PROJECT PROPOSAL ON B+G+27 FIVE STAR

INTERNATIONALHOTEL

PROJECT LOCATION: - ADDIS ABABA, KIRKOS SUB CITY,

WEREDA 08.

PROMOTER COMPANY NAME: WALIA STEEL INDUSTRY

COMPANY MANAGER:- Mr .SISAY TESFAYE

January, 2023

Addis Ababa

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 CONTENTS

I. EXCUTIVE SUMMARY.................................................................................................................................3
1. INTRODUCTION..............................................................................................................................................4
2.2. HOTEL AND TOURISM SECTOR IN ETHIOPIA...................................................................................4
PROJECT RATIONALE...................................................................................................................................6
1.2. PROJECT DESCRIPTION.........................................................................................................................6
1.3. PROJECT OBJECTIVE..............................................................................................................................6
1.4. SIGNIFICANCE OF THE PROJECT........................................................................................................7
1.5. INVESTMENT OPPORTUNITY AND POLICY ENVIRONMENT.................................................7
1.6 INVESTMENT INCENTIVES....................................................................................................................8
1.7.PROJECT LOCATION AND JUSTIFICATION...................................................................................8
2. MARKET STUDY.......................................................................................................................................10
2.1. PAST SUPPLY AND PRESENT DEMAND.........................................................................................10
2.1.2. PRESENT DEMAND............................................................................................................................10
2.1.2. FORECASTED DEMAND.............................................................................................................11
2.1.4. DEMANDS AND SUPPLY GAP........................................................................................................12
2.1.5. MARKETING STRATEGY...........................................................................................................12
2.1.6. COMPETITORS OVERVIEW......................................................................................................13
2.1.7. SERVICE PRICING AND DISTRIBUTION...........................................................................13
2.1.8. PLANT CAPACITY..........................................................................................................................13
2.1.9. PRODUCTION PROGRAM............................................................................................................13
3. TECHNICAL STUDY...................................................................................................................................14
3.1. DESIGN AND PARTICULARS...............................................................................................................14
3.5. I N P U T S / RAW MATERIALS AND UTILITIES.............................................................................18
3.6. MACHINERY AND EQUIPMENT......................................................................................................19
3.8. ENVIRONMENTAL IMPACT ASSESSMENT...................................................................................28
4. ORGANIZATIONS AND MANAGEMENT................................................................................................30
4.1. ORGANIZATIONAL STRUCTURE.......................................................................................................30
4.2. MANAGEMENT......................................................................................................................................30
4.3. MANPOWER REQUIREMENT..............................................................................................................30
5. FINANCIAL STUDY....................................................................................................................................32
5.9. SOURCE OF FINANCE...........................................................................................................................36
5.4.1. FINANCIAL EVALUATION...............................................................................................................44

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 I. EXCUTIVE SUMMARY
The purpose and scope of this proposal study is to introduce the subject matter and provide a general
idea and information on the said area. All the material included in this document is based on data
gathered from various sources and is based on certain assumptions. Although, due care and diligence
has been taken to compile this document, the contained information may vary due to any change in any
of the concerned factors, and the actual results may differ substantially from the presented
information.
Total land requirement for the envisaged plant is 7,821 square meters. Total built-up of the project is
5,000 square meters.
WALIA STEEL INDUSTRY Pvt. Ltd. Co., the project promoter is a legal concern registered by ministry of
justices before decades to engage in industry, real estate and commerce. In hotel business development
it has an appealing modern five star international building of B+G+27 on land area of 7,821 square
meters in the heart of the city area commonly called kirkos sub city 08 wereda of Addis Ababa. The
income accumulated from different business over the years is the source of equity for the investment in
the hotel sector. Now, the company has decided to expand the hotel business via construction of
B+G+27 floors.
Completion of the project requires 5 years implementation period and total initial investment cost of
project will be Birr 5.00 Billion. It is planned that the promoter would contribute 30 %(
1,500,000,000) of the total investment cost and the remaining 70 %( 3,500,000,000) is expected to be
financed by long term bank loan and the firm will create employment opportunities for 300 persons.
The loan is expected to be released on Hamle 1, 2023 with one year grace period.
Starting from the first year, the project makes profit throughout its life years. It also produces positive
net cash inflow early from the first year. The initial investment cost would be fully paid back within ten
years with the gross value of net-cash inflows. The total discounted benefit at the rate of 18% is Birr
6.6 billion and the internal rate of return is 43%, which is moderately above the considered cost of
capital.
The project is financially viable with an internal rate of return (IRR) of 24% and a net present value
(NPV) of Birr 1,595,920 million discounted at 8.5%.The project has a forward linkage effect with food
industries.
Based on the projected profit and loss statement, the project will generate a profit beginning from first
year of operation. Annual net profit after tax will grow from birr 406,419 million to Birr 627,659,
million during the life of the project. Moreover, at the end of the project life the accumulated cash flow
amounts to Birr 49,862,319 bil.
In financial analysis the 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.
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 10) is estimated by using
income statement projection. Therefore it accounts to be 12%.
The payback period, also called pay – off period is defined as the period required recovering 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 4 years.

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 1. INTRODUCTION

Ethiopia is now becoming more and more investment friendly country. The Government is creating
favorable condition that would highly encourage the private Sector to be engaged in almost all areas of
the economy. The country with population of come 80 million offers significant domestic market for
locally for locally produced goods and service the country is also a member of the common Market for
eastern and southern Africa Comesa offering huge benefit of Exporting commodities in preferential
tariff rates to a wider regional market. Privet investment should be encouraged to increase form year to
year and Investment constraints have to be alleviated in order to pave development ways so that
investment sector happens to be determinant about factor of economic development of the country like
Ethiopia. it is usually considered as the engine of the economy .both private and government Bodies in
many ways have commonly agreed this idea. Economic development in Any case needs both efforts of
the privet as well as the public sector. There are Investments that could not be undertaken by privet
sector due to its difficult nature I .e high initial capital and long gestation period. However, the passed
command economy system and the lack of experience between both sides have made it so hard for a
private sector to flourish .But now a day as Ethiopia follows free market economy ‘the roll of private
sector for the achievement of the economy policy. Accordingly, the Ethiopia federal democratic
government is encouraging investors to invest their records to contribute to the development of the
country in all sectors by avoiding all barriers and facilitating all the mince for the investment
2.2. HOTEL AND TOURISM SECTOR IN ETHIOPIA
Ethiopia has vast potential for development of various economic sectors. Although agriculture
is the mainstay of the country’s economy the opportunity to invest in other sectors
especially in Hotel, Tourism and various recreation activities are there. Although Ethiopia is
endowed with many natural and manmade tourist attractions, these resources have not been
sufficiently exploited. The country’s geographical location and the remarkable physical features
and climate have endorsed it with rich and varied natural heritages. Despite considerable
demand, tourism sector remains at relatively low stage of development.

The Hotel and recreation service facilities in Ethiopia have been found at a lower level of
development. The number of Hotel service establishments in the country has remained
insignificant to respond to the customer’s demand. Only few Hotels have the capacity or
quality to provide good accommodation and catering facilities to fulfill tourists need. There are
only few hotels in the capital, Addis Ababa, and other big towns of the region states that
organized on international standard to fulfill the consumer’s needs.

The government of Ethiopia has devised a long term strategy that gives due regard to the
preservation, development and promotion of the country’s tourist attraction. This includes plan

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for expansion of tourist facilities and the necessary infrastructure. Indeed in the wider sense the
country has a good potential for the development of high standard hotels, recreation and
market center and there is a growing realization that this sector holds a
significant development perspective, which should be fully exploited in the planned and controlled
manner. In adopting a planned and regulated approach the country is in a position to expand its hotel
and tourism sector in a way that emphasizes environmental conservation and enhances the quality of
the overall tourist experience. This will contribute substantially towards improving the standard of
living and the quality of life of the population. The past trend shows that most of the high standard
hotels and recreation centers are concentrated in the capital, Addis Ababa. The number of hotels and
recreation service facilities in other regions of the country has remained insignificant to respond to
the customers demand. Only few hotels and recreation centers out of Addis Ababa have
the capacity to provide accommodation for mid or high-class guests.

Addis Ababa’s first housing policy, incorporating the Government’s practice of maintaining public
ownership, was also implemented at this time but it assumed that the housing market alone would meet
the demand for affordable housing of the low-income population. Despite large subsidies and land
provided at highly subsidized rates, the private sector has failed to deliver affordable housing at the
large scale required. Cognizant to the vast demand and supply gap of five star hotels, in recent one
decade, the government of Ethiopia has been emphasizing the development of urban house
development program. Most of this growth manifests itself in the proliferation of small, mostly
roadside towns or service centers whose principal role is mediation of local commerce and, more often
than not, functioning as centers of public administration. The number of such settlements has been
rising so fast in the recent past that the number of overall, the concentration of resources is clearly not
well balanced in Ethiopia in general and in the spatial pattern of the national urban system in
particular.
Addis Ababa, the national capital city, nowadays stands as a primate city in the full sense of the term
and, as such, is host to some 37.5 percent of the national urban population. Like any other major city of
Africa, it is presently suffering from a host of social and economic problems, severe housing shortage
and poorly developed physical and social infrastructure and the proliferation of slum and squatter
settlements is pivotal. The five star hotel markets in emerging markets like Ethiopia are still promising
although they also have been notably affected by the global crisis. As a developing country, Ethiopia
has been going through wide-scale urbanization as a result of the rapid economic growth. The increase
in population and migration from rural to urban areas triggered rapid growth in the cities.
The past trend shows that most of the high standard hotels and recreation centers are concentrated
in the capital, Addis Ababa. The number of hotels and recreation service facilities in other regions of
the country has remained insignificant to respond to the customers demand. Only few hotels
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 and recreation centers out of Addis Ababa have the capacity to provide accommodation
for mid or high-class guests. By taking this encouraging as an opportunity the promoter project plan
to establish 5 star international Hotel service in Addis Ababa for the benefit of the promoter, the
district community as well as the country as a whole.

PROJECT RATIONALE
According to the preliminary market research, the demand for hotel service is very high and yet the
supply is limited leaving a huge service gap to the customer. Unfortunately there is no saturated
standard hotel (5 stars) in the area. Although few less than five star hotels have already working
in the area, but still huge gap is there in between demand and supply in the town. The service (5
star hotels) is widely accepted in Addis Ababa, Government employees, Private employees,
Tourists, local customers, and to some extent even in rich house-holds. So there is good scope for
establishing the units for establishing and maintain 5 star standard /international and tourist hotel
service in Addis Ababa as well as in the country. Due to this, it has become imperative to build and
maintain 5 star standard hotels service for the mankind in prevailing conditions.

1.2. PROJECT DESCRIPTION

International standard tourist hotel is high class hotel (from three to five-star level) where services like
bedroom, catering, meeting rooms, multipurpose assembly hall, swimming pool, Spa (Hot Spring),
gymnasium ,sauna and massage, other sports facilities like tennis or squash court, min-golf or
badminton, bowling, table tennis and children playground, night club with dancing to live music or
discotheque or cabaret etc.A hotel is an establishment that provides paid lodging on a short-term basis.
Facilities provided may range from a modest-quality mattress in a small room to large suites with
bigger, higher-quality beds, a dresser, a refrigerator and other kitchen facilities, upholstered chairs, a
flat screen television and en-suite bathrooms. Small, lower-priced hotels may offer only the most basic
guest services and facilities. Larger, higher-priced hotels may provide additional guest facilities such
as a swimming pool, business center (with computers, printers and other office equipment), childcare,
conference and event facilities, tennis or basketball courts, gymnasium, restaurants, day spa and social
function services. Hotel rooms are usually numbered (or named in some smaller hotels and B&BS) to
allow guests to identify their room. Some boutique, high-end hotels have custom decorated rooms.
Some hotels offer meals as part of a room and board arrangement. In the United Kingdom, a hotel is
required by law to serve food and drinks to all guests within certain stated hours. In Japan, capsule
hotels provide a tiny room suitable only for sleeping and shared bathroom facilities.

1.3. PROJECT OBJECTIVE

 The main objective of the project is aimed at to maximize the return on invested capital in the form of
profit for the promoter. However, its implementation will benefit the employee, the consumer society

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 and the government at different levels. In this respect the project is aimed to promote the following
specific objectives:-

 To maximize the return on invested capital through modern Hotel services

 To raise the significance and importance of the sector and thereby raising its contribution to the
national economic development

 To give quality and standard hotel service

 Effectively use local inputs and strengthening the linkage between agriculture and other sectors of the
economy

 To provide gainful employment to a large segment of the population of the project area and augment
earning capacity at the grassroots level,

 Increase government revenue through the different forms of taxes, which in turn used to facilitate
social and economic development.

 To create employment opportunities for 125 permanent and 175 causal

 In general, the project is believed to have significant social and economic benefits that accrue to the
society, the region and the country beyond the financial returns to its owner.

1.4. SIGNIFICANCE OF THE PROJECT.

The project which intended to be established is believed to have number of significances.
Principally, it contributes to the efforts being made towards improving the involvements of agro
industry in the country’s economy. Thus, the project is expected to provide some insights for more
informed interventions as feasibly designed in the sectors development strategies.
1.5. INVESTMENT OPPORTUNITY AND POLICY ENVIRONMENT
The rapid economic progress attained by the country in the last nine years is the outcome of the
favorable economic policy focusing on liberalization of prices and markets, removal of subsidies,
reduction of tariffs and liberalization of external current account convertibility. What is more, these
measures have also been supported by favorable fiscal and monitory policies adopted by the
government.
Similarly, the newly formulated trade policy, embracing measures like the devaluation of the Birr,
introduction of weekly foreign exchange auction, suspension of taxes and duties on most exportable
items, and liberalization of the trade, improved the competitiveness of the country’s economy in the
world market.
The conducive environment created for the development of export, the various export incentives
offered by the government, and the fact that Ethiopia offers access to producers and manufacturers to

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 larger markets by virtue of its being a member of the Common Markets for Eastern and Southern
Africa (COMESA) – an economic bloc consisting of 23 member countries with a total population of
over 300 million people, and the fact that it is well placed to benefit from “Everything But Arms” trade
opportunity offered by European Union, and the fact that the country is, moreover, a beneficiary of the
‘African Growth and Opportunity Act” (AGOA) - which offers it a privileged access to the large U. S.
market – all of these factors have contributed to the country’s success in attracting more and more
investors from different parts of the world.
The above-mentioned steps taken by the government to create the favorable investment conditions, and
the wide ranging adjustments and reforms it has made several times so far to the existing laws,
regulations, and directives so as to incorporate changes and timely improvements deemed necessary,
are outcomes of the conducive economic policy it has put into place from the outset. Briefly speaking,
the policy environment in Ethiopia for the project under consideration is suitable and attractive.
1.6 INVESTMENT INCENTIVES
The government actively encourages both domestic and foreign participation in the economy, through a
plethora of investment incentives, which include:
 100% exemption from the payment of import duties and other taxes levied on imports of capital goods,
equipment and spare part up to 15% of the value of capital invested;
 Exemption from the payment of import duties levied on the import of raw material for production of
export- orientated goods;
 Income tax exemption for periods ranging from three to eight years; this is a function of where the
investment is located and also the priority accorded to that particular good;
 All research and development expenses are tax deductible; and Remittance from the proceeds of the
sale or transfer of shares or assets upon liquidation of enterprises to domestic investors is exempted
from the payment of any tax.

1.7. PROJECT LOCATION AND JUSTIFICATION

The proposed project of 5 star B+G+27 International hotel will planned to be located in Addis Ababa
kirkos sub city administration wereda 08 of addis Ababa. Addis Ababa is the capital and largest city of
Ethiopia. It is the seat of the Ethiopian federal government. According to the 2007 population census,
the city has a total population of 2,739,551 inhabitants. The total land size the promoter requesting for
the implementation of the project is estimated at 7500 square meters, which will been obtained from
investment commission of Addis Ababa city administration Hence the owners select Addis Ababa for
proposed project by looking every aspects of business integrity tourist area. As a chartered city, Addis
Ababa has the status of both a city and a state. It is where the African Union is and its predecessor the
AU was based. It also hosts the headquarters of the United Nations Economic Commission for Africa

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(ECA) and numerous other continental and international organizations. Addis Ababa is therefore often
referred to as the political capital of Africa for its historical, diplomatic and political significance for
the continent. Addis Ababa has a subtropical highland climate. The city has a complex mix climate
zones, with temperature differences of up to 10 °C depending on elevation and prevailing wind
patterns. The high elevation moderates temperatures year-round, and the city's position near the
equator means that temperatures are very constant from month to month. As such the climate would be
maritime if its elevation was not taken into account, as no month is above 22 °C (72 °F) in mean
temperatures.
It lies at an elevation of 2,200 metres (7,200 ft) and is a grassland biome, located at 9°1′48″N
38°44′24″ECoordinates: 9°1′48″N 38°44 .[14] The city lies at the foot of Mount Entoto and forms part
of the watershed for the Awash. From its lowest point, around Bole International Airport, at 2,326
metres (7,631 ft) above sea level in the southern peripherthe city rises to over 3,000 metres (9,800 ft)
in the Entoto Mountains to the north

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2. MARKET STUDY
2.1. PAST SUPPLY AND PRESENT DEMAND
2.1.1. PAST SUPPLY

The hotel industry consists of many different services, including accommodation, restaurants, and
cafes and catering. The market for the hotel industry, especially classified hotels in a developing
country like Ethiopia, is closely linked to the tourism industry, because a majority of consumers for
the sector services come from international tourists. According to the United Nations Statistical
Commission, Tourism comprises the activities of persons traveling to and staying in places outside
their usual environment for not more than one consecutive year and staying at least 24 hours in the
country visited .The total number of international tourists arriving in Ethiopia is steadily increasing.
The highest number of tourist arrival is in 2019 i.e. 227.4 thousand. As can be seen that, during the
period 1991-2019 except for the decline observed in year 1998, the number of tourists visiting the
country was consistently growing. The growth rate registered varies from year to year; the lowest
was in 1992 (2%) and the highest in 1997 (27.7%). However, on average during the period under
consideration tourist arrivals have been increasing by about 8 % per annum. During the same period
(1991- 2005), on average about 17% of the total number of tourists that have visited the country
were for vacation purpose while those who visited the country for business account 22% of the
total. Regarding the others, transit accounts for 18%, visiting relative 9%, conference 11%
and those who did not stated their purpose account for 22% of the total.

2.1.2. PRESENT DEMAND

The demand for hotel service increases with an increase in economic growth. Ethiopia has
particularly registered remarkable economic growth. Obviously, this economic growth leads to an
increase in demand of goods and services, which in turn stimulates the establishment of new firms
and expansion of the existing ones. Eventually this will increase demand for hotel service. The rate
of urbanization (i.e. percentage of the population that resides in the cities) is an important factor from
the perspective of demand for hotel service and also considered as one of the indicators of a
country’s economic development, i.e., it is a phenomenon that comes about with the development of
a country’s economy in general and industrialization in particular.
In Ethiopia, of the total populations, about 17.4% is estimated to reside in the urban areas principally
in the capital city. Data from the CSA indicates that the current urban population growth rate is
estimated to be about 4.1%, and will remain over 3.4% up to 2034. The share of urban population
will rise from 17.4% in 2011 to about 23% by the year 2034.

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Location of the proposed hotel is a critical factor that would determine the demand for and the price
of the room services. A good location of a hotel should have a high level of concentration of business
and non business offices, good transport links, good accessibility including parking facility, safe and
clean environment and other amenities. From this perspective, the proposed hotel which is located
along the main road and its nearness to Bole International Airport constitutes the preferred and ideal
site for all types of guests. In addition to the location, the quality and attributes specific to the hotel
are also essential in terms of attracting VIP guests. Among other things, the proposed hotel is
expected to have swimming pools, car parking space and standard fire extinguisher for its customers.
The demand for hotel service is fairly associated with the fast growing trends of businesses. Despite
the skyrocketing room rent prices for hotels, it is also noted that many people are currently
conducting their day-to-day business activities in every corner of the city in rented buildings.
Thus, this growing interest in many businessmen to renting rooms in the city (paying higher rental
prices) is taken as few of the major factors for growing demand for hotel services. Apart from the
general notion, getting reliable and comprehensive data regarding actual and potential number of
people seeking room and other services, (and their respective financial capabilities) is difficult.
However, reasonably, we can show the demand by using the average occupancy rate of hotels in the
city grows. Assuming that the average household size of 5 people remains the same for the last
several years and considering the projected population of Addis Ababa. The current demand for
residential houses in Addis Ababa is estimated about 968,419.19 units.
2.1.2. FORECASTED DEMAND

Ethiopia’s tourism sector showed a steady increase in the last decade. International tourist arrivals
rose from 64,000 in 1990 to 680,000 in 2013 and are expected to reach 815,000 by 2024. This 2024
figure would mean a contribution of USD$2 billion to the country’s GDP. Over the next five years
the sector is expected to create over a million jobs, or 3.6% of total employment .Comfortable hotels
play a vital role in attracting tourists. To support this, the government adopted a policy that allows
duty-free imports of hotel furniture, fixtures and equipment. It also provides for favorable loans to
investors for the construction of new rated hotels .But, while the hotel industry is growing, the
number of available hotel rooms is still the lowest. In terms of room availability, Ethiopia is globally
ranked 134 out of 140, compared to Kenya, Uganda and Tanzania at positions 122, 121 and 118
respectively. Furthermore, there are few hotels of an international standard, and many are old and
unattractive. Infrastructure to support the hotels is lacking. There are no zoning policies to establish
the areas where hotels should be constructed, or tourist activities to complement them when they are
built

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2.1.4. DEMANDS AND SUPPLY GAP

The demand and supply of room services in Addis Ababa for the coming 20 years ranges from
million rooms to 1.88 million rooms. To spur tourism growth and development, Ethiopia must
improve the hotel industry and the infrastructure that supports it. The shortfall in the projected supply
of room services in Addis Ababa, as warranted by the forecast demand for and supply of it, shows
that the city has a fairly sufficient market that can accommodate additional hotels especially in the
five star segments. However, since the data used to forecast the supply side are old enough, it is
better to relay on other qualitative data.
2.1.5. MARKETING STRATEGY

As discussed earlier the major target groups of hotel sector are tourists who arrives the country for
business, leisure, conference and other purposes. Providing quality services and consistently
improving with the changing situations should be the promoters’ objective. The key to
competitive advantage is relevant brand differentiation consumers must find something unique and
meaningful about a market offering. These differences may be based directly on the product or on
other considerations related to factors such as personnel, channels or image. Customers are value
maximizes. They form an expectation of value and act on it. Buyers will buy from the firm that they
perceive to offer the highest customer-delivered value, defined as the difference between total
customer benefits and total customer cost. Target marketing includes three activities: market
segmentation, market targeting and market positioning. Professional positioning is of benefit to a
supplier as it enables a company to invest its resources and skills in the right marketplace. As such it
is both an effective and efficient strategy. The right market offering is being placed on the market
and professional know-how is applied to achieving this cost effectively. Hence, according to the
feasibility study, the promoter has the following marketing strategies:
 Contacting government and private agencies affiliated with tourism on a regular basis,
informing them of any corporate rate, discount programs, availability of services, etc.

 Emphasizing the access of the proposed hotel to support client’s attractions, a well as the
services and amenities available, Special effort will be made to emphasize the price-value relationship
of the service available,

 Actively marketing the hotel prior to the completion and opening,

 An aggressive local marketing effort and promotion of the hotel market to enable the hotel
to capture a more than proportionate share of support within the market, working with local

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people to establish a competitive amenity package responsive to specific requirements.

2.1.6. COMPETITORS OVERVIEW

Three are 36 standard 3 to 5 hotels in Addis Ababa but still there is a huge gap but our hotel
service is do quality and clean services. In addition to the above, the failure stories that I have
observed from other is gap the comments collected from my customers will help me to win
my competitors.

2.1.7. SERVICE PRICING AND DISTRIBUTION

Pricing of a hotel and restaurant services could be classified into three main categories i.e. food,
beverage and bed rent. In this regard the daily average price by category of service is given in table 2
bellow. Type of food to be prepared at this site is more of "ferenji"culture.
Average price of service by category
Type of Service Unit Price in Birr
Food 450 / meal / person
Beverage 85/bottle(excluding whisky)

Bed Rent 1500/night/ person

2.1.8. PLANT CAPACITY

Working days are assumed to be 365/year for food and beverage and 300/ year. The attainable
capacity and revenue of the proposed hotel and restaurant for each category of service is estimated as
follows.
2.1.9. Production Program
The service program of the proposed hotel and restaurant is assumed to start at 80% in the first year
and increases by 10% until 100% is reached in the second year.

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 3. TECHNICAL STUDY
3.1. DESIGN AND PARTICULARS
The project owner interest, as regards to how the overall building design looks like and the
level of service to be rendered by the envisaged project, is dependent on the area at which the
buildings to be placed. The owner has already decided to commit himself to construct a five star
hotel having the full knowledge what is required by the national and international standard of
Hotels in Ethiopia. The standard by the way its exhaustiveness as well as being explicitly specific
on the level of the service expected under the selected category, determines also the physical
and financial requirement of the project. Hence, in effect the contents of project components
to be described below are the derivatives of the requirements mentioned above.

3.2. Physical appearance

The hotel would have B + G +27 b u i l d i n g placed on an area of 7,821 m2. The
architecture of the buildings are influenced by the modern design setting holding the characters
of attracting customers from out ward and allowing the maximum comfort it can provide from
service point of view. Apart from the need to add a new look within the locality, exterior of the
building will be dominated by a glass panel at the strategic corners to provide a maximum
opportunity for guest to have, a look at the important land escape/scenery of the area. The outer
space is allocated to have an open garden, children’s playing ground, parking area, fountains and
inter campus paving with a medium size swimming pool adjoining the front side of the buildings.

3.3. Core facilities

The envisaged hotel should have sufficient and comfortable space to accommodate the
core services as per the requirements of the Five star hotel. Actually this has been considered
seriously at the design stage of the building along with the allocation of appropriate area and

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placement of each components with the building accordingly. On the other hand, it is also
important to figure out the layout of each component not only from the perspective of
having compliance for the standard but for the benefit exploring possibilities of bringing
complementary services under the same location and allow maximum convenience in the work
processes .The size (area) of each service, which will be explained below, determine the holding
capacity of guests as it determines the level and quality of service. Other than the critical
factors mentioned above the market aspect i.e. customers need and resource availability are
considered in which case they are the determinants to give the final set up of the facilities.

(a) Bed rooms

A total of 80 classes are allotted for room services with options to avail two different types of
accommodations. In the interest of following the trend in the industry single and double bedrooms.
Actually the standard requires allowing maximum 30% from the total while the rest can remain with
big double bed rooms or any other smaller rooms. On the bases of the above considerations under
this component, the hotel will have 50 single, 20 double and 10 suit king bed rooms
(b) Bars
Standard Five star hotels must have at least one bars with a superior comfort and service quality. The
furniture and equipment’s, as being the basic sources of customer’s attractions, need to be
fashionable of higher quality commensurate with the expectation of guests who happen to prefer this
class. Therefore, the envisaged hotel, having the requirements considered too, will have one main bar
at the ground floor adjoining the reception area. Another bar preferably with smaller space but
furnished with cozy furniture will be placed at top floor of the building. This is just to add another
attractive look for the hotel as it will be placed at a strategic location for customer to have a
panoramic view of the area. The minimum carrying capacity of the bars is estimated 200 persons per
day.

(c) Main restaurant

Technically a hotel to be classified under Five stars of as such this one must have at least two dining
places having the size proportional to the guests who have checked in as normally customers do not
prefer to worry about going out once they have settled. The area determination has to take into
account this. Hence, the hotel must provide the maximum range of varieties at all times .The hotel
will have the capacity entertaining 200 guests and allow maximum efficiency in the service by
having the restaurant located nearer to the main kitchen.
(d) Banquet/Conference hall

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A hotel with five stars needs to have a conference/banquet hall of larger area which can be used for
banquet or conference interchangeably. This project considers this component as the second
important function next to the room services as this area has a higher potential for such services. The
holding capacity of the main conference hall will be 500 persons A Five star hotel needs to have
also a business center with the service that would the customers need. For such a service, the
envisaged project will allocate a relatively bigger area preferably separate rooms at the ground floor.
Rooms are allocated to secretarial service, executive rooms for business meeting and shopping
corners. The secretarial service will be furnished with all the machines and equipment to handle any
business enquiry that may be raised by hotel guests. The shopping corner also accommodates mini
boutique, cosmetics and d/t type of shop.
(e) Supports
Two kitchens, with the processes of multiple varieties of food preparation and a proportional
capacity to handle the maximum guests to be served in the main restaurant as well as in banquet
hall, is the critical requirement for the proposed hotel. It should be large enough also to
accommodate the working areas of cold and hot meals on the one hand and pastries and
bakery on the other. In order to allow reasonable space for workers to move around as well as to
avoid the possibility of contamination and spoilage, the pastries and bakery will be placed at the
nearest door joining the main buffet at the gate of the restaurant. On the other hand, the kitchen
should be provided with a space to add a small store with a flexible structure to contain butchery
and cold rooms. These are critical for easy facilitation of cooking’s. Moreover, the kitchen
will have a well-connected washing corner with at most margin of clearance to make the area
safe and clean.
f. Power House
For the service of the hotel to continue uninterrupted, a power house is already planned to be placed in
the underground or back to the building. Hence, the power house will be supplied with agenerr
planned to be fixed for emergency service.

h. Store
Alike the capacity projection made on the kitchen, the envisaged project requires a store as big
as the varieties of items that are needed to be kept as stock. The store will need to have a
systematic management for stocks properly placed and identified at the time of delivery and
inventory. Hence, it is the required procedure to organize the stock items in separate sections so that
the proper handling of stocks shall be maintained. In view of this, the hotel requires a number of
stores with sections for food items, beverage, glass wares, silver wares, soft furnishings,

16 | P a g e
cleaning and sanitary materials, stationery materials all placed according to their physical
appearances. The store will be placed in locations nearer to kitchen or leisure service.

3.3. Car Parking

The hotel must provide the service of car parking with 24 hours protection at least for those
customers who have checked in. Again, it should be large enough to accommodate as many
vehicles as the hotel is going to entertain a large crowd. In view of this, a parking space for
about 17 vehicles is planned to be allocated with the standard width and height of the drive in
routes.

3.4. Hotel Furniture and Equipment’s

Furniture and equipment required to furnish the envisaged hotel depend on the space to be
available as well as on the quality and volume of service to be rendered. Normally the
quantity required will also depend on the standard of the hotel i.e. Five star hotel. To the
extent that the engineering design of the building align with the requirements of the standard,
the projection of furniture and equipment’s has to be consistent with the size and number of
rooms, bars, restaurants and leisure center. However, one has to be realistic in the sense that the
forecasting trend to link with the technical feasibility particularly with that of the envisaged
service capacity. Moreover, the balance to be between image building and income generation
capacity has the same level of influence as said above. Therefore, for this particular category
of forecasting two levels of considerations are taken into account. One, by the fact that the
design of building directly determines the space available for every item, size will be governed
by this and again the quality required furniture will determine base on the kinds of facilities
available. In any case the required quantities are forecasted based on the components stated below:

 80bed rooms,

 10 king size luxury bed rooms

 20 standard Double bedrooms

 50 standard Single bed rooms

 Special Bar and cafeteria

 Traditional and international restaurant

 conference rooms,

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  Massage room

 Sauna and steam bath room

 Physical fitness room

 Night club (dancing area)

 Indoor and outdoor game facilities,

 Management office and store,

 Other civil works including land escaping, parking area, fountains and inter campus
paving.
Secondly, in order to fulfill the basic requirements of hotel service, the quantities forecasted
for the above facilities have to be reviewed against the national standard. Such consideration
gives the benefit of consciously sorting out what item goes with what kind of facility or service.
Once this is determined the forecast of quantity will follow accordingly. The project detail design
work has already been undertaken and the planned facilities of the project and the required
quantities are forecasted in section5.

3.5. I n p u t s / raw materials and utilities

3.5.1. Raw Material cost

The annual cost and list of raw materials are indicated in Table 5.1.
Table 5.1 Annual requirements of raw and auxiliary materials

S/N Raw materials Quantity per cost per per year

month month
Food materials raw costs lamp sum 500,000.00 6,000,000.0
d/t type Beverage raw costs lamp sum 500,000.00 0
massage, sauna bath and other lamp sum 15,000.00 6,000,000.0
related cost 0
Cleaning materials and other lamp sum 15,000.00
miscellaneous uses 180,000.0
0
Total

3.5.2. Utilities
Annual requirement of electricity, water and fuel is estimated at 2,367,000 birr from which,
500,000 kwh, 300,000 m 3 and 2000 liters, a r e electricity, water and fuel respectively.
The total costs of utilities are, therefore, about Birr 2,367,000 per annum.

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 3.6. MACHINERY AND EQUIPMENT

Machinery and equipment required for jute bags manufacturing plant are given in Table
Table 5.3 list of machinery and equipment
Furniture and equipment's required for Suit bed rooms (10)

unit
description quantity price total costs
0
Sofa single 20 2,500 3,607,504
3 TV 29” 10 8,000 57,720,058
4 Telephone stand 10 500 3,607,504
5 Telephone apparatus 10 750 5,411,255
6 small Refrigerators 10 4,000 28,860,029
8 Coffee table 20 1,500 21,645,022
9 French Bed (120 x
180cm) 10 20,000 144,300,144

10 Cupboard built in 20 5,000 72,150,072

11 Head lump 20 1,000 14,430,014
12 Writing table with chair
set 20 2,500 36,075,036
13 Chest drawer 20 1,500 21,645,022
14 Spring mattress 10 5,000 36,075,036
16 Bed sheets 20 500 7,215,007
17 Bed cover 10 800 5,772,006
18 Pillow 30 250 5,411,255
500,000,000
Furniture and equipment's required for double bedrooms (20)

S/n Description Quantity Unit price Total (birr)

1 Sofa single 40 2,500 100,000

3 TV 21” 20 8,000 160,000
4 Telephone stand 20 500 10,000
5 Telephone apparatus 20 750 15,000
6 Refrigerators 20 4,000 80,000
7 Standing lump 20 1,000 20,000
8 Coffee table 20 1,500 30,000
9 French Bed (120 x 180cm) 40 12,000 480,000

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10 Cupboard built in 20 5,000 100,000
11 Head lump 20 1,000 20,000
12 Writing table with chair 20 2,500 50,000
13 Chest drawer 20 1,500 30,000
14 Spring mattress 40 5,000 200,000
Bed made wood 80 20,000 1,600,000
15 Bed sheets 80 500 40,000
16 Bed cover 80 800 64,000
18 Pillow 80 250 20,000
Total 3,019,000
Furniture and equipment's required for single bedrooms

S/n Description Quantity Unit price Total (birr)

1 Sofa single 100 2,500 250,000

2 TV stand 50 2,000 100,000
3 TV 21” 50 5,000 250,000
4 Telephone stand 50 500 25,000
5 Telephone apparatus 50 750 37,500
6 Refrigerators 50 4,000 200,000
7 Standing lump 50 1,000 50,000
8 Coffee table 50 1,500 75,000
9 French Bed (150 x 180cm) 50 20,000 1,000,000
10 Cupboard built in 50 5,000 250,000
11 Head lump 50 1,000 50,000
12 Writing table with chair 50 2,500 125,000
13 Chest drawer 50 1,500 75,000
14 Spring mattress 50 3,000 150,000
15 Bed sheets 100 250 25,000
16 Bed cover 100 500 50,000
17 Blanket 100 1,000 100,000
18 Pillow 100 100 10,000
Total - - 2,822,500

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Furniture and equipment's required for office, reception, leisure and others

S/n Description Quantity Unit price Total (birr)

1 Executive double redistill desk 2 20,000 40,000

2 Executive swivel arm chair 2 5,000 10,000
3 Double pedestal desk 5 4,000 20,000
4 Servile admin chair 5 3,500 17,500
5 Secretarial desk 2 3,500 7,000
6 Guest chairs 8 600 4,800
7 Safe box 4 4,000 16,000
8 Shelf 4 3,000 12,000
9 Reception desk 2 40,000 80,000
10 Sofa box 2 15,000 30,000
11 Cash register with stand 2 7,500 15,000
12 Telephone apparatus box 2 20,000 40,000
13 Telephone apparatus 10 300 3,000
14 Fax machine with stand 2 30,000 60,000
15 Pc with printer and stand 10 15,000 150,000
16 Single sofa high based 4 5,000 20,000
17 Coffee tables 4 2,000 8,000
18 Standing lump 6 2,000 12,000
19 Recreation facilities ls - 150,000
21 Emergency power generator 2 300,000 600,000
Total - - 1,295,300

Furniture and equipment's required for bar and cafe

S/n Description Quantity Unit price Total (birr)

1 Tables 60 2,500 150,000

2 Chairs 300 750 225,000
3 Long drawer (Balcony) 2 30,000 60,000
5 TV stand 5 2,000 10,000
6 TV set 27” 5 15,000 75,000
7 Casher box 3 5,000 15,000
8 Stools (high chairs) 12 1,500 18,000

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 9 Coffee machine stand 2 50,000 100,000
10 Refrigerator big 2 20,000 40,000
11 Refrigerator medium 2 12,500 25,000
12 Coffee roaster 2 7,500 15,000
13 Ice maker 2 5,000 10,000
14 Pastries stand 2 15,000 30,000
15 Juice maker 2 5,000 10,000
16 Draft beer machine 2 15,000 30,000
18 Tape recorder 2 10,000 20,000
19 DVD player 2 1,200 2,400
20 Satellite dish with receiver 2 2,500 5,000
21 Shelf with drawer 2 20,000 40,000
22 tea cup 500 25 12,500
23 coffee cup 500 25 12,500
24 Milk cup 500 25 12,500
25 Makiyato cap 500 25 12,500
26 water glass 500 15 7,500
27 draft glass 500 60 30,000
28 wine glass 500 100 50,000
29 Whisky glass 400 100 40,000
30 local gen glass 500 50 25,000
31 service tree 1000 150 150,000
Total - - 1,232,900

Furniture and equipment's required for dinning/restaurant room

S/n Description Quantity Unit price Total (birr)

1 Tables 50 2,500 125,000

2 Chairs 200 750 150,000
3 Long drawer (Balcony) 2 30,000 60,000
5 TV stand 2 2,000 4,000
6 TV set 27” 2 7,500 15,000
7 Stools (high chairs) 2 1,500 3,000
8 Refrigerator big for beer 2 20,000 40,000

9 Refrigerator medium for soft drank 2 12,500 25,000

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10 Coffee roaster 2 7,500 15,00
0
11 Ice maker 2 5,000
12 Draft beer machine 1 15,000 10,00
0
13 water glass 200 12
15,00
14 draft glass 200 60
0
15 service tree 50 30
2,40
16 30-34 sauce pot 10 20 0
17 Sauce-medium 40 30 12,00
18 Soup pot 40 50 0
19 Medium 4 45 1,50
20 Large – round hot pot 10 80 0
21 Medium – round hot pot 10 57 20
0
22 Small – round hot pot 10 30
23 High rim flat 10 70
1,20
0
24 Flat rim round 12 50
2,00
25 Normal alloy 20 45 0
26 Non stick normal 20 20 18
Total 485,750

Furniture and equipment's required for Conference rooms

S/n Description Quantity Unit price Total (birr)

1 Tables 100 2,500 250,000

2 Chairs 1000 750 750,000
3 Buffet stand 5 20,000 100,000
4 Speaker (big) 5 5,000 25,000
5 Amplifier 3 20,000 60,000
6 Wireless microphone 5 750 3,750
7 Table microphone 20 350 7,000
8 LCD projector 5 30,000 150,000
9 Slid board 5 5,000 25,000
10 Satellite dish with receiver 5 2,500 12,500
11 TV stand 5 2,000 10,000
12 TV set 27” 5 15,000 75,000
Total - - 1,468,250

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 Kitchen materials
S/n Description Quantity Unit price Total (birr)
1 Stove 5 45,000.00 225,000.00
2 Toaster 5 15,000.00 75,000.00
3 Oven 5 40,000.00 200,000.00
4 Aluminum tables 8 4,000.00 32,000.00
5 Grill (electrical) 5 15,000.00 75,000.00
6 Washer sink 5 5,000.00 25,000.00
7 Refrigerator 5 20,000.00 100,000.00
8 Clip fryer 5 5,000.00 25,000.00
9 Pastries formwork 5 5,000.00 25,000.00
10 Petra 10 2,500.00 25,000.00
11 Cupboard 3 7,500.00 22,500.00
12 Shelf 3 5,000.00 15,000.00
13 Grill bench top 5 11,887.00 59,435.00
14 Deep friend double 6 4,218.00 25,308.00
15 Micro wave grill 5 3,250.00 16,250.00
16 Mincer meat 5 12,999.60 64,998.00
17 Brad oven 5 47,999.85 239,999.25
18 Pizza claye oven 5 29,841.00 149,205.00
19 mixer 15 KG capacity 5 37,999.45 189,997.25
20 Range commercial 5 38,745.00 193,725.00
21 Range linear 3 14,995.00 44,985.00
22 Fruit blender 3 3,585.00 10,755.00
23 Potato chopper 3 41,999.30 125,997.90
24 Onion peeler /chopper 3 15,780.00 47,340.00
25 Blender small 3 3,185.00 9,555.00
26 Deep refrigerator 6 9,450.00 56,700.00
27 refrigerator 10 9,960.00 99,600.00
28 Digital scale (35k.g) 3 1,800.00 5,400.00
29 Waiting scale (220 K.g) 3 4,700.00 14,100.00
30 Kitchen hood 5 29,745.00 148,725.00
31 Kitchen cabin with double Sink 5 31,488.00 157,440.00
32 Kitchen cabin 5 27,488.00 137,440.00
33 Kitchen top -stainless steel 8 8,195.00 65,560.00
34 Kitchen top -stainless steel -large 8 13,195.00 105,560.00
35 Chaffing dish -silver 25 9,499.00 237,475.00
36 Spaghetti plate 50 712.2 35,610.00
37 Dinner plate 50 720 36,000.00

24 | P a g e
38 Dessert plate 50 720 36,000.00
39 Table fork 10 163.8 1,638.00
40 Table knife 10 136.8 1,368.00
41 Chopper knife 10 62.1 621.00
42 Table spoon 15 163.8 2,457.00
43 Kitchen Pan 10 499 4,990.00
44 Food Box 5 220 1,100.00
45 soup bowl 3 336 1,008.00
46 Cook pot large 10 693.2 6,932.00
47 Cook pot big 38 10 3,054.0 30,540.00
48 Cook pot medium 20 0 11,628.00
49 Cook pot small 20 581.4 9,392.00
50 restaurant Table w/ 4 Chair 50 469.6 462,300.00
51 cafe table 20 9,246.0 29,100.00
52 Restaurant chair- sheraton Type 100 0 251,000.00
53 cafe chair 100 1,455.0 96,450.00
0
54 Open generator-24 KV 3 1,169,244.00
2,510.0
Sub total 5,237,428.4
0
0
964.5
Steam and sauna bath
389,748.0
S/N Description Qty 0
1 sauna electric heater 16 Total
Cost
2 sauna bucket 16
3 sauna ladle 10 192,000
4 sauna thermometer 16 96,000
Unit cost
5 electric sauna timer 12 4,000
12000 4,800
6 sauna hygrometer 16
6000 3,240
7 steam generator 2
400 15,200
8 cloth hunger 17
300 70,000
9 foldable rest 24
270 4,250
10 wall mirrer 12
950 9,600
11 soffa guest chair 16
35000 10,200
12 wall mirror 12
250 5,600
13 wall mounted 10
400 48,000
14 reception table 2
850 25,000
15 swivel chair 2
350 4,400
16 satellite dish with color 2
4000 2,000
17 public addressing system 2
2500 20,000
18 wall watch 2
2200 12,000
Total
400
526,690

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S/N Aerobics and physical fitness Qt Unit cost Total
1 y Cost
Public addressing system 15,00
2 Aerobics dumbbell 3 0 45,00
3 10 3,50 0
Stepping rocks(assoried)
4 12 0 35,00
Wall mounted mirror
0 25 0
5 Bike Proms
30 0 30,00
6 Track tread mills(electrical) 0
9 20
7 Track tread mills(manual) 6,00
0
8 2
heart rate monitors and pedometers 5,50 0
9 6
body solid endurance up right 0 49,50
10 6 0
muscular dynamics 22,00
11 2 0 44,00
simplex II series
portable massage tables with tools and 2 4,00 0
12
accessories 2 0 24,00
13 massage body work tools 2,50 0
14 2 0 15,00
massage chairs with tools and accessories
15 6 11,00 0
massage store heater
16 2 0 22,00
massage table electric warming pad
2 13,00 0
17 flece message table pad
4 0 26,00
18 massage table and video kit
12 16,00 0
19 pillows/body support/back care
2 0 32,00
20 cleaner and sanitizers 0
21 16
wall mirror(1.5 ‐2 ml) 17,00
22 8 0 34,00
sofa guest chair(three set)
23 6 4,00 0
Wall maound lockers
24 10 0 24,00
receptionist table
20 11,00 0
25 swivel chair
2 0 22,00
26 satellite dish with color
4 1,50 0
27 public addressing system
2 0 3,00
28 wall watch 0
2 3,00
Total 0 12,00
2
1,00 0
Garden recreation center 0 12,00
S/N 6,00 0
Garden recreation center
1 0 12,00
Lawnmower
Qt 4,50 0
2 wheelbarrow y 0 72,00
3 Metal scraper 0
5 2,50
4 Coffee machine 0 20,00
10
5 plastic chair 0
10 40
6 Oval shaped plastic table 0 2,40
2
7 umbrella 4,50 0
40
8 juice glass 0 45,00
20 0
9 tea spoon 2,50
20 0 50,00
0
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4,40
 10 coffee spoon 50 5 250
11 juice stranner 2 150 300
12 water glass 30 20 600
13 coffee cups with saucer 20 100 2000
14 tea cups with saucer 20 60 1200
15 ice‐cream box 1 500 5000
16 water sprinkless 30 0 1200
17 water house nylon rope 4 40 2000
18 Gardner's kits 2 500 200
Total 81,000
Summary of equipment
S/n Description Total cost
1 Furniture and equipment for 90 Bed room
Luxury bed room (10 rooms) 688,000
For double bed room (20) 3,019,000
Single bed room (50) 2,822,500
2 Furniture and equipment for office and reception area 1,295,300
3 Furniture and equipment for bar and cafeteria 1,232,900
4 Furniture and equipment for restaurant and dining room 485,750
5 Furniture and equipment for conference room 1,468,250
6 Furniture and equipment for kitchen materials 5,237,428
7 Sauna and steam bath materials 526,690
8 Aerobics and physical fitness 682,100
9 Massage service materials 300,000
11 Mini market shop establish costs 200,000
12 Garden and creation area 81,000
Total 17,069,918

3.7. Land, Building and civil work

3.7.1. Land lease

The overall land required is about 7821 square meters. Land lease cost at the rate of Birr 45 per m2
average and for 99 years land holding is estimated to be Birr 4.3 million. Thus, the total land &
construction cost assuming that the total land lease cost will be paid in advance (5%)
amounts to Birr 433,917 government has following significances the remaining amount paid within
40 years per year .

Land use plan of the project

A properly designed building construction starting in last year before and insures smooth
functioning of all operations. The building will have well- ventilated appropriate international
Hotel service area the structure includes separate services and other different activates the detail as
follows

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Table 5.4. Description of Land use plan
S/n Description Quantity Unit Price Total Price
(Br) (Br)
1 Main Building G+27 2000 5,000 20,000,000
Gust room 500
Manager office 200
Minimarket shops 300
Bar and restaurant 900
Bed room (80 rooms,20 will be
double rooms, 50 single rooms and 1000
10 suits.)
Meeting room 1000
Sauna and steam bath 100
Gymnasium physical fitness 500
4 Store service 300 5,000 1,000,000
8 Parking area 450 1,000,000
9 Generator house 120 500,000
10 Guard house 120 643,475
Total - 23,143,475
7821

3.8. Environmental impact assessment

The project will seriously involve itself protecting conserving and developing the natural and
flora of the project area in line with the millennium development goal. To this to will play a
vital role in participating the varies organization and the community around the project area
to from a environmental commute in charge of all environmental issues to be handled in
accordance to varies environmental and water policies of 97/99. The owner of the project believes to
undertake several environmental issues for the conservation development and creation of sustainable
environmental around the project area.
2.9. Implementation Schedule

The actual implementation of the International 5 star hotel is planned to begin on the May 2018.
The major activities envisaged are processing of, construction and delivery, installation and
commissioning o the factory line. Undertaking of civil design works and execution of
construction works which will be carried out by side which opening and processing of L/C will
take 3 months. The FOB delivery of plant machinery and equipment will take 4 months. Allowing
additional one month for sea freight and clearing, the delivery of plant of project site
and thus commencement of installation work requires 5 month. Plant installation and

28 | P a g e
commissioning will take place for 4 months.

The provision of infrastructural facilities such as Electric Power and water will be carried out in
the course of project implementation schedule. Other activities such us man power recruitment and
training, system development, and procurement of raw and other supplies will also be duty
performed to ensure that everything is in place by the time the plant is ready for
operation. All in all the project is expected to take 12 months for completion as per the below
detailed implementation schedule.

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 4. ORGANIZATIONS AND MANAGEMENT

4.1. Organizational Structure

The organizational structure of the project is designed by including all the necessary personal under
the right division. At the top of the organizational structure, there will be a general manager with the
responsibility of supervising the overall activity of plant. Depending up on the nature of the center
and the amount of work to be performs under each will be supervised by the unit head that is
accountability for general manager organizational structure, the center has CEO three Departments
under the general manager, Addition and the internal Auditing and inspection. The departments are
the production Department, the marketing department and the general service department under each
department there are different section which are undertaking different activities

CEO

Adviser G/Manager Internal Auditing

& Inspection

Coordinator
Manager/supervisor

Secretary

Sales & technical Marketing Admin &

Unit Unit Finance Unit

4.2. Management
As to the management of the project is concerned the owner will be responsible for the overall project
planning, co-ordination and implementation. After project implementation the promoter serves as a
top management body and frequently visits and supervises the organization.
4.3. Manpower Requirement
For smooth and efficient operation of the organization, it has been anticipated that each units will
have adequate number of qualified and experienced manpower. The labor component of the
International 5 star hotel Service G/manager will hire qualified and experienced in management
whose main responsibility is to coordinate the overall activity of the project. The distinct units have
their own operational teams under them. To fill in all these work units with the required
manpower .The project will provide 300 employees, 125 permanent (100 skilled & 25unskilled) and

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175 casual skilled and unskilled workers. For smooth operation of the project, employees will be
given on job training, clear duties and responsibilities under the direct supervision of their respective
units.

Table 6.1: Manpower Requirement

Annual
S/n Description of Job Qualification No. Monthl Salary(Br)
1 General Manager BSc in Hotel management 1 y 120000
2 Coordinator/supervisor BSc in Hotel management 5 10000 360000
1 Assistance Supervisor diploma in Hotel management 5 6000 360000
2 Receptionist diploma in Accountant 5 6,000
300000
3 Pastry and Staff Cafeteria diploma in food preparation 5 5,000 420000
4 Cafeteria supervisor diploma in Hotel management 2 7,000
120000
5 Waiter diploma and Certificate 20 5,000
480000
6 Cooker diploma in food preparation 20 2,000 1680000
7 Coffee machine operator 12th complete 2 7,000
72000
9 Pastry attendant Certificate 5 3,000
300000
10 Coffee machine operator 12th complete 5 5,000 180000
11 Dessert attendant skill professional 4 3,000 72000
12 Massage expert Certificate 5 1,500 300000
13 Physiotherapist Certificate 5 5,000 300000
14 Sauna /steam Bath Certificate 5 5,000 300000
15 Sauna and Steam bath Certificate 5 5,000
attendant 5,000 300000
16 life saver Certificate 4 240000
17 Casher diploma in Accountant 4 5,000
120000
18 Cleaner vice 8th grade complete 10 2,500
180000
19 Plumber diploma in electrical 2 1,500
engineering 2,000 48000
20 Electrician diploma in electrical 2
engineering 2500 60000
21 Gardener skill professional 2 24000
22 Guards gardener 8 1000
96000
Total 125 - 6,432,000

4.4. Training Requirement

Since the machinery and equipment and services are easy to operate, a special training
arrangement is not needed. But operators, chemists, mechanics & electricians need a two
weeks training during erection, commissioning period on the production process, raw material
and product quality and operation and maintenance of machinery and equipment by the expert of
machinery supplier..
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 5. FINANCIAL STUDY

Financial analysis of the proposed project of Cattle fattening farm will be projected to test the
financial visibility if the investigated organization. Quantifying both project cost and benefits
over the assumed project life, which is five years, made the project visible. Besides it has been
tried to make a realistic forecasting of costs and the benefits based in current market price of
all necessary materials. Once the anticipated cattle fattening operation has been attained both
projects cost and revenue is estimated to be consumed to be compensated by increasing in sales
revenue

5.1. Classified Investment cost

The cost of the project is classified as fixed incitement cost and initial working capital. With regards
to fixed investment cost of the project, the bland lease, building and civil works cost, machinery and
equipment cost office furniture costs and fuel costs will be required. As to working and operating cost
a brief illustration will be given as to utilities, salary expense, maintenance cost and depreciation cost
and the other related costs

5.1.1. Fixed investment costs

Fixed cost that include Land development, Building and civil work, machinery
equipment and vehicles and office furniture estimated birr 47,797,310.which is 65 % of the
total project.

Sr. Local Total

No Cost Items Cost Cost
1 Fixed investment

1.2 Building and civil work 1,900,000,000 1,900,000,000 38

1.3 Machineries 500,000,000 500,000,000 12

1.4 Double cup pick up vehicle 400,000,000 400,000,000 9.4

1.5 Freight car(Isuzu) 250,000,000 250,000,000 4.7

1.6 Generator 10,000,000 10,000,000 0.2

1.7 Tractor 200,000,000 200,000,000 4.9

Office furniture and
1.8 equipment 225,000,000 225,000,000 0.8

1.9 Feasibility study costs 15,000,000 15,000,000 0.3

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 Sub total 3,500,000,000 3,500,000,000 72

2 Pre operating cost * 50,000,000 50,000,000 0

Sub total 50,000,000 50,000,000 8

3 Working capital ** 1,450,000,000 1,450,000,000 20

Grand Total 5,000,000,000 5,000,000,000 100

Table 5.3 List of summarized machinery and equipment’s and cost

S/n Description Total cost
1 furniture and equipment for 90 Bed room
Luxury bed room (10 rooms) 688,000 Import
Double bed room (20 rooms) 3,019,000 from
Single bed room (50 rooms) 2,822,500 duty
2 furniture and equipment for office and reception area 1,295,300 free
3 furniture and equipment for bar and cafeteria 1,232,900
4 furniture and equipment for restaurant and dining room 485,750 Local
5 furniture and equipment for conference room 1,468,250 market
6 furniture and equipment for kitchen materials 5,237,428 Local
7 Sauna and steam bath materials 526,690 market
8 Aerobics and physical fitness 682,100 Local
9 Massage service materials 300,000 market
Local
11 Mini market shop establish costs 200,000
market
12 Garden and creation area 81,000 Local
Total 500,000,000 market
Duty free
Duty
Table 5.4. Procurement of Vehicles and furniture’s free
Type of Vehicles Unit Qty Unit Price Remar Duty
S/N free
(Br) k
Local
1 Pick-up (4WD)/ No. 2 1,250,000 market
2 Mini bus No. 2 1,100,000 duty free
Local
3 Bus service No. 2 1,800,000 duty free
4 Office furniture’s Ls - 400000 duty free
5 computer and accessories 500000 Local market
Total - - 5,050,000 Local market

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Table 5.5 Summary of Fixed asset
S/n Description Cost Estimate Remark
(Birr)
1 Land development 2,533,917 100% local market
2 Building & Constructions 23,143,475 50% duty free imported
3 Machinery and equipment 17,069,918 50 % duty free imported
4 Procurement of Vehicles & furniture’s 5,050,000 90 % duty free imported
Total 47,797,310 49.7 % duty free
Imported

5.1.2. Operational cost costs

Production cost of the project includes direct production and overhead costs. The major cost item under
this category includes cost of material and labour inputs, fuel and lubricants, repair and maintenance,
employee salary and benefits, insurance, office supplies and other miscellaneous expenses; the total
estimated production cost is birr 6,732,310 million 20.8 % of the total project capital is.

Direct cost

Table 5.6.Raw materials

S/N Raw materials Quantity cost per per year
per month month
1 Food materials raw costs Lamp sum 500,000.00 6,000,000.00
2 d/t type Beverage raw costs Lamp sum 500,000.00 6,000,000.00
3 massage, sauna bath and other related Lamp sum 15,000.00
cost 180,000.0
4 Cleaning materials and other Lamp sum 15,000.00 0
Miscellaneous uses
Total 180,000.0
0
Table 5.7 Utilities 12,360,000.00
Description Qty. unit Cost per year
Electricity, kWh cost 1.25
Water, m3 500000 625000
LPG, lt 300000 4.5
Diesel, lt 2000 1350000
Total 16
32000

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 Administration cost
 Employee benefits : It includes medical expense, uniform and other incentive package and assumed to be
25% of annual salary expense = birr 1,608,000

 Travel expense: It is assumed to be 10% of annual salary expense i.e. birr 643,200

 Repair and maintenance

 Insurance: It is assumed to be 1% of fixed investment cost = birr 477,973

 Office supplies: Including stationery and sanitary supplies annual cost of birr 100,000 is
12,360,000
considered. 2,367,000
14,727,000
 Miscellaneous expense: It includes cost of land rent, telephone and postage, audit, legal and license
fees and other miscellaneous expenses. The total annual cost of these cost components6,432,000
is estimated to
1,608,000
be birr 150,000 /year. 643,200
1,177,145
477,973
Cost estimate/ year 50,000
Item
% Price 365,000
Land development 2 60,000
50678.34
Building & Constructions 2 100,000
462869.5
Machinery and equipment 3 150,000
512097.552
Vehicles & furniture’s 5 11,063,318
151500
Total - 25,790,318
1,177,145.39

Summary of Operational cost/ working capital

Table 5.8 Determination of Initial Working capital requirement
S/n Cost item Annual cost
1 Raw materials
1.1 Direct coast
1.2 Utilities
Sub total
2 Administrative costs
2.1 Salary and wage
2.2 Employee benefits
2.3 Travel expense
2.4 Repair and maintenance
2.5 Insurance
2.6 Advertising expense
2.7 Telephone expense
2.8 Wi fi Internet service
2.9 Office supplies
2.1 Miscellaneous expense
Sub total
Initial W.C. requirement
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5.2. Project Capital and financing

5.2.1. Project Capital

The total investment capital of the project is estimated at birr 5 bil of which birr 3,500,000,000
(72%) is for fixed investment items while the remaining balance of birr 1,450,000,000
(20%) will be initial working capital and pre-operating costs birr 50,000,000(8%). The detail of
investment capital of the project is given below

5.9. SOURCE OF FINANCE

Sourcing money may be done for a variety of reasons. Traditional areas of need may be for capital
asset acquirement, new machinery or the construction of a new building or depot. The development
of new products can be enormously costly and here again capital may be required. Normally, such
developments are financed internally (owners’ equity 30% of the project investment costs), whereas
capital for the acquisition of machinery come from external sources (bank 70% of investment costs).
In this day and age of tight liquidity, organizations have to look for short term capital in the way of
overdraft or loans in order to provide a cash flow cushion. Interest rates can vary from bank to bank
and also according to purpose

source of capital

Total capital 5,000,000,000

Loan 3,500,000,000

Owners 1,500,000,000

Table 5.10 Loan Repayment Schedule

beginning payment interest principal end balance

1,119,222,446.2 3,010,777,553.7
3,500,000,000 8 630,000,000.00 489,222,446.28 2
3,010,777,554 1,119,222,446 541,939,960 577,282,487 2,433,495,067
2,433,495,067 1,119,222,446 438,029,112 681,193,334 1,752,301,733
1,752,301,733 1,119,222,446 315,414,312 803,808,134 948,493,599
948,493,599 1,119,222,446 170,728,848 948,493,599 (0)
Depreciation of fixed investment items
The straight-line method has been used to depreciate/amortize all fixed items of the project.
The depreciation rate applied for all fixed assets is given below:
Table 5.11 Depreciation Schedule
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 Original Annual Depreciation
S/n Item
Value % Amount (Br.)
1 Land development 2,533,917 10 253,392
2 Building & Constructions 23,143,475 10 2,314,348
3 Machinery and equipment 17,069,918 10 1,706,992
4 vehicles and furniture 5,050,000 10 505,000
Total 47,797,310 - 4,779,731

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Table 5.12 Summary of project Annual production costs
S/n Cost item Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
1 Direct cost
1.1 Direct cost 12,360,000 12,978,000 13,626,900 14,308,245 15,023,657 15,774,840 16,563,582 17,391,761 18,261,349 19,174,417
1.3 Utilities 2,367,000 2,485,350 2,609,618 2,740,098 2,877,103 3,020,958 3,172,006 3,330,607 3,497,137 3,671,994
Sub total 14,727,000 15,463,350 16,236,518 17,048,343 17,900,761 18,795,799 19,735,588 20,722,368 21,758,486 22,846,411
2 Administrative costs
2.1 Salary and wage 6,432,000 6,753,600 7,091,280 7,445,844 7,818,136 8,209,043 8,619,495 9,050,470 9,502,993 9,978,143
2.2 Employee benefits 1,608,000 1,688,400 1,772,820 1,861,461 1,954,534 2,052,261 2,154,874 2,262,617 2,375,748 2,494,536
2.3 Travel expense 643,200 675,360 709,128 744,584 781,814 820,904 861,950 905,047 950,299 997,814
Repair and 1,177,145 1,236,003 1,297,803 1,362,693 1,430,828 1,502,369 1,577,487 1,656,362 1,739,180 1,826,139
2.4
maintenance
2.5 Insurance 477,973 501,872 526,965 553,314 580,979 610,028 640,530 672,556 706,184 741,493
Advertising 50,000 52,500 55,125 57,881 60,775 63,814 67,005 70,355 73,873 77,566
2.6
expense
2.7 Telephone expense 365,000 383,250 402,413 422,533 443,660 465,843 489,135 513,592 539,271 566,235
Wi fi 60,000 63,000 66,150 69,458 72,930 76,577 80,406 84,426 88,647 93,080
2.8
Internet
2.9 service 100,000 105,000 110,250 115,763 121,551 127,628 134,010 140,710 147,746 155,133
Office supplies
2.1 150,000 157,500 165,375 173,644 182,326 191,442 201,014 211,065 221,618 232,699
Miscellaneous
expense 11,063,318 11,616,484 12,197,309 12,807,174 13,447,533 14,119,909 14,825,905 15,567,200 16,345,560 17,162,838
Total cost working 25,790,318 27,079,834 28,433,826 29,855,517 31,348,293 32,915,708 34,561,493 36,289,568 38,104,046 40,009,249
Note: Production costs are assumed to increase by 5% annually.

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5.3. Revenue projection

The project will collect its revenue from the customer service. The selling of food and beverage and
rented rooms has estimated based on the current market price and hotel standard of similar service
provision in town. The annual service program is formulated based on proposed plant capacity
considered the following table
Table 5.13 Description of revenue projection

No of bed Price/day
S/N Bed room service per year
rooms /night
1 King standard room 10 1800 4320000
2 Double bed room 20 1400 6720000
3 Single bed room 50 1000 12000000
Subtotal 23,040,000.00
S/N Raw materials No of cost per year
per
customer
1 Food service income month 10,200,000.00
2 Beverage service income per day 10,200,000.00
3 income from Massage service 100 850,000.00 4,320,000.00
4 Income from Gymnasium 200 850,000.00
service 40 360,000.00 2,160,000.00
5 Income from sauna bath 20 180,000.00 5,670,000.00
6 Income from Meeting hole
service 45 472,500.00 1,800,000.00
Subtotal 20 150,000.00 34,350,000.00
Grand total 57,390,000.00

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 Projected profit/loss statement
Table 5.14 Project Profit/loss statement
Project Year
Description 1 2 3 4 5 6 7 8 9 10
Revenue 57,390,000 60,259,500 63,272,475 66,436,099 69,757,904 73,245,799 76,908,089 80,753,493 84,791,168 89,030,726
Less: Production
25,790,318 27,079,834 28,433,826 29,855,517 31,348,293 32,915,708 34,561,493 36,289,568 38,104,046 40,009,249
costs
Gross Income 31,599,682 33,179,666 34,838,649 36,580,581 38,409,610 40,330,091 42,346,595 44,463,925 46,687,121 49,021,478
Less: Interest on
5,923,804 5,331,424 4,739,043 4,146,663 3,554,282 2,961,902 2,369,522 1,777,141 1,184,761 592,380
loan
Less: Depreciation 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731
Profit before tax 20,896,146 23,068,511 25,319,875 27,654,187 30,075,597 32,588,458 35,197,343 37,907,053 40,722,630 43,649,366
Less: Income tax
7313651.22 8073978.79 8861956.08 9678965.58 10526458.90 11405960.22 12319069.96 13267468.52 14252920.36 15277278.13
(35%)
Net Profit 13,582,495 14,994,532 16,457,918 17,975,222 19,549,138 21,182,498 22,878,273 24,639,584 26,469,709 28,372,088

Note: Sales revenue is assumed to increase by 5% annually

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 5.4.2. Projected cash flow statement
Projected cash flow statement

Project Year
Description
0 1 2 3 4 5 6 7 8 9 10
Cash Inflow
Equity 22,076,289 - - - - - - - - -
Bank loan 51,511,340
Revenue 57,390,000 60,259,500 63,272,475 66,436,099 69,757,904 73,245,799 76,908,089 80,753,493 84,791,168 89,030,726
Depreciation 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731 4,779,731
Total Inflow 73,587,629 52,610,269 65,039,231 68,052,206 71,215,830 74,537,635 78,025,530 81,687,820 85,533,224 89,570,899 93,810,457
Cash Out Flow
Fixed Cost 47,797,310 - - - - - - - - -
Initial W.C 25,790,318 25,790,318 27,079,834 28,433,826 29,855,517 31,348,293 32,915,708 34,561,493 36,289,568 38,104,046 40,009,249
Loan Repayment 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134 5,151,134
Total Out flow 73,587,629 30,941,453 32,230,968 33,584,960 35,006,651 36,499,427 38,066,842 39,712,627 41,440,702 43,255,180 45,160,383
Net Inflow - 21,668,816 32,808,263 34,467,246 36,209,178 38,038,207 39,958,688 41,975,192 44,092,522 46,315,718 48,650,075
Cumulative
- 21,668,816 54,477,079 88,944,325 125,153,503 163,191,711 203,150,399 245,125,591 289,218,113 335,533,832 384,183,906
balance

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5.4.3. Balance sheet
Current asset
Raw cost and utilities 12,360,000
utilities 2,367,000
Administrative costs
Salary and wage 6,432,000
Employee benefits 1,608,000
Travel expense 643,200
Repair and maintenance 1,177,145
Insurance 477,973
Advertising expense 50,000
Telephone expense 365,000
Wi fi Internet service 60,000
Office supplies 100,000
Miscellaneous expense 150,000
Sub total 11,063,318
Fixed cost
Land development 2,533,917
Building & Constructions 23,143,475
Machinery and equipment 17,069,918
Procurement of Vehicles & furniture’s 5,050,000
Total fixed cost 47,797,310
Total asset 73,587,629
Liabilities
Bank loan 51,511,340.23
owners Capital 22,076,288.67
Total liabilities and capital 73,587,628.90

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 5.4.4. Viability and other measurement
Financial IRR computation
Year 0 1 2 3 4 5 6 7 8 9 10
Gross income 57,390,000 60,259,500 63,272,475 66,436,099 69,757,904 73,245,799 76,908,089 80,753,493 84,791,168 89,030,726
Total costs 73,587,629 25,790,318 27,079,834 28,433,826 29,855,517 31,348,293 32,915,708 34,561,493 36,289,568 38,104,046 40,009,249
Gross profit -73,587,629 31,599,682 33,179,666 34,838,649 36,580,581 38,409,610 40,330,091 42,346,595 44,463,925 46,687,121 49,021,478
Less: Profit tax 11,059,889 11,612,883 12,193,527 12,803,203 13,443,364 14,115,532 14,821,308 15,562,374 16,340,493 9049001.6
After tax net benefit -73,587,629 20,539,793 13,478,615 13,976,013 14,503,150 15,061,512 14,873,630 15,596,585 16,355,688 17,152,746 17,989,656
DF at 35% rate 1 0.741 0.549 0.406 0.301 0.223 0.165 0.122 0.091 0.067 0.05
Present Value -73,587,629 42,525,990 33,082,466 25,688,625 19,997,266 15,556,013 12,085,557 9,382,787 7,348,568 5,681,008 4,451,536
Net present Value 102,212,186 - - - - - - - - - -
DF at 30% rate 1 0.769 0.592 0.455 0.35 0.269 0.207 0.159 0.123 0.094 0.073
Present Value -73,587,629 44132910.0 35673624.0 28788976.1 23252634.6 18764876.1 15161880.4 12228386.1 9932679.7 7970369.8 6499243.0
Net present Value 128,817,951 - - - - - - - - - -

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5.4.1. FINANCIAL EVALUATION
5.4.2. 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 291thousand to Birr 2.33 million
during the life of the project. Moreover, at the end of the project life the accumulated net cash flow
amounts to Birr 18.17 million. For profit and loss statement and cash flow projection see Appendix
7.A.3 and 7.A.4, respectively.
5.4.3. 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.
5.4.5. 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
for capacity utilization and sales value estimated by using income statement projection are
computed as followed.
Break- Even Sales Value = Fixed Cost + Financial Cost = Birr 3,250,800 Variable Margin ratio
(%)
Break- Even Capacity utilization = Break -even Sales Value X 100 = 65.1%
Sales revenue
5.4.6. PAY-BACK PERIOD
The pay-back period, also called pay – off period i s defined as the period required for recovering
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 4 years.
5.4.7. 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
44 | P a g e
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 25.00% indicating the viability of the project.
5.4.8. 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 principle, a project is accepted if the NPV is
non-negative. Accordingly, the net present value of the project at 10% discount rate is found to be
Birr 9.5 million which is acceptable. For detail discounted cash flow see Appendix 7.A.5.
5.4.9. ECONOMIC AND SOCIAL BENEFITS
The project can create employment for 25 Persons. The project will generate Birr 4.87 million 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 will also create backward linkage
with the livestock sector and also generates income for the Government in terms of payroll tax.
5.4.10. SENSITIVITY ANALYSIS
The financial viability of the project has been tested to see the extent to which the project will be
sensitive to the following major changes that the project may encountered.
Three scenarios have been considered in the Sensitivity analysis. Those are What if amount of
products sales decreased by 15 %( from what has been planed) or discount rate rise to 20%.it is
expected that interest rate will not change because a new rate was set recently and even if a change
comes is impact will not be as such significant.
5.5. MONITORING AND EVALUATION

Monitoring and Evaluation (M&E) has long been recognized as a vital aspect of development
projects generally and of industrial and services projects in particular. The monitoring of project
performance consists of the tracking of human, physical and financial resources and the recording
of how they are converted into outputs (project goods and services), and in turn, outcomes and
impacts.

5.6. CONCLUSION AND RECOMMENDATION

Conclusion: The Project is found to be operationally profitable & has significant socio-economic benefits.
According to the projected income statement, the envisaged project starts earning profit from the first year of
production. The income statement and other profitability indicators show that the project is viable. The

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project is believed to have significant social and economic benefits that accrue to the society beyond those
financial returns to its owner. The most remarkable social benefits can be expressed in terms of job creation
that leads to reduction in the level of unemployment.

5.7. RECOMMENDATION:

The project directly employs 300 persons; therefore, considering the attractive financial and economic
benefits the project is to produce, the promoter has made the necessary preparation hoping that all the
concerned offices & financial institutions should give their support to facilitate the implementation of this
plan.

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