I.

EXECUTIVE SUMMARY

FRIENDS Dairy Farming and Processing PLC was legally established on 01/08/2019 by four
shareholders namely Ato Surafel, Ato Simon, W/o Workayehu and W/t Meareg with initial
paid up capital of Birr 4 million which is contributed by all members equally. The name
Friends is formed by taking the first alphabet of the four members and putting them in
ascending order.
The project is located in Debrebrhan town which is 25Kms away from Addis Ababa city. The
appraisal team has tried to review the current as well as forecasted demand and supply
condition and price of the planned products based on the competitors condition. As per the
existing conditions, we observed that there is excess demand for the product. As indicated
in the technical feasibility, the project site is accessible with all infrastructures like electric
power, access road and communication devices.
The financial projection results indicated profitability of the proposed venture. The total
investment cost would be Birr 52.64 million out of which Birr 26.32 million (50%) would be
bank loan & the remaining balance of Birr 26.32 million (50%) will be own contribution. The
project will generate net profit of Birr 7.9 million in the first year and Birr 12.32 million at
the end of 5th year. Furthermore, it will register a cumulative net cash flow of Birr 5.1 million
in first year and Birr 36 million at the end of 5th year. Financial IRR before and after tax are
19.34% and 13.54% respectively, indicating that the investment return is over and above
the currently existing cost of capital which is 15%.
Accordingly, the team has carefully assessed the key elements of the project and considering
its socio-economic benefits that determine the success rate of the project.
The summary of financial analysis of the project is depicted below:-
Table 1.1: Project investment (in Million Birr)

Description Amount in Million Percentage

Fixed Investment 45,874,976 87%
Working Capital 4,695,616 9%
Pre-operating costs and interest 2,069,528 4%
Total 52,640,120 100%

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Table 1.2: Source of finance (in million Birr)

Source of finance Amount D/E Ratio

Debt 26,320,060 50%
Equity 26,320,060 50%
Total 52,640,120 100%

Table 1.3: Expected financial results

Year initial Year Final
Description
Sales Revenue 28,538,000 41,782,490
Profit (Loss) 7,968,100 12,338,540
Cumulative Cash flow 5,147,100 36,004,740
IRR Before Tax 19.34%
IRR After Tax 13.54%

 Table 1.4. Sensitivity Analysis

Description IRR before Tax IRR after Tax
Decrease in Sales Revenue by 10% 18% 14%
Increase in Operating Cost by 10% 20% 16%
Increase in Investment Cost by 10% 22% 18%

1. BACKGROUND INFORMATION

1.1. The Applicant/company

Name: - Friends Dairy and Milk Processing PLC

Address:

 Region: Addis Ababa

 Sub-City: Bole

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  Kebele: 06

 House no 318/14

 Mobile: 0920717874/0936548733

 Type of Project: Farm and Milk-Processing

 Project Objective: commercial Friends Dairy and Milk Processing

1.2. Certificates and Licenses

a. Investment Certificate

 Licensing Organ: Amhara National and Regional Sate, N/shewa Zone Bureau of
Tread ,industry and Urban Development

 Licensing No: 000000000

 Date of Issue: 03/08/2019.

b. Commercial Registration Certificate

 Licensing Organ: Federal Democratic Republic of Ethiopia, Ministry of tread

 Registration NO : MT/AA/2/0031558/2019

 Date of Issue: 16/07/2019

c. Land Holding Certificate

 Licensing Organ: N/shewa Environmental protection and land Administration

 Date of Lease Contract: 17/07/2019 –2026 E.c

 Total Land Area: 50,000 m2

d. Taxpayer identification No (TIN) 0000000000

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 1.3. Brief History of the company
FRIENDS Dairy and Milk Processing PLC were legally established on 01/08/2019 by four
shareholders namely Ato Simon, Workayehu, Surafel and Meareg. As per the shareholders
meeting minute dated on 02/07/2019, paid up capital of the company is increased from Birr
4.5 million to Birr 8.14 million. The project is located in Addis Ababa city administration
around Debrebrhan. The project site is accessible in all seasons that enable it to obtain raw
materials and easily supply its final product to the market. All of the shareholders have
business experience in agriculture production in general and dairy and milk processing in
particular.

2. Project context

2.1. Macroeconomic Success Factors

 Ethiopia has shown a continuous GDP growth for the last consecutive years, implying a
positive trend of economic growth. In addition, there is stable and conducive business,
political and economic environment.

 Ethiopia is known to have agro ecological conditions which are suitable for the raring of
livestock and Dairy development.

 There are incentives to attract domestic and foreign direct investment at the federal
and regional government level such as tax exemption, tax holidays for certain years and
duty free import etc.

 There is improvement in service delivery and infrastructure

2.2. Determinants of Demand for Processed Dairy Products

Describing the factors that affect the demand for processed dairy products is complicated
because of the varied number and type of products that can be processed from milk. Factors
that influence why one consumer would purchase skim milk are considerably different from
factors that affect another’s decision to buy cheese.

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In Ethiopia there are various factors which affect the demand for dairy products. The major
determinants of demand for milk and milk products are those stated below:

 Personal Disposal Income: - As disposable income of the consumers increases so

does the demand for the dairy products. Especially in Ethiopia, milk is considered as
a luxury product for urban dwellers, which is due to low income base of urbanites.
 Population:- As number of population increases so does consumption of dairy
products increases
 Unemployment: - As the unemployment rate declines, consumption of dairy
products is expected to increase. When people are employed, they will have
purchasing power to buy dairy products for consumption.
 Inflation: - The inflation process in a given country has also a bearing in reducing the
demand for a product just by reducing the purchasing power of the society. Ethiopia
is currently exhibiting a rampant inflation, which of course, its impact is visible.
 Culture and Religion: -religion has a factor on determining the demand for dairy
products. There are religions that requires for its followers to fast a number of days
within a year. This makes the demand for the dairy products (especially raw milk) to
be reduced by a significant margin. In some cultures one type of processed diary
product may be taken as cultural food while in the others’ prohibited for consumption
for the same reason. But, on aggregate the same factors affect the consumption of each
of the processed dairy products and hence, the position of demand.
 Others: - The negative perception of the society towards processed milk has adverse
impact on demand for the same. Socioeconomic and demographic factors like age,
family size and composition, and education also affect consumption and demand for
milk.
 GDP Growth Rate (g):- Ethiopia’s economy (GDP) on average has depicted double
digit growth for last four years except the GDP Exhibited 10.3% growth in 2006 E.C
(MoFED)
Per Capita Consumption :- The per capita demand for the products is taken by dividing the
amount of production of the products in the base year (2014) by the number of urban

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population in the base year; and found to be 2.29 lit, 0.0312 Kg, and 0.03054kg; respectively,
for cow milk (pasteurized) ,butter and ghee; and cheese.

3. Project justification/ description

3.1. Statement problem

 Low quality of raw milk that comes from poor milking, handling and transporting
from household farmers to the collection center.

 The lack of prosperity to milk producer in the region through assure market and
remunerative prices all year round.
 The lack of providing fresh hygiene milk to the customers
 The problem is viability and growth of milk produced by converting surplus milk into
other dairy products and ensure their marketing.
 The other one is the shortage to the diary and milk from the market.

3.2. Priority need

The target market destination of the company will be domestic customers, particularly
the consumers in Addis Ababa market and surrounding near towns. The company will
involve selling the products directly to its customer by using vehicles equipped with
cooling machine. It will be sale for local catering institutions, supermarkets, universities
and wholesalers will be the buyers of the products. As a result, these ranges of potential
customers are expected to gradually increase in the coming 10 years of the projection
period.

3.3. The proposed approaches (type of project intervention)

As per the feasibility study of the applicant, the Company will involve selling the products
directly to its customer by using vehicles equipped with cooling machine. It will be sale for
local catering institutions, supermarkets, universities and wholesalers will be the buyers of
the products. In addition to these the appraisal team recommends the following marketing
strategies for the company:

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  Entering into long-term contracts for the supply of the products.
 Brand building for milk products, gathering local market information through
surveys & direct sales.
 Adhere to specific measurable technical qualities. All supplied product shall be within
acceptable range.
 Organizing an effective supply chain and sales forces.
 Ensure that the production and packaging systems are in line with international
practice. The production facilities, packaging technologies and production process
will be up to international standard and confirm to good agricultural/ manufacturing
practices and ISO 22000 Quality and Food Safety Management Systems.

3.4. The implementing organization

To start a dairy farm the type of breed is the most important factor affecting the productivity
of the animal. The genotype of Ethiopian livestock has evolved largely through natural
selection influenced by environmental factors. This has made the local breeds to withstand
feed and water shortages, disease challenges and harsh climates; but the capacity for high
levels of production has remained limited.

Exotic breeds of cattle have higher milk yield and reproductive performance which results
in higher productivity as compared to the local ones. The most widely known exotic breeds
of dairy cattle that are suitable for agro-ecology of Ethiopia are Holstein Friesian and
Jersey. Regarding to the amount of milk production, Holstein Friesian provide high
production as compared to Jersey; whereas, Jersey breeds yield higher percentage of fat as
compared to Holstein Friesians. Therefore, in Ethiopia most commercialized dairy farms
prefer Holstein Friesian cross breed than Jersey by considering the amount of milk obtained
from the breed. Currently there is no organized heifer breeding center that serves as a source
for dairy producers; but most dairy farmers are purchasing from different individual
suppliers. Therefore, the company has planned to procure its initial heard (pregnant heifers)
form Maleda Dairy Enterprise and Moges Kase Dairy Production Enterprise

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 Friends Dairy and Processing PLC
Implementation Schedule
2020 2021
Item Sep Oct Nov Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Processing the Loan
Building & construction
Plant Buildings
Dairy farm Building
Finishing Work
Procurement of Dairy cows
Negotiations with cooperative
union and other tasks
L/C opening for plant
machinery and Equipment
L/C settlement for plant
machinery and Equipment
Procurement of Truck and
Vehicles
Installing and commissioning
Recruitment and training
Procurement of raw materials
Trial production
Promotion & advertisement and
Setting up of warehouse
Commercial production

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 4. Project Aim

4.1. Project goal

To up life the socio-economic conditions oh milk producer in Ethiopia .To establish
an illustrative model dairy farm with all the latest facility in cattle health care an
environment friendly and health (quality product) provides to the community.

4.2. Project objective

 To bring prosperity to milk producer in the region through assure market and
remunerative prices all year round.
 To provide fresh hygienic milk to urban consumer at reasonable prices.
 To ensure viability and growth of milk produced by converting surplus milk into
other dairy products and ensure their marketing.
 To avoid the surplus of diary and milk from the market

5. Expected result

5.1. Expected Financial Results

 Profitability: - The projected profit and loss statement forecasted for 5 project years
shows that the net profit of the project in the first year of operation will be Birr 7.968
million and Birr 12.338 million in the last projection period showing that the project
could run profitable business venture.
 Liquidity: - The cash flow projection also shows an incremental cumulative net cash
balance from Birr 4.697million in the first project year to Birr 32.793 million in the
last projection period indicating that the project will not face liquidity constraint to
finance its operational cost and meeting its debt obligation.
 Financial Internal Rate of Return:- Before and after tax internal rate of return
computed based on 5 years projection period is 19.34%and 13.23% respectively.
 Sensitivity Analysis: The project's sensitivity to adverse circumstance is viewed
from three different scenarios: by decreasing its sales revenue, increasing its

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 operating cost and investment cost, by 10%. The result indicates that IRR after tax
decreases to 14%, 16% and 18% respectively. This shows that the project can
withstand any adverse circumstances.

Table 5.1: Sensitivity Analysis

FIRR before FIRR after
Description Tax Tax
Decrease in Sales Revenue by 10% 15% 11%
Increase in Operating Cost by 10% 16% 12%
Increase in Investment Cost by 10% 14%
15% 11%

6. Target group

6.1. Target markets and potential customers

The target market destination of the company will be domestic customers, particularly
the consumers in Addis Ababa market and surrounding near towns. The company will
involve selling the products directly to its customer by using vehicles equipped with
cooling machine. It will be sale for local catering institutions, supermarkets, universities
and wholesalers will be the buyers of the products. As a result, these ranges of potential
customers are expected to gradually increase in the coming 10 years of the projection
period.

6.2. Marketing Strategy of the Company

As per the feasibility study of the applicant, the Company will involve selling the products
directly to its customer by using vehicles equipped with cooling machine. It will be sale for
local catering institutions, supermarkets, universities and wholesalers will be the buyers of
the products. In addition to these the appraisal team recommends the following marketing
strategies for the company:

 Entering into long-term contracts for the supply of the products.

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  Brand building for milk products, gathering local market information through
surveys & direct sales.
 Adhere to specific measurable technical qualities. All supplied product shall be within
acceptable range.
 Organizing an effective supply chain and sales forces.
 Ensure that the production and packaging systems are in line with international
practice. The production facilities, packaging technologies and production process
will be up to international standard and confirm to good agricultural/ manufacturing
practices and ISO 22000 Quality and Food Safety Management Systems.

7. Project implementation
7.1. Activity plan

7.2. Milk processing

The company planned to process 8000 liters per day to products like pasteurize milk,
yoghurt, butter and cheese.

7.3. Pasteurized milk production

Pasteurized milk is milk which has been heat-treated to kill pathogens which cause disease.
During pasteurization common temperature and time combinations are 63 0C for 30 minutes
by the holder (batch) process and 72 0C for 15 seconds by the HTST (continuous) method. In
each case the milk is cooled without delay to 10 0C or below.
Pasteurization has little effect on the nutritive value of milk as the major nutrients are not
altered. There is no significant loss of vitamin C and the B group vitamins. The process kills
many fermentative organisms as well as pathogens but putrefactive micro-organisms
survive pasteurization. The company plans to convert 92 percent of the raw milk to
pasteurize.

7.4. Yoghurt Production

Yogurt is produced through the fermentation of milk by lactic acid bacteria, usually
Lactobacillus bulgarius and Streptococcus thermophilus. The milk is firstly heat treated,

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homogenized and then cooled to allow the addition of bacteria or starter culture. To give the
right conditions, i.e. in correct temperature and moisture, the bacteria are able to ferment
the milk sugar (lactose), and then produce lactic acid. The milk proteins then coagulate and
set, to form yogurt. A colorless liquid called acetaldehyde is also produced during
fermentation and gives yogurt its distinct flavor. Yogurt can be made from different types of
milk, including skimmed, semi-skimmed and whole milk.
The company has planned to produce yoghurt, utilizing (1%) of the raw milk, but detail of
the starter culture and flavor type are not clearly mentioned in the feasibility study; available
data from previously appraised projects is used and the company is expected to submit
Performa invoice for starter culture and additives (flavored )

7.5. Butter Production

The company plans to produce butter 3% from the total of milk. Butter is a dairy product
made by churning fresh or fermented cream or milk. Butter is a water-in-oil emulsion
resulted from phase reversal from oil-in-water emulsion with the help of continuous
churning. Butter remains solid when refrigerated, but often to a spreadable consistency at
room temperature, and melts to a thin liquid consistency at 32–350C. It generally has a pale
yellow color, but varies from deep yellow to nearly white. Its unmodified color is dependent
on the animals' feed and is commonly manipulated with food colorings in the commercial
manufacturing process, most commonly annatto or carotene.

7.6. Cheese making

Cheese consists of proteins and fat from milk, usually from the milk of cows. It is produced
by coagulation of the milk protein (casein). Typically, the milk is acidified and addition of the
enzyme rennet causes coagulation. The solids are separated and pressed into final forms.
Cheese is produced throughout the world in wide-ranging flavors, textures, and forms like
Gouda cheese (cheese produced directly from fat raw milk), local cheese (mostly produced
from skimmed milk or after cream or milk fat is removed).
Hundreds types of cheese are produced. Their styles, textures and flavors depend on the
origin of the milk (including the animal's diet), whether they have been pasteurized, the
butterfat content, the bacteria and mold, the processing, and aging. Herbs, spices, or wood

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smoke may be used as flavoring agents. The yellow to red color of many cheeses is from
adding annatto.
Cheese is valued for its portability, long shelf life, and high content of fat, protein, calcium,
and phosphorus. Cheese is more compact and has a longer shelf life than milk. Cheese makers
near a dairy region may benefit from fresher, lower-priced milk, and lower shipping costs.
The long storage life of some cheese, especially if it is encased in a protective rind, allows
selling when markets are favorable.
Misale Dairy Farm and Processing PLC has not specified the planned type of cheese to be
produced; however, the appraisal team believes that it would be Gouda cheese or mozzarella
or cottage cheese which is commonly produced and utilized in the country.

7.7. Product Storage

Finished products should be stored in a separate dispatch store at 4 0C to -20C, or for frozen
milk products, frozen in a freezer operating below -18 0C. This storing facility uses to
increase the shelf life of the final product. Air conditioning systems are essential in order to
adjust the air. The store should be regularly inspected and cleaned. An air-conditioned truck
would be required for transportation of the final milk product to different distribution areas.
The company has planned a cold room in the main processing hall and air conditioned
vehicle to collect raw milk form suppliers and to distribute the final product of the project.

7.8. Production Process and Production Capacity

Transportation of raw milk collected from the supplier to processing area is performed by
refrigeration truck. But the raw milk obtained from own farm can be transported using
pumps that are connected to central refrigeration since it is in the same compound.
Overall milk processing includes temporary preservation (raw milk handling),
filtration/clarification of raw milk, separation of all or part of the milk fat, production of
cream and butter, pasteurization, homogenization (if required), deodorization (if required),
further product-specific processing and distribution of final products.
The machinery of the project has a total processing capcity of 8,000 liters of milk per day.
Production of the plant is assumed to start at 60% and gradually increases year to year to

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reach to 95% on fifth year. Thus, the maximum capacity utilization of this project is planned
to be 95%.

Fig 5.1: General Processing Flow

8. Resource plan

8.1. Building and Construction

The main construction item of the company is the dairy farming and processing plant which
includes barn, milking house, milk processing house and hay shed structures and cost
estimates are presented in the following table
Table 8.1: Building and Construction

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 Building and
Construction No of Blocks Values in Birr
Barn
Description 3 5,654,918
Milking House 1 1,026,119
Milk Processing House 1 2,402,828
Workshop 1 1,634,119
Staff Residence 1 2,997,711
Guest House 1 1,498,856
Managers Villa 1 1,215,103
Staff Café 1 369,720
Clinic 1 241,841
Office & Generator store 1 1,853,105
Guard House 1 119,446
Hay Shed 1 1,102,668
Site Work 1 1,157,975
Total 21,274,410

8.2. Machineries and Equipment

As it is obviously known, selection of machineries and equipment’s has critical importance
since it has the capacity to determine the quantity and quality standard of the product
intended to produce. Therefore, it is mandatory to thoroughly identify whether the
appropriate type of plant that meets the consumer requirements selected & all the necessary
machineries & equipment are included. Based on this fact, considering the submitted pro
forma invoice, after appropriateness of all the necessary machineries & equipment
identified, the technical team has approved milk processing machine supplied by Shanghai
Beyond Machinery Co. Ltd. The aggregate processing capacity of the project is 8,000 liters
per day with total cost of Birr 6,144,517.48.

8.3. Farm Machineries and Implements

Based on the requirement of the project for smooth operation, 92 HP tractor and general
purpose agricultural Trailer Model 2B60TR are considered as necessary farm machineries
and equipment. Their costs and viability for the machinery was properly determined by the
technical team .The total cost is estimated to be Birr 1,348,650.00. The detail is depicted in
the below table.

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Table 8.2: Planned Farm Machineries and Implements
No Description Quantity Total
1 General purpose 92HP tractor 1 1,138,650.00
Cost(Birr)
2 General purpose Agricultural 1 210,000.00
trailer Total 1,348,650

8.4. Milking Machinery

To facilitate smooth milking operation, milking machine is required depending on the
number of milking cows that the farm is rearing. Therefore, since this project planned to
have high number of animals, the appraisal team recommended five milking machines.

8.5. Trucks and Vehicles

Due to the nature of the project, trucks and vehicles play great role in its effectiveness and
successfulness. The promoter will procure one Termoking and Equivalent refrigerating
Unit truck and one van body mounted NPR ISZU which will be used for the purpose of
raw milk collection and for delivery the final product to the market.. It has also planned to
procure Isuzu NPR and Toyota Hilux Double cabin.
Therefore, the Isuzu NPR will be used for transportation of different inputs while the pickup
will be used for transportation of management staff. The total cost of trucks and vehicles is
estimated to be Birr 3,048,174 and the detail is attached in the annex part of this appraisal
report.

8.6. Auxiliary Equipment

As any processing plant, this project requires different auxiliary equipment’s for complete
processing facilitation; and accordingly the company has planned to procure air
compressor, boiler, cooling facility, and laboratory equipment. This will reach total cost
of Birr 5,299,034 including insurance, bank charge and transportation cost. The detail is
attached in the annex part.

8.7. Utilities
It is obvious that utilities like electric power, backup generator, water and communication
devices like telephone, internet and fax are among important facilities that are supposed to

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be fulfilled for smooth operation of every project. Accordingly, the project site is accessible
with all infrastructures like electric power, and communication devices. With regard to
backup generator, there is no Performa submitted. However, since the raw material of the
project has high perishable nature, for successful processing of its final product, the need of
backup generator is a must. Therefore the company should present per forma invoice before
final appraisal.
On the other hand, the project requires considerable amount of clean water for the milk
processing, to wash houses, milk utensils, for the cattle and the processing equipment.
Accordingly there is a document submitted by the company which states that it has
completed bore hole. However, there is no valuation report made by the CRMD-I and the
appraisal team is not able to consider it as equity contribution. Therefore, the CRMD-I should
undergo valuation and deliver it before final appraisal report.

8.8. Office Furniture & Equipment

Office furniture and equipment are crucial for smooth operation of the project. Thus, all the
necessary types and number is determined and their costs are included in the total project
cost. The total estimated cost of office furniture and equipment is Birr 364,395. The details
are presented in the annex part of this report.

8.9. Summarized cost of budget

8.10. Investment Costs

The total investment cost of the project estimated at Birr 52.64 million. Out of which 87% is
fixed investment cost, while the remaining 13% is preproduction cost and interest and
working capital cost. Summary of Investment costs is shown in Table below

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 Description Existing Planned Total cost (Birr)

Building and Construction 1,092,666 17,167,887 18,260,552

Machineies & Equepments - 6,208,717 6,208,717
Truck & Vehicles 4,690,280 1,969,824 6,660,104
Auxilary Equepment 1,314,677 5,355,532 6,670,209
Office Furniture & Equepments - 364,395 364,395
Dairy Animals 631,000 7,080,000 7,711,000
Sub-total 7,728,622 38,146,354 45,874,976
Working capital 4,695,616 4,695,616
Sub-total - 4,695,616 4,695,616
Pre-production Interest - 1,735,145 1,735,145
Pre-production cost - 334,383 334,383
Sub-total - 2,069,528 2,069,528
Grand Total 7,728,622 44,911,498 52,640,120

8.11. Source of Finance

Table 8.4. Fund Allocation

Total Financial Owner's Equity

Requirements
Description (Birr) Bank Loan In Kind In Cash Total equity
-
Building and Construction 18,260,552 9,130,276 1,092,666 8,037,610 9,130,276
Machineries & Equipment’s 6,208,717 3,104,358.5 - 3,104,358.5 3,104,358.5
Truck & Vehicles 6,660,104 3,330,052 - 3,330,052 3,330,052
Auxiliary Equipment 6,670,209 3,335,104.5 1,314,677 2,020,427.5 3,335,104.5
Office Furniture &
Equipment’s 364,395 182,197.50 - 182,197.50 182,197.50
Dairy Animals 7,711,000 3,855,500 631,000 3,224,500 3,855,500
Sub-total 45,874,977 22,937,488.5 3,038,343 16,674,645.5 19,712,988.5
Working capital 4,695,616 2,347,808 2,347,808 2,347,808
Sub-total 4,695,616 4,695,616 - 2,347,808 2,347,808
Pre-production interest 1,735,145 - 1,735,145 1,735,145
Pre-production cost 334,383 - 334,383 334,383
Sub-total 2,069,528 - 334,383 1,735,145 2,069,528
Total 52,640,120 26,320,060 8,063,005 5,097,025 26,320,060
Debt equity ratio 100% 50% 10% 40% 50%

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 9. Monitoring and Evaluation
There is a need for M&E to be better integration in to project management processes. Eliciting
sustained support and commitment by project staff of the borrower and the lender and other stake
holders at field.
Ensure that the production and packaging systems are in line with international practice. The
production facilities, packaging technologies and production process will be up to international
standard and confirm to good agricultural/ manufacturing practices and ISO 22000 Quality and Food
Safety Management Systems.
Who are responsible for monitoring?
The monitoring activity performed by in process and technical department by quality control section.
Who are responsible for Evaluation?
The evaluation activity performed by general manager and different stakeholders

10. Management and personnel

10.1. Organization
The organizational setup of the project is structured based on the Bank’s commodity study
and the feasibility study of the company in which there is a general manager at the top
assisted by an auditor, secretary and project manager. There are four departments under the
auspices of the general manager; namely, processing and technical department, finance and
administration department, marketing and sales department, and apiary department. The
detail structure of the organization of the project is depicted in the diagram below:

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 Diagram 1: Organizational Structure

General
Manager

Project
Auditor
Manager

Secretary

Processing Finance and Marketing Apiary

and Technical Administration and Sales Department
Department Dpartment Department

processing Finance Purchase

Section Section Sectiion

Technical Administrativ Sales

Section e Section Section

Quaity
control General
Section Service Section

Medical
Service Section

10.2. Management
The general manager of the company is w/o werqayew Eshete who is well qualified and has
long years of experience in different capacities including animal breeding, beekeeping and
engagement in various research activities. Moreover, the project manager, Ato Surafel
Melaku, is qualified and has experience in agricultural research activities. Therefore, along
with new recruits who have necessary qualification and experience, the project management
is expected to be capable for smooth operation of its activities.

10.3. Manpower Requirement

The project is expected to hire staffs with related educational background and work
experience who meet the research process commodity study requirements for the
processing of diary and milk. After successful implementation of the project, the company is
expected to hire 100 employees

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