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Project proposal
For
Printing and packaging manufacturing Factory

Project to be implemented in Shager,Gelan Sub-city

Oromia Regional State
[

Promoter-Hundesa Debela and Gelata Printing press

Micro Enterprise

Aprill, 2023
FinFine, Ethiopia

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Table of Contents
Executive summary.....................................................................................................................................2
1. INTRODUCTION...................................................................................................................................3
1.1.Rational Behind the Project...............................................................................................................5
1.2.Objective of the project.....................................................................................................................5
1.3.The Economic significance of the project..........................................................................................5
A.Produce and supply quality printed materials..................................................................................5
B.Source of Revenue............................................................................................................................6
C.Employment opportunity.................................................................................................................6
D.Benefit for the local community.......................................................................................................6
E.Stimulate the local and National Economy.......................................................................................6
F.Technology Transfer.........................................................................................................................6
1.4.Location and Premises required........................................................................................................7
1.Location............................................................................................................................................7
2.Production Description and Application...............................................................................................10
3.Market Study and plant Capacity..........................................................................................................10
3.1.1.Current industry Structure............................................................................................................10
3.1.2.Market Demand............................................................................................................................10
3.1.3.Market Prospects..........................................................................................................................11
3.1.4.Marketing Strategy and Promotion..............................................................................................11
3.1.5.Target Customers.........................................................................................................................11
3.2.Plant Capacity and Production Program..............................................................................................11
3.2.1.Plant Capacity...............................................................................................................................12
Details production of the factory...........................................................................................................13
3.2.2.Production Program.....................................................................................................................14
3.3.Pricing.................................................................................................................................................15
4.TECHNICAL STUDY OF THE PROJECT......................................................................................................16
4.1.Product Mix.....................................................................................................................................16
4.2.Raw materials and input..................................................................................................................16
4.3.New Technology..............................................................................................................................17
4.4.Technology and Production processes............................................................................................19
4.4.1.The Design /Creative Stage.......................................................................................................20
4.4.2.The prepress Stage...................................................................................................................20
4.4.3.The Printing Stage.....................................................................................................................20

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4.4.4.The Bindery Stage.....................................................................................................................21

4.5.Technology transfers / process option............................................................................................21
4.6.Source of Technology......................................................................................................................22
4.7.Machinery and Equipments.............................................................................................................22
4.8.Project Design and Engineering.......................................................................................................22
4.9.Plant lay out and Construction works..............................................................................................22
4.10.Utilities..........................................................................................................................................23
5.Manpower and Organizational Management.......................................................................................23
5.1.Manpower.......................................................................................................................................23
5.2.Organizational Structure and Management....................................................................................24
6.Financial Requirement and Analysis.....................................................................................................26
6.1.Total Initial Investment Cost............................................................................................................26
6.1.1.Fixed Investment......................................................................................................................27
6.1.2.Project Action Plan.......................................................................................................................29
6.2.Annual Production Cost at Full Capacity..........................................................................................29
1.Raw Materials and Inputs...............................................................................................................29
2.Salary Expense................................................................................................................................30
3.Other Operating Expenses..............................................................................................................32
6.3.Financial Analysis and Statements...................................................................................................33
6.3.1.Underlying Assumption............................................................................................................33
6.3.2.Sources of Fund........................................................................................................................34
6.3.3.Loan repayment Schedule........................................................................................................34
6.3.4.Depreciation Schedule..............................................................................................................35
6.3.5.Revenue Projection...................................................................................................................35
6.3.6.Balance Sheet...........................................................................................................................36
6.3.7.Income Loss Statement............................................................................................................37
6.3.8.Cash Flow Statement................................................................................................................38
6.3.9.Profitability...............................................................................................................................38
6.3.10.Pay-Back period......................................................................................................................39
7.Future Development..............................................................................................................................39
8.ENVIROMENTAL IMPACT OF THE PROJECT...........................................................................................39
8.1.Socio-Economic Environment..........................................................................................................39
8.2.Environmental Impact Assessment of the project...........................................................................39

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Executive summary
1 Project name Printing press factory
2 Project owner Hundesa Debala and Gelata printing and
packing micro enterprise
3 Nationality Ethiopian
4 Project location Gelan Sub-city, Oromia Regional State
Production of various printed material
mainly financial report, brochure, book,
Project Composition pamphlet, letterhead, envelopment,
5 vouchers , visiting card, credit card, Gust
cute, packing material, invitation card, etc
6 Premises required 5,000 M2
Total Capital:- 5.000,000Ethiopian Birr
7 Total initial Total Capital
investment capital Fixed Capital = 3,958,567 birr
Working Capital = 1,0841,433 birr
Contingency = 50,000 birr
Source Fund
Own Equity (30%) = 1,500,000birr
Bank loan (70%) = 3,500,000 birr
The total manpower required for the plant
8 Employment will be 150 employees
opportunity Permanent Worker :- 100
Skilled and Unskilled
On Temporary Basic :- 50
Skilled and Unskilled
Product and supply of quality printing
Benefits of the materials, source of revenue, employment
9 factory for the opportunity, benefit for the local
regional /country community, stimulate the local economy
and technology transfer.

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1. INTRODUCTION

The present fast and double digit economic growth of Ethiopia especially
demands an equivalent growth in service and manufacturing sector. The sector
should expand rapidly to support the overall economic development sustainably.

As one sub-sector, Printing press is one of the most effective and economical
mediums of communication and promotion and is used by all major businesses.
The expansion of printing press has also a paramount impact in the development
of other sectors like education and others.

The Government of Ethiopia has conducive investment policies and regulations to

attract the privative sectors involvement in the economic development through
the various investment and business endeavors,

To this effect, the promoter of envisioned printing press factory, new technology
Hundesa Debela and Gelata micro Enterprise , interested to invest in Gelan Sub-
city. This project study is undertaken to check the market, technical and financial
feasibility of this project. The output of the study is very encouraging for the
promoter to establish the project in the city.

The promoter of the project has great interest and determination to commence
the project. Hence, he expects to get the necessary support from the regional
and town administration to realize the project. The promoter has experience in
importing and distributing paper and paper work products for different
customers ranging from private to government organizations for the last 5years.

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1.1. Rational Behind the Project

The printing and graphic arts sector have a great role in economic development of one
nation, due to the existence of dynamic economic growth of Ethiopia in last 20 years;
the development of this sector would have a strategic role to support the growth of all
major business sectors of the country.

Besides in today’s competing environment, businesses require appropriate marketing,

promotional and educational tools to build product recognition in market, from
brochures to packaging all are means of effective sales promotion tools and require
service of printing press. In this regard further privet investment in printing media is
necessary to meets to ample demand.

The government of Ethiopian has been implementing the five years growth and
transformation development plan which is promised to bring prosperity and
development to its citizens with collaboration with privet sector investment action;
moreover, it has a conducive and favorable investment police and guidelines for private
sectors.

Hence; the market potential for the envisioned business and favorable government
policies for private investor are taken as major project justification by the promoters to
establish the envisioned printing press factory with best and new technology in
Bishoftu .

1.2. Objective of the project

The main objective of the factory is to undertake the production of quality based, cost
effective and diverse printing materials using an update and new technology for different
target customers at reasonable price.

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1.3. The Economic significance of the project

The envisaged project deemed to contribute to the economic development of the nation
in general and the region in specific with following ways;

A. Produce and supply quality printed materials

The factory will produce quality and affordable printing materials products through this it
will serve its customers and minimize the market gap.

B. Source of Revenue

As public policy of any nation, the government collects different forms of taxes from
different business organization and individual. Among the different forms of taxes,
business income taxes. VAT and payroll taxes are collected from undertaking business
activities. Therefore, the factory will serve as sources of revenue for both the region and
nation in general.

C. Employment opportunity

One of the problems that our country faced is unemployment. Therefore, the current
objective of the government is working on tackling the problem of unemployment and
fostering the development process either through creating self employment or
employment in other organization. Hence, this factory will hire around 250 persons.

D. Benefit for the local community

As a corporate responsibility the company will engage in different development

activities on the surrounding areas. This will better worth the community and contribute
for the development of the region.

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E. Stimulate the local and National Economy

This factory has positive externality in the zone that will encourage the economic
movement of local economy relationship and transaction among different actors.

F. Technology Transfer

By implementation modern and new technology in printing press, the project will
transfer knowledge to printing press industry of the nation.

1.4. Location and Premises required

1. Location

The envisioned project is planned to be located in Gelan sub-city (which is 20 km far from
the capital city), Oromia regional state, the main justification behind the selection of this
location are:
 Strategically located to the central and largest market of nation ( Addis Ababa)

 Relatively advanced development in infrastructure (power, water, Telephone

internet, road etc.

 All road to the nearest market outlets

 Accessibility of skilled labor force

 Conducive investment policy and governance

 Environmentally fit to for printing factory

 Premises required

The total land holding of the project is 6,000 m2 the premises required planned as follows in
table below

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Table, Premises required and land Use plan

SN Description Land requirement (M2)

1 Production Hall

1.1 Production and printing Hall 1,500

1.2 Sampling room 500.00

1.3 Inspection room 500.00

1.4 Packing room 500.00

Total production Hall 3,000

2 Warehouse

2.1 Raw Material 500.00

2.2 Finished Products 500.00

Total Warehouse 1,000.00

3 Office Building 200

4 Show room 100.00

5 Loading and Unloading 200.00

6 Green area, Road, Waste Accumulation and Parking 200

Total 700.00

Ground total 5000.00

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100 M2

Packing Room
(500 M2)
Production and printing Hall
Raw Materials Warehouse
(1800 M2)
(800 M2)

Sampling Room
(500 M2)

Loading and
Office Building Inspection Room Unloading Finishing Products
(550 M2) (500 M2) (500 M2) Warehouse
(500 M2)

Show Room
(500 M2)

100 M2

2. Production Description and Application

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Paper is used for writing and printing for wrapping and packaging and a variety of other
application ranging from kitchen towels to the manufacture of building materials, in
modern times, its production in large quantities has been a significant factor in the
increasing in literacy and the raising of education levels of people throughout the world.
The most commonly used paper types are stationary paper (i.e. printing and writing )
newsprint, wrapping and packaging and paper card, small scale paper making is defined as
one having a capacity of less than 30 tonners of paper per day, this also includes hand-
made paper.

3. Market Study and plant Capacity

The market study for the printing materials media mainly arise from the business sector,
educational sector, governmental and non governmental institutions.

3.1.1. Current industry Structure

Currently, paper manufacturing and packaging industry in the country is segmented and
unorganized. There are small printing presses in the country but they are not fully
operational and do not encompass the entire demand, most of the printing are in the
primate city while there are few in the regional centers.

3.1.2. Market Demand

The market for printing products can be divided in to the following segments,
Table Categories of printing products

Description Products

Cultural and Education Items Books, brochures, newspapers and magazines

Sales promotion printing, annual reports,
Industrial and Promotion Items securities, blueprints, printing wrapping and
labels
Pictures, color and drawing book for children,
Stationery and Other Items art prints calendars, engraving, school and
office supplies, envelop etc

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3.1.3. Market Prospects

From the above market study for printing business products, there exists huge market gab in
Ethiopian market. Hence, the envisioned factory will be successful by entering in to this
market.

3.1.4. Marketing Strategy and Promotion

The company will follow the following promotion methods

 Electronic Medias
 Advertising (Medias, flayer and news paper)
 Public Relation
 Branding

The marketing strategy mainly focus on the satisfying the needs and the requirement of the
customers and to be efficient in production and delivery of the products

3.1.5. Target Customers

The company targeted different customers mainly the business organization, educational
organizational, government bureaus and non-government bureaus.

3.2. Plant Capacity and Production Program

3.2.1. Plant Capacity

Based on the plant (machine) capacity, machine specification, wastage consideration, 300 days

of operation per year and 16 hours per day (tow shift system). The envisioned printing factory

will produce the following printing materials at full capacity

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100% Maximum
Product Production proportion Capacity Attainable
Capacity (80%)
Kongsberg XN
Series Unity Unity
Carpet 25% 50,300 40,240
Textile 20% 700,678 560,542
Thin aluminum 40% 100,378 80,302
Drawing 8% 540,940 432,752
Gaskets 7% 1,222,861 978,289
Rubber 35% 1,031,033 824,826
Paper 40% 100,378 80,302
Adhesives/ 30% 864,039 691,231
Vinyl’s
Veneer 25% 1,082,265 865,812
Varnish 5% 1,321,589 1,057,271.2
blankets
Wood 7% 1,222,861 978,289
Flexo plates 10% 1,582,608 1,266,086
Fiberglass 5% 1,321,589 1,057,271.2

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Details production of the factory

Carpet:- Carpets with different forms or logos

combining colors,
Personalized, shapes

Textile:- Banners, Flags, Advertising items, Roll-up

Thin aluminums:- Displays Sign making

Drawing:- Pre-mounting for flexo plates, Plots on

paper,
Mylar foil or directly onto die board

Gaskets: - Gaskets for cars, Pumps, liquids...

Rubber:- Die rubber (no drying time required)

Mouse mats
Complements for shoes Magnetic foil

Paper:- Envelopes, Exhibitors lining, Box lining

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Adhesives/Vinyl’s:-Labels (Short runs), Vinyl’s

for banners, cars, shops Sign making

Veneer:- Furniture, Sign making, Box lining

Varnish blankets:- Varnish blankets for offset

print can be
Cut in perfect register with the printing press.

Wood:- Displays Furniture Sign & Display

Flexo plates:- Cut the flexo plates with or without

bevel
Integration with Esko’s Digital Flexo Suite is available

Fiberglass:- Sign Special constructions Modeling

3.2.2. Production Program

Considering the gradual growth of demand and the time required to the required skill the rate
of capacity utilization during the first, second and third year of production will be 50%, 70%,
and 100% respecting. Full capacity utilization will be reached during the third year of operation
as indicated in the table below.

Table production Programme

Description Production year in Unity

Year Year Year
Capacity Utilization in % 50 70 100
Kongsberg XN Series
Carpet 280,271.20 392,379.68 560,542.40
Textile 40,151.20 56,211.68 80,302.40

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Thin aluminum 216,376.00 302,926.40 432,752.00

Drawing 489,144.40 684,802.16 978,288.80
Gaskets 412,413.20 577,378.48 824,826.40
Rubber 633,043.20 886,260.20 1,266,086.40
Paper 345,615.20 483,861.84 691,231.20
Adhesives/Vinyl’s 432,906.20 606,068.40 865,812.00
Veneer 216,286.00 302,926.40 432,752.00
Varnish blankets 489,153.40 684,802.16 978,288.80
Wood 412,463.20 577,378.48 824,826.40
Flexo plates 40,131.20 56,611.68 80,302.40
Fiberglass 216,566.00 302,906.40 432,752.00

3.3. Pricing
It would be important to examine the possible level of price based on the competitors action.
In this connection, the existing average details prices of similar company were assessed for
the benefit of comparison. Based on the existing price in the market the firm stetted the price
as follows,

Table Pricing of the Factory

Product Average Price in and Price of new technology

around and AA market printing industry
in birr plc
Kongsberg XN Series
Carpet 40 37
Textile 60 56
Thin aluminum 75 72
Drawing 25 23
Gaskets 80 78
Rubber 35 30
Paper 30 27
Adhesives/Vinyl’s 75 72
Veneer 65 63
Varnish blankets 100 95
Wood 125 120
Flexo plates 85 83

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Fiberglass 45 41

4. TECHNICAL STUDY OF THE PROJECT

4.1. Product Mix

The envisioned project with installed machinery has the capability to produce all the products of
offset printing industry except news papers. In general the following product will be printing by the
envisioned factory.

 Carpet  Adhesives/Vinyl’s
 Textile  Veneer
 Thin aluminum  Varnish blankets
 Drawing  Wood
 Gaskets  Flexo plates
 Rubber  Fiberglass
 Paper

4.2. Raw materials and input

Raw materials required for the envisioned project are different types f paper, board,
cards, etc. and other inputs like chemicals, packaging materials and printing ink are also
required. The company will get some of the raw materials and inputs in domestic market
and as well as will import in the international market.

The company will be imported as well as local paper and board is being used by the
industry. Imported paper is normally used in annual reports, brochures catalogues,
prospectus and visiting cared etc. important paper is readily available in local market.
Mostly, the business is done on just in time concept due to readily availability of the raw
material, but it is recommended that some amount of raw material inventory is
maintained if the maintained project is located at a distance from suppliers, from the

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following table it is evident that increase in production paper is being consumed by the
printing industry.

 Mat art paper 135 (per rim)

 Mat art paper 115 (per rim)
 Mat art paper 260 (per rim)
 Offset paper 100 gm (per rim)
 Offset paper 90 gm (per rim)
 Offset paper 80 gm (per rim)
 Flying paper 68 gm (per rim)
 Plate 645 x 510 x.20 mm
 Plate 645 x 510 x.24 mm
 Ink Yellow (per Kg)
 Ink Magenta (per Kg)
 Ink Cyan (per Kg)
 Ink Black (per Kg)

4.3. New Technology

The project will use new production technology using update/new of version of Kongsberg
XN Series. These have many characteristics in terms of efficiency, speed, wastage,
minimization, and quality and workers safety, Eliminate errors, save time and reduce waste
with i-cut Suite, the industry standard Design-to-print-to-cut workflow

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Picture of new model Kongsberg XN Series printing Machines

Figure 1

Figure 2

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4.4. Technology and Production processes

Fig production process Flow (off-set printing)

Getting Order

Conceiving Idea

Sketching

Approval of Sample

Image Setting

Plate Making
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Ink and Water Press Run Paper

Ink and Water

Binding

Packing

Delivery

4.4.1. The Design /Creative Stage

In the Design stage the design of the product taking in to account the overall look and feel of
the paper. Text to be printing is typed is and graphics to be shown are create. Designing is of
two types, halftone and line art. Halftone is the reproduction of continuous-tone artwork (such
as a photograph) through the application of a screen that converts the image in to dots of
various sizes. Line art is the art that is made up of continuous lines such as pen & link drawings
or typefaces. These is no tonal difference from one area to another, after designing the
designer sets page layout and the design is sent to the pre-press department.

4.4.2. The prepress Stage

In the pre-press stage the artwork is taken from its delivered state (either reflective art or
digital file) all the way to the press plates. In pre-press stage, the artwork is transformed to
negative film either by imaging a digital file through an image setter, or by shooting reflective

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artwork with a copy camera. The pages are stripped together into a flat that reflects how the
page will be printed on the press sheet. The flat is burned on to a metal plate. After the flat is
burned on to the plate, the plate washed in the developing chemical, this developed plate is
wrapped around the press cylinder. For the purpose of this feasibility, this process will be
outsourced because of the high capital cost of machinery and equipment used in process and
the infrequent use of machinery.

4.4.3. The Printing Stage

The printing stage covers the transfer of an image to paper. Offset lithography is based upon
the principle.

“The ink and water do not mix”

The paper is fed through the press from a pile of paper already cut to the size of the machine.
Offset printing print at a high speed. The speed can reach 14,000 impressions per hour in case
of Kongsberg XN Series the printing image is rendered ink-receptive and water
repellent, while the non-printing areas are rendered water- receptive and ink-repellent. The ink
is distributing to the plates through a series of rollers. On the press, the plates are dampened.
First by water and then ink rollers, the rollers distribute the ink from the ink fountain on to the
plates. The image areas of the plates pick up ink from the ink rollers. The water rollers keep the
ink off the non-image areas of the plate. Each plate then transfers its image to a rubber blanket
that in turn transfers the image to paper. The plate itself does not actually touch the paper. All
of this occurs at a high speed. During the process the machine man checks the blending of inks
to maintain the colour control. Print quality is checked frequently by the operator.

4.4.4. The Bindery Stage

The bindery stage is when any trimming, folding, perforating, collating, stitching or gluing is
performed as required. Mostly, printing press performs the trimming and folding in-house and
works closely with an outside bindery on the collating, stitching and gluing.

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A typical job such as an 8.5x11 newsletter may include, a post press cut, a half fold and a double
parallel fold, there for, the purpose of this feasibility, this process will be out sourced because
the process is lab our intensive and to perform the process in house the business requires
steady orders of binding.

4.5. Technology transfers / process option

Following are different technology/process options are available for printing:-offset lithography,
web printing, letter press, flexo, Gravur, Screen printing, waterless lithography, Digital printing
to used for the country.

In a world with rapid technology and business change, it is important to invest in equipment
that offers all of the capabilities you need for the present, but with flexibility for the future. The
Kongsberg XN is easily the most versatile digital finishing device ever introduced. Whether your
focus is 2D or 3D; packaging, signs or displays; or with just about any material from vinyl’s to
boards to wood; the Kongsberg XN is perfect for any job or application.
Eliminate errors, save time and reduce waste with i-cut Suite, the industry standard
Design-to-print-to-cut workflow

4.6. Source of Technology

The machinery and equipment required for the envisioned printing factory will be imported
from Japan.

4.7. Machinery and Equipment’s

The following are the list of necessary machineries and equipments for the envisioned printing
factory;

Offset orienting machine

I-cut Machine
Artois CAD
Die Cutting Machine
Design Machine
Packaging Production

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Sign Production
Workshop tool
Electric part
Other miscellaneous equipments and machineries.

4.8. Project Design and Engineering

The proposed project comprising stock of different components to be executed at different

phases of the project life, these activities including; Design and Constriction of various buildings
(workshops), importing of machineries, additive chemical and raw materials, import of product
transporting medium vehicle.

4.9. Plant lay out and Construction works

As indicated in art 1 the total land requirement for the project is estimated to be 6,000 M2. The
buildings are planned to accommodate production houses (workshops), storage, showroom,
and other utility requirements as well as office and a social rooms/construction. In general the
buildings must be capable of being kept clean provision should be made for keeping the
sewerages drained out properly and room temperature is attained to keep health environment.
In most environments, equipment should be totally enclosed in light structure, where the
climate is suitable. A concrete floor, which can be swept, is usual.

The loading and offloading areas together with incoming and outgoing road are proposed to
pave to ensure a clean environment around the project site. The site will be encircled by a china
linked fence fastened to concrete posts. The project constriction is designed by professional
engineers and construction will be done under close supervision and collaboration of the
engineers.

4.10. Utilities

A number of utilities would be put in place in order to ensure smooth functioning of the factory.
These utilities including;

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Water Supply
Supplementary Electricity Supply

5. Manpower and Organizational Management

5.1. Manpower

At the top of the organization structure, there will be a general manager with the responsibility
of supervising the overall activity of the factory, Depending up on the nature of the center and
the amount of work to be performs; there will be auxiliary units the general manager.
Employees under each unit will be supervised by unit head that is accountable for the general
manager.

The company will use efficient trained staffs in the area of marketing to be competitive supplier
of printed materials. The opportunities of begin serviced by well skilled professionals well
enable the company to evaluate the internal weakness and strength of the company as well as
to assess the global opportunity and risk in the world market so that the company can cope up
with the dynamics of the market situation. The company will hire a total of 142 employees. Out
of this 100 permanent workers (92 skilled and 8 unskilled) and 42 temporary workers (40
unskilled and 2 skilled)

The detail human power required, monthly and yearly salary is indicated in part 5 financial part.

5.2. Organizational Structure and Management

The organizational structure of the project is designed by including all the necessary personnel
under the right division. At the top of the organizational structure, there will be a general
manager with the responsibility of supervising the overall activity of the plant. Employees under
each unit will be supervised by the department head that is accountable for the general
manager. General Manager is accountable to the owner of the factory as indicated in figure
below.

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Fig. Organizational Structure

Secretary General Manager

Production Dept. Admin.and Finance Dept. Marketing & Sales Dept.

Hence the following section deals with the duties and responsibilities of some departments.

1. Manager
Duties and Responsibilities
She/he will plan, organize, direct and control the overall activities of the factory.
She/he will devise policies and strategies that will enable the factory to be
profitable.
She/he will incorporate modern technology innovation that will facilitate the
service delivery of the project center and increase customer’s satisfaction.
She/he will plan, organize, direct and control the human and non-human
resources of the factory so as to achieve the short and long run objectives of the
organization.

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2. The Production Department

Duties and Responsibilities
It’s the core department of the project center with the following responsibilities.
Design and prepared prototype printed materials based on the plant standard and
customer preferences.
Use modern manufacture, processing technology that will enhance the quality of
printing materials.
Produce quality garment mix will enable the factory both in market.
Control on the quality of raw materials inputs quality of the product and also the
overall production process.
Production products in least cost so that the profitability of the center is
guaranteed.
Moreover control over the quality of the final printing materials.
3. Administration and Finance Department
Duties and Responsibilities
Will plan, organize direct and control the financial transaction of the factory by
using the entire necessary document.
Will develop sound financial control system by developing modern financial
control system.
Manage and execute the company national and international procurement
production.
Administer and control the company logistic resource.
Provide and manage general supportive service to the factory.
Will prepare the annual financial statement and prepare condensed reports for
the general manager. Owner and other concerned body.

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4. Marketing and Sales Department

Duties and Responsibilities
Will handle the overall marketing activities of the organization which including
planning, organizing, directing and controlling.
Gather information on new products, designs, fashions, profiles etc.
Approval of new products profile and brand plan analyzes market research.
Plan and execute sales.
Will develop effective customer handling strategies.

6. Financial Requirement and Analysis

6.1. Total Initial Investment Cost

A. The total cost of money that is required to estimated the envisaged modern construction
materials is to be birr 5,000,000.

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Table Total Initial Investment Capital

No Description Cost

1 Fixed Investment
1.1 Land, Building and Construction 1,500,000 0.00
1.2 Machines and Equipment’s 1,548,200 0.00
1.3 Vehicles and Motors 600,000 0.00
1.4 Office Furniture and Equipment 500,000 0.00
Total Fixed Investment Cost 4,148,200 0.00

2 Operating Expense 0.00

2.1 Raw Materials Purchase and Products 435,000 0.00
2.2 Salary Expense 500,000 0.00
2.3 Other Operating Expense 40,000 0.00
2.4 Pre-operating Expense 16,800 0.00
Total Operating Expense 991,800 0.00
Total Investment Cost 5,000,000 0.00
B. 4.1.1. Fixed Investment
Building and Construction
No Description Land requirement (M2) Unit cost in Br. Total Cost in Br.

1 Production Hall 1500 2650 1,250,000

2 Office Building 500 1000 1,500,000
3 Guard house 300 1000 100,000
4 Toilet and shower room 200 1000 100,000
5 Warehouse 200 1100 250,000
6 Raw material Store 200 1200 600,000
7 End product Store 200 1200 600,000
8 Show room 200 1100 550,000
9 Parking and others 200 1000 500,000
Total 5,000.00 2,550,000

C. Machinery and Equipment

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SN Description UOM Qty Unit Cost Total Cost in

in Birr Birr
1 Offset orienting machine Set 6 750,000.00 500.000.00
2 Offset printing machine Unit 4 250,000.00 100,000.00
3 Artois CAD Unit 4 150,000.00 600,000.00
4 I-cut Machine Unit 4 345,000.00 800,000.00
6 Design machine Unit 1 350,000.00 350,000.00
7 Finishing/ Packaging machine Unit 2 400,000.00 800,000.00
8 Workshop tool Unit 1 250,000.00 250,000.00
9 High Spec. Computer / Unit 5 35,000.00 175,000.00
10 Air conditioner Unit 3 10,000.00 30,000.00
11 Electric Part Set 10 50,000.00 500,000.00
12 Other Equipment’s and LS 2,800,000.00
Machineries
13 Reserved 3,400,000.00
Total 2,548,200.00

D. Vesicle

SN Description Qty Unit Price Total Price(Birr) Remark

1 Pick Up model 20/21 1 600,000 600,000 Duty Free
Total 600,000 600,000

E. Office Equipment’s

SN Description Qty Unit cost (Br). Total cost (Br).

1 Managerial chair with tables 3 10,000.00 30,000.00
2 Secretarial chairs with table 1 50000 5,000.00

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3 Office Chairs with tables 6 1,350.00 8,100.00

4 Computer with printer 5 20,000.00 100,000.00
5 Shelf 1 3,500.00 3,500.00
7 Telephone machine set 2 1,500.00 3,000.00
8 Filing Cabinets 2 2,000.00 4,000.00
9 Machine Assembly, chair and table 2,000,000
10 Decoration(Carpet & Curtain) 7,500.00
11 Reserved 1,339,000
Total 500,000.00

F. Initial Working Capital

The initial working capital is estimated to be birr. 1,351,800.00

1. Raw Materials and Inputs

The total amount of raw materials and inputs estimated to be br.1,754,000.6 at full capacity of
operation. It is based on ration output analysis, which is 50% of the direct raw materials out of
the selling price. These materials including the domestic and imported one

4.1.1. Salary Expense

As indicated in part three of this study, the total cost of salary and wage is estimated to be
5,000,000 birr.

4.1.2. Other Operating Expenses

SN Description Annual Cost in Br. Assumption Used
1 Property Insurance 30,091.95 10% of Fixed investment cost

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2 Audit and Legal Fee 10,000 10% of Salary

3 Uniforms 1,600 1% of FC
4 Telephone, Fax and Postal 1,000 1000per month
5 Cleaning Gods Supplies 2,000.00 70*60br
6 Repair and Maintenance 50,229.88 900 per month
7 Advertisement 2,000.00 1000 per month
9 Stationery and other office 1,000.00 700 per month
supplies
10 Electricity 1,000.00 0.45*150,000W per year
11 Water 5,00.00 2*1000 m3 per year
12 Fuel 90,000.00 6500 lit*20 per year
13 Oil and lubricant 1,000.00 10% of fuel cost
14 Miscellaneous Expense 1,000.00 3,000 br month
15 Other related reserved 3,200,000
Total 4,000,000
4.1.3. Pre -Service Expense
SN Description Cost in br.
1 Project proposal 10,000.00
2 Licensing fee and others lizi payment 2,450,800
3 Promotion and adverting 50,000
4 Workers capacity Building 50,000
5 EIA 40,000
Total 2,616,800

4.1. Financial Analysis and Statements

4.1.1. Underlying Assumption

The financial analysis of the envisioned Modern construction materials product is based on the
data provided in the preceding sections and the following assumptions.
A. Construction and Finance
 Construction Period ………………………………………………………….…18 Months

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 Source of finance……………………………………………..…30% equity and 70% loan

 Bank interest rate …………………………………………………………..…………10 %
 Tax holidays ………………………………………………………………………2 years
 Operating costs increase by……………………………………………..………………2%
 Operating costs and raw material increased by………………………………...………5%
 Utilities and operation expense …………………..…increase 3% per annum after 2ndyear
 Wages and Salary increase…………………………Increase 3% Per annum after 2 nd year

 Sales …………………………………………..increase by 5 % per annum after 2nd year

B. Depreciation
 Building…………………………………………………………………………….5%
 Machinery and Equipment ………………………………………………………..15%
 Office Furniture……………………………………………………………………20%

 Vehicles ………………………………………………………………………..…..15%

C. Working Capital
 Accounts Receivable…………………………………………………………….30 days
 Raw material Local …………………………………………………………..…..30 days
 Work in progress…………………………………………………………………5 days

 Finished Production ……………………………………………………………..30 days

 Cash in hand ……………………………………………………………………...5 days
 Accounts payable …………………………………………………………….…..30 days

4.1.2. Source of Fund

SN Description % share Amount(in birr)
1 Owners Share 30 22,800,000
2 Bank Loan 70 53,200,000
Total 100 5,000,000

4.1.3. Loan Repayment Schedule

Year Principal Payment Interest (10%) Total Annual Payment Remaining Balance

0 0 0 0 53,200,000

1 350,000 350,000 10,640,000 47,880,000

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2 350,000 4,788,000 10,108,000 42,560,000

3 350,000 4,256,000 9,576,000 37,240,000

4 350,000 3,724,000 9,044,000 31,920,000

5 350,000 3,192,000 8,512,000 26,600,000

6 350,000 2,660,000 7,980,000 21,280,000

7 350,000 2,128,000 7,448,000 15,960,000

8 350,000 1,596,000 6,916,000 10,640,000

9 350,000 1,064,000 6,384,000 350,000

10 350,000 532,000 5,852,000 0

Amount of
Rate of
values of Capital Depreciation
No Capital Assets depreciation
assets (Br.) estimated
(%)
(Br.)

1 Land, Building and Construction 1,500,000 5 1,100,000

2 Machines and Equipments 1,548,200 15 2,782,230
3 Vehicles and Motors 600,000 15 840,000
4 Office Equipment 500,000 20 700,000
Total 4,148,200 5,422,230
4.1.4. Annual depreciation schedule of the fixed Asset ( birr)

4.1.5. Balance Sheet (Beginning)

Asset

Current Asset Value in Br

Cash 2,551,800

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Inventory of raw material and input 2,800,00

Total Current Asset 4,151,800

Fixed Asset

Land, Building and Construction 2,000,000

Machineries and Equipment 1,548,200

Office Equipment 500,000

Vehicles 600,000

Total Fixed Asset 4,148,200

Total Asset 5,000,000

Liability

Account Payable 53,200,000

Owner Equity

Capital 22,800,000

Total Liability and Owners Equity 5,000,000

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C. FINANCIAL EVALUATION

6.1.1. Profitability

According to the projected income statement, the project will start generation profit in the 1 st
year of operation. Important ratios such as profit to total sale, net profit to equity |(return on
Equity) and net profit pulse interest on total investment (return on total investment) show an
increasing trend during the life time of the project.

The income statement and the other indicators of profitability show that the project is viable.

6.1.2. Pay-Back 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 with in 6.1 year of operation.

7. Future Development
Every busine.ss under taking is it large or small should have future development plan. It is a
plain fact that business activates are undertook in a dynamic business nature and different
environment. Therefore, the factory will have an expansion phase depending on the condition
of the industry character particularity in producing the profile itself installing the plant, in this
regard; the factory will expand its capacity to produce new paper in the future.

8. ENVIROMENTAL IMPACT OF THE PROJECT

8.1. Socio-Economic Environment

The promoter will provide the land on lease, and all required compensation will be paid
for the project. The livelihood of the local peoples around the project area is rural
dwellers of various occupation and economic background.

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8.2. Environmental Impact Assessment of the project

Current the issue of environment and envelopment get due emphasis and thus every
citizen called expert their maximum effort for fighting against any negative impacts on
th4e environment so as to result in a win-win solution on common agenda that is
creating environmental friendly business environment. The project has some impact on
the environment and the independent EIA report is required.

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