PROJECT TO BE IMPLEMENTED IN

AFAR REGIONAL STATE, ZONE 1,

SEMERA LOGIYA DISTRICT, LOGIYA
KEBELE.
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TABLE OF CONTENTS

PAGE

I. EXECUTIVE SUMMARY 1-2

II. INTRODUCTION 1-3

OBJECTIVE OF THE PROJECT
THE CEONOMIC SIGNIFICANCE OF THE PROJECT
LOCATION AND PREMISES REQUIRED
III. MARKET STUDY AND 1-3
A. SCOPE OF THE MARKET STUDY 1-3
B. MARKET DEMAND 1-6
MARKET SUPPLY
TARGET CUSTOMERS
MARKET PROSPECTES
MARKETING PROMOTION AND STRATEGY
SERVICE PROGRAM
SALES PLAN/CAPACITY
IV. MATERIALS AND INPUTS 1-7
A. RAW & AUXILIARY MATERIALS 1-7
B. UTILITIES 1-8

VI. MANPOWER & TRAINING REQUIREMENT 1-13

A. MANPOWER REQUIREMENT 1-13
B. TRAINING REQUIREMENT 1-14
VII. FINANCIAL ANLYSIS 1-15
A. TOTAL INITIAL INVESTMENT COST 1-15
B. PRODUCTION COST 1-16
C. FINANCIAL EVALUATION 1-17
D. ECONOMIC & SOCIAL BENEFITS 1-19
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I. SUMMARY

PROJECT NAME Children's playground and recreational services

PROJECT OWNER Meryem Mohammed Ebrahim
NATIONALITY Ethiopian
PROJECT LOCATION Afar Regional State, Zone 1, Semera Logiya
District, Logiya Kebele.

PROJECT Children’s Indoor and Outdoor playground,

COMPOSITION Restaurant and Café, Supermarket, Shops and
Recreational and Green area

PREMISES REQUIRED 5000 m2

TOTAL INVESTMENT Birr 21,850,750.00 of which 30% equivalent to
COST 5,462,687.50 financed by the owners equity and
the rest 70% equivalent to 16,388,062.50 financed
by bank loan.
EMPLOYMENT 67 Emplooyees
OPPORTUNITY
BENEFITS OF THE Provide better service, Source of Revenue ,
PROJECT FOR THE Employment opportunities , Benefit for local
REGION/COUNTRY
community and Stimulate the local economy
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INTRODUCTION

The Ethiopian economy has been registering extraordinary, double digit, and
economic growth for the last nine years. When there exist fast economic growth in
one nation, the income of the citizen also increase this phenomena changes the life
style and modernization of the citizen
In order to keep the economic growth long lasting there should be parallel growth and
linkage sectors of the economy such as manufacturing and service ( tertiary) sector.
The development of children's playground and recreational services as one part of
service sector has a great contribution to the economy in different ways.
However the expansion of children's playground and recreational services are
concentrates in main town of the nation hence further investments in these areas are
very vital for better service provision for the citizens through that it supports the
economic development.
The government of Ethiopia has developed conductive investment policy packages
and other sectorial reforms at federal and regional level to attract a huge private
investment for the wellbeing of the nation and its citizens as a whole. Besides it is also
currently implementing the five years growth and transformation plan that gave a
space for the development industrialization and tertiary sector by private sector.
Like the federal government investment policy packages and incentives, the Afar
regional state government has been excreting its maximum effort to expand
investment opportunities in the region, so as to foster the economic development of
the region and subduing the regions big enemy that is the trap of poverty. Therefore
the regional government has been prepared a viable business environment to attract
many domestic and foreign investors so that the dream of making poverty history
turns to be true.
Therefore the visible market gap attractive investment policies and deep interest to
contribute for the development of birth Town attracts the owner of the envisioned
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project to establish children's playground and recreational services in Afar Regional

State, Zone 1, Semera Logiya District, Logiya Kebele.
The owners of this envisaged project have a good business experience and very
ambitious to establish the project by expecting a good support and facilitation from
the regional government.

1.1- Objective of the project

The main objective of this project is to establish a standard children's playground and
recreational services in Afar Regional State, Zone 1, Semera Logiya District, Logiya
Kebele.

1.2- The economic significance of the project

The envisaged project deemed to contribute to the economic development of the
region in general and the Wereda/ zone in specific with following ways
1- Provide better service
By providing quality services, the project will satisfy the demand of the customers.
2 Source of Revenue
As public policy of any nation, the government collects different forms of taxes from
different business organizations and individuals. Among the different forms of taxes,
business income taxes and payroll taxes are collected from undertaking business
activities. Therefore the project has been serving sources of revenue for regional
government.
3 Employment opportunities
One of the problems that our country faced is unemployment. Therefore the current
objective of the government is working on tackling the problem of unemployment and
fostering the development process either through creating self-employment or
employment in other organization. In this regard, project will hire 58 employees.
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Besides during the construction work of the project extra jobs will be created
particularly for local community in construction part.
4 Benefit for local community
Apart from employment opportunity for local community, as a corporate
responsibility the project has been engaged in different development activities. This
will better worth the community in particular and contribute for the development of
the nation as a whole
5 Stimulate the local economy
The project will increase economic relationships and transaction among different
actors in the local economy.

1.3- Location and premises required

A- Project location
The envisaged project will locate in Afar Regional State, Zone 1 , Semera Logiya
District, Logiya Kebele.
Market study
2.1- Scope of the market study
The project is targeted for the project surrounding areas hence the scope of market
study of this project concentrates on the district in general and the Kebele in specific
scenario.
2.2- market demand
There are a number of factors which creates demand for children's playground and
recreational services in the area. The following major factors are identified
Economic activities
Population
Location importance
Infrastructure
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Availability of different institutions

Energy demand
These major demand factors for the project are explained as follows
1 Economic activities
The Afar Regional State, Zone 1, Semera Logiya District which is a dynamically
growing area. The main stay of the economy of the town is trade and agriculture for
the district. There exist also industries and other service based business. Besides the
agricultural productivity nature of the zone and surrounding areas are making the town
to have hot economic activity.
2 Location importance
Thus the geographical importance of the district will enhance the movement that
further necessities the demand for children's playground and recreational services
business
3 infrastructure
In the district there exist asphalt all whatever and dry weather roads that connects
different areas that will create a demand for the children's playground and recreational
services
4 availability of different institutions
In the district there exist many governmental bureaus. Besides, there exist non-
governmental organizations (NGOs) and private companies. All these institutions are
potential market demand for the project especially for restaurants cafeterias

2.3-Market supply
In the area there exist few service provider organizations. Besides all quality services
in one organization is almost nonexistent in the town.
2.4-Target customers
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The target customers of the envisioned project are

The residents of the kebele and the surrounding area
Merchants
Business community
Different occasional guests
Different institutions
Domestic and foreign tourists and visitors
2.5- Market prospects
From the above analysis of market it can be deducted that there is a huge gap between
demand and supply for children's playground and recreational services in the kebele as
well as in the region that will give a lucrative market for the envisioned project.
2.6- Marketing promotion and strategy
To reach customers different marketing ways will be used. Among the different
marketing strategies and tools for promotion controlling the market
Printed and non printed forms of advertising
Sponsorship of key government activities and public support mechanism
Seasonal discount pricing for all service types and other different customer centric
marketing strategies will be used by the company
Customers satisfaction will be the key marketing strategy of the building. Generally
the project have many advantages since there are no children's playground and
recreational services in the town.
2.7- Service program
The organization will initially operate 70% of its capacity and will reach 100% (full
capacity) service provision in the second year.
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2.8 Sales Plan/Capacity

Sr Production Quantity
.No. Item Description Unit Daily Monthly Annualy
1 Coffe Cup 70 2,100.00 25,200.00
2 Tea Cup 40 1,200.00 14,400.00
3 Milk Cup 30 900.00 10,800.00
4 Machiato Cup 60 1,800.00 21,600.00
5 Soft Drinks Bottle 100 3,000.00 36,000.00
6 Juices Cup 20 600.00 7,200.00
7 Cake Pcs 40 1,200.00 14,400.00
8 Food Pcs 60 1,800.00 21,600.00
9 Ice Cream Pcs 35 1,050.00 12,600.00
10 Candy pop Pcs 20 600.00 7,200.00
11 Indoor Playground Games No of Games 60 1,800.00 21,600.00
12 Outdoor Playground Games No of Games 30 900.00 10,800.00
13 Children’s Toys Pcs 15 450.00 5,400.00
14 Children’s Cloth Lump 0.00 0.00
15 Supermarket Items Lump 0.00 0.00
1. Machinery and Equipment
The total cost of machinery and equipment with the envisaged capacity is estimated at Birr 4.47
million,The list of machinery and equipment required by the envisaged plant is given in Table 5.1.

MACHINERY AND EQUIPMENT REQUIREMENT

Unit
Sr.No. Description Qty.(No.)

INDOOR PLAYGROUND
PCS
1 Electric playing machines 30
M2
2 Plastic Inflated playing materials 800
PCS
3 Playstation Game with Tvs 10
PCS
4 Other Playing Materials 10
OUTDOOR PLAYGROUND
M2
1 Plastic Inflated playing materials 300
PCS
2 Fixed Metal playing Materials 15
OTHERS
1 Restaurant and café Equipments LUMP 1
2 Office Equipments LUMP 1
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2. Land, Buildings & Civil Works

The total area required by the project is 5,000 m2, of which 3,800 m2 is built-up area. The cost of
building at unit cost of Birr 3,000 per m2 is, thus, estimated at Birr 11,400,000.

Sr.No. Description Land

Unit Requirement
1 Indoor playground Hall M2 1000
2 Restaurant and Cafe M2 350
3 Supermarket M2 200
4 Store M2 300
5 Offices M2 100
2
6 Shops M 120
7 Toilet and Showers M2 80
8 Workers Living rooms M2 40
9 Guard Houses M2 10
10 Outdoor playground area M2 1000
11 Recretion and Green area M2 600
3800

VI. HUMAN RESOURCE AND TRAINING REQUIREMENT

A. HUMAN RESOURCE REQUIREMENT

Total human resource required is 67 persons. The total annual cost human resource is estimated at
Birr 1,372,500. The details of the human resource requirement and the estimated annual labor cost
including employees’ benefit are given in Table 6.1.
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HUMAN RESOURCE REQUIREMENT AND ESTIMATED LABOR COST (BIRR)

Sr. No. of Monthly

No. Description Persons Salary Annual Salary
1 8,000 96,000
General Manager 1
2 4,500 54,000
Finance & Administration Head 1
3 3,000 36,000
Service Mgt. & Service Head 1
4 3,000 36,000
Marketing Head 1
5 2,000 24,000
Marketing Officer 2
6 2,500 30,000
Accountant 1
7 2,000 24,000
Sales person 2
8 7,800 93,600
Cashier 6
9 2,000 24,000
Purchaser 1
10 2,000 24,000
Store Keeper 2
11 2,500 30,000
Supermarket Supervisor 1
12 1,500 18,000
Barista 1
13 2,500 30,000
Cooking Chief 1
14 6,000 72,000
Cookers 4
16 3,900 46,800
Receipients 3
17 6,000 72,000
Waiteres 6
18 15,000 180,000
Playground & Recretional workers 15
19 4,500 54,000
Driver 2
20 6,400 76,800
Unskilled labor 8
21 3,200 38,400
Guard 4
22 3,200 38,400
Janitors 4
Sub Total 67 86,200 1,098,000
Employees benefit (25% of basic
21,550 274,500
salary)
Grand total 107,750 1,372,500
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B. TRAINING REQUIREMENT

On-site training program is believed to be adequate for key production, maintenance and quality
control personnel by the experts of machinery and technology supplier during commissioning and
performance testing period. The total cost of training is estimated at Birr 75,000.

VII. FINANCIAL ANALYSIS AND STATEMENTS

Underlying Assmption
The financial analysis of the project is based on the data presented in the previous chapters and
the following assumptions:-
A. Construction and Finance
Construction period 1 year
Source of finance 30 % equity and 70% loan
Tax holidays 2 years
Bank interest rate 10%
Operating cost increased by 1%
Salary and wages increased by 1%
Operating cost and raw material increased by 1%
Raw material increased by 1%
Sales 10% increment after 1st year
B. Depreciation
Building 5%
Machinery and Equipment 10%
Office Furniture 10%
Vehicles 20%
C. Working Capital
Accounts receivable 30 days
Raw material local 30 days
Raw material imported 120 days
Work in progress 5 day
Finished products 30 days
Cash in hand 5 days
Accounts payable 30 days
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Source of Fund

% Amount (in
Sr.No. Description Share Birr)

1 Owners Share 25 5,462,687.50

2 Bank Loan 75 16,388,062.50

TOTAL 100 21,850,750.00

Loan repayment Schedule

Total
Annual Remaining
Year Principal Payment Interest 10% Payment Balance

0 0 0 16,388,062.50

1 2,048,507.81 1,638,806.25 3,687,314.06 14,339,554.69

2 2,048,507.81 1,433,955.47 3,482,463.28 12,291,046.88

3 2,048,507.81 1,229,104.69 3,277,612.50 10,242,539.06

4 2,048,507.81 1,024,253.91 3,072,761.72 8,194,031.25

5 2,048,507.81 819,403.13 2,867,910.94 6,145,523.44

6 2,048,507.81 614,552.34 2,663,060.16 4,097,015.63

7 2,048,507.81 409,701.56 2,458,209.38 2,048,507.81

8 2,048,507.81 204,850.78 2,253,358.59 -

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Depreciation Schedule
Sr.No. Description Original Value Depreciation Depreciation
In Birr rate in % per year

1 Building 11,400,000.00 5 570,000.00

2 Machinery and Equipment 4,475,000.00 10 447,500.00
3 Office Furniture 200,000.00 10 20,000.00
4 Vehicles 700,000.00 20 140,000.00
TOTAL 1,177,500.00

Revenue Projection
Based on the productioncapacity and programe of the project indicated in previous chapter the
revenue of the organization projected as indicated in the table below.

Unit
Sr Annualy
Item Description Unit Price Total Price Assumption
.No. Production

1 Coffe Cup 25,200.00 5 126,000.00

2 Tea Cup 14,400.00 4 57,600.00
3 Milk Cup 10,800.00 10 108,000.00
4 Machiato Cup 21,600.00 12 259,200.00
5 Soft Drinks Bottle 36,000.00 20 720,000.00
6 Juices Cup 7,200.00 35 252,000.00
7 Cake Pcs 14,400.00 25 360,000.00
8 Food Pcs 21,600.00 70 1,512,000.00
9 Ice Cream Pcs 12,600.00 50 630,000.00
10 Candy pop Pcs 7,200.00 35 252,000.00
No of
11 Indoor Playground Games 21,600.00
game 30 648,000.00
Outdoor Playground
12 No 10,800.00
Games 10 108,000.00
Average
13 Childrens Toys Pcs 5,400.00
200 1,080,000.00 price
14 Childrens Cloth Lump 360.00 350 126,000.00 Lump sum
15 Supermarket Items Lump 0.00 1,100,000.00 Lump sum
Total 49,625.00 7,338,800.00
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Balance Sheet
Asset
Current Asset Cost
Cash 5,075,750.00
Inventory of raw materials and
0
inputs
Sub total Current Asset 5,075,750.00
Fixed Asset
Land, Building and civil work 11,400,000.00
Machinery and equipment 4,475,000.00
Vehicles 700,000.00
Office furniture and equipment 200000
Total Asset 16,775,000.00
Liability
Accounts payable 16,388,062.50
Owners Equity
Capital 5,462,687.50
Total Liability& Owners Equity 21,850,750.00

A. TOTAL INITIAL INVESTMENT COST

The total investment cost of the project including working capital is estimated at Birr 21.85 million
(see Table below).
INITIAL INVESTMENT COST (‘Birr)

Total
Sr.No Cost Items Cost
1 Fixed investment
1.1 Land, Building and civil work 11,400,000.00
1.2 Machinery and equipment 4,475,000.00
1.3 Vehicles 700,000.00
1.4 Office furniture and equipment 200000
Sub total 16,775,000.00
2 Pre operating cost *
2.1 Pre operating cost 50,000.00
Sub total 50,000.00
3 Working capital ** 5,025,750.00
Grand Total 21,850,750.00
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B. PRODUCTION COST

The annual production cost at full operation capacity is estimated at Birr 5.02 million (see Table
below).

Raw Material and Inputs

No Items Unit Cost
(in Birr)
1 Restaurant and Cafe LS 1,300,000.00
2 Supermarket LS 800,000.00
3 Other services LS 750,000.00
Total Costs 2,850,000.00

Other Operating Expense

No Items Cost
(in Birr)
1 Property insurance 167,750.00
2 Utilities 30,000.00
3 Maintenance and repair 335,500.00
4 Labor direct 1,098,000.00
5 Labor overheads 274,500.00
6 Administration Costs 150,000.00
7 Cost of Advertising and marketing 120,000.00
Total Costs 2,175,750.00

Initial Working Capital

Items Cost
(in Birr)
Raw Material and Inputs 2,850,000.00
Other Operating Expenses 2,175,750.00
Total Production Cost 5,025,750.00