SAMARA UNIVERSITY

COLLEGE OF DRYLAND AGRICULTURE

DEPARTMENT OF NATURAL AND RESOURCE MANEGEMENT

COURCE TITLE PROJECT PLANING AND MANAGEMENT

COURCE CODE ABVM 3142

PROJECT PROPOSAL FOR HONEY BEE PRODACTION IN MAKSEGNIT

TWON
PREPARED BY: IDNO

BAYE YIGZAW………………………………………SUR/1000682
EYERUS ABNAW……. …………………………….SUR/1000867
HAWA YENUS …......................................................... SUR/1000329
BAYE SISAY…………………………………………..SUR/1000739
GEZHAGN SISAY…………………………………….SUR/1000698
 Table of Contents

ABBEREVATIONS.................................................................................I

LIST OF TABLES..................................................................................II

I. SUMMARY....................................................................................1

1. INTRODUCTION...........................................................................2

2. TECHNICAL ANALYSIS..............................................................3
2.1. Market Study........................................................................................................................3
2.2. Demand projection..........................................................................................................3
2.3. Supply Projection.................................................................................................................5
2.4. Demand Supply – Gap.........................................................................................................6

3. THE PROJECT AREA AND THE PROJECT...................................7

3.1. The project area
3.2. The project...........................................................................................................................8
4.organization,management and man power..................................................................8
4.1. Manpower............................................................................................................................8
4.2. Organizational Structure......................................................................................................9

5- INVESTMENT...........................................................................10
5.4 Source of Finance.....................................................................................................11

ABBEREVATIONS

Br birr

Kg kilogram

CSA Central Statistics Authority

DD demand demand

SS supply supply

DD-SS demand demand-suppley suppley

Mm milimeter

List of Tables

Table 1 Demand for honey for domestic consumption (Maksegnit Town).........4

Table 2 Demand for honey of others (firms and Hotels) in Maksegnit Town.....5
Table 3 Supply of honey in Maksegnit town.........................................................6
Table 4 Demand-supply Gap For honey................................................................6

Table 5. Governing factors for the price of honey in Maksegnit Town.........7

Table 6. Man Power Amount and Distribution..........................................9

Table 7 Investment cost components.................................................10

Table 8. The price of honey by color (ETB)..........................................11

Table 9. Opportunities of honey bee products marketing system.............11
 • Summary

The apiculture farm project appraisal under consideration starts with 400 beehive unit. The
project is basically aimed at producing and supplying honey to the community and small scale
processing firms around Maksegnit. The total investment cost of the project is estimated Birr
438000. The financial analysis shows that the business will be profitable throughout the
proposed project year. Sensitivity analysis of the project also indicates that the project will be
profitable if the costs of the projects will rise by 10% and the price of farm outputs reduced by
10% simultaneously. Furthermore, the project at full implementation willhavea multi-faceted
socio-economic benefits. It will provide new jobs for about 16 workers per year. The project will
contribute to the government’s tax revenue.

1
1. Introduction

The feasibility project proposal study focus on agricultural sector which about 85 % percent of
the population engaged on it.thehonybee sector in general and waxs in particular has got
apotential to invest and got abetter profit. The study was conducted in Gondar Zaria District
(Maksegnit town) in North Gondar Zone Amhara National Regional State of Ethiopia. The
District is located at 37° 24'24''E - 37° 45' 43''E and 12o 7' 23''N - 12° 39' 24''N and its estimated
total area is 1286.76 km2. Being part of the North Gondar Zone, it is bordered to the South by
LiboKemkem District of South Gondar Zone, to the Southwest by Lake Tana, to the West
byDembiya, to the North by Lay Armachiho, to the Northeast by Wegera, and to the Southeast
by

Belessa districts. Gondar Zuria District is located at about 1107 - 3022 meters above sea
level,and falls in to two agro-ecological zones. The two agro-ecology zones, Weynadega (1500-
2300m.a.s.l) and Dega (2300-3200 m.a.s.l.) constitute the largest area coverage. In the
District,temperature ranges between 14 – 20°C with the mean annual temperature of 17.9°C.
Rainfall ranges between 1030 - 1223 mm with the mean annual of 1100 mm.The total
Population of maksegnit is estimated to be 140000 out of which 50000 are children.

In North Gonder zone the predominant mode of agricultural production is smallholder apiculture
prodactiom mixed farming system. North Gonder zone has good potential for honeybee
production. The road from Maksegnit to Gonder is known to be belt for apiculture production.
The honey bee of the zone is estimated to comprise 25000 BeehiveHive ,
honeybee in general serve for multiple purposes providing medicinal value,waxs, source of
energy,and other socio-economic functions such as an investment and source of cash income.The
project site is located on the highland and suited for bees considering the environment is free
from any pecticied chemical and pests and has a good vegetation and flower cover.More over,
there is a research centre (Gonder Agricultural research centre) which will help the project to
stay more viable with technical assistance and research intervention.
The core objectives of the project include the following:
2
• To get Economic profit, which in turn will help to scale up the capacity and add value in
the products.
 • To create job opportunities for the nearby people.
• To provide honey to consumers, with reasonable price.

2. Technical Analysis

In the technical Analysis the project has considered the availability of the materials/inputs, the
scale of operation/ demand and supply, social acceptance . . . etc.

2.1. Market Study

The demand of hony and its products is easily justifiable as it is the integral component of the
food we eat and in most cases the supply is short of demand. There has been satisfied hony
demand becouse it is neer to Gonder.honey is known for its nutritive value and also profitable
business in the area. And ther is alot of honeybee farms in the town. Therefore, after
implementation, the project under consideration will have a significant contribution to the honey
supply in the town. The marketing study prevailed that the selling price of a kilogram of hony is
120 Birr. Hence the project will begin by fixing the selling price of a kilo of honey for
firms/processors to be 100br and for household consumers and hotels is 110br/kg. To reduce
labour cost only 40% of total production is sold for domestic consumers and the remaining for
others which take in mass.

2.2 . Demand projection

In projecting the demand for honey total domestic consumer (population and proportion of
children), no of hotels, honey processing firms .etc were considered as source of demand for
honey production. Accordingly, the following have been taken:
• There is one organization which has a demand of more than 400kg/day (which is directly
transported to Gonder market), 3 relatively small scale hony processing firms with a
capacity of taking 200kg/day. For simplicity on average a 10% increase in demand of
honey was taken for all3 firms.
• Population of Maksegnit is 140, 0000 (CSA,2011) out of which children are assumed to
constitute 40%. The annual population growth rate of 2.5 was taken to estimate the
 change in demand every year. Finally out of 50000 children only 10% of them were
assumed to afford buying honey.
Therefore, the demand projection for the coming 10 years based on part of the assumption
discussed above is as follows:
Table 1 Demand for hony for domestic consumption (MaksegnitTown)
Year TotalMaksegnit population Those who can afford (10%) Children Adults Total Daily requirement A n n u a l
(40%) (60%) (kg) Requirement
(kg)
2013 1 3 0 , 0 0 0 1 5 , 0 0 0 4 , 5 0 0 1 0 , 5 0 0 4 , 8 7 5 1,779,375
2014 1 4 3 , 7 5 0 1 5 , 3 7 5 4 , 6 1 3 1 0 , 7 6 3 4 , 9 9 7 1,823,859
2015 1 5 5 , 5 9 4 1 5 , 7 5 9 4 , 7 2 8 1 1 , 0 3 2 5 , 1 2 2 1,869,456
2016 1 6 1 , 5 3 4 1 6 , 1 5 3 4 , 8 4 6 1 1 , 3 0 7 5 , 2 5 0 1,916,192
2017 1 6 5 , 5 7 2 1 6 , 5 5 7 4 , 9 6 7 1 1 , 5 9 0 5 , 3 8 1 1,964,097
2018 1 6 9 , 7 1 1 1 6 , 9 7 1 5 , 0 9 1 1 1 , 8 8 0 5 , 5 1 6 2,013,199
2019 1 7 3 , 9 5 4 1 7 , 3 9 5 5 , 2 1 9 1 2 , 1 7 7 5 , 6 5 4 2,063,529
2020 1 7 8 , 3 0 3 1 7 , 8 3 0 5 , 3 4 9 1 2 , 4 8 1 5 , 7 9 5 2,115,118
2021 1 8 2 , 7 6 0 1 8 , 2 7 6 5 , 4 8 3 1 2 , 7 9 3 5 , 9 4 0 2,167,996
2022 1 8 7 , 3 2 9 1 8 , 7 3 3 5 , 6 2 0 1 3 , 1 1 3 6 , 0 8 8 2,222,196

Note: This is only for those customers around Maksegnit, basically for consumption.

Table 2 Demand for honey of others (firms and Hotels) in Maksegnit Town
year Daily Maksegnit of large firm (kg) Daily Maksegnitprocessors of (kg) Daily Maksegnit of Hotels (kg) Annual demand (kg)
2013 4 0 0 0 3 2 0 0 3 0 0 7 5 0 0
2014 4 2 0 0 3 3 6 0 3 1 5 7 8 7 5
2015 4 4 1 0 3 5 2 8 3 3 0 . 7 5 8 2 6 8 . 7 5
2016 4 6 3 0 . 5 3 7 0 4 . 4 3 4 7 . 2 8 7 5 8 6 8 2 . 1 8 8
2017 4 8 6 2 . 0 2 5 3 8 8 9 . 6 2 3 6 4 . 6 5 1 8 7 5 9 1 1 6 . 2 9 7
2018 5 1 0 5 . 1 2 6 2 5 4 0 8 4 . 1 0 1 3 82.884468 8 9 5 7 2 . 1 1 2
2019 5 360.38256 3 4288.30605 4 02.028692 2 1 0 0 5 0 . 7 2
2020 5 628.40169 1 4502.72135 4 22.130126 8 1 0 5 5 3 . 2 5
2021 5909.821775 4727.85742 443.2366331 1 1 0 8 0 . 9 2
2022 6205.312864 4964.25029 465.3984648 1 1 6 3 4 . 9 6

2.3. Supply Projection

4
In analysis of the supply projection both household level farmer producers and small scale
apiculture farms were considered. The project also considers both the existing supply and
proposed supply by both the project under consideration and new entrants.

The Existing supply:

• There are two small scale projects /apiculture farms with an average anual production of
350with the assumption that this will grown at 10 % every year.
• There are 400 household level honey producers with aanual production of 20kg with an
assumption that the production will increase by 10% each year.
The possible supply sources in the near future:
Having an appreciable profit in the area in this business, the project has also considered other
possible sources of honey in the future. The data from investment office indicated as there are 3
small scale apicultute farms (with capacity of supplying 400kg/year) which will start the
business after two years (in 2015). To be secured more, the project also assumes as this proposed
supply will increase its production by 10% each year.

Table 3 Supply 0f honey in Maksegnit town

Y e a r Existing supply Proposed supply Total annual
(kg/Annual) (kg/Annual) (kg/Annual)
2 0 1 3 3 , 1 0 0   - 7 6 6 , 5 0 0
2 0 1 4 3 , 2 0 5   - 8 0 4 , 8 2 5
2 0 1 5 3 , 3 1 5 4 0 0 9 9 1 , 0 6 6
2 0 1 6 3 , 4 3 1 4 2 0 1 , 0 4 0 , 6 2 0
2 0 1 7 3 , 5 5 3 4 4 1 1 , 0 9 2 , 6 5 1
2 0 1 8 3 , 6 8 0 4 6 3 . 0 5 1 , 1 4 7 , 2 8 3
2 0 1 9 4 , 8 1 4 4 8 6 . 2 0 2 5 1 , 2 0 4 , 6 4 7
2 0 2 0 4 , 9 5 5 5 1 0 . 5 1 2 6 2 5 1 , 2 6 4 , 8 8 0
2 0 2 1 4 , 1 0 3 5 3 6 . 0 3 8 2 5 6 1 , 3 2 8 , 1 2 4
5
2 0 2 2 4 , 2 5 8 5 6 2 . 8 4 0 1 6 9 1 , 3 9 4 , 5 3 0
 2.4. Demand Supply – Gap
Finally to check whether there is excess demand or not we calculate the gap. The demand –
supply gap is the difference between the quantity to be demand for and quantity to be supplied. A
positive demand - supply gap ensure a promising market for the product. Based on the above
three projection tables the gap can be analysed as follows:
Table 4 Demand-supply Gap For honey
Y e a r Annual DD of honey Annual SS of honey (kg) Annual DD-SS gap of honey ( kg )
(kg)
2 0 1 3 1 7 8 6 8 7 5 7 6 6 , 5 0 0 1 , 0 2 0 , 3 7 5
2 0 1 4 1 8 3 1 7 3 4 . 3 7 5 8 0 4 , 8 2 5 1 , 0 2 6 , 9 0 9
2 0 1 5 1 8 7 7 7 2 4 . 6 0 9 9 9 1 , 0 6 6 8 8 6 , 6 5 8
2 0 1 6 1 9 2 4 8 7 4 . 4 4 3 1 , 0 4 0 , 6 2 0 8 8 4 , 2 5 5
2 0 1 7 1 9 7 3 2 1 3 . 3 5 9 1 , 0 9 2 , 6 5 1 8 8 0 , 5 6 3
2 0 1 8 2 0 2 2 7 7 1 . 6 0 1 1 , 1 4 7 , 2 8 3 8 7 5 , 4 8 9
2 0 1 9 2 0 7 3 5 8 0 . 1 9 3 1 , 2 0 4 , 6 4 7 8 6 8 , 9 3 3
2 0 2 0 2 1 2 5 6 7 0 . 9 6 6 1 , 2 6 4 , 8 8 0 8 6 0 , 7 9 1
2 0 2 1 2 1 7 9 0 7 6 . 5 7 2 1 , 3 2 8 , 1 2 4 8 5 0 , 9 5 3
2 0 2 2 2 2 3 3 8 3 0 . 5 0 9 1 , 3 9 4 , 5 3 0 8 3 9 , 3 0 1

Results of table 5 indicates as there is attractive demand for the new investment to produce up to
one million kg per year in the beginning year and more than 10,000 thousand kg per year in the
10th year.

Table 5. Governing factors for the price of honey in Maksegnit Town

Factor 1 rank 2 rank 3 rank 4 rank rank

Qualityofhone 40(100) 0 o 160 1
y
Coloer and test 0 6 111(27.5 29(72.5) 4
of honey )
Distance 1(2.50) 35(37.50) 4(10) 0 2
frommarket

Seson of honey 0 4(10) 25(62.5) 11(27.5) 3

production 6
3. The 3.Project Area and the Project

3.1. The project area

Maksegnit, is located 42kms from Gonder in the main road to Azezo. There is a good potential
for honey production in the area. The project site specifically is only 10 km from Maksegnit.

Infrastructure:Theapiculture farm under consideration has no communication problems, and is

accessible by vehicle, can easily have telephone and postal service. There is mobile network.
Electricity and tap water service are also there hence will be installed easily.

Natural and physical condition: The farm has moderate slope and it is about 3340 meters above
see level. It is located near a forestes at bank of Dengelmountain, with read clay soil. It is
classified under Dega classification with the temperature ranges between 2 0c and 270c and the
average annual rain fall is about 900mm.
Services: The main service giving institution for the apiculture farm in case of pestcide chemical
control and technical advice is the Office of Agriculture and Rural development of the wereda. .
.

3.2. The project

General Description
The apiculture farm is to be established with an initial of 400Beehives in for service.
.

Yield and benefits

In honey production yield is affected by the flworing polunation, nictores of bees, health,
management andcolonies of worker .The project will be run by experienced and capable
manager. The average yield of 4000kg of honey per colony of beehives, as indicated in some
surveys, is taken in this study.
7

4. Organization, Management and Manpower

 4.1. Manpower
The apiculture farm will have an experienced farm manager, honeymen, purchaser and sales
men, and cleaners. The farm manager, who will be a BSc holder, handles the overall
management. The remaining staffs will be those who have enough experience in similar projects.
Apart from the staff technical advice is expected from Wereda office of the Agriculture and
Rural development and MARC to keep the project viable.
Table 6 Man Power Amount and Distribution
p o s i t i o n N o
W a t e r p r  
o v i d e r 2
f a r m m a n a g e m e n t 1
H h o n e y m a n 5
P u r c h a s e & s a l e s p e r s o n 2
C l e a n e r 6
16

4.2. organizatinal Structure

The organization of the man power is organized in such a way that the owners will
have a close relation with the employees, so as to be efficient in management and
address problem on time.

8
 Figure 1 Organizational Structure

Project Owners

Farm Manager(1)

waterprovider &herder(4)
Milk Men(5) Purchase and Sales Person(1) Cleaners(6)

5. Investment
The apiculturr farm will have its own designed house, office. The general components of
investment are as follow:

Table 7 Investment cost components

S.No. Description Unit Quantity /size Unit cost Total cost
1 Purchase of bee hive + No. 80 8,000 640,000
(transport & Insurance )
2 Purchase of hive No. 10 10,000 100,000
9
3 Buildings M2 1920 150 288,000
4 honey and transporting equpt. No. 20 2000 40,000
5 Refrigerator (4000kg) No 1 70000 70000
6 Working capital Birr - - 43467.7
 Total       1,181,468

Table 8. The price of honey by color (ETB)

Types of honey No of respondents N=40
minimum maximum mean Std. deviation
Red honey 70 110 97.75 10.975
White honey 120 150 133.50 6.222
Yellow honey 60 100 78.25 8.738
Black honey 50 100 69.25 12.483
5.1. Source of Finance
The project is financed fully by own source. The Owners are working staff of
GonderAgricultural Research Center.

Table 9. Opportunities of honey bee products marketing system

Opportunities Number of respondents n=40
1strank 2nd rank 3rd rank 4th rank 5th rank
6th rank
Increase in demand of honey 8(20) 1(2.5) 22(55) 3(7.5) 2(5) 0
4(10)
and colony

Increase in the number 24(60) 1(2.5) 4(10) 6(2.5)

7(17.5 ) 4 (10)
of unemployed youth
Increment in support
honey NGO to market of Gov,t and 1(2.5) 3(7.5) 2(5) 1(2.5) 10(25)
24(57.5)
Improvement of infrastructure 0 0 3(7.5) 20(50) 4(10) 0 13(32.5)
Improvement of extension 0 2(5) 1(2.5) 14(35) 0 5(12.5) 18(45)
and training
Increase in population 1(2.5) 5(12.5) 9(22.5) 1(2.5) 23(57.5) 0 1(2.5
size of colony 10
Increase in price of 1(2.5) 28(70) 3(7.5) 2(5) 1(2.5) 5(12.5)
honey and colony
11