Mustafa Plastic Recycling BP - Revised

Bio Green
Recycling Solution
Business Plan for Working Capital Financing for the Company’s
Plastic Waste Recycling Plant.
Owner: Mr. Moustapha Abdillahi Guedi
Submitted to: Commercial Bank of Ethiopia,

Jigjiga Branch
April 2024
Jigjiga
Business Plan for working capital financing Jigjiga 2024
Contents
0. Executive Summary ......................................................................... 4
1. Introduction ................................................................................... 5
2. Company Summary ......................................................................... 5
Table: Existing Asset Value of the Company ....................................... 5
2.1. Mission ..................................................................................... 6
2.2. Products ................................................................................... 6
2.3. Keys to success ......................................................................... 6
2.4. Company ownership ................................................................... 7
2.5. Profile of the Owner/General Manager ........................................... 7
2.6. Location and Accessibility ............................................................ 7
3. Market Analysis ............................................................................ 8
3.1. Market Potential ......................................................................... 8
3.2. Competition and buying pattern ................................................... 8
3.3. Marketing strategy ..................................................................... 8
3.4. Sales Strategy ........................................................................... 9
4. Production capacity & production programme ...................................... 9
Table: Production Capacity .............................................................. 9
Table: Production programme .......................................................... 9
5. Pricing ........................................................................................... 9
Table: Product prices ......................................................................... 10
6. Sales Forecast ......................................................................... 10
Table: Planned Revenue ..................................................................... 10
7. SWOT Analysis .............................................................................. 10
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8. Financial Analysis .......................................................................... 11
Table: Existing Asset Value of the Company ..................................... 11
Table: Costs of sales ......................................................................... 12
Table: Costs of sales projection ........................................................... 12
Table: Revenue at full capacity ........................................................... 12
Table: Revenue projection .................................................................. 12
Table: Manpower Requirement and Annual Salary Expenditure ................ 13
Table: Utilities .................................................................................. 14
Table: Summary of Fixed Assets ......................................................... 14
Table: Depreciation ........................................................................... 14
Table: Repair & Maintenance costs ...................................................... 14
Table: Operating costs ....................................................................... 15
Table: Working capital Determination .................................................. 15
Table: Investment for the whole project ............................................... 16
Table: Investment Costs & Source of Finance ........................................ 16
Table: Loan Repayment Schedule ........................................................ 16
Table: Profit and Loss Statement ......................................................... 17
Table: Cash Flow Statement ............................................................... 17
Table: Balance Sheet Statement ......................................................... 18
9. Financial Evaluation ....................................................................... 19
9.1. Profitability.............................................................................. 19
9.2. Break-Even Analysis ................................................................. 19
9. Payback period ........................................................................... 19
9.4. Internal rate of return and net present value................................ 19

10. Environmental Impacts ................................................................. 20
10.1. Scoping ................................................................................... 20
10.2. Description of Impacts ............................................................... 20
10.3. Positive Impacts and Enhancement Measures................................ 21
10.3.1. Macroeconomic Benefits .......................................................... 21
10.3.2. Microeconomic Benefits ........................................................ 22
10.3.2.1. Employment ..................................................................... 22
10.3.2.2. Local Livelihood Improvement ............................................ 23
10.3.2.3. Gender Equity .................................................................. 23
10.4. Adverse Impacts and Proposed Mitigation Measures ....................... 24
10.4.1. Construction Phase ................................................................. 24
10.4.2. Operational Phase .................................................................. 24
10.4.3. Impact on Air Quality .............................................................. 25
10.4.5. Impacts on Employee’s Health & Other Risks.............................. 26

0. Executive Summary
This business plan proposes a working capital financing for Bio Green
Recycling Solution’s new plastic waste recycling project which has
been established in Jigjiga City recently.
The proposed loan request has planned to satisfy the working capital
requirements of the Company by delivering an adequate stock of
inputs. This project specializes in a plastic recycling and production of
Plastic Granules, which are extensively used in various plastic products
manufacturing industries due to their wide variety of usage, flexibility and
strength.
At full capacity operation, the Factory will have a capacity of producing

6,000 kgs of plastic raw materials (Granules) per day. However, during the
first year of operation, the Factory plans to use 70% of its capacity. Findings
of our local market study suggest that there is a large supply gap that can
well be filled by the Factory in Jigjiga and neighboring Cities. Therefore, the
overall purpose of this request for working capital financing is to enable the
Factory to effectively arrange the continuous supply of raw materials and
other inputs so as to ensure operation of the factory at its planned capacity.
Currently the existing asset value of the Factory amounts to Birr

22,030,617. However, our financial analysis indicates that the Company will
require additional finance of Birr 16,745,000.00, in order to meet its working
capital requirements.
The project creates employment for 34 persons. In addition to contributing

to the mitigation of the adverse environmental impact created by plastic
wastes, the establishment of such factory will also save foreign exchange to
the country by substituting the current imports of plastic raw materials.

1. Introduction
The Ethiopian government has identified several strategic investment areas

as a priority that deserves incentives in order to attract the private sector.
One of the major areas that is currently enjoying a significant amount
government incentives is the plastic recycling sector.
With the objective of substituting the bulk import of plastic raw materials,
which is consuming the already scarce hard currency of the country, the
government has been providing incentives for the private sector interested
to be engaged in plastic waste recycling industries.
2. Company Summary
Bio Green Recycling Solution is a new Company established to operate in

plastic waste recycling and granules manufacturing in Jigjiga City in
accordance with the commercial code of Ethiopia. The Company’s recycling
plant is located at kebele 17 area of Jigjiga City Administration.
The Company uses plastic wastes to produce value added plastic raw
materials` (Granules), which are extensively used in various plastic products
manufacturing industries due to their wide variety of usage, flexibility and
strength. Currently the existing asset value of the Factory amounts to Birr
22,030,617.
Table: Existing Asset Value of the Company
Description Value, Birr
Land & Building 11,600,000

Plant machineries 8,150,000
subtotal fixed assets 19,750,000
Inventory 1,500,000
Cash 780,617
Subtotal current assets 2,280,617
Total Value of Asset 22,030,617
2.1. Mission
Bio Green Recycling Solution is dedicated to converting plastic waste

materials into commercially viable product, utilizing environmentally friendly
recycling and manufacturing methods. We intend to make enough profit and
to finance continued growth and continued development in quality
products. We will also maintain a friendly, fair, and creative work
environment, which respects diversity, new ideas and hard work.
2.2. Products
Bio Green Recycling Solution will utilize two processes in the same facility to
produce plastic raw materials (Granules).
2.3. Keys to success

The keys to success for our Enterprise are:
 Ensure maximum operational efficiency by employing high profile
engineering, marketing. business development & management teams;
 Already secured plastic waste supply- contract with the Government’s
Sanitation & Beautification Agency

 Marketing - Contractual arrangements for the sale of virtually all of its

production.
 Management - Strong senior management with extensive, broad-
based, industry-specific experience.
2.4. Company ownership

Bio Green Recycling Solution is solely owned by Mr. Moustapha Abdillahi
Guedi, a Djiboutian entrepreneur. The plan was conceived and developed by
this individual, with the intent to apply his extensive technical knowledge,
experience and contacts in the industry to building a successful profitable
Business Venture in his home country.
2.5. Profile of the Owner/General Manager

Owner’s Name: Mr. Moustapha Abdillahi Guedi
Company Name: Bio Green Recycling Solution
Address: Region/City- Jigjiga City
Cell Phone: +251-920-888-999
A Djiboutian by citizenship and Ethiopian by birth, Mr. Moustapha Abdillahi is

a sole owner and general manager of Bio Green Recycling Solution.
Mrs. Moustapha is an energetic, innovative, and dynamic Businessman with

proven track record.
The purpose of this business plan is therefore to request a working capital

financing for his new plastic waste recycling project already established in
Jiigjiga City.
2.6. Location and Accessibility

The Company’s recycling plant is established on a 4,200 msq land located in
kebele 17 area of Jigjiga City Administration.

3. Market Analysis
3.1. Market Potential
Looking at the supply side, there is only one Factory in Jigjiga City producing
Plastic Granules. However, this factory produces around 2000 tons of the
products per annum, which is only around 5.6% of the total demand. Hence
we can conclude that there is a huge demand gap for these products in the
Country, which can well be filled by our project.
3.2. Competition and buying pattern

The demand for recycled plastic raw materials has been increasing at a
faster rate. However in Ethiopia, such projects are at their infancy.
Especially, in our target market areas (Eastern Ethiopia), only two Factories
exist. Therefore the establishment of such Factory in Jigjiga will be first to
market and is expected to take adequate market share.
3.3. Marketing strategy

The Company has chosen to focus on the production of Plastic Granules from
recycled plastic waste materials. Because of the industry experience and
expertise of the promoter, we have identified a significant available market
in the Eastern Ethiopia.
All of our initial marketing strategy will be to secure contracts in that

segment. We see little need at present for further market research and
development, and will focus on continually updating our production
technology in an effort to remain in the forefront of our chosen marketplace.

3.4. Sales Strategy
To market the products, the Company will use a number of sales

agents/brokers well known to the promoter from business transactions over
the last one year. All of these agents have a customer base of their own,
having developed successful relationships with their clientele over the years.
4. Production capacity & production programme

At full capacity operation, the Factory will have a capacity of producing
6,000 kgs of plastic raw materials (Granules) per day.
Table: Production Capacity
capacity parameters Output (Kg)

per day 6,000
per year 1,800,000
The plant will start by utilizing 70% of its capacity at the first year and then
increase to 85% and 100% in the second and third year respectively.
Table: Production programme
Capacity utilization (%) 1st year 2nd year 3rd year

70.00% 85.00% 100.00%
Granules in kgs/year
1,260,000.00 1,530,000.00 1,800,000.00
5. Pricing
Based on the current market price for Plastic Granules, we have adopted an
average factory gate price of 80,000.00 birr/ton.

Table: Product prices

items Plastic Granules
price/ton 80,000.00
6. Sales Forecast
The sales forecast is based on the assumption that we will sell all of the
highest value products that we can produce.
Table: Planned Revenue
items 1st year 2nd year 3rd year and after

70.00% 85.00% 100.00%
Sales Plastic Granules 100,800,000.00 122,400,000.00 144,000,000.00
Total 100,800,000.00 122,400,000.00 144,000,000.00
7. SWOT Analysis
The SWOT analysis provides us with an opportunity to examine the internal
strengths and weaknesses the promoter must address. It also allows us to
examine the opportunities presented to our company as well as potential
threats.
Strength
 Already secured plastic waste supply- contract with suppliers

 Knowledgeable and friendly executive team with multi-disciplinary
profession
 State-of-the art Manufacturing Technology
 Working on the right business idea at the right time
10 | P a g e B y : Bio Green Recycling Solution

Weakness
 Shortage of working capital
Opportunities
• The demand for recycled Plastic Granules has been increasing at a

faster rate.
• Market available in Eastern directions of the Country
• Huge Government incentives for the sector
• Availability of adequate work force in the market to supply our
project
• Plenty of room to expand & grow in reasonably short time
Threat
• The possibility of emergence of identical Factories in Jigjiga
8. Financial Analysis
Table: Existing Asset Value of the Company
Description Value, Birr

11,600,000
Land & Building
8,150,000
Plant machineries
19,750,000
subtotal fixed assets
1,500,000
Inventory
780,617
Cash
2,280,617
Subtotal current assets
22,030,617
Total Value of Asset

Table: Costs of sales

Ann.
no. Items Unit Cost (BIRR) Requir’t Cost (birr)
Waste plastic
1 materials Birr/kg 12 1,800,000 21,600,000
Product Packaging
2 materials Birr/piece 10 72,000 720,000
3 Other raw materials LS 11,170,000
7 Total Cost 33,490,000
Table: Costs of sales projection

1st year 2nd year 3rd year and after
Capacity 70.00% 85.00% 100.00%
costs of sales 23,443,000.00 28,466,500.00 33,490,000.00
Table: Revenue at full capacity

items Value, Birr
price/kg 80
Production /year (kg) 1,800,000
Revenue 144,000,000
Table: Revenue projection

items 1st year 2nd year 3rd year and after
70.00% 85.00% 100.00%
Sales Plastic Granules 100,800,000.00 122,400,000.00 144,000,000.00
Total 100,800,000.00 122,400,000.00 144,000,000.00

Table: Manpower Requirement and Annual Salary

Expenditure
Monthly Salary ( Annual
No. Description Reqd.No. Birr) salary
1 Plant manager 1 25,000 300,000
2 Technical Manager 2 18,000 432,000
3 Secretary 1 7,000 84,000
4 Accountant 1 10,000 120,000
Administration and
5 finance 1 9,000 108,000
6 Mechanic 1 9,000 108,000
7 Electrician 1 5,000 60,000
8 Machine operators 6 10,000 720,000
production
9 foreman/chemist 2 6,000 144,000
Clerk/Admin/time
10 keeper 1 5,000 60,000
11 Cashier 1 3,000 36,000
12 Assistant operator 3 6,000 216,000
13 Quality inspector 2 24,000 576,000
Sales & marketing
14 manager 1 6,000 72,000
15 Sales 2 6,000 144,000

16 Delivery Driver 1 6,000 72,000
17 Store keeper 1 3,600 43,200
18 Laborers 4 3,000 144,000
19 Guards 2 1,500 36,000
Sub-total 34 3,475,200
Employment benefits and allowances 20% 868,800
Total Annual Labor Cost (Direct +Indirect) 4,344,000

Table: Utilities
Annual
No. Description Consumption UOM Unit Cost ( Birr) Cost (Birr)
1 Electricity 400,000 kWh 1 232,000
2 Water 67,500 m³ 10 675,000
Total Annual Cost 907,000
Table: Summary of Fixed Assets

Description Total
Land & Building 11,600,000.00
Plant machineries 8,150,000.00
Total Fixed Investment 19,750,000.00
Table: Depreciation
Description Percentage Total Depreciation
investment
Land & Building 10.00% 11,600,000.00 1,160,000.00
Plant machineries 5.00% 8,150,000.00 407,500.00

Total Fixed Investment
19,750,000.00 1,567,500.00
Table: Repair & Maintenance costs

Description Percentage Total Repair &
investment maintenance
Land & Building 1.00% 11,600,000.00 116,000.00
Plant machineries 3.00% 8,150,000.00 244,500.00

Total 19,750,000.00 360,500.00

Table: Operating costs

Total cost/year(birr)
Description 1st year 2nd year 3rd year and after
Utilities 634,900.00 770,950.00 907,000.00
Transportation 800,000.00 920,000.00 1,058,000.00
Maintenance and Repair 312,200.00 379,100.00 446,000.00

Manpower Expenditures(
Direct labor) 3,040,800.00 3,692,400.00 4,344,000.00
promotion expense @1% of
1,008,000.00 1,224,000.00 1,440,000.00
revenue
Administration Costs*
120,000.00 126,000.00 132,300.00
Total Operating Costs 5,915,900.00 7,112,450.00 8,327,300.00

Administrative cost includes social costs and materials and services used by administrative staff etc.
Table: Working capital Determination

Direct costs Days of Required working
coverage capital
Raw materials 6 months 16,745,000.00
Sub total 16,745,000.00
Overhead working capital costs
Wage and Salaries 2 months 506,800.00
Promotional expenses 2 months 168,000.00
Utilities 2 months 105,816.67
Sub total 780,616.67
Total required working capital 17,525,616.67

Table: Investment for the whole project

No. Cost Items Local Cost
1 Land & Building 11,600,000
2 Machinery 8,150,000
4 Sub -total 19,750,000
5 Pre operating cost 82,000
Sub -total (Fixed costs) 19,832,000
6 Working capital ** 17,525,617
Grand Total 37,357,617
Table: Investment Costs & Source of Finance

Owners equity Bank Loan
Description Total Costs Amount % Amount %
Land &
11,600,000 11,600,000.00 100.00% 0.00 0.00%
Building
Machinery 8,150,000 8,150,000.00 100.00% 0.00 0.00%

Pre operating
82,000 82,000 100.00% 0.00 0.00%
cost
Sub -total
19,832,000 19,832,000 100.00% 0.00 0.00%
(Fixed costs)
Working
17,525,617 780,617 4.45% 16,745,000.00 95.55%
capital **
Grand Total 37,357,617 20,612,617 55.18% 16,745,000 44.82%
Table: Loan Repayment Schedule

Year Loan Interest Outstanding
Repayment (12.5%) Balance
0 16,745,000
1 3,349,000 2,093,125 13,396,000

2 3,349,000 1,674,500 10,047,000

3 3,349,000 1,255,875 6,698,000
4 3,349,000 837,250 3,349,000
5 3,349,000 418,625 0
Table: Profit and Loss Statement

Description Project Years
1 2 3 4 5
Sales 100,800,000 122,400,000 144,000,000 158,400,000 174,240,000
Direct cost of sales 23,443,000 28,466,500 33,490,000 35,164,500 36,922,725
Gross Profit 77,357,000 93,933,500 110,510,000 123,235,500 137,317,275
Operational expense 5,856,050 6,148,853 6,456,295 6,779,110 7,118,065
Profit before tax and
71,500,950 87,784,648 104,053,705 116,456,390 130,199,210
interest
Depreciation
1,567,500 1,567,500 1,567,500 1,567,500 1,567,500
EBITDA (Earnings
before tax, interest 73,068,450 89,352,148 105,621,205 118,023,890 131,766,710
and dep.)
Interest expense 2,093,125 3,349,000 3,349,000 3,349,000 3,349,000
Profit tax (30%) 0 0 39,587,587 44,397,573
Net profit 69,407,825 84,435,648 100,704,705 73,519,804 82,452,636
npm
68.86% 68.98% 69.93% 46.41% 47.32%
Table: Cash Flow Statement

Production Year
Cash in flow 0 1 2 3 4 5
Owners' equity 20,612,617
Existing Bank Loan 0
Additional Bank
16,745,000
Loan
Net Profit 0 69,407,825 84,435,648 100,704,705 73,519,804 82,452,636
Depreciation 1,567,500 1,567,500 1,567,500 1,567,500 1,567,500
Total Cash in flow 37,357,617 70,975,325 86,003,148 102,272,205 75,087,304 84,020,136
Cash out flow

Replacement 0 0 0 0 0
loan repayment 3,349,000 3,349,000 3,349,000 3,349,000 3,349,000
Capital Expenditure 19,750,000 - - - - -

Working capital 17,525,617 - - - - -

Existing Working
capital
Pre-operating
expenses and 82,000
interest
Total Cash out
37,357,617 3,349,000 3,349,000 3,349,000 3,349,000 3,349,000
flow
Net Cash Flow 0 67,626,325 82,654,148 98,923,205 71,738,304 80,671,136
Cash balance 85,151,942 167,806,089 266,729,294 338,467,598 419,138,734
Table: Balance Sheet Statement

Description Investment Production Year
ASSETS 0 1 2 3 4 5
Current Assets
Cash 17,525,617 85,151,942 167,806,089 266,729,294 338,467,598 419,138,734
Other Current
0 0 0 0 0
Assets
Total Current
17,525,617 85,151,942 167,806,089 266,729,294 338,467,598 419,138,734
Assets
Fixed Asset
Land & Building 11,600,000.00 10,440,000 9,280,000 8,120,000 6,960,000 5,800,000
Plant machineries 8,150,000.00 7,742,500 7,335,000 6,927,500 6,520,000 6,112,500
Vehicles 0.00 0 0 0 0 0
Total Fixed Asset 19,750,000 18,182,500 16,615,000 15,047,500 13,480,000 11,912,500
Pre-operating Costs 82,000 73,800 65,600 57,400 49,200 41,000
Total Asset 37,275,617 103,334,442 184,421,089 281,776,794 351,947,598 431,051,234
LIABILITIES
Short term liability - - - - - -
Long term liability

16,745,000 13,396,000 10,047,000 6,698,000 3,349,000 0
(Bank Loan)
Sub Total 16,745,000 13,396,000 10,047,000 6,698,000 3,349,000 0
CAPITAL
Owner's Equity 20,612,617 20,612,617 20,612,617 20,612,617 20,612,617 20,612,617

Retained Earnings -82,000 69,325,825 153,761,473 254,466,177 327,985,981 410,438,617
Earnings 69,407,825 84,435,648 100,704,705 73,519,804 82,452,636
Sub Total 20,530,617 89,938,442 174,374,089 275,078,794 348,598,598 431,051,234

Total Liability &

37,275,617 103,334,442 184,421,089 281,776,794 351,947,598 431,051,234
Capital
20,530,617 89,938,442 174,374,089 275,078,794 348,598,598 431,051,234

Net Worth
9. Financial Evaluation
9.1. Profitability
According to the projected income statement, the project will start generating profit
in the first year of operation. Important ratios such as profit to total sales, net
profit to equity (Return on equity) and net profit plus interest on total investment
(return on total investment) show an increasing trend during the life of the project.
Further, the income statement and other indicators of profitability show that the
project is viable.
9.2. Break-Even Analysis

The break-even point of the project including cost of finance when it starts to
operate at full capacity (year 2) is estimated by using income statement projection.
Fixed Cost
BE = = 49 %
Sales – Variable Cost
9. Payback period
The investment cost and income statement projection are used to project the pay-
back period. The project’s initial investment will be fully recovered within 2 years.
9.4. Internal rate of return and net present value

Based on the cash flow statement, the calculated IRR of the project is 62% and the
net present value at 9% discount rate is Birr 51,753,052.

10. Environmental Impacts
This section discusses major environmental issues and constraints that can
arise from the project implementation. Positive, negative, Direct, indirect
and cumulative impacts are addressed.
10.1. Scoping
The scoping process intends to ensure that the EIA focuses on pertinent
issues. In pursuit of deciding upon the boundaries and sensitivity of the
study area for the project and drawing the list of activities and impacts to be
studied during the assessment, the consultant has carried out an initial
environmental examination and scoping.
Based on the scoping process particular attentions have been given to the
following environmental issues:
Generation of processed and raw wastes

Dry waste and
Employee’s health hazard and safety
10.2. Description of Impacts

This section addresses potential impacts associated with the proposed
project and measures for both mitigating (i.e. avoidance, reduction, or
restoration of) negative impacts, and enhancing (i.e. improvements of)
positive effects of the plastic recycling project.
The major positive impacts of the proposed project are mainly the economic
and social benefits that can be acquired at the national, regional and local

level. Although reversible and localized, the adverse impacts of the proposed
project arise from generation of raw and processed wastes and employee’s
heath impact.
Cost-effective and environmentally sustainable techniques that can mitigate

the adverse impacts are proposed. Emphasis was given in selection of best
available techniques (BAT) and practices for preventing and reducing
potential adverse impacts to the environment without compromising the
economic and social benefits of the project.
10.3. Positive Impacts and Enhancement Measures

The establishment of this project will have a number of positive impacts both
at national regional and local levels. Some of the major positive impacts
include technological capacity building, economic development and creation
of employment. These potential positive impacts, their origin and
characteristics are presented below.
10.3.1. Macroeconomic Benefits

The implementation of the project has an array of economic benefits. It
transforms raw materials to a higher value, provides consumer goods,
generates employment, promotes skill development and disseminates
technological changes. As the enterprise intends to export at least 50% of its
products to neighboring Djibouti and Somali Land, it will serve as source of
foreign currency to the Country.
As it is plainly stated in the previous sections of this feasibility study, the

project developer will generate financial benefit in the forms profit that will

be used for saving and family consumption when the project gets
operational.
Enhancement Measures: Executing the proposed project in a manner that

benefits the country at large (example: production of quality products,
introduction of technologies that maximize the product yield as the same
time by reducing the environmental burden of the production process) is the
proposed benefit enhancement measure.
10.3.2. Microeconomic Benefits

10.3.2.1. Employment
The direct and indirect employment opportunities to be created for citizens
are other economic benefits of the project beyond those economic outputs
discussed above. The feasibility study of the project indicates that, the
enterprise will create direct job opportunities for 35 workers, most of whom,
are from local people residing near by the project area and from Jigjiga
town.
Thus, the project will be an opportunity for the town by lightening the brunt
of unemployment in the town to some extent. Moreover, the building
renovations phase of the project will have a short term employment
opportunity particularly for the local laborers.
Enhancement Measures: Hiring professionals and service providers will be

based on merits and yet on competitive base in order to get quality technical
workers, it will enhance the benefits of project to give especial consideration
for the people residing near by the project site to provide them with job as
priority for those positions not requiring especial skill.

As there will be high demand for daily laborers during construction phase of
the project, it will be twofold advantages to hire laborers from local people.
First, the project promoter will reduce time of searching for laborers and
save his money that is needed for transportation of laborers to project site.
Second, fairly distributing the benefits of the project will enhance project
social acceptability in general.
10.3.2.2. Local Livelihood Improvement

The employment opportunity to be created by the project will have a positive
implication on the improvement of local livelihoods of the community
residing nearby the project site. This local income generation related social
benefit will have long term as well as cumulative benefits.
Enhancement Measures Utilization of the available labor force in the area

enhances the benefits at local level. Out sourcing commercial activities like
cafeteria services for local competitive service providers maximizes the
social benefit of the project.
10.3.2.3. Gender Equity

Women’s efficiency in carrying out some of the production processes (e.g.
product packaging, process control and sorting of product defects) make
them preferable for industries like this one. This gender specific opportunity
will address the historical disproportionate burden of unemployment on
woman.
Enhancement Measures: Consideration to be given for keeping the above

beneficial opportunity to women and actions to avoid work area problems
women can face. The actions to be taken include: providing equal work
opportunity, strict rule on work area sexual harassments, job security,

appropriate payment (equal payment standard with men engaged on

equivalent work load), medical and reproductive health follow-up for women,
joint counseling service RH and HIV AIDS for needy employees.
10.4. Adverse Impacts and Proposed Mitigation

Measures
Although reversible and localized in their nature, employees’ health hazard;
and generation of solid wastes are found to be the main environmental
impacts of the operation phase of the project. Generally, the proposed
project is characterized with insignificant negative impacts of both
construction and operation phases. This section of the report outlines these
adverse impacts and presents the proposed prevention and mitigation
measures.
10.4.1. Construction Phase

Since the project is planned to be implemented in the already constructed
sheds, which only require small modification and renovation works. As such
the construction phase of the project does not have any adverse impacts.
10.4.2. Operational Phase

Environmental aspects of the project that cause adverse environmental
impacts are emission of odors from production units and generation of
nuisance noises from operation of production units. Accidents and work area
hazards are the other work environment aspects of the project.
There are both environmental pollution sources and human health hazards
that can be caused by the production process of the recycling plant. These
production process environmental aspects can be summarized as:

Solid wastes
generation of nuisance noises from operation of machineries and
Employee health hazard
10.4.3. Impact on Air Quality

Since the machineries in the production process are fully automated by
electric power, there will be no air emission associated with the production
process. Hence, there is no way that the potential pollutants like CO, NOx
and Sox might arise in the production process. In this context, the
operation of the Plastic recycling plant facility will actually contribute
insignificantly to the overall air quality.
Mitigation measures: Control of the odors associated with the production

process may be achieved by scrubbing exhaust fumes and, if necessary,
incinerating the remaining volatile organic compounds (VOCs).
10.4.4. Impacts of Solid Wastes

The production process of the proposed project is characterized by the
generation inevitable but less amount of solid wastes: Empty containers of
raw materials and scrap papers are the major solid waste issues of the
production process of the project.
Although solid waste may be less significant problem in qualitative and

quantitative aspects, it will have considerable environmental risks, if it is not
managed properly. Storing of solid wastes generated from the production
process in open areas, which is the common practice, will have a direct
impact on the land which is the main receiver of solid wastes.

Mitigation measures: Preventing and minimizing the generation of the

solid waste at its source is the primary measures to mitigate the impact they
can induce on the environment. In general the following abatement
measures reduce solid waste related environmental pollution problems:
Scrap papers should be collected and sold.

Damaged cartons can be collected & sold for recycling.
10.4.5. Impacts on Employee’s Health & Other

Risks
Since a work place is a potentially hazardous environment, workers
encounters direct, indirect and long-term potential health problems during
the operation of the proposed project.
Production and technical personnel have the exposure to continuous noise

and vibrations created from machines electrical motors and machineries.
Inhaling of the emissions results from operations of the production process
are potential workers’ health threat.
Interference of technicians and operators in running machine parts can

cause body injury. Interference of individuals with electrical systems, failure
from structures and failure due to slippery floor are other causes for injury.
The main environmental risks are associated with the following activities:
Activities inside the repairs and mechanical workshop of the factories may
cause oil contamination risks to the land. In addition, there may be risks to
the workers, including exposure to fumes, injury with sharps etc.

General occupational health risks exist throughout the enterprise from noise,
odors, or slippery floors.
Mitigation measures: Anticipation of potential hazards and risks in the

work environment and implementing control methods to remove or reduce
the hazard exposure of the worker is the proposed measures to mitigate the
impacts under consideration:
The general control methods available for control of hazards include:
Using local supply ventilation and natural ventilation systems to assure

the comfort of operators in production areas
Training workers regarding work area safety and hazardous control
like the fire hazardous and controlling mechanisms; application of
safety and hazard control equipment; monitor the work area or the
worker, good housekeeping, and preventive maintenance.
Using personal protective equipment like: skin protections (gloves and
aprons); eye protection (safety glass, goggles, face shield, and hood);
ear protection (ear muffs); respiratory protection (air-purifying
respirators); and safety shoes.
Besides the above; the following measures need to be considered regarding
employees’ health:
Pre-employment and periodic health checkups for workers

Insurance policy and procedures for work area caused damages
10.4.6. Impact on Energy Resources

The operation of the proposed Plastic recycling project requires a
considerable electrical energy resource for: running of machines, power for

the enterprise buildings, etc. As the project uses a renewable energy source
hydroelectric power the impact is not significant. However, from economical
point of view the issue requires attention.
Mitigation Measures: Avoiding idle operation of machineries and

implementation of proper power use practices are the mitigation measure for
reducing electrical power consumption. Installation of less energy intensive
equipment (like using florescent light rather than bulbs) reduces the energy
consumption. Training and reminding workers to switch off lights when
leaving offices is the other managerial proposed option for minimizing the
problem.
Generally, the following measures help to reduce the impact:

Train operators on operation of equipment in efficient way to minimize
energy
Supervise production processes in order to improve production
efficiency
Switch-off idle machines and unused bulbs
Provide interlocked control system for the generator to sawed-off itself
when external power returned
Setup written procedures for production operations
Avoid reprocessing and reworks
10.5. Environmental Management Plan
In order to be effective in minimizing adverse impacts and enhancing

beneficial impacts, environmental management must be fully integrated with
the overall project management effort at all levels. Hence, the overall goal of
the Environmental Management Plan (EMP) of the propose project to

minimize adverse impacts of the project by managing and implementing the

proposed impact alleviation measures and good working practices.
A great concern is given for the environmental management and protection

program during the project’s operation phase. The objectives of the
environmental management program at this phase of the project are:
protection of the environment from the production process and service
pollutants, protection of workers from work area health hazard, efficient use
of energy resources, waste management and improve the environmental
performance of the company.
Beside the environmental management tasks to be performed by different

functional units of the company; the Consultant proposes an
environmentalist and safety officer to operate the environmental
management program at this stage of the project. The environmentalist and
safety officer will coordinate and monitor all aspects of the environmental
management programs; develop further an environmental oversight
capability within the company; and facilities for the implementation of
companywide Environmental Management System (EMS).
10.6. Environmental Monitoring Program
Various kinds of environmental monitoring and evaluation will be conducted

by responsible staffs of the company. The Environmental and Safety Officer
will be responsible for most of the monitoring activities and will report to the
company top management in a weekly basis.
The company top management and affiliated units of the Jigjiga

Environmental Protection Authority, such as technical divisions of
Environmental Pollution Research, control and impact assessment core
process will make occasional and random monitoring, respectively. The
monitoring will involve both quantitative and qualitative data, as appropriate

to the nature of the information which will involve during the production
stage of the project.
10.7. Conclusions and Recommendations
The implementation of the proposed Plastic recycling project will have a pack
of economic and social benefits. It plays a role on the country’s economic
development activity through creation of employment opportunities for
citizens, generation of income for the local community, and it also paves the
way for rural development in the area.
On the other hand, the proposed project has some associated environmental
aspects that might cause adverse impacts. However most of these
environmental effects can be reduced to acceptable levels with
implementation of pollution prevention and control techniques. Therefore, it
can be concluded that there will be no severe or irreversible adverse impacts
that will prevent the implementation of the proposed pa[er products
processing project.
To have minimal and acceptable residual environmental impacts, it is

recommended that mitigation measures should be properly implemented. A
close follow up of the effectiveness of the implemented measures is also
recommended since a well-planned monitoring program is critically
important.

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Bio Green

Owner: Mr. Moustapha Abdillahi Guedi

Submitted to: Commercial Bank of Ethiopia,

0. Executive Summary ......................................................................... 4

2. Company Summary ......................................................................... 5

Table: Existing Asset Value of the Company ....................................... 5

2.1. Mission ..................................................................................... 6

2.2. Products ................................................................................... 6

2.3. Keys to success ......................................................................... 6

2.4. Company ownership ................................................................... 7

2.5. Profile of the Owner/General Manager ........................................... 7

2.6. Location and Accessibility ............................................................ 7

3. Market Analysis ............................................................................ 8

3.1. Market Potential ......................................................................... 8

3.2. Competition and buying pattern ................................................... 8

3.3. Marketing strategy ..................................................................... 8

3.4. Sales Strategy ........................................................................... 9

4. Production capacity & production programme ...................................... 9

Table: Production Capacity .............................................................. 9

Table: Production programme .......................................................... 9

Table: Product prices ......................................................................... 10

6. Sales Forecast ......................................................................... 10

Table: Planned Revenue ..................................................................... 10

7. SWOT Analysis .............................................................................. 10

1|Page B y : Bio Green Recycling Solution

8. Financial Analysis .......................................................................... 11

Table: Existing Asset Value of the Company ..................................... 11

Table: Costs of sales ......................................................................... 12

Table: Costs of sales projection ........................................................... 12

Table: Revenue at full capacity ........................................................... 12

Table: Revenue projection .................................................................. 12

Table: Manpower Requirement and Annual Salary Expenditure ................ 13

Table: Utilities .................................................................................. 14

Table: Summary of Fixed Assets ......................................................... 14

Table: Depreciation ........................................................................... 14

Table: Repair & Maintenance costs ...................................................... 14

Table: Operating costs ....................................................................... 15

Table: Working capital Determination .................................................. 15

Table: Investment for the whole project ............................................... 16

Table: Investment Costs & Source of Finance ........................................ 16

Table: Loan Repayment Schedule ........................................................ 16

Table: Profit and Loss Statement ......................................................... 17

Table: Cash Flow Statement ............................................................... 17

Table: Balance Sheet Statement ......................................................... 18

9. Financial Evaluation ....................................................................... 19

9.2. Break-Even Analysis ................................................................. 19

9. Payback period ........................................................................... 19

9.4. Internal rate of return and net present value................................ 19

2|Page B y : Bio Green Recycling Solution

10. Environmental Impacts ................................................................. 20

10.1. Scoping ................................................................................... 20

10.2. Description of Impacts ............................................................... 20

10.3. Positive Impacts and Enhancement Measures................................ 21

10.3.1. Macroeconomic Benefits .......................................................... 21

10.3.2. Microeconomic Benefits ........................................................ 22

10.3.2.1. Employment ..................................................................... 22

10.3.2.2. Local Livelihood Improvement ............................................ 23

10.3.2.3. Gender Equity .................................................................. 23