving lactose digestion,

gastrointestinal function, and stimulating the immune system.

Cooling Process

To attain optimum quality, cooling from 40 – 46°C to 15 – 22°C should be

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accomplished within 30 minutes after the ideal pH-value (4.5) has been reached

to stop further development of bacteria and further increase in acidity. The

coagulum must be subjected to gentle mechanical treatment so that the final

product will have the correct consistency. Cooling takes place in a plate heat

exchanger with special plate. This ensures gentle mechanical treatment of the

product. The capacities of pump and cooler are dimensioned to empty a tank in

20-30 minutes in order to maintain a uniform product quality.

Flavoring Process

After cooling to 15-22°C, the yogurt is ready for flavouring and colouring.

Fruits and various flavouring can be added to the yogurt when it is transferred

from the buffer tanks to the filling machines. This is done continuously with a

variable-speed metering pump which feeds the ingredients into the yogurt in the

fruit blending unit. The blending unit is static and hygienically designed to

guarantee that the fruit is thoroughly mixed into the yogurt. The fruit metering

pump and the yogurt feed pump operate synchronously.

The fruit additives can be sweet, normally 50-55% ordinary sugar content,

natural and unsweetened. The fruit should be homogeneous as possible. A

thickener in the form of gelatine can be added. The proportion of gelatine is

hardly ever higher than 0.5%, which corresponds to 0.05-0.005 of gelatine in the

end product.

Packaging Process

When the yogurt is already filled in the packages and containers using

rotary cup filling and sealing machine, it will be sent into incubation chambers.

Incubation Process

The filled containers are placed in crates of open design and at a certain

distance from each other so that the circulating warm/cold air for the incubation

and cooling room or chamber can reach every individual container. The crates

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are normally stacked pellets, which are then trucked into the incubation room.

The pallets are stationary during incubation. They are placed in such a way as to

facilitate first in/first out handling. In a typical incubation period of 3-3.5 hours, it is

very important the product is not exposed to any mechanical disturbance during

the last 2-2.5 hours, when it is most sensitive to the risk of whey separation. This

ensures uniform quality, provided that the temperature is accurately controlled.

Final Cooling Process

Final cooling, normally down to 7°C, takes place in the chill store, where

the products are held to await for distribution. The cooling capacity should be

adequate to achieve the said temperature. As a guide, it may be mentioned that

the total cooling time is about 65-70 minutes for small packages (0.175-0.2 kg)

and about 80-90 minutes for large packages (0.5 kg size).

Plant Location
Physical and Geographical Aspect

Location, Accessibility Area

Figure 3.2 Location Map of Nestle Philippines, Inc. Factory in Lipa City, Batangas
The proposed expansion and processing site will be operated at Nestle

Philippines, Inc. factory in Brgy. Pook, Lipa City, Batangas, Philippines. The site

is near the main road of Batangas to Lipa which makes it accessible for

transportation of raw materials and products.

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The Lipa City has a total land area of 20,940 hectares (209.4 km2) at an

elevation of 1,025 feet (312 m) above sea level.

According to the National Statistics Office (NSO), it has a population of

332, 386 in the year 2019 with 72 barangays contributing to it. It was the first

class city of Batangas Province among the four cities and 30 municipalities

comprising the province. It makes up 13.9 percent of the total province

population.

Plant Size and Layout

Figure 3.3 Nestle Philippines, Inc. Plant in Lipa City, Batangas

The Lipa Factory started operations in 1992 in Barangay Bagong-Pook,

Lipa, Batangas. With the biggest land area of 29 hectares, the factory is the

Nestlé Export Center for breakfast cereals like NESTLÉ KOKO KRUNCH, MILO

Balls, Honeystars, Snowflakes, Honey Gold, FITNESSE and its variants, Banana

Nut Clusters, Almond Nut Clusters, Cookie Crisp and Cornflakes. Lipa Factory is

the MILO production center of the Philippines. It is also responsible for packing

COFFEE-MATE and coffee in jars.

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For the expansion proposal project, due to the large demand of Yogurt,

Nestle Philippines, Inc. factory extend the production of yogurt from their factory

in Pulilan, Bulacan to the factory located in Lipa City, Batangas.

Figure 3.4 Nestle Philippines, Inc. Plant Expansion and Site Area in Lipa City, Batangas

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The total site area of the Plant Layout is 19,000 m 2. It is divided into three

sections: Raw Materials Handling and Preparation with 2208 m 2, Production Line

and the Flavoring and Packaging Section which both have an area of 1104 m 2

respectively. The process of yogurt making from the delivery of raw materials

until each finished product is done in this area.

Factory Equipment

Gelatine Stabilizer Storage Tank (T-101). This tank is where the gelatine

stabilizer is being stored at 27°C and 1 atm. The storage tank is made of

stainless steel. The tank has level transmitter (LT-101) and level controller (LC-

101) with 4 specifications [High-High (HH), High (H), Low-Low (LL) and Low (L)].

Milk Storage Tank (T-102). This tank is where the fresh raw milk is being

hold and keeping it cool for longer time under 4.4 - 7.2°C and 1 atm. The storage

tank is made up of stainless steel. The tank has level transmitter (LT-102) and

level controller (LC-102) with 4 specifications [High-High (HH), High (H), Low-

Low (LL) and Low (L).] to maintain the temperature, a temperature transmitter

(TT-101) and temperature controller (TC-101) with 2 specifications [High-High

(HH), High (H)].

Sweetener Storage Tank (T-103). This tank is where the honey as

sweetener is being stored at temperatures between 18- 24°C and 1 atm. The

tank has level transmitter (LT-102) and level controller (LC-102) with 4

specifications [High-High (HH), High (H), Low-Low (LL) and Low (L).]

Mixer (M-101). Ingredients for the production of yogurt such as the fresh

raw milk and sweetener are being mixed. Before entering the mixer, a flow

totalizer (FQ-101), (FQ-102) is connected in the globe valve to monitor the

amount and measure the flow rate.

Centrifuge (Fat Separator) (C-101). The mixture of milk and the

sweetener will undergo centrifugation to attain the desired amount of fat. The fat

content is reduced in the separator. The most usual fat content is 0.5 to 3.5%.

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After mixing the ingredients in M-101, the fat composition of the milk is now

reduced using a centrifuge which is connected to a Density Indicator Controller

(DIC-101).

Mixer (M-102). The mixture of milk-honey and gelatin, stabilizer, is being

mixed. Stabilizers are used as thickening agent.

Heat Exchanger (HE-101). After passing through M-102, the milk will

pass a special type of heat exchanger for the pre-treatment at a temperature

range of 70-75°C. The equipment is a plate heat exchanger. To maintain the heat

exchanger at the desired temperature, a Temperature Indicator Controller (TIC-

101) is connected at the stream before the milk goes out.

Evaporator (E-101). From the heat exchanger the hot milk flows to

vacuum vessel, where 10-20% of the water in the milk is evaporated. It is made

of stainless steel to maintain the temperature, a temperature transmitter (TT-102)

and temperature controller (TC-102) with 2 specifications [High-High (HH), High

(H)].

Fruit Washer (W-101). This equipment is primarily used to wash and

clean the strawberries or other real fruit selections.

Pasteurization Tank (T-104). To remove foreign organisms from the milk,

it will undergo pasteurization by heating the milk from 70°C to 90-95°C using a

spiral heat exchanger (HE-102). The tank is made of stainless steel. The tank

has level transmitter (LT-104) and level controller (LC-104) with 4 specifications

[High-High (HH), High (H), Low-Low (LL) and Low (L) to maintain the

temperature, a temperature transmitter (TT-103) and temperature controller (TC-

103) with 2 specifications [High-High (HH), High (H)].

Homogenizer (M-103). After pasteurization, the hot milk will be

maintained at 65°C and 20-25MPa and will be mixed thoroughly to keep its

stability and uniform distribution of the milk fat. The tank has time indicator

controller (KIC-101), temperature indicator (TI-101) and viscosity indicator

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controller (VIC-101). To maintain the pressure, a pressure transmitter (PT-101)

and pressure controller (PC-101) with 2 specifications [High-High (HH), High (H)]

is conneted to the mixer.

Refrigerator (R-101). The fruit that will be used for flavouring will be kept

at the refrigerator to maintain the temperature, a temperature indicator (TI-102) is

used.

Refrigerator (R-102). The bacteria culture, Lactobacillus bulgaricus, is to

be stored at a refrigerator at a temperature between -18-4°C to maintain the

temperature in the refrigerator, a temperature transmitter (TT-104) and

temperature controller (TC-104) with 2 specifications [High-High (HH), High (H)]

is used.

Refrigerator (R-103). The bacteria culture, Streptococcus thermophilus, is

to be stored at a refrigerator at a temperature between -20-4°C to maintain the

temperature in the refrigerator, a temperature transmitter (TT-105) and

temperature controller (TC-105) with 2 specifications [High-High (HH), High (H)]

is used.

Holding Tank (T-201). This tank is where the homogenized milk mixture

is being stored and cooled down to 40°C and 1 atm. The milk is being prepared

for the fermentation process. The storage tank is made of Stainless steel. The

tank has temperature transmitter (TT-201) and temperature controller (TC-201)

with 4 specifications [High-High (HH), High (H), Low-Low (LL) and Low (L)].

Fermenter (RV-201). This tank is where the fermentation process occurs.

The two starter cultures, Lactobacillus bulgaricus and Streptococcus

thermophiles, are being added into the homogenized and cooled milk. The

process is maintained at 40°C and a pH of 4.5. The storage tank is made of

Stainless steel. The tank has temperature transmitter (TT-202) and temperature

controller (TC-202) with 4 specifications [High-High (HH), High (H), Low-Low (LL)

and Low (L)]. To maintain the required pH of 4.5, a pH indicator (AI-201) is

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connected to the vessel. Before entering reactor, a flow totalizer (FQ-201), (FQ-

202) is connected in the globe valve to monitor the amount and measure the flow

rate.

Heat Exchanger (HE-201). After fermentation, the plain yogurt will pass a

special type of heat exchanger for cooling at a temperature range of 15-22°C.

The equipment is a plate heat exchanger to maintain the heat exchanger at the

desired temperature, a Temperature Indicator Controller (TIC-201) is connected

at the stream before the milk goes out.

Buffer Tank (T-202). From HE-202, the yogurt will be kept on a buffer

tank maintained at 15-22°C, before packaging. The storage tank is made of

stainless steel. To maintain the heat exchanger at the desired temperature, a

Temperature Indicator Controller (TIC-202) is connected at the stream before the

milk goes out.

Blender (B-301). The plain yogurt is now ready for flavouring. The line

that will produce the flavored yogurt will pass through the blender where it will be

mixed with the strawberry. To produce the desired blend for the yogurt, time

indicator (KI-301) and speed indicator (SI-301) is connected to the blender.

Cup-filling Machine (M-301). This packaging system will contain the

yogurt in container cups and will be stored in incubation chambers.

Incubation Room (S-301). The filled containers are placed in crates of

open design and at a certain distance from each other so that the circulating

warm/cold air for the incubation and cooling room or chamber, with HE-301

attached on it, can reach every individual container. It will be stored for 3-3.5

hours in the chamber. A time indicator controller (KIC-301) is used to make sure

that the time needed for the incubation is met.

Refrigerator (R-301). Final cooling, normally down to 7°C, takes place in

the refrigerator, where the products are held to await for distribution. The total

cooling time is about 65-70 minutes for small packages (0.175-0.2 kg) and about

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80-90 minutes for large packages (0.5 kg size). For the maintenance of the

temperature and time of cooling the packages, temperature indicator (TI-301)

and time indicator (KI-302) are used.

Equipment Sizing

Storage Vessels

Gelatine Stabilizer Storage Tank (T-101)

Heuristics Considered:

An addition of 30°C was added to the operating temperature to get the design

temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Optimum length/diameter = 3.

 Freeboard is 10% above 500 gal or 2 m3 capacity.

 A corrosion allowance of 3.8mm for noncorrosive streams.

Milk Storage Tank (T-102)

Heuristics Considered:

An addition of 30°C was added to the operating temperature to get the design

temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Optimum length/diameter = 3.

 Freeboard is 10% above 500 gal or 2 m3 capacity.

 A corrosion allowance of 3.8mm for noncorrosive streams.

Honey Sweetener Storage Tank (T-103)

Heuristics Considered:

An addition of 30°C was added to the operating temperature to get the design

temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Optimum length/diameter = 3.

 Freeboard is 10% above 500 gal or 2 m3 capacity.

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 A corrosion allowance of 3.8mm for noncorrosive streams.

Pasteurization Tank (T-104)

Heuristics Considered:

 An addition of 30°C was added to the operating temperature to get the

design temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Optimum length/diameter = 3.

 Freeboard is 10% above 500 gal or 2 m3 capacity.

 A corrosion allowance of 3.8mm for noncorrosive streams.

Holding Tank (T-201)

Heuristics Considered:

An addition of 30°C was added to the operating temperature to get the design

temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Optimum length/diameter = 3.

 Freeboard is 10% above 500 gal or 2 m3capacity.

 A corrosion allowance of 3.8mm for noncorrosive streams.

Buffer Tank (T-202)

Heuristics Considered:

An addition of 30°C was added to the operating temperature to get the design

temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Optimum length/diameter = 3.

 Freeboard is 10% above 500 gal or 2 m3 capacity.

 A corrosion allowance of 3.8mm for noncorrosive streams.

Fermentation Tank (RV-201)

Heuristics Considered:

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An addition of 30°C was added to the operating temperature to get the design

temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Optimum length/diameter = 3.

 Freeboard is 10% above 500 gal or 2 m3 capacity.

 A corrosion allowance of 3.8mm for noncorrosive streams.

 Intensities of agitation with impellers in baffled tanks are measured by power

input, HP/1000 gal, and impeller tip speeds:

 Proportions of a stirred tank relative to the diameter D: liquid level = D;

turbine impeller diameter = D/3; impeller level above bottom = D/3; impeller

blade width = D/15; four vertical baffles with width = D/10.

Mixing and Blending

Mixing Tank (M-101)

Heuristics Considered:

An addition of 30°C was added to the operating temperature to get the

design temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Freeboard is15% and 10% above 500 gal or 2 m 3 capacity.

 A corrosion allowance of 0.0038m.

 Intensities of agitation with impellers in baffled tanks are measured by

power input, HP/1000 gal, and impeller tip speeds:

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 Proportions of a stirred tank relative to the diameter D: liquid level = D;

turbine impeller diameter = D/3; impeller level above bottom = D/3; impeller

blade width = D/15; four vertical baffles with width = D/10.

Mixer (M-102)

Heuristics Considered:

An addition of 30°C was added to the operating temperature to get the design

temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Freeboard is15% and 10% above 500 gal or 2 m 3 capacity.

 A corrosion allowance of 0.0038m.

 Intensities of agitation with impellers in baffled tanks are measured by power

input, HP/1000 gal, and impeller tip speeds:

 Proportions of a stirred tank relative to the diameter D: liquid level = D;

turbine impeller diameter = D/3; impeller level above bottom = D/3; impeller

blade width = D/15; four vertical baffles with width = D/10.

Homogenizer (M-103)

Heuristics Considered:

An addition of 30°C was added to the operating temperature to get the design

temperature.

 A pressure of 2500 kPa was added for determining the design pressure.

 Freeboard is15% and 10% above 500 gal or 2 m 3 capacity.

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 A corrosion allowance of 0.0038m.

 Intensities of agitation with impellers in baffled tanks are measured by

power input, HP/1000 gal, and impeller tip speeds:

 Proportions of a stirred tank relative to the diameter D: liquid level = D;

turbine impeller diameter = D/3; impeller level above bottom = D/3; impeller

blade width = D/15; four vertical baffles with width = D/10.

Blender (B-301)

Heuristics Considered:

An addition of 30°C was added to the operating temperature to get the design

temperature.

 A pressure of 175 kPa was added for determining the design pressure.

 Freeboard is15% and 10% above 500 gal or 2 m3 capacity.

 A corrosion allowance of 0.0038m.

 Intensities of agitation with impellers in baffled tanks are measured by power

input, HP/1000 gal, and impeller tip speeds:

 Proportions of a stirred tank relative to the diameter D: liquid level = D;

turbine impeller diameter = D/3; impeller level above bottom = D/3; impeller

blade width = D/15; four vertical baffles with width = D/10.

Heat Exchanger (HE-101, HE-201)

 Plate type heat exchanger

Heat Exchanger (HE-102, HE-202)

 Spiral heat exchanger, Plate type

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Centrifuge (C-101)

Design considerations:

Power Consumption: 2.2 kW

Capacity: 2 m3

Speed: 6000 rpm

Function

To reduce the fat content of the milk by separation.

Refrigerator (R-101)

Design consideration:

Power Consumption: 5.20 kWh/24 h

Capacity: 0.5 m3

Function

To store the fresh strawberry fruits to avoid spoilage.

Refrigerator (R-102, R-103)

Design considerations:

Power Consumption: 0.56 kwh/24h

Capacity: 0.083 m3

Function

To store the culture bacteria that will be used for the fermentation process.

Refrigerator (R-301)

Design considerations:

Power Consumption: 2kw above

Capacity: 500-10000 m3

Temperature: -40 to 20°C

Function

To store finished product under a temperature of 7°C before transferring to the

refrigerated trucks for distribution.

Washer (W-101)

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Design considerations:

Power Consumption: 2.5-8.5 kW

Capacity: 500kg/h-10,000 kg/h

Function:

Brush cleaning machine is used for cleaning the surface of fruits from dust,

pesticide residues and other.

Evaporator (E-101)

Design Consideration:

Power Consumption: 7Kw

Capacity: 500L/h

Function:

To reduce the MNSF content of the milk mixture.

Cup-filling Machine (M-301)

Design Consideration:

Cup-filling and sealing Machine

Function:

This machine is used for a faster and systematic packaging system for the yogurt

product. Small (175g) and big (500g) packaging is being produced during the

process.

Material Balance

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Figure 3.5 Material Balance and computation

Note: Figure 3.5, values are calculated as kg/day.

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Equipment List and Cost Summary

Material of Country of
Equipment Tag No. Cost, Php Quantity Final Cost, Php
Construction Origin
Stainless steel
Gelatin Stabiliser Tank T-101 USA 960,714.04 1 ₱960,714.04
304
Stainless steel
Milk Storage Tank T-102 USA 4,493,096.08 1 ₱4,493,096.08
304
Material of Country of
EquipmentStorage
Honey Sweetener Tag No. Stainless steel Cost, Php Quantity Final Cost, Php
T-103 Construction Origin
USA 954,856.32 1 ₱954,856.32
Tank 304
Stainless steel
Blender B-103 Stainless steel USA 527,221.20 1 ₱527,221.20
Pasteurization Tank T-104 304 USA 6,432,098.21 1 ₱6,432,098.21
304
Heat Exchanger,
HE-101, HE 201 Stainless steel China 518,409.76 2 ₱1,036,819.52
Plate Type
Holding Tank T-201 USA 913,850.08 1 ₱913,850.08
304
Heat Exchanger,
HE-102, HE 202 Stainless steel China 1,296,024.84 2 ₱2,592,049.68
Buffer Tank
Spiral T-202 USA 913,850.08 1 ₱913,850.08
304
CentrifugeTank C-101 Stainless steel
Stainless steel China 5,184,099.80 1 ₱5,184,099.80
Fermentation RV-201 USA 913,850.08 1 ₱913,850.08
304
Stainless
Refrigerator
Mixing Tank R-101
M-101 Stainless steel
steel China
USA 57,024.88
169,882.24 1 ₱57,024.88
₱169,882.24
304
Stainless steel
Refrigerator
Mixing Tank R-102, R-103
M-102 Stainless steel China
USA 10,368.16
35,148.08 2
1 ₱20,736.32
₱35,148.08
304
Stainless steel
Refrigerator
Homogenizer R-103
M-103 Stainless steel China
USA 103,681,994.24
140,592.32 1 ₱103,681,994.24
₱140,592.32
304
Washer W-101 Stainless steel China 311,046.12 1 ₱311,046.12

Evaporator E-101 Stainless steel China 1,036,819.96 1 ₱1,036,819.96

Stainless steel
Pumps P-xxx China 25,920.40 44 ₱1,140,497.60
304
Stainless steel
Cup-filling Machine M-301 China 285,125.28 1 ₱285,125.28
304
TOTAL ₱131,801,372.13
Table 3.1 Equipment List and Cost Summary
Office Equipment and Factory Supplies Cost

ITEM QTY UNIT PRICE UNIT PRICE

Computer 5 ₱125,000.00 ₱125,000.00
Printer 2 ₱12,000.00 ₱12,000.00
Multimedia Projector 2 ₱70,000.00 ₱70,000.00
Air conditioner 3 ₱45,000.00 ₱45,000.00
Fax Machine 1 ₱5,000.00 ₱5,000.00
Photocopier 1 ₱50,000.00 ₱50,000.00
Television 1 ₱20,000.00 ₱20,000.00
Intercom 3 ₱3,000.00 ₱3,000.00
Sound System 2 ₱3,000.00 ₱3,000.00
Water Dispenser 1 ₱4,000.00 ₱4,000.00
Computer Table 5 ₱6,000.00 ₱6,000.00
Clerical Desk 5 ₱7,500.00 ₱7,500.00
Clerical Chairs 5 ₱2,500.00 ₱2,500.00
Visitors Chairs 5 ₱1,250.00 ₱1,250.00
Executive Chairs 5 ₱7,500.00 ₱7,500.00
Executive Tables 5 ₱25,000.00 ₱25,000.00
Conference Tables 2 ₱60,000.00 ₱60,000.00
Sofa 2 ₱16,000.00 ₱16,000.00
Clocks 2 ₱1,000.00 ₱1,000.00
Fire Extinguisher 5 ₱12,500.00 ₱12,500.00
Corkboard 2 ₱1,000.00 ₱1,000.00
Calculator 5 ₱5,000.00 ₱5,000.00
Trashbins 5 ₱10,000.00 ₱10,000.00
Paper Cutter 2 ₱2,000.00 ₱2,000.00
Coffee Maker 1 ₱1,000.00 ₱1,000.00
Whiteboard 3 ₱1,800.00 ₱1,800.00
TOTAL ₱497,050.00

Table 3.2 Office Equipment and Factory Supplies Cost

Office Supplies List Cost Summary

OFFICE EQUIPMENT and FACTORY SUPPLIES COST

ITEM QTY UNIT UNIT PRICE SUBTOTAL
Bond Paper 70 ream ₱200.00 ₱14,000.00
Ballpen 50 pcs ₱20.00 ₱1,000.00
Pencil Sharpener 5 pcs ₱55.00 ₱275.00
Pencil 50 pcs ₱10.00 ₱500.00
Puncher 5 pcs ₱120.00 ₱600.00
Scissors 5 pcs ₱50.00 ₱250.00
Stapler 5 pcs ₱100.00 ₱500.00
Staple Wire 20 box ₱40.00 ₱800.00
Carbon Paper 5 box ₱100.00 ₱500.00
Adhesives 5 pcs ₱20.00 ₱100.00
Brown Envelope 70 pcs ₱3.00 ₱210.00
Folder 50 pcs ₱8.00 ₱400.00
 Inks (Printer) 30 bottles ₱300.00 ₱9,000.00
Record Book 15 pcs ₱60.00 ₱900.00
Receipt (100 sheets) 100 booklet ₱35.00 ₱3,500.00
Whiteboard Marker 5 box ₱450.00 ₱2,250.00
Permanent Marker 10 pcs ₱25.00 ₱250.00
TOTAL ₱35,035.00

Table 3.3 Office Supplies List Cost Summary

Overall Total Costing ₱132,333,457.13

Table 3.1, 3.2 and 3.3 summarizes the total office equipment and

factory supply cost needed which when added is equivalent to Php

132,333,457.13. The cost for regular office equipment is accounted, since

the plant will start as a relatively small scale plant it is logical to choose

regular office equipment and minimize its quantity to lower the total cost

for the plant.

Annual Total Product Cost

ANNUAL TOTAL PRODUCT COST AT 100% CAPACITY

Capacity, kg/yr ₱7,562,690.08
Fixed Capital Investment,
₱248,208,344.00
FCI
Item Basis Basis Cost, Php/yr Cost, Php/yr
Raw Materials ₱58,256,648.57
Operating Labor ₱7,957,040.00
Operating Supervision 0.15 of operating labor ₱7,957,040.00 ₱1,193,556.00
Utilities ₱11,951,060.70
Maintenance and repairs 0.06 of FCI ₱248,208,344.00 ₱14,892,500.64
0.15 of maintenance and
Operating Supplies repair ₱14,892,500.64 ₱2,233,875.10
Laboratory charges 0.15 of operating labor ₱7,957,040.00 ₱1,193,556.00
Royalties (if not on lump-
sum basis) 0.01 of co ₱138,176,627.36 ₱1,381,766.27
Catalysts and solvents -- --
Variable Cost = ₱99,060,003.28
Item Basis Basis Cost, Php/yr Cost, Php/yr
Taxes (property) 0.02 of FCI ₱248,208,344.00 ₱4,964,166.88
Financing (interest) ₱248,208,344.00 -
Insurance 0.01 of FCI ₱248,208,344.00 ₱2,482,083.44
Depreciation -
Fixed Charges ₱7,446,250.32

0.06 of labor, supervision

Plant overhead, general ₱24,043,096.64 ₱14,425,857.98
and maintenance
 Plant Overhead ₱14,425,857.98
Manufacturing Cost ₱120,932,111.57
Administration ₱24,043,096.64 ₱4,808,619.33 ₱24,043,096.64
Distribution & Selling ₱138,176,627.36 ₱6,908,831.37 ₱138,176,627.36
Research and
Development ₱138,176,627.36 ₱5,527,065.09 ₱138,176,627.36
General Expense ₱17,244,515.79
Total Product Cost without Depreciation
₱138,176,627.36
co
 Table 3.4 Annual Total Product Cost

The total annual production cost at 100% capacity was estimated

and presented through Table 3.4 where in the total variable cost is Php

99,060,003.28, with fixed charges of Php 7,466,250.32, plant overhead

cost of Php 14,425,857.98, manufacturing cost of Php 120,932,111.57

and with a general expenses of Php 17,244,515.79. This resulted to a total

product cost of Php 138,176,627.36 without depreciation.

Total Operating Salary

 HEALTH SERVICES
Monthly FINANCE
Title / Position Quantity OPERATING SALARY
Salary
Monthly Annual Salary 13th Month Total
Title / Position Quantity Administration
Company Doctor 1 ₱30,000.00
Salary ₱360,000.00
Annual Salary ₱30,000.00
13th Month ₱390,000.00
Total
Monthly
Title /Manager
Dentist Position Quantity
1 ₱21,000.00 ₱252,000.00
Salary ₱21,000.00
Finance ₱40,000.00 ₱480,000.00 ₱40,000.00 ₱273,000.00
₱520,000.00
Salary Annual 13th Month Total
Nurse
Management 2 ₱12,000.00 ₱144,000.00 ₱12,000.00 ₱312,000.00
President 1 ₱100,000.00 ₱1,200,000.00 ₱100,000.00 ₱1,300,000.00
Accounting
SUB-TOTAL 4
1 ₱40,000.00
₱50,500.00 ₱480,000.00
₱606,000.00 SUB-TOTAL
₱40,000.00 ₱975,000.00
₱520,000.00
Domestic Operation 1 ₱50,500.00 ₱656,500.00
Manager
Corporate Service 1 ₱50,500.00 ₱606,000.00 ₱50,500.00 ₱656,500.00
Cost Accounting
Production Division 11 ₱30,000.00
₱50,500.00 ₱360,000.00
₱606,000.00 ₱30,000.00
₱50,500.00 ₱390,000.00
₱656,500.00
Manager
Sales & Marketing
Credit Collection 1 ₱50,500.00 ₱606,000.00 ₱50,500.00 ₱656,500.00
Manager 1 ₱17,000.00 ₱204,000.00 ₱17,000.00 ₱221,000.00
Manager
Customer
SUB-TOTAL 41 ₱50,500.00 ₱606,000.00 SUB-TOTAL
₱50,500.00 ₱1,651,000.00
₱656,500.00
Development
Research
1 ₱50,500.00 ₱606,000.00 ₱50,500.00 ₱656,500.00
Development
Plant Operation and
2 ₱50,500.00 ₱606,000.00 ₱50,500.00 ₱1,313,000.00
Logistics
Finance 1 ₱50,500.00 ₱606,000.00 ₱50,500.00 ₱656,500.00
Regulatory Affairs 1 ₱30,000.00 ₱360,000.00 ₱30,000.00 ₱390,000.00
Quality Service 1 ₱30,000.00 ₱360,000.00 ₱30,000.00 ₱390,000.00
SUB-TOTAL 12 SUB-TOTAL ₱7,988,500.00
DEPARTMENT MANAGEMENT

Monthly
Title / Position Quantity
Salary Annual Salary 13th Month Total
Marketing & Brand
Development 2 ₱35,000.00 ₱420,000.00 ₱35,000.00 ₱910,000.00
Manager
Market Research
2 ₱35,000.00 ₱420,000.00 ₱35,000.00 ₱910,000.00
Manager
SUB-TOTAL 4 SUB-TOTAL ₱1,820,000.00
CUSTOMER DEVELOPMENT
Monthly
Title / Position Quantity
Salary Annual Salary 13th Month Total
National Sales
2 ₱35,000.00 ₱420,000.00 ₱35,000.00 ₱910,000.00
Manager
Regional Sales
3 ₱33,000.00 ₱396,000.00 ₱33,000.00 ₱1,287,000.00
Manager
Key Account
3 ₱33,000.00 ₱396,000.00 ₱33,000.00 ₱1,287,000.00
Manager
SUB-TOTAL 8 SUB-TOTAL ₱3,484,000.00
PLANT OPERATION AND LOGISTICS
Monthly
Title / Position Quantity
Salary Annual Salary 13th Month Total
Product Manager 2 ₱35,000.00 ₱420,000.00 ₱35,000.00 ₱910,000.00
Engineering
1 ₱33,000.00 ₱396,000.00 ₱33,000.00 ₱429,000.00
Manager
Quality Assurance
2 ₱35,000.00 ₱420,000.00 ₱35,000.00 ₱910,000.00
Manager
Logistics Manager 2 ₱30,000.00 ₱360,000.00 ₱30,000.00 ₱780,000.00
PPIC Manager 2 ₱30,000.00 ₱360,000.00 ₱30,000.00 ₱780,000.00
Supervisors 3 ₱25,000.00 ₱300,000.00 ₱25,000.00 ₱975,000.00
Operators 30 ₱8,136.00 ₱97,632.00 ₱8,136.00 ₱3,173,040.00
SUB-TOTAL 42 SUB-TOTAL ₱7,957,040.00
 QUALITY SYSTEM
Monthly
Title / Position Quantity
Salary Annual Salary 13th Month Total
Information
3 ₱30,000.00 ₱360,000.00 ₱30,000.00 ₱780,000.00
Technology
Process & System 3 ₱30,000.00 ₱360,000.00 ₱30,000.00 ₱780,000.00
Suppliers
Management 2 ₱25,000.00 ₱300,000.00 ₱25,000.00 ₱650,000.00
System Manager
Distribution
Management 2 ₱25,000.00 ₱300,000.00 ₱25,000.00 ₱650,000.00
System Manager
Company
4 ₱15,000.00 ₱180,000.00 ₱15,000.00 ₱585,000.00
Secretaries
Security Service 8 ₱12,000.00 ₱144,000.00
₱12,000.00 ₱780,000.00
SUB-TOTAL 22 SUB-TOTAL ₱4,225,000.00
MAINTENANCE AND OTHER SERVICES
Monthly
Title / Position Quantity
Salary Annual Salary 13th Month Total
Janitors 4 ₱8,136.00 ₱97,632.00 ₱8,136.00 ₱423,072.00
Mechanics 3 ₱12,000.00 ₱144,000.00 ₱12,000.00 ₱468,000.00
Electricians 3 ₱12,000.00 ₱144,000.00 ₱12,000.00 ₱468,000.00
Messenger 2 ₱8,136.00 ₱97,632.00 ₱8,136.00 ₱211,536.00
Delivery Driver 4 ₱8,136.00 ₱97,632.00 ₱8,136.00 ₱423,072.00
Company Driver 4 ₱8,136.00 ₱97,632.00 ₱8,136.00 ₱423,072.00

Table 3.5 Total Operating Salary

Total Employees 135 OVER-ALL TOTAL ₱26,898,612.00

Table 3.5 summarizes the salary from the top managerial positions down

to maintenance and other services. Values from this table are based on salary

and we found in the internet in Philippine setting.

Electricity Consumption

ELECTRICITY CONSUMPTION
VARIABLE CONSUMPTION
Consumption
Consumption, Cost
Equipment Quantity per year, Cost, Php/yr
kWh Php/kWh
kWh/year
Mixing Tank M-101 1 0.15 1114.2144 7.8975 ₱8,799.51
Mixing Tank M-102 1 0.01 108.576 7.8975 ₱857.48
Homogenizer M-103 1 0.11 834.912 7.8975 ₱6,593.72
Blender B-103 1 0.29 1668.3264 7.8975 ₱13,175.61
Heat Exchanger,
HE-101, HE 201 2 2.00 29952 7.8975 ₱236,545.92
Plate Type
Heat Exchanger,
HE-102, HE 202 2 3.00 44928 7.8975 ₱354,818.88
Spiral
Centrifuge C-101 1 2.20 16473.6 7.8975 ₱130,100.26
Refrigerator R-101 1 5.20 38937.6 7.8975 ₱307,509.70
Refrigerator R-102, R-103 2 0.56 8386.56 7.8975 ₱66,232.86
Refrigerator R-103 1 2.00 14976 7.8975 ₱118,272.96
Washer W-101 1 8.50 63648 7.8975 ₱502,660.08
Evaporator E-101 1 7.00 52416 7.8975 ₱413,955.36
Pumps P-xxx 44 0.75 245786.112 7.8975 ₱1,941,095.82
Cup-filling
M-301 1 2.50 18720 7.8975 ₱147,841.20
Machine
Screw Conveyor 8 17.60 1054310.4 7.8975 ₱8,326,416.38
Belt Conveyor 3 0.80 17971.2 7.8975 ₱141,927.55
SUBTOTAL 644,092.60 ₱5,086,721.31
FIXED CONSUMPTION
Consumption
Consumption,
Auxiliary Items QTY per year, Cost Php/kWh Cost, Php/yr
kWh
kWh/year
Factory Lights 100 1 748,800.00 7.8975 ₱5,913,648.00
Office Lights 20 0.02 2,995.20 7.8975 ₱23,654.59
Warehouse Lights 30 0.5 112,320.00 7.8975 ₱887,047.20
Air conditioner 5 1.492 55,860.48 7.8975 ₱441,158.14
Coffee Maker 3 0.5 11,232.00 7.8975 ₱88,704.72
Computer 10 0.4 29,952.00 7.8975 ₱236,545.92
Fax Machine 2 0.2 2,995.20 7.8975 ₱23,654.59
Intercom 5 0.02 748.80 7.8975 ₱5,913.65
Multimedia Projector 5 0.2 7,488.00 7.8975 ₱59,136.48
Photocopier 3 0.2 4,492.80 7.8975 ₱35,481.89
Printer 5 0.01 374.40 7.8975 ₱2,956.82
Sound System 3 0.4 8,985.60 7.8975 ₱70,963.78
Television 2 0.05 748.80 7.8975 ₱5,913.65
Water Dispenser 5 0.5 18,720.00 7.8975 ₱147,841.20
SUBTOTAL 402,285.31 ₱3,177,048.25

Table 3.6 Total Electricity Consumption

TOTAL 1,046,377.91 ₱8,263,769.56

Fixed and Variable Cost Electricity Consumption

YEAR FIXED COST VARIABLE COST TOTAL COST

2019 ₱4,651,516.35 ₱7,447,468.67 ₱12,098,985.02
2020 ₱5,116,667.98 ₱8,192,215.54 ₱13,308,883.52
2021 ₱5,628,334.78 ₱9,011,437.09 ₱14,639,771.87
2022 ₱6,191,168.26 ₱9,912,580.80 ₱16,103,749.06
2023 ₱6,810,285.08 ₱10,903,838.88 ₱17,714,123.96
2024 ₱7,491,313.59 ₱11,994,222.77 ₱19,485,536.36
2025 ₱8,240,444.95 ₱13,193,645.05 ₱21,434,089.99
2026 ₱9,064,489.44 ₱14,513,009.55 ₱23,577,498.99
2027 ₱9,970,938.39 ₱15,964,310.51 ₱25,935,248.89
 2028 ₱10,968,032.23 ₱17,560,741.56 ₱28,528,773.78
2029 ₱12,064,835.45 ₱19,316,815.71 ₱31,381,651.16
2030 ₱13,271,318.99 ₱21,248,497.28 ₱34,519,816.28
Table 3.7 Fixed and Variable Electricity Consumption

Percentage Increase of Cost of Electricity 10.00%

Energy rate for the equipment are based on the equipment

specification data available and the values for office equipment energy

rate are based on the regular consumption of energy according to Nestlé

Philippines.

Fixed and Variable Water Consumption

FIXED CONSUMPTION
QTY m3/worker-month m3/Year
WORKERS
135 0.25 405

VARIABLE CONSUMPTION
PROCESS WATER AND COOLING WATER
YEAR
0.125 kg yoghurt m3
2019 7,562,690 257,283
2020 7,562,690 257,283
2021 7,562,690 257,283
2022 7,562,690 257,283
2023 7,562,690 257,283
2024 7,562,690 257,283
2025 7,562,690 257,283
2026 7,562,690 257,283
2027 7,562,690 257,283
2028 7,562,690 257,283
2029 7,562,690 257,283
2030 7,562,690 257,283

Table 3.8 Fixed and Variable Water Consumption

 Total
Fixed Variable
Water Fixed Cost Variable Cost Unit Cost Total Cost
Consumption Consumption
YEAR Consumption

m3 m3 m3 Php Php/m3 Php/m3 Php

2019 330 257,283 257,613 ₱10,618.84 ₱8,278,919.63 ₱32.18 ₱8,289,538.47

2020 330 257,283 257,613 ₱10,937.40 ₱8,527,287.22 ₱33.14 ₱8,538,224.63
2021 330 257,283 257,613 ₱11,265.53 ₱8,783,105.84 ₱34.14 ₱8,794,371.36
2022 330 257,283 257,613 ₱11,603.49 ₱9,046,599.01 ₱35.16 ₱9,058,202.51
2023 330 257,283 257,613 ₱11,951.60 ₱9,317,996.99 ₱36.22 ₱9,329,948.58
2024 330 257,283 257,613 ₱12,310.14 ₱9,597,536.89 ₱37.30 ₱9,609,847.04
2025 330 257,283 257,613 ₱12,679.45 ₱9,885,463.00 ₱38.42 ₱9,898,142.45
2026 330 257,283 257,613 ₱13,059.83 ₱10,182,026.89 ₱39.58 ₱10,195,086.72
2027 330 257,283 257,613 ₱13,451.63 ₱10,487,487.70 ₱40.76 ₱10,500,939.32
2028 330 257,283 257,613 ₱13,855.18 ₱10,802,112.33 ₱41.99 ₱10,815,967.50
2029 330 257,283 257,613 ₱14,270.83 ₱11,126,175.70 ₱43.24 ₱11,140,446.53
2030 330 257,283 257,613 ₱14,698.96 ₱11,459,960.97 ₱44.54 ₱11,474,659.93

Percentage Increase of Cost of Water per m3 3.00%

The water consumption calculation assumed every worker

consumes 0.25m3 per month of water and the price of water will increase

by 3% annually.

Waste Disposal

Dairy waste includes milk, milk products and all dairy processing

wastes that do not meet applicable quality standards, have become

contaminated, or otherwise have become unusable for human

consumption, animal feed, or any other beneficial use.

Milk, milk products and all dairy processing wastes must be

properly disposed when they have been spilled, do not meet applicable

quality standards, have become contaminated, or otherwise have become

unusable for human consumption, animal feed, or any other beneficial

use. Milk that cannot be sold to a processor may be recycled by the

farmer in the same manner used for manure. Waste from milk processing,
 including but not limited to raw milk, processed milk, wash water, and

disinfectants, is considered industrial process wastewater and may not be

discharged to septic systems, or to waters of the state through field tiles,

direct dumping or any other method. Bulk milk haulers, bulk milk samplers,

milk transfer stations, cooperatives, and processing plants must use the

following methods for proper disposal of raw milk; milk products, including

but not limited to pasteurized milk, flavored milk, canned milk, condensed

milk, cheeses, ice cream, or yogurts; milk by-products, including but not

limited to whey and cow water; and related waste liquids, including but not

limited to disinfectants and spent wash water.

1. Land application by permit. IDEM requires a permit for land application

of industrial process wastes, including dairy wastes.

2. Solidification and disposal at a permitted municipal solid waste

landfill.

3. Haul to a permitted wastewater treatment plant.

4. Discharge to a permitted sanitary sewer. A pre-treatment permit from

the local sewer authority or an Industrial Wastewater Pre-treatment permit

from IDEM is required.

Spill Cleanup Requirements

Dairy producers, haulers, samplers, cooperatives, transfer stations,

and processing plant operators need to be aware of the requirements for

disposing of dairy waste and measures to respond to accidental spills,

should they occur. When milk or milk wastes have been spilled in or near

waters of the state, whether the spill occurs at a facility or during

transportation, the responsible party must do the following:

1. Immediately contain the spill and prevent additional spilled materials

from entering waters of the state.

2. Perform a spill response, which means to contain the spill and remove

spilled materials.
 3. Report the spill to DENR’s 24-hour spill reporting line.

4. Submit a written report to DENR, upon request.

5. Notify affected landowners and any downstream water user within the

nearest 10 miles.

Unpermitted discharges and/or accidental spills of milk and dairy

products into a waterway have been known to impact water quality and

cause fish kills. When milk is released into a stream or lake, it provides a

food source for bacteria, which use oxygen in the water to live and grow.

Bacteria growth following a significant release or spill will often cause

stress, or death, for fish and other aquatic life living in the impacted

waterway.