ADDIS ABABA INSTITUTE OF

TECHNOLOGY
SCHOOL OF CHEMICAL AND BIO ENGINEERING
Business Management and Entrepreneurship
Business Plan: Production of Pineapple and
Strawberry Jam
Company Name: Julia’s Jam and Jellies PLC.

Prepared By
Name ID
Hibreselam Dereje ATR/8198/11

Israel Dereje ATR/2750/11

Yoseph Ephrem ATR/1038/11

Submitted to: Mr. Bisrat K.

Submission Date: February 8, 2023

Julia’s Jam and Jellies PLC

Company Address: Physical – Koye Fecha, Addis Ababa.

Email – israeldereje43@gmail.com

Telephone – 0942747605

Owners Address

Name Phone Number

Hibreselam Dereje 0942747605

Israel Dereje 0953404787

Yoseph Ephrem 0913103110

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Acknowledgment

We would want to thank the Almighty in the beginning for providing us the confidence and
fortitude to finish this job. In addition, we want to express our gratitude to our business
instructor Bisrat Kasahun for inspiring us to pursue this venture, opening doors to new
opportunities, and for his help and follow-up. Without the assistance of our lab workers, this
project would not have been accomplished. We also thank Mr. Hintsa for assisting in the
advancement and successful completion of all practical tasks.

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Executive Summary

The company is called Julia’s Jams and Jellies and is a Private Limited Company, which is
owned by the principal members: Bereket Tadesse, Dereje Dejene, Hibreselam Dereje, Israel
Dereje and Yoseph Ephrem.

The company currently plans to produce strawberry and pineapple jams. Its main consumers
are children and young adults, and its secondary customers are hotels, resorts, and cafes that
use jams and jellies for serving a light and sweet breakfast.

The project plans to seek a loan, from a bank, of 46,100,672.4 ETB for the total capital
investment, with an interest of 18%. The interest from loan will be payed off from the
revenue and the loan will be payed off from the profits gained. Due to the current high
inflation rate of 28.57% in 2023, according to a report from statista.com, it is certainly better
to get a loan that has a lower interest rate than the inflation rate.

The project envisages production of 1,164.24 Quintal of strawberry and pineapple jam. The
project has an estimated amount of fixed capital investment which is 23,090,196 ETB and
annual working cost which is 23,010,476.40 ETB. Based on the cash flow statement, ROI of
the project is 31.83%. The net present value (NPV) is 34,701,086.47 ETB. The profitability
index (PI) is 2.182. The plant is expected to create employment opportunities for about 74
people. Furthermore, the company needs 2.9 years in order payback all its total capital
investment. The project uses the local raw materials as the main ingredients of the products.
Therefore, it creates forward and backward linkages to the different sectors of the economy.

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Table of Content

Acknowledgment ii

Executive Summary iii

Table of Content iv

List of Figures ix

List of Tables x

Chapter One 1

1. General Company Description 1

1.1. Description 1

1.2. Mission Statement 1

1.3. Product 1

1.4. Principal Members 1

1.5. Goals and Missions 2

Chapter Two 3

2. Production and Product Description 3

2.1. Company Products 3

2.1.1. Pineapple jam 3

2.1.2. Strawberry 3

2.2. Process condition and process 4

2.2.1. Pre-treatment 4

2.2.2. Size-reduction 4

2.2.3. Clarification 4

2.2.4. Mixing 5

2.2.5. Filling and Sealing 6

2.2.6. Cooling 6
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 2.2.7. Wrapping 6

2.3. Product Characterization 6

2.3.1. Moisture content 6

2.3.2. PH value 7

2.3.3. Total soluble solid 7

2.4. Delivery System 7

Chapter Three 8

3. Plant Layout, Location and Production Planning 8

3.1. Plant Layout 8

3.1.1. Plant footprint size 8

3.2. Plant location 9

3.3. Production plan 9

3.4. Inventory 9

3.4.1. Raw material inventory 10

3.4.2. In process inventory 10

3.4.3. Finished product inventory 10

3.5. Raw Material Suppliers 11

Chapter Four 12

4. MARKET RESEARCH 12

4.1. Industry 12

4.2. Core Market 14

4.3. Raw Materials 15

4.3.1. Pineapples 15

Strawberries 15

4.3.2. Lemon 16

4.3.3. Sugar 16
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 4.4. Market Size 16

4.4.1. World Market Size 16

4.4.2. African Market 16

4.5. Current Demand 17

4.5.1. Customers 17

4.5.2. Competitors 17

4.6. Competitive Advantage 18

4.7. Niche and Marketing Strategy 18

4.7.1. Niche 18

4.7.2. Marketing Strategy and Promotion 18

4.8. Pricing and Distribution 19

Chapter Five 20

5. Jam production Legal requirement 20

5.1. Food safety and Sanitation 20

5.2. Licensing and permits 20

5.3. Product labeling requirements 21

5.4. Food additive requirements 21

5.5. Packaging requirements 21

5.6. Intellectual Property 21

5.7. Tax obligations 21

5.8. Environmental regulations 21

Chapter six 22

6. Management Structure 22

Chapter Seven 23

7. Financial Analysis 23

7.1. Equipment 23
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 7.2. Raw Materials and Utilities 24

7.2.1. Availability and Source of Raw Materials 24

7.2.2. Annual Requirement and Cost of Raw Materials 24

7.2.3. Utilities Requirement at Full Capacity 24

7.3. Human Resource and Training Requirement 25

7.3.1. Human Resource 25

7.3.2. Training Requirement 26

7.4. Assumption 26

7.4.1. Construction and Finance 27

7.4.2. Depreciation 27

7.5. Total Capital Investment 27

7.6. Profitability 28

7.6.1. Annual Net Return 28

7.6.2. Net Profit 28

7.6.3. Net Return 29

7.6.4. Return on Investment 29

7.6.5. Cash Flow 29

7.6.6. Net Present Value 29

7.6.7. Profitability Index 29

7.6.8. Breakeven Analysis 30

7.6.9. Payback Period 30

Reference 31

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List of Figures

Figure 1: Process Flow Sheet 4

Figure 2: Plant Layout Diagram 8

Figure 3: Work shed diagram 8

Figure 4: Production of the various LMP sectors in tons and index growth of production,
2006/2010 13

Figure 5: The Fruits and Vegetables Value Chain 14

Figure 6: Chas Flow for ten years 29

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List of Tables

Table 1: Composition of jam product 5

Table 2: Raw Material Suppliers 11

Table 3: Equipment and Their Cost 23

Table 4: Annual requirement and price of raw materials 24

Table 5: Utilities required and their cost 25

Table 6: Human resource 25

Table 7: Training requirement 26

Table 8: Construction and finance 27

Table 9: Depreciation 27

Table 10: Fixed, working and total capital investment 27

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Chapter One

1. General Company Description

1.1. Description

Our company, Julia’s Jams and Jellies, plans to produce a variety of jams and jellies like
Mixed Fruit Jelly, Strawberry Jam and Jelly, Mango Jam and Jelly, Pineapple Jelly, and
Orange Jam and Jelly that are full of vitamins.

1.2. Mission Statement

The mission of Julia's Jam and Jellies is to provide a variety of high quality jams at
competitive prices for customers who seek a sweet and convenient experience anywhere,
anytime.

We intend to make enough profit to generate a fair return on our investment and to finance
continued growth and development in quality products. We also intend to maintain a friendly,
fair, and creative work environment, which will respect diversity, new ideas, and hard work.

1.3. Product

Our company plans to produce a variety of jams and jellies like Mixed Fruit Jelly, Strawberry
Jam and Jelly, Mango Jam and Jelly, Pineapple Jelly, and Orange Jam and Jelly that are full
of vitamins; and also caffeinated jams and jellies. We plan to seize the opportunity of the
current market gap, which happened to come about due to the import ban policy published
earlier in the year. Our products will be produced with a standard of high quality, variety and
taste and also with different sizes of packaging to fulfill our customer's wide range of need.

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 1.4. Principal Members

The principal members of the company are: Bereket Tadesse, Dereje Dejene, Hibreselam
Dereje, Israel Dereje, and Yoseph Ephrem; and the roles played are: Quality Assurance
Manager, CEO, R&D Head, Sales and Marketing Manager, and Production Manager
respectively.

1.5. Goals and Missions

 The project uses the local raw materials as the main ingredients of the products. 
 The plant is expected to create employment opportunities for about 74 persons.
 The plant produces domestically so it will reduce foreign import of such products.
 We will all work as a team in an effort towards achieving common goals and
objectives.
 Our success can be measured in our ability to get the job right first time, which will
ensure that our products are supplied to achieve consistent customer satisfaction. It is
the company’s stated aim to become and remain market leader with respect to the
quality and value of its products
 To be the best jam and jelly producer in Ethiopia.
 To develop as a brand that is loved, trusted and always popular by and among
customers and consumers.
 To export our products to neighboring nations and across Africa.

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Chapter Two

2. Production and Product Description

Due to its low cost and strong organoleptic characteristics, jam is a widely consumed food
item. Although typically not as hard as jelly, it has a tendency to comprehend shape. Jam has
a lengthy shelf life, allowing for year-round availability. Fruit pulp, acid, pectin, and sugar
must all be used in the right proportions while making jam to get the desired result. The
quality of the production process and the raw materials are the determinants of finished
product quality. It is believed that citric acid is required to build the network between pectin
and sugar that is required for jam to set. Sugar acts as a dehydrating substance that
strengthens bonds between molecules. Pectin is a pure polysaccharide that is often extracted
from citrus fruit peel. Pectin is a thickening agent since it alters the finished product's texture
and flow characteristics. (M.S., F., M.J., & M.H., 2021)

2.1. Company Products

There are two types of Jam our company will be producing which are pineapple and
strawberry jam.

2.1.1. Pineapple jam

Pineapple jam is a type of fruit preserve traditionally made with sugar pectin and pineapple.
The taste of pineapple jam is distinctive. It is a common component in many dishes, and the
sweet and sour flavor it gives may truly liven up a meal. Additionally, pineapple jam can be
put on toast, crackers, or in sandwiches. vitamin C, calcium, and other nutrients in pineapple
jam are also abundant.

2.1.2. Strawberry

Strawberries, sugar, and pectin are combined to make strawberry jam, a delicious spread.
Strawberry jam is made by mashing the fruit and combining it with sugar and pectin to make
a thick, spreadable mixture. It is frequently used as a filling in baked products including
cakes and pastries as well as a topping for toast, biscuits, and crackers. It's also a widely used
ingredient in cooking. Strawberry jam is vivid red in color and has a pleasant, fruity taste.

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Can provide vitamins, minerals and anti-oxidants that are beneficial for health, also has a
long shelf life due to high sugar and acid content which helps to preserve it.

2.2. Process condition and process

Figure 1: Process Flow Sheet

Pineapple and Strawberry jam production with the key processes being preparation of the raw
materials, size reduction, clarification, mixing, filling and sealing, cooling and Wrapping.

2.2.1. Pre-treatment

This stage of the process involves cleaning the Pineapple and strawberries, peeling of the
pineapple, plucking of the strawberries and chopping them to smaller sizes.

2.2.2. Size-reduction

This stage is the process of blending the Pineapple and Strawberries until a soft pulpy
consistency is found. This is where pulp, one of the main components of the jam is obtained.
It is utilized to obtain the desired flavor, texture, and consistency in jam production. It aids in
breaking up large fruit pieces, distributing the fruit evenly, and adding air to the mixture,
which can change the texture of the finished result. Additionally, it enables the equally
blending in of other ingredients like sugar and pectin, resulting in a consistent and reliable
final product.

2.2.3. Clarification

Here removal of any impurities like seeds and stems or solids from the Pineapple and
Strawberry pulp mixture using a strainer takes place. The final product's texture would be less
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smooth due to these contaminants. Additionally, by purifying the fruit juice through this
procedure, jam is made to be clearer and more aesthetically pleasing. Additionally, by
eliminating any bitter or astringent components from the fruit, straining can enhance the
flavor of the jam.

2.2.4. Mixing

This is the stage where the main process, mixing of the pulp with sugar and pectin happens.
In this process a natural pectin solution is used that will eliminate the need for purchase of
pectin. The pectin solution is obtained from lemon fruit by first squeezing the juice out of the
lemon and pith of the lemon is then soaked in the lemon juice for about an hour after that
water is added and soaked again for another hour then the solution is boiled at 90 ℃ until it
simmers. This alternative method of obtaining pectin also has the additional advantage of
having citric acid which is needed to bond the sugar and pectin. At this point all the materials
needed for mixing (fruit pulp, sugar and natural pectin solution) are obtained the natural next
step is to mix the ingredients in a given composition at high temperature which is normally
anywhere between 90℃ and 110℃ . The composition is determined by the fruit type,
sweetener and flavor we want.

The composition used in this given jams is given below

Table 1: Composition of jam product

x Composition (Wt%)

Fruit pulp 36.33

sugar 41.63

Natural pectin 22.04

solution

The mixing will take place at high temperature with the composition given above until it
reaches the desired thickness it’ll need stirring constantly to prevent burning.

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Skimming is also an important part of this stage. It’s removal of any foam that forms on the
surface of the boiling mixture using a skimmer. This procedure guarantees a crystal-clear,
seamless, and superior final product. By removing any undesired ingredients that can have a
detrimental effect on the finished product, it can also assist to shorten the cooking time and
improve the flavor and texture of the jam.

2.2.5. Filling and Sealing

Filling and sealing are essential processes in the jam-making process because they make sure
the jam is securely kept and shielded from air and germs, which can lead to deterioration and
have an impact on the product's flavor, texture, and safety. Transferring hot jam into
containers and filling them to the proper level, providing headspace for expansion during
storage, constitutes the filling process. The jam will stay fresh and flavorful for a long time
thanks to the sealing procedure, which entails closing the containers with a lid to form an
airtight seal that prevents contamination and oxidation.

2.2.6. Cooling

When making jam, cooling means quickly bringing the hot fruit mixture's temperature down
to minimize the risk of spoiling and boost preservation.

In order to set the pectin, lower the risk of bacterial development, enhance the finished
product's texture, flavor, and overall quality, cooling is crucial while making jam.

2.2.7. Wrapping

The packing of the product to maintain its quality and freshness is referred to as "wrapping"
jams. The typical container for jam is a glass jar with a tight-fitting cover to keep out air and
light, which can lead to deterioration. Important details like the manufacturer, the contents,
and the expiration date can also be included on the jar labels. The packaging is often made to
both preserve the goods and give the consumer information.

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 2.3. Product Characterization

2.3.1. Moisture content

A number of methods, including oven drying, microwave oven drying, and Karl Fischer
titration, can be used to determine the amount of moisture in jam. In the process of oven
drying, a sample of the jam is weighed, put in the oven, and dried until its weight stays
constant. The moisture content is then determined by comparing the weight of the sample
before and after drying. Similar to oven drying, microwave oven drying is quicker and more
effective. Karl Fischer titration is a chemical technique that measures the amount of reagent
needed to react with the water in a sample after titrating it with a reagent, usually iodine.

The moisture content of the Pineapple and Strawberry jam product was measured using oven
drying and it was 22.63% and 22.24% respectively.

2.3.2. PH value

Jams are acidic because their pH values can commonly range from 3.3 to 4.5. When
influencing the stability, texture, and preservation of jams, the pH level is a crucial
consideration. A pH meter or litmus paper can be used to determine the pH level of jams.

The pineapple jam and strawberry jam both had PH values of 3.56 and 3.75, respectively.

2.3.3. Total soluble solid

Jams and other fruit spreads' sugar content is calculated using the Total Soluble Solids (TSS)
measurement. It measures the amount of sugar present in a sample and is measured in degrees
Brix (°Bx). The amount of light that is bent, or refracted, by the sample is measured using a
refract meter to determine the TSS. For the purpose of adhering to food standards as well as
assessing the quality and stability of jams, the TSS value is crucial.

Since the measurement apparatus couldn't measure above 45%, the TSS of the pineapple and
strawberry jam was determined to be higher than 45%, jams are often thought to have a TSS
of 60 to 65%.

2.4. Delivery System

The 450 gram glass jam containers used to manufacture and sell jam goods will be utilized by
Julia's Jam & Jelly to transport its product. They are made of glass and have a 450 gram
7
capacity, which is a typical size for food goods sold in consumer packaging. To keep the
product fresh, the containers can be closed with a lid. They are also convenient for storage
and transportation.

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Chapter Three

3. Plant Layout, Location and Production Planning

3.1. Plant Layout

Figure 2: Plant Layout Diagram

Figure 3: Work shed diagram

3.1.1. Plant footprint size

The total area required by the plant is estimated to be 2000 m2

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 3.2. Plant location

The availability of raw ingredients, manpower, transportation, and market demand are some
of the variables that affect where a jam-making facility should be located. Jam can be
manufactured on a small scale for local consumption or on a big scale for national and
international distribution in a variety of settings, including rural and urban locations.

We have chosen Koye Feche to be our plant location site for Julia’s Jams and Jellies.

The following are reasons for selecting Koye Feche as plant location:

 It is nearest place we can find our potential market location which is Addis Ababa
 There is a lot of land available for developing and expanding infrastructure on.
 Land price is cheaper compared to mid-city.
 Sufficient service and transportation infrastructure to link our plant's location with
clients in the Addis Ababa and Oromia region.
 Services including water supply, lodging options, and adequate power are all
available.
 Existence of sufficient work force

3.3. Production plan

Market research shows that there is now a sizable demand-supply gap for jams. A factory
with a daily capacity of 1,232 Jars are envisioned in this study. 280 days a year will see the
plant in use. Sundays and federal holidays that amount to 65 days a year, are recognized as
plant holidays. Additional 20 days are allocated for maintenance and repair work as well as
for a contingency of unplanned job stoppage. If the factory produces for the aforementioned
number of working days, it will produce roughly 1,164.24 quintal yearly.

3.4. Inventory

Inventory control is the process of controlling the flow of raw materials, work-in-progress,
and finished goods to the facility in order to maintain an effective and economical production
process. It includes keeping track of and keeping an eye on inventory levels, establishing
stock reorder points, and choosing when to produce more products in light of demand

10
projections and present inventory levels. Inventory control aims to minimize waste, lower the
possibility of stockouts, and maximize resource efficiency.

Julia’s Jams and Jellies follows three inventory control methods

3.4.1. Raw material inventory

The stock of unfinished and unprocessed goods that are utilized as inputs in the creation of
finished goods is referred to as raw material inventory. Raw materials can be in the form of
commodities, components, or substances used in the manufacturing process. When there is
need to produce jams, raw materials will be stocked out from the warehouse.

3.4.2. In process inventory

Unfinished goods that are being processed inside a production facility but have not yet been
finished or sold are referred to as in-process inventory. These are the raw materials, works-in-
progress products, and partially finished goods that are converted into final goods through
several production steps.

3.4.3. Finished product inventory

Finished product inventory describes finished items that are offered for sale or distribution. It
reflects the stock of items that are prepared to be sold to customers or delivered to distributors
and is the result of the production process.

The amount of finished goods in stock can reveal a plant's degree of productivity and
efficiency as well as its capacity to satisfy consumer demand.

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 3.5. Raw Material Suppliers

The name and address of main suppliers (potential suppliers) of raw materials for the
production of the cattle feeds are the following:

Table 2: Raw Material Suppliers

Raw Material Supplier Telephone No.

Strawberry Enyi Fresh Strawberry Farm +0111-55-91-67

Strawberry Nuredin Hassen Strawberry +251-11-419-7721

Farm

Pineapple Jittu Horticulture PLC. +251-11-372-7791

Pineapple Ethiopian Fruit & Vegetable +251-11-416-3665

Marketing S.C. (ETFRUIT)

Lemon BIS Vegetables & Fruits +251-911-20-43-

Agro industry 59

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Chapter Four

4. MARKET RESEARCH

4.1. Industry

Our company will produce jams and jellies and so joins the food industry by default.

The food-processing sector is by far the largest manufacturing industry in Ethiopia,

covering 39% of the gross value of production (GVP) in 2009/2010 of large and medium
size manufacturing industry.

The gross value of production equals 16,220 million Birr – corresponding to about 900
million USD – whereas small-scale manufacturers together show a GVP of 308 million
Birr in food processing, excluding grain milling. The grain millers alone account for a
GVP of 1,113 million Birr.

The CSA differentiates between, on one hand, large and medium-scale processors
(LMP), and on the other, small-scale enterprises. This leads to separate ways of reporting
the status in the sector. The agency delivered a survey on large and medium-scale
manufacturers, from which most of the information reported below was retrieved. The
data for small-scale manufacturers cover the time period 2007/2008 (which represents
the latest data available), whereas the LMP data refer to 2009/2010.

Among the LMP, which total 2,172 manufacturers, 560 establishments are in the food
sector and employ more than 60,000 people, which is about 45% of all the jobs in the
food-processing industry (including small scale). Small-scale food processing, excluding
grain millers, covers 1,541 food processors providing 4,748 jobs. The grain millers
include 23,047 manufacturers, and 70,023 people work in this industry.

The grain milling and the bakery industries are by far the largest in numbers,
representing two-thirds of the factories. With respect to GVP, sugar is the largest
industry. Together with grain milling and bakery, it covers 47% of the total of 16,220
million Birr in the food-processing sector of LMP.

Lemonade, beer, and mineral water dominate the volume in the processing of food and
beverages. However, if the focus is on food, then wheat flour, sugar, and biscuits are the

13
main categories. The production of biscuits in 2010 was ten times greater than in 2009.
None of the products with a significant contribution to production volume shows a stable
trend, which implies a very unstable market.

The growth of GVP is steep, relative to the growth in quantity, which is a consequence
of the inflation rate. The increase in quantity was 50% over 5 years, but is nonetheless
very small if considered as an absolute value.

Figure 4: Production of the various LMP sectors in tons and index growth of production,
2006/2010
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 4.2. Core Market

The discussion in the core market looks at each step along the value chain from producer to
end consumer. The below figure provides a simple representation of that productive chain,
and the following subsections detail how each step functions and how it is constrained.

Figure 5: The Fruits and Vegetables Value Chain

Value-addition opportunities are more considerable for fruits than vegetables. Fruits have
much more value addition potential, with juice pulping, juice processing and jam processing
already active in the country.

In general, fruit processing can be broken down into two-stages: 1.) fruit pulp processing
which separates the fruit from the skin and seed, processes it to pulp to be sold in bulk
quantities for further processing; and 2.) finished processed goods - turn pulp and concentrate
into jams and juices.

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 4.3. Raw Materials

4.3.1. Pineapples

In terms of varieties, Ethiopian pineapples are endowed with both Smooth Cayenne and Red
Spanish. Smooth Cayenne grows in Teso in the Sidama zone. It is characterized by relatively
soft, spiny leaves and yellowish smooth innards, with a very welcoming odor. Its shape is a
rounded square.

Red Spanish, on the other hand, is characterized by a beautiful shape and slender body with
reddish purplish spiky hard leaves. Ethiopian farmers are producing the currently more
popular Smooth Cayenne as it has considerably higher market potential than the Red Spanish,
especially in Europe.

The prices of pineapples in Ethiopia per tonne for the years 2016, 2017 and 2018 were US$
1,000.00, US$ 1,000.00 and US$ 1,000.00 respectively.

The whole price, as of 2023, in Ethiopian Birr is ETB 41.95 per kg. The average price for a
tonne is US$ 1000 in Dire Dawa and Addis Ababa.

Strawberries

Frag aria Anamosa, commonly known as strawberries, are cultivated all over the world for its
fruits. The fruit is appreciated for its characteristic aroma, bright red colors, juicy texture, and
sweetness.

Ethiopian strawberries are sold in the international market as fresh fruits. The remaining is
availed in processed form as jam or juice.

There are three main varieties of strawberries plant, these include:

June bearing plant –they have one monster crop of berries per year, June is a general time for
bearing, but they may be early or later depending upon the zone, Ever-bearing plants –They
have a modest-sized crop but can start producing as soon as they are exposed to 12 hours
daylight and continue bearing fruits until the end of summer.

Day-neutral strawberry plant –they have three peak periods of fruiting. Usually, these begin
as early as June, mid-July and late August, hence provides an excellent spread outcrop.

The prices of strawberries have gone up. Prior to 2019, a kilo of strawberries was going for
US$3.64 in 2017 and US$3.56 in 2018. In 2019 the export price changed to $2.60 per kilo, by
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-27.139%. In 2023, the wholesale price in Ethiopian Birr is ETB 108.87 per kg. The average
price for a tonne is US$ 2595.47 in Dire Dawa and Addis Ababa.

4.3.2. Lemon

Ethiopian lemons are sourced from the Melkassa area that lies in the southeast of the country
as well as the Upper Awash Valley. With a combined acreage of 1100 hectares together with
lime, Ethiopia lemon is an important citrus fruit. Market prices of lemon have decreased.
Before 2019, 1 kg of lemon was going for US$0.15 in 2017 and US$0.16 in 2018. In 2019
the export price changed to $6.00 per kilo, by 3,544.037%.

In 2023, the wholesale price in Ethiopian Birr is ETB 234.9 per kg. The average price for a
tone is US$ 5600 in Dire Dawa and Addis Ababa.

4.3.3. Sugar

Ethiopia sugar cane is extensively grown in the Peoples’ Regional State (SNNPR), and
Southern Nations Nationalities which is estimated to be 52.4% of the total land set aside for
the growth of sugarcane in the country.

4.4. Market Size

4.4.1. World Market Size

Jam, Jelly, And Preserves Market size is estimated at $8.46 billion in 2022, projected to grow
at a CAGR of 3.58% during the forecast period 2023-2028. The increased popularity of jams,
jellies, and preserves as a snack packed for school-aged children is expected to drive market.
Rising innovation is increasing market demand for jam and jelly spreads, as well as satisfying
shifting customer tastes.

4.4.2. African Market

The jams, jellies and marmalades market in Africa was equal to 1.24 billion USD (calculated
in retail prices) in 2015. Until 2025, the jams, jellies and marmalades market in Africa is
forecast to reach 4.04 billion USD (in retail prices), thus increasing at a CAGR of 11.22% per
annum for the period 2020-2024. This is a decrease, compared to the growth of about 14.15%
per year, registered in 2015-2019. The average consumption per capita in value terms reached
1.40 USD per capita (in retail prices) in 2015. In the next five years, it grew at a CAGR of
17
7.23% per annum. In the medium term (by 2025), the indicator is forecast to slow down its
growth and increase at a CAGR of 6.38% per annum.

4.5. Current Demand

The markets for the jams and jellies are concentrated in major cities of the nation, where the
demand for convenient and quick snacks, that can be made and packed easily, is increasing,
due to different reasons.

4.5.1. Customers

Our main consumers, people that will use our products, are children between the ages of 6 to
16 years old; As children love sweet food products. Our secondary consumers are young
adults that use our product for the sake of a having a sweet, timely, and convenient snack or
breakfast.

Our main customers are the parents or guardians of the children that want jams and jellies,
who have an income level of 10,000 ETB per month or greater. Our secondary customers are
hotels, resorts, and cafes that use jams and jellies for serving a light and sweet breakfast for
their customers.

4.5.2. Competitors

Our direct competitors are other local producers of jams and jellies and the import market.
The local products are Raha Jam produced by Nuredin Juice and Jam, Theday Jam produced
by Theday Agro Industry PLC and Cado Jam produced by Cado Industries Fruit and
Vegetable Processing. Nuredin Juice and Jam, located around the Haile Garment area on the
southwestern edges of the capital, opened in 2013 with an initial capital of 23 million Br. It
used to produce strawberry jam under the "Raha Jams" brand, sourcing the fruit from two
farms the company leased in the Oromia Regional State. However, the farms ceased
production in 2019, leading to the closure of the strawberry jam processing plant. Theday
Agro Industry PLC, located in Tatik Industry Zone, opened in 2011. It produces jams with
the flavors of strawberry, mango and passion fruit. It has the processing capacity of 84 tons
per annum. Right now, it is the biggest producer of jams in Ethiopia and also has the first
mover advantage. Cado Industries Fruit and Vegetable Processing, which began operations in
2016, produces jams from locally grown strawberries, mangoes, and papayas. The products
of the company have the lowest price as compared to any other competition.
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 4.6. Competitive Advantage

The advantages that our company will have over the current competitors are:

Variety: Current local producers only produce a total of two types of jams, which are:
strawberry and pineapple flavors. We intend to produce these and also more such as ,
mango, passion fruit, papaya, mixed fruit and orange flavored jams as well as jellies.

Improved and Unique Products: Our company will have an R&D Department, that will
always strive to improve product quality and also to develop unique products such as
caffeinated jams, lemon flavored jams and so on.

Brand Identity and Reputation: In contrast to current local producers, our company will
develop its brand identity to be trusted and make our products popular.

Cost Leadership: Our company will work to bring down our costs and pass those savings
down to the customer, to achieve what is called pricing power.

4.7. Niche and Marketing Strategy

4.7.1. Niche

Currently Julia’s Jams and Jellies plans to produces of two types of jams, which are:
strawberry and pineapple flavors, but our future plan is to produce mango, passion fruit,
papaya, mixed fruit and orange flavored jams as well as jellies. In terms of market size our
present potential market is around Addis Ababa and Adama, but our goals are ‘be better for
all’ so we have plans to extend our market to East Africa nations.

4.7.2. Marketing Strategy and Promotion

Any business that wants to grow beyond the corner of the street must be ready to utilize every
available means (both conventional and non – conventional) to advertise and promote the
business. We intend growing our business which is why we have perfected plans to build our
brand via every available means.

Below are the platforms we will leverage on to boost our strawberry jam production company
and to promote and advertise our business;

Place adverts on community based newspapers, radio and TV stations.

Encourage the use of word of mouth publicity from our loyal customers

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Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook,
Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.

Ensure that we position our banners and billboards in strategic positions all around Addis
Ababa Mexico. Advertise our business in our official website and employ strategies that will
help us pull traffic to the site Brand all our official cars and trucks and ensure that all our staff
members wear our branded shirt or cap at regular intervals.

4.8. Pricing and Distribution

When it comes to pricing our product, there are two sides to the coin. We are aware of the
pricing trend in the industry which is why we have decided to produce various sizes of jams
for the future, while using one size for now. In view of that, our prices will conform to what
is obtainable in the industry but we will ensure that within the first 6 to 12 months our
products are sold a little bit below the average market price in Ethiopia. We will put in place
business strategies that will help us run on low profits for a period of 6 months; it is a way of
encouraging people to buy into our brand. The price of a 450-gram bottled jam will be 180
ETB. When we come to distribution, we have chosen to use retailers and individual sale to
consumers. When we come to retailer distribution method there will be a third party between
us and customers and also, it’s the most commonly used method of distribution.

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Chapter Five

5. Jam production Legal requirement

Although the legality of making jam varies from country to country, generally speaking, it is
constrained by a number of food safety laws. In order to safeguard consumers, these
regulations work to guarantee the product's quality, safety, and labeling. These legalities
surrounding jam production even though they vary by country and jurisdiction, there are
some common regulations that include:

 Food Safety and Sanitation

 Product Labeling requirements
 Food additive requirements
 Packaging requirements
 Licensing and Permits
 Intellectual Property
 Tax obligations
 Environmental Regulations

5.1. Food safety and Sanitation

Regulations for food safety and sanitation must be followed by jam manufacturing facilities
to guarantee the product is suitable for human consumption. Jam production must comply
with food safety laws, such as the Good Manufacturing Practices (GMP), and Hazard
Analysis and Critical Control Points regulations (HACCP).

5.2. Licensing and permits

Jam manufacturing plants depending on the jurisdiction, might need to get business licenses
or food production facility licenses and/or register with the local health department in order to
operate.

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 5.3. Product labeling requirements

Jam needs precise labeling with details on ingredients, allergies, nutrition, and net weight and
more. They must include the name and address of the producer and a "best before" or "use
by" date.

5.4. Food additive requirements

The use of food additives must comply with regulations and must be listed on the label.

5.5. Packaging requirements

Jam must be packaged in containers that are appropriate for the product and adhere to the
rules for food packaging.

5.6. Intellectual Property

To safeguard their goods and brand, jam manufacturing facilities are required to abide by
intellectual property laws, such as those governing trademarks and patents.

5.7. Tax obligations

Producers must comply with local, state, and federal tax regulations, including registering for
a tax ID number and reporting and paying taxes on their sales.

5.8. Environmental regulations

Depending on how they manage their waste, water use, and air pollutants, jam manufacturing
plants are subject to environmental restrictions.

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Chapter six

6. Management Structure

23
Chapter Seven

7. Financial Analysis

7.1. Equipment

Table 3: Equipment and Their Cost

No Equipment Unit Cost(In Birr)

1 Plastic raw material containers 200 93,500

2 Blender 3 495,000

3 High Temperature Mixer Tank 3 156,000

4 Weighing Scale (5 Tons) 1 8,195

5 Filling, Sealing and wrapping 2 1,278,000

6 Stainless steel hopper 2 154,000

7 Fruit Washer 3 411,000

8 Bottle Sterilizer 12 132,000

9 cooler 2 55,000

10 Fork Lift 4 220,000

11 Damas 2 1,400,000

12 Weigh Feeder 2 220,000

13 Other Accessories - 400,000

= Sub-Total - 4,792,195.935

+ Freight, Insurance, Banks, Charges, Inland Transport, - 700,000

etc.

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 = Total Cost of Machinery and Equipment - 5,190,195.935

7.2. Raw Materials and Utilities

7.2.1. Availability and Source of Raw Materials

The main ingredients for the production of the Pineapple and Strawberry jam are Strawberry,
Pineapple, Lemon, water and Sugar. All of the above raw materials are readily available in
Ethiopia.

7.2.2. Annual Requirement and Cost of Raw Materials

The quantities and costs of raw materials required for the production of 1,164.24 Quintal of
jam are indicated in Table below. With 814.97 Quintal being strawberry jam and 349.272
Quintal being pineapple

Table 4: Annual requirement and price of raw materials

No Raw Material Quantity(Quintal Price/ Quintal Total Price

)

1 Pineapple 205.7 4195 862,911.5

2 Strawberry 398.8 10,887 4,341,735.6

3 Lemon 301.85 23,490 7,090,456.5

4 Sugar 452.36 5000 2,261,800

5 Water 300 650 195,000

Total Cost = 14,751,903.6 ETB

7.2.3. Utilities Requirement at Full Capacity

Utilities required by the plant consist of electricity and water. The annual requirement and
costs of these utilities is shown in Table below.

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Table 5: Utilities required and their cost

No Item Annual Cost/ Unit Cost (ETB)

Requirement

1 Electricity 97,600 KWH 0.928/KWH 90,572.8

2 Water 1000 Quintal 650/ 650,000

Quintal

3 Total Cost = 740,572.8 ETB

7.3. Human Resource and Training Requirement

7.3.1. Human Resource

The manpower requirement of the plant will be 74. In terms of annual expenditure, a total of
5,624,000 ETB will be expended for salary and wages.

Table 6: Human resource

No Description No Monthly Annual Expenditure

Salary/Wages

Production

1 Plant Manager (Chemical 1 25,000 300,000

Engineer)

2 Production Supervisor 4 14,000 672,000

3 Operators 8 8,000 768,000

4 Labor workers 30 4,000 1,440,000

Administration

26
 5 Human Resource Officer 1 14,000 168,000

6 Secretary 1 8,000 96,000

7 Personnel Officer Accountant 1 14,000 168,000

8 Salesman 3 7,000 252,000

9 Cashier 1 6,000 72,000

10 General Services 4 4,000 192,000

11 Lab Technicians 8 6,000 576,000

12 Security 8 4,000 384,000

13 R&D Head 1 25,000 300,000

14 Quality Assurance Manager 1 25,000 300,000

15 Sales & Marketing Manger 1 25,000 300,000

16 CEO 1 40,000 480,000

Total Cost = 6,468,000 ETB

7.3.2. Training Requirement

The company will have both skilled and unskilled employees, so those who lack experience
will receive training. The following are the estimated numbers of skilled workers and the
associated training costs:

Table 7: Training requirement

Number of Unskilled Cost of Training/ Person Total cost of training

workers (ETB) (ETB)

50 1000 50000

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 7.4. Assumption

The information from the chapters before as well as the following hypotheses provide the
basis for the financial analysis of the jam manufacturing facility.

7.4.1. Construction and Finance

Table 8: Construction and finance

Construction period 1 years

Source of finance Loan

Bank interest rate 18%

Spare Parts, Repair & Maintenance 1% of fixed investment

7.4.2. Depreciation

Table 9: Depreciation

Building 5%

Machinery and equipment 10%

Office furniture 20%

Vehicles 20%

7.5. Total Capital Investment

Table 10: Fixed, working and total capital investment

Items Cost (ETB)

Land 5,000,000

Building and Civil Works 10,000,000

Office Equipment 700,000

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 Vehicles 2,200,000

Plant Machinery & Equipment 5,190,195.935

Total Fixed Investment Cost 23,090,196

Annual Utility 740,572.8

Annual Raw Material Cost 14,751,903.6

Salary 6,468,000

Training 50,000

Canteen 1,000,000

Total Working Capital 23,010,476.4

Total Investment Cost 46,100,672.4

7.6. Profitability

7.6.1. Annual Net Return

* one jar = 450 gram of jam

Gross Profit = Total Revenue – Total Working Capital

Total Revenue = Annual Production (in Jar) * Sell price/jar = 258,720 jar * 180 ETB =
46,569,600 ETB

Gross Profit = 46,569,600 - 23,010,476.4 = 23,559,123.6 ETB

7.6.2. Net Profit

Depreciation = (0.05 * 10,000,000) + (0.1 * 5,492,195.935) + (0.2 * 700,000) + (0.2 *

2,200,000)

Depreciation = 1,629,219.594 ETB

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Income Tax = 0.35 * (Gross Profit - Depreciation)

Income Tax = 7,675,466.4 ETB

Net Profit = Gross Profit - Depreciation - Income Tax

Net Profit = 14,254,437.61 ETB

7.6.3. Net Return

Net Return = Net Profit + Depreciation

Net Return = 15,883,657.2 ETB

7.6.4. Return on Investment

ROI = (Net Profit)/ (Total Investment cost) = 14,254,437.61 / 46,100,672.4) * 1 0 0 %

ROI = 30.92%

7.6.5. Cash Flow

Let assume the maintenance will be done every three years. Maintenance cost = 1% of Fixed
cost = 0.01*23,090,196= 230,901.96 ETB So cash flow statement for 10 years starting from
the investment year will be the following.

Figure 6: Chas Flow for ten years

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 7.6.6. Net Present Value

NPV = - CF * 1 /(1+r)1 ((CFprofit - CF maintenance) * (+ 1/(1+r)1 + 1/(1+r)2 + 1/(1+r)3+

1/(1+r)4 + 1/(1+r)5 + 1/(1+r)6 + 1/(1+r)7 + 1/(1+r)8 + 1/(1+r)9 + 1/(1+r)10) –
CFvechile&furniture * (1/(1+r)^6)

NPV = -27,246,431.28 + 63,021,769.21 - 1,074,251.464

NPV = 34,701,086.47 ETB

Since the NPV >> 0 the project is accepted.

7.6.7. Profitability Index

PI = Cash Flow in / Cash Flow out

PI = 64,059,442.62 / 29,358,356.15

PI = 2.182

7.6.8. Breakeven Analysis

The breakeven point of the projects is given by the formula:

Total Revenue = Total Cost

Amount of Sales × Price per Unit = Fixed Capital Investment + Working Capital

Amount of Sales needed to break even = (23,090,196 + 23,010,476.4) / 180

Unit Sales needed to break even by = 256,115 units

BEA = (256,115 / 258,720) x 100 = 98.99%

7.6.9. Payback Period

PP = Total investment cost / Net return

PP = 46,100,672.4 / 15,883,657.2

PP = 2.9 years

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Reference

M.S., R., F., Y., M.J., K., & M.H., R. (2021). Evaluation of quality characteristics and storage
stability of mixed fruit jam. Food Research, 5(1), 225-231.

Selina Wamucii Website (2023).

https://www.selinawamucii.com/insights/prices/ethiopia/lemon/

Selina Wamucii Website (2023).

https://www.selinawamucii.com/insights/prices/ethiopia/pineapples/

SelinaWamucii Website (2023).

https://www.selinawamucii.com/insights/prices/ethiopia/strawberries/

2Merkato Website. https://www.2merkato.com/directory/39993-theday-agro-industry-plc

2Merkato Website. https://www.2merkato.com/directory/19430-nuredin-hassan-strawberry-

farm-raha-strawberry-jam

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