DR - Lisanework Project Abaya

PROJECT PROPSAL FOR AGRO- INDUSTRY DEVELOPMENT IN
ABELA ABAYA WOREDA, WOLAYTA ZONE, SNNPRS
PROJECT PROPOSAL FOR AGRO-INDUSTRY

DEVELOPMENT (dairy cow, poultry and crop production)
PROJECT LOCATION- ABELA ABAYA, WOLAYTA ZONE
Project Name – DR.LISANWORK integrated Agro industry
PROMOTERS
Dr. Lisanwork Honsebo Solomon
`EXCUTIVE SUMMARY
[1]
The project will establish integrated agro industry (dairy cow, poultry and vegetables &
Fruits) in boloso sore Woreda of Wolaita zone. The project will have 32 cow breeds
out of which 25 breeds are improved European breed called Holitsen Persian breed
called “Waadu Miziyo” many other local breeds. It also develops poultry (chicken for
its eggs & Broiler) The project total investment cost is 10,000,000 of which fixed asset
like cow breeds, machine and equipments will be highest rate. The project promoters
are very envisioned two individuals named Dr. Lisanwork Honsebo Solomon and
Mr.Francios Xavier.
The project also intergrades farming activities our company agriculture development
decided to involve into agriculture preferably, vegetable and other crops production and
supply to nearby cities and markets. The business need 50 hectare of lands that expected
to be obtained from the government in Boloso Sore Woreda where the development
aimed to produce vegetable gardening, supply to consumers Wolayta zone and other
nearby cities. Currently the promoters are developing in 4 hectare land. The project will
be proposed to start with 50 hectare of land area expected to be obtained from the
government and will start at end of 2015 E.C or beginning of 2025. The project will be
operational for 5 years from 2020-2025 and expected to produce5000 ton per year of
240,000 ltrss of milk and milk products eggs and vegetables other fruits and will earn
total sale more 15 million ETB and wish to secure net profit of at the end of the
production year means 2025
 Total investment cost
The total investment of the project cost is 10,000,000 The project will use fund for the project
from two sources of promoters contributions and investment loan from the bank, accordingly,
Promoters’ contributions – as the business is partnership type of business entity, the promoters
will contribute 30% (3 million ETB) which they equally share together and each partner and the
bank loan will be70% (7 million ETB). Regarding bank loan, based on the investment law of the
countries and other directives, an investor can be excess to loan service from commercial bank
of public and private owned ones. Hence this project will have 70 % of the remaining fund 7
million ETB from financial institute sources.
PROJECT DISCRIPTIONS
Project Proposal milk production & poultry farm
 Project name -- Animal production (Dairy /milk production) Fruit &
vegetable agricultural development partnership
[2]
Promoters name- Dr. Lisanwork Honsebo Solomon and Mr.Francios Xavier.

 Project location- Boloso Sore Woreda, Wolayta zone
 Project promoters- four individuals
 Total area of land need – 50 hectare.
 Current operational -4 hectare
 Type of business entity –sole proportiership
 Name of business- agricultural development Plc.
 Project durations- from 2022-2027
 Project total establishment cost- 4,35million birr
 Proposed starting time-June 2022
1.1. TOTAL CAPAITAL REQUIREMENTS

Activities Cost Remarks
Purchase of machineries 3,000,000.00 Will be purchased by Tax
(tractor) and pick up double exemption
gab car
Seeds & inputs 500,000.00
Improved cow breed 4,000,000
Water drilling 500,000.00
Working capital 2,000,000
10,000,000
Total investment budget for the project would be lump sum 10,000,000 ETB which can be
obtained from two sources; promoters’ contributions and loan from the banks.
1. Promoters’ contributions – as the business is partnership type of business entity, the two
promoters will contribute 30% (3000,000 ETB) which they equally share together each
partner and the bank loan will be 7,000,000 ETB.
[3]
2. Regarding bank loan, based on the investment law of the country and other directives, an
investor can be excess to loan service from commercial bank of public and private owned
ones. Hence this project will have 30 % of the remaining fund 3,000,000 ETB bank loan
from development banks.
3. Loan analysis – total loan ------------------7,000,000 ETB.
4. Interest rate (10%) per year----------------700,000
5. Total principal to be refund back to bank-------7,000,000 ETB.
6. Annual repayment to bank breakdown
The loan shall be due by the 5 year as investment law of Ethiopia and commercial code
of the country, therefore the project will repay back the interest and principal together
according to the breakdown listed below.
Year one -----------------------------1,400,000
Year two-----------------------------1,400,000
Year three ---------------------------1,400,000
Year four ----------------------------1,400,000
Year five ----------------------------1,400,000
Total ----------------------------------7,000.000
Interest
Year one -----------------------------140,000
Year two-----------------------------140,000
Year three ---------------------------140,000
Year four ----------------------------140,000
Year five ----------------------------140,000
Total ----------------------------------700,000
1.1. PROJECT OBJECTIVES

 Producing, (milk production) Dairy cow as vegetables & fruits Banana cash crop
 Supplying of Milk production vegetables & fruits to local and international
markets (to communities in local as well as national markets)
 Contribute to development of the country
 Create employment opportunity paying tax to government
[4]
1.2. PROJECT COMPONENTS
The project has two component parts; one is the construction and facilities development and
second is the operation components. The facilities development components deal with
construction of shades agricultural storages and other farm units and offices building where as
the operation component deal with purchase of equipment’s needed for farm, inputs like fertilizer
and land management phases. It also includes the farm management practice based on the type of
the vegetable crop that will be plated and the cultural practice that can be deployed on the
proposed cash crop.
 Project total area – 50 hectors of land
 Types of investment –Agribusiness development production investment
 Estimated yield annual ---5000QT/year
1.3. EXPECTED BENEFICIARIES
THE PROJECT WILL SECURE BENEFIT FOR THE FOLLOWING
 Local and national markets( the community)

 unemployed citizens
 promoters and families
 government from tax revenue
1.4. MANPOWER NEED OF THE PROJECT
 Permanent- The project will benefit10 permanent employees
 Temporary -20 temporary employees who make 30 total workforce
 Durations -5 years from 2014-2019E.C
[5]
PART ONE
DAIRY (MILK) PRODUCTION
SUMMARY
This profile envisages the establishment of a plant for the production of dairy products(milk)
with a capacity of processing 240,000 liters of raw (whole) milk per annum producing 160,000
liters of pasteurized milk, 15,000 kilograms of butter, 6,000 kilograms of cheese, and 4,000
kilograms of yoghurt per annum. This will use 30 cow breed (Holitsen Persian(locally called
“Waadu Miziyo” and local Zebu breed)
The country`s requirement of dairy products is met through local production and import. The
present (2012) unsatisfied demand for pasteurized milk, butter, cheese and yogurt in Addis
Ababa is estimated at 277,290 hl, 3,296 tons, 1,542 tons, and 229 tons respectively. The
unsatisfied demand for the pasteurized milk, butter, cheese and yogurt in Addis Ababa is
projected to reach 519,501 hl, 6,011 tons, 2,783 tons and 415 tons, respectively by 2022.
The principal raw material required is cow milk, which is locally available.
The total investment cost of the project including working capital is estimated at Birr 5 million.
From the total investment cost the highest share (50%) is accounted by fixed investment cost
followed by pre operation cost (25%) and initial working capital (25%).
The project is financially viable with an internal rate of return (IRR) of 20.00% and a net present
value (NPV) of Birr 6.65 million discounted at 10%.
The project can create employment for 10 persons. The establishment of such cow farming will
have a foreign exchange saving effect to the country by substituting the current imports. The
project will also create backward linkage with the livestock sector and also generates income for
the Government in terms of tax revenue and payroll tax.
1. PRODUCT DESCRIPTION AND APPLICATION
[6]
Cow milk is white liquid containing water, fats, protein, sugar and ash. It is revealed through
chemical analysis that about 86 - 88% by weight of cow milk is water. A number of products
such as pasteurized milk, yogurt, cheese and butter are produced by processing of cow milk. All
these products are consumed by human beings as part of diet on the daily feeding menu.
The main protein of milk is casein which exists as a colloidal suspension and is a good protein
nutritionally. It is prepared from skimmed milk by coagulation with acid or by self souring. Cow
milk contains 2.4 - 6.1% of lactose. Lactose is the characteristic carbohydrate of milk. It is
manufactured from the whey remaining after the manufacture of cheese from milk. Lactose is a
complete food for infants up to 6 months of age; afterwards it acts as supplement to other foods.
One point of milk supplies about 320 cal. of which 50% is contributed by fat 20% lactose and
21% by protein. Cow milk is also valuable source of phosphorus, calcium and vitamins. It
contains a useful amount of vitamins including vitamin A, thiamin (vitamin B), riboflavin,
pyridoxine (vitamin B6), bistin, pentothenic acid and vitamin D etc.
1.1. MARKET STUDY AND PLANT CAPACITY
A. MARKET STUDY
1. Past Supply and Present Demand
Dairying is practiced almost all over Ethiopia involving a vast number of small or medium or
large-sized, subsistence or market-oriented farms. Based on climate, land holdings and
integration with crop production as criterion, dairy production systems are recognized in
Ethiopia; namely the rural dairy system which is part of the subsistence farming system and
includes pastoralists, agro-pastoralists, and mixed crop–livestock producers; the peri-urban; and
urban dairy systems. The first system (pastoralism, agro-pastoralism and highland mixed
smallholder production system) were found to contribute to 98%, while the peri-urban and urban
dairy farms produce only 2% of the total milk production of the country (Sintayehu et al 2008).
Demand for standard diary products from the modern sector is met by domestic production and
through import (see Table 3.1 and Table 3.2)
[7]
Domestic production of diary products between 2001/02-2009/10 is presented in Table 3.1.

CSA’s Large and Medium Scale Manufacturing and Electricity Industries Survey Report doesn’t
provide data on Yogurt. Therefore, it is estimated based on Diary Development Enterprise’s
(DDE) production data of 1980/81-2001/02. Specifically, the average share of yogurt in 1980/81-
2001/02 had been 0.2%. This figure is used to obtain annual production of yogurt in 2001/02-
2009/10 period (by assuming the share was maintained in these years).
Table 3.1
DOMESTIC DIARY PRODUCTION
Year Pasteurized Butter (tons) Cheese Yogurt *

Milk (HL) (tons)
(tons)
2001/02 89,382 384 166 18.41
2002/03 107,469 180 140 21.46
2003/04 121,739 339 189 24.64
2004/05 135,077 394 104 27.17
2005/06 162,103 588 122 32.83
2006/07 134,617 354 480 27.75
2007/08 146,291 365 236 29.54
2008/09 160,927 611 270 32.94
2009/10 242,564 982 185 49.33
*Estimated as 0.2% of total annual production of the four diary products (based on DDE data)
Source: - CSA, Large and Medium Scale Manufacturing and Electricity Industries Survey,
Various Issues.
[8]
As can be seen from Table 3.1, production of milk, butter, cheese, and yogurt has grown from
89,382 tons, 384 tons, 166 tons and 18 tons in 2001/02 to 242,564 tons, 982 tons, 185 tons, and
49 tons, respectively in 2009/10. The pattern of production of pasteurized milk also showed
generally a rising trend, with brief interruption in the exceptional 2006/07-2007/08 period. In
2008/09 it started to rise again and by 2009/10 climbed to 242,564 HL. The average growth rate
of 2001/02-209/10, which is 15%, has been applied on 2009/10 level to estimate the production
level of pasteurized milk in 2012 which gives is 320,791 HL.
Similarly, production of butter has generally been rising with sudden drop in exceptional three
years (2002/03, 2003/04, and 2006/07). Average growth rate of 2001/02-209/10 (24%) has been
applied on 2009/10 level to estimate the production level of in 2012 which gives 1,510 tons.
Production of yogurt has also been rising. Hence, average growth rate of 2001/02-209/10 (14%)
has been applied on 2009/10 level to estimate the production level of in 2012 which gives 64
tons. The Production of cheese showed a different pattern (of fluctuation) in the study period. As
a result, last four years average has been taken as 2012 production estimate which is 292 tons.
To meet the unsatisfied demand Ethiopia also imports diary products from abroad. A summary
of the four types of diary products imported during the period 2001 – 2011 is presented in Table
Table 3.2
IMPORT OF DIARY PRODUCTS (TONS)
Year Milk Butter Cheese Yogurt
2001 13.1 4.4 19.1 2.4
2002 21.1 7.0 12.3 0.8
2003 3.8 1.8 19.3 2.6
2004 4.0 11.4 45.3 1.2
2005 17.9 2.1 55.0 4.6
2006 18.3 25.3 58.1 5.1
2007 38.5 16.3 58.1 7.8
[9]
2008 322.9 14.2 60.8 8.9
2009 46.3 32.7 70.3 6.8
2010 84.3 3.9 78.5 7.7
2011 165.0 12.8 98.3 11.9
Source:- Ethiopian Revenue and Customs Authority.
It can be seen from Table 3.2 that import of milk which was 13 tons at the beginning of the
period (2001) has grown to 84 tons by the end of the period (2011). Butter, cheese and yogurt
also showed growth from 4 tons, 19 tons, 2 tons to 12.8 tons 98.3 tons 11.9 tons, respectively.
Pattern in level of import differed by type of product. Pasteurized milk and butter exhibited
fluctuations whereas import level of cheese and yogurt has more or less been rising (see Table
3.2). Therefore, in estimating the level of import of milk and butter for 2012, the average of last
three years has been taken for milk and butter while for cheese and yogurt the average growth
rate of the 2001-2011 has been applied on 2011 import levels. Accordingly, import level is
estimated at 98.5 tons (or 956 HL), 16.5 tons, 118 tons, and 17.8 tons for milk, butter, cheese and
yogurt, respectively.
To arrive at the aggregate supply or apparent consumption, the level of import and the existing
domestic production have been added. Accordingly, aggregate supply or apparent consumption
of pasteurized milk, butter, cheese, and yogurt (in 2012) is estimated at 321,747 HL, 1,526.5
tones, 410 tons, and 81.8 tons, respectively.
However, these figures are unlikely to reflect the real demand for a number of reasons. First, as
was mentioned earlier a substantial amount of milk is processed outside the modern
establishment where standard procedures, practices and facilities don’t exist. In addition, studies
have shown that there was a shortfall of 76% in milk supply in Addis Ababa alone (Azage et al
2006). Hence, a better estimate would be to consider African countries’ average per capita milk
consumption. African countries’ average per capita milk consumption is 40 kg or 38.8 liters
(DIARY MAIL AFRICA 2007). According to CSA (2011), the population of Ethiopia is 82
[10]
millions out of which 13.75 million is urban dwellers. This would yield a demand figure of 5.3
million HL for milk. About 28.8%, 58%, 13.2% and 0.2% of the demand for milk in urban
Ethiopia comes from demand for pasteurized milk, butter , cheese and yogurt, respectively
(based on Feleke and Geda 2001). Hence, the present urban demand for pasteurized milk and
yogurt is 1,526,400 and 1,060 tons, respectively. The milk demand necessary for preparation of
butter and cheese is 3.07 million HL and 699,600 HL respectively. These needs to be converted
into corresponding demand for butter and cheese. 19.38 liters of Milk is required to make
1Kilogram of Butter and 10 liters of Milk is required to make 1(one) Kilogram of Cheese.
Hence, the present demand for butter and cheese is 15,841 tons, and 6,996 tons respectively. The
urban population of Ethiopia is 11,862,821 while that of Addis Ababa is 2,739,551, (CSA 2011).
Addis Ababa constitutes about 23% of the total urban population of Ethiopia and processor(s) in
Addis Ababa are assumed to capture 23% of the demand likewise. Hence, the present effective
demand for pasteurized milk, butter, cheese and yogurt in Addis Ababa is 351,072 HL, 3,643
tons, 1,609 tons, and 243.8 tons respectively. On such basis the unsatisfied present demand for
pasteurized milk, butter, cheese and yogurt in Addis Ababa is 277,290 HL, 3,296 tons, 1,542
tons, and 229 tons respectively.
1.2. Demand Projection
Milk is basic requirement for humans. According to World Health Organization (WHO) milk
consumption of 100 liters per capita is required for healthy life. The demand for pasteurized milk
and other milk products in the end is highly influenced by urban population growth, income, and
favorable change in household attitude towards processed foods.
Current development in the country is characterized by rapid population growth in general and
towns (4.4 %) in particular – one of the fastest in Africa. Similarly, there is a positive per capita
income growth. As a result, the demand for dairy products is increasing as ever. Considering the
combined effect of these factors an annual growth rate of 6% is applied in projecting the demand
for these diary products and for exiting production annual growth rate of 4% is applied. On this
basis the total projected demand in 2013 for pasteurized milk butter, cheese and yogurt will be
1,617,984 HL, 16,791 tons, 7,416 tons and 1,123 tons respectively. Exiting production of
[11]
pasteurized milk butter, cheese and yogurt in 2013 will be 333,622 HL, 1,570 tons, 303 tons, and
66 tons respectively. This will leave unsatisfied demand of 1,284,362 HL, 15,221 tons, 7113
tons, and 1,057 tons of pasteurized milk butter, cheese and yogurt respectively. The urban
population of Ethiopia is 11,862,821 while that of Addis Ababa is 2,739,551, (CSA, 2011).
Addis Ababa constitutes about 23% of the total urban population of Ethiopia and processor(s) in
Addis Ababa are assumed to capture 23% of the demand likewise. The projected unsatisfied
demand is shown in
Table
PROJECTED DEMAND FOR DIARY PRODUCTS (2013-2022)
Year Unsatisfied Unsatisfied Unsatisfied Unsatisfied

Demand for Demand for Demand for Demand for
Pasteurized Milk Butter Cheese Yogurt
(HL) (tons) (tons) (tons)
2013 295,403 3,501 1,636 243
2014 314,662 3,718 1,736 258
2015 335,138 3,949 1,841 274
2016 356,906 4,193 1,953 291
2017 380,047 4,453 2,072 308
2018 404,645 4,729 2,198 327
2019 430,791 5,021 2,331 347
2020 458,580 5,332 2,473 368
2021 488,114 5,661 2,623 391
2022 519,501 6,011 2,783 415
1.3. Pricing and Distribution
[12]
Milk, butter, cheese, and yogurt are retailed in super markets on average at Birr 50 per liter, Birr
155 per kg, Birr 150 per kg and Birr 34 per liter, respectively.
Allowing 25% for retail margin for distributors and retailers, a price of Birr 16 per liter, Birr 124
per kg, Birr 120 per kg, and Birr 27.20 per liter, is recommended for milk, butter, cheese and
yoghurt, respectively.
Distribution of the products could be undertaken through small retail outlets such as shops as
well as supermarkets and catering establishments.
1.4. PLANT CAPACITY AND PRODUCTION PROGRAM

 Plant Capacity
Based on the projection of unsatisfied demand for dairy products in the market study and the
minimum economic scale of production, the envisaged plant will have a capacity of processing
240,000 liters of raw (whole) milk per annum producing 160,000 liters of pasteurized milk,
15,000 kilograms of butter, 6,000 kilograms of cheese, and 4,000 kilograms of yoghurt per
annum at full operation capacity. This capacity is proposed on the basis of two shifts of 8 hours
per day and 300 working days per annum.
 Production Program
With an assumption that enough time, during the initial production period, will be required for
market penetration and technical skill development, the envisaged plant will start production at
85% of its installed capacity which will grow to 90% in the second year. Full capacity
production will be attained in the third year and onwards. Details of the annual production
program along with the product mix are shown in Table 3.4
ANNUAL PRODUCTION PROGRAM
Sr. Description Unit of Production Year

No. Measure
1st 2nd 3rd &
Onwards
1 Pasteurized milk lt 136,000 144,000 160,000
2 Butter kg 12,750 13,500 15,000
[13]
3 Cheese kg 5,100 5,400 6,000
4 Yoghurt lt 3,400 3,600 4,000
5 Capacity % 85 90 100
utilization rate
1.5. MATERIALS AND INPUTS
A. RAW MATERIALS
The principal raw material required for the production of pasteurized milk, butter, cheese and
yoghurt is raw (whole) cow milk. In addition, small quantities of coagulation enzymes and salt
are also required for the production process. The raw (whole) cow milk and salt are available
locally while the coagulation enzymes have to be imported. Details of annual requirement for
raw materials at 100% capacity utilization of the plant and the estimated costs are shown in
The auxiliary materials required for the envisaged plant comprise packing materials like 200 cc
plastic bags, 40 gm glycine paper and carton box. The plastic bags and carton boxes can be
acquired from the local market while the glycine paper has to be imported. The annual
requirement for auxiliary materials at full capacity of the envisaged plant and the estimated costs
are indicated in Table 4.2.
ANNUAL AUXILIARY MATERIALS REQUIREMENT AND COST
Sr. Description Unit of Required Unit Cost ('000 Birr)

No. Measure Qty. Price,
F. C. L.C. Total
Birr/Unit
1 200 cc pc 800,000 0.65 520.00 520.00

Plastic bag
2 400 gm kg 58.2 232 10.802 2.70 13.50

Glycine
[14]
paper
3 Caton box pc 24,000 4.00 96.00 96.00
Total 10.80192 618.70 629.50
1.5. TECHNOLOGY
1. Process Description
Processing of raw milk mainly involves heat treatment operation usually known as pasteurization
and sterilization. These processes are discussed in detail as follows.
A weighed amount of raw milk is pumped to a clarifier by means of the milk pump, where it is
removed of microscopic impurities. Clarified milk is next sent to the cooler where it is cooled to
about 2-5oC, then pumped to the storage tank.
The milk is, then, preheated and pasteurized to a temperature of about 80 oC by heat exchange.
Further, by the effect of ultra-high temperature sterilizer, the fatty ingredients are homogenized
in the homogenizer and recycled to the ultra-high temperature sterilizer where it is pasteurized
instantly in about 2 seconds at high temperature of 135oC.
Finally, cooling is achieved by means of chilled water to lower the temperature to 3oC, after
which the milk is stored in the surge tank for filling into suitable containers for various uses.
After such a process, a specified quantity of the milk is sold as a pasteurized product while the
remaining portion is further processed in the plant for the production of other milk products such
as butter and cheese. The details of the production processes are stated as follows.
Whole milk is partially or totally separated to produce standardized whole milk with 3.25% milk
fat, low fat milks, 1 - 2% milk fat, and skim milk. After separation, cream is held in stainless
steel tanks and refrigerated at (4 - 7oC).
[15]
The separated cream is pasteurized in order to destroy bacteria. Following pasteurization, rapid
cooling is conducted to facilitate the formation of butter by a churning process. By continuous
churning, the entering cream will be pasteurized giving tempered cream which is further agitated
vigorously by beater bars. This action causes stripping of the fat globule membrane and
aggregation of the fat into chunks. Finally, a continuous ribbon of yellow butter streams from
the end of the continuous churn. Butter as a product drops into a hopper, where it is transferred
to packing machinery.
Cheese is made from pasteurized skim milk, and in form of discrete particles classified as small
or large curd. A curd forms when the increasing lactic acid of milk during fermentation attains
the isoclectric point of casein at pH 4.6. This soft curd additionally contains lactose, salt and
water. Latter, the curd matrix is cut and cooked to about 126 oF (52oC). Separation of whey
from the curd is rapid, and is followed by two or three water washings at warm to chill
temperatures. Washing removes whey from residues and acts as a cooking medium. After
drainage of the last wash water, the chilled curd is blended with a viscous, salted cream dressing
to give 4.2% fat and 1% salt, and is packaged.
1.6. Environmental Impact
The dairy products plant does not have any pollutant emitted from the production process, except
the washing water which has to be connected to appropriate sewerage line to get rid of. Thus, the
envisaged project is environment friendly.
1.7. ENGINEERING
 Machinery and Equipment
The list of plant machinery and equipment required for the envisaged project and the estimated
costs are given in Table 5.1.
 Land, Buildings and Civil Works
[16]
Total land area required is 1,000 square meters out of which 600 square meters are built – up
area. The construction cost of buildings and civil works at a rate of Birr 4,500 per m 2 is estimated
at Birr 1.7 million.
According to the Federal Legislation on the Lease Holding of Urban Land (Proclamation No
721/2004) in principle, urban land permit by lease is on auction or negotiation basis, however,
the time and condition of applying the proclamation shall be determined by the concerned
regional or city government depending on the level of development.
The legislation has also set the maximum on lease period and the payment of lease prices. The
lease period ranges from 99 years for education, cultural research health, sport, NGO , religious
and residential area to 80 years for industry and 70 years for trade while the lease payment
period ranges from 10 years to 60 years based on the towns grade and type of investment.
Moreover, advance payment of lease based on the type of investment ranges from 5% to
10%.The lease price is payable after the grace period annually. For those that pay the entire
amount of the lease will receive 0.5% discount from the total lease value and those that pay in
installments will be charged interest based on the prevailing interest rate of banks. Moreover,
based on the type of investment, two to seven years grace period shall also be provided.
However, the Federal Legislation on the Lease Holding of Urban Land apart from setting the
maximum has conferred on regional and city governments the power to issue regulations on the
exact terms based on the development level of each region.
In SNNPRS different zones & the City’s Land Administration and Development Authority is
directly responsible in dealing with matters concerning land. However, regarding the
manufacturing sector, industrial zone preparation is one of the strategic intervention measures
adopted by the City Administration for the promotion of the sector and all manufacturing
projects are assumed to be located in the developed industrial zones.
Accordingly, in order to estimate the land lease cost of the project profiles it is assumed that all
new manufacturing projects will be located in industrial zones located in expansion zones.
[17]
Therefore, for the profile a land lease rate of Birr 266 per m 2 which is equivalent to the average
floor price of plots located in expansion zone is adopted.
On the other hand, some of the investment incentives arranged by the SNNPRS Wolayta zone
City Administration on lease payment for industrial projects are granting longer grace period and
extending the lease payment period. The criterions are creation of job opportunity, foreign
exchange saving, investment capital and land utilization tendency etc.
Table 5.3
INCENTIVES FOR LEASE PAYMENT OF INDUSTRIAL PROJECTS
Payment Down
Grace Completion Paymen
Scored Point Period Period t
Above 75% 5 Years 30 Years 10%
From 50 - 75% 5 Years 28 Years 10%
From 25 - 49% 4 Years 25 Years 10%
For the purpose of this project profile, the average i.e. five years grace period, 28 years payment
completion period and 10% down payment is used. The land lease period for industry is 60
years. Accordingly, the total land lease cost at a rate of Birr 266 per m 2 is estimated at Birr
266,000 of which 10% or Birr 26,600 will be paid in advance. The remaining Birr 239,400 will
be paid in equal installments within 28 years i.e. Birr 8,550 annually.
INITIAL INVESTMENT COST DAIRY FARM
Sr. No Cost Items Total

[18]
Cost
1 Fixed investment
1.2 Building and civil work 50,000.00
Machinery and equipment(heavy duty track,

1.3 double cab Toyota and farm tractor) 3,000,000.00
1.4 Milking tools and equipments 50,000.00
Water wells and facilities development cost 300,000.00
1.5 Cow breeds(20cowsx80,000.00) 1,600,000.00
Sub total 5,000,000
2 Pre operating cost *
2.1 Pre operating cost 100,000.00
2.2 Interest during construction 50,000
Sub total 150,000
3 Working capital ** 1,000,000.00
Grand Total 6,150,000.00
PART TWO
[19]
POULTRY PRODUCTION
2. EXCUTIVE SUMMARY
This profile envisages the establishment of a farm for the rearing of poultry with raising capacity
of 200,000 heads of poultry per annum. Poultry meat and eggs have become the most important
sources of protein in the human diet by using it directly or after passing through food processing
industries. The major inputs and auxiliary raw materials required are day old chickens,
commercial formula feed, and high quality vaccines which have to be imported. The present
unsatisfied demand for poultry meat and eggs in Addis Ababa is estimated at 7,750 tonnes and
5,410 tons respectively. The demand is expected to reach at 7,845 tones and 11,238 tones for
eggs and poultry meat respectively by the year 2020.
The total investment requirement is estimated at Birr 2,500,000 million, out of which Birr
1 million is required for plant and machinery. The plant will create employment opportunities for
17 persons. The project is financially viable with an internal rate of return (IRR) of 17.63 % and
a net present value (NPV) of Birr 3.59 million, discounted at 8.5 %. The poultry farm has a
backward linkage effect on animal feed processing industries and a forward linkage effect on
food processing industries. There is also a substantial export potential.
2.1. FARM DESCRIPTION AND APPLICATION
Poultry are large domestic fowl (e.g. hens, ducks, geese, turkey) reared for meat or egg. The
consumption of poultry has increased considerably owing to the speed at which fowl mature and
to the small amount of feed required per kg of meat produced. The production cycle for the
envisaged poultry farm starts with day old chicken. Day old chicken is bought for rearing in the
[20]
envisaged plant by feeding well balanced feed in disease controlled and hygienic shed for about
six month and then marketed at this stage. The major consumers of the product of the envisaged
plant will be hotels, restaurants, supermarkets, various institutions with food catering services,
and households
2.2. MARKET STUDY AND FARM CAPACITY
 MARKET STUDY
 Past Supply and Current Demand
Poultry products such as egg and poultry meat are the central diets of Ethiopian’s. “Doro Wet”
which is prepared from poultry meat and eggs is one of the favorite dishes of the local population
which is prepared especially during religious festivals and holidays, virtually in every household
in the country. Moreover, eggs as they are easy to prepare and digest, have good test and nutrient
are becoming the favored breakfast items in urban areas like Addis Ababa and other regional
cities like Hawassa. Accordingly, due to the traditional consumption habit and as the awareness
of the population on the nutritional and other advantages of poultry products increases the market
for the products is also expected to expand.
Most of the chickens and egg that are supplied to the Hawassa city Administration’s market
come from SNNPRS regional states and, according to the study made by Livestock Marketing
Authority in 2014, the number of eggs and chicken that entered the Addis Ababa city was
estimated to be 86 million, and 3.1 million, respectively.
According to the unpublished data of Hawassa and Addis Ababa City Administration’s Urban
Agriculture Department (2011), the per capita consumption in Addis Ababa was about 3.28 kg of
eggs and 3.5 kg of poultry meat. Accordingly, considering the total population size of Addis
Ababa in 2014 the total consumption of the products is give below.

[21]
2.2. Total Egg And Poultry Meat Consumption Of Addis Ababa & Hawassa (2019)
No Poultry products in KG Consumption/population
1. Egg consumption per person ( kg) 3.28
2. Population size (head 4000,000
3. Total consumption ( Kg 13,120,000
4. Poultry meat consumption per person ( kg) 3.5
5. Population size (head) 4000,000
6. Total Consumption ( kg) 14,000,000
Source ( CSA,2015)
As can be seen from Table 3, the total current consumption of egg and poultry meat in SNNPRS
13,120,000 tonnes for egg and 14,000 tonnes for poultry meat It is estimated that the poultry
population in the SNNPRS is about 23,500,000 where most of the chicken are raised on small
scale level in the backyards. The poultry population is insignificant as compared to the national
poultry population, which is estimated at about 63 million. The existing chicken’s population in
the Hawassa City is estimated to produce about 3000 tonnes of egg and 705 tonnes of poultry
meat. The present unsatisfied demand for poultry meat and eggs in SNNPRS is estimated at7,
750 tones and 5,410 tonnes, respectively.
2.3. Projected Demand
The demand for poultry meat is mainly influenced by population growth and income rise. The
1961, 1967 and 1978 population sample survey for Addis Ababa revealed that the population of
Addis Ababa was 0.4, 0.7 and 1.2 million, respectively. The 1984 census put the population of
[22]
Addis Ababa at 1.4 million while the 1994 census recorded 2, 112.737 people. There is an
increase of 0.7 million or 50 % increase over a decade period. The annual increase over the
period 1984-1994 is 5 %. The total population of Addis Ababa in 2007 is estimated to be about
3.4. The population grows at an average annual growth rate of 2.9%. The city population is
estimated to reach 4.4 million in year 2015.
Accordingly, the rapidly increasing population of the city will augment the demand for poultry
products such as egg and poultry meat With increasing income or purchasing power, people
demand more diversified food products like poultry products. Therefore, the level of poultry
products consumption has a strong association with the growth of income. One of the indicators
that measure the economic performance of a country and the well being of the population is
GDP. During the period 1995-2005 real GDP growth averaged 5.8% a year, export grew by
about 5% a year, annual inflation averaged about 4% and in year 2005 investment had risen to
16% of GDP. The positive performance of the Ethiopian economy is expected to continue in the
future. As a result, the market for poultry products may also be expected to increase as economic
expansion lead to a raise in the income level of the population
Accordingly, the demand for the products is estimated to grow at 2.9% per annum which is
equivalent to the population growth. Table 3.4 shows the projected demand for eggs and poultry
meat in Addis Ababa and regional cities computed by taking the estimated present demand as a
base and applying an average annual growth rate of 2.9%.
PROJECTED DEMAND (IN TONNES)

[23]
No Year Egg demand Meat Demand
1. 2008 5,677 7,978
2. 2009 5728 8,206
3. 2010 5,894 8,444
4. 2011 6,065 8,689
5. 2012 6,241 8,941
6. 2013 6,422 9,200
7. 2014 6,609 9,467
8. 2015 6,800 9,741
9. 2016 6, 997 10,024
10. 2017 7,200 10,315
11. 2018 7, 409 10,614
12. 2019 7, 624 10,922
13. 2020 7, 845 11,238
source; CSA(2014)
The envisaged farm, as a new entrant into the market, has to penetrate the market and create
awareness and product loyalty first. Therefore, the objective of the pricing policy should be to
gain a foot hold in the market, get a sizable market share and attempt to sustain a reasonable
profitability, which at the initial stage, could only be achieved through charging of lower prices
that could influence users of the product. Accordingly, by taking the price of live chicken in to
consideration Birr 80 per kg of poultry meat or 100 per head is proposed for the envisaged plant
[24]
The product can be sold directly to bulk buyers. For individual buyers existing outlets such as
super markets and specialized food items department stores can be used.
2.5. FARM CAPACITY AND PRODUCTION PROGRAMME
 Farm Capacity
The proposed annual capacity of the poultry farm by considering the market study and minimum
economies of scale is rearing 200,000 heads. The production capacity is determined based on
300 days per year operation of the farm
2.6. Production program
The farm will operate at 70% and 85% of its rated capacity in the first and second year. Full
production capacity will be achieved in the third year and then after
ANNUAL PRODUCTION PROGRAMME
No Description Year 1 Year 2 Year 3-10
1. Production head 140,000 170,000 200,00
2. Capacity in % 70 85 100
2.7. FARM INPUTS AND UTILTIES
 FARM INPUTS
The principal farm inputs required are chicken for breeding, poultry feed, and medicines.
Chickens and poultry feed required by the plant can be acquired locally. The annual requirement
for farm inputs and the corresponding cost at 100% capacity utilization is given in. The total
annual cost of farm inputs is estimated at Birr 3,740,000.
No Description Measurement Quantity Unit price Cost
[25]
1. Chicken day old No 220,000,00 10 2,200,000
2. Animal feeds tons 720 2000 1,440,000
3. Medicines kg 50 2000 100,000
4. Grand total - 3,740,000
2.8. UTILITIES
The major utilities required are: water for feeding chickens and general purpose, electric power
for lighting and heating. The total yearly consumption of utilities at 100% capacity utilization
rate and their estimated costs are given in Table below The total annual cost of utilities is
estimated at Birr 195,652.
No Description Measurement Quantity Unit price Cost
1. Water M3 50,000 3.25 162,500.00
2. Electricity kmh 70,000 0.4736 33,152,00
3. Grand total 195,652,00
2.9. TECHNOLOGY AND ENGINEERING
 TECHNOLOGY
 1.12 Production Process
Chicken production is typically carried out at so-called complexes. Each complex contains a feed
mill, a hatchery, a processing plant, and chicken farms where the chicks are raised, usually in a
30-40 mi (48.3-64.4 km) radius from the processing plant. But the envisaged farm starts from the
day old chicken from the hatchery and grows them for about six month and sells them. The
[26]
chicks live in large houses which hold as many as 20,000 birds. These grow-out houses are kept
at about 85° F (29.4° C) through heating and ventilation controls. The birds are not caged, and
typically they are provided with approximately 0.8 sq ft per bird. The floor of the house is
covered with a dry bedding material such as wood chips, rice hulls, or peanut shells. The birds
are fed a diet of chicken feed, which is typically 70% corn, 20% soy, and 10% other ingredients
such as vitamins and minerals. When the chickens are old enough for slaughter, they are
collected and shipped to the processing plant.
Sick chickens are treated with antibiotics or other medications. These chickens then go through a
withdrawal period before slaughter, to make sure no medication residue remains in their meat.
The chickens are usually watered through nipple drinkers, so that they don't spill and wet their
bedding. A significant waste produced in chicken farming is the feces of the birds. Because the
flocks are so large, with 100,000 chickens per batch typical for a broiler growing-out farm, the
amount of feces is enormous. So these feces has to be collected and used for fertilizer or bio gas
generation for own energy source. By doing so the environmental effect will be controlled
2.10. Source of Technology
Machinery and equipment for poultry rearing and processing plant can be acquired from Italy,
Bulgaria, Brazil, etc. through contacts with the commercial attaches of respective embassies to
Ethiopia. The following company can be considered as one of the possible source of technology:
Dah Chong Hong (Japan) Ltd.
(K.K.Taisha) Bouekekou (10). 18-2, Roppongi 5- Chome, Minato - Ku, 106-0032
Tel: 03-3582-0706
Fax: 03-3586-8393, 03-3582-7148.
[27]
2.11. Machinery and Equipment
The list of required plant machinery and equipment is given in Table below The cost of
machinery and equipment is estimated at Birr 3.675 million, of which Birr 3.12 millions is
required in foreign currency.
No Description Measurement Quantity FC cost LC Total
1. Drinking set 5 743.75 131.25 875
2. Feeder set 5 743.75 131.25 875
3. Brooder 5 1,190 210 1400
4. Manure handler 5 446.25 78.25. 535
5. Total 20 3.123.75 551.25 6.675
Source CSA, 2014
2.12. Land, Building and Civil Works
The total area of land required for the plant is about 50hectare for future investment but the
promoters are currently operating under 4 hectare of land square meters. The total built up area
will be 2000 square meters and the estimated cost of building, at the rate of Birr 1,800 per m2,
will amount to Birr 6.3 million. The rearing buildings covers the 3000m2 area, the store 350m2
and the office building 150 m2.
According to the Federal Legislation on the Lease Holding of Urban Land (Proclamation
No 272/2002) in principle, urban land permit by lease is on auction or negotiation basis,
however, the time and condition of applying the proclamation shall be determined by the
concerned regional or city government depending on the level of development.
[28]
In Wolayta zone and zonal the City’s Land Administration and Development Authority is
directly responsible in dealing with matters concerning land. Regarding the manufacturing
sector, industrial zone preparation is one of the strategic intervention measures adopted by the
zonal and City Administration for the promotion of the sector and all manufacturing projects are
assumed to be located in the developed industrial zones.
However, the project under consideration is an urban agriculture project. Therefore, it is assumed
that the project will be located outside the industrial zones at Wolayta sodo, Areka and other
cities administration.. Accordingly, the initial land lease rate in SNNPRS region set by the
City’s Land Administration and Development Authority based on the location of land is as
shown Development Authority and regional land management section based on the location of
land.
2.13. MANPOWER AND TRAINING REQUIREMENT
 MANPOWER REQUIREMENT
The total manpower required is 17 persons. Details of manpower and annual estimated labor cost
including the fringe benefits are given in Table below. The total annual manpower cost is
estimated at Birr 260,250.
TOTAL INITIAL INVESTMENT COST
The total investment cost of the project including working capital is estimated at Birr 2.5 million,
of which 50% is required in foreign currency. The major breakdown of the total initial
investment cost is shown
NO COST ITEM TOTAL COST
1. Land lease value 100,000
[29]
2 Building & civil work 300,000
3 Machineries 500,000
Labor cost 185,680.00
5 Vehicles 1,000,000
7 Working capital 414,320.00
8 Total investment cost poultry 2,500,000
PRODUCTION COST
The annual production cost at full operation capacity is estimated at Birr 6.60 million (see Table
7.2). The raw material cost accounts for 56.62 per cent of the production cost. The other major
components of the production cost are land lease, depreciation and financial cost which account
for 14.87 %, 12.04% and 6.79 % respectively. The remaining 9.68% is the share of direct labor,
utility, repair, maintenance, labor overhead and other administration cost.
ANNUAL PRODUCTION COST AT FULL CAPACITY ('000 BIRR)
No ITEMS COST %
1 Raw material 3740.00 56.62
2 Utility 195.50 2.96
3 Minatance 183.75 2.78
4 Labor direct 124.92 1.89
5 Labor overhead 52.05 0.87
6 Administrative 83.28 1.26
7 land lease cost 982.33 14.87
8 Total 5,361.98 81.17
9 Deprecation 795.00 12.04
10 Cost of finance 448.66 6.79
11 Total 6,605.64 100
1.19 FINANCIAL EVALUATION
[30]
1. Profitability
Based on the projected profit and loss statement, the project will generate a profit throughout its
operation life. Annual net profit after tax will grow from Birr 1.14 million to Birr 1.68 million
during the life of the project. Moreover, at the end of the project life the accumulated cash flow
amounts to Birr 17.63 million.
1.19 . Ratios
In financial analysis financial ratios and efficiency ratios are used as an index or yardstick for
evaluating the financial position of a firm. It is also an indicator for the strength and weakness of
the firm or a project. Using the year-end balance sheet figures and other relevant data, the most
important ratios such as return on sales which is computed by dividing net income by revenue,
return on assets (operating income divided by assets), return on equity (net profit divided by
equity) and return on total investment ( net profit plus interest divided by total investment) has
been carried out over the period of the project life and all the results are found to be satisfactory.
1.21 . Break-even Analysis
The break-even analysis establishes a relationship between operation costs and revenues. It
indicates the level at which costs and revenue are in equilibrium. To this end, the break-even
point of the project including cost of finance when it starts to operate at full capacity ( year 3) is
estimated by using income statement projection.
BE = Fixed Cost = 30 %
Sales – Variable Cost
1.22 . Payback Period
The payback period, also called pay – off period is defined as the period required to recover the
original investment outlay through the accumulated net cash flows earned by the project.
[31]
Accordingly, based on the projected cash flow it is estimated that the project’s initial investment
will be fully recovered within 6 years.
1.23 . Internal Rate of Return
The internal rate of return (IRR) is the annualized effective compounded return rate that can be
earned on the invested capital, i.e., the yield on the investment. Put another way, the internal rate
of return for an investment is the discount rate that makes the net present value of the
investment's income stream total to zero. It is an indicator of the efficiency or quality of an
investment. A project is a good investment proposition if its IRR is greater than the rate of return
that could be earned by alternate investments or putting the money in a bank account.
Accordingly, the IRR of this project is computed to be 17.12 % indicating the viability of the
project
Net Present Value
Net present value (NPV) is defined as the total present ( discounted) value of a time series of
cash flows. NPV aggregates cash flows that occur during different periods of time during the life
of a project in to a common measuring unit i.e. present value. It is a standard method for using
the time value of money to appraise long-term projects. NPV is an indicator of how much value
an investment or project adds to the capital invested. In principal a project is accepted if the NPV
is non-negative. Accordingly, the net present value of the project at 8.5% discount rate is found
to be Birr 5.59 million which is acceptable.
ECONOMIC BENEFITS
The project can create employment for 27 persons. In addition to supply of the domestic needs,
the project will generate Birr 3.55 million in terms of tax revenue. The poultry farm has a
backward linkage effect on animal feed processing industries and a forward linkage effect on
food processing industries.
[32]
2. Descriptions of the project
This report from world bank group and world foods and agricultural organizations (FAO) one of
a series of “Flagship Studies” intended to help clarify the opportunities, constraints, and strategic
directions facing Africa and its partners as they attempt to accelerate economic growth in order
to reduce poverty and put Africa on a path toward meeting the Millennium Development Goals
(MDGs). The report is part of the analytic work promised inthe plan titled “Meeting the
Challenges of Africa’s Development” (World Bank 2005e), also known as the African Action
Plan (AAP). The AAP hasa strong focus on increasing shared growth. By undertaking a long-
termapproach and country-specific analysis, this report combines learning fromhistory and from
diverse experiences to guide country growth diagnosticwork and strategies for scaling up growth.
It is the intention of the WorldBank’s Africa Region to provide further studies in this series that
willexamine in much greater depth several of the areas critical for growth. Astudy on financial
markets was recently published. Another on infrastructure
is currently being drafted.Substantively, this report draws lessons from a half-century of growth
experience in Africa and around the world, providing an important repositoryof lessons learned
to shape growth strategies in Africa. It is influencedby, and builds upon, three major studies—
The Political Economy of EconomicGrowth in Africa, 1960–2000 (Ndulu et al., eds.
forthcoming), conducted underthe African Economic Research Consortium (AERC); Can Africa
Claim the 21stCentury? (World Bank 2000a), produced collaboratively by the World Bank)
The two major World Bank studies of growth, Can Africa Claim the 21stCentury?(World Bank
2000a) and Economic Growth in the 1990s (WorldBank 2005d), present a good mix of analytical
and policy experienceinsights about what matters most for growth. Can Africa Claim the 21st
Century?Focused on four pillars: (1) improving governance and resolvingconflict, (2) investing
in people, (3) increasing competitiveness and diversifyingeconomies, and (4) reducing aid
dependency and strengtheningpartnerships. In addition to building upon the many points
emphasized inthe study, the current report emphasizes strategies that are largely part ofthe
second and third pillars, such as investing in tertiary education, harnessingskills for innovation,
[33]
and reducing behind-the-border barriers toscaling up and diversifying exports.The messages

emerging from Economic Growth in the 1990s emphasize theimportance of country-specific
growth diagnostics in identifying bindingconstraints and what is needed to relieve them. This
approach can best besummarized by the following quote from the foreword of the report: The
central message is that there is no unique universal set of rules.
Sustained growth depends on key functions that need to be fulfilledover time: Accumulation of
physical and human capital, efficiency inthe allocation of resources, adoption of technology, and
the sharingof the benefits of growth. Which of these functions is the most criticalat any given
point in time, and hence which policies will need tobe introduced, which institutions will need to
be created for thesefunctions to be fulfilled, and in which sequence, varies depending oninitial
conditions and the legacy of history. (World Bank 2005d, xiii)
According to the World Bank group studies in order to promote agricultural development world
nations should design policy and procedures that will be stepping stone for achieving the extreme
poverty. According to the report from United Nations (UN) 2015, majority of the UN
millennium development goals (MDG) in most nations were left unachieved. These calls for
development of agriculture in both urban and rural regions of the world, order to secure extreme
poverty reductions. Our company envisioned contributing to extreme poverty reductions which
has been planned to achieve in 2015 and more or less left unachieved.
2.1. Project Rational and location
The project is located in SNNPRS, Wolayta zone Boloso sore Woreda Localities. The reasons
for the selection of the area is that the promoters were tried urban agriculture in the indicated
area by using land obtained from local leaders by rent and agreement, the harvest for the year
has been excellent and initiated them to plan for huge project undertaking that can benefit, the
communities, the government and the nation in general.
 Project total area – 50 hectares of land (estimated)
 Types of investment – agriculture
 Currently operational- 4 hectare
 Estimated yield annual - 5000QT/year(expected yield per year)
[34]
THE PROJECT WILL SECURE BENEFIT FOR THE FOLLOWING

 Unemployed citizens
 Promoters and families
 Government from tax revenue
 Permanent- The project will benefit10 permanent employees
 Temporary -20 temporary employees who make 30 total workforce
 Durations -5 years from 2014-2019E.C
2.2. SOCIO- ECONOMIC BACKGROUND
Developing countries have deep rooted economic and social problems that need immediate
solutions. The problem is worse in urban area where urban centers are reflected by high rate of
population growth, vegetable production is one of urban agriculture that expected to feed high
populations with fresh able products from small land area. Countries of the world has been
drafted the policy document that helps to promote urban agriculture preferably Banana
productions.
Growing your own fruits and vegetables preferably banana is both fun and rewarding. All you
really need to get started is some decent soil and a few plants. But to be a really successful
vegetable gardener — and to do it organically — you'll need to understand what it takes to keep
your plants healthy and vigorous. Here are the basics."Feed the soil" is like a mantra for organic
gardeners, and with good reason. In conventional chemical agriculture, crop plants are indeed
"fed" directly using synthetic fertilizers. When taken to extremes, this kind of chemical force-
feeding can gradually impoverish the soil. And turn it from a rich entity teeming with
microorganism’s insects and other life forms, into an inert growing medium that exists mainly to
anchor the plants' roots, and that provides little or no nutrition in its own right. Although various
fertilizers and mineral nutrients (agricultural lime, rock phosphate, greensand, etc.) should be
added periodically to the organic garden, by far the most useful substance for building and
maintaining a healthy, well-balanced soil is organic matter. You can add organic matter to your
soil many different ways, such as compost, shredded leaves, animal manures or cover crops.
[35]
Organic matter improves the fertility, the structure and the tilth of all kinds of soils. In particular,
organic matter provides a continuous source of nitrogen and other nutrients that plants need to
grow. It also provides a rich food source for soil microbes. As organisms in the soil carry out the
processes of decay and decomposition, they make these nutrients available to plants. For more on
this subject, read Building Healthy Soil.
Make Efficient Use of Space

The location of your banana/garden (the amount of sunlight it receives, proximity to a source of
water, and protection from frost and wind) is important. Yet just as crucial for growing
vegetables is making the most of your garden space. Lots of people dream of having a huge
vegetable garden, a sprawling site that will be big enough to grow everything they want,
including space-hungry crops, such as corn, dried beans, pumpkins and winter squash, melons,
cucumbers and watermelons. If you have the room and, even more importantly, the time and
energy needed to grow a huge garden well, go for it. But vegetable gardens that make efficient
use of growing space are much easier to care for, whether you're talking about a few containers
on the patio or a 50-by-100-foot plot in the backyard. Raised beds are a good choice for
beginners because they make the garden more manageable.
To sum up with the socio- economic impact of the project, the points should be the first
dividends;
1. Contribute to solve urban food shortage

2. Become model business enterprise
3. The community will get fresh quality product by affordable price
4. The promoters and families benefit much more
5. Model self-employments
6. Provide employment opportunity for other citizens
7. Contribute to macro -economic development
8. Increase the national income
9. Encourages other entrepreneurs to start similar projects
[36]
2.3. PROJECT STATUS

Who would benefit from urban agriculture development project on course of project
commence and operations? The proposed project will benefit the following;
 Unemployed citizens
 Promoters and families
 Government from tax revenue
 Hotels and restaurants of Wolayta and SNNPRS as well as Addis Ababa National
market and nearby cities
 Other public service providing organizations like universities and hospitals
2.4. SUPPORT TO THE PROJECT
The promoters wish to get support from the following institutions for the project come true in
operating its urban agricultural development of urban vegetable productions.
1. Wolayta zone Damot sore Administrations trade and industry bureau for the issue of
license and registrations
2. Wolayta zone Damot sore administrations agricultural development office for kindly
remarks
3. Wolayta zone Damot Sore administration for provision of land at proposed site for the
project
4. Wolayta zone Damot Sore Woreda administration environmental protection office and
SNNPRS, environmental protection authority for comments regarding the project’s
impact on natural environment Wolayta zone Damot Sore Woreda
5. Financial institutions for timely provisions of loans.
6. Damot Sore administrations investment unit for recognizing the project as investment
portfolio
In additions to the above mentioned support lists the company have support for the project it has
the following value and beliefs;
1. Talent
[37]
2. Self confidence and imitativeness

3. Group work
4. Use of technology
5. Financial contributions
6. Well developed organizational structure and human resource management that can
produce quality, innovative organic vegetables.
2.5. PROJECT SUMMARY

This profile envisages the establishment of a plant for vegetables and fruits farm of 50 hectares
of land for vegetables with a capacity of 10o tons per annum.
The present demand for the proposed product is estimated at 130.89 tons per annum. The
demand is expected to reach at 5000 tons by the year 202302027.The plant will create
employment opportunities for 130 temporary and permanent work forces
The total investment requirement is estimated at about Birr 4.35 million, out of which Birr 1.50
million is required for plant and machinery.
The project is financially viable with an internal rate of return (IRR) of 21.72% and a net present
value (NPV) of Birr 2.64 million, discounted at 8.5%.
The project creates forward linkage with the banana sector. The establishment of such factory
will have a foreign exchange saving effect to the country by substituting the current imports.
2.6. PRODUCT APPLICATION
This project is going to produce vegetable seed that the country mostly imports from European
countries. Currently, vegetables and fruits (banana) and dairy production has a high demand in
Addis Ababa and other cities and its surroundings although its quality is sometimes questionable.
Fruits and vegetables like banana, tomato, lettuce, Swiss hard and cauliflower are expected to be
produced from the envisaged plant. These vegetable have a high demand since consumers have
[38]
better preference and do not need much additional expense to prepare them. It can be processed
in factory or taken as a salad mixed with lettuce or prepared as paste. Similarly lettuce can be
taken as a salad and no cooking is necessary in its preparation. Swiss chard is also much liked
and it is served cooked. Seemingly cauliflower is more expensive than the other three and
foreigners like it. Above all these facts these vegetables are the major sources of vitamins and
minerals.
3. MARKET STUDY AND PLANT CAPACITY
A. MARKET STUDY
3.1. Past Supply and Present Demand
Besides being consumed daily, banana is commercial crops whose seeds are required in
abundance in the future due to expected growth in the agricultural sector. The country's
requirement for banana has been met through domestic production and imports. However, data
on domestic production of the product is not readily available. The amount of imports of the
product during 1997-2008 is shown in Table 3.1. As can be seen from the information depicted
in the Table, the amount of imports was fluctuating with a rising trend. During the period under
reference, imports varied from 22.06 tons in 1997 to 98.97 tons in 2008. Imports averaged 57.65
tons during the period.
Table 3.1
IMPORTS OF BANANA IN (TONS)
Year Imports
1997 22.06
1998 26.62
1999 29.25
2000 57.47
2001 55.92
[39]
2002 54.71
2003 42.19
2004 96.33
2005 92.98
2006 98.97
Average 57.65
Source: Customs Authority, External Trade Statistics, 1997-2008.

Assuming supply was driven by demand and imports measure demand gap and taking into
account the persistent increase in imports of the product, the amount of vegetable seed imported
in 2006 is considered as the effective demand gap for the product for that year. The average rate
of growth of imports of the product during the reference period is computed to be 25.6%.
However, a conservative estimate of 15% rate of growth is adopted in estimating the demand for
the product. The present demand for the product (i.e. 2008) is thus estimated at 130.89 tons.
3.2. Projected Demand
The Ethiopian Government’s strategy for poverty reduction as stipulated in the “A plan for
Accelerated and Sustained Development to End Poverty, PASDEP” includes production
diversification in to more marketed oriented production from the traditional grain based
agricultural production.
The agricultural strategy will revolve around a major effort to support the intensification of
marketable farm products -both for domestic and export markets, and by both small and large
farmers. Elements of the strategy include the shift to higher-valued crops, promoting niche high-
value export crops, a focus on selected high-potential areas, facilitating the commercialization of
agriculture. Accordingly, one of the market oriented products selected are vegetables.
Therefore, due to the priority given by the government it can be concluded that demand for
banana will grow in the future. Therefore a growth rate of 15% is considered in projecting the
domestic demand for vegetable seed. The projected demand for the product is shown in Table
3.2.
[40]
Table 3.2
PROJECTED DEMAND FOR BANANA COMMERCIAL FARM (TONS)
Projected
Year Demand
2009 151
2010 173
2011 199
2012 229
2013 263
2014 303
2015 348
2016 400
2017 460
2018 530
2019 609
2020 700
Based on the CIF price of the external trade statistics for 2006 (the latest data available), and
allowing 30% for import duty and other clearing expenses, the factory-gate price for the
envisaged plant is estimated at Birr 92,445.90 per tonne.
The product can get its market outlet through the existing wholesale and retail network for
agricultural inputs. The envisaged plant can also supply its product directly to users or appoint
agents at selected locations.
3.4. PLANT CAPACITY AND PRODUCTION PROGRAMME
1. Plant Capacity
[41]
Based on the market study, the envisaged plant will have a capacity of processing 5000tons (or ,
quintals) of improved banana products . The processing plant will operate double shift for 16
hours per day and 300 days per annum.
3.5. Production Programme
Considering the time required for penetrating the market, the envisaged plant will start operation
at 75% of capacity during the first year. Then production capacity will grow to 85% and 100%
of capacity during the second and third year, respectively. Table 3.3 below shows production
build-up programme.
[42]
Table 3.3
PRODUCTION PROGRAMME
Year Capacity Production(quintal)

Utilization
1 75 750
2 85 850
3-10 100 1000
3.6. MATERIALS AND INPUTS
A. RAW AND AUXILIARY MATERIALS
The raw and auxiliary materials required for processing plant are Banana seedlings ,fertilizer,
agricultural tools treatment. The annual requirement of raw and auxiliary materials along with
corresponding costs is shown in Table 4.1 below. The materials required by the plant could be
purchased from local markets in Addis Ababa.
Table 4.1
ANNUAL REQUIREMENT OF RAW AND AUXILIARY MATERIALS AND COST (AT
FULL CAPACITY)
Sr. Description Unit of Unit Cost Qty Cost (‘000 Birr)

No. Measure (Birr) LC FC TC
1 Banana seedling tonne 2,000 101 - 2020 2020
2 Agricultural tools Pcs 1,400,000 1010 6.06 - 1,400,000
Tractor
3 fertilizer m3 25 70 5 - 5
4 Chemicals lts 20 500 - 10 10
[43]
Grand Total - 11.06 2030 1,420,000
B. UTILITIES
Water supply are the most important utilities required for Banana and other fruits and vegetables
farm processing plant. The annual requirement of electricity and water is 15,000 kWh and 400
m3, respectively. The total cost for the utilities is estimated at about Birr 6036.00.
TABLE 4.2
UTILTIES REQUIREMENT AND COST
Sr. Description Unit of Quantity Unit Total Cost

No. Measure Cost(Birr) (Birr)
1 Electricity kWh 10,000 0.4736 4736
2 Water m3 400 3.25 1300
3 Generator 1 100,000
for water
pumping
Total 107,300
3.7. TECHNOLOGY AND ENGINEERING
A. TECHNOLOGY
1. Production Process
The basic improved banana seedling will be procured from Ethiopian and Regional Agricultural
Research Institutes and distributed to farmers for multiplication by contractual agreement to be
[44]
made between the two parties, the project and the farmers. After procuring from farmers, the
seeds will be collected for processing.
The seed processing plant comprises 3 steps viz pre-cleaning, production of banana from
processing and banana seedling series.
Weighing of the collected seeds will be the first step in seed processing. Then the seeds being
cleaned and pass through a distribution system, a self regulating, feeding flap, being equipped
with weights, and finally reaches the screening drum. Because of the rotary motion, coarse and
foreign matters and dusts, including lighter pieces of shells are sorted out. Thereafter, the pre-
cleaned product is falling into a collection hopper with out let socket. During pre-cleaning three
kinds of impurities: coarse, foreign matters and dusts, including higher pieces of shells are sorted
out. In the seed processing, drying and cooling will be employed for conservation purposes
before storage. Seeding drying and cooling will be followed by seed treatment which includes
dressing of seeds with powder or liquid chemicals against seed born pests. Finally, the seed is
bagged with a bag with a 100 kg capacity and stored in a ware house with controlled temperature
and humidity.
In general terms, the total area required for the store and facilities building are estimated to be
1000 m2. The land is 100 ha out of which some shades, stores and office building will be built
expected to be utilized for construction of stores, offices, and seed processing units. The area for
seed processing unit, warehouse, offices and staff canteen is estimated to be 400 m 2, 200m2, 120
m2 and 80 m2, respectively and the remaining 1000 m2 will be left open. Cost of construction for
building, at a unit cost of Birr 2,300 per/m2 is estimated to be Birr 1.84 million.
According to the Federal Legislation on the Lease Holding of Urban Land (Proclamation No
272/2002) in principle, urban land permit by lease is on auction or negotiation basis, however,
the time and condition of applying the proclamation shall be determined by the concerned
regional or city government depending on the level of development.
[45]
In Boloso Sore woreda Administration urban agriculture office is directly responsible in dealing
with matters concerning land. Regarding the manufacturing sector, industrial zone preparation is
one of the strategic intervention measures adopted by the Boloso Sore woreda Administration for
the promotion of the sector and all manufacturing projects are assumed to be located in the
developed industrial zones.
However, the project under consideration is an urban agriculture project. Therefore, it is assumed
that the project will be located outside the industrial zones. Accordingly, the initial land lease
rate in Boloso Sore woreda Administration Land Administration and Development office based
on the location of land is as shown in As can be seen from Table 5.2, the initial land lease rate
ranges from Birr 1,167.3 to 132.3 per m2 .
Considering the nature of the project the expansion zones of the city are recommended as the
best locations. Accordingly, the highest land lease rates in the expansion zones of the city which
is Birr 245.7/ m2 is adopted.
The Federal Legislation on the Lease Holding of Urban Land legislation has also set the
maximum on lease period and the payment of lease prices (see Table 5.2 and Table 5.3).
Table 5.2
LEASE PERIOD
Lease Period
Type of Service ( Years)
Residential area 99
Industry 80
Education, cultural research health, sport,
NGO and religious 99
Trade 70
Urban Agriculture 15
Other service 70
[46]
Table 5.3
LEASE PAYMENT PERIOD
Period of Payment
Sr. According to the Grade of
No. Service Type Towns
Private residential are obtained
1 through tender or negotiation 50 - 60 years
2 Trade 40 - 50 years
3 Industry 40 - 50 years
4 Real estate 40 -50 years
5 Urban Agriculture 8 - 10 years
6 Trade and social service 40 - 50 years
7 Others 40 – 50 years
Moreover, advance payment of lease based on the type of investment ranges from 5% to 10%.
For those that pay the entire amount of the lease will receive 0.5% discount from the total lease
value and those that pay in installments will be charged interest based on the prevailing interest
rate of banks. Moreover, based on the type of investment, two to seven years grace period shall
also be provided. The lease price is payable after the grace period annually.
Regarding, the terms and conditions of land lease the Wolayta zone Boloso Sore woreda
Administration urban agriculture office have adopted very minimal changes. Therefore, for the
purpose of this project profile since the project is urban agriculture, 15 years lease period, 10
years lease payment completion period, 10% down payment and two years grace period is used.
Accordingly, the land lease cost of the project, at rate of Birr 245.7 per m 2 for 15 years of
holding is estimated at Birr 7.37 million. Assuming 10% of the total cost ( Birr 737,100 ) will be
paid in advance as down payment and the remaining Birr 6.63 million will be paid in equal
installments within 10 years, the annual lease payment is estimated at Birr 663,390.
[47]
4. MANPOWER AND TRAINING REQUIREMENT
A. MANPOWER REQUIREMENT
The manpower requirement for the envisaged seed processing plant is shown in Table 6.1. The
total number of employees required is 30 persons.
Table 6.1
MANPOWER REQUIREMENT AND LABOR COST
Sr. Description Req. Monthly Annual Salary

No. No. Salary (Birr) (Birr)
1 Plant manager 1 3,000
36,000
2 Secretary/cashier sales man 1 900 10,800
3 Accountant 1 1,200 14,400
4 Store keeper 1 600 7,200
5 Line operators 6 3,600 43,200
6 Mechanic 2 1,400 16,800
7 Drivers 2 1,000 12,000
8 Laborers (including office boy and 16 3,500
janitor 42,000
Total 30 182,400
Employees benefit (25%) 45,600
Grand Total 30 228,000
4.1. TRAINING REQUIREMENT
[48]
Training is required for the manager and for the three line operators. The training will be
provided for one month by the multi-seed cleaner supplier at the project site. The total cost for
training, which will be paid for the supplier, is estimated to be Birr 20,000
4.2. FINANCIAL ANALYSIS
The financial analysis of the seed processing for vegetables seed project is based on the data
presented in the previous chapters and the following assumptions:-
Construction period 1 year

Source of finance 30 % equity
70 % loan
Tax holidays 3 years
Bank interest 8.5%
Discount cash flow 8.5%
Accounts receivable 30 days
Raw material local 30 days
Raw material import 30 days
Work in progress 2 days
Finished products 15 days
Cash in hand 5 days
Accounts payable 30 days
Repair and maintenance 5% of machinery cost ,
4.3. PRODUCTION COST
The annual production cost at full operation capacity is estimated at Birr 3.49 million (see Table
7.2). The raw material cost accounts for 58.39 percent of the production cost. The other major
components of the production cost are land lease, depreciation and financial cost which account
[49]
for 18.98%, 10.29% and 3.50% respectively. The remaining 8.84% is the share of utility, direct
labor, repair and maintenance and other administration cost.
Table 7.2
ANNUAL PRODUCTION COST AT FULL CAPACITY ('000 BIRR)
Items Cost %
Raw Material and Inputs
2,041.06 58.39
Utilities 6.04 0.17
Maintenance and repair
75.10 2.15
Labor direct 109.44 3.13
Labor overheads
45.60 1.30
Administration Costs 72.96 2.09
Land lease cost
663.39 18.98
Total Operating Costs 3,013.59 86.21
Depreciation 359.70 10.29
Cost of Finance 122.31 3.50
Total Production Cost
3,495.60 100
4.4. FINANCIAL EVALUATION
1. Profitability
Based on the projected profit and loss statement, the project will generate a profit through out its
operation life. Annual net profit after tax will grow from Birr 987.95 thousand to Birr 1.08
million during the life of the project. Moreover, at the end of the project life the accumulated
cash flow amounts to Birr 10 million.
2. Ratios
In financial analysis financial ratios and efficiency ratios are used as an index or yardstick for
evaluating the financial position of a firm. It is also an indicator for the strength and weakness of
the firm or a project. Using the year-end balance sheet figures and other relevant data, the most
important ratios such as return on sales which is computed by dividing net income by revenue,
[50]
return on assets ( operating income divided by assets), return on equity ( net profit divided by
equity) and return on total investment ( net profit plus interest divided by total investment) has
been carried out over the period of the project life and all the results are found to be satisfactory.
3. Break-even Analysis
The break-even analysis establishes a relationship between operation costs and revenues. It
indicates the level at which costs and revenue are in equilibrium. To this end, the break-even
point of the project including cost of finance when it starts to operate at full capacity ( year 3) is
estimated by using income statement projection.
BE = Fixed Cost = 29%

Sales – Variable Cost
4. Payback Period
The pay back period, also called pay – off period is defined as the period required to recover the
original investment outlay through the accumulated net cash flows earned by the project.
Accordingly, based on the projected cash flow it is estimated that the project’s initial investment
will be fully recovered within 5 years.
5. Internal Rate of Return
The internal rate of return (IRR) is the annualized effective compounded return rate that can be
earned on the invested capital, i.e., the yield on the investment. Put another way, the internal rate
of return for an investment is the discount rate that makes the net present value of the
investment's income stream total to zero. It is an indicator of the efficiency or quality of an
investment. A project is a good investment proposition if its IRR is greater than the rate of return
that could be earned by alternate investments or putting the money in a bank account.
[51]
Accordingly, the IRR of this porject is computed to be 21.72 % indicating the vaiability of the
project.
6. Net Present Value
Net present value (NPV) is defined as the total present ( discounted) value of a time series of
cash flows. NPV aggregates cash flows that occur during different periods of time during the life
of a project in to a common measuring unit i.e. present value. It is a standard method for using
the time value of money to appraise long-term projects. NPV is an indicator of how much value
an investment or project adds to the capital invested. In principal a project is accepted if the NPV
is non-negative.
Accordingly, the net present value of the project at 8.5% discount rate is found to be Birr 2.64
million which is acceptable.
4.5. ECONOMIC BENEFITS
The project can create employment for 24 persons. In addition to supply of the domestic needs,
the project will generate Birr 829,610 in terms of tax revenue. The establishment of such factory
will have a foreign exchange saving effect to the country by substituting the current imports.
The project creates forward linkage with the horticultural sector
5. PROJECT GOALS AND OBJECTIVES
GOAL AND OBJECTIVES
The project has two types of goals which can be names overall goals and main &
objectives and the specific goal and objectives.
5.1. OVERALL GOALS AND OBJECTIVES
The overall goal and objectives of the project will be producing vegetable products in
quality and world standard and supply to the customers around Damot Sore and nearby
localities and cities and to contribute to poverty reductions and overall development of
the country.
[52]
The project specific goal and objectives will be establishing vegetable and other crops
producing enterprise by cultivating vegetable like onion, cabbage, green pepper garlic,
tomatoes and others. For success of this, facility development, operation and market
research as well as market share and value chain development will be carried out by
promoters.
5.2. DESCRIPTIONS OF THE PROJECT AREA
The project area is located in SNNPRS, Wolayta zone Boloso Sore woreda Administration which
is some 320 km from the federal capital Addis Ababa and it is regional capital where as the site
is the center for nations nationalities and peoples which live in the region.
5.3. PHYSICAL AND NATURAL CONDITIONS OF THE SITE
The climate of the area Boloso Sore woreda Administration a located at low land and some parts
is is wet dega and some areas wet kolla with altitude of 800-1000meteres above sea level with
average temperature of 23 -27 degree Celicious and estimated annual rainfall of 1200mm
perineum. The topography is undulating land terrain around the project area is plain with the
catchment of to woybo river and other river and other temporary streams with the soil type of
sandy in some parts to vertysol of known rift valley region which is fertile if enough water for
irrigation available or frequent rainfall secured and the relative humidity about suitable for the
urban vegetable growth
5.4. AREA OF LAND REQUIRED FOR INVESTMENT
The area of land required for investment and for future expansion has been estimated as 50
hectares of land. The land use will be panned as construction of facilities, offices and agricultural
farm lands.
[53]
No Components Unit Area Remarks
1. Banana ha 20
2 Cabbages ha 20
3 Peppers ha 2
4 Tomatoes ha 2
5 Animal feed & foarge ha 2
6 For facilities ha 8
Total land area required 54 Ha
Source;developed by project writer(2015)
The project will use human force to have success in operations where it require to employee both skilled
and labor worker as well as semiskilled human resources. The project planned to employee 30 permanent
and 100 temporary workers and gradually will boost the human resource to 130 workers up on conditions
of project success. The employment of such number to job in the project is not an easy contribution that
secures the socio- economic benefit to the labor force which live under poverty line. Getting 30 human
force both skilled and non skilled promote socio – economic way of them.
As far as the socio- economic benefit of society has concern the area has high population in country and
the region level where there for this means there is high birth rate and population growth that need
enough food supplies for populations and ever-growing populations. Therefore the community benefit
from the supply of quality vegetable products, and also the organization will pay tax that helps
construction of infrastructures and service giving facilities that will benefit the community.
5.5. ECONOMIC CONTRIBUTIONS TO THE COUNTRY
[54]
Today the government of Ethiopia undertake the accelerated economic development in Africa and
contributing to overall development by designing policy that small and micro trade enterprises
policy that encourage citizens to be self employed and by using innovations inputs from the
government that derive them gradually industrialized nations therefore, the project will become
model enterprise and will contribute the national development by supply of vegetable products to
needy people for consumption there by solving consumption problem around Wolayta
sodo ,paying tax to the development.
One can have never had a vegetable production before, this may be the year to devote a part of
your garden to vegetables. It's hard to beat the fresh flavor and high nutritional value of
vegetables harvested directly from your own garden. As well, with World conditions the way
they are, it's probably wise to have a few fresh vegetables handy. By taking a little time in
planning, before you decide where you are going to locate your vegetable garden. Then once you
have decided on a spot, it is important to select which crops you want to grow. Next, you need to
decide where they fit best in the garden layout. By proper planning, followed by wise planting at
the beginning of the season, you are more apt to have a bountiful harvest this summer and fall.
So here are a few ideas on how to get started.
The location is Boloso Sore woreda Administration Choose the sunniest, brightest spot in the
whole yard. . If there's not such a spot, choose the next sunniest spot, avoiding any areas that are
too shady, as leaf-crops are about the only thing that will grow in limited sun. If you are limited
for space or do not have a bright, sunny spot in the yard, then you can grow some vegetables in
containers on a sunny patio, deck or lanai. In fact, you'll be amazed at how many vegetables you
can grow in a really limited space, such as a container. A few years ago my neighbor, who had a
very small yard, grew all his vegetables in the sunny part of his garden, amongst his summer
flowering annuals. Being a farm man, knowing what he was doing, he harvested a fine crop. Of
course, in such situations one would not use harsh chemicals or pesticides
6. METHOD OF GROWING FRUIT CROP
[55]
Are you going to plant in open soil or plant in raised beds? I prefer raised beds, because the soil
warms quicker, remains warm longer, and this method provides better drainage. You can
accomplish a raised bed vegetable garden by simply mounding the soil or by actually enclosing
the soil in wood frames, decorative stones, or concrete, etc. When you design the raised beds I
recommend that they be only 3 to 4 feet wide. (Actually, the national average is 21 inches.) We
grow all our vegetables, even in our test garden, in raised beds. Why, because the soil warms
quicker, you can plant earlier in the season, and the soil remains warmer, bringing the crop to
earlier maturity. Either way, the depth of the raised soil should be 8 to 12 inches above ground
level.
6.1. SOIL PREPARATION
Another of the key factors in successfully growing vegetables is proper soil preparation. To your
existing soil add generous amounts of organic humus. Compost, peat moss, well rotted manure
or processed manure (the bagged stuff) are all good forms of organic humus. I would suggest
avoiding the use of fresh manure, unless it is applied in the fall, as some tend to burn and the
gases of a few can actually stunt crops. Mix the organic humus thoroughly with your existing
soil. Then you are almost ready to begin planting. By the way, if you bring in topsoil to enrich or
add to the existing soil, be certain to add organic humus to it too.
6.2. CHOOSING THE VARTY AND SEED RATE
It's important to base the types of vegetables, and number of plants, on the eating habit of
consumers. You want to utilize every inch of space by growing the crops that meet the desires
and needs of your family. Next, you want to choose varieties that grow, mature and yield in this
region. If you are in doubt as to which variety to grow, consult a gardening neighbor, you're local
'Certified Nursery-person', 'Master Gardener', or County Extension Service. Or, buy your seeds
and plants from local or regional companies. If wondering how many vegetables to grow for the
average family four, here is a general outline of a few of the most popular ones:
 Banana 30 to 40 plants Beans, a row 15 to 25 feet long
[56]
 Beets a row 10 to 15 feet long Broccoli, Brussels sprouts and cabbage 10 to 15 plants
each Carrots a row 20 to 30 feet long Corn a row 20 to30 feet long
 Lettuce a row 10 to 15 feet long Peas a row 30 to 40 feet long
 Pumpkins/Squash 1 to 3 plants Radishes a row 4 feet long
 Rhubarb 1 to 3 plants Spinach a row 10 to 20 feet long
 Tomatoes 10 to 15 plants
 Green peppers 30 to 35
Needless to say, these are very general suggestions of a few of the most popular vegetables. The
important thing is you need to adjust the lengths of each row depending upon soil type, water
availability and soil fertility
On other hand for the productions of vegetable like commercial business on more than family
gardening, the standard seed rate planting width soil type cultural practice, fertilizer requirement,
planting depth and seasons of harvesting has been presented below table
6.3. The land layout
Now that you have decided on the location, which crops and how many plants you are going to
grow, it's time decide where they best fit in the garden. The tall crops such as Banana, beans and
corn, should be planted on the north side of the vegetable garden. In this way they will not shade
the rest of the vegetable crops. In the center of the vegetable garden area, plant the medium sized
crops such as cabbage, cauliflower, broccoli, tomatoes, squash, pumpkins and other mediums
sized crops.
Then at the very southern end of the garden is where the low growing crops like Banana, carrots,
beets, lettuce, onions and other low growing ones are planted. Whenever possible, I think the
rows in the vegetable garden should run north and south, for best sun exposure and air
[57]
circulation. If the rows run east and west the first row tends to shade the second row, the second
row the third and so forth...
By taking a little time in planning the layout of your Banana and other vegetablesfarm now,
before planting, your chances of harvesting a more bountiful yield this summer and fall are
greatly increased.
Model layouts figure as presented in below table belongs to the gardening farm at homesteads or the
verandas but the commercial farm layout will be carried out for each vegetable crop type peculiarly so
that the standards design and layouts at the farm level and the reasons for the proposed type of vegetables
will be described as follows
PART TWO
Dairy production
I. SUMMARY
PRODUCT DESCRIPTION & APPLICATION
MARKET STUDY AND PLANT CAPACITY

A. MARKET STUDY
B. PLANT CAPACITY & PRODUCTION PROGRAM
MATERIALS AND INPUTS
A. RAW & AUXILIARY MATERIALS

B. UTILITIES
[58]
TECHNOLOGY & ENGINEERING
A. TECHNOLOGY
B. ENGINEERING
HUMAN RESOURCE & TRAINING REQUIREMENT

A. HUMAN RESOURCE REQUIREMENT
B. TRAINING REQUIREMENT
FINANCIAL ANLYSIS
A. TOTAL INITIAL INVESTMENT COST
B. PRODUCTION COST
C. FINANCIAL EVALUATION
D. ECONOMIC & SOCIAL BENEFITS
6.4. OVERALL AGRICULTURAL PRACTICE FOR INDIVIDUAL CROPS
Next to intensive planting, trellising represents the most efficient way to use space in the garden.
People who have tiny gardens will want to grow as many crops as possible on vertical supports,
and gardeners who have a lot of space will still need to lend physical support to some of their
vegetables, such as climbing varieties of peas and pole beans. Other vegetables that are
commonly trellised include veining crops, such as cucumbers and tomatoes.
The fence surrounding your garden may well do double-duty as a trellis, so long as the crops
grown on the fence can be rotated in different years. Other kinds of vegetable supports are
generally constructed from either wood or metal. However, no matter which design or materials
you use, be sure to have your trellis up and in place well before the plants require its support —
preferably even before you plant the crop. With some vegetables, such as tomatoes or melons,
you may also have to tie the plants gently to the support, or carefully weave them through the
trellis as they grow.
[59]
6.5. KEEP CROPS MOVING

Crop rotation within the vegetable garden means planting the same crop in the same place only
once every three years. This policy ensures that the same garden vegetables will not deplete the
same nutrients year after year. It can also help foil any insect pests or disease pathogens that
might be lurking in the soil after the crop is harvested.
To use a three-year crop rotation system, make a plan of the garden on paper during each
growing season, showing the location of all crops. If, like most people, you grow a lot of
different vegetables, these garden plans are invaluable, because it can be difficult to remember
exactly what you were growing where even last season, much less two years ago. Saving garden
plans for the past two or three year’s means that you don't have to rely on memory alone.
6.6. CONTINUOUS HARVEST

Planting crops in succession is yet another way to maximize growing area in the garden. All too
often, though, gardeners will prepare their seedbeds and plant or transplant all their crops on only
one or two days in the spring, usually after the last frost date for their location.
While there is nothing wrong with planting a garden this way, wouldn't it be easier to plant a few
seeds or transplants at a time, throughout the course of the whole growing season, rather than
facing is important task.
After all, a job almost always becomes easier the more you divide it up. Plan to plant something
new in the garden almost every week of the season, from the first cold-hardy greens and peas in
late winter or early spring, to heat-loving transplants such as tomatoes, peppers and eggplant
once the weather becomes warm and settled.
Then start all over again, sowing frost-hardy crops from midsummer through mid-fall, depending
on your climate. Keep cleaning out beds as you harvest crops to make room for new vegetables
that will take their place. You can even interplant crops that grow quickly (radishes) alongside
other vegetables that require a long season (carrots or parsnips), sowing their seeds together. This
[60]
makes thinning out the bed easier later on, since you will have already harvested the quick-
growing crop and given the long-season vegetables that remain some much-needed elbow room.
Another benefit of succession planting, of course, is that your harvest season lasts longer for
every crop. This means that, instead of getting buried in snap beans or summer squash as your
plants mature all at once, you can stagger plantings to ensure a steady, but more manageable
supply of fresh vegetables.
KEEP GOOD RECORDS

Finally, we end up where we started — with the realization that, although vegetable gardening
can be rewarding even for beginners, there is an art to doing it well. There is also a mountain of
good information and advice from other gardeners available to you. Yet one of the most
important ways of improving your garden from year to year is to pay close attention to how
plants grow, and note your successes and failures in a garden notebook or journal.
Just as drawing a garden plan each year helps you remember where things were growing, taking
notes can help you avoid making the same mistakes again, or ensure that your good results can
be reproduced in future years. For instance, write down all the names of different vegetable
varieties, and compare them from year to year, so you will know which ones have done well in
your garden.
Many people keep a book in their car to record when they change their oil and perform other
routine maintenance. In the same way, get in the habit of jotting it down whenever you apply
organic matter or fertilizer to the garden, or the dates on which you plant or begin to harvest a
crop. Over time this kind of careful observation and record-keeping will probably teach you
more about growing vegetables than any single book or authority. That’s because the notes you
make will be based on your own personal experience and observations, and will reflect what
works best for you in the unique conditions of your own garden. As in so many other pursuits, so
it is in the art
[61]
One of the common errors for beginners is planting too much too soon and way more than
anybody could eat or want. Unless you want to have zucchini taking up residence in your attic,
plan carefully. Start small.
The Very Basics
First, here are some very basic concepts on topics you'll want to explore further as you become
a vegetable extraordinaire:
 Do you have enough sun exposure? Vegetables love the sun. They need at least 6 hours
of full sun every day, and preferably 8.
 Know your soil. Most soil can be enriched with compost and be fine for planting, but
some soil needs more help. Vegetables must have good, loamy, well-drained soil.
Check with your local nursery or local cooperative extension office about free soil test
kits so that you can assess your soil type. See our article on preparing soil for planting.
 Placement is everything. Avoid planting too near a tree, which will steal nutrients and
shade the garden. In addition, a garden too close to the house will help to discourage
wild animals from nibbling away your potential harvest.
 Decide between tilling and a raised bed. If you have poor soil or a bad back, a raised
bed built with nonpressure-treated wood offers many benefits. See more about raised
garden beds and how to build them.
 Vegetables need lots of water, at least 1 inch of water a week. See more about when to
water vegetables.
 You'll need some basic planting tools. These are the essentials: spade, garden fork,
soaking hose, hoe, hand weeder, and wheelbarrow (or bucket) for moving around mulch
or soil. It's worth paying a bit extra for quality tools.
 Study those seed catalogs and order early.
[62]
 Check your frost dates. Find first and last frost dates in your area and be alert to your
local conditions.
DECIDING HOW BIG
A good-size beginner vegetable garden is about 16x10 feet and features crops that are easy to
grow. A plot this size, planted as suggested below, can feed a community for one summer, with
a little extra for canning and freezing (or giving away).
Make your garden 11 rows wide, with each row 10 feet long. The rows should run north and
south to take full advantage of the sun.
Vegetables that may yield more than one crop per season are beans, beets, carrots, cabbage,
kohlrabi, lettuce, radishes, rutabagas, spinach, and turnips.
SUGGESTED PLANTS FOR ROWS
The vegetables suggested below are common, productive plants but you'll also want to contract
your local cooperative extension to determine what plants grow best in your local area. Think
about what you like to eat as well as what's difficult to find in a grocery store or farmers'
market.(Note: Link from each vegetable to a free planting and growing guide.)
 Banana—no stalk needed

 Zucchini squash—4 plants
 Peppers—6 plants
 Cabbage
 Bush beans
 Lettuce, leaf and/or Bibb
 Beets
[63]
 Carrots
 Chard
 Radishes
 Marigolds to discourage rabbits!
The need of financial resources is the most decisive factor for the comments and establishments
of the project. The project as indicated in executive summary of the paper it will raise fund from
two sources, namely promoters’ contribution and loan from the banks, accordingly, the
investment fund can be categorized as
TOTAL CAPAITAL REQUIREMENTS

Investment capital
Tractors & track bicycles & Equipment --------------------2,250,000.00
Seeds & inputs -------------------------------------------------100,000.00

Fertilizers & cow breeds-------------------------------------1,000,000.00
Working capital -------------------------------------------- --1,000,000.00
Total investment cost ---------------------------------- 4,350,000.00
Total investment budget for the project would be lump sum will be 4,350,000 ETB which
can be obtained from two sources; promoters’ contributions and loan from the banks.
Promoters’ contributions – as the business is partnership type of business entity, the two
promoters will contribute 25% (1,087,500 ETB) which they equally share together and
each partner and the bank loan will be 3,262,500 ETB.
Regarding bank loan, based on the investment law of the countries and other directives,
an investor can be excess to loan service from commercial bank of public and private
[64]
owned ones. Hence this project will have 75 % of the remaining fund 3,262,500 ETB.
bank loan from commercial banks.
Loan analysis – total loan ------------------3,262,500ETB.
Interest rate (10%) per year----------------326,250
Total principal to be refund back to bank-------3,262,500 ETB.
Annual repayment to bank breakdown
The loan shall be due by the 6 year as investment law of Ethiopia and commercial code
of the country, therefore the project will repay back the interest and principal together
according to the breakdown listed below.
Year one -----------------------------653,500.00
Year two-----------------------------653,500.00
Year three ---------------------------653,500.00
Year four ----------------------------653,500.00
Year five ----------------------------653,500.00
Year six -----------------------------653,500.00
Total ----------------------------------3,262,500.00
6.2 FINANCIAL STATEMENT FORCAST- YEAR ONE

1. Sales---------------------------------------------------------900,000.00
2. Cost of goods sold
Fixed cost ----------------------------146,000.00
Purchases -----------------------------10,000.00
Total costs of gods sold-------------156,000.00
3. Administrative costs
Labor cost----------------------------50,000.00
Others---------------------------------100,000.00
Loan repayment ---------------------123,933.00
Total ---------------------------------273,933.00
Gross profit----------------------------------------------------430,000.00
Tax ----------------------------------- (income tax- 4%)=17,000.00
Net profit --------------------------------------------------------------------413,000.00
6.3 PRODUCTION FORCAST FOR PROJECT PERIOD
[65]
No Production year Area of Product/hectare Total yield Price Total price

land /quintal
1. Year one 60Ha 50QT 3000Qt 600ETB/ 900.000
2. Year two 60 Ha 50QT 3000Qt 600ETB 900.000
3 Year three 80Ha 50QT 4000Qt 600ETB 2,400,000
4 Year four 90Ha 50QT 4500QT 600ETB 2,700.000
5 Years five 99Ha 50QT 4590QT 600ETB 2,970,000
Total 99 Ha 9,870,000
6.4 COST – BENEFIT ANALYSIS
TOTAL COST FOR CAT FOR THE PROJECT 5 YEARS PERIOD
No Production year Total Total profit Percentage

estimated estimated
cost sales
1 2008 447,000.00 900,000.00 453,000.00
2 2009 580,000.00 900,000.00 320,000.00
3 2010 750,000.00 2,400,000.00 1,650,000.00
4 2011 1.050,000.00 2,700,000.00 1,650,000.00
5 2012 1,500,000.00 2,970,000.00 1,470,000.00
Total 4,327,000.00 9.870.000.00 5,543,000.00
 Total cost --------4,327,000.00

 Total sales ------9,870,000.00
[66]
 Total net income----5,543,000.00

RATIO OF COST TO BENEFIT
Sales/cost= 9,870,000.00 =2.28%
4,327,000.0
7. MARKETING AND PROMOTION
Due to increased number of population, the need for vegetable products has been augumenting
from time to time. As Damot Sore woreda is one of highest rate of growth and increased birth
rate, more population each day that need for consumption of vegetable and fruits. This invites the
promoter of vegetable growing partnership work hard to start the new urban agriculture business
that aimed to solve vegetable requirement by population.
7.2 COMPANY OBJECTIVES
 To provide vegetable marketing for residences of Damot Sore woreda

 To involve in enerpernuerial activity of self employment
 To use the best practice and skill as well as motivation from the government
 To create employment opportunity for unemployed citizens
 To submit quality product for customers
7.3 COMPANY STRATEGIC DIRECTIONS
The company will have 5 years strategic plan of establishment and production vegetable crops
products so that it will be competitive in horticulture markets area. The strategic option has been
expressed by mission vision, goal and values of the company.
7.4 STRATEGIC PLANNING APPROACH

The following must be taken into consideration:
 Are current production/profitability constraints due to facilities or management
capability? If the answer is management capability, then address these issues before
considering expansion.
[67]
 Is the management able/ready to manage a larger herd? In many cases, expansion results
in hiring additional labor and one has to consideravailability, cost and the development
of a human resource plan.
 Excellent farm management excellent people management. Excellent cow managers are
often meticulous in details related to the management of the farm blocks and orchard
hired labor do not meet their expectations. A well designed human resource plan and the
development of standard operating procedures can often alleviate this issue.
7.5 VISION
 To be leading vegetable producing and supplying company at Damot Sore woreda and
surroundings in coming 5 years
 To appear as competitive company interims of quality and market share.
7.6 MISSION
Undertaking of different vegetable crops which has highest demand in markets around Damot
Sore woreda city administrations
7.7 VALUES
 Loyalty
 Hard work
 Timeliness quality
 Customer care
 Solidarity
 Ethically soundness
7.8 HUMAN RESOURCE MANAGEMENT

A human resource management plan is an important component of a strategicplan for
today’s dairy farm. Areas to consider are:
 Sourcing
 Training
[68]
 Job description
 Advancement
 Pay and incentive plan
 Retention plan
7.9 ORGANIZATIONAL BACKGROUNDS AND STRUCTURE
Agriculture development (vegetable production & dairy cow) plc. Organic organizational
structure which is the required organizational facilities for production oriented organizations.
Similarly our organization will be designed in relation to increase customer satisfaction and for
provision of quality services. The company will be managed and supervised by top executive
body organized by general manger that will be of promoter.
ORGANIZATIONAL STRUCTURE OF HIDASE URBAN AGRICULTURE

(VEGETABLE PRODUCTION) PARTNERSHIP
GENERAL MANGER
FINANCE
DEPARTMENT
OPERATION UNIT
Farm
operation
Labor and
unit
equipment
Marketing department
[69]
Market assessment Market Promotion department
development
MARKET ANALYSIS
The company customers are the residences of the city that need continuous supply of quality
vegetable for personal use at home and commercial uses in café and restaurants, youth clubs.
There assuming high market demands for raw milk by community the company strive for
submitting
7.10 ENTERPRISE ANALYSIS

The majority of urban agricultural businessis involved in at least fourproduction enterprises:
1. Vegetableproduction
2. Nursery management
3. Cropping and cultural practice
4. Cattle sales, either for dairy production or beef
Strong performance in any one area often hides unrealized opportunities in other production
enterprises. Unfortunately, most vegetable farms only have one set of financial statements and it
is difficult to assess how well the farm is performing in each production area. Transplanting and
cropping profitability are not maximized on many Wolayta areas area vegetable production and
warrant increased scrutiny to optimize productivity and profitability. This is because the
production and supply to sodo , Tebela Humbo and other city come and sodo , hawassa and
Addis Ababa which on other hand increased price that now challenging the consumers. The
cropping enterprise should be designed to optimize e quality and a reduce exposure to escalating
off-farm and transportation costs.
7.11 MONITORING AND EVALUATION
[70]
The organization will use frequent mentoring and evaluations system in order to improve the
productivity and production capacity. There will be evaluations each quarter years depend up on
the call of the promoter.
7.12Keeping records
The project will use keeping of records and data management for each of work components like
seed rate, planting time, germination rate, harvesting date, yield estimates and cultivated areas
well as the number of employee wage rate etc.. on other hand all date regarding wage and cost
fixed assets and capital will be recorded and kept by computerized system
7.13 PROJECT COMPLETIONS
According to strategic planning of the project will have 5 years strategist from 2022 -2025E.C
but up on completion the project planned to pay all its debts and loans and the claims of debtors.
The project will sustain for the nest time after completion of projects
7.14 PROJECT SUSTANBLITY AND FEASIBLITIES
The project will be sustained as the promoters keep it up as it show profit margins and
encourages them to do the business by more diversified, technology application to keep quality
and volume of production increased, therefore, there would be no problem of project
sustainability.
INCOME STATEMENT
From December 31-2023 to December 31-2028
Revenue 2020 2021 2022 2023 2024

sales Income 9,265,561.64 10,192,117.80 11,211,329.60. 12,332,462.60 13,565,708.90
Total Revenue 9,265,561.64 10,192,117.80 11,211,329.60. 12,332,462.60 13,565,708.90
Cost and Expenses
Direct Material Cost 390,000 428,200 469,670 496,824.70 542,877.75
Wage and salary 240,000 264,000 284,640 301,644 330,401
Utility expense 36,168 36,168 36,168 36,168 36,168
[71]
Other costs and expense

Depreciation 70,000.00 84,000.00 92.000.00 101,200.00 113,000
500,175.00 400,140.00 326,112.00 231,761.08 51,217.92
Interest expense
1,236,343 1,212,508 1,116,682 1,167,597.78 1,073,664.67
Expense
Income Before Tax 8,029,218.64 8,979,609.80 10,094,647.60 11,164,864.82 12,492.000
Less: tax deduction 802,921.86 897,796.10 1,009,464.76 1,116,486.48 1,249,000
Net Income of the year 7,226,296.78 8,081,813.70 9,993,701.24 10,048,378.34 11,243,000
Profit & Loss Analysis
Description Years of project

1 st
2 3rd
nd
4th 5th
Income 9,265,561.64 10,192,117.80 11,211,329.60. 12,332,462.60 13,565,708.90
Expense 1,236,343 1,212,508 1,116,682 1,167,597.78 1,073,664.67
Balance 8,029,218.64 8,979,609.80 10,094,647.60 11,164,864.82 12,492.000
Tax 10 % 802,921.86 897,796.10 1,009,464.76 1,116,486.48 1,249,000
Net profit 7,226,296.78 8,081,813.70 9,993,701.24 10,048,378.34 11,243,000
Agro- industry estimated

Balance Sheet
For Year End January 2023 – 2027 Budget Year
From December 31-2016 to December 31-2025

Current Assets 2023 2024 2025 2026 2027
Cash 7,226,296.78 8,081,813.70 9,993,701.24 10,048,378.34 11,243,
Total Current Assets 7,226,296.78 8,081,813.70 9,993,701.24 10,048,378.34 11,243,
Fixed Asset 1,230,000 1,230,000 1,230,000 1,230,000 1,230,000
Other fixed assets 6,343.00 6,343.00 343.00 343.00 34.00
Total fixed Assets 1,236,343 1,212,508 1,116,682 1,167,597.78 1,073,664.67
Total Assets 8,462,639.78 9,294,321.7 11,110,383.24 11,215,976.12 12,316,664
LIABILITEIS
Loan & interest payable 1,236,343 1,212,508 1,116,682 1,167,597.78 1,073,664.67
Owners Equity 7,226,296.78 8,081,813.70 9,993,701.24 10,048,378.34 11,243,
[72]
EQUITY & Capital 8,462,639.78 9,294,321.7 11,110,383.24 11,215,976.12 12,316,664
[73]

DR - Lisanework Project Abaya

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PROJECT PROPSAL FOR AGRO- INDUSTRY DEVELOPMENT IN

ABELA ABAYA WOREDA, WOLAYTA ZONE, SNNPRS

PROJECT PROPOSAL FOR AGRO-INDUSTRY

PROJECT LOCATION- ABELA ABAYA, WOLAYTA ZONE

Project Name – DR.LISANWORK integrated Agro industry

vegetable agricultural development partnership

Promoters name- Dr. Lisanwork Honsebo Solomon and Mr.Francios Xavier.

 Project promoters- four individuals

 Total area of land need – 50 hectare.

 Current operational -4 hectare

 Type of business entity –sole proportiership

 Name of business- agricultural development Plc.

 Project durations- from 2022-2027

 Project total establishment cost- 4,35million birr

 Proposed starting time-June 2022

1.1. TOTAL CAPAITAL REQUIREMENTS

1.1. PROJECT OBJECTIVES

 Supplying of Milk production vegetables & fruits to local and international

markets (to communities in local as well as national markets)

 Contribute to development of the country

 Create employment opportunity paying tax to government

1.2. PROJECT COMPONENTS

proposed cash crop.

 Project total area – 50 hectors of land

 Types of investment –Agribusiness development production investment

 Estimated yield annual ---5000QT/year

1.3. EXPECTED BENEFICIARIES

THE PROJECT WILL SECURE BENEFIT FOR THE FOLLOWING

 Local and national markets( the community)

1. PRODUCT DESCRIPTION AND APPLICATION

1.1. MARKET STUDY AND PLANT CAPACITY

Domestic production of diary products between 2001/02-2009/10 is presented in Table 3.1.

DOMESTIC DIARY PRODUCTION

Year Pasteurized Butter (tons) Cheese Yogurt *

2001/02 89,382 384 166 18.41

2002/03 107,469 180 140 21.46

2003/04 121,739 339 189 24.64

2004/05 135,077 394 104 27.17

2005/06 162,103 588 122 32.83

2006/07 134,617 354 480 27.75

2007/08 146,291 365 236 29.54

2008/09 160,927 611 270 32.94

2009/10 242,564 982 185 49.33

IMPORT OF DIARY PRODUCTS (TONS)

Year Milk Butter Cheese Yogurt

2001 13.1 4.4 19.1 2.4

2002 21.1 7.0 12.3 0.8

2003 3.8 1.8 19.3 2.6

2004 4.0 11.4 45.3 1.2

2005 17.9 2.1 55.0 4.6

2006 18.3 25.3 58.1 5.1

2007 38.5 16.3 58.1 7.8

2008 322.9 14.2 60.8 8.9

2009 46.3 32.7 70.3 6.8

2010 84.3 3.9 78.5 7.7

2011 165.0 12.8 98.3 11.9

Source:- Ethiopian Revenue and Customs Authority.

1.2. Demand Projection

PROJECTED DEMAND FOR DIARY PRODUCTS (2013-2022)

Year Unsatisfied Unsatisfied Unsatisfied Unsatisfied

2013 295,403 3,501 1,636 243

2014 314,662 3,718 1,736 258