Académique Documents
Professionnel Documents
Culture Documents
(Feasibility study)
March, 2009
Addis Ababa
Table of Contents
IEXECUTIVE SUMMARY
IIMARKET STUDY
IIIRAW MATERIALS AND UTILITIES STUDY
IVPLANT LOCATION AND ENVIRONMENTAL
CONSIDERATION
VENGINEERING AND TECHNOLOGY
VIORGANIZATION, MANAGEMENT AND MAN POWER
VIIPROJECT IMPLEMENTATION SCHEDULE
VIIIFINANCIAL STUDY
IXCONCLUSION AND RECOMMENDATION
ANNEXES:
I.
Page
1
3
19
25
26
32
34
37
41
i.
43
ii.
44
iii.
45
iv.
46
v.
47
vi.
48
vii.
49
viii.
51
EXECUTIVE SUMMARY
needs for high-quality fish products. The company aspires to meet local
needs and contribute to efforts of the country in generating foreign
exchange earnings. The organization and management system of the
business is designed to respond to the level of sophistication in the
production and marketing operations.
1.2 Amount of Financing Required
The total investment requirement of the proposed business intervention
is estimated at Birr 192,610,476.
amount through a scheme of 70% and 30% between Bank and GILAD
TRADING Private Limited Company. Consequently, the Bank avails Birr
134,827,333 while GILAD TRADING Private Limited Company meets the
remaining Birr 57,783,143 .
1.3 Market Prospect
The market prospect of the proposed project is strongly linked with the
current attractive investment policy of Ethiopia. The government has
been on foreign direct investment (FDI) and has been improving the term
and conditions under which they are to operate. Having also reviewed the
countrys economic development, the consumption of fish is increasing
which in turn necessitate improvement in the fish processing industry and
the development of relevant infrastructures.
There are evidences that consumption of fish is increasing in all target
towns and regions. The most important terminal markets for fish,
however, are: the major urban centers of Gonder, Debre Tabor, Dessie,
and Kombolcha. Many smaller
Furthermore, there are several water bodies mainly rivers and reservoirs
which are yet untapped.
team,
three
divisions
(Production,
Processing,
and
back
period
of
and
7years.
The
project
contributes
to
MARKET STUDY
General analysis
Altitude
(m)
Area
(km2)
Potential
Mean depth
Production
annual yield
(m)
(mt)
(mt)
1280
1285
1710
1570
1585
1575
1850
Na
550
1160
90
410
230
205
435
255
13.0
7.1
11.6
8.6
17.0
7.6
2.5
9.0
3500
9800
600
1100
1300
1700
4500
2400
1350
1830
2160
0
3500
170
7005
8.0
9.0
0
24900
1700
51500
1000
0
5430
2.1.2
660
0
320
0
2000
100
of
the
Animal
and
Fisheries
Development
and
Regulatory
Custom Duty
enterprise
Spare parts not greater than 15% of the total value of the capital
goods shall be given the same privilege.
The fish processing sub sector is not under areas reserved to domestic
investors, thus it is open to international investors.
2.2
Target market
For the reason of high demand of fish products in the EU, Middle East and
Some African Countries, the products of the project are mainly sold to
10
2.3.1
Fish Production
To
undertake
trade,
adequate
production
is
an
important
first
(420
percent).
The
developed
countries
increased
their
Region
World
Developed
1963
FP
44.0
[100]
24.0
[55]
1976
HP
3.2
[100]
1.0
[32]
FP
68.8
[100]
39.4
[57]
11
2003
HP
4.1
[100]
1.1
[27]
FP
132
[100]
30.9
[23]
% increase
19632003
HP
FP
HP
6.3
200
97
[100]
1.3
29
30
[21]
Developing
20.0
[45]
2.2
[68]
29.4
[44]
3.0
[73]
101.9
[77]
5.0
[79]
410
127
There are few developing countries in the world that have not expanded
their fish production, because it is the natural resource that requires the
least lead time for development. Enhanced production has been the result
of: (i) sustained efforts by the respective countries in capture and culture
fisheries; (ii) development assistance in the realm of fisheries, often
provided by the developed countries and multilateral aid agencies; and
(iii) foreign direct investment. Among the countries examined in this
study, those that faced barriers on the path to fisheries development
were primarily those that experienced political constraints and turmoil.
Namibia was the classic example of this until it attained independence in
1990. Another was Nicaragua, where fish production in 2003 was only
22 000 tonnes far below potential and less than even that of the small
island state of Fiji, which produced 34 600 tonnes. In the case of
Namibia, since constraints were removed after independence, fisheries
have become a cornerstone of development for that country. Brazil,
Senegal and Sri Lanka have not expanded their fish production at the
average pace of the developing countries over the four decades. Here
again, in Sri Lanka, the ethnic conflicts in its northern territories were an
important cause of this stagnation. Fish production in Ghana, Kenya,
Thailand, the Philippines and Fiji has risen faster than the average
rates for developing countries. Chile, though among the worlds largest
fish producers, accounting for 4.1 million tonnes in 2003, saw production
drop from peak levels of nearly 8 million tonnes in 1995. Despite
variations in levels and rates of increase, fish production in all the
countries rose faster than the human population numbers.
2.3.2
Realms of Production
12
The three broad realms of fish production are marine capture, inland
capture and aquaculture. Their shares in the total have changed radically
between 1963 and 2003. In the realm of marine and inland capture
fisheries, as many as 15 developing countries featured in the list of the
top 50 fish-producing nations. These nations accounted for a third of
global capture fish production. The picture in aquaculture was more
dramatic. Developing countries in 2003 produced 34.1 million tones,
accounting for 81 percent of global production of 42.1 million tonnes.
China, alone, accounted for 84 percent (34.2 million tonnes) of this
developing countries aquaculture output. Together with India, the
Philippines and Indonesia, the share rises to over 95 percent.
At the global level, in 1963 inland capture and aquaculture together
accounted for only 8 percent of the total. This share increased to 35
percent in 2003. The developing countries accounted for 90 percent of
the fish from these sources. Within the developing countries, China,
alone, accounted for 79 percent of the inland and aquaculture production
in 2003. In 1963 Chinas share was only 37 percent.
The trade orientation of the three realms of fish production, particularly
the international trade orientation, varies considerably. By and large, fish
from inland capture is less oriented towards international trade. There are
important exceptions. Kenyas Lake Victoria capture fishery is now
almost entirely export oriented. Inland capture fisheries are also the
realm in which there is greater subsistence production, as has been
evident in Brazil. Aquaculture, on the other hand, is more market
oriented, with the international market figuring high in its priorities. The
case of Chile is an example of the latter. In China, Indonesia, the
Philippines and Thailand, aquaculture is oriented towards both the
domestic and international markets. The orientation of marine capture is
mixed. In countries in which fish is not the preferred source of domestic
13
1976
2003
Exports Imports Exports Imports
7.98
8.84
63.5 68.3 [673]
[695]
2.94
1.19
30.3
12.38
[931]
[940]
37
13
48
18
International Trade
fishmeal to the United States. The closing of the Chinese market after the
1949 revolution created a big gap in the supply of fishery products in the
world market. As a result, major fish importers such as the United States
and countries in Europe were compelled to search for new sources of
supply for fishery products such as tropical shrimp. India and Thailand
were among the major beneficiaries of this supply gap. The rise in oil
prices and the spate of EEZ extensions in the late 1970s and early 1980s
made countries such as Japan cut back on their own fish production
obtained using distant water vessels. They adopted the strategy of
importing fish from the same developing countries where their vessels
once fished. Indonesia, the Philippines and India thus became major
suppliers to the Japanese market. The former two countries received aid
for fisheries development. This came to be called the development
import strategy.
FAO holds systematic data on international trade in fishery products from
1976 onwards. According to these data, by 1976 developing countries
had already accounted for about 37 percent of the value of exports, but
just 13 percent of imports. Their share of exports increased to 48 percent
and imports to 18 percent by 2003 (Table 2.3).
In nominal value terms, world fish exports rose by almost 700 percent
from around US$8 billion in 1976 to US$63 billion in 2003. The
developing countries focus on exports is self-evident. Their natural and
comparative advantage lies in this realm. However, given the phenomenal
increases in total production, as well as shifts of production to realms
that are more explicitly trade oriented, the foray of developing countries
into international trade is relatively less impressive and constrained.
The global value of fish imports, in nominal terms, increased by about
673 percent from US$8.84 billion to 68.3 billion between 1976 and 2003.
15
There are important regional and country variations. For example, the
role of fish imports into West African countries such as Cte dIvoire,
Nigeria and Ghana and into other countries such as Egypt, Brazil, Sri
Lanka and the Philippines
Over the last quarter century, the value of developing countries exports
increased substantially, though their share of global trade rose only
marginally. However, their
export
performance
pales
before
their
There is another way to analyze the issue of the slowing down of the
growth of trade by examining the prices received (paid) for the fish
exported (imported). For the purpose of comparability, we express these
prices as the unit value of the live weight (UVLW) of exports and
imports. By taking live weight rather than product weight, we move
towards greater product homogenization, because expressing the vast
diversity of fishery products in their wet-weight terms implies equalizing
them in terms of their food values (Table 2.4).
Taking the developing countries, we see that the UVLW for exports
increased marginally in the pre-WTO phase, from US$2 390 to 2
476/tonne, and then dropped significantly in the WTO phase to US$1
763/tonne. However, the UVLW for imports decreased marginally in the
pre-WTO from US$308 to 277/tonne and then increased marginally in the
WTO phase to US$283/tonne. The impact of inflation is not considered,
as the values stated are in current prices. The trends we observe in the
16
post-1995 WTO phase are no cause for celebration. From the food-value
perspective, the earning per unit of developing countries exports reduced
during this period, while the unit cost paid for imports increased.
More conventional trade analysis, for example taking the barter terms of
trade, does not paint a rosier picture of the trends on the aggregate
(Table 2.5). The terms of trade of the developed countries show a slight
deterioration in the period 19902000. In fact, they have improved in the
WTO phase. Developing countries, on the other hand, experienced a
significant deterioration in terms of trade in the WTO phase. When we
account for the China effect, the decline is more modest.
The deteriorating terms of trade, caused primarily by falling unit export
prices, create pressures to export more quantity, or if possible graduate
to more value-added products. Both these options are limited. A rough
estimation of losses on this score is revealing. Consider the case of
shrimp, the mascot of developing countries fish exports. In 2000 the
value of global shrimp exports (all process forms) was valued at US$11
billion and the developing countries share was about a third or US$3.15
billion. Our calculations show that if world prices in 2000 had remained at
the 1996 level, the total shrimp export value would have been worth
US$1 billion more and developing countries would have made their
proportionate gains.
When examined from a food-value perspective, the unit earnings from
exports of developing countries have reduced more rapidly than the cost
paid out for unit of import. The conventional terms of trade in fishery
products for developing countries have deteriorated in the WTO phase.
The potential earnings loss to their economies has been considerable,
with attendant food-security implications.
17
Year
1990
1995
2000
Import price
(US$ per
tonne)
308
277
283
Index
100
90
92
Export price
(US$ per
tonne)
2 390
2 476
1 763
Index
100
103
74
1976
1.00
1.00
1.00
1990
0.99
1.11
0.98
1995
0.98
0.91
1.07
2000
1.01
0.95
1.02
The long- and near-term trends in world and developing countries fishery
production and international fishery trade exhibit both disturbing and
encouraging trends as we have seen from the discussion above.
2.4 Analysis of Domestic Fish Market
2.4.1
Competition
18
in fish marketing business is FPME, which handles both whole selling and
retailing on a specialized basis.
Private traders would be in a better position to compete with the project
if they could have adequate storage facilities (small freezers rather than
refrigerators) to overcome the problem of the daily and seasonally
fluctuating demand for fish. This would allow them to procure fish from
fishermen daily as the project shall do and store in deep freezer to meet
the higher demand on the two weekly and monthly fasting days.
Therefore the facility available in the project shall make it competitive to
supply fish on sustainable condition all the year round.
2.4.2
The enterprise
reestablishes
as
19
2Tarig ahmed
Amhara
Mohammed elshafie
3Vittorino Viezzer and SNNPR
carlo Talarico PLC
4CARLO TALARICO
SNNPR
Bahir Dar
SNNPR
Wolaita Sodo
Capital
Investment
('000
Status
Birr)
351
Preimplementation
1,987
PreImplementation
9,509
Preimplementation
9,350
PreImplementation
7,500
Operation
SNNPR
Arba Minch
8,700
7Pascal Lafeneter
8Hashim Abdelkarim
Addis Ababa
Addis Ababa
Addis Ababa
Addis Ababa
17,540
2,000
No
Name of Investor
Region of
Investment
City/ Town
of
Investment
Oromia
Arbaminch
14,620
12,951
Addis Ababa
1,915
Preimplementation
Implementation
Preimplementation
PreImplementation
Implementation
PreImplementation
As the above table indicates most of the described firms are relatively
with better investment capital and as a result expected to compete well
with the project.
2.4.3
Market Prospect
20
Fish potential of the country can be placed at between 30.000 tons and
40,000 tons per year. The total demand is estimated at about 23,000
tons per year and the planned supply is expected to be 16,000 ton per
year. From this we can observe that there exists about 30 % capacity to
absorb existing demand or 40 50% to absorb the total potential of the
country.
Therefore a capacity of 30 40% of the unabsorbed capacity from the
total potential is estimated for this project being reasonable.
2.5 Key success factors
The following points are considered as key success factors to remain
competent in the fishery market:
-
III.
21
22
Male - Aura
F1
Female
Female
Male
Marketing females
3 ponds 100 m
5000 male
5 ponds of 200 m
15000 female
Plastic pond
Marketing male
Plastic pond
F2
Breeding season April - November
10 ponds 500 m
The firm will build two fish farms in the Lake Tana, each one producing
3000 ton per year.Breeding
Farm season
size March
is show
in the figure below.
November
10 ponds 1000 m
1000 f, 330 m
Training pond
For each
fish
be market
should
receive
Fattening
cageto
Fattening
cages: 6m the
depth farm
X 12m diameter
Fattening
cage 1.1 fingerlings.
Fattening cage
Fingerlings will be kept in 360 m 3 training cages for 70 days up to the
weight of 80 grams. In this stage they will be transferred to fattening
cages. Every training cage support two fattening cages in a cycle.
In the fattening cage which is round cages 12m diameter and 6m depth,
with 378 m3, every fish will reach the weight of 750 800 grams in 150
days. In one year we can do two cycles and each farm will hold 74
fattening cages and 19 training cages.
23
Every fattening cage will hold 27.000 fish in total weight of 20 ton,
annual harvest 40 ton for each cage.
3.2.2
The fish will be fed with concentrated food (grains and other dry organic
matters). No chemicals, hormones, or artificial ingredients. The food is
very important and the company should hold a good position in order to
reduce the cost of the fish food (The food is about 85% of the production
cost). The project plans to supply the organic part of fish food from its
own fish food plant. The grain part of the fish food also planed to be
supplied from the waste of the sesame seed oil plant.
24
25
For 10 kg fillet one piece of carton with a dimension of 29.5 X 48.5 X 8.5
cm needed and each piece of fillet will be raped with plastic bag. The
plastic bottles with 350 g and 500 g capacity also required to pack the
sesame and bio diesel oil.
Table 3.1 Annual consumption of materials
Unit of
Meas.
Description
Year 1
Year 2
>Year 3
Capacity Utilization
Production
60
75
100
tones
2520
3150
4200
tones
18
22
30
tones
12
15
20
tones
540
675
900
tones
1860
2325
3100
252000
5400
315000
6750
420000
9000
60
75
100
tones
1800
2250
3000
tones
13800
17250
23000
Pcs
12000
15000
20000
60
75
100
tones
450
560
750
tones
270
337
450
Direct Materials
1.
2.
3.
4.
Food
Food
Food
Food
for
for
for
for
fingerlings
parents
training
fattening
Auxiliary Materials
Pcs
kg
5. Carton
6. Plastic bag
Sesame seed oil plant
Capacity Utilization
Production
Direct Materials
Sesame seed
Auxiliary Materials
Plastic bottle
Capacity Utilization
Production
1.
2.
Fish food
Bio diesel
26
Direct Materials
tones
4500
5625
7500
72000
360000
90000
450000
120000
600000
Auxiliary Materials
Pcs
Pcs
Unit
price
Year 1
Year 2
>Year 3
1.
2.
3.
4.
27,280
491,040
600,160
818,400
20,130
241,560
301,950
402,600
5,550
2,997,000
3,746,250
4,995,000
4,450
8,277,000
10,346,250
13,795,000
12
3,024,000
3,780,000
5,040,000
13
70,200
87,750
117,000
5,000
69,000,000
86,250,000
115,000,000
36,000
45,000
60,000
288,000
360,000
480,000
1,080,000
1,350,000
1,800,000
Auxiliary Materials
5.
6.
Carton
Plastic bag
Sesame seed oil plant
Direct Materials
Sesame seed
Auxiliary Materials
Plastic bottle
Bio diesel oil plant
Direct Materials
Wastage from filleting plant
Auxiliary Materials
1.
2.
Total
3.4 Utilities
The utilities required are electric power and water. Electric power is
required for all the electric-driven machinery and equipment. It is also
27
required for factory and office building lights and other general services.
Low voltage, three-phase (380 400V, 50Hz) and single-phase (220240V, 50Hz) power is required for the running of all equipment and
machinery in the plant. The supply of power will be from the national grid
operated by the Ethiopian Electric Power Corporation (EEPCo).
It is
PANT
LOCATION
AND
ENVIRONMENTAL
CONSIDERATION
4.1 Location
Tana Lake contains fresh water and relatively high rate of microorganism.
Tana Lake is an ideal place to locate in fish farms in cages and specially
Tilapia. Sites should be carefully picked, taking into consideration local
sub streams and oxygen level in the water.
Seven hundred fish cages in the size of 5*5*5 to be installed in defined
sites in the lake. The breeding system will be located on the site of the
factory seven kilometers from the lake. The location of the plant will be
seven kilometers from the lake.
Two sites will be selected to hold the cage system. Every site will hold a
production unit of 2000-3000 ton. Every farm will hold 19 training cages
and 74 fattening cages. Total investment in every farm will be
28
Tilapia
24 ton/day
29
Silurid/ Catfish
10 ton/day
Barbs/ Carp
6 ton/day
Total
40 ton/day
After filleting, all fish are packed, weighed and transferred to freezing and
-18oC storage until dispatch. Production output is based on plant working
one 10 hour shift
Filleting process:
Receive fish in plastic creates, covered in ice flakes. Storage in 0 oC cold
storage. Processing on demand of production. Then transfer the fish into
container from which a low conveyor takes the fish to the ritual blood
letting tables. A table from each side of the conveyor letting operated on
the table (2 tables one from each side of the conveyor). An upper
conveyor takes the fish to the bleeding water tank, De scaling machine
and Washing and disinfection tank
Filleting room:
After washing and disinfection the fish is transferred vial conveyor or slide
to filleting room where fish home removal, skin removal and final
trimming take place. Then fillet in trays is transferred to freezing on
stainless steel trolleys.
Freezing
Fish fillet trolleys are held in freezing until the temperature in the center
of the product will reach -18oC. Afterwards the trolley is transferred to
the packing room.
Packing
30
Before packing, the fish in the packing room are transferred to a cold
water tank for glazing. The fish is packed for various commercial
demands: bulk package, trays, bags and carton package. After wholesale
packaging in cartons, sealing, weighing and labeling transferred to
storage in 18oC until dispatch.
Item
Description
Total Price in
USD
Qty
Fishing system
1 Fishing Boats with Accessories
2 Pier
Total
50
5
16,500.00
50,000.00
66,500.00
29
5,800.00
18,000.00
5,000.00
6,000.00
4,000.00
10,000.00
50,000.00
98,800.00
Fingerlings farm
3 Water Drainer
4 Net
5 Covering Nets
6 Silos
7Disinfection Sprayer
8 Lifts
9Fish Transferring Container
Total
2,500
2
1
2
2
Fish farm
10 Silos
11 Feeding Boat
12 Boat
13Marketing Boat
14 Nets
15 Sucker
16 Wagon
17 Fingerlings Transferring Containers
18Scale - 100kg
19 Bridge Scale 17 M Long
20 Oxygenizers Wagon
31
11
2
1
1
2
1
1
2
1
1
77,000.00
100,000.00
8,000.00
90,000.00
180,000.00
56,000.00
3,000.00
6,500.00
1,400.00
29,000.00
8,000.00
21 Oxygenizers
Total
100
65,000.00
623,900.00
250,000.00
250,000.00
500,000.00
1,000,000.00
1,000,000.00
1
1
1
182,000.00
169,000.00
143,000.00
1
1
1
1
1
1
1
1
104,000.00
117,000.00
91,000.00
78,000.00
65,000.00
117,000.00
91,000.00
143,000.00
1,300,000.00
1
1
1
1
1
1
160,000.00
144,000.00
120,000.00
128,000.00
112,000.00
136,000.00
5.2.2
Auxiliary equipment
32
800,000.00
4,389,200.00
70,227.20
9,656.24
87,784.00
4,556,867.44
11.1025
50,592,620.75
1,517,778.62
5,059,262.08
57,169,661.45
S/No
A
B
C
Description
Utility equipment
1Transformer station (575
KVA)
2Diesel generator (542 KVA)
3Diesel generator (150 KVA)
4Diesel engines
Workshop equipment
Water and supply system
Sub total
Price
in USD
Qty
2
2
2
25
Total cost
Contingency (10% of total cost)
Total cost at Project site
5.2.3
Total Cost
in Birr
100,000
1,110,250
250,000 2,775,625
50,000
555,125
3,000
33,308
50,000
555,125
10,000
111,025
463,000 5,140,458
13,890
154,214
476,890 5,294,671
47,689
529,467
524,579 5,824,138
S/No
Description
Qty
33
2
1
5
1
Price
Total Cost
in USD
in Birr
40,000
444,100
30,000
333,075
90,000
999,225
10,000
111,025
150,000
1,665,375
120,000
1,332,300
90,000
999,225
20,000
222,050
1
1
50,000
80,000
555,125
888,200
Sub total
680,000
20,400
700,400
70,040
770,440
11
5.2.5
7,549,700
226,491
7,776,191
777,619
8,553,810
Description
Total Cost in
Birr
5,226,977
20,270,258
12,225,305
3,794,658
3,151,109
1,492,893
265,003
5,338,033
14,000,000
22,400,000
13,141,615
101,305,851
253,265
101,559,116
The initial working capital of the first project year is estimated to be Birr
11,102,500. This amount will serve as payment for purchase of wage and
salaries, operating expenses and other overheads till the finished product
(outputs) are sold and cash is realized.
Summary
S/No.
Description
34
ORGANIZATION,
VI.
57,169,661
5,824,138
1,000,000
8,553,810
101,559,116
11,102,500
185,209,226
MANAGEMENT
AND
POWER
Organization Structure
6.1
Management
Producing
Fingerlings
Fish food +
transport
transport
Fingerlings
farm
Processing
Processing plant
Raw
materials +
transport
Marketing
Distribution
Smoking
6.2
No
Head
count
Monthly
wage per
head in Birr
Management
35
Annual
salary in
Birr
MAN
1Firm President
2CEO
3Finings Manager
4Professional Assistance
5Man Power Manager
6Purchasing Manager
7Assistance
8Secretary
9Accounting Manager
10Assistance
11Legal Division
12Maintenance
13Cleaning
14Drivers
15Messengers
1
1
1
4
1
1
2
6
1
6
2
2
2
2
2
20,000
15,000
10,000
8,000
8,000
8,000
6,000
2,000
8,000
6,000
8,000
5,000
1,000
1,500
500
240,000
180,000
120,000
384,000
96,000
96,000
144,000
144,000
96,000
432,000
192,000
120,000
24,000
36,000
12,000
16Guard
1,000
72,000
Total
40
2,388,000
Professional
Section
1Professional Manager
(Foreigner)
2Local Professional Guides
13,000
156,000
10,000
360,000
3Head Veterinarian
8,000
96,000
4Veterinarian
6,000
216,000
5Biologist
6,000
72,000
6Secretary
2,000
48,000
7Drivers
1,500
36,000
Total
13
984,000
Manufacturing
Section
1Manager
8,000
96,000
2Secretary
1,500
18,000
3Accountant
6,000
72,000
4Assistant
4,000
48,000
5Marketing Manager
8,000
96,000
6Purchaser
1,500
18,000
7Drivers
1,500
18,000
8Cleaning
1,000
24,000
Total
390,000
Fingerlings Farm
1Foreign Expert
36
13,000
156,000
13,000
156,000
3Distributor
6,000
72,000
4Secretary
1,500
18,000
5Supervise - Parents
4,000
48,000
6Supervise - Fingerlings
4,000
48,000
7Feeding Workers
2,000
48,000
10
2,000
240,000
2,500
30,000
10Plumber
2,500
30,000
11Maintenance
3,000
72,000
12Warehouse
3,000
36,000
13Cleaning
1,000
12,000
14Guards
1,000
48,000
15Drivers
1,500
36,000
8Pond Workers
9Electrician
Total
30
1,050,000
Fish Farms
1Station Manager
8,000
96,000
2Secretary
1,500
18,000
3Accountant
4,000
48,000
4Fattening Supervisor
4,000
48,000
5Feeding Workers
18
2,000
432,000
6Pond Workers
18
2,000
432,000
3,000
180,000
3,000
72,000
1,000
72,000
10Divers
1,500
72,000
11Cleaning
1,000
24,000
7Cage Maintenance
Workers
8Warehouse And Net
Workers
9Guards
Total
Grand Total
VII.
59
1,494,000
151
6,306,000
We expect the bank to avail a loan for the 70% of the total capital. In the
mean time the transfer of 30% capital will be transferred from our
account. Site plan preparation and construction will be done in less than
4 months; the houses will be ready for installation and start up of the
machinery. In preparation time, the utilities will also be ready like
37
50,000
5,551,250
1,300,000
workers)
500,000
4. Designing cost
Total project implementation expense
7,401,250
All these costs are amortized over the project years. Consequently, the
annual amortization amount would be Birr 493,416.67.
38
Activities
Purchasing of machineries
& equipment
Installing utilities
Hiring labors
Training
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
FINANCIAL STUDY
VIII.
Investment Outlay
8.1
8.1.1
As indicated under Table below, the total planned investment cost of the
project is about Birr 192,610,476. Out of which Birr 134,827,333 is financed
by bank (Bank loan) and the rest Birr 57,783,143 is promoters own
contribution (equity).
Table 8.1: Investment Requirements
S.N.
Description
Foreign
Purchase
Amount in
USD
5,149,260
Total
8.1.2
5,824,138
1,000,000
770,440
1,000,000
8,553,810
101,559,116
101,559,116
11,102,500
11,102,500
500,000
1,850,000
7,401,250
6,944,279
115,511,616
192,610,476
Total in Birr
57,169,661
524,579
Local
Purchase
Amount in
Birr
Fixed Capital
Source of Fund
The total planned investment cost of the project is about Birr 192,610,476.
Out of which Birr Birr 134,827,333 is financed by bank (Bank loan) and the
rest Birr 57,783,143 is promoters own contribution (equity).
A loan of Birr 134,827,333 will cover all costs of machinery & equipment,
under the following terms. The total loan of Birr 134,827,333 is to be repaid
on 15 equal annual installments of Birr 15,932,339 at a yearly interest rate
of 8.5%.
8.2
8.2.1
Production Estimate
The factory planned to produce 4,200 tons of processed fish (fillets), 3000
tons of sesame seed oil and 450 tons of bio diesel oil. The production rate
is 60% at the first year, 75% in the second year and by the third year it will
attain its full capacity 100% of each product.
8.2.2
Revenue Estimate
The revenue source of the project will be from sales of processed fish. As
indicated in the sales plan of this proposal, the sales price of the products is
fixed at Birr 20.00 per kg for processed fish, Birr 40 per kg for sesame seed
oil and Birr 5.50 per kg for bio diesel oil throughout the life of the project.
Accordingly, the
gross
revenue
of the
project ranges
between
Birr
123,885,000 and 206,475,000 from the first to the last project Year.
8.2.3
Operating costs include all project expenses other than fixed investment.
They are expenditures to be spent on annual operating items. In estimating
the operating costs, an attempt has been made to depend on current market
information and the experience of similar projects. Summary of operating
costs if the plant operates at full capacity is indicated below.
Raw Materials
Direct Labor
Manufacturing section
Fingerling farm
Fish farm
142,508,000
390,000
1,050,000
1,494,000
Total
2,934,000
984,000
2,150,000
300,000
11,377,336
14,811,336
2,388,000
150,000
1,910,762
4,448,762
164,702,098
Depreciation
According to the projected income statement of the study (Annex II), the
project will generate a positive net profit over the entire project years, the
total net profit amounts to Birr 343,400,887.
8.3.2
Financially, the project is highly liquid. The cumulative cash inflow (Annex
III) shows a net and positive cash surplus starting the first year of the
project and result into Birr 2,760,440,250 at the end of the 15 th Year. The
net cash surplus of each year surpasses the financial obligation of the
company.
8.3.3
Balance forecast
According to the projected balance sheet of the study (Annex IV), the
project will have a Debt equity ratio of 2.49% at the end of the 15 th year of
the project.
8.4 Viability and other measure of project worth
8.4.1
Indexes
= 2,760,440,250
= 1,255,028,885
8.4.2
Financial IRR
= 58.65%
Return on Investment
return on investment.
8.4.3
Profit Margin
The GILAD TRADING PLC registers an average of 12% profit margin over the
15 years life time. In the computation of the profit margin, a percentage
difference
between
total
net
profit
of
Birr
343,400,887and
total
8.4.4
In order to cover the total loan of Birr 134,827,333 over the 15 years of the
project, a total of Birr 238,985,086 is required. Having reviewed the total
depreciation and net profit of the project, the loan repayment period would
be between the 6th and 7th year of the project.
8.4.5
=
Annual Sales X Annual Fixed Costs
Annual Sales Annual Variable Costs
206,475,000 X 20,087,514
206,475,000 145,108,000
Birr 67,586,316
8.4.6
20,087,514 X 100
.
206,475,000 145,108,000
32.73%
Ratio Analysis
The ratio analysis of the project is shown in detail in the Annex VI.
IX.
9.1
Conclusion
Recommendation
Annex I
Projected sales forecast
Product Type
Capacity utilization (%)
Sales
Processed fish (fillet)
Sesame seed oil
Bio - diesel oil
Y-1
Y-2
Y-3
Y-4
Y-5
Y-6
Y-7
Project Year
Y-8
Y-9
Y - 10
Y - 11
Y - 12
Y - 13
Y - 14
Y - 15
60
75
100
100
100
100
100
100
100
100
100
100
100
100
100
123,885,000
154,856,250
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
50,400,000
63,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
72,000,000
90,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
1,485,000
1,856,250
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
Annex II
Projected income statements (Birr)
Particulars
Y-6
Project Year
Y-7
Y-8
Y-9
Y-1
Y-2
Y-3
Y-4
Y-5
Y - 10
Y - 11
Y - 12
Y - 13
Y - 14
Y - 15
123,885,000
154,856,250
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
206,475,000
50,400,000
63,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
84,000,000
72,000,000
90,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
120,000,000
1,485,000
1,856,250
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
2,475,000
85,504,800
106,881,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
2,934,000
2,934,000
2,934,000
3,110,040
3,296,642
3,494,441
3,704,107
3,926,354
4,161,935
4,411,651
4,676,350
4,956,931
5,254,347
5,569,608
5,903,784
13,651,336
14,198,836
14,811,336
14,870,376
14,932,958
14,999,296
15,069,613
15,144,150
15,223,159
15,306,908
15,395,682
15,489,783
15,589,530
15,695,262
15,807,337
Revenue:
Sales
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
102,583,552
124,507,252
160,746,752
160,981,832
161,231,017
161,495,153
161,775,137
162,071,920
162,386,510
162,719,976
163,073,449
163,448,131
163,845,294
164,266,286
164,712,538
21,301,448
30,348,998
45,728,248
45,493,168
45,243,983
44,979,847
44,699,863
44,403,080
44,088,490
43,755,024
43,401,551
43,026,869
42,629,706
42,208,714
41,762,462
2,908,682
3,158,162
4,448,762
4,595,042
4,749,979
4,914,089
5,087,922
5,272,057
5,467,110
5,673,734
5,892,620
6,124,502
6,370,155
6,630,405
6,906,123
11,281,866
10,870,808
10,423,417
9,936,481
9,406,504
8,829,683
8,201,876
7,518,576
6,774,880
5,965,448
5,084,469
4,125,621
3,082,020
1,946,174
709,930
7,110,900
16,320,027
30,856,068
30,961,644
31,087,500
31,236,075
31,410,065
31,612,447
31,846,500
32,115,843
32,424,461
32,776,746
33,177,531
33,632,135
34,146,408
9,370,822
9,423,020
9,483,734
9,553,950
9,634,753
9,727,338
9,833,024
9,953,259
10,089,640
10,243,923
7,110,900
16,320,027
30,856,068
30,961,644
31,087,500
21,865,252
21,987,046
22,128,713
22,292,550
22,481,090
22,697,123
22,943,722
23,224,272
23,542,494
23,902,486
Accumulated profit
7,110,900
23,430,927
54,286,995
85,248,640
116,336,139
138,201,391
160,188,437
182,317,150
204,609,700
227,090,790
249,787,913
272,731,635
295,955,907
319,498,402
343,400,887
Annex III
Projected cash flow statement (Birr)
Particulars
Project Year
Pre Operating
Period
Y-1
Y-2
Y-3
Y-4
Y-5
Y-6
Y-7
Y-8
Y-9
Y - 10
Y - 11
Y - 12
Y - 13
Y - 14
Y - 15
CASH INFLOW
Beginning cash balance
(773,167)
5,136,765
27,593,774
62,417,431
101,164,732
129,954,101
167,869,034
195,959,328
223,516,507
250,503,328
204,332,234
230,055,587
255,079,791
279,355,494
302,829,718
113,552,991
141,941,239
189,254,985
189,254,985
189,254,985
189,254,985
189,254,985
189,254,985
189,254,985
189,254,985
189,254,985
189,254,985
189,254,985
189,254,985
189,254,985
Revenue:
Cash Sales
Collection
Own fund
10,332,009
12,915,011
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
57,783,143
134,827,333
192,610,476
112,779,824
157,410,013
229,763,770
268,892,431
307,639,732
336,429,101
374,344,034
402,434,328
429,991,507
456,978,328
410,807,234
436,530,587
461,554,791
485,830,494
509,304,718
85,504,800
106,881,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
Direct labor
2,934,000
2,934,000
2,934,000
3,110,040
3,296,642
3,494,441
3,704,107
3,926,354
4,161,935
4,411,651
4,676,350
4,956,931
5,254,347
5,569,608
5,903,784
Factory overhead
2,274,000
2,821,500
3,434,000
3,493,040
3,555,622
3,621,960
3,692,277
3,766,814
3,845,823
3,929,572
4,018,347
4,112,447
4,212,194
4,317,926
4,430,001
997,920
1,247,400
2,538,000
2,684,280
2,839,217
3,003,327
3,177,160
3,361,295
3,556,348
3,762,972
3,981,858
4,213,740
4,459,393
4,719,643
4,995,361
11,281,866
10,870,808
10,423,417
9,936,481
9,406,504
8,829,683
8,201,876
7,518,576
6,774,880
5,965,448
5,084,469
4,125,621
3,082,020
1,946,174
709,930
102,992,586
124,754,708
161,837,417
161,731,841
161,605,986
161,457,411
161,283,420
161,081,039
160,846,986
160,577,643
160,269,024
159,916,739
159,515,954
159,061,351
158,547,077
Acquisition of fixed
assets
Loan
and
other
payments:
174,106,726
9,553,810
72,547,610
4,650,473
5,061,531
5,508,922
5,995,858
6,525,835
7,102,656
7,730,463
8,413,763
9,157,459
9,966,891
10,847,870
11,806,718
12,850,319
13,986,165
15,222,409
Project implementation
expense
7,401,250
9,370,822
9,423,020
9,483,734
9,553,950
9,634,753
9,727,338
9,833,024
9,953,259
10,089,640
Sub total
Total Cash Outflow
Net cash balance (Deficit)
11,875,667
193,383,642
4,650,473
5,061,531
5,508,922
5,995,858
16,079,645
7,102,656
17,101,286
17,836,782
18,641,193
92,068,451
20,482,623
21,534,056
22,683,343
23,939,425
25,312,050
193,383,642
107,643,059
129,816,239
167,346,339
167,727,699
177,685,631
168,560,067
178,384,706
178,917,821
179,488,179
252,646,094
180,751,647
181,450,796
182,199,298
183,000,775
183,859,127
(773,167)
5,136,765
27,593,774
62,417,431
101,164,732
129,954,101
167,869,034
195,959,328
223,516,507
250,503,328
204,332,234
230,055,587
255,079,791
279,355,494
302,829,718
325,445,592
Annex IV
Projected Balance Sheet (Birr)
Particulars
Pre -
Project Year
operating
period
Y-1
Y-2
Y-3
Y-4
Y-5
Y-6
Y-7
Y-8
Y-9
Y - 10
Y - 11
Y - 12
Y - 13 Y - 14
Y - 15
ASSETS
Current Assets
(773,167)
5,136,765
27,593,774
62,417,431
101,164,732
129,954,101
167,869,034
195,959,328
223,516,507
250,503,328
204,332,234
230,055,587
255,079,791
279,355,494
302,829,718
325,445,592
- Raw Materials
Inventory
- Accounts Receivable
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
11,875,667
10,332,009
12,915,011
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
17,220,015
11,102,500
27,344,441
52,384,452
91,513,113
130,260,414
159,049,783
196,964,716
225,055,010
252,612,189
279,599,010
233,427,915
259,151,269
284,175,473
308,451,175
331,925,400
354,541,273
57,169,661
57,169,661
57,169,661
57,169,661
57,169,661
57,169,661
57,169,661
57,169,661
57,169,661
57,169,661
114,339,323
114,339,323
114,339,323
114,339,323
114,339,323
114,339,323
5,824,138
5,824,138
5,824,138
5,824,138
5,824,138
5,824,138
5,824,138
5,824,138
5,824,138
5,824,138
11,648,277
11,648,277
11,648,277
11,648,277
11,648,277
11,648,277
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
8,553,810
8,553,810
8,553,810
8,553,810
8,553,810
17,107,620
17,107,620
17,107,620
17,107,620
17,107,620
25,661,430
25,661,430
25,661,430
25,661,430
25,661,430
25,661,430
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
101,559,116
13,288,098
26,576,196
39,864,293
53,152,391
66,440,489
79,728,587
93,016,684
106,304,782
119,592,880
132,880,978
146,169,076
159,457,173
172,745,271
186,033,369
199,321,467
174,106,726
160,818,628
147,530,530
134,242,432
120,954,334
117,220,047
103,931,949
90,643,851
77,355,753
64,067,656
123,327,168
110,039,070
96,750,972
83,462,874
70,174,777
56,886,679
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
7,401,250
493,417
986,833
1,480,250
1,973,667
2,467,083
2,960,500
3,453,917
3,947,333
4,440,750
4,934,167
5,427,583
5,921,000
6,414,417
6,907,833
7,401,250
7,401,250
6,907,833
6,414,417
5,921,000
5,427,583
4,934,167
4,440,750
3,947,333
3,453,917
2,960,500
2,467,083
1,973,667
1,480,250
986,833
493,417
192,610,476
195,070,902
206,329,399
231,676,545
256,642,331
281,203,996
305,337,415
319,646,194
333,421,859
346,627,165
359,222,166
371,164,005
382,406,695
392,900,883
402,593,593
411,427,952
9,370,822
9,423,020
9,483,734
9,553,950
9,634,753
9,727,338
9,833,024
9,953,259
10,089,640
10,243,923
9,370,822
9,423,020
9,483,734
9,553,950
9,634,753
9,727,338
9,833,024
9,953,259
10,089,640
10,243,923
134,827,333
130,176,860
125,115,329
119,606,407
113,610,549
107,084,715
99,982,058
92,251,595
83,837,832
74,680,373
64,713,481
53,865,611
42,058,893
29,208,574
15,222,409
(0)
134,827,333
130,176,860
125,115,329
119,606,407
113,610,549
107,084,715
99,982,058
92,251,595
83,837,832
74,680,373
64,713,481
53,865,611
42,058,893
29,208,574
15,222,409
(0)
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
57,783,143
64,894,042
81,214,069
112,070,138
143,031,782
174,119,282
195,984,534
217,971,580
240,100,293
262,392,843
284,873,932
307,571,055
330,514,778
353,739,050
377,281,544
7,110,900
16,320,027
30,856,068
30,961,644
31,087,500
21,865,252
21,987,046
22,128,713
22,292,550
22,481,090
22,697,123
22,943,722
23,224,272
23,542,494
23,902,486
57,783,143
64,894,042
81,214,069
112,070,138
143,031,782
174,119,282
195,984,534
217,971,580
240,100,293
262,392,843
284,873,932
307,571,055
330,514,778
353,739,050
377,281,544
401,184,030
- Cash
Fixed Assets
Machineries and
equipments
Auxiliary equipment
Office equipment and
furniture
Vehicles, trucks and
portable equipment
Building and
construction
Less: Accumulated
Depreciation
Net Fixed Assets
Other Assets
Project
implementation expense
Less: Accumulated
Amortization
TOTAL ASSETS
LIABILITIES
Current Liabilities
- Accounts payable
Total current liabilities
Long term Liabilities
- Loans payable
Total long term
liabilities
OWNERS EQUITY
- Capital Beginning
- Accumulated Capital
Add: Net Profit
Total Owner's Equity
192,610,476
195,070,902
206,329,399
231,676,545
256,642,331
281,203,996
305,337,415
319,646,194
333,421,859
346,627,165
359,222,166
371,164,005
382,406,695
392,900,883
402,593,593
411,427,952
Annex V
Internal Rates of Return Calculation
Particulars
Pre operating
period
Project Year
Y-1
Y-2
Y-3
Y-4
Y-5
Y-6
Y-7
Y-8
Y-9
Y - 10
Y - 11
Y - 12
Y - 13
Y - 14
Y - 15
(773,167)
4,363,599
31,957,373
94,374,804
195,539,536
325,493,637
493,362,671
689,321,999
912,838,506
1,163,341,834
1,367,674,068
1,597,729,655
1,852,809,446
2,132,164,940
2,434,994,658
NPV
(712,596)
4,734,346
23,439,677
48,867,112
72,997,869
86,425,380
102,894,500
110,702,588
116,378,216
120,211,456
90,373,167
93,779,015
95,833,907
96,732,101
96,645,616
95,726,531
Accumulated NPV
(712,596)
4,021,750
27,461,427
76,328,539
149,326,409
235,751,789
338,646,289
449,348,877
565,727,094
685,938,549
776,311,716
870,090,731
965,924,638
1,062,656,739
1,159,302,354
1,255,028,885
2,760,440,250
NPV
1,255,028,885
IRR
58.65%
2,760,440,250
Annex VI
Projected financial ratio (%)
Particulars
1. Sales Margin:
Pre-tax profit
Net sales
2. Return on Asset (ROA):
Y-1
5.74
Y-2
1
0.54
Y-3
Y-4
Y-5
Y-6
Y-7
Project Year
Y-8
Y-9
Y - 10
Y - 11
Y - 12
Y - 13
Y - 14
Y - 15
14.94
15.0
0
15.06
15.13
15.21
15.31
15.42
15.55
15.70
15.87
16.07
16.29
16.54
13.32
12.0
11.06
10.23
9.83
9.48
9.19
8.94
8.74
8.57
8.44
8.35
8.30
Pre-tax profit
Gross assets
3. Return on Equity:
Net profit after tax
Capital + Reserve
4. Current Ratio:
Current assets
Current liabilities
5.Return on investment:
Pre-tax profit
Capital invested
6. Debt Ratio:
Total debt
Total assets
3.65
7.91
12.31
2
5.15
37.99
27.6
3
21.73
12.56
11.22
10.15
9.28
8.57
7.97
7.46
7.03
6.66
6.34
- 2,101.89
2,388.35
2,663.64
2,926.53
2,422.77
2,664.15
2,890.01
3,099.00
3,289.76
3,460.99
1
65.42
37
9.64
717.79
720.2
4
723.17
726.63
730.67
735.38
740.83
747.09
754.27
762.47
771.79
782.36
794.33
66.73
6
0.64
51.63
44.2
7
38.08
35.81
31.81
27.99
24.30
20.70
17.13
13.57
9.97
6.29
2.49
Annex VII
Summary of annual operating cost
No
Cost Items
1Raw Materials
2Direct Labor
3Factory Over Head
Salaries of indirect labor
Utilities
Y-1
Y-2
Y-3
Y-4
Y-5
Y-6
Y - 11
Y - 12
Y - 13
Y - 14
Y - 15
85,504,800
106,881,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
142,508,000
2,934,000
2,934,000
2,934,000
3,110,040
3,296,642
3,494,441
3,704,107
3,926,354
4,161,935
4,411,651
4,676,350
4,956,931
5,254,347
5,569,608
5,903,784
13,651,336
14,198,836
14,811,336
14,870,376
14,932,958
14,999,296
15,069,613
15,144,150
15,223,159
15,306,908
15,395,682
15,489,783
15,589,530
15,695,262
15,807,337
984,000
984,000
984,000
1,043,040
1,105,622
1,171,960
1,242,277
1,316,814
1,395,823
1,479,572
1,568,347
1,662,447
1,762,194
1,867,926
1,980,001
1,290,000
1,612,500
2,150,000
2,150,000
2,150,000
2,150,000
2,150,000
2,150,000
2,150,000
2,150,000
2,150,000
2,150,000
2,150,000
2,150,000
2,150,000
225,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
300,000
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
11,377,336
4Marketing and
Administration Cost
Salaries of supporting
staff
Office supplies
2,908,682
3,158,162
4,448,762
4,595,042
4,749,979
4,914,089
5,087,922
5,272,057
5,467,110
5,673,734
5,892,620
6,124,502
6,370,155
6,630,405
6,906,123
907,920
1,134,900
2,388,000
2,531,280
2,683,157
2,844,146
3,014,795
3,195,683
3,387,424
3,590,669
3,806,109
4,034,476
4,276,544
4,533,137
4,805,125
90,000
112,500
150,000
153,000
156,060
159,181
162,365
165,612
168,924
172,303
175,749
179,264
182,849
186,506
190,236
Depreciation of vehicles
and furniture
5Amortization
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
1,910,762
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
493,417
105,492,234
127,665,414
165,195,514
165,576,874
165,980,996
166,409,243
166,863,059
167,343,977
167,853,620
168,393,710
168,966,069
169,572,633
170,215,449
170,896,691
171,618,662
Total
The operating costs have been calculated for the year of operation when the designed capacity is
expected to be utilized.
Assumptions:
-
The operating cost computation is based on the data contained in the previous section of
this report. These data include the product outputs, requirement of labor, consumables,
spare parts, fuel, electric energy, water, etc.
All costs and normative values used in this cost estimates are based on the data
available on the current market and assumed to increase by 5% every year
Cost of electric energy has been calculated based on the annual power requirement and
the cost of Birr 0.4168 per kwh, if the energy supply is provided from the external power
transmission line.
Expenses for spare parts and maintenance during the operation of machineries are
assumed to be 2% of their cost.
Calculation of the depreciation charges have been made on the basis twenty years is
assumed as an effective service year for building, ten years for machineries &
equipments, five years for vehicles and furniture
Project Year
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Total
Interest
(Birr)
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
15,932,339
238,985,086
54
11,281,866
10,870,808
10,423,417
9,936,481
9,406,504
8,829,683
8,201,876
7,518,576
6,774,880
5,965,448
5,084,469
4,125,621
3,082,020
1,946,174
709,930
104,157,753
Balance
Bank Loan (Birr)
Reduction (Birr)
4,650,473
5,061,531
5,508,922
5,995,858
6,525,835
7,102,656
7,730,463
8,413,763
9,157,459
9,966,891
10,847,870
11,806,718
12,850,319
13,986,165
15,222,409
134,827,333
134,827,333
130,176,860
125,115,329
119,606,407
113,610,549
107,084,715
99,982,058
92,251,595
83,837,832
74,680,373
64,713,481
53,865,611
42,058,893
29,208,574
15,222,409
(0)
(0)