Contents

I. Executive Summary.................................................................................................................3
1.1 Project Objective...............................................................................................................6
1.2 Brief History Of The Promoter/Project.............................................................................7
1.3 Capital Structure Of The Promoter/Project.......................................................................7
1.4 Credit Information.............................................................................................................7
2. Key Risk And Success Factors.................................................................................................7
2.1 Population.........................................................................................................................7
2.2 Economic Growth.............................................................................................................8
2.3 Manufacturing Industry...................................................................................................10
2.4 Plastic Sector In Ethiopia................................................................................................11
3. Swot Analysis Of The Project................................................................................................12
4. Market Study..........................................................................................................................12
4.2 World Market Overview.................................................................................................12
4.3 Domestic Market.............................................................................................................14
4.4 Demand And Supply Analysis........................................................................................16
4.5 Plastic Production...........................................................................................................17
4.6 Plastic Demand Continues To Grow...............................................................................18
4.7 Marketing Channel Of The Products..............................................................................19
4.8 Pricing Of Product..........................................................................................................19
4.9 Quality Of Product..........................................................................................................20
4.10 Market Destination......................................................................................................20
4.11 Marketing Strategy Of The Project.............................................................................20
5 Technical Study......................................................................................................................21
5.1 Location..........................................................................................................................21
5.2 Availability Of Utility.....................................................................................................21
5.3 Availability Of Input Or Raw Material...........................................................................21
5.4 Technology......................................................................................................................22
5.5 Production Process..........................................................................................................22
5.6 Machinery And Equipment.............................................................................................23
6 Project Implementations Schedule.........................................................................................24
7 Environmental Impact Assessment........................................................................................25
8. Organization, Management And Human Resource Requirement..........................................27

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 8.1 Organizational Structure.................................................................................................27
8.2 Management And Manpower..........................................................................................28
8.3 Manpower.......................................................................................................................28
9. Financial Study.......................................................................................................................29
9.1 Breakdown Of Investment Requirement.........................................................................29
9.2 Source Of Finance...........................................................................................................29
10. Socio Economic Benefits....................................................................................................30
11. Conclusions And Recommendations..................................................................................30
11.1 Conclusions.................................................................................................................30
11.2 Recommendations.......................................................................................................31

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I. Executive Summary

This is the business proposal conducted by the initiation of Kaleab Endale who is going to
establish plastic factory. Kaleab Endale plastic manufacturing factory is established as sole
proprietorship legal entity. The project site is located in Finfinne Special Zone, Sebeta Woreda,
and 04 Kebele. So far the promoter is working in producing plastic shoe for local market since
2011 E.C with initial capital registered Birr 20,000. The project business strategy will revolve
around the need to provide quality service to its various target customers, in the process fully
satisfying their needs. The major purpose of the project is to produce quality monofilament rope.

Ethiopia has been importing a wide variety of plastic goods and machinery including molds for
plastic, GI pipes, Dies and molds for plastic films, plastic packaging material, kitchen products,
pipe and fitting are few of them. Plastic Production industry is an important industrial sector in
the country. Over the last few years, the manufacturing and financial sectors including
construction sector have registered strong growth rates. These sectors are some of the major
drivers of growth for the demand of plastic products.

The global market for plastic products is growing at about 3% year on year, according to
research by The Business Research Company in its report Plastics Product Manufacturing Global
Market 2017. It was worth $1.1 trillion in 2016, and will grow to $1.2 trillion by 2020. The
biggest segment is plastics packaging materials and unlamented film and sheet manufacturing,
which accounts for about 20% of the total. This statistic depicts the plastic consumption in
Ethiopia from 2007 to 2015, and estimated figures from 2016 to 2020. In 2015, the plastic
consumption volume in Ethiopia reached around 172,000 tons. This figure is expected to
increase to some 308,000 tons of plastic by 2020.

The industrial sector contributes less than 13% of the total GDP. And the plastic industry is a
major part of the industrial sector amounting to around 5% of the industrial sector as of
commodity study indicates. This indicates there is high level of demand for the plastic products.
And the industry is unable to satisfy the current demand. This is because of the fact that
consumption of plastic products is growing due to different factors like, economical and
technological factor. To fill this gap the country is till importing from abroad.

3
According to the data collected from different study, Demand for plastics products specifically
monofilament rope is growing at unprecedented scale due to the government’s commitment to
promote green economy and to rehabilitate the areas. So the growth of the industrial sector is
sure to spur the demand for the plastic products in general and packing materials in particular.
Due to this reason Kaleab Endale plastic factory planned to fill the plastic demand gap of the
market.
The major focused market area for the product is local market. There is sufficient market demand
for companies output in the local market. The project will have the advantage of using the latest
technology against the existing domestic producer at better quality. The products can be
distributed outlets in strategic towns or by using hired or commissioned agents.
The price analysis is a process of comparing the price with known indicators of reasonableness.
Market segmentation is the segregation markets based on the specific need of consumers in those
segments. It involves the differentiation of the product to suit the specific need of those
segmented markets. Markets can be segmented in different ways: Geographically, on gender etc.

The promoter has enough knowledge and experience about the business operating and the market
for the products also. The promoter has more than 10 years experience in the business and has
completed grade 12. However, currently the promoter has built manufacturing hall for the
proposed monofilament Rope manufacturing factory.
The Project is located at Finfinne Special Zone Sebeta Town. The Owner has a land 10,000 area.
The Owner has built Manufacturing hall which has 800 m 2 areas which is appropriate for the
machinery proposed to be procured. The location of the project is very close to Addis Ababa
which is all infrastructure requirements has been accessible. The availability of raw material,
labor which both skilled and unskilled easy to access. Regarding this the project would not face
any problem.
There is enough electricity and water avail for the project. The total required power is more than
190 KW. However the promoter installed 315 KVA which mean 252 KW transformer electric
power in the Site which already functional and there is also enough water availability in the
project site.
The technology/Machinery required for manufacturing of the Plastic ropes are Monofilament
extrusion plant, color mixer, extra bobbin winder, rope making machine, coiling machine, ply
yarn twister, feeding bobbins, electronic weighing machine and box strapping machine etc.

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Plastic rope filament extruding machine is automatic production line for PET, PP, PE
monofilament which is used to produce different kind’s plastic rope product.

Kaleab Endale plastic factory is organized on a simple functional organization structure manner,
since it has a form of sole proprietorship, the project has been planned to be managed and
supervised by the promoter with the assistance of hired professionals mainly the production and
technical manager together with machine operators.

As the matter of fact, any organization has social responsibility in creating job opportunity and
involving in different social affairs. The economic benefit of this project is not far from this
truth. This project has paramount importance in reducing unemployment rate and helping
industry sector in providing raw materials and thereby supplementing the country’s GTP of
industrial objectives. Furthermore, the linkage between various sectors of the economy will be
increased.
The project total investment cost is Birr 11,844,129.65 which will be covered by the promoter
and the development Bank of Ethiopia through lease finance scheme. The Bank will cover 100%
of machinery cost which value Birr 5,567,495.35 and the promoter will cover the working capital
part which value Birr 1,113,499.07 as equity contribution and pre operating interest Birr
163,165.24. In addition to this the promoter has constructed manufacturing hall 800 m 2 which
value estimated Birr 5 million.
As the projected income statement shows, the project will earn Birr 3,712,987 and Birr
6,698,391 in the first and 6th years. The projected cash flow statement reveals that the company
cumulative cash flow will increase from Birr 2,599,091 to Birr 23,804,167 in the six years. In
addition through lease repayment period the project net worth is Birr 12,238,670 and Birr
29,904,167 in the first and six years respectively.

In line with this the promoter request the Bank to finance Birr 5,567,495.35 though lease finance
scheme for the procurement of monofilament rope making machine.

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 1. Background Information
Name of the project/company: Kaleab Endale Plastic Manufacturing
Address:-
District: Oromia Zone: Finfinne Special Zone
Woreda: Sebeta Kebele: 04
House No. New Tel. (Office) __________
P.O.Box ______________ Mobile: 09 11 794268
E-mail. _______________ Fax. _____________________
City/Town: Sebeta
Business License:-
Legal form of Business: Sole Proprietorship
Date of establishment: 25/07/2011 E.C
Type of license: Plastics products manufacturing
Licensing Organ: Sebeta Town Trade and development Office
Date Licensed: 25/07/2011 E.C
License No.: ORO/SWT/1/0001356/2012
Tax paying identification number (TIN): 0010628621
Registered capital of the project/company: Birr _____________
Marital Status ___________________
Type of project: - Manufacturing
1.1 Project Objective
The project business strategy will revolve around the need to provide quality service to its
various target customers, in the process fully satisfying their needs. Marketing materials shall be
professionally done so as to be reflective of its intended image and reputation.
In summary it has intend to attain the following objectives:

 To produce quality monofilament rope

 Contribute positively to our communities and our environment.
 Maximizing company profit
 Establish a market presence that assure short and long term sustainability of the
company

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  Develop enthusiastically satisfied customers all of the time.
 We are fully committed to supporting growth and development in the overall
economy of Ethiopia.
 Create job opportunity for youths
 Establish a market presence that assures short term and long term profitability,
growth and success.
1.2 Brief History of the Promoter/Project
Kaleab Endale plastic manufacturing factory is established as sole proprietorship legal entity.
The project site is located in Finfinne Special Zone, Sebeta Woreda, and 04 Kebele. So far the
promoter is working in producing plastic shoe for local market since 2011 E.C with initial capital
registered Birr 20,000. The promoter has enough knowledge and experience about the business
operating and the market for the products also. The promoter has more than 10 years experience
in the business and has completed grade 12. However, currently the promoter has built
manufacturing hall for the proposed monofilament Rope manufacturing factory.
1.3 Capital Structure of the Promoter/Project

As the promoter commercial registration license indicates initially the paid up capital is Birr 20,
000 and currently rise to Birr 500,000.00.
1.4 Credit Information
The promoter has a credit relation with private Bank NIB for years with excellent performance
of loan repayment history.

2. KEY RISK AND SUCCESS FACTORS

2.1 Population
According to World Bank estimate, the total population is 112 million people (2019). Ethiopia is
the second most populous nation in Africa after Nigeria, and the fastest growing economy in the
region. However, it is also one of the poorest, with a per capita income of $850. Ethiopia aims to
reach lower-middle-income status by 2025.
Ethiopia is a nation that has been beset by hunger and poverty for most of its long history. A land
where child starvation and subsequent death have been prevalent for such a long time requires
assistance from the more privileged and prosperous nations of the world. It is the responsibility
of all members of the peaceful international community to step in with more rigor and
determination to empower the Ethiopians. This population has proven to be one of the strongest
7
on the face of the earth, having endured massive hardships. If it is given a little assistance,
Ethiopia will be able to build on the strength of its inhabitants in order to increase the strength of
the nation itself.
2.2 Economic growth
Ethiopia has become a fast-growing African country with high economic growth since 2007. In
light of its economic achievement, the Government of Ethiopia produced an Industrial
Development Strategic Plan (IDSP) (2013-2025) to achieve structural change in the economy by
increasing the industrial sector share and transform Ethiopia into a middle-income country by
2025. Ethiopia is now in the third year of the 2nd Growth and Transformation Plan.

Ethiopia’s economy experienced strong, broad-based growth averaging 9.4% a year from
2010/11 to 2019/20, Ethiopia’s real gross domestic product (GDP) growth slowed down to 6.1%
in 2019/20 due to COVID-19 (corona virus pandemic. Industry, mainly construction, and
services accounted for most of the growth. Agriculture was not affected by the COVID-19
pandemic and its contribution to growth slightly improved in 2019/20 compared to the previous
year. Private consumption and public investment explain demand-side growth, the latter
assuming an increasingly important role.

The consistent higher economic growth brought with it positive trends in poverty reduction in
both urban and rural areas. The share of the population living below the national poverty line
decreased from 30% in 2011 to 24% in 2016. The government has launched a new 10-year
perspective plan which will run from 2020/21 to 2029/30. The plan aims to sustain the
remarkable economic growth achieved under the Growth and Transformation Plans, while
putting more emphasis on the private sector.

Indicator of growth economy of Ethiopia

 An average of about 11% annual GDP growths for the last 14 years. The fastest-growing
economy in the world during the same period (World Bank Global Economic Prospects)
 46% growth in FDI inflow-one of the most dynamic and largest FDI recipients in Africa
(UNCTAD World Investment Report, 2017)

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 Ethiopia is ranked 57th, better than its regional peers (Kenya, Rwanda and South Africa),
for its conducive macroeconomic environment (World Economic Forum, Global
Competitiveness Report, 2017-2018)
 Recognized by UNCTAD for promoting investment in the Sustainable Development
Goals (SDGs)
 Recognized by the World Bank through its “Star Reformer Award” for Ethiopia’s
outstanding performance on investment policy reform and promotion
 Stable and conducive macroeconomic environment.
 Stable and positive economic outlook forecasts of more than 7% projected by IMF and
the African Development Bank, placing Ethiopia among the world’s growth leaders over
the medium term.

 Investment policy and incentives provided as per the Ethiopian Investment Laws
1. There is no restriction on the modality of participation,
2. There is no discrimination between domestic and foreign investors regard to the provision
of incentives,
3. There is a 100% Exemption from the payment of customs duty on imported capital goods
and construction materials including spare parts whose value is not greater than 15% of
the total value of capital goods to be imported.
4. Income tax exemption for investments in manufacturing, agro-processing, agriculture and
ICT from 2 up to 7 years. The privileges of Loss carry forward for half of the tax holiday
period.
5. Export incentives like Duty drawback scheme, Voucher system, Bonded manufacturing
warehouse scheme

2.3 Manufacturing industry

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The Ethiopian manufacturing sector is still far from being an engine of growth and economic
transformation. It plays a marginal role in employment creation, exports, and output, and is short
of stimulating domestic linkages. The sector is dominated by small firms and resource-based
industries, low-value and low-technology products, and weak inter-sectoral and intra-sectoral
linkages. The sector’s export orientation has been low and stagnant. Based on evidence from the
past twenty-five years, the chapter analyses the structure and performance of the sector and
explores the reasons behind the ‘paradox’ of the slow growth of industrial outputs and structural
shifts. In the mid-2010s, there are some promising signals that the manufacturing sector is
coming out of the doldrums and showing positive dynamics. 
In overall economic development, a critically important role is played by micro, small and
medium enterprises in the developing world. The vast majority of countries rely on the
dynamism, resourcefulness and risk-taking of private enterprises (to which most small scale
manufacturing enterprises belong) to trigger, sustain the process, and form the base for private
sector led of economic growth. In this regard, small-scale manufacturing industries are playing
an ever-increasing role in the manufacturing industrial structure of the country. Expansion and
development of the sector increases agricultural productivity through providing agricultural
inputs and creating demand for agricultural outputs. Furthermore, small-scale manufacturing
industries play a key role in stimulating other sectors of the economy such as trade, construction
and services and in reducing unemployment.
The Manufacturing sector comprises establishments engaged in the mechanical, physical, or
chemical transformation of materials, substances, or components into new products. The
establishments are often described as plants, factories, or mills and typically use power-driven
machines and materials-handling equipment. They include all intermediate processes required
for the production and integration of a product's components. Manufacturing is a wealth-creating
sector of an economy, and closely connected with engineering and industrial design and provides
important material support for national infrastructure. It involves the mechanical or chemical
transformation of materials or substances into new products. It makes products from raw
materials by the use of manual labor or machines and is usually carried out systematically with a
division of labor. In a more limited sense, manufacturing is the fabrication or assembly of
components into finished products on a fairly large scale.

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 2.4 Plastic sector in Ethiopia
Most of developing African countries becoming a key player in international plastics industry
where plastics good and expertise are high demands. The story is similar for Ethiopia also
consuming various types of plastics products from local and import from abroad. In investment
also the plastic sector is among the top investment in the country.
Ethiopia has been importing a wide variety of plastic goods and machinery including molds for
plastic, GI pipes, Dies and molds for plastic films, plastic packaging material, kitchen products,
pipe and fitting are few of them.
Plastic Production industry is an important industrial sector in the country. Over the last few
years, the manufacturing and financial sectors including construction sector have registered
strong growth rates. These sectors are some of the major drivers of growth for the demand of
plastic products.
The Plastic industry:
 Supports the construction sector providing various types of materials for the
building activities. House furniture and various instruments and equipment’s;
 It supports the transport sector in providing the necessary materials for
manufacturing of cars, carriage utensils; number plates, small and large sized
bags;
 It is also used in designing and realization traffic signs;
 Used in the preparation of different types of gaskets to be used for different
purposes
 Give a hand to the banking and financial institutions in providing different types
of plastic cards
 Support associations by providing them membership cards;
 It also supports the hotel industry and recreational activities in providing rain
covers and sun shading
The plastic products are useful for households and individuals in presenting the necessary
materials like utensils, plastics boxes, seats, and other furniture. In addition, plastic
manufacturing products are used for presents and cosmetics, document folders and credit cards.
Therefore, in line with the current development endeavors of the country, there is a great market
demand for plastic products.

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 3. SWOT analysis of the Project
Strength Weakness
1. Secured a good market share. 1. Limited financial base compared to our competitors
2. Company Interest to upgrade & expand the 2. New organizational practices
project.
3. Stability
4. Low production cost
Opportunities Threats

1. Good credit facilities & insurance service 1. Suspicion for shortage of foreign exchange for import
2. Supportive and Favourable Government raw materials from abroad.
policy. 2. Import of other similar products that may shift the
3. Increasing demand for the product with the consumer preference.
growing market segment. 3. Period to be consuming loading and transport good from
4. Availability of skilled man power with abroad.
minimum cost. 4. Fluctuation of currency while importing raw materials
5. Governments need for import substitution from abroad
and currency saving. 5. Price competition

4. MARKET STUDY
4.1 Product description
PET ropes made from fibrillated flat tapes have already replaced cotton, jute, sisal fiber and
manila fiber ropes all over the world. The advantage of PP ropes is its strength, light weight, long
life, and water resistance. These ropes find application in many a field such as defense industry,
navy, shipping & marine industry, fishing Industry, petroleum Industry, electricity boards, port
trust and dock-yards, paper plants, sugar mill, transport industry, railways and agriculture etc.
However the promoter planned to produce monofilament rope from recycled plastic which easily
available local and other inputs like monofilament yarn. The remaining raw materials like
gasoline and chemicals imported from abroad like china and UAE.
4.2 World market overview
The global plastic market size was valued at USD 579.7 billion in 2020 and is expected to
expand at a compound annual growth rate (CAGR) of 3.4% from 2021 to 2028. Increasing
plastic consumption in the construction, automotive, and electrical & electronics industries is
projected to support market growth over the forecast period. Regulations on decreasing the gross
vehicle weight to improve fuel efficiency and eventually reduce carbon emissions are driving

12
plastic consumption as a substitute for metals, including aluminum and steel, for the
manufacturing of automotive components. The growth of the construction industry in emerging
markets, such as Brazil, China, India, and Mexico, has been instrumental in fueling the demand
for plastics. The growth of the market can be attributed to increased foreign investment in these
domestic construction markets as a result of easing FDI norms and requirements for better public
and industrial infrastructure.

The global market for plastic products is growing at about 3% year on year, according to
research by The Business Research Company in its report Plastics Product Manufacturing Global
Market 2017. It was worth $1.1 trillion in 2016, and will grow to $1.2 trillion by 2020. The
biggest segment is plastics packaging materials and unlamented film and sheet manufacturing,
which accounts for about 20% of the total.

The market growth is mainly attributed to the rising number of applications for plastics,
increasing adoption and awareness rates of bio-plastics and recycled plastics, and heavy
investments made in the research and development of bio-based plastic products and solutions.

13
In addition, governments are coming up with policies and laws to encourage the development
and usage of bio plastics in a transparent manner, which is expected to drive market growth
during the forecast period.
The global plastics market is mainly attributed due to the increased demand for plastic in
packaging products such as bottles, films, containers, among others. Additionally, the
implementation of government laws and regulations across the globe limits the production and
plastics.
Moreover, in several countries such as Germany, the U.S., and Canada, laws regarding the ban
on single-use plastics have also been implemented, thereby discouraging the demand for plastics
on a global scale. The increasing emphasis on advanced and innovative technologies and
products in the plastics industry, such as bio-based plastics and recycled plastics, creates several
opportunities for the manufacturers to expand their revenue stream and product portfolios.
COVID-19 has hit the plastics industry hard in terms of import of raw-material, transportation,
and in maintaining a smooth supply-demand. The unavailability of sufficient raw material has
created an imbalance in supply for medium-scale manufacturers as well as small-scale and
medium-scale end users. Moreover, the price imbalance created in the oil and gas sector due to
COVID-19 resulted in volatility in petroleum-based plastic prices.
4.3 Domestic market
 This statistic depicts the plastic consumption in Ethiopia from 2007 to 2015, and estimated
figures from 2016 to 2020. In 2015, the plastic consumption volume in Ethiopia reached around
172,000 tons. This figure is expected to increase to some 308,000 tons of plastic by 2020.
The plastic industry back dates to the early 1900s, but it wasn’t until the 1950’s that the mass
production of plastics began. Since then, more than nine billion metric tons of plastic
materials have been produced worldwide, with plastics becoming a ubiquitous part of human
life. The global plastic market was valued at 580 billion U.S. dollars in 2020 and is expected to
experience considerable growth over the next decade. Some of the key players within the plastics
industry include ExxonMobil, Sinopec, and Lyondell Basell.

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According to the UN environment body, globally one million plastic drinking bottles are
purchased every minute and Five trillion single-use plastic bags are used worldwide every year.
In total, half of all plastics produced annually are designed to be used once: the world produces
300 million tons of plastic waste annually, a weight equivalent to the weight of the entire human
population.

In Ethiopia, a Country Cluster of EUROMAP-European Plastics and Rubber Machinery puts the
per capita plastic consumption in 2018 at 2.8 kg, a 267% rise from a figure that put the
consumption per capita at 0.6 kg in 2007. That places Ethiopia as the second largest importer of
plastic raw material in central and eastern Africa and the fastest growing plastics industry in the
continent.

15
4.4 Demand and supply analysis
5.

Plastic products are any of a wide range of synthetic or semi-synthetic organic solids that are

moldable and manufactured typically from organic polymers of high molecular mass which is
derived from petrochemical. Now a day, The Ethiopian economy is growing hastily and
enormously by two digit figure. Even though it is not the major contributor, the industrial
sector plays a significant role for the recorded economic growth. The industrial sector
contributes less than 13% of the total GDP. And the plastic industry is a major part of the
industrial sector amounting to around 5% of the industrial sector as of commodity study
indicates.
This indicates there is high level of demand for the plastic products. And the industry is unable
to satisfy the current demand. This is because of the fact that consumption of plastic products is
growing due to different factors like, economical and technological factor. To fill this gap the
country is till importing from abroad.
Plastic product manufacturing, as of the constituent of manufacturing sub sector, plays an
important role in any developmental phases for countries like Ethiopia. Unfortunately, the
major raw material for plastic manufacturing, crude oil, is not available in Ethiopia and the
industries manufactured their product through importing from abroad though the price of raw
material is directly related to crude oil price.

Plastic products are prominent in every aspect of human life. They are available in huge
numbers and varieties across the world due to their cheapness and convenience to use. The
products are lighter, moldable, hygienic, flexible and cheaper than metal, wood, paper,
ceramics and glass which making them suitable for a wide variety of applications including
food and product packaging, agriculture and housing. These products are many and most of
them are fall in to four big categories, among those categories, Different variety of household
objects can be made out of plastic. These products are usually manufactured in different size,
shape and applications. The products are found anywhere for various uses. Here are the most
common types of household items. Plastic Patlas /stools/,Plastic Drum, Plastic Kitchen Basket,
Plastic Mugs, water jug and cup, Plastic Food and drinks packaging Container . A variety of
those products are ; easily to use, flexible, lightweight Easy to clean, heavy load bearing

16
 capacity and lightweight mainly used for liquor packing, flexible, lightweight to handle,
Unbreakable and most commonly used as a container to hold beverages.

Plastic products are produced all over the world unlike the plastic raw materials which majorly
produced in crude oil producing countries. it can be used as a raw material for other industries
or as the final product. It also plays an important role in enabling growth through innovation in
a wide range of key industries such as automotive, electrical & electronic building &
construction and food & beverage sectors.

The GTP has envisioned for the industrial sector to grow by about 21.3% (in the high base case
scenario) in the period between 2009/10 and 2014/15. This will make the sector’s contribution
to grow to 18.8 from 12.9 it was at the beginning of the planning period. The GTP has aimed at
increasing the contribution of the industrial sector to the total GDP. This all shows that the
government is determined to help the industrial sector by all means at its disposal. And also
mentioned the importance of the plastic industry (GTP, Pg: 60). It proclaims as one factory to
be established just only to substitute import.

4.5 Plastic production

Annual global plastic production reached a high of 368 million metric tons in 2019, having
experienced a compound annual growth rate (CAGR) of roughly 3.5 percent from 2010.
However, the plastics industry was disrupted in 2020 due to the outbreak of COVID-19, which
caused global output to decrease by an estimated 0.3 percent compared to 2019. China is
the leading producer of plastics, accounting for roughly 31 percent of global production. Despite
the economic impacts of the pandemic, the production of plastic products in China increased
during 2020. In comparison, plastic production in Europe continued to decrease, falling by an
estimated five percent compared to 2019. North America (NAFTA) is the second-largest
producer, with plastic production in the United States amounting to more than 56 million metric
tons in 2019.
Although there are thousands of different plastics, there are approximately seven broader types
of plastic that are produced and consumed in large quantities: polyethylene terephthalate (PET),
high-density polyethylene (HDPE), polyvinyl chloride (PVC), low-density polyethylene (LDPE),
polypropylene (PP), polystyrene/styrofoam (PS), and miscellaneous plastics. Polyethylene (PE)
is the most widely produced plastic worldwide and is used to produce many products, such

17
as packaging. The second-most produced plastic is polypropylene (PP), of which more than 70
million metric tons worth was produced in 2020.
4.6 Plastic demand continues to grow
Despite the recent backlash against plastics due to pollution concerns, plastic remains a hugely
important commodity that is used in virtually all aspects of modern daily life. Thus, plastic
demand is set to continue growing for the foreseeable future, with production set to reach 589
million metric tons in 2050. The global demand for polyethylene terephthalate (PET) – a
thermoplastic polymer most associated with plastic bottles – reached 27 million metric tons in
2020 and is projected to reach 42 million metric tons by 2030. The demand for eco-friendly
solutions such as sustainable plastic packaging is also expected to experience growth. However,
COVID-19 has had an impact on sustainability goals within the industry. Hygiene concerns have
resulted in a substantial rise in the demand for single-use plastic products such as gloves and face
masks, with some cities having to temporarily reverse bans on these items.

The CSA data shows that the production of each of those products is increasing which implicitly
means the demand for the products is increasing, too. The other component of apparent
consumption is import. There are exports of plastic products from the country but the amount of
export is insignificant and decreasing over time. According to the data collected from different
study, import is decreasing both in terms of quantity and value; it has decreased by 30% and
22%, respectively, in quantity (kgs) and values (USD), in the period during 2020. The
destination of export is also not convincing to depend on. The amount of export to each specific
country is small and not persistent. The export market for plastic products has not been the
comparative advantage of the country. The future potential demand for the products is then
positively related with the growth in manufacturing industry and commerce in the country.
Industrial sector is the one that the government is doing to uphold its performance, even to a
position to have a leading role.

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Table 1 Monofilament rope demand and supply gap projection

Year 2020 2021 2022 2023 2024 2025 2026 2027 2028

Quantity 341 598 659 542 596 828 979 973 1233
supplied
(Ton)’000

Quantity 699 806 926 1068 1232 1423 1639 1888 2117
demanded
(Ton)’000

358 208 267 526 636 595 660 915 884

Gap(Ton)’000

Source: CSA and own calculation

As a whole, Demand for plastics products specifically monofilament rope is growing at

unprecedented scale due to the government’s commitment to promote green economy and to
rehabilitate the areas. So the growth of the industrial sector is sure to spur the demand for the
plastic products in general and packing materials in particular. Due to this reason Kaleab Endale
plastic factory planned to fill the plastic demand gap of the market.

4.7 Marketing channel of the products

 Having a good website
 Engage with social medias
 Using promotional materials such as brochures and business cards
4.8 Pricing of product
Since the global market, price is sensitive; in deciding the price for a product the planned project
will offer reasonable price by examining the specific cost and profit calculation. The company
uses market penetration pricing strategies. The price hence would be determined based on the
prevailing market price and the cost incurred for the production of the item. The pricing of the
product will be determined based on competitive market price.
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4.9 Quality of product
The envisaged project is expected to have good quality to take advantages and maintain big
market shares and further win more market shares. Moreover, the promoter has selected well
branded and quality machinery which helps to produce quality products. In addition to this it is
bear fact that, quality inputs and machineries with skilled and experienced manpower are basic
determinants for quality products in the production of any industry.
4.10 Market Destination
The major focused market area for the product is local market. There is sufficient market
demand for companies output in the local market. The growing demand plastic end products and
inputs trough out the country on one hand and demand for construction material on the other
hand and monofilament rope production), thus the project will have enough market size through
different marketing strategy and producing quality products to have best preference by its
customers.
4.11 Marketing strategy of the project
The project will have the advantage of using the latest technology against the existing domestic
producer at better quality. The products can be distributed outlets in strategic towns or by using
hired or commissioned agents.

The selling process will depend on personal selling/networking and advertising to inform
potential customers about the products we offer and the benefits of utilizing our products.

Price for a product we offer we tried to be fair and reasonable by examining the specific cost and
profit calculations. The price analysis is a process of comparing the price with known indicators
of reasonableness.

Market segmentation is the segregation markets based on the specific need of consumers in those
segments. It involves the differentiation of the product to suit the specific need of those
segmented markets. Markets can be segmented in different ways: Geographically, on gender etc.
The company identifies itself by marketing items of superior quality and reliability and to
operate on a large scale. In the past the firm used to focus on small scale operation, however the
number of customer is increasing from day to day as more business men and organization are
engaged themselves in industrial sector, especially in production plastic products.

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5 Technical Study
5.1 Location
The Project is located at Finfinne Special Zone Sebeta Town. The Owner has a land 10,000 area.
The Owner has built Manufacturing hall which has 800 m 2 areas which is appropriate for the
machinery proposed to be procured. The location of the project is very close to Addis Ababa
which is all infrastructure requirements has been accessible. The availability of raw material,
labor which both skilled and unskilled easy to access. Regarding this the project would not face
any problem.

5.2 Availability of utility

There is enough electricity and water avail for the project. The total required power is more than
190 KW. However the promoter installed 315 KVA which mean 252 KW transformer electric
power in the Site which already functional and there is also enough water availability in the
project site.
5.3 Availability of input or raw material
Concerning the project’s raw material, the major raw materials of the company are PET flakes
(100% recycled material). PET which stands for polyethylene terephthalate, is a form of polyester
(just like the clothing fabric). It is extruded or molded into plastic bottles and containers for
packaging foods and beverages, personal care products, and many other consumer products. PET
is a clear, strong, and lightweight plastic that is widely used for packaging foods and beverages,
especially convenience-sized soft drinks, juices and water.
The worldwide crisis of plastics-waste pollution calls for action from a wide range
of stakeholders, from consumers to regulators to brand owners to plastics producers. While the
desire to see action is easy to understand, but identifying the most effective approaches to current
waste problems and those of the future represents a complex challenge.
Solution lies in creating a circular economy - Redesigning plastic products to be recyclable →
putting in place effective systems to recover end-of-life plastics → reuse the recovered plastics
by recycling them, turning them into new products that will create value. Accelerate your
transition by choosing from the large number of possible approaches and tailoring them to the
recycling needs of different plastics, applications, and regional waste management systems.
However the promoter has a plan to use PET plastic recycling inputs which are available in the
local market and other raw material which are imported from Saud Arabia& India. Recycled
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PET can be converted to fibers, fabrics, sheets for packaging and manufacturing automotive
parts. Chemically, Polyethylene terephthalate is very much similar to Poly butylenes
Terephthalate. As it known the country is under outstanding foreign currency shortage and to
alleviate this problem, the promoter will recycle the inputs available in the local market.
5.4 Technology
The technology/Machinery required for manufacturing of the Plastic ropes are Monofilament
extrusion plant, color mixer, extra bobbin winder, rope making machine, coiling machine, ply
yarn twister, feeding bobbins, electronic weighing machine and box strapping machine etc.
Plastic rope filament extruding machine is automatic production line for PET, PP, PE
monofilament which is used to produce different kind’s plastic rope product.

The supplier called Qingdao Zhuoya Machinery Co., Ltd is a science and technology
knowledge-intensive corporation integrated with research and development, fabrication, sales
and service, professionally engaged in the manufacture of Plastic Filament Machine Equipment.
We are expert in manufacturing plastic broom brush filament extruding machine, plastic rope
filament extruder machine, plastic synthetic hair filament extruder machine, plastic synthetic
false eyelash filament extrusion machine, plastic cosmetic brush filament extruder
machine, plastic safety net filament production line and other plastic wire extruding machine.
5.5 PRODUCTION PROCESS
FIBRE LUBRICATION FIBRE CLEANING

COMBING
FIBRE STRAIGHTENING & SPREADING

SLIVER FORMATION

DRAWING

LEFT HAND TWIST RIGHT HAND TWIST

WINDING DYEING TWISTING CREELING & STRANDING

PACKING UN RAVELLING WINDING

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5.6 Machinery and Equipment
PET rope filament making machine is used to produce PET monofilament from recycled PET
bottle flakes. The PET monofilament will be processed into PET rope by twisting machine
automatically.
PET rope filament making machine is new technology in this field. It can produce filament
according to details requirement of different diameters, colors etc. Our PET rope filament
extruding machine line is with professional technology design, mature production process
support.
The PET rope filament produced by our machine is with advantages of anti-oxidation, anti-
corrosion, high strength, good abrasion resistance, good elasticity, bright color, and no pollution.
Therefore, the PET rope made from this filament is with widely application comparing with
other material ropes. Also due to its low production cost, PET rope has absolute advantage in the
market.
General Description:
This unit can produce PP, PE, and PA monofilament automatically for plastic rope product. To
make different raw materials plastic rope fiber, we have advanced and professional machine line
design and technology support which is in leading position in this field. With recycled raw
material, and less labor requirements, the production cost is cheap, so our clients will get good
profit in the market. Our machine line is welcomed and gets good reputation in this field.
With our practices experience for many years and comprehensive conclusion, we supply the
most suitable machine line model as below for our clients.
Machine Procedure: 
Automaticmaterial loader→high efficiency extruder→screenchanger→spineret(mould)→cooling
water tank→first pulling and stretching unit→hot water tank→second pulling and
stretchingunit→oil coating→winding→shaping→cutting.

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 According to the presented proforma invoice the required machinery for the production of PET
rope has been depicted as follow.
Name Configuration Quantity Price/USD
Raw material dryer 1 set
Automatic Feeding Machine 1 set
SJ-90 Single Screw Extruder 1 set
Extruding die head+ spinneret 2 sets
SJ-90 PET (With Screen Changer)
Rope Filament Water trough calibration system 1 set USD101,560/set
Production Line 7-roller tensile unit 2 sets
5-roller tensile unit 1 set
Hot water tank 2 sets
Winding machine 1 set
Electric control system 1 set
Auxiliary Steel bobbin for filament winding 200pcs USD 9,000
machines
Total FOB Qingdao Price USD110,560 /Set

6 Project implementations schedule

Depending up on Project implementation schedule of the project it started its lease process at
September 2021, Commencement of Production at March 2022 and expected to start Lease
Loan Repayment Schedule after 6 month grace period that is September 2022 .

  Project implementation plan

2021/22
Sr.N
Type of Activities De
o Sept Oct Nov Jan Feb Mar
c
1 Documentation Process              

2 Lease Processing with Bank

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 Procurement of Machineries and
3              
Installation
4 Procurement of Raw Material              
Employees recruitment and
5              
training

6 Commencement of Production              

7 Environmental impact assessment

While there are many manufacturing processes, most use heat to soften the plastic and pressure
to force the molten material into a mold cavity or through a dye. An effective process safety
management program should establish procedures for routinely documented machinery
inspection and service to monitor excess heat, friction, leakage, malfunction, and control
potential ignition of flammable or combustible materials. Remotely located emergency shutoff or
automatic shut off switches should be provided for hydraulic equipment.
Plastics are manufactured by processing of petrochemicals derived from non renewable natural
resources, crude oil. So the impacts can occur at every stage of plastic manufacturing in
extracting raw materials, production, distribution and the disposal. Despite the fact that In
Ethiopia, energy consumption for transportation of plastic products and emission during the
production process may not be a big problem concerning the environmental issue but most
plastic products are not biodegradable and will persist in the environment for hundreds of years
which cause a range of health problems, water and air pollution. Different studies suggested, In
addition to reducing the amount of plastics waste disposal, recycling plastic can have several
other advantages: i.e. Conservation of non-renewable fossil fuels, Plastic production uses 8% of
the world's oil production, Reduced consumption of energy & reduced emissions of carbon-
dioxide (CO2), nitrogen-oxide (NO) and sulfur dioxide, (SO2).

A large quantity of easily ignitable dust may be generated in plastic production areas. Plastic dust
only requires a small ignition source to create a severe explosion. If not controlled, the presence
of ignitable dust and static can lead to total losses. Due to plastic’s natural insulating ability,
static electricity build up occurs in:
 The manufacturing process

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  Pneumatic conveying systems used in transferring and blending plastic pellets
 Finishing activities such as shaping, trimming and sanding
 Grinding activities
 Rolling or calendaring process that forms plastic films and sheets
Machinery that produces dust should be properly fitted for a dust collection system. The type of
collection system and safeguards required will depend largely on the volume of dust being
generated and the size of the particles. Most plastics manufacturing operations regrind plastic
scrap and poor quality parts/products. The small self-contained regrind units typically do not
generate quantities of dust to be considered hazardous. Large re-grinders, normally found in bag
manufacturing plants do generate significant quantities of airborne dust which require controls to
prevent dust explosion. Plastic regrind dust is a combustible dust comparable to wood or grain
from an explosion standpoint.
Portions of system-handling powdered materials from which dust can escape should have
permanent dust collection systems. Production machinery such as hoppers, storage bins,
conveyors, conveyor ducts and grinders that come into contact with plastic dust should be
constructed with dust-tight seals and explosion venting. Controls for static generation are
variable and depend on the process involved.
Anti-static coatings, additives and sprays, and grounded metal static combs may be used to
reduce the surface resistance of plastic material. The use of conductive belting, low conveyor
belt speeds and short center drives is advisable. Pneumatic dust conveying systems should be
restricted to handle only dust and no other waste. Dust collection typically involves placement of
local exhaust ventilation systems close to the source of dust emissions.
To assess the prevailing quality of air, water, noise, land etc., regular monitoring of these
parameters is necessary. This data will help to arrive at improvement in protection measures. The
project proponent has set up a permanent cell, which shall take care of effective implementation
of Environment Management Plan which is very much necessary to preserve/protect the
surrounding environment.
The functions of the environmental cell are as follows:
 Implementation of the planned mitigating measures
 Monitoring the programmed of implementation
 To estimate the efficiency of the measures taken

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  Environmental monitoring and maintaining the test reports in a file for each of the
monitoring parameters like air, water, soil etc.

8. Organization, Management and Human Resource Requirement

8.1 Organizational structure

Kaleab Endale plastic factory is organized on a simple functional organization structure manner,
since it has a form of sole proprietorship, the project has been planned to be managed and
supervised by the promoter with the assistance of hired professionals mainly the production and
technical manager together with machine operators.

The general manager will have the authority to manage fully the overall operation of the factory
with the main assistance of production and technical unit who has degree in technology with
sufficient experience in the same field. So, factory managerial hierarchy has the following
structure

General Manager

Executive secretary

Accounts and Production and

Administration technical manager
manager

Accountant Forman for

General Service Quality control
production process
Purchasing and head
selling unit

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 Store keeper Guard and senators Machine Technical
and cashier operators support staff

Figure: Organizational structure of the project

8.2 Management and manpower

The promoter or the general manager is engaged in diversified businesses of which all are
profitable. Even though his educational background is grade 12th complete he has enough
experience and exposure to run the project operation without any difficulty. He has related
experience with sector since he has engaged in the production plastic shoe manufacturing and
trading business activities.

Besides the general manager the project management will be supported by professionals hired at
the post of production and technical manager, and accounts and administration manager which
helps to smoothly run the project.

8.3 Manpower

Description No. of workers Salary/month Annual salary (Birr)

General manager 1 7,500.00 90,000.00
Secretary 1 1,500.00 18,000.00
Production & Technical Section Head 1 4,000.00 48,000.00
Production worker 20 900.00 216,000.00
Administrative & HR Section Head 1 2,000.00 24,000.00
Quality Control 2 2,000.00 48,000.00
Operators 1 2,050.00 24,600.00
Marketing & Finance Section Head 1 4,000.00 48,000.00
Sales Person 1 2,000.00 24,000.00
Purchaser 1 2,500.00 30,000.00
Accountant 1 2,300.00 27,600.00
Casher 1 1,500.00 18,000.00
Driver 1 1,500.00 18,000.00
Cleaner 1 800.00 9,600.00
Guards 1 900.00 10,800.00

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 Total Annual Salary 35 35,450.00 654,600.00

The project will hire 28 workers and the detail manpower requirement with their respective
wages and salaries is depicted below.

9. Financial study
The project total investment cost is Birr 11,844,129.65 which will be covered by the promoter
and the development Bank of Ethiopia through lease finance scheme. The Bank will cover 100%
of machinery cost which value Birr 5,567,495.35 and the promoter will cover the working capital
part which value Birr 1,113,499.07 as equity contribution and pre operating interest Birr
163,165.24. In addition to this the promoter has constructed manufacturing hall 800 m 2 which
value estimated Birr 5 million.
9.1 Breakdown of Investment Requirement

Total Investment
Description Existing Planned Total
Building & Construction 5,000,000.00 - 5,000,000.00
Machineries 5,567,495.35 5,567,495.35
Sub Total 5,000,000.00 5,567,495.35 10,567,495.35
preproduction interest   163,135.24 163,135.24
Working Capital   1,113,499.07 1,113,499.07
Total 5,000,000.00 6,844,129.66 11,844,129.66
percentage 42% 58% 100%

9.2 Source of Finance

Equity
Description Contribution DBE lease Total
Building & Construction 5,000,000   5,000,000
Machineries   5,567,495 5,567,495
Sub Total 5,000,000 5,567,495 10,567,495
preproduction interest 163,135   163,135
Working Capital 1,113,499 - 1,113,499
Total 6,276,634 5,567,495 11,844,130
Lease Financing
Debt/Equity     47%
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 10. Socio Economic benefits
Plastic products manufacturing has wide range of socio economic benefit
 Absorbs both Skilled and unskilled labor
 Foreign currency saving
 Technology transfer
 Revenue generation to government
 Import substitution
 As the matter of fact, any organization has social responsibility in creating job
opportunity and involving in different social affairs. The economic benefit of this project
is not far from this truth.
 This project has paramount importance in reducing unemployment rate and helping
industry sector in providing raw materials and thereby supplementing the country’s GTP
of industrial objectives. Furthermore, the linkage between various sectors of the economy
will be increased.

11. Conclusions and Recommendations

11.1 Conclusions
In overall economic development, a critically important role is played by micro, small and
medium enterprises in the developing world. The vast majority of countries rely on the
dynamism, resourcefulness and risk-taking of private enterprises (to which most small scale
manufacturing enterprises belong) to trigger, sustain the process, and form the base for private
sector led of economic growth. In this regard, small-scale manufacturing industries are playing
an ever-increasing role in the manufacturing industrial structure of the country. Expansion and
development of the sector increases agricultural productivity through providing agricultural
inputs and creating demand for agricultural outputs. Furthermore, small-scale manufacturing

30
industries play a key role in stimulating other sectors of the economy such as trade, construction
and services and in reducing unemployment.
Plastic Production industry is an important industrial sector in the country. Over the last few
years, the manufacturing and financial sectors including construction sector have registered
strong growth rates. These sectors are some of the major drivers of growth for the demand of
plastic products.
Kaleab Endale plastic manufacturing factory is established as sole proprietorship legal entity.
Since the promoter planned to produce monofilament rope from PET flakes recycle plastic, it has
a lot of benefit other than creating employment opportunity, foreign currency saving, tax revenue
and community benefits. The required financial, economical and social analysis has been
conducted. Accordingly the project is viable through all measures of project viability including
IRR. Thus the establishment of the project has environmental importance which is the current
global problem and while it reduce environmental pollution significantly.

11.2 Recommendations
Based up on its all round importance the owner has expectantly request the bank to finance Birr
5,567,495.35 though lease finance scheme for the procurement of all the necessary machineries
having in mind project importance and verification of the submitted documents.

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