Alex Food
Alex Food
Alex Food
PROJECT PROPOSAL
FOR
Aug, 2021
Table of contents
I. Executive Summary
1. Introduction
1.1 Background …………………………………….…………………………….……….5
1.2 Objectives of the product ……………………………………………..…...…………..7
1.3 The project Description and Application ……………….…...……….……………….7
1.4 Location Map of the Area …………………………….……………………..
………....8
2. General Market Study and Plant Capacity
2.1 Past Supply and Present Demand…………………………………………….………..9
2.2 Project Demand ………………………………………………..……………………..11
2.3 Pricing and Distribution …………………………………………….…………….…12
2.4 Plant Capacity and Production Programmed ……………………………..………..12
2.5 Material and Inputs…………………………………………………………………..13
2.6 Land requirement and land use plan……………………………………..…….....…13
2.7 Technology and Engineering…………………………..……………………….....….15
3. Organization Structure, Management and Manpower
3.1 Man power Requirement ………………………………………………...............…..16
3.2 Organizational Structure……………………………………………………...…..….17
3.3 Organizational Management duties and Responsibilities……………………....…....18
4. Financial Requirement and Analysis
4.2.1. Underlying
Assumption………………………..........................................................23
4.2.2. Source of Fund ………………………………………………………………….....24
4.2.3. Loan Repayment Schedule
…………………………………………………….......24
4.2.4. Annual depreciation schedule of the fixed asset ( birr)…………………..............25
4.2.5. Balance Sheet (Beginning)………………………………………………….……..25
4.2.6. Net working Capital………………………………………………………….........26
I. EXECUTIVE SUMMARY
8 Employment The total manpower requirement for the plant will be 230 employees
Opportunity at full capacity.
9 Benefits of the factory Produce and supply different Food Complex Source of revenue,
for the region/ country create employment opportunity, save foreign currency, benefit for the
local community, stimulate the local economy and transfer
technology
1. INTRODUCTION
The agriculture sector dominates the overall economic activities of the country. Since the launch
of the new market-oriented economic policy of the existing government, Ethiopia is showing
significant progress in all economic sectors. The sector is appreciated for its dominant role in the
country’s foreign exchange earning, employment creation and gross national product. Besides,
the agricultural sector supplies the industry sector with the required raw materials and also
creates markets for the out put of the latter. However, the sector remained back ward and as a
result, has negatively affected the over all performance of the economy of the country.
So to introduction yeast and how to used in baking bread, like that of agriculture remained
backward and had been characterized by poor performance. This reached its worst position
especially during the past regime because of the ill-advised economic policy of the government
used to follow. But together with the coming to power of the present government after the
overthrow of the dergue regime, the situation started changing in favor of the country’s
economy. Consequently, the overall performance of the economy has been improving and has
resulted in the economic development that has been achieved with in past few years.
There are various reasons behind this. Above all, the government after it has seized the power
had shown its keen interest and dedication to exert all necessary efforts towards the development
of the economy. This was clearly indicated in the economic policy issued during the transitional
period. Besides, various investment codes were issued following the issuance of the new
economic policy.
Currently, in order to encourage private investment and to attract capital technology and know-
how to the country comprehensive packages of incentives are granted to investor by the
investment proclamation.
1.1 Background
To introduction to yeast its instant yeast can be known by several different names these include
The new economic policy of our country guarantees investors in the various areas of investment
incentive for investors legislated by federal and regional governments further flourished the
environment and attracted a number of local and foreign investors. As the country is part of the
world, its liberal economic policy paves market oriented economic system. The country in its
investment policy opens the door for investors in various sectors. The government has
recognized the participation of private sectors in all possible and feasible investment fields which
in effect could play vital role in satisfying the growing demand in the respective sector. Because
of the fact that the economic policy of Ethiopia is became one of the attracting nations for
investment. To this end, there is increasing private sector participation in all sectors including
manufacturing, industry, agro industry and service delivery etc. Next to agriculture, the industry
sector has a contribution of about 15% to GDP of the economy.
Hence it is accumulative experience which entities him to Food Complex in newly grow thing
Bishan Guracha town. Bishan Guracha is a Townin central Ethiopia. Located in the East Zone of
the Oromia Region, this Townhas a latitude and longitude of 8°55′N 38°37′E and an elevation of
2,356 meters (7,730 feet) above sea level. The oromia investment commission has been
exporting it is maximum effort to expand investment opportunities in the region so has to faster
the development of the region and sub during the city being enemy that is the trap of poverty.
Therefore aside with the government duties and responsibility visited on it.
To establish
Wheat Flour, Pasta, Macaroni, Biscuit
Yeast ,Bread Improver ,Shanty Cream, Snacks Nuts ,Super ghetto, Starch and
Other related products
Different Related to Food Processing, factory for local and foreign to meet the increasing
demand for these type of output, production, preparation & supply of quality product services at
fair and competitive price and also important as a source of revenue for the promoter through
domestic and foreign market in which a reasonable amount of profit could be realized.
In addition to this the overall objective of the project under consideration is to contribute to the
development process in the country by taking part in the manufacturing sector.
Food Complex, is many raw materials used wheat flour and others Yeast Bread, Improver Shanty
Cream, Cereal, Snacks Nuts, Starch, candy, chocolate & confectionary is processed based on a
sweetener, which may be sugar or honey, to which other ingredients are added, such as flavors &
spices, nuts, fruits, vegetable fats and oils, gelatin, emulsifiers, colorings, egg, milk products,
chocolate or cacao to produce different kinds of fruit, vegetable and other related products. The
treatments of these ingredients with different heat levels determine the types of products. This is
based on the fact that when sugar is boiled, it goes through different stages from soft to hard in
crystallization process.
The steps in yeast bread production is :- benching allow the dough to rest before shaping -
makeup and panning- proofing-baking-cooling-storing and etc
The project under study is planned to be located in Oromia National Regional State, West Arsi
zone, at Bishan Guracha on the east part of the country. The Townis located at about 130 KMs
away from the capital of the country/Addis Ababa. The total land required for the project is
about M2 10,000.
Infrastructure of the area is well developed (Road, Electric power, at the area and banking,
insurance, health facilities, education, etc at the Town of Bishan Guracha ). Some of the reasons
behind selecting the area are:-
Transportation networks which connect it to Addis Ababa and all the regional parts of the
country.
Public utilities such as electricity, telecommunication, services, financial institutions, and
other social infrastructures such as schools, hotel, health centers and the like.
Availability of skilled and semi-skilled man power,
Prospective of future development.
The main objective of this factory is to manufacture, cost effective, market oriented, client based
and quality Wheat Flour, Macaroni, Pasta, Biscuit and Others related for local market.
The envisaged project deemed to contribute to the economic development of the nation in
general and the region in specific with following ways:
As public policy of any nation, the government collects different forms of taxes from different
business organizations and individuals. Among the different forms of taxes, business income
taxes, payroll tax and VAT are collected from undertaking business activities. Therefore, the
project will serve as sources of revenue for both the region and nation as a whole.
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 project will hire 230 (100 permanent and 130 on temporarily basis)
citizens.
All types of the envisioned products (Produced by the project) are mostly imported from abroad.
By producing in Ethiopia, the factory will save the foreign currency of the nation.
By minimizing the market demand and supply gab for these products, the factory will help to
reduce the nation’s foreign exchange cost to import these products. This will save the foreign
exchange resource of the nation.
This factory has positive externality in the country that will encourage the economic movement
of local economy. There will be economic relationship and transactions among different factors.
The major plant machinery and equipment required for the envisaged plant comprise mixers,
laminator, cutting machine, moulding machine, baking oven, conveyors, etc. The plant
machinery and equipment required and their estimated costs are given
The Promoter acquired a total of 10,000 M2 areas of land the promoter had been using the land
and planned to use it as indicated in table below.
Table: Land Use Plan for Wheat Flour, Biscuit, Pasta and related product Factory
5 Warehouse 500
Total 10,000 m2
Based on the outcome of market study and considering the minimum economic scale of
production, the envisaged plant will have production capacity of 1,500 tons of hard biscuits per
annum. This capacity is proposed on the basis of a single shift of 8 hours per day and 320
working days per annum
Year 1 2 3-10
At the top of the organization structure, there will be a general manager with the responsibility of
supervising the overall activity of the plant. It is always true that Organization and Management
of the project plays a key role and bear direct impact on the success and profitability of the
project. The opportunities of being 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 risks in the world market so that the company can cope up with the
dynamics of the market situation.
Therefore, it must particularly to the project under consideration, to give especial affection to
select and recruit the appropriate total manpower requirement for the plant will be employees at
full capacity.
Unskilled:-30
The total number of manpower, manpower list, qualification, and salary and sex composition are
listed in the table below.
S Monthly
N Description No Qualification Salary Annual Salary
1 General Manager 1 BA in Business Management 10,000.0 120,000.00
0
2 Production Manager 1 BSC in industrial Engineering 5,000.00 60,000.00
3 Supervisor 1 BSC in Production 4,000.00 48,000.00
Technology
4 Secretary 1 Diploma In Secretarial 2,000.00 24,000.00
Science
5 Public Relation 1 Dip in Social Science 4,000.00 48,000.00
Officer
6 Personnel 1 Dip in HRM 4,000.00 48,000.00
7 Planning Officer 1 Dip in Economics/Statistics 4,000.00 48,000.00
8 General service 1 Dip in management 5,000.00 60,000.00
9 Color Operator 1 Diploma in Chemical 4,000.00 48,000.00
Engineer
10 Hydraulic 1 10+2 in general Mechanic 5,000.00 60,000.00
Technician
11 Machine Operators 4 10+2 in general Mechanic 5,000.00 240,000.00
12 Marketing head 1 BA in Marketing management 5,000.00 60,000.00
13 Purchaser 1 Diploma in Purch. & Suppli 5,000.00 60,000.00
mgt
14 Administer 1 Dip in Management 5,000.00 60,000.00
15 Sales person 3 Diploma in sales management 5,000.00 180,000.00
16 Finance head 1 Dip in Accounting 5,000.00 60,000.00
17 Accountant 1 Diploma in Accounting 5,000.00 60,000.00
18 Electrician 1 10+2 in general electricity 5,000.00 60,000.00
19 Cashier 1 10+2 in bookkeeping 3,000.00 36,000.00
20 Cleaner 4 Unskilled 3,000.00 144,000.00
21 Driver 2 10 completed 3,000.00 72,000.00
22 Gardner 2 Unskilled 2,500.00 60,000.00
23 Guards/Security 4 Basics 2,000.00 96,000.00
24 Helpers and laborers 194 10 completed 1,395.00 3,247,560.00
Grand Total 230 4,999,560.00
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 manager with the
responsibility of supervising the overall activity of the plant. Depending up on the nature of the
center and the amount of work to be performs; there exist auxiliary units under the general
manager.
Employees under each unit will be supervised by the department head that is accountable for the
general manager. General Manager is appointed by the owners.
Owner
General Manager
Executive
Secretary
Production
Promoter: -Alexander Asefa Page 20
Department Admin & Finance Commercial
Department Department
Project Proposal for Food Complex 2020
Pre- Packing
treatment
Admin. & Financial
Inspection HRM
Marketing Sales
Fig: Organizational Structure
Hence the following section deals with the duties and responsibilities of some departments.
1. General 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 technological innovation that will facilitate the service
delivery of the project center and increase customer’s satisfaction.
He/he will plan, organize, direct and control the human and non-human resources of the
plant so as to achieve the short and long run objectives of the organization.
2. The Manufacturing Department
Duties and responsibilities:-
It is the core department of the project center and has the following responsibilities.
Use modern manufacture, processing and technologies that will enhance the quality
of those products.
Produce quality product that will enable the center competent both in the domestic
and international market.
Use appropriate technology to manage its products.
Control on the quality of raw materials, inputs, quality of the product and also the
overall production process.
Produce products in least cost so that the profitability of the center is guaranteed.
Moreover control over the quality of the final products
3. Administration and Finance Department
Duties and responsibilities:-
Will plan, organize direct and control the financial transaction of the plant by using the
entire necessary document.
Will develop sound financial control system by developing modern financial control
systems.
Will prepare the annual financial statements and prepare condensed reports for the
general manager, owner and other concerned government body.
Will control the human and non human resources of the plant, which include: effective
handling of the different inventories of the machineries, equipments, raw materials,
finished products, and devise strategies of controlling against fraud and damage.
Manage and execute The promoter national and international procurement procedure
Administer and control The promoter logistic resource
Effectively administer the promoter Procurement process domestically as well as
internationally.
Manage the public relation of The promoter/factory with external parties/stakeholders
Provide and manage general supportive service to the plant.
4. Commercial Department
Duties and responsibilities:-
Will handle the overall marketing activities of the organization which include planning,
organizing, directing, and controlling.
Provide cost estimates in preparation for securing ...
Gather information on new product design, profile
Approval of new products profile & brand plan analyzes market research.
Plan and execute sales.
Will develop effective customer handling strategies
B. TRAINING REQUIREMENT
The production supervisor and skilled workers require few weeks training on machine operation
and production technology. Training is assumed to be entertained during the erection and
commissioning period and the cost is in built there and hence about Birr 25,000 is sufficient to
cover expenses associated with the training programmed.
The total cost of money that is required to estimate the envisaged Food Complex product is to be
birr 76,000,000.
1 Fixed Investment
1.1 Land, Building and Construction 22,000,000 0.00
1.2 Machines and Equipment’s 18,548,200 0.00
1.3 Vehicles and Motors 5,600,000 0.00
1.4 Office Furniture and Equipment 3,500,000 0.00
Total Fixed Investment Cost 49,648,200 0.00
Total 18548200
4.1.3. Vehicles
SN Description Qty Unit Price Total Price(Birr) Remark
1 Pick Up model 20/21 1 2,200,000 2,200,000 Duty Free
2 Service Bus 2 1,300,000 2,600,000 Duty Free
3 Mini Bus 1 800,000 800,000 Duty Free
Total 4 800000
4.1.4. Office Equipment’s
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
Amount of
Rate of
values of Capital Depreciation
No Capital Assets depreciation
assets (Br.) estimated
(%)
(Br.)
1 Land, Building and Construction 22,000,000 5 1,100,000
2 Machines and Equipments 18,548,200 15 2,782,230
3 Vehicles and Motors 5,600,000 15 840,000
4 Office Equipment 3,500,000 20 700,000
Total 49,648,200 5,422,230
4.1.4. Annual depreciation schedule of the fixed Asset ( birr)
Asset
Cash 3,551,800
Fixed Asset
Vehicles 5,600,000
Liability
Owner Equity
Capital 22,800,000
4.2.7. Profitability
According to the projected income statement, the project will start generating profit in the 1st
year of operation. Important ratios such as profit to total sales, net profit to equity (Return on
equity) and net profit plus interest on total investment (return on total investment) show an
increasing trend during the lifetime of the project.
The income statement and the other indicators of profitability show that the project is viable.
The investment cost and income statement projection are used to project the pay-back period.
The project's initial investment will be fully recovered at the 3 years of operation.
The owner will provide the land on bases and all required compensation will be paid for the
project. The livelihood of the local people around the project area is rural dweller of various
occupation and economic background.