Food Complx and Animal Food

project proposal for food Complex and anomals Fooder 2020
PROJECT PROPOSAL FOR
FOOD COMPLEX FACTORY AND

ANIMALS FOODER PROCESSING
(Wheat Flour, Pasta, Macaroni, Biscuit, Animals Fodder and
Other Related)
PROJECT TO BE IMPLEMENTED IN AFAE REGIONAL STATE,
SEMERA TOWN,
PROMOTER: AWEL SUALIH MOHAMMED
MAY, 2021
Addis Ababa, Ethiopia
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Table of contents
I. Executive Summary
1. Introduction
1.1 Background …………………………………….…………………………….……….5
1.2 Objectives of the product ……………………………………………..…...…………..7
1.3 The project Description and Application ……………….…...……….……………….7
1.4 Location Map of the Area …………………………….……………………..
………....8
2. General Market Study and Plant Capacity
2.1 Past Supply and Present Demand…………………………………………….………..9
2.2 Project Demand ………………………………………………..……………………..11
2.3 Pricing and Distribution …………………………………………….…………….…12
2.4 Plant Capacity and Production Programmed ……………………………..………..12
2.5 Material and Inputs…………………………………………………………………..13
2.6 Land requirement and land use plan……………………………………..…….....…13
2.7 Technology and Engineering…………………………..……………………….....….15
3. Organization Structure, Management and Manpower
3.1 Man power Requirement ………………………………………………...............…..16
3.2 Organizational Structure……………………………………………………...…..….17
3.3 Organizational Management duties and Responsibilities……………………....…....18
4. Financial Requirement and Analysis
4.1. Total Initial Investment Cost………………………………………………………...20
4.1.1. Fixed Investment …………………………………………………………….……24

4.1.2. Initial Working Capital……………………………………………………………23
4.2. Financial Analysis and Statements ………………………………………..………...23
4.2.1. Underlying
Assumption………………………..........................................................23
4.2.2. Source of Fund ………………………………………………………………….....24
4.2.3. Loan Repayment Schedule
…………………………………………………….......24
4.2.4. Annual depreciation schedule of the fixed asset ( birr)…………………..............25
4.2.5. Balance Sheet (Beginning)………………………………………………….……..25
4.2.6. Net working Capital………………………………………………………….........26
4.2.7. Income/Loss ………………………………………………………….....................27
4.2.8. Cash Flow
Analysis………………………………………………………………...28
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4.2.9. Profitability……………………………………………………...……..…………..29
4.2.10. Pay-Back Period……………………………………………………….…………...30
5. Environmental Impact of the project
5.1 Socio Economics Environments …………………………………………………….…...….31

5.2 Environmental Impact Assessment of the Project …………………………………...……...31
I. EXECUTIVE SUMMARY
1 Project Type Food Complex and Animals Fodder Industry
1.1. Status News
1.2. Sector Agro- Industry Sector’s ( Different Food complex and Animals
Foddedr)
2 Project Owner Awel Sualih Mohammed
3 Nationality Ethiopian
4 Project Location Afar Region,

Semera Town
5 Project Accommodation  Wheat Flour
 Bread Improver
 Pasta
 Macaroni
 Biscuit
 Starch
 Animals Fodder
 Different Related to Food Processing
6 Premises Required 10,000 M2 or 1 Hek.
7 Total Capital  The total of birr 20,000,000 is required.

 From this 30% (birr 6,000,000.00) will be covered by the
promoter of the project,
 While the rest 70% (birr 14,000,000.00) `will be covered by
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bank loan.
 Loan Repayment Period: - 5 years
 Interest Rate: - 9-12 %
8 Employment The total manpower requirement for the plant will be 230 employees
Opportunity at full capacity.
 Permanent Workers 100

 Skilled 50
 Unskilled 50
 Temporary Worker 130
 Skilled 100
 Unskilled 30
9 Benefits of the factory Produce and supply different Food Complex Source of revenue,
for the region/ country create employment opportunity, save foreign currency, benefit for the
local community, stimulate the local economy and transfer
technology
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1. INTRODUCTION
The agriculture sector dominates the overall economic activities of the country. Since the launch
of the new market-oriented economic policy of the existing government, Ethiopia is showing
significant progress in all economic sectors. The sector is appreciated for its dominant role in the
country’s foreign exchange earning, employment creation and gross national product. Besides,
the agricultural sector supplies the industry sector with the required raw materials and also
creates markets for the out put of the latter. However, the sector remained back ward and as a
result, has negatively affected the over all performance of the economy of the country.
So to introduction yeast and how to used in baking bread, like that of agriculture remained
backward and had been characterized by poor performance. This reached its worst position
especially during the past regime because of the ill-advised economic policy of the government
used to follow. But together with the coming to power of the present government after the
overthrow of the dergue regime, the situation started changing in favor of the country’s
economy. Consequently, the overall performance of the economy has been improving and has
resulted in the economic development that has been achieved with in past few years.
There are various reasons behind this. Above all, the government after it has seized the power
had shown its keen interest and dedication to exert all necessary efforts towards the development
of the economy. This was clearly indicated in the economic policy issued during the transitional
period. Besides, various investment codes were issued following the issuance of the new
economic policy.
Currently, in order to encourage private investment and to attract capital technology and know-
how to the country comprehensive packages of incentives are granted to investor by the
investment proclamation.
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1.1 Background
To introduction to yeast its instant yeast can be known by several different names these include
 Wheat Flour, pasta, macaroni, biscuit ,

 Quick rise yeast , rapid rise yeast,
 Fast rising yeast or bread machine yeast
 The instant type of yeast will have a quicker raising time for the dough
 Instant yeast has a much faster raising time
 Than the dry yeast known as active dry yeast and fresh yeast
The new economic policy of our country guarantees investors in the various areas of investment
incentive for investors legislated by federal and regional governments further flourished the
environment and attracted a number of local and foreign investors. As the country is part of the
world, its liberal economic policy paves market oriented economic system. The country in its
investment policy opens the door for investors in various sectors. The government has
recognized the participation of private sectors in all possible and feasible investment fields which
in effect could play vital role in satisfying the growing demand in the respective sector. Because
of the fact that the economic policy of Ethiopia is became one of the attracting nations for
investment. To this end, there is increasing private sector participation in all sectors including
manufacturing, industry, agro industry and service delivery etc. Next to agriculture, the industry
sector has a contribution of about 15% to GDP of the economy.
Afar Region (/ˈɑːfɑːr/;[4] Afar: Qafar; Amharic: ዓፋር ክልል), formerly known as Region 2, is a
regional state in northeastern Ethiopia and the homeland of the Afar people. Its capital is the
planned city of Semera, which lies on the paved Awash–Assab highway.
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Awash River near Asaita
The Afar Triangle, the northern part of which is the Danakil Depression, is part of the Great Rift
Valley of Ethiopia, and is located in the north of the region. It has the lowest point in Ethiopia
and one of the lowest in Africa. The southern part of the region consists of the valley of the
Awash River, which empties into a string of lakes along the Ethiopian-Djibouti border. Other
notable landmarks include the Awash.
Demographics
Based on the 2017 projections by the Central Statistical Agency of Ethiopia (CSA), the Afar
Regional State has a population of 1,812,002, consisting of 991,000 men and 821,002 women;
urban inhabitants number 346,000 of the population, a further 1,466,000 were pastoralists.[2]
Based on the 2007 Census conducted by the Central Statistical Agency of Ethiopia (CSA), the
Afar Regional State has a population of 1,390,273,[5] consisting of 775,117 men and 615,156
women; urban inhabitants number 185,135 or 13.32% of the population, a further 409,123 or
29.43% were pastoralists. With an estimated area of 96,707 square kilometers, this region has an
estimated density of 14.38 people per square kilometer. For the entire region 247,255 households
were counted, which results in an average for the Region of 5.6 persons to a household, with
urban households having on average 4 and rural households 6 people.
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Ethnicity of Afar region
Ethnic Group 2007 Census[6] 1994 Census[7]
Afar 90.03% 91.8%
Oromo 5.22% 4.5%
Argobba 1.55% 0.9%
Tigrayan 1.15% 0.8%
Amhara 0.61% 0.8%
Welayta 0.59% 0.5%
Hadiya 0.18% 0.2%
Religion of Afar region
Religion 2007 Census[6] 1994 Census[7]
Muslim 96 95.6%
Christian 4.7% 4.4%
Orthodox 3.86% 3.9%
P'ent'ay 0.43% 0.4%
Catholics 0.09% 0.1%
In the previous census, conducted in 1994, the region's population was reported to be 1,106,383
of whom 626,839 were men and 479,544 women; urban inhabitants were 85,879 or 7.76% of the
population.
Afar is predominantly (89.96%) spoken in the region and is the working language of the state.
Other languages with a significant number of speakers in the state include Amharic (6.83%),
Tigrinnya (1.06%), Argobba (0.79%), Wolaitigna (0.43%), and Oromifa (0.4%).
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According to the CSA, as of 2004, 48.57% of the total population had access to safe drinking
water, of whom 26.89% were rural inhabitants and 78.11% were urban.[8] Values for other
reported common indicators of the standard of living for the Afar Regional State as of 2005
include the following: 67.3% of the inhabitants fall into the lowest wealth quintile; adult literacy
for men is 27% and for women 15.6%; and the regional infant mortality rate is 61 infant deaths
per 1,000 live births, which is less than the nationwide average of 77; at least half of these deaths
occurred in the infants’ first month of life.[9] On 20 April 2007, the regional government
announced that it had increased health coverage from 34% to 40%, the result of construction of
64 new health clinics, increasing the total for the region to 111
A map of the regions and zones of Ethiopia
Afar Depression, Erta Ale active volcano, Awash National Park, Yangudi Rassa National Park,
Hadar and Aramis areas, are the major tourist attraction area of the region. The hot springs, Afar
culture and cultural games are other attraction areas.
In 2005, a giant rift was formed in just a few days.[11][12] The rift opened when the Dabbahu
Volcano, situated in the north of the region, erupted. The crack forming is thought to be part of
the process in which the Arabian Plate and the two African plates, the Nubian Plate and the
Somali Plate, are moving apart. This new crack, 500 metres (1,640 ft) long, and 60 metres
(197 ft) deep, opened when the lava from the erupting volcano flowed underground and cooled
forming a 60 kilometres (37 mi) long, 8 metres (26 ft) wide dike within days.
Environment
The Afar Depression, a plate tectonic triple junction is found in the Afar Regional State. This
geologic feature is one of earth's great active volcanic areas. Due to this volcanic activity the
floor of the depression is composed of lava, mostly basalt. The continuous process of volcanism
results in the occurrence of major minerals including potash, sulfur, salt, bentonite, and gypsum.
In addition to these minerals, there are also promising geothermal energy sources and hot springs
in different areas of the region. Most of the region's mineral potential are found in Dallol,
Berhale and Afxera woredas of Zone Two. Elidar, Dubti and Millee in Zone one and Gewane in
Zone Three also have some mineral possibilities.
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Afdera Lake
Afar is home to peculiar wild life, which notably include the African wild ass, Grevy's zebra,
wild fox, wild cat, cheetah, and ostrich. These wild animals are found in the region's national
parks. Because the region's tourism development is still in a poor state there are only two lodges
in Awash National Park.
Agriculture
The CSA estimated in 2005 that farmers in the Afar Regional State had a total of 327,370 cattle
(representing 0.84% of Ethiopia's total cattle), 196,390 sheep (1.13%), 483,780 goats (3.73%),
200 mules (0.14%), 12,270 asses (0.49%), 99,830 camels (21.85%), 38,320 poultry of all species
(0.12%), and 810 beehives (less than 0.1%). The CSA estimated on the basis of a survey
performed in December 2003 that nomadic inhabitants had 1,990,850 cattle (an 83.8% share of
those animals in the region that year), 2,303,250 sheep (90.6%), 3,960,510 goats (90%), 759,750
camels (85.9%), 175,180 asses (92.5%), 2960 mules (88.6%), and 900 horses (100%).[13]
Regional instability
As of 2012, the area has been increasingly unstable, as tensions between Ethiopia and Eritrea
remain high after the Eritrean-Ethiopian War of 1998-2000. On January 18, 2012 five foreign
tourists were murdered while on holiday in the region.[14] The Ethiopian government has
accused Eritrean gunmen of being responsible for the attack. Many governments around the
world advise against traveling to the Afar region, citing increasing security concerns.
Fossil finds
Hadar, a community in Afar, was the site of the discovery in 1973-74 of "Lucy", the
Australopithecus afarensis skeletal remains, by Donald Johanson of the Cleveland Museum of
Natural History. On March 5, 2005, another skeleton, estimated to be 3.8 million years old and
said to be the world's oldest bipedal hominid skeleton, was found in the region. Yohannes Haile-
Selassie led digs there each year from 2004 to 2007.
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Erta Ale Volcano
On March 24, 2006 it was reported that a "significantly complete" cranium had been found at
Gawis in the Gona area.[15] The cranium appears as an intermediate form between Homo
erectus and Homo sapiens.
On October 1, 2009, scientists reported that they had found a skeleton, which dates around 4.4
million years ago. Named Ardi, it is a form of the species Ardipithecus ramidus. The specimen is
a distant cousin of the Australopithecus afarensis, Lucy's species.
In June 2010, the oldest direct evidence of stone tool manufacture was found in the Afar region
and attributed to Australopithecus afarensis.[16][17]
In 2013, a graduate student from the Arizona State University discovered a hominid jawbone in
the Ledi-Geraru region of Afar. Scientists estimated that the fossil dates back around 2.8 million
years ago, which is 400,000 years before the next oldest hominid fossil remains.[18]
In 2015, a hominin jawbone and teeth was discovered in the Afar region. Scientists believe that
the bones belonged to a previously undiscovered ancestor. The new species was named
"Australopithecus deyiremeda", meaning "close relative" in the native Afar language. The
species lived around 3.5 - 3.3 million years ago, about the same time period as other hominins
such as Australopithecus afarensis.
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1.2 Objectives of the Project

The main objective of the project is to satisfy the growing demand of highly Food Complex by
supplying quality product type. More specifically the project is intended to:-
 To establish
 Wheat Flour, Pasta, Macaroni, Biscuit
 Yeast, Bread Improver, Shanty Cream, Snacks Nuts ,Super ghetto, Starch and
 Other related products
Different Related to Food Processing, factory for local and foreign to meet the increasing
demand for these type of output, production, preparation & supply of quality product services at
fair and competitive price and also important as a source of revenue for the promoter through
domestic and foreign market in which a reasonable amount of profit could be realized.
In addition to this the overall objective of the project under consideration is to contribute to the
development process in the country by taking part in the manufacturing sector.
1.3 The Product Description and Application
Food Complex, is many raw materials used wheat flour and others Yeast Bread, Improver Shanty
Cream, Cereal, Snacks Nuts, Starch, candy, chocolate & confectionary is processed based on a
sweetener, which may be sugar or honey, to which other ingredients are added, such as flavors &
spices, nuts, fruits, vegetable fats and oils, gelatin, emulsifiers, colorings, egg, milk products,
chocolate or cacao to produce different kinds of fruit, vegetable and other related products. The
treatments of these ingredients with different heat levels determine the types of products. This is
based on the fact that when sugar is boiled, it goes through different stages from soft to hard in
crystallization process.
The steps in yeast bread production is :- benching allow the dough to rest before shaping -
makeup and panning- proofing-baking-cooling-storing and etc
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1.4 Location Map of the Area.
The project under study is planned to be located in Afar National Regional State, samara town.
on the east part of the country. The town is located at about away from the capital of the
country/Addis Ababa. The total land required for the project is about M2 10,000.
Infrastructure of the area is well developed (Road, Electric power, at the area and banking,
insurance, health facilities, education, etc at the town of Samara ). Some of the reasons behind
selecting the area are:-
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 Proximity to the major potential market for the out put

 Availability of relatively raw material and infrastructure facilities such as
 Transportation net works which connect it to Addis Ababa and all the regional parts of
the country.
 Public utilities such as electricity, telecommunication, services, financial institutions, and
other social infrastructures such as schools, hotel, health centers and the like.
 Availability of skilled and semi skilled man power,
 Prospective of future development.
1.5. Brief History of the Promoter

 The Promoter is many experiences on food complex and different business actives
Mr. Awel Sualih Mohammed planned the new of buildings, installed machineries,
other requirements and the project is operational, of Wheat Flour, Macaroni, Pasta,
Biscuit and Animals fodder Others related Factory and supplying to the local market and
created job opportunity for the local peoples. The financial performance of the factory
was viable.
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2. GENERAL MARKET STUDY AND PLANT CAPACITY

A. MARKET STUDY
2. 1. Past Supply and Present Demand
In Ethiopia, the rural population used to consume flour made from cereals by traditional means at
home. Grain mills, however, are expanding deep into rural areas reducing labour and time for
women, replacing home-made flour consumption of industrially processed flour, however, is still
insignificant in rural Ethiopia.
Urban dwellers, on the other hand, consume more and more flour produced by flour mills thus
shifting to manufactured flour. Urban house-holds also consume food items like bread, biscuits
and cakes prepared at home or in bakeries and pastries from industrially processed flour.
The demand for wheat flour is met through both local production and imports. The apparent
consumption of flour, comprising both domestic production and Biscuits are very popular food
items. They are pleasant in taste and do not require cocking and hence ready to be served. The
local demand for biscuits is met both by domestic production and imports.
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2.1.1. Objective of the Project
The main objective of this factory is to manufacture, cost effective, market oriented, client based
and quality Wheat Flour, Macaroni, Pasta, Biscuit and Others related for local market.
2.1.2. The Economic Significance of the Project
The envisaged project deemed to contribute to the economic development of the nation in
general and the region in specific with following ways:
2.1.3. Source of Revenue
As public policy of any nation, the government collects different forms of taxes from different
business organizations and individuals. Among the different forms of taxes, business income
taxes, payroll tax and VAT are collected from undertaking business activities. Therefore, the
project will serve as sources of revenue for both the region and nation as a whole.
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2.1.4. Employment opportunity
One of the problems that our country faced is unemployment. Therefore, the current objective of
the government is working on tackling the problem of unemployment and fostering the
development process either through creating self employment or employment in other
organization. Hence, this project will hire 230 (100 permanent and 130 on temporarily basis)
citizens.
2.1.5. Save/Generate the Country Foreign Exchange
All types of the envisioned products (Produced by the project) are mostly imported from abroad.
By producing in Ethiopia, the factory will save the foreign currency of the nation.
By minimizing the market demand and supply gab for these products, the factory will help to
reduce the nation’s foreign exchange cost to import these products. This will save the foreign
exchange resource of the nation.
2.1.6. Benefit For The Local Community

As a corporate responsibility the promoter will engage in different development activities on the
surrounding areas. This will better worse the community and contribute for the development of
the nation.
2.1.7. Stimulate The Local Economy
This factory has positive externality in the country that will encourage the economic movement
of local economy. There will be economic relationship and transactions among different factors.
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2. TECHNOLOGY AND ENGINEERING

A. TECHNOLOGY
1. Production Process
The production process of wheat flour consists of four major operations:-

• Wheat Intake and Pre-Cleaning,
• Wheat Cleaning and preparation,
• Milling, and Packing and Dispatching.
Wheat Intake and Pre-cleaning:- The major unit operations are dumping, conveying, weighing,
pre-cleaning and conveying to storage silos or transferring to the working bins of the cleaning
room.
Wheat Cleaning and Preparation: - The main unit operations involved are weighing,
screening, destining, impurity separation, ferromagnetic separation, scouring, aspiration,
dampening, tempering and ventilating.
Milling: - Major operations involved are weighing, breaking open, scalping, scratching,
detaching, sifting, purifying, milling (grounding), resifting and entoleting.
Packing and Dispatching: - The major operations involved are collection of flour streams and
bran, mixing and aerating, resifting, entoleting, packing, sewing, loading and dispatching. The
process does not release any pollutant to the environment.
2. Machinery and Equipment

The major plant machinery and equipment required for the envisaged plant comprise mixers,
laminator, cutting machine, moulding machine, baking oven, conveyors, etc. The plant
machinery and equipment required and their estimated costs are given
3. Economic activity of Area

Most of the residents of the Country earn its living means from business activity, even though
the number of civil servants can’t be under mined. The location of the town on a get way to
many zonal towns facilitated by types, quantity of transactions being under taken, & different
types of private industries are allocated in the town. Bars, restaurants, hotels, pastry, recreation
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centers and Industrialization area are flourishing as well as response to demand from the business
community. This is further facilitated by the number of daily arrivals from different enroot to
Addis Ababa.
2.2.2. Land Use Plan
The Promoter acquired a total of 10,000 M2 areas of land the promoter had been using the land
and planned to use it as indicated in table below.
Table: Land Use Plan for Wheat Flour, Biscuit, Pasta and related product Factory
SN Description Land Requirement (M2)

1 Production Hall 5,000
2 Office Building 1,500
3 Guard house 500
4 Toilet and shower room 500
5 Warehouse 500
6 Raw material Store 500
8 End product Store 500
9 Show room 500
10 Parking and others 500
Total 10,000 m2
2.2.3. Pricing and Distribution

The current price of flour at Addis Ababa is Birr 385 per quintal. For this project, an ex-Factory
price of Birr 370 per quintal is proposed. Flour is an industrial as well as a consumer product.
Bakeries and pastries could be supplied directly at factory gate or through intermediaries.
Households could be supplied through retailers as well as with distribution centers to be
established by the new project itself. The prices of most biscuit brands are within reach of
ordinary people’s budget. Biscuits are, therefore, in demand in both urban and rural areas of the
country. There are also many convenient outlets for biscuits including neighborhood and village
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shops. The general situation in the market for biscuits is going towards full-fledged competition
through brand development, range of products offered, delivery, advertisements and packaging.
The price of biscuits varies with the brands and their contents and packaging are also different.
The average price some of the most popular brands is Birr 4/100 gm. On the basis of this price
level and taking in to account a margin of 25% for wholesalers and distributors, the
recommended ex-factory price for the new project is Birr 3.20/100gm.
2.3. PLANT CAPACITY AND PRODUCTION PROGRAMME
2.3.1 Plant Capacity
According to the market study, the unsatisfied demand of wheat flour in the year 2008 will be
65,445 tones, whereas this demand will grow to 384,611 tons by the year 2020. Taking only
about 50% of the demand of the year 2008, the envisaged plant will have an annual capacity of
processing 41,000 tones pure wheat and produce 31,160 tons of wheat flour and 9,840 tones of
bran. The plant will operate 3 shifts of 24 hours a day, and for 300 days a year.
Based on the outcome of market study and considering the minimum economic scale of
production, the envisaged plant will have production capacity of 1,500 tons of hard biscuits per
annum. This capacity is proposed on the basis of a single shift of 8 hours per day and 320
working days per annum
2.3.2. Production Programmed

The plant will start operation at 75% of its installed capacity during the first year, and will
increase production to 85% in the second year, and then to 100% in the third year and then after.
Year 1 2 3-10
Capacity utilization (%) 75 85 100
Production Flour 23,370 26,486 31,160

(tonnes)
Bran 7,380 8,364 9,840
(tonnes) Biscuit 1,125 1,275 1,500
(tonnes) Macaroni 1,125 1,275 1,500
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(tonnes) Pasta 1,125 1,275 1,500
% Capacity utilization rate 75 85 100
2.3.3 MATERIALS AND INPUTS

A. RAW MATERIALS
Various types of biscuits do exist depending on the ingredients used and manufacturing process
employed. The envisaged plant will produce hard biscuit. The raw materials required for
production of hard biscuit comprise wheat flour, sugar, shortenings, salt, Sal volatile, sweet jelly,
glucose, and starch. The major raw materials like wheat flour and sugar can be obtained locally
from flour mills and sugar factories while the remaining 8 raw materials will be imported.
Annual requirement for raw materials at full production capacity of the envisaged plant and the
estimated costs are given
The principal raw material for flour production is wheat grain. Flour for baking bread is
produced from hard wheat or a blend of hard and soft wheat, while flour for cakes and biscuits is
milled from soft wheat. Wheat can be available in different part of the region. The impurity rate
for local wheat should not exceed 8%.
B. Utilities
A number of utilities would be put in place in order to ensure smooth functioning of the factory.
These utilities include: Water Supply, Supplementary Electricity supply, Paved Road
Transportation, Drainage Facility.
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3. MANPOWER, OGANIZATION STRUCTURE AND MANAGEMENT
3.1 Man Power
At the top of the organization structure, there will be a general manager with the responsibility of
supervising the overall activity of the plant. It is always true that Organization and Management
of the project plays a key role and bear direct impact on the success and profitability of the
project. The opportunities of being serviced by well skilled professionals well enable the
company to evaluate the internal weakness and strength of the company as well as to assess the
global opportunity and risks in the world market so that the company can cope up with the
dynamics of the market situation.
Therefore, it must particularly to the project under consideration, to give especial affection to
select and recruit the appropriate total manpower requirement for the plant will be employees at
full capacity.
I) Permanent Workers :- 100

 Skilled :-50
 Unskilled:-50
II) Temporary Workers:-130
 Skilled :-100
 Unskilled:-30
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1.1.2. Salary Expense
The total number of manpower, manpower list, qualification, and salary and sex composition are
listed in the table below.
S Monthly
N Description No Qualification Salary Annual Salary
1 General Manager 1 BA in Business Management 10,000.0 120,000.00
0
2 Production Manager 1 BSC in industrial Engineering 5,000.00 60,000.00
3 Supervisor 1 BSC in Production 4,000.00 48,000.00
Technology
4 Secretary 1 Diploma In Secretarial 2,000.00 24,000.00
Science
5 Public Relation 1 Dip in Social Science 4,000.00 48,000.00
Officer
6 Personnel 1 Dip in HRM 4,000.00 48,000.00
7 Planning Officer 1 Dip in Economics/Statistics 4,000.00 48,000.00
8 General service 1 Dip in management 5,000.00 60,000.00
9 Color Operator 1 Diploma in Chemical 4,000.00 48,000.00
Engineer
10 Hydraulic 1 10+2 in general Mechanic 5,000.00 60,000.00
Technician
11 Machine Operators 4 10+2 in general Mechanic 5,000.00 240,000.00
12 Marketing head 1 BA in Marketing management 5,000.00 60,000.00
13 Purchaser 1 Diploma in Purch. & Suppli 5,000.00 60,000.00
mgt
14 Administer 1 Dip in Management 5,000.00 60,000.00
15 Sales person 3 Diploma in sales management 5,000.00 180,000.00
16 Finance head 1 Dip in Accounting 5,000.00 60,000.00
17 Accountant 1 Diploma in Accounting 5,000.00 60,000.00
18 Electrician 1 10+2 in general electricity 5,000.00 60,000.00
19 Cashier 1 10+2 in bookkeeping 3,000.00 36,000.00
20 Cleaner 4 Unskilled 3,000.00 144,000.00
21 Driver 2 10 completed 3,000.00 72,000.00
22 Gardner 2 Unskilled 2,500.00 60,000.00
23 Guards/Security 4 Basics 2,000.00 96,000.00
24 Helpers and laborers 194 10 completed 500.00 847,560.00
Page 23
Grand Total 230 4,999,560.00
3.2. Organizational Structure
The organizational structure of the project is designed by including all the necessary personnel
under the right division. At the top of the organizational structure, there will be manager with the
responsibility of supervising the overall activity of the plant. Depending up on the nature of the
center and the amount of work to be performs; there exist auxiliary units under the general
manager.
Employees under each unit will be supervised by the department head that is accountable for the
general manager. General Manager is appointed by the owners.
Owner
General Manager
Executive
Secretary
Production
Department Admin & Finance Commercial
Department Department
Pre- Packing
treatment
Admin. & Financial
Inspection HRM
Marketing Sales
Page 24
Fig: Organizational Structure
Hence the following section deals with the duties and responsibilities of some departments.
3.3. Organizational Management Duties and responsibilities
1. General Manager
Duties and responsibilities
 She/he will plan, organize, direct and control the overall activities of the factory
 She/he will devise policies and strategies that will enable the factory to be profitable.
 She/he will incorporate modern technological innovation that will facilitate the service
delivery of the project center and increase customer’s satisfaction.
 He/he will plan, organize, direct and control the human and non-human resources of the
plant so as to achieve the short and long run objectives of the organization.
2. The Manufacturing Department
Duties and responsibilities:-
It is the core department of the project center and has the following responsibilities.
 Use modern manufacture, processing and technologies that will enhance the quality
of those products.
 Produce quality product that will enable the center competent both in the domestic
and international market.
 Use appropriate technology to manage its products.
 Control on the quality of raw materials, inputs, quality of the product and also the
overall production process.
 Produce products in least cost so that the profitability of the center is guaranteed.
 Moreover control over the quality of the final products
3. Administration and Finance Department
 Will plan, organize direct and control the financial transaction of the plant by using the
entire necessary document.
Page 25
 Will develop sound financial control system by developing modern financial control
systems.
 Will prepare the annual financial statements and prepare condensed reports for the
general manager, owner and other concerned government body.
 Will control the human and non human resources of the plant, which include: effective
handling of the different inventories of the machineries, equipments, raw materials,
finished products, and devise strategies of controlling against fraud and damage.
 Manage and execute The promoter national and international procurement procedure
 Administer and control The promoter logistic resource
 Effectively administer the promoter Procurement process domestically as well as
internationally.
 Manage the public relation of The promoter/factory with external parties/stakeholders
 Provide and manage general supportive service to the plant.
4. Commercial Department
 Will handle the overall marketing activities of the organization which include planning,
organizing, directing, and controlling.
 Provide cost estimates in preparation for securing ...
 Gather information on new product design, profile
 Approval of new products profile & brand plan analyzes market research.
 Plan and execute sales.
 Will develop effective customer handling strategies
 Will design and implement effective advertisement and promotion schemes
 Will develop the marketing strategies for future project center’s development.
 Conduct both foreign and domestic market research for expanding the sales of The
promoter
All workers have responsibilities on each activity they assigned for.
B. TRAINING REQUIREMENT
The production supervisor and skilled workers require few weeks training on machine operation
and production technology. Training is assumed to be entertained during the erection and
Page 26
commissioning period and the cost is in built there and hence about Birr 25,000 is sufficient to
cover expenses associated with the training programmed.
4. FINANCIAL REQUIREMENT AND ANALYSIS
4.1. Total Initial Investment Cost
The total cost of money that is required to estimated the envisaged Food Complex product and
Animals Fodder production is to be birr 20,000,000.
Table Total Initial Investment Capital

No Description Cost
1 Fixed Investment
1.1 Land, Building and Construction 5,600,000 0.00
1.2 Machines and Equipment’s 4,400,000 0.00
1.3 Vehicles and Motors 600,000 0.00
1.4 Office Furniture and Equipment 400,000 0.00
Total Fixed Investment Cost 11,000,000 0.00
2 Operating Expense 0.00
2.1 Raw Materials Purchase and Products 4,000,000 0.00
2.2 Salary Expense 2,000,000 0.00
2.3 Other Operating Expense 600,000 0.00
2.4 Pre-operating Expense 400,000 0.00
Total Operating Expense 7,000,000 0.00
Contingency (Lump sum) 10% 2,000,000
Total Investment Cost 20,000,000 0.00
4.1.1. Fixed Investment
Building and Construction
No Description Land requirement (M2) Unit cost in Br. Total Cost in Br.
1 Production Hall 5,000 336 1,680,000

2 Office Building 1,500 746.66 1,120,000
3 Guard house 500 1120 560,000
4 Toilet and shower room 500 224 112,000
5 Warehouse 500 336 168,000
6 Raw material Store 500 560 280,000
7 End product Store 500 1120 560,000
Page 27
8 Show room 500 1120 560,000

9 Parking and others 500 1120 560,000
Total 10,000.00 6682.66
4.1.2. Required Machinery

A. Total Cost Machinery and Equipment for Wheat flour and macaroni and Pasta
No Description Qty Unit Total Cost Total
Price (Birr)
1 Fully Automatic Wheat flour Milling No 2 1,274,100 2,548,200
processing machine with accessories
2 Fully Automatic Fast Delivery pasta “ 1 1,250,000 1,250,000

macaroni spaghetti Wheat flour Milling
processing machine with accessories
3 Animals Fodder mixer machine and other 1 601,800 601,800

related spare part
Total 601800
4.1.3. Vehicles
SN Description Qty Unit Price Total Price(Birr) Remark
1 Service Bus 1 600,000 600,000 Duty Free
Total 1 600000
4.1.4. Office Equipment’s
Unit cost Total cost
No Description Qty
in Br. in Br.
1 Managerial Tables 50 2,162 108,108
2 Secretarial chairs with table 50 1,081 54,054
3 Managerial Chairs 50 649 32,432
3 Computer and Printer 150 432 64,865
4 Shelf 200 216 43,243
5 Filing Cabinets 300 108 32,432
6 Customer Chair 100 54 5,405
7 Television 15 324 4,865
8 Waiting Room with sofa 1,000,000 10,811
Page 28
9 others related service 3,550,000 38,378

500,
10 Assembly chair and table(set) 5,405
000
Total 400,000
4.2. INITIAL WORKING CAPITAL

The initial working capital is established to be 26,351,800.00 birr
4.2.1. Material and Inputs

A. Raw and Auxiliary Materials
The major raw materials and auxiliaries required for the production of Food Complex shown in
Table 4.1 below. All the raw and auxiliary materials are to be imported.
Sr. Description Unit Of Annual Unit Price Total Price (CIF)
No. Measure Quantity (CIF)
1 Different Food Complex kuntal 1,600 2,500 4,000,000
materials
Total 0
4.2.2. Salary Expense

As indicated in part three of this study, the total cost of salary and wage is estimated to be
2,000,000 birr.
4.2.3. Other Operating Expenses

SN Description Annual Cost in Br. Assumption Used
1 Property Insurance 30,091.95 10% of Fixed investment cost
2 Audit and Legal Fee 10,000 10% of Salary
3 Uniforms 1,600 1% of FC
4 Telephone, Fax and Postal 1,000 1000per month
5 Cleaning Gods Supplies 500.00 70*60br
6 Repair and Maintenance 50,229.88 900 per month
7 Advertisement 2,000.00 1000 per month
Page 29
9 Stationery and other office 1,000.00 700 per month

supplies
10 Electricity 1,000.00 0.45*150,000W per year
11 Water 5,00.00 2*1000 m3 per year
12 Fuel 20,000.00 6500 lit*20 per year
13 Oil and lubricant 1,000.00 10% of fuel cost
14 Miscellaneous Expense 1,000.00 3,000 br month
15 Other related reserved 3,200,000
Total 600,000.00
4.2.4. Pre -Service Expense

SN Description Cost in br.
1 Project proposal 10,000.00
2 Licensing fee 250,000
3 Promotion and adverting 50,000
4 Workers capacity Building 50,000
5 EIA 40,000
Total 390000
Page 30
4.1. Financial Analysis and Statements
4.1.1. Underlying Assumption

The financial analysis of the envisioned Food Complex industry is based on the data provided in
the preceding sections and the following assumptions.
A. Construction and Finance
 Construction Period ………………………………………………………….…18 Months

 Source of finance……………………………………………..…30% equity and 70% loan
 Bank interest rate …………………………………………………………..…………10 %
 Tax holidays ………………………………………………………………………2 years
 Operating costs increase by……………………………………………..………………2%
 Operating costs and raw material increased by………………………………...………5%
 Utilities and operation expense …………………..…increase 3% per annum after 2ndyear
 Wages and Salary increase…………………………Increase 3% Per annum after 2 nd year
 Sales …………………………………………..increase by 5 % per annum after 2nd year
B. Depreciation
 Building…………………………………………………………………………….5%
 Machinery and Equipment ………………………………………………………..15%
 Office Furniture……………………………………………………………………20%
 Vehicles ………………………………………………………………………..…..15%
C. Working Capital
 Accounts Receivable…………………………………………………………….30 days
 Raw material Local …………………………………………………………..…..30 days
 Work in progress…………………………………………………………………5 days
 Finished Production ……………………………………………………………..30 days

 Cash in hand ……………………………………………………………………...5 days
 Accounts payable …………………………………………………………….…..30 days
Page 31
4.1.2. Source of Fund

S Description % share Amount(in birr)
N
1 Owners Share 30 6,000,000
2 Bank Loan 70 14,000,000
Total 100 20,000,000
4.1.3. Loan Repayment Schedule

Principal Total Annual Remaining
Year Interest (10%)
Payment Payment Balance
0 0 0 0 20,000,000
1 2,000,000 2,000,000 4,000,000 18,000,000
2 2,000,000 1,800,000 3,800,000 16,000,000
3 2,000,000 1,600,000 3,600,000 14,000,000
4 2,000,000 1,400,000 3,400,000 12,000,000
5 2,000,000 1,200,000 3,200,000 10,000,000
6 2,000,000 1,000,000 3,000,000 8,000,000
7 2,000,000 800,000 2,800,000 6,000,000
8 2,000,000 600,000 2,600,000 4,000,000
9 2,000,000 400,000 2,400,000 2,000,000
10 2,000,000 200,000 2,200,000 0
4.1.4. Annual depreciation schedule of the fixed Asset ( birr)
S Original Value Depreciation Depreciation Per

Description
N In Birr rate in % year
Construction and
1 5,600,000 5 280,000
Civil Work
Machines &
2 4,400,000 15 660,000
Equipment’s
3 Vehicles 600,000 20 120,000
4 Office Equipment 400,000 15 60,000
Total 11,000,000 1,120,000
Page 32
4.1.5. Balance Sheet (Beginning)
Balance Sheet
Asset
Current Asset
Cash 3,000,000
Inventory of raw materials and inputs 4,000,000
Total Current Asset 7,000,000

Fixed Asset
Land, Building and Construction 5,600,000
Machineries and Equipment’s 4,400,000
Office Equipment 400,000
Vehicles 600,000
Total fixed Asset 11,000,000
Total Asset
Liability
Account payable 14,000,000
Owners Equity 6,000,000
Capital
Total Liability & Owners’ Equity 20,000,000
Page 33
Income Loss Statement

Revenue Year 1 Year 2 Year 3-10
541,800,00
Sales 270,900,000 297,990,000
0
Sales expenses (5%)* 13,545,000 14,899,500 27,090,000
265,075,09
Purchase of Raw Material 4,000,000 265,075,095
5
276,724,90
Gross profit 266,900,000 32,914,905
5
Expenses
Salary Expense 2,000,000 2,100,000 2,205,000
Operating Expenses 600,000 630,000 661,500
Pre-operating Expense 400,000 420,000 441,000
Deprecation Building 280,000 280,000 280,000
Deprecation machine 660,000 660,000 660,000
Deprecation Vehicles 120,000 120,000 120,000
Deprecation office Equip 60,000 60,000 60,000
Lease Expense 16,340,000 16,340,000 16,340,000
Interest Expense 2,000,000 1,800,000 200,000
Total Expense 22,460,000 22,410,000 20,967,500
541,800,00
Profit Before Tax 270,900,000 297,990,000
0
162,540,00
Tax(30% ) 81,270,000 89,397,000
0
379,260,00
Net Profit 189,630,000 208,593,000
0
Page 34
Cash Flow Statement
Particulars Year0 Year I Year II Year III-XI

A. Cash Inflow 0
· Own equity 6,000,000
· Bank loan 14,000,000
· Depreciation 0 1,120,000 1,120,000 1,120,000
· Net profit 0 189,630,00 208,593,00 379,260,00
0 0 0
Total inflow 190,750,00 209,713,00 380,380,00
20,000,000 0 0 0
B. Cash outflow 0
· Fixed capital 11,000,000
· Working capital 7,000,000
. Contingency (Lump sum) 2,000,000
10%
· Loan repayment 2,000,000 1,800,000 200,000
Total outflow 20,000,000 2,000,000 1,800,000 200,000
Net inflow (A-B) 188,750,00 207,913,00 380,180,00
0 0 0 0
Cumulative balance 188,750,00 207,913,00 380,180,00
0 0 0 0
Page 35
4.2.7. Profitability
According to the projected income statement, the project will start generating profit in the 1st
year of operation. Important ratios such as profit to total sales, net profit to equity (Return on
equity) and net profit plus interest on total investment (return on total investment) show an
increasing trend during the lifetime of the project.
The income statement and the other indicators of profitability show that the project is viable.
4.2.8. Pay-Back Period
The investment cost and income statement projection are used to project the pay-back period.
The project's initial investment will be fully recovered at the 3 years of operation.
5. ENVIRONMENTAL IMPACT ASSESSMENT OF THE PROJECT

5.1 Socio Economics Environments
The owner will provide the land on bases and all required compensation will be paid for the
project. The livelihood of the local people around the project area is rural dweller of various
occupation and economic background.
5.2 Environmental Impact Assessment of the Project

Environmental aspects are fundamental for the sustainability assessment of the current
competition marketing related plant. In this regard the factory will undertake a separate and
detail Environmental impact Assessment.
Page 36

Food Complx and Animal Food

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project proposal for food Complex and anomals Fooder 2020

PROJECT PROPOSAL FOR

FOOD COMPLEX FACTORY AND

PROJECT TO BE IMPLEMENTED IN AFAE REGIONAL STATE,

PROMOTER: AWEL SUALIH MOHAMMED

Addis Ababa, Ethiopia

4.1. Total Initial Investment Cost………………………………………………………...20

4.1.1. Fixed Investment …………………………………………………………….……24

5.1 Socio Economics Environments …………………………………………………….…...….31

1 Project Type Food Complex and Animals Fodder Industry

1.1. Status News

2 Project Owner Awel Sualih Mohammed

4 Project Location Afar Region,

6 Premises Required 10,000 M2 or 1 Hek.

7 Total Capital  The total of birr 20,000,000 is required.

 Permanent Workers 100

 Wheat Flour, pasta, macaroni, biscuit ,

Awash River near Asaita

Ethnicity of Afar region

Ethnic Group 2007 Census[6] 1994 Census[7]

Afar 90.03% 91.8%

Oromo 5.22% 4.5%

Argobba 1.55% 0.9%

Tigrayan 1.15% 0.8%

Amhara 0.61% 0.8%

Welayta 0.59% 0.5%

Hadiya 0.18% 0.2%

Religion of Afar region

Religion 2007 Census[6] 1994 Census[7]

Christian 4.7% 4.4%

Orthodox 3.86% 3.9%

P'ent'ay 0.43% 0.4%

Catholics 0.09% 0.1%

A map of the regions and zones of Ethiopia

Erta Ale Volcano

1.2 Objectives of the Project

1.3 The Product Description and Application

1.4 Location Map of the Area.

 Proximity to the major potential market for the out put

1.5. Brief History of the Promoter

2. GENERAL MARKET STUDY AND PLANT CAPACITY

2.1.1. Objective of the Project

2.1.2. The Economic Significance of the Project

2.1.3. Source of Revenue

2.1.4. Employment opportunity

2.1.5. Save/Generate the Country Foreign Exchange

2.1.6. Benefit For The Local Community

2.1.7. Stimulate The Local Economy

2. TECHNOLOGY AND ENGINEERING

The production process of wheat flour consists of four major operations:-

2. Machinery and Equipment

3. Economic activity of Area

2.2.2. Land Use Plan

SN Description Land Requirement (M2)

2 Office Building 1,500

3 Guard house 500

4 Toilet and shower room 500

6 Raw material Store 500

8 End product Store 500

9 Show room 500

10 Parking and others 500

2.2.3. Pricing and Distribution