MILIHAN AGRO-INDUSTRY

PROMOTER:- KADIR IBRAHIM TORBALA

Address :-0911505861

PROJECT TO BE IMPLIMENTED IN ADDISABABA CITY ADMINISTRATION

JULY 2020

ADDISABABA

ETHIOPIA

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Contents
1.EXCUTIVE SUMMARY................................................................................................................................................................................................. 5
2.BACK GROUND.......................................................................................................................................................................................................... 6
2.1.background and description of the business.............................................................................................................................................................7
2.4. location of the business......................................................................................................................................................................................... 7
2.4.1. economic significance of the project.................................................................................................................................................................7
2.4.2.contribute to the nations development...............................................................................................................................................................8
2.4.3. source of revenue.......................................................................................................................................................................................... 8
2.4.4.Employement opportinity................................................................................................................................................................................. 8
2.4.5.save/ generate the country foregn exchange......................................................................................................................................................8
2.4.6. enviromental benefits..................................................................................................................................................................................... 8
2.4.7.technology transfer......................................................................................................................................................................................... 8
2.4.8.infra-structure................................................................................................................................................................................................. 8
3. market study and plant capacity market study.................................................................................................................................................................9
3.1.fast GDP growth.................................................................................................................................................................................................... 9
3.2 marketability of the project...................................................................................................................................................................................... 9

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4. plant capacity and production program..........................................................................................................................................................................9
4.1 plant capacity............................................................................................................................................................................................................ 9
4.2. Production program.............................................................................................................................................................................................. 9
4.3 table of production program................................................................................................................................................................................. 10
4.4. PRICING AND DISTRIBUTION........................................................................................................................................................................... 10
4.5. raw materials and inputs..................................................................................................................................................................................... 11
5. ORGANIZATIONAL STRUCTURES AND MAN POWER...............................................................................................................................................11
5.1. Organization and mgt.......................................................................................................................................................................................... 11
5.2. man power......................................................................................................................................................................................................... 11
5.3. organizational structure of milihan agro-industry.....................................................................................................................................................11
6.1. total investement costs with in three years.............................................................................................................................................................13
6.2. total investement costs with in first year...............................................................................................................................................................14
7. financial analysis and statements................................................................................................................................................................................ 15
7.1.underlying assuption............................................................................................................................................................................................ 15
7.2.Revenue projection.............................................................................................................................................................................................. 15
7.3.Profitability.......................................................................................................................................................................................................... 17
7.4.pay back period................................................................................................................................................................................................... 17
7.5.return on investement.......................................................................................................................................................................................... 17
8.ENVIROMENTAL IMPACT ASSESSMENT OF THE PROJECT.....................................................................................................................................17
8.1.1.produce and supply fruit juices....................................................................................................................................................................... 17
8.1.2.source of revenue......................................................................................................................................................................................... 17
8.1.3.save and generate the country foreign exchange..............................................................................................................................................18
8.2.adverse impact assesment................................................................................................................................................................................... 18
8.2.1.pre-construction phase.................................................................................................................................................................................. 18
8.2.2.impact during construction phase.................................................................................................................................................................... 18

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 8.3.impact during operation phase.............................................................................................................................................................................. 19
8.3.1.impact on solid waste................................................................................................................................................................................... 19
8.3.2.impact on liquid waste................................................................................................................................................................................... 19
8.3.3.impact on air pollution.................................................................................................................................................................................... 19
9. Loan amortization schedule....................................................................................................................................................................................... 20
1.EXCUTIVE SUMMARY.............................................................................................................................................................................................. 25
2. Short description about the organization..............................................................................................................................................................25
3. MISSION AND VISION OF THE ORGANIZATION......................................................................................................................................................26
4. Name of committees in the organization.............................................................................................................................................................27
5. Capital needed for the organization...................................................................................................................................................................... 28
6. Direct labor cost..................................................................................................................................................................................................... 29
7. List of fixed assets currently owned by the organization.......................................................................................................................................30
8. Depreciation cost................................................................................................................................................................................................... 31
9.Lists of over head costs/ indirect costs by estimation............................................................................................................................................32
10.Direct raw materials needed and their costs.......................................................................................................................................................33
11. financial plan from the starting to the last of third year operation ...................................................................................................................34
12.sales plan in three years....................................................................................................................................................................................... 35
4.3 table of production program................................................................................................................................................................................. 35
13.PRICING AND DISTRIBUTION................................................................................................................................................................................ 36
14. Table of Profit and loss statement in three year................................................................................................................................................37
15.Cash flow plan for milihan agro-industry plc......................................................................................................................................................44
16. BUSINESS INCOME TAX RULE............................................................................................................................................................................... 45
17. Balance sheet of milihan agro-industryPLC.........................................................................................................................................................46

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1.EXCUTIVE SUMMARY
The purpose of this poject proposal is to raise Birr 120,000,000 for working capital of milihan agro-industry while show casting the expected financial and
operations over the next three years. Milihan agro-industry is located in addisababa city administration.

The following table shows the summary of the project.

1 Project name Milihan agro-industry plc

2 Project owner Kadir ibrahim torbala
3 Project status Pre-operation
4 Nationality Ethiopian
5 Project manager Nasiro Hasen
6 Project location Addisababa nifas silk Lafto kifle ketema
7 Project composition Fruits juices processing industry
8 Project area 20,000 sqm
9 Employement opportinity 70 employees
 On permanent bases 20
 On temporary bases 50

10 Source of fund for the project Loan requested from commercial bank of ethiopia
11 Figure of loan One hundred thirty one million and six hundred four
thousand and six hundred sity seven 131,604,667

2.BACK GROUND
Ethiopia is one of fruit and vegetable highly producing country in the world. But, due to different factors the current postharvest loss of the produced
fruit and vegetables is 30-40% FAO (2012). As a result, this leads high economic loss annually.

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In addition to this, lack of processing technology, less understanding and processing skill and preservation method in the country are the main
reason for post-harvest loss of fruit and vegetable. Pineapple is one of well-known and acceptable fruit in Ethiopia. but the production, marketing and
consumption of fruit is restricted due to improper handling, inadequate transport and storage facility, disease problems, and sensitivity to low storage
temperature.
Thus, there is a need to preserve and store it from time of harvest through the period of scarcity, for the purpose of retaining them as foods and
articles of trade.
The goal of processing is to minimizing undesirable reactions while still maintaining and in cases enhancing, the inherent quality of the fruit. The
most frequent reason for quality deterioration of fruit product is the result of microbial activity and this often result in food moulding, fermenting and
change in acidity. Many consumers are concerned with the wholesomeness of products, which have undergone minimal heat treatment.
Therefore, the objective of this project will be to preserve fruit throughout the year, minimize economic loss and analysis of nutritional analysis
through further processing
Fruits and vegetables are important sources of essential dietary nutrients such as vitamins, minerals and fibers. Since the moisture content of the
fresh fruits and vegetables is more than 80%; they are highly perishable commodities. The world fruit production was about 609 million MT in 2014
-11 (FAO, 2014). According to the estimate, nearly 20-40% of the fruits are lost due to spoilage, mishandling during transportation and lack of cold
storage and processing techniques
(Singh et al., 1994).

Food preservation ensures conservation and better utilization of fruits and vegetables through avoiding the glut and utilizing the surplus during the off-season. It is
necessary to employ modern methods to extend storage life for better distribution as well as Value added product and also processing techniques to preserve
them for utilization in the off-season (Vidhya and Narain, 2013). The fruit can be preserved by converting it into products like jam, jelly, fruit bar, juice, pickle ,to
prolong their utilizable lifespan. Jam is a product made by boiling fruit pulp with sufficient sugar to a reasonably thick consistency, firm enough to hold the fruit
tissues in position, Apple, pear, , apricot, loquat, peach, papaya, carrot, plum, straw- berry, raspberry, mango, tomato, grapes and muskmelon are used for
preparation of jams. It can be prepared from one kind of fruit or from' two or more kinds.

2.1.background and description of the business

Food is the most required products since,human kind came into existance. In modern era, people look for quality of food products. There fore demand for food in
the market is perennial.

As stated above, the industry will provide value added fruit products like jams, jellies, fruit juices sucha s rani,fruit caramel, vinegars ( Acheto) and etc. For local
market as well as export level. This goal can be achieved by using skilled man power and modern agro-processing machineries.

Again, quality of our product canbe tested through Ethiopian food and drug administrationand nutritional composition, microbial identification and other
parameters will be conducted and this instituition will label our food products and liscence us in order to keep cnsumer health and performance.

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2,3.the type of service provided by the business

The industriy will provide diffirent fruits products like:-

 Fruits jams
 Fruits jellies
 Fruits caramels
 Vinegars and others.

2.4. location of the business

The location of the business is located in Addisaba city administration lafto woreda.

2.4.1. economic significance of the project

The envisaged project is deemed to contribute to the ecoinomic development of the nation in general and the region in specific with the following ways.

2.4.2.contribute to the nations development.

By supplyiong customer oriented, high quality and cost effective fruit juice products that will satisfy the demand for diffirent consuption and preservation purposes.

2.4.3. source of revenue

As puplic policy of any nation, the goverment collects diffirent form of taxes from diffirent organization and individuals. Among those taxes,business income
taxes,payrol taxes and VAT are collected from undertaking business activities.therefore, the project will serve as the sources of revenue for both revenue for both
the region and nation as the whole.

2.4.4.Employement opportinity
One of the propblems that our contry faced is unemployement. There fore, the current objective of the goverment is working on tackling the problem of un
employement and fostering the development processeither through creating self employement or employement in other organization. Hence, the project will hire
70 ( 20 permanent and 50 temporary bases) citezens.

2.4.5.save/ generate the country foregn exchange

All types of the envisioned products( produced by the industry are mostly collected from farmers, private and goverment farms and further processed in milihan
agro-industry sell for local market and abroad the countries .

By minimizing the market demand and supply gap for these products the industry will help to reduce the nation’s foreghn exchange cost to import these products.
This will save the foreign exchange resource of the nation.

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2.4.6. enviromental benefits
The industry have no negative effect on enviroment. Because we use the three waste mgt strategies, such as reducing-recycling and re-using methods of waste
products.

2.4.7.technology transfer
It is necessary to employ modern methods to extend storage life for better distribution as well as Value added product and also processing
techniques to preserve them for utilization in the off-season .

2.4.8.infra-structure
The town is head quarter of african union and have good infra structure for obtaining raw materials, electricity,road and easy for distribution on all direction.

3. market study and plant capacity market study.

Fruits juices are slightly rising as a result of general national growth in public spending and tourist/expert preferences (Yonad, 2017). The average annual
imported processed fruits consumption is 250 tones with a consumption growth of 695% from 2005 to 2008 (Yonad, 2011). Of the total consumption or processed
fruits, average annual imported processed fruits juice consumption is three percent (Yonad, 2011)

3.1.fast GDPgrowth
The Ethiopian economy has been expriancing dyanamic and double digit growth that exprianced annual average growth of 11.4% in past 8 years. According to
ministry of finance and economic development(MOFED) the forecasted economic growth the economic growth GDP at constant basic price for 2011/2013 is
estimated % this continuous and two digit high growth would place Ethiopia among the fast growing countries in the world.

3.2 marketability of the project

Fruits and vegetables are important sources of essential dietary nutrients such as vitamins, minerals and fibers. They are also a major source of
income for many farmers who cultivate them for fresh produce markets. It also provides a source of nutrients and play important role in the diet of
many people living in the tropics by raising its nutritional value through the provision of essential minerals and vitamins and addition of flavors, colors
and variety to the diet and equally by contributing to the proteins and calories contents of the diet. The world fruit production was about 609 million
MT in 2010 -11 (FAO, 2010). Consumption of fruit juices is specifically indicated for hypochlorhydria (scanty gastric juice) which is manifested by
slow digestion and a sense of heaviness in the stomach; gastric ptosis (prolapsed stomach) caused by the stomach inability to empty itself a
condition known as gastric atonia; obesity; and sterility due to its trace manganese content actively involved in the formation of reproductive cells in
both males and females. It has also been shown that, pineapple is a powerful inhibitor of the formation of nitrosamines. Nitrosamine is a carcinogenic
substance that forms in the stomach as a chemical reaction between nitrites and certain proteins contained in foods (Roger and George, 2008).

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Pineapple fruit has antiparasitic, abortive, detoxifier, vermifuge, stomach relief properties. The fruit has also been indicated amongst others to
improve digestion, stomach acidity regulation, detoxification, neutralization (Nwaizu et al., 2011).

4. plant capacity and production program

4.1 plant capacity
Based on our machine capacity , our employees shift each other in the gap of 8hrs and 350 working days in a year, the industry will produce a total of 4,000,000
litre fruit juices and 1,000,000 candies. Our plan is to produce 11429 litre juices and 2857 candies per day at full capacity.

4.2.Production program
Based on our imagine the demand growth of demand and the time required developing the required skill the rate of capacity utilization during the first and second
year of production will be 75 and 100%respectively. Full capacity utilization will be reached during the second year of operation.

4.3 table of production program

s.n Specification Year
Description TOTAL

1 2 3
1 Sprite Litre 500,000 500,000 500,000 1,500,000
2 Vinegar (acheto) Litre 500,000 500,000 500,000 1,500,000
3 Jams Litre 1,500,000 1,500,000 1,500,000 4,500,000
4 Candies Number 1,000,000 1,000,000 1,000,000 3,000,000
5 Mirinda Litre 1,000,000 1,000,000 1,000,000 3,000,000

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4.4. PRICING AND DISTRIBUTION
It would be important to examine the possible level of price based on the compititors action. Costs of production and selling price with in three years will be stated
as follows.

Product Cost of production Selling price Profit

Mango juice 33,000,000 60,000,000 27,000,000
Sprite 22,500,000 37,500,000 15,000,000
Vinegar 22,500,000 37,500,000 15,000,000
Pineapple jam 52,500,000 75,000,000 22,500,000
Apple jam 55,500,000 75,000,000 22,500,000

4.5. raw materials and inputs

The basic raw material for production of those products are farmers, cooperative organizations, unions, goverments farms and machineries and chemicals are
also obtained from import levels.

5. ORGANIZATIONAL STRUCTURES AND MAN POWER

5.1. Organization and mgt
The organizational structure should be in a way that the promoter are able to achieve itsd objectives as well as the satisfaction of standard requirement.

5.2. man power

The total man power required for the factory will be 70 which is 50 temporary and 20 permanent) persons. The man power list and ther corresponding labor cost
are shown in financial part.

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5.3. organizational structure of milihan agro-industry.
The organizational structure of the project is designed by including all the necessery personel under the right division. At the top of orghanizational structure,there
will be manager with the responsibilityof supervising the over all activity of the plant.depending up on the nature of the centre,and the amount of the work to be
performs, there exist auxilary units umder the general mgr.

Fig. Organizational structure of milihan agro-industry

The followiong section deals with the duties and responsibilities of some departements.

1. General manager
Duties and responsibilities
 She/he will plan,organize,direct and control the overall activities of the factory.
 He/she will device policies and strategies thaat will enable the factory to be profitable.
 He/she will incorporatemodern technological innovation that will facilitate the service delivery of the project center and increase customer
satisfaction.

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2.the manufacturing department

It is the core departement of the project centre and has the following responsibilities.

 Use modern manufacture processing and technologies that will enhance the quality of that product.
 Produce high quality product that will enable the center competant both the domestic and international market
 Use appropriate technology to manage the products
 Control the quality of raw materials and processed fruit juices and our products

3.administration and finance departement

They will

 Plan, organize direct and control the financial transaction of the plant bhy using the entire necessery document.
 Develop sound financial control syestem by using modern financial syestems.
 Prepare annual financial statements and prepare condensed reports for general mgr owner and other concerned body.
 Manage the puplic relation of the promoter with the external parties/stake holders.

4. commercial departements

 Will handle the overall marketing activites of the organization which include planning,organizing, directing and controlling.
 Gather information on new product and value addition.
 Follow approval of new products brand analysis and conduct market research.
 Develop customer handling strategies.
 Will conduct advertisements and promotions

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 6.FINANCIAL REQUIREMENTS AND ANALYSIS
6.1. total investement costs with in three years.
6.1.1. summary of financial requirements in three years

No Description Cost
I. Fixed investement Birr cent
1.1 Land, building and construction 50,000,000 00
1.2. Machinery and factory equipments 3,000,000 00
1.3. Office equipments 400,000 00
1.4. Laboratory equpments 5,000,000 00
1.5 Vehicles and motors 3,000,000 00
Total fixed investement cost 61,400,000 00
2 Operating expense
2,1. Raw material purchase and input 186,000,000 00
2,2. Salary expense 17,064,000 00
2.3. Indirect labor cost 5,000,000 00
2.4. Overhead cost 1,650,000 00
2.5 Preoperationg cost 100,000 00
2.6 Principal will pay after three years 120,000,000 00
209,814,000 00

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6.2. total investement costs with in first year.

No Description Cost
I. Fixed investement Birr cent
1.1 building and construction 50,000,000 00
1.2. Machinery and factory equipments 3,000,000 00
1.3. Office equipments 400,000 00
1.4. Laboratory equpments 5,000,000 00
1.5 Vehicles and motors 3,000,000 00
Total fixed investement cost 61,400,000 00
2 Operating expense
2,1. Raw material purchase and input 62,000,000 00
2,2. Salary expense 5,688,000 00
2.3. Indirect labor cost 1,666,667 00
2.4. Overhead cost 550,000 00
2.5 Preoperationg cost 100,000 00
Total 70,204,667 00
Grand total costs 131,604,667 00

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7. financial analysis and statements
7.1.underlying assuption
The financial analysis of the envisioned factory is based on the data provided in the preeceeding section and the following assuptions

A. Finance
Source of finance:-----------------------80% equity and 20% loan
Bank interest rate----------------------- interest free banking service

s.n descriptrion Amount in birr

CBE loan Interest free bank loan 131,604,667.00

7.2.Revenue projection
Based on our plan and assuption,of plant capacity ptroduction program and pricing of this paper, the revenue of the project at full capacity until 3rd year is as
follows.

Product Amount Specification Cost of Cost per litre Selling price Profit
production
Mango juice 1,500,000 Litre 33,000,000 22 birr 60,000,000 27,000,000
Sprite 1,500,000 litre 19,500,000 13 37,500,000 15,000,000
Vinegar 1,500,000 litre 22,500,000 15 37,500,000 15,000,000
Pineapple jam 1,500,000 litre 52,500,000 35 75,000,000 22,500,000
Apple jam 1,500,000 litre 55,500,000 37 75,000,000 22,500,000
Mango jam 1,500,000 litre 55,500,000 37 2,775,000,000 219,500,000
Fruit candies 3,000,000 Number 1,500,000 0.50 cent 6,000,000 4,500,000
Mirinda 1,000,000 litre 27,000,000 27 40,000,000 13,000,000
Total 267,000,000 3,203,500,000 2,936,500,000

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Income and loss statements

s.n Description
Operating years
Year 1 Year 2 Year 3
1 Gross sales 1,067,833,333 1,067,833,333 1,067,833,333
2 Cost of sales 89,000,000 89,000,000 89,000,000
3 Operating profit 978,833,333 978,833,333 978,833,333
4 Depreciation , 2,046,666,7 2,046,666.7 2,046,666,7
5 Profit before tax 204,852,889 204,852,889 204,852,889
6 Income tax 23,893,503.7 23,893,503.7 23,893,503.7
7 Principal payed 43,868,222,3 43,868,222.3 43,868,222.3
8 Fixed investment costs 69,938,000 69,938,000 69,938,000
9 Net income 839,086,940.3 839,086,940 839,086,940.3
So 2,517,260,820.9 is net income in 3 yrs

7.3.Profitability
According to the projected income statement,the project will startgenerating profit in the first year of operation.

Important ratios such as profit to total sales,net profit equity, return on equity and net profit on total investment show constant during life time of the industry.

7.4.pay back period

The investement cost and income statement projection are used to project the pay back period.

The investement cost and income statement will be fully covered at the three years of operation.

7.5.return on investement
Break even point=total asset/total lioability

2,517,260,820.9 /209,814,000= 11.99

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8.ENVIROMENTAL IMPACT ASSESSMENT OF THE PROJECT
Enviromental aspects are fundumental for sustainability assessment of the current and novel design of liquid wastes from fruit pulps and seeds and water wastes
are the main waste generated from our industry.In this regard,milihan agro-industry will undertake a separate and detail enviromental impact assessment with his
stakeholders.The project will have significant contribution towards trhe development of social and economic aspects of the country. Such as creating job
opportinity for 70 employees.

8.1.1.produce and supply fruit juices.

Firstly fruit producers and farmers are much get benefit from our industry, because milihan agro-industry will purchase fruit p[roducts directly from farmers.so that,
post harvest losses and fruits wastes and detoriaration can be decreases. Additionally waste of time in order to sell their fruit product can be minimize.

8.1.2.source of revenue
As puplic policy of any nation, the goverment collects diffirent form of taxes from diffirent organization and individuals. Among those taxes,business income
taxes,payrol taxes and VAT are collected from undertaking business activities.therefore, the project will serve as the sources of revenue for both revenue for both
the region and nation as the whole.

8.1.3.save and generate the country foreign exchange.

All types of the envisioned products( produced by the industry are mostly collected from farmers, private and goverment farms and further processed in milihan
agro-industry sell for local market and abroad the countries .

By minimizing the market demand and supply gap for these products the industry will help to reduce the nation’s foreghn exchange cost to import these products.
This will save the foreign exchange resource of the nation.

8.2.adverse impact assesment

We can see the adverse impact assessment in to three phases, namely,pre-construction phase,construction phase and operation phase.

8.2.1.pre-construction phase
The project has no impact in pre-assesment.since,the production facility is already owned.

8.2.2.impact during construction phase

We focuses on construction of food processing laboratory and ware houses. Since it is food laboratory, it have own standard and specification inorder too keep
consumer safety. So it doesnt have any negetive effect on enviroment.but the only things are soil removed ( excavation) work.This is also removed from the town
to farmers arround kaliti woreda floriculture farmers.

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Additionally,the excavated materials during the construction will be kept as adike sorrounding the pit.

8.2.2.1. Impact on soil quality

The construction of proposed plant will disrupt the land and soil strata. But the disruption is for posative causes and the impact will be permanent.

8.2.2.2.impact on air quality

Suspended particulate matter will be the main pollutant which will be generated due to the site development and vehicular movement. Because of vehicular traffic
there may be marginal increase in concentration of No2 and So2. The impact of such activities would be temporaily and restricted to construction phase.

8.2.2.3. impact on water quality

Water requirement for construction phase will be met by own bore wells and through tankers. The local labor force willbe deployed during construction phase and
no colony would be proposed as the workers will be emplyed from the near by local village.how ever necessery permission will be taken from the concerned body
or authority.

8.2.2.4.impact on noise levels.

The major sources of noise during thev construction phase are vehicular traffic and construction equipment like concrete mixers,generators, pumps, compressers
and et.c. the noise level expected due to operation of the equipmewnt range between 70-75(A).the noise produced during construction will have significant impact
on the existing ambient noise levels.

8.2.2.5.impact on health and safety

The health and safety of workers will be at risk due to generation of particulate matter and noise during construction if not managed well.carefull attention will there
fore be given to mitigation of dust, noise vibration and other hazards in the work enviroment.

8.3.impact during operation phase

8.3.1.impact on solid waste
Among our wastes, fruit seeds are only solid waste.so, we plan this solid wastes at farm levels and re-plant the seeds and we develop re-use waste mgt
strategies.

8.3.2.impact on liquid waste

The main waste generated from milihan agro-industry is liquid wastes. From those wastes like fruit pulps,and fibers,we plan to prepare biogases,vermi-
compost,vinegars.

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8.3.3.impact on air pollution
Fruit wastes can be give off-flavour if it is inappropriate stored and managed. This off flovor can causes sinesis,typhoids and othe bacterial diseases. So it is
important to manage those wastes to combat those diseases.

9. Loan amortization schedule.

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