Technical and investment guidelines for milk cooling centres Technical and investment guidelines for milk cooling centres Technical authors Frazer Moffat Som Khanal Anthony Bennett Tek Bahadur Thapa Sonnet Malakaran George FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 2016 Recommended citation FAO. 2016. Technical and investment guidelines for milk cooling centres, by Moffat, F., Khanal, S., Bennett, A., Thapa, T.B. & Malakaran George, S. Rome, Italy. Cover photograph ©FAO/T.B. Thapa and L. Rlung The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. 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FAO information products are available on the FAO website (www.fao.org/publications) and can be purchased through publications [email protected]. iii Contents PREFACE vii ACKNOWLEDGEMENTS viii EXECUTIVE SUMMARY ix ABSTRACT xi TECHNICAL AUTHORS xii ACRONYMS xiv Chapter 1 Introduction 1 Chapter 2 Production of fresh and clean milk 3 Chapter 3 Rural milk collection, cooling and preservation 5 3.1 Fresh milk delivery 5 3.2 Milk collection points 6 3.3 Small-scale milk cooling and preservation technologies 6 3.4 The lactoperoxidase system of milk preservation 12 Chapter 4 Milk cooling centres 13 4.1 Overview 13 4.2 Location and general building requirements for milk cooling centres 13 4.3 Milk collection schemes 14 Chapter 5 Milk reception, cooling and storage systems 23 5.1 Milk reception 23 5.2 Milk cooling and storage 24 5.3 Refrigeration systems 24 Chapter 6 Refrigerated milk cooling tanks 29 6.1 Overview 29 6.2 Ice bank milk cooling and storage tanks 31 6.3 Direct expansion milk cooling and storage tanks 34 6.4 Ice builders and instant cooling 36 6.5 Milk precooling equipment 36 6.6 Heat recovery units 40 6.7 Energy use, precooling and options for refrigerated milk cooling systems 40 6.8 Cooling options and configurations 41 iv Chapter 7 Power supply and renewable energy options 69 7.1 Overview 69 7.2 Non-renewable energy 69 7.3 Renewable energy 70 Chapter 8 Economic indicators 83 8.1 Planning and feasibility studies for a new milk cooling centre 83 8.2 Basic financial analysis methods 83 8.3 Factors affecting the operating overheads and profitability of a milk cooling centre 84 8.4 Sample financial analysis of a milk cooling centre in Bangladesh 86 Chapter 9 Recommendations 91 9.1 Planning 91 9.2 Assessing feasibility 92 9.3 Milk cooling options 92 9.4 Renewable and non-renewable energy options 93 REFERENCES 95 ANNEXES 1 Study requirements when considering the establishment of a milk cooling centre 97 2 Cleaning and sanitation of milk cooling centres 101 BOXES 1 FAO’s Afghanistan Integrated Dairy Development Programme 2 2 Self-sustaining container with solar energy options for milk cooling 75 FIGURES 1 FAO rural dairy collection and dairy value chain 5 2 Aluminum alloy and stainless steel milk cans of 10, 20 and 40 litres 6 3 The pictorial representation of milk cooling centre establishment 7 4 Charcoal cooler with milk cans 8 5 Cooling using natural water systems 9 6 Surface milk cooler 10 7 Immersion cooler with refrigeration unit and insulated cooling and storage container 11 8 Milk cooling centre exterior 15 9 Milk cooling centre layout and cross-section 16 10 Milk cooling centre laboratory layout 17 11 Milk tank dimensions 18 12 Section view and floor layout 20 13 Floor layout and description 21 14 A rural milk cooling centre 22 15 Resource requirements vs milk cooling options 23 16 Milk reception area 24 v 17 Refrigeration operating cycle 25 18 Refrigeration unit 26 19 Energy comparison chart 27 20 Open-top direct expansion tanks 30 21 Fully enclosed direct expansion tank 31 22 Integrated ice bank milk cooling tank 32 23 Cross-section of an integrated ice bank milk cooling tank 33 24 Integrated ice bank milk cooling tank 34 25 Cross-section of an enclosed direct expansion milk cooling tank 35 26 Enclosed direct expansion milk cooling system 35 27 Ice builder with instant cooling using a PHE 36 28 Ice bank tank 37 29 Corrugated plate of plate heat exchanger 38 30 Heat exchange pattern in a plate heat exchanger 39 31 Direct expansion refrigerated milk cooling tank 42 32 Option 1 43 33 Direct expansion milk cooling tank with precooling using mains or well water 44 34 Option 2 45 35 Bulk milk cooling tank with precooling followed by instant cooling 47 36 Option 3 48 37 Integrated ice bank milk cooling tank 50 38 Option 4 51 39 Integrated ice bank milk cooling tank with precooling using mains or well water 52 40 Option 5 53 41 Precooling of milk using precooled mains water from an integrated ice bank milk cooling tank 55 42 Option 6 56 43 Ice bank milk cooling tank with precooling using mains or well water followed by instant cooling using ice water from an integrated ice bank 58 44 Option 7 59 45 Instant milk cooling using a plate heat exchanger and an ice bank tank 61 46 Option 8 62 47 A containerized milk cooling centre 64 48 Milk reception area at a containerized milk cooling centre 65 49 Option 9 66 50 Containerized, stand-alone, solar photovoltaic milk cooling unit 75 51 Photovoltaic cooling system with electrical energy storage 76 52 Photovoltaic cooling system with ice bank energy storage 77 53 Containerized milk cooling centre using solar panels 79 54 Break-even point 85 TABLES 1 Floor area and height requirements for milk tanks 19 2 Space requirements for milk cooling tanks (including compressors) 19 3 Space requirements for milk collection centres 19 4 Comparison of direct expansion and ice bank cooling systems 40 5 Estimated percentage reductions in refrigeration cooling requirements following precooling 40 6 Electrical power requirements with and without precooling 41 7 Basic equipment for a direct expansion refrigerated milk cooling system 43 vi 8 Basic equipment for a direct expansion refrigerated milk cooling system with precooling 45 9 Basic equipment for a bulk milk cooling system with precooling followed by instant cooling 48 10 Basic equipment for an integrated ice bank milk cooling system 51 11 Basic equipment for an integrated ice bank milk cooling system with precooling using mains or well water 53 12 Basic equipment for precooling of milk using mains water from an integrated ice bank milk cooling tank 57 13 Basic equipment for ice bank milk cooling system with precooling using mains or well water followed by instant cooling using ice water from an integrated ice bank 60 14 Basic equipment for instant cooling using a plate heat exchanger and an ice bank tank 63 15 Basic equipment for a containerized milk cooling centre 67 16 Photovoltaic generator sizes, storage and system costs for cooling 500 litres of milk per day 78 17 Costs of a 1 000-litre milk cooling system operated with wind power 81 18 Sample financial analysis of a milk cooling centre in Bangladesh 87 19 Sample trial profit and loss statement for a milk cooling centre in Bangladesh 88 PHOTOS 1 Milk transportation from MCC to the Herat Livestock Development Union processing plant at Herat, Afghanistan 3 2 Milk collection centre at Mazar, Balkh, Afghanistan 4 3 Milk reception at Kabul Dairy Union plant at Guzergah, Kabul Afghanistan 4 4 Parabolic trough with ammonia absorption refrigeration unit 72 5 Ice removal for use in cooling milk in cans 72 6 Containerized, stand-alone, solar photovoltaic milk cooling unit 75 7 CIP cleaning unit 101 vii Preface Billions of people consume milk and dairy products every day. These are not only a vital source of nutri- tion for millions of smallholders and their families. Dairying is an essential part of integrated farming systems in developing countries and countries in transition. The share of milk in the livestock GDP of these countries is significant. Thus, milk and dairy are an important subsector in the national economies of many developing countries, providing food, regular incomes for households and sustainable liveli- hoods for rural farmers and small and microenterprises. This publication examines and provides guidance on the options for investing in milk collection and cooling for smallholders. As cooling is the most widely used technique for preserving raw milk, the publication focuses on the planning, feasibility, start-up and operation of milk cooling centres (MCCs). The book reviews small-scale milk cooling and preservation technologies employed around the world. It discusses the steps to be followed when establishing a new MCC and selecting appropriate equip- ment and technology for sustainable operation of the MCC, especially in developing and transitional countries. It also discusses precooling options that minimize the overhead costs of cooling milk. Nine milk cooling options and configurations are discussed in detail. Investors or farmers can select the option best suited to their location, depending on milk availability and access to roads, power, water, etc. Vari- ous power supplies and renewable energy options for MCCs are discussed, and the potential for using renewable energy such as solar, wind and geothermal power are reviewed and explored. The last chapter discusses basic economic indicators and financial analysis methods for operating MCCs cost-effectively. The book aims to serve small and microenterprises, small-scale organizations, non-governmental organizations (NGOs) and government agencies by providing options from which to select suitable milk cooling systems for local areas, taking into consideration milk production and availability, and access to roads, water and an electricity supply. It also aims to serve as a reference and guideline document for the manufacturers of bulk milk coolers for small and microenterprises and for the teaching and educational institutions offering courses in dairying, food sciences and technology. The book has been prepared by dairy and engineering experts, and an early draft was thoroughly discussed and reviewed in a three-day write-shop on “Techno-Economic Options for Milk Cooling Centres” held at FAO Headquarters in Rome from 16 to 18 December 2014. The objective of the write- shop was to elicit technical contributions from: i) the private sector; ii) the public sector; iii) civil society organizations; iv) NGOs; v) intergovernmental organizations; and vi) other potential partners. Partici- pants provided practically applicable solutions for milk cooling, with an emphasis on energy options for MCCs in developing and transitional countries. Many experts from private-sector manufacturers of milk cooling equipment, refrigeration experts, dairy professionals, faculty members from research, educational and training institutions, and development partners participated and contributed to finalizing the manuscript. The Nutrition and Food Systems Division (ESN) thanks all those who generously shared their exper- tise and field experience, time and energy in getting this book completed. Anna Lartey Director, Nutrition and Food Systems Division viii Acknowledgements This book on Technical and investment guidelines for milk cooling centres has been prepared by Mr Frazer Moffat and Mr Som Khanal under the technical leadership of Mr Anthony Bennett, Group Leader, Agrifood Industries Group, Nutrition and Food Systems Division (ESN). The first draft was thoroughly reviewed and updated by Mr Tek Bahadur Thapa, senior dairy and food consultant, FAO, and Sonnet Malakaran George, dairy industry and losses consultant, FAO. The authors wish particularly to acknowledge the contributions made by experts from the private sector and development partners in finalizing the manuscript during a three-day write-shop on “Techno- Economic Options for Milk Cooling Centres” held at FAO Headquarters in Rome from 16 to 18 December 2014. Participants included Mr Jean Claude Lambert, Senior FAO Consultant; Mr Frazer Moffat, lead author; Mr Christian Cesbron, Director, Cesbron Consulting and expert at the International Institute of Refrigeration; Mr Steven Gunst, Business Unit Manager, Packo, Belgium; Mr Tek Bahadur Thapa, Senior Dairy Specialist, College of Applied Food and Dairy Technology, Nepal; Mr Kasturi Lal Arora, Dairy Expert, Maxcare, India; Mr Rajat Bhardwaj, Big Ten BV, Netherlands; Mr Sonnet Mala- karan George, dairy industry and losses consultant, FAO; Alessandro Flammini, specialist in greenhouse gas emissions and energy, FAO; and Eva Gálvez Nogales, Agribusiness Economist, FAO. The guidance of the ESN colleagues who carried out an internal review and of external experts is greatly appreciated and enriched the content of the publication during its production process. Publishing production was coordinated by Ms Larissa D'Aquilio and Ms Stefania Maurelli (FAO); copy editing by Ms Jane Shirley Shaw; cover and layout design by Mr Simone Morini (FAO); and proofreading by Giuseppe Provenzano. For granting permission to use previously published material, special thanks go to Jörg Waschull, Ph.D., Department of Applied New Technologies, Institut für Luft- und Kältetechnik gGmbH, Bertolt- Brecht-Allee 20, 01309 Dresden for use of his work which appears as Photo 6 and Figures 50–52, Solar container milk cooling options for remote locations, in Chapter 7. ix Executive summary In many developing nations, agriculture plays a major role in food security, employment and national income. The small and medium-scale dairy industry provides a means for milk producers to have a regular and sustainable income through the establishment of reliable markets for fresh milk and dairy products. Milk collection schemes provide both a secure market and a means of reducing post-harvest losses by col- lecting and preserving fresh milk, allowing the manufacture of quality and nutritious dairy products on a sustainable basis. Such schemes also allow the regular flow of cash and income from urban to rural areas. The small and medium-scale dairy sector produces multiple benefits through which smallholder producers and the private sector can mobilize support for agro-enterprise development. These benefits include: i) poverty reduction though regular family income; ii) off-farm jobs; iii) environmental benefits from cost-effective and sustainable milk cooling options; iv) efficient energy options; and v) improved household food security and nutrition. Milk collection schemes differ from country to country and no single scheme can be applied univer- sally. Raw milk is a highly perishable product that must be collected and cooled within a few hours to reduce losses due to spoilage and to preserve quality. As milk production is often remote from markets and processing facilities, milk cooling centres (MCCs) provide the means for preserving quality through chilling and hygienic storage prior to onward transportation to processing facilities. In many developing countries, the lack of MCCs is a main limitation to the development of sustainable dairy value chains. Milk can be cooled in two steps: precooling, followed by refrigerant cooling to 4 °C. Cooling costs at an MCC can be reduced by precooling the fresh warm milk using water from the mains supply or surface, well or groundwater. Precooling reduces the refrigeration load, thereby reducing costs and energy needs. When the temperature difference between the mains/well water and the fresh raw milk is significant, refrigeration costs can be reduced by up to 64 percent. The final temperature of the precooled milk depends on the temperature difference between the precooling water and the fresh milk. The choice is then on whether the system should use direct expan- sion refrigeration milk cooling tank, ice bank refrigeration milk cooling tanks or ice builder/plate heat exchange (PHE) refrigeration combined with an insulated, unrefrigerated milk storage tank. The latter two systems build ice over a period of ten-plus hours and are more suited to locations where the electric- ity supply is reliable, where only a single-phase supply is available and/or where a lower tariff is applied to electricity consumption at night. Nine milk cooling and storage options have been identified, ranging from simple direct expansion to more advanced and complex integrated systems that incorporate energy- and space-saving precooling with ice bank and instant cooling technology. The advantages and limita- tions of each option are evaluated and presented in this publication. The most appropriate milk cooling technology or system depends on: i) the location; ii) the availability of electricity and water; iii) capacity requirements; and iv) the capital and operating costs. A major finding of this study is the clear benefit of using precooling to reduce overall electricity requirements and the capital equipment and operating costs of the MCC. The nine options identified are: ƒ Option 1: direct expansion refrigerated milk-cooling tank; ƒ Option 2: direct expansion milk cooling tank with precooling using mains or well water; ƒ Option 3: bulk milk cooling tank with precooling using mains or well water followed by instant cooling using ice water from an ice builder unit; ƒ Option 4: integrated ice bank milk cooling tank; ƒ Option 5: integrated ice bank milk cooling tank with precooling using mains or well water; ƒ Option 6: precooling of milk using precooled mains water from an integrated ice bank milk cooling tank; ƒ Option 7: ice bank milk cooling tank with precooling using mains or well water followed by instant cooling using ice water from an integrated ice bank; ƒ Option 8: instant milk cooling using a PHE and an ice bank tank; ƒ Option 9: containerized MCC.