JIMMA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

POSTGRADUATE MPMA PROGRAM

COURSE TITLE: PROJECT APPRAISAL AND ANALYSIS

SUBMITTED BY:-
1) JEMAL HUSSEN
2) TEKA WOLDE
3) SULTAN KEDIR
4) ZAHRA TEMAM
SUBMITTED: TO INSTRUCTOR AREGA SEYOUM (PHD)
JULY, 2018

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Table of Contents

1. Executive Summary......................................................................................................................5
2. Project Background and Basic Ideas...........................................................................................6
3. Market and Demand Analysis.....................................................................................................7
3.1 Demand and Supply Trends in milk Market..........................................................................7
3.1.1 Marketing segmentation ....................................................................................................7
3.1.2 Demand analysis ............................................................................................................................7
3.1.2.1 Determinants of demand for dairy production ...........................................................................8
3.1.2.2 Estimation of demand for processed dairy product ..................................................................13
3.2 Supply projection ............................................................................................................................13
3.2.1 Production of processed production product ..............................................................................14
3.2.2 Demand and supply gap ..............................................................................................................14
3.2.2.1 Raw milk ...................................................................................................................................14
3.2.3 price estimation ...........................................................................................................................15
3.3 marketing and distribution .............................................................................................................17
4. Raw Materials and Supplies Study............................................................................................18
4.1 Equipment............................................................................................................................18
4.2 Stock selection.....................................................................................................................19
5. Location, Site and Environmental Impact Assessment.............................................................20
5.1 Demographics......................................................................................................................20
5.2 Location Analysis................................................................................................................20
5.3 Environmental Impact Assessment......................................................................................21
5.4 Socio-economic Policies......................................................................................................21
5.5 Infrastructural conditions.....................................................................................................21
5.6 Site selection........................................................................................................................22
5.7 Cost of Land Acquisition and Preparation...........................................................................22
6.technological selection ...............................................................................................................23
6.1 project enginering ...............................................................................................................23
6.1.1 Building and civil work .................................................................................................................23
6.1.2 Machineries and equipment ........................................................................................................23
6.1.3 Utilities .........................................................................................................................................23

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 6.1.4 Material for use ...........................................................................................................................24
7. Organization and Human Resource...........................................................................................25
7.1 job description of different section .....................................................................................................27
8. revenue estimation and operating cost ......................................................................................30
8.1 Revenue estimation .............................................................................................................31
8..1.1 operating cost ..................................................................................................................31
8.2 projected financial statement .........................................................................................................31
8.2.1 Profit or loss forecast ...................................................................................................................31
8.2.2 Cash flow forecast ........................................................................................................................31
9. Conclusion..................................................................................................................................32
10. References................................................................................................................................33

List of Tables
Table 3.1 recommended dairy amount of milk ...............................................................................9
Table 3.2 Cforcasted demand for raw milk ..................................................................................10
Table 3.3 whole cow milk supply projection ................................................................................14
Table 3.4 supply and Demand gap raw milk ................................................................................15
Table 3.5 milk price trend for the past 7 years .............................................................................16
Table 3.6 adjusted project milk price using qualitative data........................................................16
Table 3.7 sales forcat ....................................................................................................................17
Table 3.8 marketing expence ........................................................................................................17
Table 4.1 Office Equipment and Furniture....................................................................................18
Table 4.2 financial plan for JIREN dairy .....................................................................................19
Table 5.1 Proposed Land Lease Agreement and Payments.........................................................13
Table 7.1 organizational structure...............................................................................................................25
Table 7.2 Human Resource Requirement of the project................................................................26

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Acknowledgement

We are truly grateful to Investment officers of Jimma district who provided us a substantial

documents and data in order to go through this proposal pertaining poultry development and

processing project. Their gracious support and assistance brought us to accomplish the project

proposal to have its current form and Dr.Arega Siyoum who has deeply instructed us the UNIDO

project proposal form is appreciated above all. The last but not the least the group members is

appreciated for their unreserved efforts.

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1. Executive Summary

This is a new project was prepared for production of dairy milk at jimma town at large scale with
total estimation cost of 17,462,448.07. The exact location of the project will be at jimma zone kersa
woreda, Ankessso qebele with informally known palce kebterbata area.

The owner of the project is the students of jimma university school of accounting masters program
and they are four in number to finance with loan and some from share contribution. And named as
JIREN dairy farm manufacturing. They initiated with continues increase of milk price and demand
for the milk around the city due to most of the farm are small scale and they did not cover the
growing need of milk product by their production . jimma zone is highly favorable weather for
dairy production and yield attractive production. So that as a result in our study shows there is a
large amount of supply and demand gap that should cover with satisfactory revenue.

The total investment cost of the project is estimated to be birr 17,462,448.07 and expected to
generate 5,637,354.00 in the first year of operation and annual revenue of birr 13,000,711.00 at the
end of the project year from sale of production .

Operating cost basically includes costs of salary, wage, seeds, fertilizers, pesticides, fuel, lubricant,
maintenance, land lease, insurance, utilities and travel and per diem.

The farm initially start its production by producing 20 litter milk per day from one holestinfresian
cow and 100 will yield 2000 and yearly production will be 720,000 litter. According to the sales
forecast data collected from city the price of litter milk was estimated and the total birr production
seen in the sales forecast part of the project.

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 2. Project Background and basic ides
We the students of jimma university Business and economics faculty, project management and
finance 2018 GC batch (jemal, sultan, teka nd zahra) selected to prepare feasibility study in diary
firms. T the time of study we saw paradox and try to contribute some ides and want to work hardly
made sound proposal and implement to work.

The Ethiopian dairy system can be paraphrased by the statement that “though there is huge
Livestock population with high potential for milk and dairy production and ever more people tend
to drink milk and consume more dairy products, yet milk production is still too low in the country
to satisfy the needs, which is hampered by bucketful of paradoxes, hopes and heartbreaks”.

The Ethiopian dairy systems can be categorized under five systems of operation; pastoral
(traditional pastoral livestock farming), Agro-pastoral (Traditional lowland mixed livestock
farming), mixed crop livestock system (traditional highland mixed farming), Urban and Peri-urban
(the emerging smallholder dairy farming) and Commercial (specialized commercial intensive dairy
farming). In the Ethiopian context the type of milk and dairy products that needs to be considered
are whole milk (liquid milk, Ititu, Ergo, buttermilk etc) and other dairy products from fermented
processing (butter, ghee, Ayib, Metata Ayib etc.),

From the overall Ethiopian milk production, the rural dairy system, which includes Pastoral, Agro-
pastoral and Mixed crop livestock system, contributes 98%, while the peri-urban and urban
including the commercial dairy farms produce only 2% of the total milk production of the country.
Indigenous stock produce 97% of the milk produced from cattle and the remaining 3% from
improved exotic crosses and pure grade cattle. Most of the milk produced in the rural dairy system
is retained for home consumption and it is non-market oriented. Although the total amount of milk
produced has increased with increases in human population, the per capita milk production has
declined for some years. Based on the 2008/09 survey of CSA, milk per capita, increased to 37.62
liter. Based on other estimates however, the per capita milk is much lower than this.

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3. Market and Demand Analysis

3.1 Demand and Supply Trends in milk Market

Presenting the market for the dairy products is the theme of this part of the study. Presenting the
prospect of dairy product in the world level is the theme of the first part of the study. In this part of
the major producer, consumer and traders of the product will be presented. The second part dwells
on the demand and supply situation of the product in domestic and forecasting of the same will be
made.

The data for the world part is majorly collected from one of the United Nations affiliate organ, food
and agricultural organization (FAO). FAO has been compiling data on the production of the
products since the year 1962. For the domestic part, beyond FAO data from Central Statistics
Authority and Ethiopian meat and Dairy technology Institution have been used.














3.1.2 D






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






























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
































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

































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  
 
  
  






























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




















a. 











b. 

12
























c. 









13












d. 





















14



e. 





























15

















 
 
 
 
 
 
 








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
































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






 
 
 
 
 
 
 


















18

































   

19
  
   
  
   
  
   
  
   
  
   
  
   
  












As we could hardly find well organized data concerning the demand and supply of milk was
increasing continuously the price also increasing due to unmeet of supply and demand also
continuous growth of resources increase for production of milk. To estimate the price using trend
analysis and project for future sales forecast. The project will start to supply 144,000 litter milk per
years and want to increase these by 10% yearly production.

20
Table 3.5 milk price trend for the past 7 years
S.No Year Average Annual price per % Annual Price Change Remark
litter
0 2004 18 0
1 2005 19 5%
2 2006 20 5%
3 2007 21 5%
4 2008 24 14%
5 2009 26.5 10.4%
6 2010 29 9.5%

When we thoroughly looked at this price climbing up, it is right to take it as an indication of rising
demand while the speed of increase in producing and productivity of backyard poultry production is
far lagging behind the demand. To say another way, there is enough demand in the market. The
trend in price increase could also continue. By using the above data the trend line could be obtained
as:

The price trend line was y=1.86 X +16.92. The estimated price was determined using this trend line
and used in sales projections.

However the forecasted price should be adjusted to average based on judgments and qualitative data
from the market as in the schedule below:

Table 3.6 Adjusted Projected, milk price using Qualitative data

Year (E.C) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Annual Market Price 29 29 30 30 31 31 32 32 33 33
based on Judgments
Annual Market Price 35.3 35.3 37.08 37.08 38.88 38.88 40.68 40.68 42.5 42.5

Adjusted price 32.15 32.15 33.54 33.54 34.94 34.94 36.34 36.34 37.75 37.75

y=1.86 X +16.92

21
Table 3.7 Sales Forecast
Year (E.C) Adjusted price Number of milk to Sales in Birr Remark
be sold in year
2011 32.15 720,000.00 23,148,000.00
2012 33.54 792,000.00 26,563,680.00
2013 33.54 871,200.00 29,220,048.00
2014 34.94 958,320.00 33,483,700.00
2015 34.94 1,054,152.00 36,832,070.00
2016 36.34 1,159,567.2 42,138,672.00
2017 36.34 1,275,523.9 46,352,538.00
2018 37.75 1,403,076.2 52,966,126.00
2019 37.75 1,543,383.8 58,262,738.00

3.3. Marketing and Distribution

Consequently, there is no market problem for the project and planned capacity is production and
demand for because of shortage of milk production all over the countries town. Since the market is
untapped, it can attract many new entrants in the future. So JIREN has to take advantage of the
early beginner and take the price set by the market and create its position in the market via
advertisement as the first renowned diary farm around Jimma using FANA Jimma FM Radio,
distributing print leaflets to major prospective customers were used. At most construct four
distribution shope in the different place to close to customer and was also rented to make accessible
the product to all customers.

Table 3.8 Marketing Expenses

S. No Description Quantity Monthly Rate Annual Cost Remark

1 Distribution Shop 1 12000 144,000.00
2 Transportation Fee Monthly 10,000 120,000.00
3 FM Radio Advertisements Quarterly 8000 32,000.00
4 Leaflet Printing 1 in A 4000 16,000.00
year
5 Miscellaneous 10% of the costs - 31200
Total 343,200.00

22
4. Raw Materials and Supplies Study

Dairy equipment can be made available from locally available materials as they can also be
automated and machine controlled. In this project cost effective production method was decided. In
the premise of the project strategy all cost reducing techniques were exhaustively looked for at each
step of decision to accumulate capital for future expansion and development back and forward as
needed depending on the market attractiveness.

4.1 Equipment

To efficiently use floor space of the cows to be established and labor, for the project and used it as
its production facility.

Table 4.1 Office Equipment and Furniture

S. Equipment Name Unit Unit Price Amount Total Cost Remark

No Needed
1 Tables No 4200 5
21,000.00
2 Chairs No 1200 10
12000.00
3 Shelves No 3500 3
10500.00
4 Computers No 8000 2
16000.00
5 Printers NO 4500 2
9,000.00
6 Fixed line Apparatus NO 1450 1 1450.
00
Total 69950.00
Contingency10% 6995.00
Total 76946.00

23
 Table 4.2 Financial plan for JIREN dairy farm

Description Local Cost Foreign Financial plan

(Birr) Costs
(Dolar) Loan Planned equity
Land, Building & Site Development 6,224,390.92 223,898.95 4,874,451.15 1,349,939.77
Equipment & Machinery 3,430,879.00 123,858.5 3,430,879.00
Indigenous
Imported
Know-how
Training
Miscellaneous Fixed Assets 3,716,000.00 133,699 3,716,000.00
Preliminary & Pre-operating 584,165.00 21,013.2 584,165.00
Office furniture 76,946.02 2,767.80 76,946.02
Provision for Contingency (10%) 1,403,238 50476.2 1,403,238.00
Working Capital 1,314,066.61 47,268.6 1,314,066.61
Total Investment Costs 18,865,686.2 678,621.8 16,854,635.41 2,011,050.79

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4.2 Stock selection

Commercially the cow holestinefresan which leads more than 20 litters per day will be purchased
from bishoftu area because the land weather is somehow compatible with the project area and
without any problem and risk the cattle familiarize the weather and yield the expected milk
production

5. Location, Site and Environmental Impact Assessment

The project farm is located in oromia regional state, Jimma zone, kersa woreda , ankesso peasant
association. The project is located at about 07 km from jimma town which is one of the major and
largest cities in south-western Ethiopia. It has a latitude and longitude of 7°40′N 36°50′E
respectively. It is far 335 km southwest of Addis Ababa.

The town has an average altitude of 1760 meters above sea level with a mean minimum and
maximum temperatures of 11 and 27 degree Centigrade, respectively. Jimma has an average annual
rainfall of 1489 mms. Maximum precipitation occurs during the three months period, June to
August, with minimum rainfall in December and January. From a climatic point of view, abundant
rainfall makes this region one of the best watered of Ethiopian highland areas, conducive for
agricultural related production.

5.1 Demographics

Based on the 2007G.C Census conducted by the Central Statistical Agency of Ethiopia (CSA), the
town has a total population of 120,960, of whom 60,824 are men and 60,136 women. With an area

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of 50.52 square kilometers, Jimma has a population density of 2,394.30 all are urban inhabitants. A
total of 32,191 households were counted in this Zone, which results in an average of 3.76 persons to
a household, and 30,016 housing units based on which we extrapolated our demand forecast.

5.2 Location Analysis

Jimma town lies in the climatic zone locally known as WeynaDega which is considered ideal for
agriculture as well as human settlement. The town is generally characterized by warm climate with
a mean annual maximum temperature of 30°C and a mean annual minimum temperature of 14°C.
The annual rainfall ranges from 1138 mm to 1690 mm. The climatic condition of the town as well
as its surroundings was conducive for farming and rearing agricultural activities. The weather was
suitable for Dairy production and the grass and main foods buys from local market around adiss
abeba quality dairy farm food processing company.

5.3 Environmental Impact Assessment

Dairy is among environmentally sound agricultural product. But to a lesser amount it should be far
from residential areas to serve both the farm and the surrounding community effectively. The
contagious bacterial diseases my come into the farm and the project deemed to mitigate the bad
odor problem and related issues by properly locating the farm in the distance that optimizes the
wellbeing of the society. The other problem that needs due consideration is the disposal of waste
and its management. To this end the project handles the waste tactfully and devised a mechanism
that benefits urban agricultural firms by providing organic fertilizer from the dried manure of the
birds. Generally as a policy every project activities were all in all undertook environmentally
friendly manner as a business firm and the project was obeyed by the Ethiopian Environmental
Impact Assessment /EEIA/ Proclamation (Proc. no. 299/2002).

5.4 Socio-economic Policies

Considering the socio economic policies and public polices and government regulations, value
creation and new venture development was appreciated and multiple supports were given to
entrepreneurs. There is no legal restriction which impedes the project. This project presumed
several assistances that could be offered from technical and managerial (business related) services

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from the town administration. Hence, it is highly supported by government policies and the
regional investment office so as the project benefits the community as intended.

5.5 Infrastructural conditions

The availability of a developed and diversified economic and social infrastructure is often of key
importance for a project. In light of this the project area has well established economic infra
structures like transport; telecommunication and water etc. Permanent water source and electricity
are critical factors of consideration because the machinery plan to purchase will operate by the
electric and water. Besides the good rainfall that the project area enjoys the project area is well
supplied with clean water permanent hydro power electricity and secured for investment.

5.6 project engineering

The building and construction ensure that the smooth operation of the project planned. This
includes milk cow shed, milk processing room, office, feed store, straw store, calf shed sptic tank,
boiler house, managers residence and staff residence which have a cost of birr 6,224,390.92 .

Table 5.1 land and preparation cost

Unit Price Qty
No Cost Item Unit Unit cost Total
Birr 10,000
2.11/Year
Land Lease Value
for 35
1 m2 years 236,320.00
Site Clearance -
2 m2 50,000.00
Fencing -
3 M2 170,000.00
Access Road -
4 Construction M2 45,000.00
Other costs
associated with land
preparation and
acquisition 82,845.00
Total Land Acquisition & -
Preparation cost 584,165.00

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6 Technology Selections
6.1 Project Engineering

6.1.1Building and Civil works

Constructions that ensure smooth operation of the project are planned. These include milk cow
shed, milk processing factory, office; feed store, straw store, calf shed, septic tank, boiler house,
manager residence and staff residence which have a cost of birr 6,224,390.92 as per the cost
revision estimate made by the region’s appraisal team civil engineer.

6.1.2 Machinery and equipment

The planned machinery required for the project are milk cooling tank, continuous filtering,
continuous type pasteurization and the likes which worth Birr 3,430,879.00

3.1.3 Utilities

The project area has sufficient water supply but has no electric power supply, but has planned to
buy generator for supply of electric power for the sit. As per the pro forma invoice submitted by the
promoter, the generator that will be purchased has a value of Birr 411,270.00

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 3.1.4 Materials for Use (inputs)

In general the main raw materials for dairy farming and processing are dairy cows, feed (Dry &
Green roughage), water, medicine and packing materials. From the listed raw materials above the
major head ache of the sector is shortage of heifer and feed since the local market is not satisfied by
the current supply. But the heifer can import from Holland and Israel even though it has high risk to
adapt Ethiopian temperature and can’t have the funds for purchasing since they are very expensive.
The animal feed is another head ache for those dairy processing firms around the town since lack of
land availability. The feed is generally shortage and can’t solve its problem to get high production
and the agro-industrial products are increasing in their cost through time and the supply decreasing
in direct relationship.

Most of feed resource producer factories are found in and around Addis Ababa and on the
Deberazaitet- modjo road. Regarding to the market arrangement, customers (dairy farmer) are buy
the feed at the gate of the factories and they cover their transportation cost by themselves.

In Ethiopia industrially processed compound animal feed is mainly produced in Addis Ababa
and around Addis Ababa cities like Debrezeit, Mojo and Adama. Products are distributed to
customers one or in other way either by order to purchase in bulk or suddenly going at
factory gate with own transport. If the customer has long relation with the producer there is
an option that the producer gives a service in transporting from factory gate to dairy farm
location either by cash or by credit.

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7. Organization and Human Resource

There is no as such sophistication in management for dairy farming, processing and marketing.
From the visited farms, it has been found that most of the employees are professionals and semi-
professionals in management, administrative, finance and from some technical areas. Employees
from high school level and below are engaged in production areas. Employees from high school
level and below are engaged in production areas. In addition the production workers in dairy
farming and processing plants particularly perform tasks like process feed, supply feed, collect milk
and participating in making pasteurized milk, yogurt, cheese, butter etc…

Types and numbers of professionals required in running a dairy farming and processing industry
along with the minimum qualification & experience and salary is presented as follows.

The overall objective of the project is to supply table for Jimma Town while generating adequate
return for the operators and it has strong vision to be one of the largest sources of dairy products
serving the entire country market. To meet this objective the owners of the project will be
permanently deployed on the site accordingly to the expertise they have. The member who
possesses experience in finance and accounting took leading role in the overall activities of
managing the farm and its finance with his colleagues. The management expert will be responsible
for overall management of the market, recruit distribution channels and manage the customer
relationship with key customers who could buy in bulk like university, hotels, restaurants etc. The
one who has experience/trained on animal husbandry and production supervises take the routine
day-to-day operation of the farm and coordinate resources necessary for the farm. In other words
the enterprise work was categorized into three sub sections as farm activities, marketing, and
finance and overall management. Each department has its own personnel which is very critical for
the work. The organizational structure of the enterprise is depicted in the following diagram.

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 Table 7.1 Organizational chart

General Manager

Marketing & sales Representative Production Manager Admin and finance head

Cashier and
Sales person Production Workers
accountant

Table 7.2 Human Resource Requirement of the project

S. no Position No of Salary in Ethiopian Birr Remark

personnel Monthly Annual
1 Manager 1 8000 96,000.00
2 Farm Supervisor 1 3800 45,600.00
3 Marketing & Sales 1 45,600.0
Representative 3800 0
Admin and finance head 1 45,600.0
3800 0
4 Farm Employees 16 153,600.0
800 0
5 Sales Person 1 2100 25200.00
6 Cashier and accountant 1 2100 25,200.00
7 Guard 2 600 14,400.00
Sub Total 21 - 451,200.00

Other Employee Benefits 5%of 22,560.00

Total Cost
TOTAL 473,760.00

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7.1 Job Description of Different sections

General Manger

General Manager is responsible for planning and directing the overall operations of the firm to
ensure and enhance performance, productivity and profitability. The General Manager requires a
working knowledge of business, management, finance, accounting, human resources, information
technology, production and project management to successfully perform the diverse tasks
associated with the firm.

Marketing & sales Representative/Manger

A sales manager is responsible for planning and executing sales activities of a firm in a market in
order to achieve firm’s sales and profit objectives. The ability to lead and motivate a sales team and
distribution channels is core to success in this job. Excellent strategic planning and implementation
are essential to achieving firm/project objectives

Main Job Tasks and Responsibilities

 Establishes and manages effective programs to compensate, coach, appraise and train sales
representatives.
 Collaborates with General manger in establishing and recommending the most realistic sales
goals for the company.
 prepare sales action plans and strategies
 schedule sales activity
 develop and maintain a customer database
 develop and maintain sales and promotional materials
 plan and conduct direct marketing activities
 Reviews progress of sales roles throughout the firm.
 Accurately forecasts annual, quarterly and monthly revenue streams.
 Assists sales personnel in establishing personal contact and rapport with top echelon decision-
makers.

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 Educates sales team by establishing programs/seminars in the areas of new account sales and
growth, sales of emerging products and multi-product sales, profitability, improved presentation
strategies, competitive strategies, proper use and level of sales support, management of
expenses and business/financial issues on contact.

Production Manager

Production managers are responsible for the technical management, supervision and control of
production processes. Tasked with ensuring the efficient production of goods and maximizing the
return on assets, the production manager is key in ensuring firm profitability.

Responsibilities of the job include:

 planning and organizing production schedules

 assessing project and resources requirements
 estimating, negotiating and agreeing budgets and timescales with clients and managers
 determining quality control standards
 overseeing production processes
 re-negotiating timescales or schedules as necessary
 Selecting, ordering and purchasing materials, feeds etc.
 organizing the repair and routine maintenance of production equipment
 liaison with buyers, marketing and sales staff
 Supervising the work of junior staff attendants

Administrative &Finance Head

Controlling and directing financial statements and the payroll preparation, processing and
distribution requires strong organizational and scheduling skills together with good problem-solving
ability.

Responsibilities of the job include:

 In charge of developing and implementing Firm’s accounting guidelines and procedures

 Identify and resolve accounting issues

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  Supervise controls for accounting procedures and systems
 Manage tax returns, financial statements and period closings
 Budget for and approve major expenses
 Act as an expert for general management
 Responsible for recruiting, training and team management for accounting staff together
with General Manger, Marketing & sales Representative and Production manager.

Sales Person

Main Job Tasks and Responsibilities

 make sales calls to new and existing clients

 maintain sales activity records and prepare sales reports
 respond to sales inquiries and concerns by phone, electronically or in person
 ensure customer service satisfaction and good client relationships
follow up on sales activity
 perform quality checks on product and service delivery
 monitor and report on sales activities and follow up for management

Education and Experience

 knowledge of principles and practices of sales

 knowledge of customer service principles
 knowledge of basic business principles
 experience in sales
 experience in making presentations
 proven ability to achieve sales targets

Cashier/Accounting Clerk

Main Job Tasks and Responsibilities

General accounts receivable functions

 Prepare and submit customer invoices

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  Code, post and receipt payments
 Prepare and coordinate deposit activities
 Perform all necessary account, bank and other reconciliations
 Monitor customer accounts for nonpayment and delayed payment

General accounts payable functions

 Check, verify and process invoices

 Prepare payments for signature
 Sort, code and enter accounts payable data
 Analyze discrepancies and unpaid invoices
 Maintain vendor files

General Payroll functions

 Collect, confirm and process timesheets and overtime

 Verify taxes and other deductions
 Prepare and distribute payroll checks
 Track employee vacation and sick Leave.

Job Description for Farm worker /dairy Attendant

 Cleans and fills feeders and water containers
 Keeping cow houses with disinfectants and vaccines
 Inspects poultry for diseases and removes weak, ill, and dead milk cow.
 Maintains feeding and breeding reports.
 Monitors feed, water, illumination, and ventilation systems; and cleans, adjusts, lubricates,
and replaces systems parts, using hand tools.
 Inspect and report if there is occurrence of disease.

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8. Revenue Estimates and operating cost

8.1 Revenue Estimate

The project expected to generate revenue amounting birr 5,637,354.00 in the year of
operation and annual revenue of 13,000,711.00 at the end of the project year from sale of the
production

8.1.1 Operating cost

This cost basically includes costs of salary ,wages ,seeds fritzes, pesticides, packing materials,
machineries rent, fuel and lubricant ,maintenance ,land lease ,insurance utilities and travel
and per diem are operating expense these costs account a total of birr 2,450,841.61 in the
first year and birr 6,043,726.82 at the end of the project year.

8.2 Projected financial statements

There are three financial statements which indicate the profitability, liquidity and net worth
of a give project. These are the income statement, the cash flow projection, and the balance
sheet.

8.2.1 Profit and/ or loss forecast

The project profit and/or loss statement indicates that the project is going to be a profitable
venture through its life. The projects net profit at first year and at the end of the project year
is birr 493,677.00 and birr 3,630,341.00 respectively. This shows that the business is highly
income generating and profitable venture.

8.2.2 Cash flow forecast

The projected cash flow indicates the liquidity position of the project over its estimated life
span. Hence the project under caption excepted to generate net cash flow and cumulative cash
flow amounting birr 1,468,305 and birr 1,468,305 respectively in the first year and end of the
year the project excepted to generate birr 2,963,727 and birr 5,142,371 net and cumulative

36
cash flows respectively. This can be an evidence for the project to meet its obligations since. It
has positive liquidity position through the projected year

9 Conclusions

From the project proposal in general it is evident that daiy development and processing project is
lucrative business ventures that could have promising potential of earning high return for investors
willing to participate in the venture. The project is so feasible that the demands for milk products
is so huge and remain untapped. On the other hand the existing petty traders and suppliers are
nowhere near to meet the demand. Therefore, JIREN is aimed to tap the opportunity by providing
excellent quality dairy products to satisfy its future customers. The return on the investment is so
great and less sensitive to even price fluctuation. Therefore anyone who has a capacity and
willingness to invest in the venture is welcome and has to prepare to harvest cash cow.

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10. References

 Behrens, W. &Hawranek, P.M (1991) Manual for the Preparation of Industrial

Feasibility Studies. Newly Revised and Expanded Edition. UNIDO; Vienna.
 Callahan, K.R., Stetz, G.S. & Brooks, L.M. (2007) Project Management Accounting:
Budgeting, Tracking, and Reporting Costs and Profitability. John Wiely& Sons., Inc.,
New Jersy.
 Kerzner, H. (2009) Project Management: A Systems Approach to Planning, Scheduling,
and Control. (10thed.) John Wiely& Sons., Inc., New Jersy.
 Nicholas, J.M. &Steyn, H. (2012) Project Management for Engineering, Business and
Technology. (4thed). Routledge; London.
 Project Management Institute (2008) A Guide to The project Management Body of
Knowledge. (PMBOK Guide 4thed.) Project Management Institute, Inc., USA.

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