MALL PROJECT PROPOSAL

OF INVESTMENT

By,-HAJI ABDULLAH
OROMIYA, EAST HARARGE ,HARAMAYA WOREDA

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Contents
I. Executive Summary.............................................................................................................2
COST OF THE PROJECT................................................................................................................3
Employment Opportunity...........................................................................................................3
The total work force requirement of the project will be estimated at about 190 employees.
From total workersPermanent workers are 100 (Skilled 70, & Unskilled 30).Casual workers 90
(skilled 20 and unskilled 70)........................................................................................................3
Employment Opportunity.....................................................................................................3
1. Introduction.......................................................................................................................4
Ethiopian infrastructure construction remains robust................................................................5
Specific objective........................................................................................................................6
2.6 Project Rationale...................................................................................................................8
3. The market Study....................................................................................................................9
3.1 Market..................................................................................................................................9
Supply of Premises....................................................................................................................11
3.3 Current supply of mixed use and residential apartment building.......................................11
4.1 Description of the project Service the................................................................................14
Income.....................................................................................................................................30

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 I. Executive Summary

KEY INFORMATION HIGHLIGHTS

PROJECT TITLE MAGARTU ABRAHIMMixed Use Building

PROJECT OWNER MAGARTU ABRAHIM

LAND REQUIREMENT0.5 Hectares (5,000 M2)

PROJECT AREA MAYA CITY, AWADAY sub-city

PRODUCTION CAPACITY G+6 Building and 2 blocks of G+3 Malls services TO BE rendered Rental, Hospital
(higher Clinics) with standardized Pharmacy Public Library with average size Youth recreational
sites;Various Prayer sites &6Project Composition The underground floor designed for Car Rakingservices and
Warehouses, Ground Floor up to 2th Floordesigned for different business centers like,
Cafeteria,Supermarkets, Pharmacies, Banking & Insurance and otherbusiness activities,governmental,
private, NGO & otherofices services etc Related Facilities.

Play grounds Supermarkets & other facilities that may berequired by the ‘would be residents ‘Apartment and
Wholesales Shopping Mall .

MARKET - For Domestic and International Trader/user

COST OF THE PROJECT

For implementing this project a total of Required 5000 M2Planned InitialIv statment Capital The total initial
investment cost for implementing this project is ETB. 100,000,000 Out of the total budget of the project 50%
or ETB, 50,000,000 will be covered by the ownerequity; and Financial institutions will cover the rest 50%
orETB.50,000,000.00

Employment Opportunity
The total work force requirement of the project will be estimated at about 190 employees. From total
workersPermanent workers are 100 (Skilled 70, & Unskilled 30).Casual workers 90 (skilled 20 and
unskilled 70)
PROJECT LIFE 5 YEARS

NUMBER OF WORKINGDAYS 365 DAYS

Employment Opportunity The total work force requirement of the project will be estimated at about 190
employees. From total workersPermanent workers are 100 (Skilled 70, & Unskilled 30).Casual workers
90 (skilled 20 and unskilled 70)

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 FINANCIAL VIABILITY
the Project Is Technically Feasible, Financially And Commercially Viable As Well As Socially And
EconomicallyAcceptable. Hence, The Project Is Worth Implementing of hotel investment

1. Introduction
With a per capita income of about 280 US Dollar, Ethiopia is one of the poorestcountries
in theworld. The agriculture sector which accounts for the average 45%ofGDP, is a
source of livelihood for about 80% of the country's manifested by persistently growing
unemployment; poor quality dwellings and homelessness; increasing number of slums
and squatter neighbors;congestion; lack of basic services and infrastructure. These
factors combine to produce the critical urban issue: the lack of affordable,healthy
commercial housing for all sectors of the urban population. Currently, in Maya, therein
strong commercial housing demand as a result of the mismatch between the expanding
urban population and limited commercial housing supply.In recognition of the
magnitude of the problem, the Ethiopian government has launched theIntegrated
Commercial Housing Development Program (IHDP) in 2004 which among other things,
aims to increase the commercial housing supply for the low tomiddle-incomegroups of
population (MoWUD, 2004). Up on launching the program, thegovernmentwas
confronted whichextremely high demand, and to date the program only managed to
build about half of the demandedunits (UN-HABITAT,2010). As commercial housing
supply lags behind demand, and commercialhousing conditions continue toworsenin the
face of teeming urban population in the country, it becameincreasinglyimperative that a
new paradigm has to be adopted if the commercial housing challenge is to be met. It is
little surprise that faced with ever expanding cities, poor anddwindlingfinancial
resources and unimpressive performance of public provision, commercial housing
policyemphasis is shifting from state provision towards facilitation of privatesector
participation incommercial housing development.Enablement strategy to commercial
housing would prefer the government to assume the role of supporter in contrast to
provider in the commercial housing sector. Instead of embarking one of dwelling units,
the government is to concentrate on reforming and managing the legal,regulatory and
financial policy framework in such a way asto create an environment for the people and
the private sector to housing.The requirement for private sector developers to make
affordable commercial housing or atleastinclude a percentage element of affordable
commercial housing provision within all mixed use and residential apartment and
residential developments over a certain threshold number of units wasacontentious
issue but has been accepted in most areas and situations by the privatehouse
buildingindustry. However, private developers are motivated by profit andsowhat is the
rationale for them to provide what is essentially a welfareservice?The argument is that
there are good economic and business justifications forthe private sector to be involved
in the provision of affordablecommercialhousing.Private developers, however, have
failed to deliver affordable commercial housing units evenfor best paid professionals

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 such as Engineers and Doctors. So far, their main targethas been building high-value,
high-end homes for the few high income groups inandoutside thecountry.
2.1. General Background Ethiopia construction
industry updateThe current fast and dynamic economic growth of Ethiopia especially in
Mayatownnecessitates equivalent growth of building and construction sector. The
sector should expand rapidlyto support the overall economic development
sustainable.Ethiopia is undergoing a transformation. The East African state is prioritizing
a wealth of construction projects in order to stimulate its economy, reinvigorate its
infrastructure and supplyaffordable housing and power to its population of close to 110
million. Construction is a huge part of Ethiopia’s economic recovery. The building sector
has seen doubledigit growth, expanding by 37% annually, and is ushering in a new phase
of development for thecountry.So what is new in Ethiopia’s construction industry?
Major activity is ongoing throughout the nation,in both residential and infrastructure
sectors, as well commercial areas.7 Affordable housing construction keeps pace with
Ethiopian demandMaya, Ethiopia’s capital city is expanding at a rate of 3.3% each year,
creating a housingvoid that needs to be filled. In fact, affordable housing is something of
a nationwide priority for theEthiopian government, although at present much of the
house building activity is centered on thecapital. is the main focus and a collection of
ongoing developments arescattered across the capital – all with different price points
but each with affordability in mind. The 4 program, where tenants pay for 4% of an
apartment’s cost and the government contributing the remaining 60% is making solid
progress. Maya. 3 total condominium units are being built in in the city. further
apartment blocksare planned under the 4 scheme over the next five years.Outside the
affordable housing sector, more high-end developments are planned. China’s Sin mark
Real Estate is developing a -tower residential complex in Maya. The Chinese
developershave stated this will be “the biggest mixed use mall project in Ethiopia”, and
will feature swimming pools, a commercial zone and sports centers. Costs are expected
to reach over $94 million.

Ethiopian infrastructure construction remains robust

Huge sums are being invested in infrastructure. Take the Grand Renaissance Dam (GERD) for
example. Ethiopia’s flagship infrastructure project, the $4.8 billion dam is one of the nation’s
mostexpensive developments.Despite delays, thanks to political wrangling due to the GERD’s
location spanning the Blue Nilewhich flows into Egypt and Sudan, construction is well underway.
Overseen by Italian firm SaliniImperil, building work on the dam is expected to finish in 2017,
although the dam itself was stated to be 70% complete in May 2016. It is estimated that the
GERD will generate 6,000 megawatts of electricity.Garamulata new road-and other related
projects kicked off in June 2016, three focused on building new links while the remaining two
are centered around repair and maintenance. A total of 147 kilometers of newhighway will be
put into action after this project is finished at a cost of some 245 million state-owned
construction companies will be handling the building work. The longest individual stretch of

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 road, Route Number One, measures 30 kilometers, connecting Diredawa and Harar
ineastern.Ethiopia’s building projects keep on rollingThis is just a snapshot of the construction
activity underway across Ethiopia. For a more in depthlook at the nation’s building sector, why
not download ITE Build & Interiors’ free guide today? Thereport goes in detail about Ethiopia’s
construction sector, the scale of imports of key building materials and the opportunities for
foreign companies East Africa’s fastest growing economy holds.In the building sector of the
economy, the multi- purpose in the one becoming rapidly expanding in Maya City since dynamic
economic development of urban economy requires the construction of these buildings in the
city to support the growing of business service sectors like supermarkets,Beauty salon, shops,
offices cinemas, Computer Center, Cafeterias

2. The Organization Objective

2.1 General Objective All business organizations are established with objectives of ensuring their
indefinite existence bychoosing promising businesses, operating profitably, owning assets and
securing capable humanresources while simultaneously discharging their social responsibilities.
Selecting a business sector that provides shelter for human kind, on the other hand, is response to
the moral, religious and business calls because of the drastic population increase in the world in
which Ethiopia is the one.In addition to meeting the above mentioned justifications, now a days,
suchMixed Use Buildingdevelopment project is one of the few business ventures that is believed to
have significanteconomic, social & demographic spill-over effects to the society.. ‘Its specific
objectives include the following.

Specific objective
Commercial Mixed Use Building

To construct and developG+G5 Modern Mixed use on 4,000 square feet for facilities of rental
residential rooms, shops, offices, and restaurant & cafeteria, bed rooms, conferences hallfacilities that
enable to provide standard services to customers

.To undertake trading and other refuted business activities that enable to generate a reasonable
tothe invested capital.

To develop modern business center that would provide full services on city standard.To create
employment opportunities.Contribute towards the beautification of the city through the
construction of modern buildinginfrastructure and facilities

. Specific objective of Commercial Shopping Mall

A typical mall has four anchor stores, each with three floors, and on 4,000 square feet. Naturally, mall
sizes and costs vary greatly according to size, site conditions, construction Technique

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 Te emphasize on energy saving and environment protection. So we
will try to use solar energy as much as possible.The sewage water
will be recycled and used for gardening and similar
purposes.Corporate social responsibilities Besides, the envisaged
investment project has been designed in very attractive & modern
style to addecstatic value to the Maya City Administration.

The Project owners are promised to contributea major share fund

raising during construction of various social services providing
centers that arebelieved to ease life of local residents. Those important
service providing centers are:Primary & secondary level schools, Bank
servicesHospital (higher Clinics) with standardized PharmacyPublic
Library with average size Youth recreational sites;Various Prayer
sites & Play groundsSupermarkets & other facilities that may be
required by the ‘would be residents’ To establish economically viable,
socially acceptable and environmentally friendly mixed use
andresidential apartment.

2.3 Project description The long-term goal of the project is become

the best choice trade center in the city. The proposed project will have
a total area of 5,000m2, designed to reader a multipurpose giving
business, whichwill in turn plays significant role towards solving
shortage of business center in Maya city, Awaday sub city.The
historical nature of the city as business unique location in one of the
most attractive centeringEthiopian (100% urban center). The owners
plan the project to render banking and insurance,shopping facility,
offices and cafeteria services to create high quality class to satisfy the
interest of customers in the city. Based on environmental and other
considerations, the entrepreneur hasdetermined the type and size of
the building which is already determined by the site; conceptual
planning and preliminary analysis have been carried out by
analysts.In order to attract its clients to the service, the project will
develop high standard shop & bankingrooms and office of best

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 choices and will also save best quality apartments, restaurant and
café

2.6 Project RationaleThe existing promising investment

opportunities, the emands of service need along with relativelysound
investment support made by the government in such kinds of feasible
projects, compelled the project promoter to initiate the multipurpose
oriented business project to be established. Despite the promising
business opportunities of the city, the trend on such kinds of
investment found to notenough. The mismatch between the demand
for and supply of such kind of services in easilyobserved in the city.
Therefore, the existing shortage or absence in the supply of these
services,along with its commercial and administrative access, better
location and infrastructure access,escalating trend of urbanization
and business activities, thus it is with such reason that this project
isidentified and proposed and assumed to be more profitable.In
general, the country’s privatized and free market economy; good
governance creates a favorableenvironment for the development of
investment for private investors.

2.5 The significance of the projectThe envisaged project deemed to

add to the economic development of the city in general in specificwith
following ways:

A.Source of RevenueAs public policy of any nation, the government

collects different forms of taxes from different business organizations
and individuals. Among the different forms of taxes, business income
taxes, payroll income tax and VAT are collected from undertaking

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 business activities. Therefore, the building will serve as sources of
revenue for the city.

B.Employment opportunityOne of the problems that our country

faced is unemployment. Therefore, the current objective of
thegovernment is working on tackling the problem of unemployment
and fostering the development process either through creating self-
employment or employment in other organization. Hence, this project
will hire 243 individuals and more than
2.6 Project Location The envisaged projects is planned to be located
inMaya City, Awaday Sub city's 2021 population is now estimated at
692,000 .In 1950, the population of MAYA was 192,000. 4.42%
annual change.These population estimates and projections come from
the latest revision maya . These estimates represent the Urban
agglomeration of Maya, which typicallyincludes Maya's population in
addition to adjacent suburban areas.

3. The market Study

3.1 Market Analysis There are a number of factors which affects the
demand of standardized mixed use and residential apartment
building. Of these factors, the most important to have influence is
population growth andthe level of income. The currently expanding
service industry in MAYA CITY, and from every corner of the country
the city has been inviting skilled and unskilled labor forces to the
center; in addition,the number of both national and international
offices has been increasing. Above all the increase inthe number of
population increases for the provision of different services. Nowadays,

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 most of the private business organizations need their own small-
medium offices in order to give their servicesand provide their
products, and they prefer the place that found in the center or close
to the road. Asclearly indicated in the introductory part of this
proposal,MAYA CITY, is the dynamically growingurban center of
Ethiopia. Though the market demand gap for mixed use and
residential apartment building is not clearly understanding there is
wider gap for such demand as many merchants,organizations are
flouring to the city every day. From prior business experiences, the
demand of mixed use and residential apartment building is very high
and hence the demand and the supply gapis very wide. Rapid
urbanization, one of the greatest socio-economic changes during the
lastfivedecades or so, has caused the growth of squatter and informal
housing allaroundthe rapidlyexpanding cities of the developing world
(UN-Habitat,2010).Despite having one of the lowest proportions of
urban population in the world atonly16.7 percent, Ethiopia is rapidly
urbanizing at a high annual growth rate of 3.5 percent. Maya,the
capicity, dominates the urban hierarchy with a population of 689,000
holding 3 percent of the total urban population in the country(CSA,
2007). Maya is the capital cityof east Oromiya which occupies an area
of 32 squarekilometers has an estimated 3 million inhabitants. The
city is sub-divided into tensub-cities, each of which has an
averagepopulation of around 200,000people.The three largest sub-
cities by population are Awaday (with263,417inhabitants), Haramaya
(274,583) and Addele (141,743). In terms of landarea,thelargest sub-
cities Addele are like that. Population densities vary ouseholds in
thecity.Given this increase, the city's housing demand is increasing.
Accommodatingthisincreased demand will require additional housing
development and constructioninthe inhabitants.

3.2 The Demand-Supply Gap There has been a significant growth in

the number of local and international trades across the country. This
increase is mainly associated with the stimulation of economic activist
and partly due to an increase in the flow of international and local
traders in to the Maya City. Since MAYA City is an important
commercial center in addition there is a significant increase in
businessactivates and hence increasing the number of traders. Even
though there is a lack of quantitativeestimates that depict the actual
demand and also the annual growth rate commercial facilities
arescarce in the city. As a result, there is a large gap between the

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 developed and that of the supply for modern Bank and cafeteria
accommodation hence this project would not face any problem of
demand scarcity for it business center and it would provide good
service to customers.

Supply of Premises Through the creation of the cluster development

program, the government has begun to addressthe problem of the
shortage of space for business operations. With the launch of the
program, businesses have had the opportunity to acquire spacious
premises at affordable rents. The premiseshave typically been used for
production and operations activities.

3.3 Current supply of mixed use and residential apartment

building Commercial building/office sector has shown a dynamic change
in the past few years. The reason for this could be rapid economic
growth and a supporting public infrastructural development. Other
factors relevant in the specific case of commercial buildings are the
large increases in national andinternational businesses, particularly
firms in the services sector.The business of multipurpose buildings
inMAYA CITY, in booming highly due to the recent rapidgrowth
experienced in Ethiopia. As a result, a good number of local and
international organizationalare coming in place. Government offices
which used to operate in limited spaces all over the city arealso
concentrating on leasing new and modern buildings. Increasing
numbers of internationalorganization which in the past had typically
converted residences into office space are now movingtowards renting
whole floors or even multiple floors in modern city-center commercial
buildings.

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 3.4 Future market or Demand of Ccommercial Building The
demand for office space is a derived demand because firms rent space
as an input to the production of services or goods they provide to
businesses and households in the local or nationaleconomy. Following
our survey of office space users in several areas are mainly firms
providing banking, offices, cafeteria and restaurants, supermarkets,
computer center service. Future demand for office space is actually
driven from growth in number of offices in the city which in turn
isinfluenced by the macro-economic growth in the country. Assuming
that demand for office space isdirectly related to the growth in the
economy, the forecast for office space demand is

3.5 Target customers The target customers of this envisaged project

include: -1.Business Community 2.Business organization
3.The government bureau 4.Non-governmental organizations

3.6 Marketing promotion and strategy In order to penetrate and

gain considerable market share, one of the major marketing strategies
for the project is consistently rendering quality service to its tenants.
Due emphasis must be placed onimproving quality of service and
facilities.

3.6 Marketing promoyion and marketing strategies The major

marketing strategies to promote the projectand gain considerable
market share include:

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 Advertising through different means focusing on the existing service
and facilitiesPromote in association to the key location and nearby
businessWorking on sustained promotional work.Working on
public relations to reach and influence key personas and organization
with acapacity of making decision.Keeping the quality of its service/
facilities and consistently improving with changing
situations.Seasonal discount pricing different others customer
centric marketing strategies will be used bythe company.

3.7 CompetitionThere are different forms of competition that may

face the envisaged mixed use and residentialapartment building.
These are price and non-price based competition. Moreover, there are
differentcompetitors that will compete with the project either directly
or indirectly. But the mixed use andresidential apartment building
under discussion has diversified marketing strategies that could
enableit Cope up with the different competitors in the market.
Moreover, it will frequently conductcompetitors research which
focuses on, the strength and the weaknesses, the strategies, the
techniques they use in rendering the service, their customer handling
methods, andothers.Generally, the project has many other projects all
over Maya City villages which compete with it.

3.8 The project facilities and Services planIn order to provide mixed
use and residential apartment business center building services of a
highstandard, it has been planned to construct and develop the
infrastructure and facilities that wouldviable to meet the requirements
of an international standard business center. Accordingly, various
buildings and facilities will be constructed phase by phase starting
with the most needed ones thatare essential to commence the
operation of its business activities. With the completion of
construction, the building will provide a combined service such as
rental Bed rooms, shops, offices,restaurant and café service as well as
at modern business center that primarilyserve its guests and major
clients. Since the project will be engaged in mixed building the main

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 sources of its annual revenue would befrom the rental of building
spaces such as shops, offices, and banking, café and
restaurant,apartments and mall. Therefore, the sources of revenue
have been classified in to one category namely the rental of banking
and supermarket, offices, shops, bedrooms restaurant and café based
onthese classifications. Based on the market price of similar mixed
use and residential apartment building in the area, the envisioned
buildings set the following fair price (Before VAT) for itsservice, hence
when the building construction fully get operational it is assumed to
generate a yearlyincome of ETB 341,347,500.00.

4 Technical Studies

4.1 Description of the project Service the envisioned mixed

purpose building will provide different rental services to the
differentcustomer groups for different purpose. The building will have
basement, ground and twelve floors.The purpose of the building
explained as follows;

The ground floor to fourth floor designed for different commercial

business centers like banks,supermarket, beauty salon(man and
women), Computer center, pharmacy, internet café, boutiques,
different shops, bed rooms and other business activities,

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 4-5 floors designed for Offices.,

4.1.1 Land Use PlanThe total land required for the envisioned project
is estimated to be5,000m2.The total area for theconstruction of the
building will be 4,000 M2, as revealed below
Year Area 2

Grond 1,000

Flour 100 First floor

100m2

Blocks 1,2 blocks 3000m2

Parking up and down 1000m2

walking road greenery

Total area 5,000M Total area

24

4.2 Construction work and Technology

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 4.2.1 Construction schedule The construction project is proposed to
be started onJuly 2023 and is expected to be finished onFebruary
2025. As seen in the abbreviated construction schedule above, a
majority of the schedule’stime is made up of five major activities;
concrete, building Enclosure, masonry, mechanical andElectrical
install. Concrete activities include processes such as placing
foundations and slab on deck.The Building Enclosure Phase includes
erecting the scaffolding that will allow for exterior
sheathinginstallation and bricklaying. Mechanical and Electrical
install coincide with each other due to theneed for coordination
between the two divisions. There are several periods of construction
during theschedule in which there are multiple construction activities
occurring at the same time. Theconstruction site must be organized
accordingly as these processes take place. As with anyconstruction
project, the goal of the schedule will to complete all construction
activities before therequired Date of completion.This date of
completion is practical based on the time of year in which the building
will becompleted. The team allowed a two-week contingency for any
setbacks. Typically, winter construction tends to cause unforeseen
delays that negatively impact a construction project. Theseconditions
can and will almost undoubtedly impact the project schedule by
causing unforeseendelays and project inefficiency.

4.2.2 Architectural Design & Layout Although functional spaces for

the project were laid out in significant detail, the rest of the
buildinghad designated spaces but set layouts. It was at the
discretion of the project promoter to devisetypical layouts for the non-
detailed commercial and office spaces. To make sure that the
building’slayouts were practical, the project owner researched typical
architectural layouts for laboratory and executive office spaces. The
walls and partitions throughout the floor will congruent with
thestructural frame and column locations.

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 4.2.3 Structural design One of principle deliverables of the project is
the structural design of the building. The structural bays were
coordinated with the layout of the building adjustments will be made
to the bays if specific layouts are necessary. The frame will be made
up of a grid with repeating standard structural bays. Included in the
structural system are bay sizes, shape and size of structural
members, floor compositions and curtain walls. These elements were
established to resist gravity ad lateral loads asappropriate.The gravity
load design will have completed for two frames; one of structural steel
and one of reinforced concrete. The structural steel frame will choose
for further design based on cost per square foot, local availability of
material and constructability considerations, such as erection
andfabrication. The steel system will then have designed for lateral
loading with necessary adjustment being made to framing.

4.2.4 Reinforced concrete The project group prepared hand

structural design calculations for a typical bay of a reinforcedconcrete
frame. In all reinforced concrete bay designs, a superimposed dead
load of 8 pounds per square foot will be assumed for mechanical
equipment, floor coverings and ceilings.Similarly, the design of the
typical bay accounted for the use of different commercial space, in
whicha live load of 1000 pounds per square was assumed. Loads will
be calculated based on therequirements of the minimum Design loads
for Buildings and other Structures.

4.2.5 Foundation Design The design of a superstructure may be

accurate, have considered all possibilities and still fail because the
substructure is incapable of distributing the applied loads to the
supporting soil.Foundation design takes more into consideration than
merely the loading from the columns. Whilethe main part of the
project focused on the structural frame and its alternate designs, a
preliminary foundation plan was designed based upon maximum load
carried from the superstructure through thecolumns. The foundation
design conducted by the project team consisted of the selection of

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 foundation type, determination of the bearing capacity and the design
for typical interior and exterior spread footings.

4.2.6 Construction Plan and process The construction process for

this project is normally a disjointed three mages development by
whichthe conceptualized need of the promoter of this project is
translated into a functional facility that willmeet their needs in terms
of time, cost and quality. Based on a general program of the
projectowners the consultant who is going to be hired makes site
studies, develops structural designs, prepares drawings and
specifications, determines quantities involved and estimated the
resultantscosts. All these activities will be done in the first phase of
the project which is the design stage after the document are produced
by the designers have been received, and the works secured the
project issupposed to enter the tendering stage. At this stage
contractor study the project document analyzeand subsequently
determine the construction methods, built up their unit rates and
submit their bidsfor the works. The promoter of this project intends to
compare the bids and award the contract for the lowest responsible
bidder. This, is of course, presupposes that the favorable proposal
does notexceed the allocated budget After the award is made and the
contract signed between this projectowner and the contractor, the
project constructor is expected to prepare and submits a
detailedconstruction program which includes material schedule,
manpower requirement and cash flowforecast.

4.3 Utilities A number of utilities world be put in place in order to

ensure smooth functioning of the project.These utilities include:

Year 1 2

Grond 1,000

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 Utility Quantity Costs

Electicity 200000 500,000

Water supply 30,000 300,000

Telephone 10,000

Total 5,000M 810,000

24

5. Engineering and civil works

5.1 Land, Building and Civil WorksThe Mixed use and residential
apartment building has a total site area of 5,000 m2. The open
spacearea has covered 1,000 m2 and the remaining 4,000 m2 is left
for construction. The type of buildingsand its corresponding civil
construction cost is given on:
NO CONSN Costs

1excavation and 2,279,570.

earth works 672

concrete work 7,436,546.

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 34

Roofing 2,171,108.
004

Finishing 3,111,379.
447

Carpentry and 2,323,760.

joinery 005

Metal works 4,820,860.

006

Painting Workers 188,150

benefit

Block work 2,997,401.

403

Sanitary installation 8,151,022

and elecr

TOTAL 32,168,203
.6

VAT(15 4,825,230

%)

TOTAL 36,993,433

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 2.2 Labor AvailabilityWorkers for this type of plant are available
throughout the year. No foreseeable problems areexpected as most of
the work requires no previous skills.

5.3 Project implementationThe project’s implementation is

expected to take 24 months. The major activities include Bank loan
processing construction of the building, cleaning the area around the
building, Procurement of equipment and start rendering services. The
time schedule for major activities is presented below:

Table 7: project Implementation scheduleSN

NO Activity Date

Preparration 16/4/2023
proposal

Land acquisition 16/5/2023

Land approval 16/6/2023

Site development 16/7/2023

Building and 10/8/2023

construction work

Preparration service December

2024

Service execution February

2025

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 20222Land acquisition November 20223Land requisition/approvalNovember- December
20224Bank loan processing January – June 20235Site Development January 20236Building and
construction work February 2023 - November 20246Preparation for service December,
20246Service execution February, 20255.

4. Organizational Structure5.

4.1 Organization and management The organizational structure of

the project is designed by including all the necessary personnel under
the right division. At the top of the organizational structure, there will
be manager with the responsibility of supervising the overall activity
of the building. Depending up on the nature of the center and the
amount of work to be performs; there exist auxiliary units under the
general manager.Employees under each unit will be supervised by the
department head that is accountable for thegeneral manager. General
Manager is appointed by the owne organizational structure, the
center organization has one general manager and three main
sections.Under the general manager there are the, Marketing
Department, Maintenance and Building administration department.
Under building admin dept there exist two sections i.e., HRM &
financeand general service. Further sub sections are also organized
under technical and maintenancemanager. The following section deals
with the duties and responsibilities of each department.

A.The General Manager’s Duties and ResponsibilitiesHe/she

will plan, organize, direct and control the overall activities of the
building.He/she will devise policies and strategies that will enable
the center to be profitable.He/she will incorporate modern

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 technological innovation that will facilitate the service delivery of the
building to increase customer’s satisfaction.He/she will plan,
organize, direct and control the human and non-human resources of
the building so as toachieve the short and long run objectives of the
organization.

B. Building Administration Department The building

Administration Department of the multipurpose building has two
main sections (HRM andFinance and General Service section). It has
responsible for undertaking the following activities;Manage the
human resources and control employee’s activityWell non-human
resources of the project, which include; effective handling of the
different resourcesof the building, and devise strategies of controlling
against fraud and damage.Will provide the right material or
inventory to the center with right price at the right time.Will plan,
organize direct and control the financial transaction of the building by
using all thenecessary documents.Accountant and casher that will
collect money from the customers.Will develop sound financial
control system by developing modern financial control systems.Will
prepare the annual financial statements and prepare condensed
reports for both the GeneralManager and other concerned government
body.

C. marketing department Will handle the overall marketing

activities of the organization which include planning,
organizing,directing, and controlling.Will develop the marketing
strategies for future multipurpose building developmentWill develop
effective customer handling strategies.Execute the promotion
methods.

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 D.Technical and maintenance managerWill handle the overall
physical maintenance and related issuesWill make sure electricity
and back up is organized.Follow up security issues and educate
tenantsWorks in collaboration with general service to make sure
tenants are well served Figure 1.organizational structure

5.6 Financial Requirement and AnalysisThe financial resource is a

prime resource for undertaking any activities. Hence for
implementingthis mixed use and residential apartment building a
total of100,000,000.00 ETB is required. Fromthis 50%50,000,000.00
birr will be covered by the promoter of the project while the rest50 %
( 50,000,000.00) will be covered through loan from bank at the
prevailing interest rate. Therefore,the said amount of finance is
needed for undertaking the following.5.1fixed InvestmentA.Land,
Building & ConstructionS.NDescription of worksTotal Cost in
birr1Building materials and construction inputs50,052,758.4 2Site
Development10,050,000 3Design and supervision1,120,000.00 4
Vehicles 5,000,000.001st Year land lease2,000,640Total 59,645,398.4

Building Machineries and

EquipmentSNDescriptionMeasurementQtyUnit cost inBirrTotal cost
inBirr.

6 . Financial analysis The financial analysis of this mixed use and

residential apartment project is based on the data presented in the
previous chapters and the following assumptions: -

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 Finishing period-2 years

Source of finance-50 %

equityDebt finance 50 %

loan,Bank interest13%

Discount cash flow10%

Accounts receivable30 days

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 Raw material (perishable)3 days

Raw Material (nonperishable)30 days

Cash in hand5 daysAccounts payable30 days

Repair and maintenance5% of equipment cost

6.1 Repair and Maintenance CostThe annual repair and

maintenance cost of the plant is estimated based on the following
rates.
Item Rate 2024

Machinery 5%
and
equipment

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Building and 2%
civil works
Utilities 5%

6.2 Depreciation and AmortizationThe following depreciation

rates are applied to depreciate the assets of the project:Buildings
and associated Civil works 5%, linear to scrap ValueMachinery and
Equipment’s 10%, linear to scrap Value36

6.3 Total Revenue Based on the projected profit and loss statement,
the project will generate a profit
1 2 3 4 5

Raw material costs 45 mill 45 mill 45 mill 45 mill 45 mill

Wages 580,000 580,000 580,000 580,000 580,000

Repair maintenance and 1 mill 1 mill 1 mill 1 mill 1 mill

insurance

Misceleneous costs 30,000 30,000 30,000 30,000 30,000

Land lease costs and 340,000 340,000 340,000 340,000 340,000

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 insurance cost

Maintenance and utility cost 35,000 35,000 35,000 35,000 35,000

Operating costs 2,315000 2,31500 2,315000 2,315000 2,31500

0 0

Total sale 47,665,000 47,665,0 47,665,0 47,665,0 47,665,0

00 00 00 00

6.4 Discounted Payback Period The payback period, also called

pay–off period is defined as the period required recovering
theoriginal investment outlay through the accumulated net cash
flows earned by the project.Accordingly, based on the projected cash
flow it is estimated that the project’s initial investmentwill be fully
recovered within 3 year 9 months.

6.5 Cash flow The projected cash flow of the envisaged project shows
that the project would generate positive netcash flows throughout
the operation years. Cumulative cash flow generated by the project
towardsthe end of the first operation year will amount to

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 Birr68,091,250.At the end of the project life, thisamount will rise to
Birr1,280,912,500.00.

6.6 Benefit cost ratioThe BCR is defined as the ratio of the sum of the
project’s discounted benefits to the sum of itsdiscounted investment
and operating costs.When BCR > 1, accept the projectWhen BCR < 1,
reject the projectWhen BCR = 1, be indifferent BCR Br C r t t t nt t t
n ( )( )1100BCR is 5 and positive this indicates this
project would return 5 birr in benefits for eac

6.7 Internal Rate of ReturnThe internal rate of return (IRR) is an

indicator of the efficiency or quality of an investment. A project is a
good investment proposition if its IRR is greater than the rate of
return that could be earned by alternate investments or putting the
money in a bank account. Accordingly, the IRR of the project after tax
is computed to be34.13% indicating the viability of the project.

6.8 Net present value Net present value (NPV) is defined as the total
present (discounted) value of a time series of cashflows. NPV
aggregates cash flows that occur during different periods of time
during the life of a project into a common measuring unit i.e. present
value. It is a standard method for using the timevalue of money to
asses’ long-term projects. NPV is an indicator of how much value an
investmentor project adds to the capital invested. In principle a
project is accepted if the NPV is non-negative.Accordingly, the net
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 present value of the project at 10% discount rate is found to be
Birr154,439,417which is acceptable.

7. Conclusions and Recommendations.The objective of this

proposed feasibility study is primarily to facilitate the entrepreneur
with theinvestment information and provide an overview about
project. The proposed feasibility may formthe basis of an
management of the company and the required man power. The
highest authority in the project will be vested in the hand of the
owner. He will control the overall activities of the proposed
project.Demand projection divulges that there is high demand for
feed production in the country.Accordingly, the planned project is set
to provide quality products in the area.The proposed project
possesses wide range of economic and social benefits such as
increasing thelevel of investment, tax revenue and employment
creation for both women and youths. It will havealso environmental
concerns to protect it by planting trees around its working area and
by utilizingenvironmental friendly raw materials. Generally, the
project is technically feasible, financially andcommercially viable as
well as socially and economically acceptable. Hence the project is
worthimplementing.RecommendationsFinancial sensitivity analysis
shows that the project is highly sensitive to decrease in sales revenue
but relatively less sensitive to increase in raw material and
investment costs. Therefore, it isrecommended that the company
should give a great attention for the possible reasons for
salesreduction. In this case, different mechanisms should be selected
and implemented to increase sales.In addition to this, the company
should decrease its cost that lowers profitability. The project
mustutilize modern promotional styles to capture the planned
market share. To do so, it has to designeffective strategy to achieve
this plan.Although, due care and diligence has been taken to compile
this document, the containedinformation may vary due to any
change in any of the concerned factors, and the actual results
maydiffer substantially from the presented information. In this case,

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 any delaying to implement the project creates some problem on its
profitability as there is always change like change in price of services
and goods, cost of raw materials, customers preference and
purchasing power etc.….So, it isrecommended that investors should
implement the project as soon as possible before any changeoccurre
important investment decision and in order to serve this objective,
the documentcovers various aspects of Concept Development, Start-
up, Production, Marketing, Finance andBusiness Management. The
feasibility is based on the information obtained from various
agricultural sources as well as discussions with business men. For
financial model, since theforecast/projections relate to the future
periods, actual results are likely to differ because of the events and
circumstances that don’t occur frequently as expected. Whilst due
care and attentionhas been taken in performing the exercise, no
liability can be inferred for any in-accuracy or omissions reported
from the results thereof. It is essential that our report be read in its
entirety withfinancial model in order to fully comprehend the impact
of key assumptions on the range of valuesdetermined
Income
Year 1 2 3 4 5

Rent of floor 7 mill 7 mill 7 mill 7 mill 7 mill

Rent of second flour 6 mill 6 mill 6 mill 6 mill 6 mill

Rent of third flour 5 mill 5 mill 5 mill 5 mill 5 mill

Rent of forth flour 4 mill 4 mill 4 mill 4 mill 4 mill

Rent of fifth flour 4 mill 4 mill 4 mill 4 mill 4 mill

Parking base ment 35,000 45,000 55,000 66,000 76,000

Unit 5.5 6.66 6.66 6.66

Price 5

Total sale 30,350,00 30,450, 30550, 30660, 30760,

0 000 000 000 000

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 6.7 Internal Rate of ReturnThe internal rate of return (IRR) is an indicator of the
efficiency or quality of an investment. A project is a good investment proposition if its IRR is
greater than the rate of return that could beearned by alternate investments or putting the
money in a bank account. Accordingly, the IRR of the project after tax is computed to be34.13%
indicating the viability of the project.6.8 Net present value Net present value (NPV) is defined as
the total present (discounted) value of a time series of cashflows. NPV aggregates cash flows
that occur during different periods of time during the life of a project into a common measuring
unit i.e. present value. It is a standard method for using the timevalue of money to asses’ long-
term projects. NPV is an indicator of how much value an investmentor project adds to the
capital invested. In principle a project is accepted if the NPV is non-negative.Accordingly, the net
present value of the project at 10% discount rate is found to be Birr 554,439,417which is
acceptable.7. Conclusions and Recommendations.The objective of this proposed feasibility study
is primarily to facilitate the entrepreneur with theinvestment information and provide an
overview about project. The proposed feasibility may formthe basis of an important investment
decision and in order to serve this objective, the documentcovers various aspects of Concept
Development, Start-up, Production, Marketing, Finance andBusiness Management. The
feasibility is based on the information obtained from variousagricultural sources as well as
discussions with businessmen. For financial model, since theforecast/projections relate to the
future periods, actual results are likely to differ because of theevents and circumstances that
don’t occur frequently as expected. Whilst due care and attentionhas been taken in performing
the exercise, no liability can be inferred for any in-accuracy or omissions reported from the
results thereof. It is essential that our report be read in its entirety withfinancial model in order
to fully comprehend the impact of key assumptions on the range of valuesdetermined.The
project is accessible and has the necessary infrastructure such as road, telephone, water
andelectric power. The proposed project clearly identifies all the necessary equipment ,

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