EXECUTI

VESUMMARY

1.
PROJECTNAME PVCPipes,
condui
tandf
it
ti
ngsmanuf
act
uri
ng
pl
ant

PROJECTOWNER CHALAI
SMEALYUSUF

NATI
ONALI
TY AMERI
CAN

PROJECTLOCATI
ON OROMIANATIONALREGI
ONAL
STATE,
BISHOFTUCI
TYADMI
NISTRATI
ON.

PROJECTCOMPOSI
TION MANUFACTURINGOFPVCPRODUCTS
MAINLYPVC:
PIPESCONDUI
T,FI
TTI
NGS,
FLOORI
NGANDROOFI NG

PREMI
SESREQUI
RED 10000M^
2

TOTALI
NITI
ALCAPI
TAL TOTALCAPITALREQUI
REMENTISBI RR
87,
092,
090.
4OFWHI CH26,
127,
627.12(
30)I
S
OWNERS'EQUITYAND60,
964,
463.28IS
FI
NANCEDBYBANKLOAN

EMPLOYMENTOPPORTUNI
TY TOTALMANPOWERREQUIREDFORTHE
PLANTWILLBEEMPLOYEESATFULL
CAPACI
TY:

PERMANENTWORERS216:
SKI
LLED86&
UNSKI
LLED30

TEMPORARYWORKERS75:
SKI
LLED14
&UNSKI
LLED51

RAW MATERI
ALS THEMAINRAW MATERIALISINCLUDEPVC
RESI
N.OTHERMATERIALSINCLUDE
PLASTI
CIZERS,
STABI
LIZERS,
LUBRI
CANTS&
FI
LLERS

TECHNOLOGY THEPREFERREDTECHNOLOGYWILL
I
NCLUDE:EXTRUSION,
CUTTI
NG,
TRACTI
ON,SI
ZING

MARKETSHARE 80%FORDOMESTICMARKETAND20%FOR
EXPORTTOINTERNATI
ONALMARKET
 ESPECI
ALLYFORNEI
GHBORI
NG

BENEFI
TSOFTHEPROJECTFORTHEREGI
ON SUPPLYOFEQUALI TYANDAFFORDABLEPVC
ORCOUNTRY PIPES,CONDUI
TS,FITTI
NGSANDFLOORING
ANDROOFI NG,
SOURCEOFREVENUE,
EMPLOYMENTOPPORTUNI TY,SAVE
FOREIGNCURRENCYANDSTI MULATETHE
LOCALECONOMYANDTECHNOLOGY
TRANSFER.
 1.
Int
roduct
ion

1.
1Gener
albackgr
ound

Ethi
opiaisacountryendowedwi
thsignif
icantgrowt
hpot ent
ial.Despit
ethepotentialt
he
country
'seconomyhadbeencharact
erizedbystagnant.
atbest,steadyeconomygr owth,unti
lthe
demiseofthesociali
stori
ent
edmil
it
aryregime.Underthecur r
entgov er
nment,ittookEthiopi
a
onlyt
wodecadesofeconomi cmetamor phism t
oexhibi
tedsust ai
neddoubledigiteconomy
growth.Theimpressi
veeconomi
cgrouwandsoundmacr oeconomi cstabi
li
tyaremadepossi ble

Prodbyfundamental changesinpoli
ti
calandeconomi csystem,mat
ureeconomicmanagement
andongoingpartnershipandwi t
hexternaldonor
sandi nvestor
saswell
.Et
hiopi
ahasbeenmade
peaceandst abl
ethroughestablishmentoffederalsy
stem ofgover
nmentandparl
iamentar
y
democracy.Simult
aneousl yt
herewast hegeneralshi
ftfr
om commandeconomyt omar ket
economy .

Macr oeconomicstabil
i
tyhasbeensecur edbyacar ef
ul sequencingandimplement at
ionof
economi crefor
mscoupl edwithf i
ghtfi
scalandmonet arypolicy.Thi
smayi ncl
udeder egulat
ion
ofdomest icpri
cecontrol,
l
iber
alizat
ionofforeigntr
ade,pri
vatizat
ionofpubli
centerpri
ses,
promul gat
ionofli
beral
izedinvestmentlaws,andtheli
ke.Ont opthis,
inv
estmentincentiv
esand
i
nv estmentproper
typrotecti
onhav ealsograntedtobot hdomest icandfor
eigninvestors.

Pr
ofi
l
eoft
hepr
omot
er

Thepr omot eroftheproject,

chalaI smeal ,
i
sanEt hiopianborn,Americandiasporabusinessman
hasbeenl i
vingU.S.Aformanyy ears.Currentl
yhecomeEt hi
opi arespondingtogov er
nmentcall
forEthiopiadiasporathatthrought heirskil
landfinancehelpt heirmothercountrybuil
dongoing
peaceanddemocr ati
zati
onpr ocess, benefi
tedfr
om t hei
rengagementandhav egood
i
nternational i
mageamongot herthings.Thepromot erhasav erywel lunder
standingof
government '
spoli
cesandst rategiesandhi ghlyconv i
ncedthatt heplanedprojectwil
lenabl
e
him sharet hecountry'
sburdenoff ighti
ngpov er
tyandr educingunempl oyment .

Thef easi
bil
it
yofthepr ojecthasbeencar eful
lyassessedandthepromot eri
sconfidentthati
t
will
beat otalsuccess.Thepr omoteri
sal soextremelyopti
misti
canddet er
minanttomodel the
newway sofpracti
cingmoder npr
oductionandmar keti
ngwhilemeetingthegrowingdemand
forPVCcondui tandpipes. Hence,
thepromot erexpectedtogetthenecessarysupportf
rom the
r
egi
onandl
ocal
gov
ernmentt
omaket
hepr
ojectoper
ati
onal
.

Obj
ect
iveoft
hepr
oject

Thegeneral
obj
ecti
veoftheproj
ecti
stoest
abl
i
shhi
ghqual
i
tyandcostef
fect
ivePVCpr
oduct
s
manufact
uri
ngfact
oryi
nBishoft
ucit
y.

Thepr
ojectwi
l
ltr
yto

Meett
hegr
owi
ngdemandofPVCpi
pes,
condui
tsandf
loor
ing.

Cr
eat
ejoboppor
tuni
ty(
causal
andper
manentempl
oyment
).

I
ncr
easei
ncomet
othepr
omot
er.

Sav
efor
eigncur
rencyand

Gener
atei
ncomet
othegov
ernmenti
nthef
ormsofi
ncomeandbusi
nesst
axs.

Pr
oduct
iondescr
ipt
ion

Amongthevari
ousthi
ngsthattherecentscient
if
icinnovat
ionhasbeenexploi
ti
ngisthatthe
maki
nguseofplast
icmateri
alforproducti
onofsev eral
products.Thedeepunder
standi
ngof
pl
ast
icsandtheemploymentofplasti
cforcountlessappli
cat
ion.

Theemploymentofplasti
cmateri
alsf
orpr
oducti
onofmat er
ial
swhichhasbeenmadefrom
scar
esresourcessuchasmetalandwoodenmat eri
alsi
snotonlyeasi
ngthepressur
eonthi
s
scar
esmat er
ials,
butal
somakingthemanufact
uringprocesseasi
erandtheproduct
manufact
uredlesscostl
y.

Pl
ast i
csaredivi
dedint
ocategori
eswhichi
ncl
ude:
Natur
alpl
ast
ics,
semi
synt
heti
cplast
ic,
sy
nt heti
cplast
icandther
moplasti
cs.Amongt
hesecat
egori
est
hermopl
asti
ciscat
egoriesi
n
whichPVCbel ong.

Thermoplasti
csareplasti
ct hatcanbesof tenedandf ormedusingheat,
andwhencool,wi
l
ltake
uptheshapeoft hei
rmol ds.Butifhaeti
sr eappli
edt heywil
lnotsoft
enagain.
Theare
permanentl
yintheshapet hatt
heyhav ebeenmol dedinto.
Polyvi
nyl
_Chlor
ide(PVC)i
saplasti
c
productwhichhasmat chlessv er
sati
li
ty.I
feffecti
velyrepl
aceswood,paperandmetali
nseveral
appli
cati
ons.

Theenv
isagepr
ojectwi
l
lpr
oducepr
oduct
smadeupf
rom pol
yvi
nyl
_Chl
ori
de(
PVC).

Thesepr
oduct
smai
nlyi
ncl
ude:

1.
PVCcondui
t,pi
pesandf
it
ti
ngs

2.
PVCFl
oor
ingandr
oof
ing.
1.
PVCcondui
t,pi
pesandf
it
ti
ngs

Conduitsareusedtocoverel
ectr
ical
cables.
Fit
ti
ngsr ef
ertomat er
ial
smadeoft hesame
substancesusedtoconnectpi
pesandcondui t
s.Polyvi
nyl_Chl
ori
de(PVC)pi
pesar eusedfor
carr
yingdri
nkingwater,
i
rri
gati
onwater,
sewerage,otherli
quidandsemili
qui
dsubst ances,
and
gasform oneplacetoanother
.Thesepipesreplacedpipesmadeofmet al
,asbestosorcement.

PVCpi peshav esuperresi

stancetocorrosion.Theyar
enon_ t
oxicandinnowayr eactwitht
he
fl
uidbeingtransportnoraff
ectthetast
e, f
lavourandcolour.Si
ncet heyhavelargetensil
e
strengt
h,theyarenotsubjecttopressi
ngordeny i
ngbypr essure.
Theyarelightandthismakes
tr
ansporti
ngt hem andsubsequentpipi
ngr elati
vel
yeasy.Thesechar act
eri
sticsmaket he
productpreferr
edoptionstothemet al
,
asbest osorcementmadesubst it
utes.

2.
PVCf
loor
ingandr
oof
ing

PVCf l
oori
ngandr oof ingareplasti
csmadeupofl ar
geor gani cmol eculecontai
ningcar bon.The
aremadef rom pol
y ethyleneandotherpl asti
csbycal endar ingandi njecti
onintomoul di
ng
machines.Theyaref ormedusi ngpre_paredpl asticsheet s.PVCf looringisusedf orthepurpose
ofcoveri
ngf l
oorswhi leplasti
croofi
ngusedf orcov er
ingr oof .PVCr oof i
ngandf l
ooringhav e
manyadv antages,suchasl i
ghtweight,strength, andhighr esi stancet owater,f
ungus, chemi cal
,
rustandotherdamages.Theyar echeapert hant heirrespect i
vecompl ementaryproduct ssuch
assteelsheet,
woodandmar blefl
ooringpr oduct s.Hencet heyar eusedbybi gbui l
dings,suchas
offi
cesapartment,residenthouses,etc.
forf l
ooringandr oof ing.

MARKETANALYSI
SORSTUDY

DemandAnal
ysi
s

Thedemandf orPVCmat eri

alisdet
erminedbyseveralf
actors.InEthi
opiacasehowever
,the
majordet
erminingfact
orsareeconomicgr owt
hofthenation,thepatt
ernsandgrowthtr
endof
theconst
ruct
ionindust
ry,gover
nmentpolicyandr
egulati
onandpopul ati
ongrowthamongot her
thi
ngs.

A.
Fasteconomygr
owt
h

TheEt hiopi
aeconomyhasbeenexper iencingdynami canddoubl edi
gitgrowt
ht hat
experi
encedannual averagegr owthof11. 4%inpast8y ears.Accor
dingtominist
eroffi
nance
andeconomi cdev el
opment( MOFED),theforecastedeconomi cgrowththeeconomicgrowth
(GDPatconst antbasicprice)for2011/ 2012isestimat edt obe10.4%.Aspertheesti
mates,
annual growthratesofthemaj orsectors,
I,
e.Agri
culture,industr
yandservicewere7.6%,
10.6%
and13. 0%r espectiv
elyandt heirshar
esoutoft het otalGDPwer e42%,43%and45%
respectivel
y.

Thereexi
stsdi
rectr
elat
ionshi
pbetweensector
aldev
elopmentandincomel
evel
ofthepeopl
ein
economicssci
ence.Whent hei
ncomeleveloft
hepeoplei
ncreaset
hedemandforbasi
cgoods
al
soincr
easewithdif
fer
entrat
edependi
ngont henatur
eofgoods.
Indevel
opingcount
ri
esli
ke
Ethi
opi
athefast
esteconomicgrowt
h.Createdincr
easi
ngdemandforagett
erresi
denti
al
housi
ngthatent
ail
sincr
easeforPVSmat er
ial
s.

B.
Thepat
ter
nsandgr
owt
htr
endoft
heconst
ruct
ioni
ndust
ry

Assectionsoft heeconomy ,
theagri
cult
ureandconstruct
ionsectoral
sogrowswi t
hdoubledigi
t
withtheav er
ageannual growth10.
31%and12%r especti
vel
yinthepast8y ear
s.Asshowni n
thetabl
ebel owt hegrowthofthesector
sdirect
lyrel
atedwit
ht heeconomyaspar t
soft he
economy .Thefastestgrowthofconst
ructi
onsector,
parti
cular
lythebui
ldi
ngconstruct
ion,
creat
edt hefastandbulkdemandf orproductsofthefact
ory.

C.Popul
ati
ongr
owt
h

Ther ateofgr owthofur banpopul ationisincreasingfrom yeartoyear.Accor dingtothecent r

al
statisticsAut hori
ty(CSA) ,
currentpopul ationgrowt hisestimatedtobe2. 8%perannual ,
andt he
growt hrateisexpect edtor emai nabov e2%f orthenext20y ear
s.Rural popul at
ioni
sgr owi ngat
about3. 0%whi l
etheur banpopul ati
onisgr owingatabout4. 3%.
Totalpopul ationisproj
ect edto
reach129mi lli
onby2030. I
nEt hiopiaoft hetotalpopulationabout16.0%i sest i
matedtor eside
i
nt heur banar eas.
Thet rendsuggest st
hatsizeofur banpopul ati
onislikelyt oconti
nuet o
growt hatahi ghspeedi nthefut ure.Theshar eofur banpopul at
ionwillrisefrom 16.0%in2005
toabout23%by2030. Nearly20mi l
l
ionoft hetotal129mi l
l
ionwilll
i
vei nci t
iesandt ownsby
2030. Asar esultfr
om bi gpopul ationgrowt handur banizati
ondemandf orPVCmat eri
alswi ll
i
ncr ease.

D.
Gov
ernmentpol
i
cyandRegul
ati
on

Thegov ernmentofEt hi
opiahasdev i
sedandi mpl ement edpoli
ciesthatencour
agedi ntensi
ve
priv
atesect orengagementi nt heeconomyi ngener al
andt hedev el
opmentofconst ructi
on
sectorinpar ti
cular.Attr
ibutabletothest r
ongpol icybacking,
thesectorhasexhibiti
ngdouble
digi
tgrowt hasshowni ntableabov e.Mor eover
,thecur r
entfiv
ey earsEthi
opiagrowthand
tr
ansformat ionpl anwi l
lexpandt hecurrentinfr
ast r
ucture,r
esidenti
al(Condominium)and
buil
dingsinl argeamount .Thisalsoshowst heincreasingprospectsofdemandf orPVC
productsoft hepr oject.

Suppl
yanal
ysi
s

Ast udyconduct edbyindustr

ialpr
ojectst
udi
es(I
PS)est i
matedt he2007countr
ywidedemand
ofPVCpi pes,conduit
sandf i
tti
ngstobeabout961km whichi sequi
val
entto8542
tons.construct
ionandagr i
cul
turearethetwol
eadingsectorsincontemporar
yEthi
opi
ainter
ms
ofrapidex pansion.About95%oft hi
sdemandissatisf
iedthroughimport
.

I
fwet
akeaconsecut
iveassumpt
ionofa10%annual
growt
hint
hedemand,
the2009count
ry
widedemandwi l
lst
andat10,
336t
on.ontheot
herhandtheconstr
ucti
ondat
ashowedt
hat,t
he
demandf orPVCfl
oori
ngi
n2008isesti
matedat643tons:
onlyabout150t
onsi
sdomesti
call
y
produced.

Pr
oject
eddemand

Thedemandanalysisundertakenabov eshowedthatt
hereishugedemandf orproductsofthe
envi
sagedfact
oryinEthi
opia.Thei ncr
easinggr
owingbuil
dingconstruct
ionsectorandt he
i
ncreasi
ngneedforstandardlivi
nghouseandcommer ci
albuil
dingalongwiththeprevaili
ngfast
economygrowthandimpr ovedl i
festy
le,
thedemandforPVCpi pes,condui
tsandf i
tt
ingsinone
handandthedemandf orPVCr oofi
ngandf l
oor
ingontheotherhandhasshownsi gnif
icant
i
ncreaseovert
helasttwodecades.

Despit
ethei ncreasi
ngdemandf orproductsoft hef act
ory,
thedemandf orPVCconduct .Pipes
andfit
ti
ngsi smor ethanthedemandf orPVCf loor i
ngandr oofingduet oit
swi derappli
cat
ion
andexperienceofconsumer s.Taki
ngt heseallfactoryint
oconsi derati
on.Thef utur
edemand
forPVCcondui t,pi
pesandfit
ti
ngsisexpectedtogr owatanav erageannual r
ateof15%whi l
e
thedemandf orPVCf l
oor
ingisexpectedtoriseatanav eragerateof8%pery ea.Theyproj
ected
demandf orPVCcondui t,
pipesandfitti
ngsandt hatofPVCf looringisdepict
edi ntabl
e1&2
below

Tabl
e1:
proj
ect
eddemandf
orPVCcondui
t,pi
pesandf
it
ti
ngs

Year Pr
oject
eddemand(
ton)

2009 10,
336

2010 11,
886

2011 13,
669

2012 15,
719

2013 18,
077

2014 20,
789

2015 23,
907

2016 27,
493

2017 31,
618

2018 36,
360
Tabl
e2:
proj
ect
eddemandPVCf
loor
ing

Year
s Pr
oject
eddemand(
ton)

2008 643

2008 1,
157

2010 2,
083

2011 3,
750

2012 6,
750

2013 12,
150

2014 21,
870

2015 39,
366

2016 70,
858

2017 127,
545

Mar
ketpr
ospect
s

Themar ketdemandandsupplyanal
ysisconduct
edaboveshowedthatt
her
eexistver
yhuge
marketgapinEthiopi
af ort
heenv
isi
onedproduct
s.Hencethef
actor
ywil
lbesuccessf
ulby
ent
eri
ngi ntothi
smar ket.

Mar
ketshar
e

Theenv i
sionedproj
ectwil
lsuppl
y80%ofitsproduct
sfordomesti
cmar ketand20%ofi
ts
productforexpor
ttoint
ernati
onalmar
ketespeci
all
yfornei
ghbor
ingcountri
es.

Mar
ketpl
an

Productsareproducedi
nter
nall
ybyr ecei
vi
ngfactor
sofpr oduct
ionfr
om ext
ernalsuppli
est
o
fulf
il
ltheneedsandwantswithrequiredamount,
atreasonabl
epr i
cewit
hinhighquali
tyand
highsatisf
acti
ontothecust
omer s.

Pr
ici
ngst
rat
egy

Thepri
cingstr
ategywi
llbedonebyconduct
ingmarketr
esearchandbyassessi
ngthe
competi
torspri
ceandcustomersi
ncomelevel
.Thepl
antwil
lusepenet
rat
ionstr
ategyt
o
i
ntroducetheproductsandtoattactthecustomer s.Thepr i
ceoftheproductsi
sdeter
mi ned
pri
mar i
lybywhatcustomersarewi l
li
ngtopayt hatt hecompanyi soff
eri
ng.Thepenet
ration
str
ategyisusedt ocapt
urethemar ketshar
eati ni
tialstageofproduct
ion.Fort
hismatterthe
exist
ingret
ail
priceofinthemarketisassessedf orcompar ati
veanalysi
sandthefi
rm settl
ed
thelowerpri
ce(beforeVAT)indi
catedinthef ol
lowingtable

Tabl
e_pr
iceoft
hepr
oduct

S.
N PRODUCT UNI
T UNIPRI
CEI
NBI
RR

1 PVCFLOORI
NGAND TONES 35,
000
ROOFI
NG

2 PVCPIPES TONES 22,

000
CONDUITSAND
FI
TTI
NGS

Pr
omot
ion

Thepl antwilluseav arietyofadver

tisingmet hodtoat
tractattent
ionofcustomersint
hetar
get
mar ket.Accordingl
y,itwilladver
ti
zet hroughwordofmout h.Localpubl
icati
ons
(broachers,
flayersandnewspaper ),
sponsor shi
pofkeygov ernmentactiv
iti
esandpubl
ic
suppor tedaccessions.Electr
onicmedi as(websit
edevelopment ,r
adioandTV)bil
lboar
dand
branding.

4pl
antcapaci
tyandpr
oduct
ioncapaci
ty

Locat
ion

Theenv isagedpr oj
ectist obelocatedinoromianat i
onalregionalstate,
Bishof
tucity
administrati
on.Thepr ojectisstrat
egi
call
ylocatedtot hi
ssitetoexpl oi
ttheopportuni
tyof
fered
byits;proxi
mi t
yt othelargestmar ketofthenation(Addi
sAbaba) ,
rel
ativ
elyadvanced
developmenti ntheinfrastruct
ure(Power,
wat er
,tel
ephone,roadet c),
goodsupplyofmat er
ial
and
otherresource,thenatur alenvi
ronmentofthear eaanditsgeogr aphicsetti
ng.

Pl
antcapaci
ty

Consideri
ngtheproject
eddemand, compet
iti
onandeconomi esofscal
etheplantwil
lpr
oduct
3200t onsofPVCsheet s(f
loor
ingandroof
ing)and1200tonsPVCcondui tpi
pesandfit
ti
ngsat
ful
lcapacityuti
l
izat
ion.Theplanti
sassumedt oworkonsingleshi
ftf8hoursofeachshif
tand
300wor kingdaysperyear.
Pr
oduct
ionpr
ogr
am

Attheiniti
alstageofproducti
onper i
odt heenvisagedprojectmayr equir
esamey eartocapt
ure
asignifi
cantmar ketshareofproduct
s.Thepl antmayst artproducti
onat70%and80%ofi ts
rat
edcapaci tyinthefi
rstandsecondy earofproduction,
respectiv
ely.Ful
lproduct
ionshal
lbe
att
ainedinthet hi
rdyearandthenaf t
er.Theproposedpr oductionprogram i
ndicat
edinthe
fol
lowingtable.

Tabl
e_pl
antcapaci
tyandpr
oduct
ionpr
ogr
am

Capaci
ty
Uti
l
izat
ion

S.
N Pr
oduct
s Uni
ts Year1 Year2 Year3&
above

1 PVCcondui
t Ton 2240 2560 3200
pi
pesand
fi
tt
ings

2 PVCsheets Tonn 840 960 1200

(fl
oori
ngand
roofi
ng)

Tot
al 3080 3520 4400

5.Techni
cal
studyoranal
ysi
s

Pr
oduct
ionpr
ocessandTechnol
ogy

Pr
oduct
ionpr
ocessofPVCf
loor
ing

Alli
ngredi
entsaremi xedinari
bbontypeblender.
Themi xedcompoundsar epl
asticat
edbya
powerfulsheari
ngstressonaBanbur y
_ mi
xer.
Thear efur
therpl
asti
catedonahor i
zontal
two_rol
l
mil
li
ngmachi newi t
hi natemperat
urerangewhichmakest hem rol
leasi
lyoncalendarmachi
ne.
ThePVCcompoundi sthenfedt
ot hefour_
roll
calendarwherei
tisrol
ledtosheetofthedesi
red
thi
cknessbyf ourst
eel r
oll
swhil
epassingthroughthem.

Whenscr apisusedtopr oducebacklayer,

mi xedPVCcompoundswi t
hsomev i
rgi
nandscr
ap
gradearefedtoastraineraftert
wo_roll
mi l
l
ing, sothatimpur
it
iescanbef i
l
ter
edwhil
epassi
ng
thescreenmeshofdi eheadi nformatofstrainer.
HotPVCsheet sfrom t
hecal
endart
henpass
throughcool
ingdrumsandwoundt otherequiredlengthonsurfacewinder
.
Final
l
yt hethr
eelayer
sarelami
natedonthel
aminat
ingmachi
ne.Themiddlelayersarepri
ntedto
thedesiredpatt
ernbefor
elami
nat
ing.Thent
hearecutt
otherequir
edsize.Thetechni
caldata
andinformati
onarecompl i
edf
rom UNDOdocument"Howtostartmanufactur
ingindust
ri
es
Volume.

Pr
oduct
ionpr
ocessofPVCcondui
tsandpi
pes

Theproduct
ionofPVCconduitandpi
pesi
nvolv
esseveralprocess.Themajorpr
ocessofPVC
product
ioni
ncludesext
rusi
on.Si
zi
ngtr
act
ionandcut
ting.Thedet ai
lsoft
heseprocessar
e
descri
bedasfoll
ows.

A.Ext
rusi
on:

PVCuncompoundedr esin,
unli
kesomeot hert
hermoplasti
csisnotsuit
ablefordi
rect
processing.
Toconf ertherequir
edprocessi
ngandendi nstabi
l
ity
,iti
snecessarytomixaddi
ti
ves
tothePVCr esi
n.Fol
lowingaresomeoft headdit
iveswhicharegeneral
lyusedforthe
manuf actur
eofPVCpi pes.

Pl
ast
ici
zer
s:Thecommonst
abi
l
iseri
nusei
sDOP,
DIOP,
DBP,
DOA,
DEP,
Reopl
ast
,par
apl
exet
c.

St
abi
l
izer
s:Thecommonst
abi
l
izer
sar
elead,
bar
ium,
cadmi
um,
fib,
stear
ateet
c.

Lubr
icant
s:Wi
del
yusedl
ubr
icant
sar
eBur
y_st
ear
ate,
Gly
cer
olmi
ni_
stear
ate.

Expoxi
disedmonoest
erofol
eicaci
d,st
ear
icaci
det
c.

Fi
ll
ers:
Fil
l
ersar
ealsousedforpr
oducingspeci
alqual
i
typr
oduct(
e.g.
cal
cinedcl
ayi
susedt
o
i
mprovetheel
ectr
ical
proper
ti
esofcablecompounds)
.

Beforet heextr
usionoper at
ionPVCr esinistobecompoundedwi thplast i
cizers,
stabil
isers,
lubr
icantsandf i
ll
erst
oi mpr ovepr ocessi
bil
i
tyandimpr ovetheendur edstabil
it
y.PVC
resini
scompoundedwi t
hotheringredientsi nahighspeedmi xer
.Thecompoundr esinisfedto
thedoubl escrewext ruderwherethei nser t
sanddi ebodyfortherequiredpi pediamet erar
e
fi
tted.
PVCcompoundsar ethenpassedt hroughaheatedchamberandt heygetmel tedunder
thecompr essi
onoft hescrewandt emper atureofthebarr
el.
Themar kingont hepipeisdoneat
thetimeofext rusion.

B.Si
zi
ng:Thepi
pescomi
ngoutfr
om theext
ruderi
scool
edinthesi
zi
ngoper
ati
on.Ther
ear
e
basi
cal
lytwoty
pesofsi
zi
ngusedformanufact
uri
ngofpi
pes.

Theyar
e(i
)pr
essur
esi
zi
ngand(
ii
)vacuum si
zi
ng.

C.Tract
ion:
Thenextoper
ationneededaft
ersi
zingi
sfr
acti
on.Thetubet
ract
ionuni
tisr
equi
red
forconti
nuoushaul
ageofthepipesbei
ngextr
udedbytheextr
uder
.

D:cutt
ing:
Thelastoper
ati
onneededi
scutti
ng.
Therear
ebasical
lytwocutt
ingt
echni
quesf
or
ri
gidPVCpipesvizmanualandaut
omati
c.Thepipesar
ethententedf
orISImar
ksandareready
f
ordi
spat
chi
ng.

5.
2Rawmat
eri
al

Themainrawmat eri
alrequi
redi scompoundedPVCr esin.
OtherCompoundi
ngmateri
als
i
ncludepl
asti
cizer
s,st
abili
zers,
lubri
cantsandfi
ll
ers.
General
lytherawmater
ial
andauxi
li
ary
materi
ali
nputrequi
rementoft heprojectar
eli
stedinthefol
lowingtabl
e.

S/
N Descr
ipt
ion Uni
tv Qual
i
ty

1 pVCr
esi
n Kg 220,
000

2 St
abi
l
izer " 82,
000

3 Lubr
icant
s " 26,
000

4 Fi
l
ler
s " 30,
000

5 Col
orant " 21,
000

6 Pr
ocessi
ng " 50,
000

7 D.
O.P " 150,
000

8 PVCVar
nishes " 20,
000

9 Packingcar
tons " 120,
000
(packagi
ng)

10 Plast
ic " 600,
000
bag(packagi
ng)

Tot
a 1,
319,
500
5.
3Qual
i
tycont
rol

Mostfloormanufactur
ersnowusest
ati
sti
calprocesscontr
ol(
SPC)foreachstepoft
he
manufacturi
ngprocess.Manyal
soworkcl
oselywiththei
rrawmater
ialsuppl
i
estoensur
ethat
speci
fi
cationsar
emetbef or
ethemater
ial
isused.

Thefinalpr
oductmustmeetcer tainspecificati
onsregar
dingphysicalandchemical pr
operti
es.
Propert
iesmeasuredincl
udemechani calstrength,
abr
asi
onr esi
stance,chemicalr
esistance,
waterabsorpt
ion,di
mensionalstabil
i
ty ,
frostresist
ance,
andl i
nearcoef f
ici
entofthermal
expansion.
morerecentl
y,t
heslipresistance, whi
chcanbedet erminedbymeasur i
ngt he
coeff
ici
entoffri
cti
on,hasbecomeaconcer n.

5.
4.Technol
ogy

Ther esul
tofthestudymadebymar ketstudycrewoft hi
stheprojectshowedthattechnol
ogyi
s
veryimportantfact
orforpr
oduci
ngmar ketcompet i
ti
vequali
typroductatlowerpr
ice.The
envisagedprojectwil
lempl
oyeemodernt echnol
ogy ,
thefi
rstofit
skindintheEthi
opia,to
producehighqual i
tyPVCfl
oori
ngandpipewi threasonabl
emar ketpri
ce.

Tot hi
send,
theenvi
sagedproj
ectwil
li
mpor tstat
eofartproduct
ionmachinefrom Chi
naand
HongKongandwi l
lal
sohirepr
ofessi
onalexpatr
iateworker
sabroadandt her
ebywi l
lhi
ghl
y
contri
but
etotransf
ormati
onoftheexist
inglocalpr
oduct
ionsystem t
hroughtransf
erof
technol
ogy.

5.
5.Machi
ner
yandequi
pment

5.
5.1.Machi
ner
yandequi
pmentf
orPVCf
loor
ingmanuf
act
uri
ng

Machi
ner
y&equi
pmentr
equi
redf
ort
hepr
oduct
ionofPVCf
loor
ingar
eindi
cat
edi
nthef
oll
owi
ng
t
abl
e.
Tabl
e2:
Requi
redmachi
ner
iesandequi
pment

I
tem Descr
ipt
ion Uni
t Qual
i
ty

1 Bl
ender Pcs 2

2 Banbur
ymi
xer " 1

3 Two_
rol
lmi
l
l " 1

4 St
rai
ner " 1

5 Four
_rol
lcal
endar " 1

6 Lami
nat
or " 1

7 Pr
int
er " 1

8 Sur
facewi
nder " 1

9 Wat
ert
reat
mentuni
t Set 1

10 Boi
l
er&accessor
ies " 1

11 Cool
i
ngwat
ersy
stem " 1

12 Handl
i
ngequi
pment " 1

5.
5.2.
Machi
ner
yandEqui
pmentf
orPVCcondui
tandf
loor
ing.

I
.Pi
pemaki
ngsel
ect
ion

1.
Twi
nscr
ewext
rude

2.
Moul
dingdi
es

3.
Cool
i
nguni
t

4.
Take_
offuni
t

5.
Cut
ti
ngmachi
ne

6.
Stacki
nguni
t

7.
Aut
oloader

8.
Socketf
ormi
ngmachi
ne
9.
Socketf
ormi
ngdi
es

10.
Scr
apcl
utt
er

11.
Crusher

12.
Compr
essor

13.
Labor
ator
yequi
pment

I
I.
Fit
ti
ngsmaki
ngsect
ion

1.
Aut
omat
ici
nject
ionmachi
ne

2.
Moul
ds

3.
Wat
ercool
i
ng

4.
Bal
ance

5.
6.Ut
il
it
ies

Poweri sthebasicuti
l
ityintheindustry.AsperJCA' Sstudy.Excludi
ngtherecentlyoperati
onal
GibeII,
Ethiopi
acurr
entpowergener ati
ngcapaci t
yis1600MW, Outofwhi chfrequentpower
i
nterrupti
onwast hemaj orobstacleforindustr
iestomai nt
ainsmoot hproducti
on, Howeverwit
h
comingi ntooperat
ionofTekezeandgi beproj
ectpowerpr oblem hasbeenreduced.Thepl ant
will
maket heuseofotherutili
ti
essuchaswat ersupply
,pavedr oadtranspor
tati
on, dr
ainage
faci
li
tyandsupplement aryelectr
icuti
li
ties.

5.
7Bui
l
dingandci
vi
lwor
ks

Thepr
ojectpromoterhasaplantoconstructamul ti
pur
posebuildi
ngthati
ncl
udes;
main
manuf
acturi
nghouses,stor
es,admini
str
ativeoffi
ces,
workshops,
social
rooms,
gourdhouses
andot
herphysical
facil
it
iesandinf
rast
ructure.

5.
8.Pr
emi
sesr
equi
redandl
andusepl
an

Thetot
allandrequi
rementforthepr
ojecti
sest
imat
edt
obe10000M^
2.Thel
andpl
annedt
obe
usesasindicat
edintabl
ebelow.
Tabl
e_6_
Premi
sesr
equi
redandusepl
an

S/
N Descr
ipt
ion Landr
equi
rement(
M^2)

1 Pr
oduct
ionhal
l

1.
1 Wor
kshop 2000

1.
2 I
nspect
ionr
oom 600

Tot
alpr
oduct
ionar
ea 2,
600

2 War
ehouse

2.
2 Rawmat
eri
als&i
nput
s 2,
000

2.
3 Fi
nishedpr
oduct
s 2,
000

Tot
alwar
ehousear
ea 4,
000

3 Offi
ce,gr
oundhouse& 500
generat
orroom

4 Wast
eaccumul
ati
onar
ea 400

5 Greenar
ea,
par
king,
spaci
ng 2,
500
androad

Tot
al 10,
000
6.Or
gani
zat
ionandmanagement

6.
1.or
gani
zat
ional
str
uct
ureandmanagement

Businessact i
v i
ti
esneedswell establ
ishedsystem i
nordertobecompetit
iveandbecome
profi
table.Theenv i
sagedprojectwi l
lhaveit
sownaut onomyandlegalenti
tytoexecut
eits
objecti
ves.Or gani
zati
onalst
ruct ureoftheproj
ectisdesi
gnedbyincl
udingallt
henecessary
personnel undertheri
ghtdiv
ision.Structur
all
yitwil
lhavethr
eemainDepartments;
product
ion
andt echnicalDepart
mentundert heoffi
ceofgeneralmanager.

Atthet opoforganizati
onalstr
ucture,therewillbemanagerwi thther esponsi
bil
ityof
supervisi
ngtheov erall
acti
vit
yofthepl ant.Thepr oduct i
onandt echnicalDepart
menti s
responsibl
eforoper ati
onalandtechnicalaspect sofpr oducti
on,maintenanceandsaf etyofthe
plant.
Themar keti
ngDepar tmentisresponsi bl
ef orprocur ementofrawmat er
ialandsales
activ
iti
es.Theadmi nistr
ati
onandf i
nancedepar tmentisr esponsibl
ef orcontr
oll
ingandgui ding
personnelandforcont rol
li
ngallf
inancialaccount s.Empl oyeesundereachDepar tmentwil
l be
supervisedbythedepar tmentheadt hatisaccount ableforthegener almanager.

Gener
almanageri
sappoi
ntedbyt
heowner
.

6.
2.Manpowerr
equi
rement

Thesmoot handeffi
cientoperat
ionofthefactor
ypresupposesadequatenumberofquali
fi
ed
andexperiencedmanpower .
Themanpowercomponentoft hefact
orywill
incl
udethegeneral
manager ,
unitmanagersandskill
ful
techni
cianstocontrol
theproduct
ionli
nes,
operat
orsand
othersupporti
ngst
aff'
s.

Theownerwill
appointprojectmanagerwhoisresponsi
bletheresponsi
bil
ityofsuper
visi
ngthe
over
all
acti
vi
tyoftheplant.ThemanagerWi l
lbeaccountabletotheowner.Moreovertheproj
ect
wil
lhi
reski
ll
ed.Semi_ski
ll
edandunski l
ledempl
oy eesi
ncludingguar
ds,feedersandother
s.

Thet
otal
manpowerr
equi
redf
ort
hepl
antwi
l
lbe291empl
oyeesatf
ull
capaci
ty.

per
manentwor
ker
s216:
Ski
l
led86andUnski
l
led30

Tempor
arywor
ker
s75:
ski
l
led14andunski
l
led51

Empl oy
eeswi l
lbegivenonjobtrai
ning,clearduti
esandresponsibi
l
ityunderthedirect
supervi
sionofthei
rrespect
iveunit
s.Atr aini
ngprogr
am isproposedf oroper
ator
sand
supervi
sorsforaboutamont hbythemachi ner
ysuppli
es.Theproduct i
onandmai ntenance
personnelneedatwoweeksonj obtrai
ningonhowt ousethemachi nesandont he
manuf
act
uri
ngpr
ocess.

Tabl
e_8_
Manpowerr
equi
rementandqual
i
cat
ion

Posi
ti
on Qual
i
ficat
ion Requi
rednumbermat
eri
al'
s

Gener
almanager MSC/ MSCindust
ri
al 1
engi
neer
ing

Pr
oduct
ionmanager BSCi
nindust
ri
alengi
neer
ing 3

Qual
i
tycont
rol BSCi
npr
oduct
iont
echnol
ogy 2

Publ
i
caf
fai
rs BAi
nMTG/
leader
shi
p/pSI
R 1

Mar
ket
inghead BAmar
ket
ingmanagement 1

Admi
nist
rat
ion&f
inancehead BAi
naccount
ing,
economi
cs 1

Fi
nancehead BAi
naccount
ing 1

Per
sonnel
head BAi
nMTG/
leader
shi
p 1

Desi
gnerandcol
oroper
ator BSCi
nDesi
gni
ng 3

Account
ant BAi
naccount
ing 3

Hy
draul
i
ctechni
cian 10+3i
ngener
almachani
cs 4

Sal
es 10+3sal
esshi
p 5

Oper
ator
s Di
ploma10+2i
nmechani
cs 95

Assi
sti
ngoper
ati
ons 10+1gener
almechani
cs 81

Mechani
c 10+2gener
almechani
cs 2

El
ect
ri
cian 10+3gener
alel
ect
ri
cit
y 2

Secr
etar
y Di
plomai
nsecr
etar
ysci
ence 3

Cashi
er 10+3"bookkeepi
ng 3

Cl
erk 10compl
eted 2

St
orekeeper 10+2i
nlogi
sti
cmanagement 3
Dr
iver 10Compl
eted 5

Assi
stantdr
iver Basi
c 2

Of
fi
ceboy
/gi
rl 10compl
eted 2

Cl
eaner
&laundr
y Unski
l
led 10

Secur
it
y Basi
c 3

Gar
dner Unski
l
led 2

Wagewor
ker
s Unski
l
led 50

Tot
al 291
7.
Financi
alRequi
rementandAnal
ysi
s

7.
1.Fi
xedI
nvest
ment

7.
1.1.
Bui
l
dingandconst
ruct
ion

S/
N Descr
ipt
ion Land Uni
tcosti
nbi
rr Tot
alcosti
nbi
rr
requi
rement
(M^2)

1 Wor
kshop 2,
000 5,
500 11,
000,
000

2 I
nspect
ionar
ea 600 6,
000 3,
600,
000

3 Rawmater
ial
s 2,
000 4,
500 9,
000,
000
andi
nput
s

4 Of
fi
ce 500 6,
500 3,
250,
000

5 Fi
nished 2,
000 2,
500 5,
000,
000
pr
oducts

6 Green 2500 540 1,

350,
000
area,
par
king,
spaci
ng&r oad

7 Waste 400 1000 400,

000
accumul
ati
on
area

8 Fences 380,
000

9 Design& 1,
750,
000
supervi
sion

10 Si
tedev
elopment 765,
000

11 Water
lines& 880,
000
el
ectr
ic
i
nstal
lati
on

12 Landl
easei
nit
ial 1,
125,
000
fee

10,
000 38,
500,
000
7.
1.2.Vehi
cle

S/
N Descr
ipt
ion Qt
y Uni
tcost Tot
alcost Remar
k

1 Tr
uck18M^
3 2 1,
700,
000 3,
400,
000 Dut
yfr
ee

2 Truckwit
h 1 1,
000,
000 1,
000,
000 Dut
yfr
ee
comefixed

3 Pi
ckup 2 750,
000 1,
500,
000 Dut
yfr
ee

4 Worker 2 1,
200,
000 2,
400,
000 Dut
yfr
ee
ser
vicebus

7 8,
300,
00

7.
1.3.
Fact
orymachi
ne

Mostofthemachi
neriesareimport
edfrom abroad.Thecostofr
equi
redmachiner
iesand
equipmentf
ormanufacturi
ngdi
ffer
entkindsofproduct
'swit
hallwor
kshopaccessori
esi
s
esti
matedtobebi
rr27,591,
775.
00
7.
1.4.
off
iceequi
pment

S/
N Descr
ipt
ion Qt
y Uni
tcosti
nbi
rr Tot
alcosti
nbi
rr

1 Manager
ial 4 15,
000 60,
000
t
abl
eswithchai
r

2 Secr
etar
ial
chai
rs 3 6,
000 18,
000

3 Of
fi
cet
abl
es 12 3,
000 34,
000

4 Of
fi
cechai
rs 30 2,
000 60,
000

5 Computerwi
th 13 15,
000 195,
000
i
tspr
int
ers

6 Shel
f 7 5,
5000 38,
500

7 Telephoneand 2 2,
000 4000
faxmachine

8 Fi
l
li
ngcabi
net
s 2 3,
1000 6,
200

9 Decor ati
on 200,
000
(curtain,sof
a&
carpet)

10 Assembl
yset 1 90,
000

11 Ot
her 135,
000
miscel
l
aneous
pr
oducts

Tot
al 840,
700
7.
2.Expenses

7.
2.1.
Rawmat
eri
alpur
chasepr
oject
ed

Theenvi
sagedprojectwil
lusedi
ff
erentr
awmat er
ial
sindi
cat
edinsect
ion5.
2ofthi
sdocument
.
Thetot
alfi
nancerequir
ementforthepur
chaseofrawmateri
alsi
sesti
matedtobeETHbir
r

75,
035,
913.
0

7.
2.2.Sal
aryandbenef
itex
pense

Asindi
cat
edinthet
ablebel
owthetot
alexpensef
orsal
aryandbenef
it
sofmanpowerf
or
pl
annedproj
ecti
sesti
matedtobeETHbirr6,
414,
480.
00

Ot
heroper
ati
ngexpenses

S/
N Descr
ipt
ion Remar
k Annual
costi
nbi
rr

1 St
ati
oner
ies 10,
000permont
h 120,
000

2 Det
ergent
s Br3500permont
h 45,
000

3 Tel
ephone,
faxand Br2000permont
h 24,
000
post
al

4 Uni
for
ms 400*
180br 72,
000

5 El
ect
ri
cit
y 0.
45*
350000pery
ear 157,
000

6 Wat
er 1.
5*1500M^
3per 7,
500
month

7 Fuel 20,
500l
it
*17"per 348,
000
month

8 Pr
oper
tyi
nsur
ance 1%offi
xed 752,
324.
75
i
nvest
mentcost

9 Audi
t&l
egal
fee Br4000permont
h 4,
800

10 Spar
epar
ts Lumpsum 200,
000

11 Repai
r&mai
ntenance 2%oft
hef
ixedcost 1,
504,
649.
5

12 Oi
landl
ubr
icant 10%off
uel
cost 34,
850

13 Miscel
laneous Br9000permont
h 108,
000
expense
 3,
003,
824.
25

Per
_ser
viceExpense

S/
N Descr
ipt
ion Tot
alcosti
nBr

1 Pr
ojectf
easi
bil
i
tyst
udy 15,
000

2 Pr
omot
ion&dev
elopment 400,
000

3 Envi
ronment
ali
mpact 30,
000
assessment

4 St
affcapaci
tybui
l
ding 150,
000

5 Li
censi
ngfeeandot
her 20,
000
pr
ocessi
ng

615,
000

I
nit
ial
wor
kingcapi
tal

Thei
nit
ial
wor
kingoft
hei
sest
imat
edt
obeETHbi
rr7,
456,
430.
Summar
yoft
het
otal
capi
tal
requi
rement
s

SN Descr
ipt
ion Costi
nbi
rr

1 Bui
l
ding&const
ruct
ion 38,
500,
00

2 Machi
nes&equi
pment 27,
591,
775

3 Vehi
cles 8,
300,
00

4 Of
fi
ceequi
pment 840,
700

Tot
alf
ixedi
nvest
mentcost 75,
232,
475

5 I
nit
ial
wor
kingcapi
tal 7,
097,
373

6 Pr
eser
viceexpense 615,
000

Tot
al 82,
944,
848

Cont
ingency(
5%) 4147242.
4

Tot
ali
nit
ial
inv
est
mentcost 87,
092,
090.
4
8.Fi
nanci
alAnal
ysi
sandst
atement
s

8.
1.Under
lyi
ngAssumpt
ion.

Thefinanci
alanal
ysisoft
heenvi
sagedpr
ojectisbasedonthedat
apr
ovi
dei
nthepr
ecedi
ng
sect
ionsandt heassumpti
oni
ndi
catedi
nthef ol
lowi
ngtabl
e.

TL Descr
ipt
ion Rat
e

1 Depr
eci
ati
on

Bui
l
ding 5%

Machi
ner
y&equi
pment 10%

Vehi
cle 20%

Of
fi
ceEqui
pment 10%

2 Fi
nanci
ng&oper
ati
oncost

Sour
ceoff
inance 3o%equi
ty&70%l
oan

Taxhol
i
day
s 2y
ear
s

Rev
enuei
ncr
easedby 4%af
ter3y
ear
s

Sal
ary&wagesi
ncr
easedby 3%af
ter3y
ear
s

Oper
ati
ngcost
sincr
easedby 2%af
ter3y
ear
s

Rawmat
eri
ali
ncr
easeby 3%af
ter3y
ear
s

3 Leasi
ngandi
nter
estr
ate

Banki
nter
estr
ate 10%

Leaseper
iod 60%

Leasepay
mentper
iod 20%
Sour
ceoff
und

SN Descr
ipt
ion Shar
ein% Amount

1 Owner
sshar
e 30 26,
127,
627.
12

2 Bankl
oan 70 60,
964,
463.
28

Tot
al 100 87,
092,
090.
4

Bankl
oanr
epay
mentschedul
e

Year Pri
nci
pal I
nter
est Tot
alannual Remaini
ng
payment pay
ment bal
ance

0 60,
964,
463.
28

1 6,
096,
446.
33 6,
096,
446.
33 12,
192,
892.
66 54,
868,
016.
96

2 6,
096,
446.
33 5,
486,
801.
70 11,
583,
248.
03 48,
771,
570.
62

3 6,
096,
446.
33 4,
877,
157.
06 10,
973,
603.
39 42,
675,
124.
29

4 6,
096,
446.
33 4,
267,
512.
43 10,
363,
958.
76 36,
578,
677.
96

5 6,
096,
446.
33 3,
657,
867.
80 9,
754,
314.
13 30,
482,
231.
63

6 6,
096,
446.
33 3,
048,
223.
16 9,
144,
669.
49 24,
385,
785.
30

7 6,
096,
446.
33 2,
438,
578.
53 8,
535,
024.
86 18,
289,
338.
97

8 6,
096,
446.
33 1,
828,
933.
90 7,
925,
380.
23 12,
192,
892.
64

9 6,
096,
446.
33 1,
219,
289.
26 7,
315,
735.
59 6,
096,
446.
31

10 6,
096,
446.
33 609,
644.
63 6,
706,
090.
96 (
0,02)
Depr
essi
onschedul
e

SN Descr
ipt
ion Or
igi
nal
val
uei
n Depr
eci
ati
onr
ate Depreci
ati
onper
bi
rr i
n% year

1 Const
ruct
ionand 38,
500,
000 5 1,
925,
000
bui
ldi
ng

2 Machinesand 27,
591,
775 19 2,
759,
177.
5
equi
pment

3 Vehi
cles 8,
300 20 1,
660,
000

4 Of
fi
ce 840,
700 10 84,
070

Tot
al 75,
232,
475 6,
428,
247/
5
Rev
enuepr
oject
ion

Basedonthepr
iceandt
hecapaci
typrogram oft
hefact
oryi
ndi
cat
edi
npr
evi
ouschapt
er,
the
rev
enueofthef
actor
ypr
oject
edasindicatedi
nthet
ablebel
ow.

Capaci
ty Ut
il
izat
ion

SN Pr
oduct
s Uni
t Year
1 Year2 Year
,3&
abov
e

1 PVCcondui
t Ton 49,
280,
000 56,
320,
000 70,
400,
000
pi
pes&
fi
tt
ings

2 PVCsheets Ton 29,

400,
00 33,
600,
000 42,
000,
000
(fl
ooring&
roof
ing)

Tot
al 78,
680,
000 89,
920,
000 112,
400,
000
I
ncomel
ossst
atement

Rev
enue y
ear1 y
aer2 y
ear3

Sal
esr
evenue 78,
680,
000 89,
920,
000 112,
400,
00

Pur
chaseofraw 52,
525,
139.
10 60,
028,
730.
40 75,
035,
913.
00
mater
ial
&inputs

Gr
osspr
ofi
t 26,
154,
860.
90 29,
891,
269.
60 37,
364,
087.
00

Expenses

Sal
aryexpense 4,
490,
136.
0 5,
131,
584.
0 6,
414,
480.
0

Otheroper
ati
ng 2,
102,
677.
0 2,
403,
059.
4 3,
003,
824.
3
expenses

Depr
ecat
ionbui
l
ding 1,
925,
000.
0 1,
925,
000 1,
925,
000

Depr
ecati
on 2,
759,
177.
5 2,
759,
177.
5 2,
759,
177.
5
machiner
ies&
equi
pment

Depr
eci
ati
onVehi
cles 1,
660,
000 1,
660,
000 1,
660,
000

Depr
eci
ati
onof
fi
ce 84,
070.
0 84,
070.
0 84,
070.
0
equi
pment

I
nter
estexpense 6,
096,
446.
3 5,
486,
801.
7 2,
743,
400.
9

Leasepay
ment, 253,
125.
9 253,
125.
0 253.
125.
0

Tot
al 19,
370,
631.
8 19,
702,
817.
6 18,
843,
077.
6

Pr
ofi
tbef
oret
ax 6,
784,
229.
10 19,
702,
817.
6 18,
521,
009.
40

Tax(
30%) 5,
556,
302.
82

Netpr
ofi
t 6,
784,
229.
095 19,
702,
817.
60 12,
964,
706.
58
Cashf
lowst
atement

Year Year0 Year1 Year2 Year3

Equi
tyCapi
tal

Loanpr
inci
pal

NetSal
e

Total
cashi
n
fl
ow

Cashpay
ment

Sal
aryexpense

Pur
chaseofr
aw
mater
ial

Preoperat
ing
expense

I
nvest
ment

Otheroper
ati
ng
cost

Loanr
epay
ment

Loanspay
ment

Taxpay
ment

Tot
alTax
pay
ment

Cash
sur
plus/
Def
ici
t

Cumul
ati
vecash
fl
ow
Pr
ofi
tabi
l
ity

Asclear
lyshowi ntheincomest atementpart,
theproj
ectwil
l r
eturnit'
si nit
ialcostinshortper
iod
ofti
me.Accordingtothepr ojectedincomest atement,
thepr
ojectwi llstartgenerati
ngprofi
tin
the1styearofoperat
ion.Impor tantrati
ossuchaspr ofi
ttototalsales,netprofittoequi
ty
(Ret
urnonequity)andnetpr ofitplusint
erestontotali
nvest
ment( ,Ret urnont otali
nvestment)
Showanincr
easingt
rendduri
ngthel
i
fet
imeoftheproj
ect
.Thusi
ncomest
atementandt
he
otheri
ndi
cat
orsofpr
ofit
abi
li
tyshowt
hatthepr
ojecti
svi
able.

Pay
_backper
iod

Theinv
estmentcostincomest
atementproj
ecti
onareusedtoproj
ectt
hepay_backper
iod.That
proj
ect
'si
nit
ial
invest
mentwil
lbeful
lyrecov
eredwit
hin5yearsofoper
ati
on.

Fut
uredev
elopment

Intoday '
sdy nami candhy percompet it
ivebusinessenv i
ronmentf i
rmsmustchangei nor derto
surviv
eandpr osper.I
nsuchi nnovat i
veandchangi ngenv i
r onment ,supperstr
ategybecome
l
ame, effici
entway sofproductionbecomewast eful,
ift
heywoul dnotinal i
newi t
htheor derof
theday .Oper atinginsuchenv ir
onmentt heref
ore,thefactorywi l
lhaveanexpansi onphase
dependi ngont hecondit
ionoft hei ndustrycharacterpart
icul ar
lyi
npr oduci
ngt heprof
ileitsel
fby
i
nst al
li
ngt hepl ant.
Inthi
sr egard,theenv i
sionedpr oj
ectwi llexpanditscapacit
ytoincludeot her
typesofPVCmat eri
alsmanuf acturinginthefuture.

Env
ironment
ali
mpactoft
hepr
oject

I
nr ecentyear
senv i
ronmentali
ssueshasswoll
enenoughtoassumepr essingnati
onaland
i
nternati
onalagendas.ThegovernmentofEthi
opi
ahasdev i
cepoli
cies,
st r
ategi
esanddirect
ives
t
hatr egul
ateenvi
ronmentalimpactsofpr
oject
s.Accor
dingthi
spoli
cypr oj
ectstobe
i
mpl ementedinthecountr
yshouldnotcauseenvir
onmentalandsocialharms.

Theenvi
ronmental
andsociali
mpactsassoci
atedt
othepr
ojectshoul
dbeav
oidedi
fpossi
bleor
mit
igat
edthroughvar
iousmit
igat
ionmethods.

Inconnecti
ontothi
s,
thepr oposedfactor
yhasbothposi ti
veandnegat
iveimpactont
he
envi
ronmentandsociety.Theenvisagedproj
ectwillundert
akenaseparat
edetail
sof
envi
ronmentalandsoci
al i
mpactassessmentt ogetherwithit
smit
igat
ionmethodsoasto
ensuresoci
alandenvir
onment alsafet
yofthesociety.