Project Proposal For Cattle and Goat Fattening and Dairy Farm (Final Draft)

ETHIOPIAN INVESTMENT HOLDINGS
ETHIOPIAN AGRICULTURAL BUSINESSES CORPORATION
PROJECT PROPOSAL FOR LIVESTOCK FATTENING AND DAIRY FARMING IN

ETHIOPIAN AGRICULTURAL BUSINESSES CORPORATION:
 CATTLE FATTENING FEEDLOT

 DAIRY FARM FEEDLOT
 GOAT FATTENING FEEDLOT
By Aweke Belete (M.Sc.), Seed Marketing Team Leader
Addis Ababa, Ethiopia
January, 2024
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Table of contents
Sr.No. Topic Page
1. ACRONYMS ........................................................................................................................................ 1
1. EXECUTIVE SUMMARY................................................................................................................... 2
2. INTRODUCTION ................................................................................................................................ 3
2.1. Background of the study ............................................................................................................... 3
2.2. Project Rationale ........................................................................................................................... 5
2.3. Project Objectives ......................................................................................................................... 6
2.3.1. Development Objective......................................................................................................... 6
2.3.2. Project outcomes ................................................................................................................... 6
2.3.3. Project outputs ...................................................................................................................... 6
2.3.4. Main Activities of the Project ............................................................................................... 7
3. PROJECT IDENTIFICATION, SELECTION AND DESCRIPTION................................................. 8
3.1. Project Identification and Selection .............................................................................................. 8
3.2. Detail Project Description ........................................................................................................... 11
3.2.1. Livestock Fattening Feedlot ................................................................................................ 11
3.2.2. Goat Fattening Feedlot ........................................................................................................ 12
3.2.3. Dairy Farm Feedlot ............................................................................................................. 12
3.2.4. Project Area Suitability ....................................................................................................... 13
4. RISK FACTOR ANALYSIS .............................................................................................................. 15
5. PROJECT PLANNING MATRIX (LOGICAL FRAMEWORK) ..................................................... 16
6. PROJECT IMPLEMENTATION STRATEGY ................................................................................. 19
7. PROJECT STAKHOLDERS AND BENEFICIARIES ...................................................................... 20
7.1. Stakeholders ................................................................................................................................ 20
7.2. Project Beneficiaries ................................................................................................................... 20
8. PROJECT ASSUMPTIONS AND RISK MANAGEMENT ............................................................. 22
9. ORGANIZATIONAL SETUP ............................................................................................................ 23
10. PROJECT PRODUCTION AND INCOME GENERATION CAPACITY .................................. 24
11. PROJECT BUDGET COST ........................................................................................................... 25
11.1. Fixed capital budget cost............................................................................................................. 25
11.2. Operating Cost ............................................................................................................................ 32
11.3. Working capital ........................................................................................................................... 34
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11.4. Manpower plan ........................................................................................................................... 35
12. INCOME STATEMENT ................................................................................................................ 36
13. CASH FLOW STATEMENT ......................................................................................................... 39
14. BALANCE SHEET ........................................................................................................................ 42
15. ECONOMIC ANALYSIS............................................................................................................... 45
16. FINANCIAL RATIO ANALYSIS FOR CATTLE FATTENING, DAIRY FARMING AND
GOAT FATTENING FEEDLOTS ............................................................................................................. 46
17. PROJECT MONITORING AND EVALUATION ........................................................................ 49
18. ROLES AND RESPONSIBILITIES ............................................................................................. 50
19. SUSTAINABILITY OF THE PROJECT ....................................................................................... 51
20. CONCLUSION AND RECOMMENDATIONS ............................................................................ 53
21. REFERENCE .................................................................................................................................. 55
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1. ACRONYMS
APM Association for Project Management
B/C Benefit- Cost
CSA Central Statistical Authority
EABC Ethiopian Agricultural Businesses Corporation
ETB Ethiopian Birr
FAO Food Aid Organization
GDP Growth Domestic Product
IRR Internal Rate of Return
MOFED Ministry of Finance and Economic Development
NPV Net Present Value
SWOT Strength, Weakness Opportunity and Threat
USD United State Dollar
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1. EXECUTIVE SUMMARY
1.1. Main project: EABC Livestock Fattening and Dairy Farm Project
1.2. Sub-projects: Cattle Fattening Feedlot, Dairy Farm Feedlot and Goat Fattening Feedlot.
1.3. Locations of the sub projects: Shallo (Cattle Fattening and Dairy Farm), Asella (Dairy
Farm), Ardayita (Dairy Farm), Gibe (Goat fattening) and EABC head office (Dairy farm)
1.4. Purpose of the project: The proposed main project is intended for setting up of modern
livestock feedlots for the production of fattened cattle and goats and milk products as
well.
1.5. Production capacity of the project: The project is designed for the production of 50
fattened cattle and 100 fattened goats per production cycle and 20 liters per head per day
from 50 milk cows with a capacity of 80%. .
1.6. Financial feasibility of the project: Of the three competitive potential projects, dairy
farm is financially the best feasible project with a payback period of 3.03 year, B/C of
2.54 and NPV of 286,463,083 and IRR of 85.98% the second project is cattle fattening
with a payback period of 3 year, B/C of 1.08, NPV of 11,624,195.16 and IRR of 30.77%
and the least feasible project is Goat fattening with a payback period of 4.91year, B/C of
1.11, NPV of 5,852,673.03 and IRR of 22.85.
1.7. Project budget cost: To effectively implement the project a budget cost of about ETB
65,638,083.35 is required. Of this, ETB 55,443,348.24 (84%) will be allocated for
capital budget cost and 10,194,635.11(16%) allotted for operating budget cost.
1.8. Project economic and social benefits: In the first place, the project will generate an
income of ETB 53,550,000.00 with a profit of ETB 16,481,030.06 in the first year and
continue to grow at a moderate rate in its economic life period. Additionally, the project
will also create job opportunities and make sure of domestic market price stability.
Furthermore, the project will produce manures for the farm soil fertility and finally, it
will supply source of energy (light and charcoal) for the farms and communities.
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2. INTRODUCTION
2.1. Background of the study

It remains a fact of life that Ethiopian agriculture is still characterized by agrarian economy,
about 85% of the livelihood depends on agricultural and related activities. Crop and livestock
sub sectors are the major integral parts of the country's agricultural production system. The
livestock sector accounts for about 40% of agricultural GDP and 18% of overall GDP in Ethiopia
(MOFED, 2014). Different sources have reported that Ethiopia has the largest livestock
population in Africa with 70 million cattle, 56 million chickens, 52 million goats, 42 million
sheep, 8 million camels, and therefore, Ethiopian livestock is vital to the country’s economic
wellbeing and food security.
Livestock and their products are the sources of livelihoods and foreign exchange earnings,
Middle East countries represent the largest potential market for the Ethiopian livestock and
livestock products. According to Ethiopian Sanitary and Phytosanitary Standards and Livestock
& Meat Marketing Program (2015), the Ethiopian meat and livestock export revenue reached
USD 300 Million per year. Despite their large number, importance and development efforts
made is disproportionally low due to number of technical and non-technical issues of which the
animal nutrition factor is critical among others (ESPSLMMP, 2015).
The author pointed out that livestock production in Ethiopia is not well developed due to the fact
that land holdings are small and does not give owners incentives for improved livestock
nutrition. In recent years, there is a growing trend of awareness to improve livestock productivity
through commercialization and small scale management in the light of achieving food security.
Livestock fattening and diary farming’s are source of animal protein that plays an essential role
in increasing food security, improving the household income of farmers, investment
opportunities, and providing manure for agricultural sustainability. There is a significant market
gap between demand for and supply of meat and milk products in Ethiopia which subsequently
results in high product price.
As a company, the mission of Ethiopian Agricultural Business Corporation (EABC) is to provide

agricultural inputs and technologies that should considerably improve production and
productivity, boost modern farms and agro-Industries at very competitive price to make the
economic development of the nation grow fast. The purposes for which the corporation was
established are numerous and related to the mission but it will engage in other related activities
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for the attainment of its purposes. And therefore, this business plan for livestock fattening and
dairy farming has been designed in alignment with the national effort of filling the supply side
gap through cattle and goat fattening and dairy farming activities for the objective of meeting the
unmeet domestic demand market.
This report document contains 17 main sections: Executive summary, Introduction, project
identification, screening and description, project factor analysis, project planning matrix,
Implementation strategies, list of project stakeholders and beneficiaries, project assumptions and
risk management, project organizational structure, project cost structure, project financial
statement, project sustainability, Monitoring and evaluation, economic feasibility analysis and
financial ratio analysis and conclusion and recommendations.
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2.2. Project Rationale
In Ethiopia context, the alarming rate of population growth, the expansion of urbanization and
gains in real per capita income has contributed to the rapid growth of effective demand for
livestock products. The demand for dairy products and meat are rising rapidly in Ethiopia but the
supply side is not yet well developed. According to CSA report, the country produces about 4
billion liters of milk valued at $ 5.1 million, one million tons of beef valued at $ 2.5 billion and
116 million eggs (CSA, 2019). Per capita consumption is very low, estimated at about 20 liters
per year, though rising consumption levels in Addis Ababa have brought it to about 40 liters
(USAID, 2018).
The figure pointed out that per capita consumption of milk and meat remains extremely low and
it becomes skewed to the better off. The bad news is in the next 35 years the aggregate
consumption of all livestock products will be more than double but the supply side relatively
stagnant. This may be constrained by technical and institutional factors. Lack of both quality and
quantity of feed and water, disease outbreaks, lack of veterinary services, the occurrence of
droughts, a lack of market access and infrastructure, illegal live animal trades, the genetic
potential of indigenous cattle breeds and poor linkage between the researcher and end users are
some of them. As a result of this, there is a huge gap between demand and supply.
And therefore, as a public business institution, this project proposal aims to contribute in the
national effort of filling livestock products supply gap by intervening in beef cattle and goat
fattening and milk production sectors for domestic market with a motive of playing its
indispensable role in the process of ensuring local market price stability.
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2.3. Project Objectives
2.3.1. Development Objective
The long term objective of this project proposal is to enhance the contributive competence of
EABC in fulfilling social responsibility and its financial needs through engaging in livestock
product supply chain and making sure of price stability in the domestic market.
2.3.2. Project outcomes

To achieve the above development objective, the outcomes of the projects are listed as follows:
 Supplying fattened Cattle and Goats and milk products to the domestic market at
reasonable price.
 Strengthening the financial capability of EABC
 Promote new cattle and goat breeds and technologies to the project communities and the
surroundings through intensive farming system.
2.3.3. Project outputs

To achieve the stated outcomes of the project, the following outputs of the projects are to be
successfully achieved:
 Supplying of 50 fattened cattle per production cycle.
 Supplying of 1000 liters of milk product per head per day
 Supplying of 1000 fattened Goats per production cycle
 Generating an initial income of ETB 113,550,000.00 and at a profit of ETB

16,481,030.06 at a moderate growth rate.
 Livestock products will be supplied to the domestic market at 10% price reduction
 Holstein Frisian breed and new technologies related to manure and livestock production
management will be promoted to the project communities.
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2.3.4. Main Activities of the Project
To achieve the targeted outputs of the project, the following activities are to be carried out as per
schedule:
 Conduct project feasibility study
 Conduct business plan of the project
 Prepare implementation plan
 Prepare annual work plan and budget
 Recruit and train enforcement staff
 Conduct baseline survey for feedlots and other buildings
 Land clearing and preparation
 Complete engineering specifications for buildings
 Prepare tender documents, select contractors and make an agreement
 Constructing animal shades and buildings
 Procurement of fattened cattle, dairy heifers and Goats
 Carrying out livestock production and marketing
 Conduct project monitoring and evaluation
 Produce periodic performance report as per schedule.
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3. PROJECT IDENTIFICATION, SELECTION AND DESCRIPTION
3.1. Project Identification and Selection

From the inception, the idea of the project was emanated from the mission of Ethiopian
Investment holdings and Ethiopian agricultural businesses corporation with the intention of
agricultural businesses motives and fulfilling corporate development objectives. Hence,
Livestock production and marketing project is one component of the national program that has
been given due priority in the platform. In realizing the livestock production objectives, intensive
production system of feedlot was selected as a basic tool in ensuring the economic viability,
environmental sustainability and management performance of the project and therefore, the
feasible projects were selected based on the following technical criteria.
Criteria for project selection

Most practitioners are familiar with the following major criteria in consideration of feedlot site
selection: Climate, access to feedstuffs, sufficient land and water supply.
1. Climate
Globally, climate is one of the determinant factors that directly influence the performance of
livestock fattening and dairy farming. Hence FAO came to the conclusion that climate change
and food security are two of the most pressing challenges facing the global community today.
Improving smallholder agricultural systems is a key response to both (FAO, 2011).
1.1. Cattle fattening
Watt1 (2016) pointed out that for cattle fattening; sites with a high annual moisture deficit (low
rainfall and/or high evaporation rates) are preferable with an average annual rainfall of less than
750 mm recommended. Since winter-dominant rainfall with a low evaporation rate can result in
wet pens and potential odor nuisance. In this case, Shallo area and Gibe farm feedlots are
approaching to the stated range and the areas have relatively high evaporation rate. However,
experiences showed that Gibe and the surrounding area are vulnerable to cattle diseases and it is
a risky area in selecting it as a project site. As an alternative, Goat fattening is preferred in the
area.
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1.2. Dairy farming
As far as dairy farming is concerned, research pointed out that the ideal temperature range for
dairy cattle is between 25 and 65 degrees Fahrenheit. Once the temperature goes above 80
degrees Fahrenheit cattle reduce feed intake, which has a negative impact on production. At 90
degrees Fahrenheit or above, one can usually notice a dramatic decrease in milk production
ranging from 3 to 20 percent (Richard, 1993). Therefore research and experience showed that the
general climate condition of Asella, Ardayita, Shallo and Addis Ababa is suitable for dairy farm
and different dairy farms have been operating in the surrounding area in different economies of
scale.
1.3. Goat fattening
Goats usually seek cover from rain, snowy conditions, and hot sunny weather. Their production
of meat and milk is not effected when the temperature is between 0 and 55° F. The most
important time for housing, however, is during winter months when the does are kidding
(University of Massacusetts, 2023). The goats are best suited to the drylands in Ethiopia, but the
niche for Abergelle is in the north, and that of Yabello is in the south of Ethiopia. The heat maps
suggest that the mean annual temperature and precipitation have the largest contribution in the
classification of geographic areas into suitability classes (Science Direct, 2022).
Therefore Gibe and the surrounding areas are characterized by dryland hence the areas are
suitable for Goat fattening and the selected breed originated from Borena-Yabela.
2. Access to feedstuffs
Reliability of supply of feed commodities such as grain and roughages (hay, silage) is critical.
Ethiopian Agricultural Businesses Corporation has different potential farm areas and therefore,
the company has an opportunity for the production of animal feedings at relatively low cost and
ease of access in a short period of time.
3. Sufficient land
Sufficient land is needed for the feedlot complex (pens, cattle handling, feed mill and commodity
storage, effluent ponds and manure storage) and should include provision for potential
expansion. A reasonable rule of thumb for the feedlot complex area should be at least three times
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the pen area. The pen area is the maximum number of cattle multiplied by the stocking density. It
is assumed that the stocking density is at 15 m2/head (Watts1, 2016). Hence, in our feedlot a 100
head feedlot at 0.15 ha of pens and the total feedlot complex would require about 0.45 ha of land
and therefore the corporation has no land availability constraints.
4. Water supply
Security of an adequate water supply is vital. A feedlot requires a secure, highly reliable water
supply that is correctly licensed, of sufficient capacity and of suitable drinking quality for
livestock. That security must be in both a legal (i.e. a legal right to the required volume) and a
physical sense (i.e. the physical ability to pump, store and deliver the required volume of water
(Watts1, 2016). It is well known that the water supplied to feedlot used for drinking for cattle,
dust suppression, feed processing; cattle and vehicle wash down, general cleaning, landscaping,
staff and office amenities, dilution of feedlot effluent before application on land.
Hence in addition to the natural gift of water potentials such as Gibe River, Shallo surface water
access and others, EABC has been developing irrigation water schemes in its own seed farms.
And therefore, there is a high attractive golden opportunity for securing reliable water supply to
the feedlots.
Based on the above major criteria, the following feedlots are technically feasible and selected:
1) Shallo cattle fattening and dairy farm feedlots
2) Gibe farm Goat fattening feedlots
3) Gondie Iteya dairy farm feedlot
4) Ardayita dairy farm feedlot
5) Head office dairy farm feedlot
After properlly selecting a project site, the feedlot layout must be well planned. Becouse it has
dual purposes: 1) It should maximise economic efficiency of construction, cattle health, welfare,
performance and social benefits and 2) It should minimise ongoing maintenance costs and any
adverse environmental impacts.
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3.2. Detail Project Description
3.2.1. Livestock Fattening Feedlot
From global perspective, cattle fattening is a source of animal protein that plays an indispensable
role in ensuring food security and improving the livelihood income of farmers, investment
opportunities and providing manure for agricultural sustainability (Earth and Environmental
science, 2020). In line with this viewpoint, the term livestock fattening feedlot project should be
clearly defined and delineated in pertinent to the objective of the project proposal stated above.
In so doing, lots of researchers and practitioners defined and described cattle fattening feedlot as
“Controlling what livestock’s eat by using high quality feed so that to generate faster
weight gains”. It is a strategic feeding option which produces a quick result (3-4 terms per a
year). This implies additional feeding would result in increased weight.
Before selection or purchasing of cattle for fattening and dairy farm feedlots, the following
factors are taken in to consideration: 1) Breeder of cattle, 2) Gender, 3) Maturity type and 4)
Age. As far as cattle fattening in feedlot is concerned, buying cattle fattening, healthy, young
male calves are preferred. These animals gain weight very quickly, when we feed them with the
right rations. In case of purchase of animal if the age of animal is between two to three years, it
can be easily fattened. Bulls, oxen, infertile cow or young bulls can be choosing. Usually it is
better to have a bull for beef fattening. When choosing cattle, make sure that the body structure
is a little bit bigger. In case of dairy farm the best high yielding, disease resistant and climate
adaptive breed is crucial.
And therefore, it is the recommendation of researchers that Boran breed type should be used for
cattle fattening. The meat from Boran cattle found in Ethiopia is very much appreciated by
Ethiopians but also in export markets (Alema Koudijs Feed PLC, 2022).
Picture 1: Boran Bull

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3.2.2. Goat Fattening Feedlot
In Goat fattening, the major criteria that were considered are high yielding breed, sex and age
and therefore, based on this consideration, Borena origin local male breed which is young was
selected as the component of the project, as shown below.
Picture 2: Borana type Male Goat Type
3.2.3. Dairy Farm Feedlot

Dairy production is all-inclusive activity, related to animal care, reproduction, feeding, and
management. It is defined as all those aspects and activities relating to rising of dairy animals
during their various phases of life to get wholesome milk. (SMEDA, 2009). There are top breeds
in the world in milk yield and its attributes. The top 7 are: 1) Ayrshire, 2) Brown Swiss, 3)
Guernsey, 4) Red and White, 5) Holstein Frisian, 6) Jersey and 7) milking shorthorn.
Holstein Frisian is a well-known breed in Ethiopia. The major historical development of this
breed occurred in Netherland and more specifically in the two northern provinces of North
Holland and Friesland. Holsteins are most quickly recognized by their distinctive color markings
and outstanding milk production. Holsteins are large, stylish animals with color patterns of black
and white or red and white. Holstein heifers can be bred at 15 months of age. Holstein gestation
is approximately nine months. The normal productive life of a Holstein is Nine years (Anon.,
2022).
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Different researchers are revealing that Holstein Frisian breed is a high milk yielding breed,
ranging from 37 up to 45 liters per day and therefore, it is the recommendation of this project for
the application of the breed for dairy farms as the picture shown below.
Picture 3: Holstein Frisian
3.2.4. Project Area Suitability

Cattle and Goat fattening and Diary farming production is sensitive to the change in the value
and quantity of feed supply. It will be highly profitable if feed are obtained in the locality. The
feed ingridients are rice straw, corn stover, rice bran and molasses (Agri farming, 2020). Feedlot
must not be located in urban area. It should also be close to the source of feed and have easly
access to the source of feed and the source of animals that are suitable for feed lot livestock
production. Easy access of land and a good sources of water and feed is critical. (USAID, 2022).
EABC has adequate land for beef cattle and Goat fastenings and dairy farm as well.
Consequently, the project will start its operation with a capacity of 50 beef cattle fattening, 100
Goat fattening and 50 heifers’ cattle dairy farm in the feedlots located at Gondie Iteya farn,
Ardayita farm, Shallo compound, and Gibe farm and EABC head office compound here in Addis
Ababa as shown below.
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Project Location, Feedlot type and Startup capacity description
Location Feedlot type Initial startup capacity

Gondie Iteya Dairy farm feedlot 50 cows dairy farm
Ardayita farm Dairy farm feedlot 50 cows dairy farm
Shallo compound Cattle fattening and Dairy 50 cattle fattening and 50
farm feedlot cow dairy farm
Gibe farm Goat fattening 100 goat fattening
EABC head office Dairy farm feedlot 50 cattle fattening
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4. RISK FACTOR ANALYSIS
A SWOT analysis can help in analyzing these factors in the sub sector, which can play important
role in making the decision of the project.
Strengths Weaknesses
 The project is main stay of the economy  Lack of appropriate knowledge and research
extension
 The project is major sources of food security and livelihood  Lack of commercially viable breeds of animal
income
 The project is the sources of farm yard manures for agricultural  Lack of education and initiative in farmer,
traditional approach due to lack of skills and
sustainability
management.
 The project is an import substitution and foreign exchange saving  Outbreak of diseases, shortage of feed and
technology
 The project will create an enabling environment for job  High price of livestock feed
 Shortage of labor
opportunities for local communities.
 The project may support the key missions of the Corporation throgh  Lack of farm/ market infra structures &
marketing information
financing
 The project will contribute in price stability of the nation and  . Management of livestock farm is a
challenging job
filling products deficit gap
Opportunities  .Shortage of labor
Conducive working environment Threats
High demand for livestock products  Climate change
Value added livestock products are in demand  Shortage of foreign currency
 High price of cattle and feedstuffs
 Peace and security issues
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5. PROJECT PLANNING MATRIX (LOGICAL FRAMEWORK)
Project logic/Objective narrative Objectively verifiable Indicators Means of Assumptions
Verification
Impact/Goal: Contribute 1% of the total It is expected that the Government may

domestic fattened cattle and Goat give additional mission for the
The long term objective of this project proposal is to enhance the
and milk product supply market corporation in supplying fattened Cattle
Periodic
contributive competence of EABC in fulfilling social
and Goat and dairy farm products for
reports
responsibility and its financial needs through engaging in
the purpose of filling the national
livestock product supply chain and making sure of price stability
livestock products supply gap.
in the domestic market.
Outcome:  Quantity of fattened cattle and  Availability of effective national

Goat and milk products livestock demand.
 Supplying fattened Cattle and Goats and milk products to the
supplied to the domestic
domestic market at reasonable price.
market  Availability and commitment of
marketing channels
 Strengthening the financial capability of EABC Periodic
 Number of employment
created
reports  community participation in the
 Promote new cattle and goat breeds and technologies to the
project labor force
project communities and the surroundings through intensive
 Number of technology used
farming system.
and adopted  EIAR will supply new breeds
technology.
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Project logic/Objective narrative Objectively verifiable Means of Assumptions
Indicators Verification
Outputs:  Availability of livestock breeds
 Supplying of 50 fattened cattle per production cycle.  Availability of water and feed
 Supplying of 1000 liters of milk product per head per day supply
 Productivity
 Supplying of 1000 fattened Goats per production cycle
 Availability of seeds from
 Generating an initial income of ETB 113,550,000.00 and at a profit
research centers
of ETB 16,481,030.06 at a moderate growth rate.
 Livestock products will be supplied to the domestic market at 10%  Plan Vs. actual
 local government commitment
price reduction
 Holstein Frisian breed and new technologies related to manure and  Stakeholder and federal
livestock production management will be promoted to the project government commitments
communities.
Activities: Implementation/work Periodic reports  Availability of resources (

programme targets. labor, land, capital, loan and
 Conduct project feasibility study
technology )
 Conduct business plan of the project
 Prepare implementation plan  Managing the social factor of
 Prepare annual work plan and budget the project areas
 Recruit and train enforcement staff
 Political stability in the project
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 Conduct baseline survey for feedlots and other buildings areas
 Land clearing and preparation
 Conducive working
 Complete engineering specifications for buildings
environment
 Prepare tender documents, select contractors and make an
agreement
 Constructing animal shades and buildings
 Procurement of fattened cattle, dairy heifers and Goats
 Carrying out livestock production and marketing
 Conduct project monitoring and evaluation
 Produce periodic performance report as per schedule.
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6. PROJECT IMPLEMENTATION STRATEGY
For successful beef fattenings and dairy farms, exploiting the full genetic potential of the animals
is crucial and therefore, the following business strategies or tools should be implemented:
 Give enough shade space for the animal to hide
 Make sure there is always fresh water available, unlimited!
 Make sure there is always roughage available, unlimited!
 Have a soft bedding (sand or straw), to make the animal comfortable
 Make sure there is comfortable environment
 Establish friendly relation with animals, freedom from fear and distres
 Do the proper vaccinations
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7. PROJECT STAKHOLDERS AND BENEFICIARIES
7.1. Stakeholders
In effective implementation of the project, the following stakeholders are influential.
 Ethiopian Investment Holdings
 Aagricultural investment Agency
 Ministry of agriculture
 Agricultural Transformation Agency
 Ministry of Trade
 Ethiopian Institute of Agricultural Research
 Local government administrative
 EABC workers and management
 Agricultural Input suppliers
7.2. Project Beneficiaries

The beneficiaries of the project are end users or customers of the project outputs. In view of this,
the major are as follow:
 Consumer cooperatives
 Ethiopian Government
 processors
 Local governments
 The surrounding communities of the project areas
 Domestic consumers,
 milk processors,
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 dairy companies,
 milk collection companies
 contractors
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8. PROJECT ASSUMPTIONS AND RISK MANAGEMENT
In order to implement the project smoothly, the following national and area level assumptions are
used to develop the most likely scenario for the project life time:
 Regional government good will and commitment
 Managing the social factor of the project areas
 Political stability in the project areas
 Agriculture remains the major source of growth and macroeconomic stability
 Availability of resources ( labor, land, capital, loan and technology )
 Conducive working environment
 Availability of foundation seeds from research centers
 Availability of effective national livestock product demand.
 Obtaining legal entity in livestock business.
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9. ORGANIZATIONAL SETUP
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10. PROJECT PRODUCTION AND INCOME GENERATION CAPACITY
It is assumed that the project will generate income from three sub project sources:1) Cattle
fattening feedlot, 2) Dairy farm feedlot and 3) Goat farm feedlot. Cattle fattening feedlot will
produce 50 fattened cattle per production cycle and generate an income of ETB 20,000,000.00 per
year. Dairy farm will produce milk product with a minimum capacity of 20 liter/head/day and
generate an income of ETB 25,550,000.00 per year and Goat fattening will produce 100 Goats per
production cycle and generate an income of ETB 8,000,000.00 per year. It is also assumed that
income generated from the schemes will grow at a rate of 10% annually.
Production And Initial Income Generation Capacity By Project Site Feedlot

Type
Location Feedlot type Initial capacity Production First year Income

capacity generated
Gondie Iteya Dairy farm feedlot 50 cows dairy farm 20 liter/head/day 20,000,000.00
Ardayita farm Dairy farm feedlot 50 cows dairy farm 20 liter/head/day 20,000,000.00
Shallo compound Cattle fattening and 50 cattle fattening and 50 50 fattened 45,550,000.00
cattle/production
Dairy farm feedlot cow dairy farm
cycle
20 liter/head/day
Gibe farm Goat fattening 100 goat fattening 100 fattened 8,000,000.00
Goat/production
cycle
EABC head office Dairy farm feedlot 50 cattle fattening 20 liter/head/day 20,000,000.00
Sum 113,550,000.00
24
11. PROJECT BUDGET COST
This project budget cost is classified into feedlot fixed capital budget cost and feedlot operating
budget cost. Feedlot fixed budget cost is again categorized into feedlot building budget cost,
machinery and equipment budget cost and livestock purchase cost. Likewise, operating budget
cost is categorized into input budget cost and overheads budget cost V feedlot type.
11.1. Fixed capital budget cost

11.1.1. Beef Cattle Fattening Feedlot
11.1.1.1. Building Budget Cost
No. Item Area (square meter) Unit Price (Cost/M2 Total Cost (birr)
1 Fatting centre (Shades) 585.29 1,500.00 877,933.35
2 Raw materials store 185.81 1,200.00 222,967.20
3 Guard's House 92.90 1,200.00 111,483.60
4 Outside toilet pit 92.90 1,200.00 111,483.60
5 Changing room 92.90 1,200.00 111,483.60
6 Staff cafeteria 92.90 1,200.00 111,483.60
7 Office building 92.90 2,000.00 185,806.00
10 Waste treatment plant 92.90 1,200.00 111,483.60
11 Feed processing plant 371.61 1,200.00 445,934.40
12 Workshop 92.90 1,200.00 111,483.60
13 Raw materials store 92.90 1,200.00 111,483.60
14 Product materials store 92.90 1,200.00 111,483.60
Total 2,624,509.75
25
11.1.1.2. Cattle Fattening Machinery Requirement and Cost
Description Quantity Unit price (Birr) Cost (Birr)
Tractor trolley 1 612,000.00 612,000.00

Cattle crate 1 600,000.00 600,000.00
Tube well 1 136,000.00 136,000.00
Chaff cutter 1 27,200.00 27,200.00
Forage cutter 1 170,000.00 170,000.00
Water tank 1 10,880.00 10,880.00
Water Pump 1 13,600.00 13,600.00
Freezer 1 14,960.00 14,960.00
Generator( 32MW) 1 300,000.00 300,000.00
Molasses Tank 1 250,000.00 250,000.00
Others 250,000.00
Total 2,384,640.00
26
11.1.1.3. Office equipment per project site
Resource Quantity Unit price Amount

Transport facilities
Double cabin pick up 1 13,300,000.00 13,300,000.00
Motor cycle 1 100,000.00 100,000.00
2. Office Furniture -
Managerial table 1 25,000.00 25,000.00
Managerial chair 1 16,000.00 16,000.00
Expert chair 1 7,500.00 7,500.00
Double size table 3 5,000.00 15,000.00
File cabinet 1 40,000.00 40,000.00
Computer desk top 3 30,000.00 90,000.00
Laptop 3 55,000.00 165,000.00
Printer 3 35,000.00 105,000.00
Summary
Transport facilities 13,400,000.00
Office equipment 463,500.00
13,863,500.00
11.1.1.4. Cattle Purchase Budget Cost

 Breed Type: Boran bulll/steer (100kg)
 Project Cycle: 3 monthes
 Replacement rate: 4
 200 steers purchased in the first year and 15 steers per year in the remaining years and
the reamining 35 will be replaced from dairy farm.
 Purchased amount in ETB: 5,000,000.00 in the first year and the remaining inflated at
10%.
27
Sr.No. Description Area sq. meter. Unit cost Total cost
92.90
1 Cowshed 5,500.00 510,966.50
Open paddock for cows

185.81
2 5,500.00 1,021,933.00
Stores for fodder, concentrate and equipment

22.00
3 5,000.00 110,000.00
Utensils and milk storage room

18.58
4 5,500.00 102,193.30
Servant room, wash room
5 9.29 5,500.00 51,096.65
Silage bunker
1.49
6 5,500.00 8,195.00
Calf pen
7 69.68 5,500.00 383,224.88
Open area for calf

139.35
8 5,500.00 766,449.75
Electric connection and installation to the
9 farm 60,000.00
Milk cooling system

10 40,000.00
Total 3,054,059.08
28
9.1.2.2. Office equipment per project site
Resource Quantity Unit price Amount
Double cabin pick up 1 13,300,000.00 13,300,000.00

Motor cycle 1 100,000.00 100,000.00
Managerial table 1 25,000.00 25,000.00
Managerial chair 1 16,000.00 16,000.00
Expert chair 1 7,500.00 7,500.00
Double size table 3 5,000.00 15,000.00

File cabinet 1 40,000.00 40,000.00
Computer desk top 3 30,000.00 90,000.00

Laptop 3 55,000.00 165,000.00
Printer 3 35,000.00 105,000.00
Summary
13,863,500.00
29
9.1.2.3. Cattle Purchase for dairy farm
 Breed Type: Holestein Forsian (150kg)
 Project Cycle: 1 year
 Replacement rate: 10 year
 50 cows purchased in the first year
 Purchased amount in ETB: 9,000,000.00
9.1.3. Goat fattening feedlot

Description Area Cost estimated

square meter ( Birr)
Housing shade 90.58 150,000.00
Exercising yard 464.52 200,000.00
Feed shelter 6.97 80,000.00
Wheel 92.903 10,000.00
Kid pen 108.70 100,000.00
Goat farm office 9.29 250,000.00
Equipment store 9.29 100,000.00
Wheel barrow (3) 25,000.00
Generator( 32MW) 1.00 300,000.00
others 100,000.00
1,165,000.00
30
Goat fattening feedlot machinery requirement and cost
Unit price
Description Quantity Cost (Birr)
(Birr)
Water pump(5HP) Tank (including

1 220,588.24 220,588.24
boring)
Tubes 8 2,205.88 17,647.06
Hand craft 4 7,352.94 29,411.76
Mobile weighing scale 1 73,529.41 73,529.41
Fans in shed for ventilation 2 4,411.76 8,823.53
Lighting shed 38 220.59 8,382.35
Lighting open paddock 8 220.59 1,764.71
Miscellaneous farm equipment 1 29,411.76 29,411.76
Total 389,558.82
Resource Quantity Amount

Double cabin pick up 1 13,300,000.00
Motor cycle 1 100,000.00
Managerial table 1 25,000.00
Managerial chair 1 16,000.00
Expert chair 1 7,500.00
Double size table 3 15,000.00
File cabinet 1 40,000.00
Computer desk top 3 90,000.00
Laptop 3 165,000.00
Printer 3 105,000.00
Summary
13,863,500.00
31
9.1.3.2. Purchase Budget Cost
 Breed Type: Borana Goat ( Male)
 Project Cycle: 3 months
 Replacement rate: 4 per cycle
 400 Male Goat will be purchased every year.
 Purchased amount in ETB: 2,000,000.00 in the first year and the remaining inflated at
10%.
11.2. Operating Cost

11.2.1. Beef Cattle Fattening Feedlot
11.2.1.1. Feed requirement and cost estimation
Cattle feed Annual

Raw Material Amount /day(kg) Kg per cycle # of cattle/year requirement
Cereal bran(wheat) 15% 2.4 216.00 200.00 43,200.00
Oil seed (Noug cake) 5% 0.8 72.00 200.00 14,400.00
Lime 5% 0.8 72.00 200.00 14,400.00

Salt 5% 0.8 72.00 200.00 14,400.00
Molasses 20% 2.8 252.00 200.00 50,400.00

Sum 0.50 7.60 136,800.00

Kgs per animal Annual

Description Birr per Kg Cost in Birr # of cow Annual cost
per day requirement
32
Forage 40 2.90 116.00
14,600.00 50.00 16,820.00
Silage 25 8.82 220.59

9,125.00 50.00 97,318.34
Concentrate 5 51.47 257.35

1,825.00 50.00 662,305.36
Total 70 25,550.00 776,443.70
11.2.3. Goat fattening feedlot

Cattle feed Annual

Raw Material Amount /day(kg) Kg per cycle # of cattle/year requirement Price Amount
0.6 54.00 200.00 10,800.00 3.05 32,913.00

Cereal bran(wheat) 15%
0.2 18.00 200.00 3,600.00 3.05 10,971.00

Oil seed (Noug cake) 5%
0.2 18.00 200.00 3,600.00 1.79 6,458.40

Lime 5%
0.2 18.00 200.00 3,600.00 8.05 28,980.00

Salt 5%
0.8 72.00 200.00 14,400.00 10.47 150,696.00

Molasses 20%
2.00 180.00 36,000.00 230,018.40

Sum 0.50
33
11.3. Working capital
Working capital budget cost for fattening
Description Budget cost
OVER HEAD COST
Salary 2,363,772.00
Pension 118,188.60
Over Time 354,565.80
Perdiem & Transport 236,377.20
Training & Seminar 354,565.80
Uniform 70,913.16
Stationary & Printing Material 47,275.44
Telephone, Posts & Fax 31,500.00
Electricity & Water 127,500.00
Fuel & Lubricant 120,000.00
Municipal & Land Tax 22,400.00
Legal Fee 4,500.00
Bank Service Fee 1,500.00
Medical Expense 94,550.88
Cleaning & Sanitation 23,637.72
Licence & Registration 7,500.00
Hotel Accomodation 22,500.00
Cashier Allowance 10,500.00
Mobile Card 18,000.00
Photo Copy 7,500.00
Service Vehicles Maintenance 120,000.00
Repair & Maint. Office Equipment 25,000.00
Agri Machinary Maintenance 100,000.00
Building 80,000.00
Tyre With Inner Tube 675,000.00
SPARE PART
Service Vehicles 100,000.00
Generator 15,000.00
Grain Mill 12,000.00
Total cost 5,164,246.60
34
11.4. Manpower plan
Sr.No. Title No. Monthly salary Annual salary

I Livestock department ( Project coordinator)
1 Department head 1 33,000.00 396,000.00
2 Executive secretary 1 8,048.00 96,576.00
3 Veterinary technician 1 15,443.00 185,316.00
4 Nutritionist 1 15,443.00 185,316.00
5 Quality Control inspector 1 15,443.00 185,316.00
6 Researcher 1 15,444.00 185,328.00
II Production and marketing team ( At project site) -
7 Team leader 1 23,080.00 276,960.00
8 Header 1 10,256.00 123,072.00
9 Feeder/milkier 2 10,256.00 246,144.00
10 Sales man 2 10,256.00 246,144.00
11 Guard 3 6,600.00 237,600.00
Total 15 2,363,772.00
35
12. INCOME STATEMENT
Income Statement for Cattle Fattening
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating Revenues 20,000,000.00 33,726,000.00 50,589,000.00 75,883,500.00 113,825,250.00 170,737,875.00 256,106,812.50 384,160,218.75 576,240,328.13 864,360,492.19
Cost of sales 12,307,333.68 13,538,067.05 14,891,873.75 16,381,061.12 18,019,167.24 19,821,083.96 21,803,192.36 23,983,511.59 26,381,862.75 29,020,049.03
Gross Operating Profit 7,692,666.32 20,187,932.95 30,281,899.43 45,422,849.15 68,134,273.72 102,201,410.58 153,302,115.88 229,953,173.81 344,929,760.72 517,394,641.08
7,692,666.32 20,187,932.95 30,281,899.43 45,422,849.15 68,134,273.72 102,201,410.58 153,302,115.88 229,953,173.81 344,929,760.72 517,394,641.08
General Administration Expenses 1,342,704.12 1,476,974.53 1,624,671.98 1,787,139.18 1,965,853.10 2,162,438.41 2,378,682.25 2,616,550.47 2,878,205.52 3,166,026.07
Profit Before Tax 6,349,962.21 18,710,958.43 28,066,437.64 42,099,656.46 63,149,484.69 94,724,227.04 142,086,340.56 213,129,510.84 319,694,266.25 479,541,399.38
Provision for tax 1,904,988.66 5,613,287.53 8,419,931.29 12,629,896.94 18,944,845.41 28,417,268.11 42,625,902.17 63,938,853.25 95,908,279.88 143,862,419.81
Profit Ater Tax 4,444,973.54 13,097,670.90 19,646,506.35 29,469,759.52 44,204,639.28 66,306,958.93 99,460,438.39 149,190,657.58 223,785,986.38 335,678,979.57
Interest Expense 1,743,832.69 1,918,215.96 2,110,037.56 2,321,041.32 2,553,145.45 2,808,459.99 3,089,305.99 3,398,236.59 3,738,060.25 4,111,866.28
Profit (loss) for the year 2,701,140.85 11,179,454.94 17,536,468.79 27,148,718.21 41,651,493.84 63,498,498.93 96,371,132.40 145,792,420.99 220,047,926.13 331,567,113.29
Legal reserve 135,057.04 558,972.75 838,459.12 1,257,688.68 1,886,533.02 2,829,799.53 4,244,699.30 6,367,048.94 9,550,573.42 14,325,860.12
Dividend to MoFED 1,539,650.28 6,372,289.31 9,558,433.97 14,337,650.95 21,506,476.43 32,259,714.65 48,389,571.97 72,584,357.96 108,876,536.93 163,314,805.40
Retained earning 1,026,433.52 4,248,192.88 7,139,575.70 11,553,378.57 18,258,484.38 28,408,984.76 43,736,861.13 66,841,014.09 101,620,815.78 153,926,447.77
36
Income Statement for Dairy farm
Cost of sales 13,788,821.21 15,167,703.33 16,684,473.66 18,352,921.03 20,188,213.13 22,207,034.45 24,427,737.89 26,870,511.68 29,557,562.85 32,513,319.13
11,761,178.79 18,558,296.67 27,837,445.00 41,756,167.51 62,634,251.26 93,951,376.89 140,927,065.33 211,390,598.00 317,085,896.99 475,628,845.49
General Administration Expenses 5,204,795.72 5,725,275.29 6,297,802.82 6,927,583.10 7,620,341.41 8,382,375.56 9,220,613.11 10,142,674.42 11,156,941.86 12,272,636.05
Profit After Tax 4,589,468.15 8,983,114.96 15,764,782.56 26,166,294.97 42,020,475.70 66,078,850.12 102,471,225.40 157,395,083.34 240,149,694.78 364,687,318.91
Interst Expense 2,497,953.50 2,747,748.85 3,022,523.74 3,324,776.11 3,657,253.72 4,022,979.10 4,425,277.01 4,867,804.71 5,354,585.18 5,890,043.69
Legal reserve 104,575.73 311,768.31 467,652.46 701,478.69 1,052,218.03 1,578,327.05 2,367,490.57 3,551,235.86 5,326,853.78 7,990,280.67
Retained earning 794,775.57 2,369,439.12 6,943,368.34 14,143,183.14 25,315,718.39 42,484,615.64 68,689,065.32 108,491,954.03 168,742,122.69 259,717,794.86
37
Income Statement for Goat Fattening
Cost of sales 4,269,171.34 4,696,088.48 5,165,697.32 5,682,267.06 6,250,493.76 6,875,543.14 7,563,097.45 8,319,407.20 9,151,347.91 10,066,482.71
3,730,828.66 4,103,911.52 6,155,867.29 9,233,800.93 13,850,701.40 20,776,052.09 31,164,078.14 46,746,117.21 70,119,175.82 105,178,763.72
General Administration Expenses 156,143.87 171,758.26 188,934.08 207,827.49 228,610.24 251,471.27 276,618.39 304,280.23 334,708.26 368,179.08
Profit After Tax 2,502,279.35 2,752,507.29 4,128,760.93 6,193,141.39 9,289,712.09 13,934,568.14 20,901,852.20 31,352,778.31 47,029,167.46 70,543,751.19
Interest Expense 503,462.72 553,808.99 609,189.89 670,108.88 737,119.77 810,831.74 891,914.92 981,106.41 1,079,217.05 1,187,138.75
Legal reserve 99,940.83 109,934.91 164,902.37 247,353.56 371,030.34 556,545.51 834,818.26 1,252,227.39 1,878,341.08 2,817,511.63
Retained earning 759,550.32 835,505.35 1,474,781.62 2,455,848.39 3,951,816.14 6,222,572.12 9,658,190.87 14,844,052.27 22,658,520.97 34,419,468.28
38
13. CASH FLOW STATEMENT
Cash flow statement for Cattle fattening
Revenue 20,000,000.00 33,726,000.00 50,589,000.00 75,883,500.00 113,825,250.00 170,737,875.00 256,106,812.50 384,160,218.75 576,240,328.13 864,360,492.19
Costs(other than Depreciation) 12,455,947.82 13,701,542.60 15,071,696.86 16,578,866.55 18,236,753.20 20,060,428.52 22,066,471.37 24,273,118.51 26,700,430.36 29,370,473.40
Depreciation 1,194,089.98 1,313,498.97 1,444,848.87 1,589,333.76 1,748,267.13 1,923,093.85 2,115,403.23 2,326,943.55 2,559,637.91 2,815,601.70
Gross profit 6,349,962.21 18,710,958.43 34,072,454.27 57,715,299.70 93,840,229.67 148,754,352.63 231,924,937.90 357,560,156.69 546,980,259.85 832,174,417.09
6,349,962.21 18,710,958.43 34,072,454.27 57,715,299.70 93,840,229.67 148,754,352.63 231,924,937.90 357,560,156.69 546,980,259.85 832,174,417.09
General and administration 1,342,704.12 1,476,974.53 1,624,671.98 1,787,139.18 1,965,853.10 2,162,438.41 2,378,682.25 2,616,550.47 2,878,205.52 3,166,026.07
Profit before tax 5,007,258.09 17,233,983.90 32,447,782.29 55,928,160.52 91,874,376.57 146,591,914.23 229,546,255.65 354,943,606.22 544,102,054.34 829,008,391.02
Net profit after tax 3,505,080.66 12,063,788.73 22,713,447.60 39,149,712.36 64,312,063.60 102,614,339.96 160,682,378.96 248,460,524.35 380,871,438.04 580,305,873.71
Adjustment
Add: Depreciation 1,194,089.98 1,313,498.97 1,444,848.87 1,589,333.76 1,748,267.13 1,923,093.85 2,115,403.23 2,326,943.55 2,559,637.91 2,815,601.70
Net cash flow 4,699,170.64 13,377,287.70 24,158,296.47 40,739,046.12 66,060,330.73 104,537,433.80 162,797,782.19 250,787,467.90 383,431,075.94 583,121,475.41
Discount rate 14% 0.8772 0.7695 0.6750 0.5921 0.5194 0.4556 0.3996 0.3506 0.3075 0.2697
Present Value of Cash Flow 4,122,079.51 10,293,388.51 16,306,162.00 24,120,785.73 34,309,665.74 47,625,848.57 65,060,069.79 87,915,817.72 117,908,101.39 157,293,408.19
Cumulative Present Value of Cash Flow 4,122,079.51 14,415,468.01 30,721,630.01 54,842,415.74 89,152,081.48 136,777,930.05 201,837,999.84 289,753,817.55 407,661,918.94 564,955,327.13
39
Cash flow statement for Dairy farm
Revenue 25,550,000.00 33,726,000.00 44,518,320.00 58,764,182.40 77,568,720.77 102,390,711.41 135,155,739.07 178,405,575.57 235,495,359.75 310,853,874.87
Depreciation 1,151,091.91 1,266,201.10 1,392,821.21 1,532,103.33 1,685,313.66 1,853,845.03 2,039,229.53 2,243,152.48 2,467,467.73 2,714,214.51
Gross profit 6,556,383.07 12,833,021.38 21,536,043.51 33,483,678.27 49,760,166.22 71,801,301.41 101,507,388.06 141,392,389.47 194,780,855.04 266,067,919.68
6,556,383.07 12,833,021.38 21,536,043.51 33,483,678.27 49,760,166.22 71,801,301.41 101,507,388.06 141,392,389.47 194,780,855.04 266,067,919.68
Provision for tax 405,476.21 2,132,323.83 4,571,472.21 7,966,828.55 12,641,947.44 19,025,677.76 27,686,032.49 39,374,914.51 55,087,173.95 76,138,585.09
Net profit after tax 946,111.15 4,975,422.26 10,666,768.49 18,589,266.61 29,497,877.37 44,393,248.10 64,600,742.47 91,874,800.53 128,536,739.22 177,656,698.54
Adjustment
Net cash flow 2,097,203.05 6,241,623.36 12,059,589.69 20,121,369.94 31,183,191.03 46,247,093.13 66,639,972.00 94,117,953.01 131,004,206.95 180,370,913.05
Discount rate 14% 0.8772 0.7695 0.6750 0.5921 0.5194 0.4556 0.3996 0.3506 0.3075 0.2697
40
Cash flow statement for Dairy farm
Revenue 25,550,000.00 33,726,000.00 44,518,320.00 58,764,182.40 77,568,720.77 102,390,711.41 135,155,739.07 178,405,575.57 235,495,359.75 310,853,874.87
Depreciation 1,151,091.91 1,266,201.10 1,392,821.21 1,532,103.33 1,685,313.66 1,853,845.03 2,039,229.53 2,243,152.48 2,467,467.73 2,714,214.51
Gross profit 6,556,383.07 12,833,021.38 21,536,043.51 33,483,678.27 49,760,166.22 71,801,301.41 101,507,388.06 141,392,389.47 194,780,855.04 266,067,919.68
6,556,383.07 12,833,021.38 21,536,043.51 33,483,678.27 49,760,166.22 71,801,301.41 101,507,388.06 141,392,389.47 194,780,855.04 266,067,919.68
Provision for tax 405,476.21 2,132,323.83 4,571,472.21 7,966,828.55 12,641,947.44 19,025,677.76 27,686,032.49 39,374,914.51 55,087,173.95 76,138,585.09
Net profit after tax 946,111.15 4,975,422.26 10,666,768.49 18,589,266.61 29,497,877.37 44,393,248.10 64,600,742.47 91,874,800.53 128,536,739.22 177,656,698.54
Adjustment
Net cash flow 2,097,203.05 6,241,623.36 12,059,589.69 20,121,369.94 31,183,191.03 46,247,093.13 66,639,972.00 94,117,953.01 131,004,206.95 180,370,913.05
Discount rate 14% 0.8772 0.7695 0.6750 0.5921 0.5194 0.4556 0.3996 0.3506 0.3075 0.2697
41
14. BALANCE SHEET
Balance sheet For cattle fattening
Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Asset
Current assets
Cash and cash equivalents 2,701,140.85 11,179,454.94 17,536,468.79 27,148,718.21 41,651,493.84 63,498,498.93 96,371,132.40 145,792,420.99 220,047,926.13 331,567,113.29
2,701,140.85 11,179,454.94 17,536,468.79 27,148,718.21 41,651,493.84 63,498,498.93 96,371,132.40 145,792,420.99 220,047,926.13 331,567,113.29
Non-current assets
Property, plant and equipment 11,194,089.98 12,313,498.97 12,313,498.97 13,544,848.87 14,899,333.76 16,389,267.13 18,028,193.85 19,831,013.23 21,814,114.55 23,995,526.01
11,194,089.98 12,313,498.97 12,313,498.97 13,544,848.87 14,899,333.76 16,389,267.13 18,028,193.85 19,831,013.23 21,814,114.55 23,995,526.01
TOTAL ASSETS 13,895,230.83 23,492,953.91 29,849,967.76 40,693,567.08 56,550,827.59 79,887,766.07 114,399,326.24 165,623,434.22 241,862,040.68 355,562,639.30
Liabilities
Current liabilities
Trade and Other payables 1,539,650.28 6,372,289.31 9,558,433.97 14,337,650.95 21,506,476.43 32,259,714.65 48,389,571.97 72,584,357.96 108,876,536.93 163,314,805.40
Total Liabilities 1,539,650.28 6,372,289.31 9,558,433.97 14,337,650.95 21,506,476.43 32,259,714.65 48,389,571.97 72,584,357.96 108,876,536.93 163,314,805.40
Equity
Paid up Capital 11,194,089.98 12,313,498.97 12,313,498.97 13,544,848.87 14,899,333.76 16,389,267.13 18,028,193.85 19,831,013.23 21,814,114.55 23,995,526.01
Legal Reserve 135,057.04 558,972.75 838,459.12 1,257,688.68 1,886,533.02 2,829,799.53 4,244,699.30 6,367,048.94 9,550,573.42 14,325,860.12
Retained earnings 1,026,433.52 4,248,192.88 7,139,575.70 11,553,378.57 18,258,484.38 28,408,984.76 43,736,861.13 66,841,014.09 101,620,815.78 153,926,447.77
Total Equity 12,355,580.54 17,120,664.59 20,291,533.79 26,355,916.12 35,044,351.16 47,628,051.42 66,009,754.27 93,039,076.27 132,985,503.75 192,247,833.90
TOTAL EQUITY & LIABILITIES 13,895,230.83 23,492,953.91 29,849,967.76 40,693,567.08 56,550,827.59 79,887,766.07 114,399,326.24 165,623,434.22 241,862,040.68 355,562,639.30
42
Balance sheet For cattle Dairy farm
Asset
Current assets
2,091,514.65 6,235,366.11 12,742,258.82 22,841,518.86 38,363,221.98 62,055,871.02 98,045,948.39 152,527,278.63 234,795,109.60 358,797,275.21
Non-current assets
11,651,091.91 12,816,201.10 14,097,821.21 15,507,603.33 17,058,363.66 18,764,200.03 20,640,620.03 22,704,682.03 24,975,150.24 27,472,665.26
TOTAL ASSETS 13,742,606.55 19,051,567.21 26,840,080.03 38,349,122.19 55,421,585.64 80,820,071.05 118,686,568.42 175,231,960.66 259,770,259.84 386,269,940.47
Liabilities
Current liabilities
Equity
Paid up Capital 12,843,255.26 16,370,359.78 19,429,059.23 23,504,460.37 29,053,649.22 36,757,128.36 47,630,012.53 63,188,770.78 85,701,283.36 118,561,864.94
Legal Reserve 104,575.73 311,768.31 467,652.46 701,478.69 1,052,218.03 1,578,327.05 2,367,490.57 3,551,235.86 5,326,853.78 7,990,280.67
Retained earnings 794,775.57 2,369,439.12 6,943,368.34 14,143,183.14 25,315,718.39 42,484,615.64 68,689,065.32 108,491,954.03 168,742,122.69 259,717,794.86
Total Equity 13,742,606.55 19,051,567.21 26,840,080.03 38,349,122.19 55,421,585.64 80,820,071.05 118,686,568.42 175,231,960.66 259,770,259.84 386,269,940.47
43
Balance sheet For Goat fattening
Asset
Current assets
1,998,816.63 2,198,698.30 3,519,571.04 5,523,032.52 8,552,592.33 13,123,736.39 20,009,937.29 30,371,671.90 45,949,950.41 69,356,612.44
Non-current assets
4,029,152.94 4,432,068.24 4,432,068.24 4,875,275.06 5,362,802.56 5,899,082.82 6,488,991.10 7,137,890.21 7,851,679.23 8,636,847.16
TOTAL ASSETS 6,027,969.57 6,630,766.53 7,951,639.28 10,398,307.57 13,915,394.89 19,022,819.22 26,498,928.39 37,509,562.11 53,801,629.65 77,993,459.59
Liabilities
Current liabilities
Equity
Paid up Capital 4,029,152.94 4,432,068.24 4,432,068.24 4,875,275.06 5,362,802.56 5,899,082.82 6,488,991.10 7,137,890.21 7,851,679.23 8,636,847.16
Legal Reserve 99,940.83 109,934.91 164,902.37 247,353.56 371,030.34 556,545.51 834,818.26 1,252,227.39 1,878,341.08 2,817,511.63
Retained earnings 759,550.32 835,505.35 1,474,781.62 2,455,848.39 3,951,816.14 6,222,572.12 9,658,190.87 14,844,052.27 22,658,520.97 34,419,468.28
Total Equity 4,888,644.09 5,377,508.50 6,071,752.23 7,578,477.01 9,685,649.04 12,678,200.44 16,982,000.23 23,234,169.88 32,388,541.29 45,873,827.06
44
15. ECONOMIC ANALYSIS
Economic parameters such as Payback Period, Net Present Value, Internal Rate of Return, and
Benefit Cost Ratio are used for evaluating and screening out of candidate projects from competing
alternative projects. Hence, as clearly shown (Table) the feasibility study pointed out that dairy
farming, cattle fattening, Goat fattening feedlots ranked first, second and third in economic
viability respectively.
Evaluation Decision Option1 Option 2 Option 3

Result
criteria Rule for acceptance Cattle Fattening Dairy Farming Goat fattening
Payback period
Less than 10 year 3.00 3.03 4.91 Accepted
(year)
Profitability
Greater than One 1.08 2.54 1.11 Accepted
Index(B/C)
Net Present Value Greater than Zero 11,624,195.16 286,463,083.50 5,852,673.03 Accepted
Internal Rate of Greater than Cost of

30.77 85.98 22.85 Accepted
return Capital
Rank 2 1 3
45
16. FINANCIAL RATIO ANALYSIS FOR CATTLE FATTENING, DAIRY FARMING AND GOAT
FATTENING FEEDLOTS
No Ratio Formula Cattle Fattening

1st year 2nd year 3rd year 4th year 5th year 6th year 7th year 8th year 9th year 10th year
(Net sales - CGS) 38% 60% 60% 60% 60% 60% 60% 60% 60% 60%
1 Goss Profit Margin
sales
Profit before tax 32% 55% 55% 55% 55% 55% 55% 55% 55% 55%
2 Profit Margin
sales
Sales 144% 144% 169% 186% 201% 214% 224% 232% 238% 243%
3 Asset Turnover
total assets
Profit before tax 46% 80% 94% 103% 112% 119% 124% 129% 132% 135%
4 Return on investment
total assets
Profit before
22% 65% 86% 103% 119% 133% 146% 157% 165% 172%
Interest & tax
5 ROCE
total assets-Current
liability
Total current asset 175% 175% 183% 189% 194% 197% 199% 201% 202% 203%
6 Current Ratio
total current
liabilities
46
Ratio Formula Dairy farm
(Net sales -
Goss Profit 46% 55% 63% 71% 81% 92% 104% 118% 135% 153%
CGS)
Margin
sales
Profit before
26% 38% 48% 59% 71% 84% 97% 113% 130% 149%
Profit Margin tax
sales
Sales 186% 177% 166% 153% 140% 127% 114% 102% 91% 80%
Asset Turnover
total assets
Return on Profit before 48% 67% 80% 91% 99% 106% 111% 115% 118% 120%
investment total assets
Profit before
17% 40% 59% 75% 88% 99% 107% 113% 118% 122%
Interest & tax
ROCE
total assets-
Current
liability
Total current
175% 175% 239% 286% 320% 345% 363% 377% 387% 394%
asset
Current Ratio
total current
liabilities
47
Ratio Formula Goat Fattening
(Net sales -
Goss Profit 47% 47% 47% 47% 47% 47% 47% 47% 47% 47%
CGS)
Margin
sales
Profit before
45% 45% 45% 45% 45% 45% 45% 45% 45% 45%
Profit Margin tax
sales
Sales 133% 133% 166% 190% 213% 234% 252% 267% 279% 289%
Asset Turnover
total assets
Return on Profit before 59% 59% 74% 85% 95% 105% 113% 119% 125% 129%
investment total assets
Profit
before
41% 41% 58% 73% 88% 104% 118% 131% 142% 151%
Interest &
ROCE tax
total assets-
Current
liability
Total current
175% 175% 187% 196% 202% 207% 210% 213% 215% 216%
asset
Current Ratio
total current
liabilities
48
17. PROJECT MONITORING AND EVALUATION
Project monitoring and evaluation is a key determining factor in ensuring project objective. It is
not just like expressionless as many wrongly mislead and use it in a floating way. As opposed to
this, many researchers pointed out that there is a positive strong correlation between strong or
strict monitoring and evaluation system in a project life cycle and the efficacy of the project
objective. This research finding is also strongly pertinent to livestock producer’s firm.
Monitoring and evaluation is not only referring to the work of a planner or a management body
but it is the work of the institution as a whole. It should be done in a participatory approach.
Therefore, the Federal Democratic Republic of Ethiopia Investment Holdings, EABC board of
directors, Ethiopian Agricultural Businesses Corporation at all levels, and other major
stockholders of the project are responsible for monitoring and evaluation the project management
process and made necessary enabling environment for timely correction measures as per
submitted report.
The EABC- Operation sector deputy CEO is the apex of implementation and report the progress
to EABC-CEO, technical and managerial responsibility is entirely executed by Ethiopian Seed
and Forest Products Supply sector, implementation and follow up will be made by Seed
Production, processing and distribution department at daily, weekly, monthly and quarterly base
prepare implementation report and evaluate at sector management level. Until the end of project
Ethiopian Agricultural Business Corporation (EABC) will lead all the implementation.
49
18. ROLES AND RESPONSIBILITIES
18.1. Project management

The project management, normally the corporation, will remain responsible for delivering the
outputs of the projects, the actual implementation, input management and sound administrative
management. The project staff will also develop the project work plan and the annual project
report to the corporation, thus providing critical information and lessons learned regarding the
effectiveness of the implementation strategy and the delivery of outputs. The corporation will
gather and manage information, reflect critically to improve action and communicate and report
results to all concerned development parties.
 Allocate the necessary budget and assign/employ the necessary manager office,
administrative and technical personnel,
 Follow up the construction of infrastructures like road, shades, facilities, buildings, etc.,
 Avail machineries and materials, etc.,
 Procurement of office supplies,
 Deliver periodic reports to board, Ethiopian Investment Holdings and others and
 Render technical support at all level.
18.2. Development partners (stakeholders)
 Follow up the progress of the project as per their monitoring and evaluation schedule.
 provide input and policy support for the implementation of the project
 Measures progress and performance mainly in outcome and goal/impact
 Carries a thorough analysis of linkages and attributions through set criteria
 Helps to refine and adjust the project objectives
The corporation in collaboration with project stakeholders at all levels ( federal, regional and local
levels) will remain responsible for the overall monitoring of the progress towards outcome as well
as the project’s contribution in terms of strategic outputs through stakeholder workshops, annual
work reviews, meeting and field visit. And finally communicating results to the public through
mass media such as written and oral reports, visual displays and field days may be different media
of results communication.
50
19. SUSTAINABILITY OF THE PROJECT
As we realize the fact that the economy is located in the environment and there is a strong
interdependence between economic activity and the environment. By bearing this in mind, in this
project proposal, project sustainability is deliberately incorporated in the content of the project for
the advantages of realizing socio economic benefits, long-term plan, and positive environmental
impacts. Before dealing with livestock business, the concept of project sustainability needs to be
clearly understood in the perspective of professionals.
Association for Project Management (APM) described project sustainability as an approach to

business that balances the environmental, social, economic aspects of project-based working to
meet the current needs of stakeholders without compromising or overburdening future
generations. Project sustainability involves both individual and organizational responsibility to
ensure that outputs, outcomes and benefits are sustainable over life cycles (APM, 2023).
And therefore livestock fattening and dairy farming project proposal should take into
consideration the short term and the long term socio economic impact of the project and its
mitigation strategy.
51
Environmental Impact Assessment of the Project
Positive impact assessment Negative impact assessment
 Supply fattened livestock to the surrounding area  It may lower the quality of the environment mainly
and central market at reasonable price. through production with the use of natural resources
 Supply milk product to the surrounding area and excessively, and the resulting residue (Shanty
central market at reasonable price. Oktavilia, 2016).
 Promote new cattle breeds and technology to the  Local resource competition
surrounding communities  Creation of environmental pollution ( odor and noise)
 Supply animal by manure to the surrounding farms
 Contribute to water and air pollution and
for soil fertility and energy consumption
contamination
 Creation of market opportunities for animal feeds
 Creation of job opportunities to the surrounding  Contribute to global warming via emissions of
areas methane (CH4)
 The production of charcoal from fresh cow manure
 Contribute to the conversion of natural habitat to
provides women in cattle camps a time-saving, agricultural land due to the increasing demand for
ecologically sustainable alternative to the chopping feed crops.
down and carrying of firewood (United Nation
 Add substantial amounts of greenhouse gases to the
peacce keeping, 2019)
atmosphere.
52
20. CONCLUSION AND RECOMMENDATIONS
As a matter of fact, as a whole, the demand for livestock products in Ethiopia is increasing from
time to time at alarming rate. This may be as a result of high population growth, expansion of
urbanization and gain in real per capita income. Subsequently, as of late, there is a critical
shortfall of livestock product supply in the domestic market. And therefore, this project proposal
aims to contribute its utmost effort in filling the supply gap by engaging in beef cattle and goat
fattening and milk supply chain as well for domestic market with a motive of playing its
indispensable role in the process of ensuring local market price stability and fulfilling the financial
needs of EABC. To realize the objectives of the project, the study revealed that this proposal is
operationally, technically, financially and economically viable.
Based on the outcomes of the study, the following key technical commendations are extremely
indispensable:
1. Because of the nature, complexity and objective of the project, the project was classified
as three subprojects, cattle fattening, dairy farming and Goat fattening feedlots and
therefore the decision makers should act accordingly.
2. The feasibility study pointed out that dairy farming, cattle fattening, Goat fattening
feedlots ranked first, second and third in financial viability respectively. If finance sources
are secured, it is the recommendation of the study to implement the full scale of the
project.
3. In the process of successfully achieve the project objectives, the project organizational
structure is a significant determining factor and therefore, the management should consider
it as a potential business unit of EABC and acts accordingly.
4. The proposal was designed by integrating own farm crop straws/residual to feedlot feeding
and cattle manure to own farm as fertilizer input and source of energy as well for the
objective of cost minimization and optimum allocation of resources and therefore the
management should allot some part of the farm for animal feeds like alfalfa crop
production.
5. Finally the operational and technical feasibility study results showed that even though
there is an opportunity to use animal medicines for cattle diseases control, experiences and
different sources showed that there is a high tendency of low cattle productivity trends in
53
Gibe and the surrounding areas. And therefore, Cattle fattening in the areas will not be
recommended.
54
21. REFERENCE
Agri farming, 2020. Cattle fattening methods and techniques, s.l.: s.n.
Alema Koudijs Feed PLC, 2022. Nutritional solutions , s.l.: s.n.
Anon., 2022. Cattle breed, s.l.: s.n.
CSA, 2019. livestock management, Addis Ababa: CSA.
Earth and Environmental science, 2020. Cattle fattening, s.l.: s.n.
ESPSLMMP, 2015. Census, Addis Ababa: s.n.
FAO, 2011. Climate-Smart Agriculture, s.l.: s.n.
Lukuyu B, G. C. L. M. L. C. a. M. S. (., 2012. Daily feeding cattle in East Africa , Nairobi Kenya: East Africa
Dairy Development Project.
MOFED, 2014. EThiopian Economy, Addis Ababa: s.n.
Richard, J. F. K. a., 1993. How to Reduce Heat Stress in Dairy Cattle, s.l.: Extension University of Missouri.
Science Direct, 2022. Environment suitability mapping of livestock: A case study of Ethiopian indigenous
sheep and goats, s.l.: s.n.
SMEDA, 2009. Dairy farm, s.l.: s.n.
University of Massacusetts, 2023. http://abe.psu.edu/extension/idea-plans/goat/ip-728-26(link is

external). [Online]
[Accessed January 2024].
USAID, 2018. Business and economics, s.l.: s.n.
USAID, 2022. Agribusiness project, s.l.: s.n.
Watts1, P. J., 2016. Beef cattle feedlots, s.l.: s.n.
55

Project Proposal For Cattle and Goat Fattening and Dairy Farm (Final Draft)

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Project Proposal For Cattle and Goat Fattening and Dairy Farm (Final Draft)

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ETHIOPIAN INVESTMENT HOLDINGS

ETHIOPIAN AGRICULTURAL BUSINESSES CORPORATION

PROJECT PROPOSAL FOR LIVESTOCK FATTENING AND DAIRY FARMING IN

 CATTLE FATTENING FEEDLOT

By Aweke Belete (M.Sc.), Seed Marketing Team Leader

Addis Ababa, Ethiopia

APM Association for Project Management

B/C Benefit- Cost

CSA Central Statistical Authority

EABC Ethiopian Agricultural Businesses Corporation

ETB Ethiopian Birr

FAO Food Aid Organization

GDP Growth Domestic Product

IRR Internal Rate of Return

MOFED Ministry of Finance and Economic Development

NPV Net Present Value

SWOT Strength, Weakness Opportunity and Threat

USD United State Dollar

2.1. Background of the study

As a company, the mission of Ethiopian Agricultural Business Corporation (EABC) is to provide

2.3.2. Project outcomes

 Strengthening the financial capability of EABC

2.3.3. Project outputs

 Supplying of 50 fattened cattle per production cycle.

 Supplying of 1000 liters of milk product per head per day

 Supplying of 1000 fattened Goats per production cycle

 Generating an initial income of ETB 113,550,000.00 and at a profit of ETB

 Conduct project feasibility study

 Conduct business plan of the project

 Prepare implementation plan

 Prepare annual work plan and budget

 Recruit and train enforcement staff

 Conduct baseline survey for feedlots and other buildings

 Land clearing and preparation

 Complete engineering specifications for buildings

 Prepare tender documents, select contractors and make an agreement

 Constructing animal shades and buildings

 Procurement of fattened cattle, dairy heifers and Goats

 Carrying out livestock production and marketing

 Conduct project monitoring and evaluation

 Produce periodic performance report as per schedule.

3.1. Project Identification and Selection

Criteria for project selection

1.1. Cattle fattening

1.3. Goat fattening

1) Shallo cattle fattening and dairy farm feedlots

2) Gibe farm Goat fattening feedlots

3) Gondie Iteya dairy farm feedlot

4) Ardayita dairy farm feedlot

5) Head office dairy farm feedlot

adverse environmental impacts.

Picture 1: Boran Bull

Picture 2: Borana type Male Goat Type

3.2.3. Dairy Farm Feedlot

Picture 3: Holstein Frisian

3.2.4. Project Area Suitability

Location Feedlot type Initial startup capacity

Impact/Goal: Contribute 1% of the total It is expected that the Government may

Outcome:  Quantity of fattened cattle and  Availability of effective national

Outputs:  Availability of livestock breeds

Activities: Implementation/work Periodic reports  Availability of resources (

 Give enough shade space for the animal to hide

 Make sure there is always fresh water available, unlimited!