Feasibility Study For Gypsum Powder Manufacturing

Business Plan for Gypsum
Powder Manufacturing Plant
Owner: AMX Manufacturing PLC
Submitted to: Development Bank of Ethiopia

Dire Dawa
June 2021
Ayshea Wereda, Siti Zone, Somali Region
Feasibility Study for Gypsum Powder Manufacturing Plant by AMX PLC Ayshea, 2021
Contents
0. EXECUTIVE SUMMARY....................................................................24
1. BACKGROUND...............................................................................25
1.1. RESOURCE POTENTIAL OF THE PROJECT AREA............................25
2. PROJECT OBJECTIVES....................................................................26
3. PRODUCT DESCRIPTION AND APPLICATION......................................26
4. THE COMPANY...............................................................................26
5. BASIC INFORMATION OF THE COMPANY...........................................27
5.1. SHORT PROFILE OF THE GENERAL MANAGER..................................27
5.2. MISSION & VISION.....................................................................28
5.3. PRODUCT LAUNCH PLAN..............................................................28
5.4. OPERATIONS PLAN......................................................................28
6. SWOT ANALYSIS..........................................................................29
6.1. STRENGTH..............................................................................29
6.2. WEAKNESS..............................................................................29
6.3. OPPORTUNITIES.......................................................................29
6.4. THREAT..................................................................................30
7. MARKET STUDY.............................................................................30
7.1. PAST SUPPLY AND PRESENT DEMAND............................................30
7.2. PROJECTED DEMAND...................................................................31
7.3. PRICING AND DISTRIBUTION.......................................................32
7.4. CAPACITY UTILIZATION & REVENUE GENERATION...........................32
Table: Revenue at Full Capacity utilization..........................................32
Table: Revenue Forecast..................................................................32
7.5. TARGET MARKET.........................................................................33
7.6. MARKETING PLAN.......................................................................33
7.7. COMPETITIVE ANALYSIS..............................................................33
8. PLANT CAPACITY AND PRODUCTION PROGRAMME..............................34
8.1. PLANT CAPACITY........................................................................34
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9. PRODUCTION PROGRAMME.............................................................34
Table: Production Programme.............................................................34
Table: Costs of Sales at full capacity operation......................................34
10. PROJECT FINANACIALS.................................................................35
Table: Revenue at Full Capacity utilization..........................................35
Table: Revenue Forecast..................................................................35
Table: Total Fixed Investment.............................................................36
Table: Depreciation...........................................................................36
Table: Repair and maintenance costs based on the standard rate.............36
Table: Operating Costs.......................................................................36
Table: Projected annual operating costs................................................38
Table: Working capital Determination...................................................38
Table: Total Investment.....................................................................38
Table: Source of Finance....................................................................38
Table: Yearly loan repayment schedule.................................................39
Table: Profit and Loss Statement.........................................................21
Table: Cash Flow Statement................................................................22
Table: Balance Sheet Statement..........................................................23
Table: NPV & IRR................................................................................0
Table: Payback period..........................................................................0
Table: Breakeven point........................................................................0
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0. EXECUTIVE SUMMARY
AMX Manufacturing PLC proposes to establish a Gypsum Powder

Manufacturing Project in Ayshea Wereda of Siti Zone, Somali Region so as to
successfully utilize the abundant gypsum resources in the area.
At full capacity operation, the Plant is capable of manufacturing 150,000

tons of Gypsum Powder per annum. The project is proposed to require 5
Hectares of Land for its Manufacturing Plant at Ayshea Wereda.
The unsatisfied present demand for the proposed product is estimated at

102,742.97 tonnes per annum. This demand gap is expected to reach at
175,957.81 tonnes by the year 2030.
Findings of our market study suggest that beyond existing unsatisfied

demands in the Country, there is also a large demand gap for the Company’s
products in other East African Countries and in the Middle East.
The total investment requirement of the project is estimated at about Birr

140,873,813.03, out of which Birr 35,203,184.77 (25%) is the owners’
equity while the remaining Birr 105,670,628.26 is expected to be financed
by the Development Bank of Ethiopia through the Project Finance procedure.
At full capacity operation the project will create more than 200 daily labor
jobs and about 100 permanent professional jobs for the local community. By
substituting externally produced similar products, the project helps the
country to put the (hard-earned) money to work within the boundaries.
Furthermore, since the product has huge potential for export market,
especially, to neighboring Countries, the project will also have direct
contribution to raise foreign exchange earnings of the Country.
The financial viability of the project has been tested by applying all relevant
measures and was found to be very satisfactory and viable, showing an
internal rate of return (IRR) of 42 % and a net present value (NPV) of ETB:
585,049,557, discounted at 10 %.
Further, results of our break-even analysis indicate that the project should at
least use 7.12% of its full capacity to avoid loss. The project will fully
recover the initial investment and working capital within ONE year plus nine
months operation. Details are annexed.
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1. BACKGROUND
Ethiopia is considered as one of the fastest growing economies in Africa. This
is apparent by fast growing and booming industries all over the country. This
has led to the increasing requirement of industrial input materials in various
ways with the development of industries in ceramic, construction material,
foundries, cement and etc..
Thus the demand for industrial minerals like Gypsum, Pumice and other
minerals is also increasing in proportion to the industrial development.
Currently the demand for such products is met through import and only few
local suppliers.
To better help in the growth of the industry, it is imperative to increase the

local production of such materials and substitute imports. This will save
foreign currency expenditure of the country and creates job opportunity for
local population.
1.1. RESOURCE POTENTIAL OF THE PROJECT AREA

Siti Zone of Ethiopian Somali Region has rich resources of gypsum and other
industrial input minerals. The Dire Dawa National Cement SCO fulfills its
gypsum requirements from the mountains of Siti Zone. However,
mechanized productions with heavy duty machineries and technologies have
not yet been practiced in the region, except for few local Cooperative
Associations which are operating in a traditional exploration practices.
Therefore, being attracted by this opportunity, AMX Manufacturing PLC is

now preparing to operate in the Gypsum Powder Manufacturing Plant in
Ayshea Wereda of Siti Zone.
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2. PROJECT OBJECTIVES
The ultimate goal of the project is to make profit by producing and selling
gypsum powder to local and foreign markets.
In addition, the project will realize the derived benefits that include creation
of employment, import substitution effect for the Economy, increasing
foreign currency earnings of the Country and contribute to the government
treasury in the form of taxations.
3. PRODUCT DESCRIPTION AND APPLICATION
In Ethiopia, gypsum is mostly used in the construction sector, in the

manufacturing of building products such as plaster, plasterboard and
cement. At present there are both small scale and large scale cement
factories which use gypsum as a raw material for the production of cement.
Gypsum has also significant application for chemical and ceramic raw
material fillers that aid in cost minimization and chemical enhancement.
These products have got wide applications in the glass, ceramic, fertilizer
and chemical industries.
4. THE COMPANY
The project site proposed to be located in Ayshea Wereda of Siti Zone. The
founders of the Company have adequate experience and technical reputation
to run the Plant with appropriate business ethics and standard.
Therefore, there is strong belief that the members can run the project with
remarkable technical and managerial base.
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5. BASIC INFORMATION OF THE COMPANY
Name of the Company: AMX Manufacturing PLC

Business Type: Manufacturing
Year of establishment: 2021 GC
Location: Ayshea Wereda, Siti Zone
The Company has been registered with the Dire Dawa Administration Trade
and Industry Office. The Company is held entirely by two young
entrepreneurs who each have 50% share of the Company, with a total paid
up capital of ETB: 9,000,000.00.
5.1. SHORT PROFILE OF THE GENERAL MANAGER
Name: Abshir Jama Omar

Address: Region/City- Dire Dawa
Telephone Number (Mob): +251-915-656-559
Mr. Abshir Jama is one of the shareholders and General Manager of the
Company. He has got more than 12 years’ professional experience working
in different managerial positions in Government Offices and Cooperative
Associations working in the Gypsum Mining and Supply Business at Ayshea
Wereda of Siti Zone, Somali Region.
Mr. Abshir has got a Diploma in Accounting from Rift Valley University
College of Dire Dawa. He had worked as a Finance Manager of Siti Zone
Administration for the first 8 years of his career. And since the last four
years, he had been working as Chairman of Berarug Mining (3 years) and
since the last one year; he has been working as a Finance Manager of Siti
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Berwako Gypsum Mining Cooperative Association at Ayshea Wereda of Siti

Zone.
During his business years, Mr. Abshir has acquired smooth business
transaction practices with different financial institutions such as: Oromia
Cooperative Bank and Commercial Bank of Ethiopia.
5.2. MISSION & VISION
 Mission Statement: Manufacture and supply Gypsum Powder.

 Company Vision: Backbone to manufacturing industry of Ethiopian
and east Africa.
 Corporate Values & Approach: Innovation, Locality, Technology,
Quality, sustainability.
5.3. PRODUCT LAUNCH PLAN
 Continue strengthening our current production of Gypsum

 Continual Research and Development and develop one additional
product range per quarter (4 per year)
 Address all product requirements within our sector in 5 years
5.4. OPERATIONS PLAN
 After Capital raise (near future):

o Excavator Machine
o Dump Trucks
o Spare parts for easily wearing parts
 After one year: Departments
1. Production,
2. Maintenance
3. Sales
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4. Marketing
5. Export
6. Logistics
7. Finance.
8. Accounting
9. Administration
10. Quality
11. Information technology
12. Research and development
13. Engineering
6. SWOT ANALYSIS
6.1. STRENGTH
 Government policy alignment

 Having adequate land for future production
 Harmonized relationship with the local community
 Huge market demand for our products locally and in the international
market,
 Adequate experience of the owners
6.2. WEAKNESS
 Lack of machineries
 Shortage of working capital
6.3. OPPORTUNITIES
 Raw Material available

 Operating in the Country’s priority sector
 Huge Export market potential
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 The industry sector in booming in the country and hence the demand
for our product rises
 Government incentive including tax exemption for purchasing
machineries
 HUGE Work force in the market to supply our expansion project
 Plenty of room to expand & grow in a reasonably short time
6.4. THREAT
 New companies entering the market may induce competition
7. MARKET STUDY
7.1. PAST SUPPLY AND PRESENT DEMAND
Market for gypsum is being driven principally by the current growing demand
of the raw material in the construction sector.
In Ethiopia, like other countries, there has been an increased demand of

cement, following the construction boom for the last decade. The
construction of big buildings: office towers, business buildings, residential
complexes, ring roads, and all kinds of roads everywhere in the country
need basically cement and of course, other products like stucco/ gesso for
interior use in buildings.
Cement factories are the major consumers of gypsum. However, there is an

increase in demand for gypsum powder, plaster board, decorative plaster,
gypsum sheets, gypsum tiles and plasters in the current construction
activity.
These markets are likely to show significant growth due to the fact that big
building walls require plaster, wall board and decorative.
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7.2. PROJECTED DEMAND
The demand for gypsum, like many other construction materials, is a

function of a number of interrelated variables. These variables that are
essential in determining the magnitude and trend of the demand for gypsum
are:
o the overall economic development level and growth trend of the

country,
o the pattern and trend of the construction industry in general and the
building construction sector in particular,
o expected technological change that affects the structure of the
construction industry,
o government policies and regulations that have impact on the future
level and trend of construction activities, and
o Size of population and its growth rate.
The following table shows the projected demand for gypsum in the Country
from 2019 to 2022. The data include demand for gypsum in the form of
inputs for Cement Industries, Wall Boards, decorative and other applications.
Table: Projected Demand for Gypsum

Year Projected Demand Existing Demand Gap
(Tonnes) Local Supply
2021 127,739.37 24,996.40 102,742.97
2022 136,684.64 27,496.04 109,188.60
2023 146,256.33 30,245.64 116,010.69
2024 156,498.30 33,270.21 123,228.09
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2025 167,457.49 36,597.23 130,860.26

2026 179,184.13 40,256.95 138,927.17
2027 191,731.95 44,282.65 147,449.30
2028 205,158.46 48,710.91 156,447.55
2029 219,525.20 53,582.00 165,943.20
2030 234,898.01 58,940.20 175,957.81
Source: Consultants’ estimation based on data from different sources.
7.3. PRICING AND DISTRIBUTION
The price of Gypsum varies according to the specification and required

application. In different parts of the Country, price of gypsum varies from
Birr 3000 to Birr 4000 per tonne. An average of Birr 2500 per tonne is taken
for the purpose of financial analysis.
7.4. CAPACITY UTILIZATION & REVENUE GENERATION
Although currently we are operating at 10-20% of our production capacity,

the following table shows our revenue estimation when operational at full
capacity.
Table: Revenue at Full Capacity utilization

Products Unit Qty Unit price Annual
(Birr) Revenue
Gypsum tons/annum 150,000.00 2,500.00 375,000,000.00
Total Revenue 150,000.00 375,000,000.00
Table: Revenue Forecast

Year 1 Year 2 Year 3
Capacity Utilization 75% 85% 100%
281,250,000.0 318,750,000.0 375,000,000.0
Revenue Forecast 0 0 0
7.5. TARGET MARKET
o Market Demographics: Ethiopia, East Africa, Middle East
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o Market Trends & Growth Patterns:

Current Ethiopia
o Future: Market will grow with manufacturing, export needed, no projects
Market Size and Potential:
o Export market: Unlimited
7.6. MARKETING PLAN
Marketing Strategies:
o Cover 70% local market in Eastern Ethiopia with our 75% capacity and
export the rest to markets in East Africa and expand to Middle east,
o Research and Development for more product range, capitalize, expand
and take good share of Export Market
Public Relations:
o partnering with private and Government Manufacturing facilitators,
industry promoters
7.7. COMPETITIVE ANALYSIS
Competitive Overview:
o Competition is low because GAP is high
Market Share Analysis:
o We stake maximum share for our major product when operating fully
Competitive Advantages:
o local raw Material, Foreign currency shortage, Innovation, expertise,
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8. PLANT CAPACITY AND PRODUCTION PROGRAMME

8.1. PLANT CAPACITY
According to the market study presented above and three years period for
attaining full capacity, the envisaged gypsum production plant will have a
production capacity of 150,000 tonnes per year working 300 days, three
shift of eight hours a day.
9. PRODUCTION PROGRAMME
The plant is assumed to start production at 75% of its capacity in the first
year, 85% in the second year, and at 100% in the third year and thereafter.
The production programme is shown in the Table below.
Table: Production Programme.
Year Year 1 Year 2 Year 3
Capacity Utilization (%) 75% 85% 100%

Production (tonnes) 112,500.00 127,500.00 150,000.00
Table: Costs of Sales at full capacity operation
No Description measurement Annual Cost (Birr)

1 Gypsum raw 1100 birr/ton * 172,500 189,750,000.00
material tons/annum
2 Packaging materials 6 million pieces/year 30,000,000.00
3 Additive minerals LS 6,000,000.00
Miscellaneous @ 11,287,500.00
5%
Total 237,037,500.00
10. PROJECT FINANACIALS
Table: Revenue at Full Capacity utilization

Products Unit Qty Unit price Annual
(Birr) Revenue
Gypsum tons/annum 150,000.00 2,500.00 375,000,000.00
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Total Revenue 150,000.00 375,000,000.00
Table: Revenue Forecast

Year 1 Year 2 Year 3
Capacity Utilization 75% 85% 100%
281,250,000.0 318,750,000.0 375,000,000.0
Revenue Forecast 0 0 0
Table: Machineries and equipment to be purchased

No Description Qty Unit Price Total Cost
1 Excavator 34 ton capacity 1 3,480,000.00 3,480,000.00
2 Jack Hammer 1 290,000.00 290,000.00
Turnkey Gypsum Powder
3 Plant 1 55,000,000.00 55,000,000.00
Spare parts & other
4 Equipment LS 4,500,000.00 4,500,000.00
Total 63,270,000.00
Shipping costs @15% 9,490,500.00
Grand Total 72,760,500.00
Table: Vehicles to be purchased

No Description Unit Price Quantity Total Cost
1 Pick up car 1 1,820,000.00 1,820,000.00
2 Dump Truck 5 2,250,000.00 11,250,000.00
Total 13,070,000.00
Shipping costs @15% 1,960,500.00
TOTAL 15,030,500.00
Table: Total Fixed Investment
No Description Total
1 Building 15,000,000.00
2 Machineries & Equipment 72,760,500.00
2 Vehicles 15,030,500.00
Total 102,791,000.00
Table: Depreciation
Depreciation Original value Annual Dep.

Description
rate (Birr) (Birr)
Machineries & Equipment 0.10 72,760,500.00 7,276,050.00
Building 0.10 15,000,000.00 1,500,000.00
Vehicles 0.10 15,030,500.00 1,503,050.00
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Total Fixed Investment 102,791,000.00 10,279,100.00
Table: Repair and maintenance costs based on the standard rate
Total Repair &maintenance

Description Percentage
investment costs
Machineries &
0.03 72,760,500.00 2,182,815.00
Equipment
Building 0.03 15,000,000.00 450,000.00
Vehicles 0.03 15,030,500.00 450,915.00
Total 102,791,000.00 3,083,730.00
Table: Operating Costs
Expenses Value, Birr

Salary Expense 4,632,593.75
Transport 3,650,000.00
machinery rent 5,760,000.00
Labor 12,000,000.00
Payroll Tax Expense-Pension 509,585.31
Car Rent Expense 1,701,932.08
Fuel & Lubricant Expense 1,627,238.14
Spare Part Expense 1,777,316.08
Repair & Maintenance 1,852,385.24
Expense
Travel Expense 1,178,599.75
Guest House Rent Expense 252,648.90
Printing & Stationary Expense 192,653.79
Miscellaneous Expense 700,524.17
Advertising Expense 136,537.50
Cleaning & Detergent 26,765.87
Expense
Terminal & Storage Charge 33,366.26
Transit Service Expense 570,807.95
Transportation Expense- 396,388.95
CARGO
Telephone Expense 138,168.65
Insurance Expense 171,616.97
Colored Panel -Storage 80,729.48
Mat.Exp
Utilities Expense 2,436,121.79
Security Service Expense 230,360.00
Wage Expense-Daily Laborers 683,648.81
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Store Rent Expense 186,535.00

Sales Commission Expense 1,126,231.25
Truck Expense -Djibouti to 1,850,290.00
DD
Interest Expense 1,180,290.48
Total Operating Costs 45,083,336.14
Table: Projected annual operating costs
Costs (birr)
Description
year1 year2 year3 year4
operating costs 33,812,502.11 38,320,835.72 45,083,336.14 47,337,502.95
Table: Working capital Determination
Required
Description Days of coverage working capital
Costs of sales 2 months 29,629,687.50
Operating expenses 3 months 8,453,125.53
Total required working capital 38,082,813.03
Table: Total Investment
Total costs
Description
(birr)
72,760,500.00
Machineries & Equipment
Building 15,000,000.00
Vehicles 15,030,500.00
Subtotal (Fixed 102,791,000.0
Investment) 0
Working capital 38,082,813.03
140,873,813.0
Total Investment Capital
3
Table: Source of Finance
Description Total Costs Owners’ equity Financing required

Amount % Amount %
Machineries &
72,760,500.00 3,638,025.00 5% 69,122,475.00 95%
Equipment
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Building 15,000,000.00 1,500,000.00 10% 13,500,000.00 90%

Vehicles 15,030,500.00 1,503,050.00 10% 13,527,450.00 90%
Subtotal (Fixed
102,791,000.00 6,641,075.00 6% 96,149,925.00 94%
Investment)
Working capital 38,082,813.03 28,562,109.77 75% 9,520,703.26 25%
140,873,813.0 35,203,184.7 105,670,628.2
Grand Total 25% 75%
3 7 6
Table: Yearly loan repayment schedule
Loan
Interest Outstanding
Repaymen
(11.5%) Balance
Year t
105,670,628
1 10,567,063 12,152,122 95,103,565
2 10,567,063 10,936,910 84,536,503
3 10,567,063 9,721,698 73,969,440
4 10,567,063 8,506,486 63,402,377
5 10,567,063 7,291,273 52,835,314
6 10,567,063 6,076,061 42,268,251
7 10,567,063 4,860,849 31,701,188
8 10,567,063 3,645,637 21,134,126
9 10,567,063 2,430,424 10,567,063
10 10,567,063 1,215,212 0
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Business Plan for Gypsum Powder
Manufacturing Plant
Table: Profit and Loss Statement

Description Project Years
1 2 3 4 5 6 7 8 9 10
281,250,00 375,000,00 412,500,00 549,037,50 603,941,250.0 664,335,37
318,750,000 453,750,000 499,125,000 730,768,913
Sales 0 0 0 0 0 5
Direct cost of 177,778,12 237,037,50 248,889,37 288,120,56 302,526,590.8 317,652,92
201,481,875 261,333,844 274,400,536 333,535,566
sales 5 0 5 3 7 0
103,471,87 137,962,50 163,610,62 260,916,93 301,414,659.1 346,682,45
Gross Profit 5
117,268,125
0 5
192,416,156 224,724,464
7 3 5
397,233,346
Gross Margin(%) 36.79% 36.79% 36.79% 39.66% 42.41%

Operational
33,812,502 38,320,836 45,083,336 47,337,503 49,704,378 52,189,597 54,799,077 57,539,030.69 60,415,982 63,436,781
expense
Profit before tax 116,273,12 206,117,86 243,875,628.4 286,266,47
69,659,373 78,947,289 92,879,164 142,711,778 172,534,867 333,796,565
and interest 2 0 3 2
Depreciation 10,279,100 10,279,100 10,279,100 10,279,100 10,279,100 10,279,100 10,279,100 10,279,100.00 10,279,100 10,279,100
EBITDA (Earning
103,158,26 126,552,22 216,396,96 254,154,728.4 296,545,57
b4tax, interest 79,938,473 89,226,389
4 2
152,990,878 182,813,967
0 3 2
344,075,665
and depreciation)
Interest expense 12,152,122 10,936,910 9,721,698 8,506,486 7,291,273 6,076,061 4,860,849 3,645,636.67 2,430,424 1,215,212
Profit tax (35%) 57,835,258 70,014,630 83,655,172.84 98,917,292 115,978,149
107,766,63 130,027,17 155,359,606.7 183,703,54
57,507,251 68,010,379 83,157,466 135,420,505 108,623,548 215,387,991
Net profit 6 0 0 3
net profit margin
ratio 20.45% 21.34% 22.18% 26.13% 29.84% 22 24
Table: Cash Flow Statement

Production Year
Cash in flow 0 1 2 3 4 5 6 7.00 8 9 10
Owners' equity 35,203,185
Existing Bank Loan 0

Additional Bank
105,670,628
Loan
Net Profit 0 57,507,251 68,010,379 83,157,466 107,766,636 135,420,505 108,623,548 130,027,169.54 155,359,607 183,703,543 215,387,991
Depreciation 10,279,100 10,279,100 10,279,100 10,279,100 10,279,100 10,279,100 10,279,100.00 10,279,100 10,279,100 10,279,100
Total Cash in flow 140,873,813 67,786,351 78,289,479 93,436,566 118,045,736 145,699,605 118,902,648 140,306,269.54 165,638,707 193,982,643 225,667,091
Cash out flow

Replacement 0 0 0 0 0 0 0.00 0 0 0
loan repayment 10,567,063 10,567,063 10,567,063 10,567,063 10,567,063 10,567,063 10,567,062.83 10,567,063 10,567,063 10,567,063
Capital
102,791,000 - - - - - - - - - -
Expenditure
Working capital 38,082,813 - - - - - - - - - -
0
Pre-operating
expenses and
interest
Total Cash out
140,873,813 10,567,063 10,567,063 10,567,063 10,567,063 10,567,063 10,567,063 10,567,062.83 10,567,063 10,567,063 10,567,063
flow
Net Cash Flow 0 57,219,288 67,722,416 82,869,503 107,478,674 135,132,542 108,335,585 129,739,206.71 155,071,644 183,415,580 215,100,028
Cash balance 95,302,101 163,024,517 245,894,021 353,372,694 488,505,236 596,840,821 726,580,028.16 881,651,672 1,065,067,252 1,280,167,281
Table: Balance Sheet Statement

Description Investment Production Year
ASSETS 0 1 2 3 4 5 6 7.00 8 9 10
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Current Assets
163,024,51 245,894,02
Cash 38,082,813 95,302,101 353,372,694 488,505,236 596,840,821 726,580,028.16 881,651,672 1,065,067,252 1,280,167,281
7 1
Other Current
0 0 0 0 0 0 0.00 0 0 0
Assets
Total Current 163,024,51 245,894,02
38,082,813 95,302,101 353,372,694 488,505,236 596,840,821 726,580,028.16 881,651,672 1,065,067,252 1,280,167,281
Assets 7 1
Fixed Asset
Machineries &
72,760,500.00 65,484,450 58,208,400 50,932,350 43,656,300 36,380,250 29,104,200 21,828,150.00 14,552,100 7,276,050
Equipment 0
Building 15,000,000.00 13,500,000 12,000,000 10,500,000 9,000,000 7,500,000 6,000,000 4,500,000.00 3,000,000 1,500,000 0
Vehicles 15,030,500.00 13,527,450 12,024,400 10,521,350 9,018,300 7,515,250 6,012,200 4,509,150.00 3,006,100 1,503,050 0
Total Fixed Asset 102,791,000 92,511,900 82,232,800 71,953,700 61,674,600 51,395,500 41,116,400 30,837,300.00 20,558,200 10,279,100 0
Pre-operating
Costs including 0 0 0 0 0 0 0.00 0 0 0
interest
245,257,31 317,847,72
Total Asset 140,873,813 187,814,001 415,047,294 539,900,736 637,957,221 757,417,328.16 902,209,872 1,075,346,352 1,280,167,281
7 1
LIABILITIES
Short term
- - - - - - - - - - -
liability
Long term liability
105,670,628 95,103,565 84,536,503 73,969,440 63,402,377 52,835,314 42,268,251 31,701,188.48 21,134,126 10,567,063 0
(Bank Loan)
Sub Total 105,670,628 95,103,565 84,536,503 73,969,440 63,402,377 52,835,314 42,268,251 31,701,188.48 21,134,126 10,567,063 0
CAPITAL
Owner's Equity 35,203,185 35,203,185 35,203,185 35,203,185 35,203,185 35,203,185 35,203,185 35,203,184.77 35,203,185 35,203,185 35,203,185
Retained Earnings 0 57,507,251 125,517,630 208,675,096 316,441,732 451,862,237 560,485,785 690,512,954.91 845,872,562 1,029,576,105 1,244,964,096
Earnings 57,507,251 68,010,379 83,157,466 107,766,636 135,420,505 108,623,548 130,027,169.54 155,359,607 183,703,543 215,387,991
160,720,81 243,878,28
Sub Total 35,203,185 92,710,435 351,644,917 487,065,422 595,688,970 725,716,139.68 881,075,746 1,064,779,290 1,280,167,281
5 1
Total Liability & 245,257,31 317,847,72
140,873,813 187,814,001 415,047,294 539,900,736 637,957,221 757,417,328.16 902,209,872 1,075,346,352 1,280,167,281
Capital 7 1
160,720,81 243,878,28
35,203,185 92,710,435 351,644,917 487,065,422 595,688,970 725,716,139.68 881,075,746 1,064,779,290 1,280,167,281
Net Worth 5 1
23 | P a g e
Business Plan for Gypsum
Powder Manufacturing Plant
Table: NPV & IRR

Yea
r Net Cash Flow Discount Factor NPV IRR
0 -140,873,813 1.00 -140,873,813 0.44
1 57,219,288 0.92 52,470,087
2 67,722,416 0.84 57,022,275
3 82,869,503 0.77 63,975,256
4 107,478,674 0.71 76,094,901
5 135,132,542 0.65 87,836,152
6 108,335,585 0.60 64,568,009
7 129,739,207 0.55 70,967,346
8 155,071,644 0.50 77,845,965
9 183,415,580 0.46 84,371,167
10 215,100,028 0.42 90,772,212
0 585,049,557
Table: Payback period

Item Year
0 1 2 3
Investment cost 140,873,813
Net profit 57,507,251 68,010,379 83,157,466
Interest 12,152,122 10,936,910 9,721,698
Depreciation 10,279,100 10,279,100 10,279,100
Profit 79,938,473 89,226,389 103,158,264
Table: Breakeven point

Items
Value (Birr) Values at full capacit
operation
Fixed Cost 102,791,000

variable costs 311,038,221.85
Sales 453,750,000.00
Ratio of var cost to 68.55%

sales
contribution ratio 31.45%
Break-even level of 32,329,446.59
sales
total sales 7.12%
BE Point of 5.34%
production capacity
(1st year)
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Business Plan for Gypsum

Powder Manufacturing Plant

Owner: AMX Manufacturing PLC

Submitted to: Development Bank of Ethiopia

AMX Manufacturing PLC proposes to establish a Gypsum Powder

At full capacity operation, the Plant is capable of manufacturing 150,000

The unsatisfied present demand for the proposed product is estimated at

Findings of our market study suggest that beyond existing unsatisfied

The total investment requirement of the project is estimated at about Birr

To better help in the growth of the industry, it is imperative to increase the

1.1. RESOURCE POTENTIAL OF THE PROJECT AREA

Therefore, being attracted by this opportunity, AMX Manufacturing PLC is

3. PRODUCT DESCRIPTION AND APPLICATION

In Ethiopia, gypsum is mostly used in the construction sector, in the

5. BASIC INFORMATION OF THE COMPANY

Name of the Company: AMX Manufacturing PLC

5.1. SHORT PROFILE OF THE GENERAL MANAGER

Name: Abshir Jama Omar

Berwako Gypsum Mining Cooperative Association at Ayshea Wereda of Siti

5.2. MISSION & VISION

 Mission Statement: Manufacture and supply Gypsum Powder.

5.3. PRODUCT LAUNCH PLAN

 Continue strengthening our current production of Gypsum

5.4. OPERATIONS PLAN

 After Capital raise (near future):

 Government policy alignment

 Raw Material available

In Ethiopia, like other countries, there has been an increased demand of

Cement factories are the major consumers of gypsum. However, there is an

7.2. PROJECTED DEMAND

The demand for gypsum, like many other construction materials, is a

o the overall economic development level and growth trend of the

Table: Projected Demand for Gypsum

2025 167,457.49 36,597.23 130,860.26

7.3. PRICING AND DISTRIBUTION

The price of Gypsum varies according to the specification and required

7.4. CAPACITY UTILIZATION & REVENUE GENERATION

Although currently we are operating at 10-20% of our production capacity,

Table: Revenue at Full Capacity utilization

Table: Revenue Forecast

7.5. TARGET MARKET

o Market Demographics: Ethiopia, East Africa, Middle East

o Market Trends & Growth Patterns:

7.6. MARKETING PLAN

7.7. COMPETITIVE ANALYSIS

o Competition is low because GAP is high

Market Share Analysis:

o local raw Material, Foreign currency shortage, Innovation, expertise,

8. PLANT CAPACITY AND PRODUCTION PROGRAMME

Table: Production Programme.

Year Year 1 Year 2 Year 3

Capacity Utilization (%) 75% 85% 100%

Table: Costs of Sales at full capacity operation

No Description measurement Annual Cost (Birr)

10. PROJECT FINANACIALS

Table: Revenue at Full Capacity utilization

Total Revenue 150,000.00 375,000,000.00