ASHENAFI MENGISTE KEFYALEW

Page
Table of content #
1. Executive Summary 3
INTRODUCTION 5
1.     Background of the Manufacturer 5
2.     Objective of study 5
2.1 General Objective 6
2.1.1 Specific objective 6
2.3 Project description 6
2.4 Project Rationale 7
2.5 The significance of the project 7
2.6 Project Location 8
3. The market Study 8
3.1 Market Analysis 8
3.2 The Demand-Supply Gap 8
3.3 Current printing products supply 9
3.4 Future market or the worldwide capacity of printing 9
3.5 POTENTIAL TARGET CUSTOMERS / MARKETS 9
3.6 MARKETING PROMOTION strategy 9
4.     Competition 10
5.1 Production Process 10
5.1.1 The Design / Creative Stage 11
5.1.2 The Prepress Stage 11
6.     CRITICAL FACTORS 14
7.     GEOGRAPHICAL POTENTIAL FOR INVESTMENT 15
9. PROJECT COST SUMMARY 15
9.1. Project Economics 15
9.2 Project Financing 16
Financial Requirement 16
9.3 Project Cost 17
9.4. Space Requirement 17
9.5 Machinery & Equipment Requirement 18

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 9.6 Furniture & Fixtures Requirement 19
9.7 Office Equipment Requirement 20
9.8 Raw Material Requirement 20
9.8 Human Resource Requirement 20
9.9 Utilities and Other Costs 21
9.10 Revenue Generation 22
9.11. Pre-service Expenses 22
9.12. CONTACT DETAILS 22
9.13. USEFUL WEB LINKS 22
9.14. Project implementation 23
9.15. Organization and management 24
Organizational Structure 24
10.1. Financial analysis 26
10.2. Repair and Maintenance Cost 27
10.3. Depreciation and Amortization 27
10.4. Total Revenue 27
10.5. Discounted Payback Period 27
10.6. Cash flow 27
10.7. Benefit cost ratio 27
10.8. Internal Rate of Return 28
10.9. Net present value 28
11. Conclusions and Recommendations 29
Conclusion 29
Recommendations 30
Page
list of tables #
Table 1. Executive Summary 4
Table 2: Process Flow Chart 13
Table. 2 Project Economics 16
Table 3: Project Financing 16
Table 4: Project Cost 17
Table 5: Space Requirement 18

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 Table 6: Machinery & Equipment 18
Table 7: Furniture & Fixture 19
Table 8: Office Equipment Requirement 20
Table 9: Human Resource Requirement 21
Table 10: Utilities 21
Table 11: Revenue Generation – Year 1 22
Table 14: project Implementation schedule 23
Table 15: Repair and Maintenance Cost 26
Table 16. Depreciation 23
Table 17. Amortization 23
Annex.12.1. Income statement 31
Annex.12.2. Balance Sheet 32
Annex.12.3. Cash Flow Statement 33
Annex.12.4. Operating cost 34
Annex 12.5.  loan disturbance 35
Annex 12.6. Sales Revenue 35
13.1 Production Cost Assumptions 35
13.2 Production Cost Assumptions 36
13.3 Revenue Assumptions   36
13.4 Financial Assumptions  36

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1. Executive Summary

Technology has been advancing at a rapid rate, but many industries are still in need of
innovation. Printing continues to disrupt modern day technology with personalized solutions
going beyond simple problem-solving. The market for printed material in Ethiopia has been
developing steadily over the last decade. This -feasibility aims to highlight the basic information
for setting up a printing press business in any of the major urban city in Ethiopia. The proposed
business venture is presumed to produce different types of printing material for a variety of client
segments including business enterprises, educational sector and others. The printed materials
produced by the unit mainly include promotional material (brochures, catalogues, posters,
calendars, diaries and visiting cards, etc.), Garment products (T-shirt, bed sheets and pillow
cover, clothes branding, bolo…), Outdoor advertising (banner, billboard, car branding, flags),
office stationary (letterheads, printed files, vouchers, invoices, inward / outward documents,
etc.), published materials (literature and text books, etc.) and packing material printings.
Currently in Ethiopia, majority of printing presses are using canon and Heidelberg Mo-E
machines, as they are easily available in local market at economical rates and cheap
maintenance. Accordingly, in this feasibility study it is recommended to install conventional
machines (i.e. Accurio print C4065) along with to cater for the needs of high-end quality
oriented customers. The potential of these printing presses in local market is very huge and it is
further increasing with changing market trends and technologies. The proposed unit has an
installed capacity of producing 4200 impressions per hours. Therefore, on 8 hours single shift
basis proposed press will produce more than 10.48 million impressions annually. The unit will
operate at 60% of the installed capacity during first year with a gradual increase of 5% in
subsequent years to achieve the maximum capacity (i.e. 95%). The estimated total cost of the
proposed printing press is birr 3 million out of which birr 2.68 million is the capital cost and birr
0.395 million is for working capital. The project is to be financed through 70% debt and 30%
equity. The project NPV is around birr. 25 million, with an IRR of 40% and Payback Period of
2.5 years. The project will provide direct employment opportunities to 28 people including
owner manager. The legal business status of this project is proposed as ‘sol’.

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 1. Executive Summary
KEY INFORMATION HIGHLIGHTS
PROJECT OWNER ASHENAFI MENGISTE
KEFYALEW
PROJECT TITLE Printing press
LAND REQUIREMENT 20 M2
PROJECT AREA Ethiopia,Addis Ababa
Sub city KIRKOS, Woreda 01
H.n 232/10
PRODUCTS TO BE Digital Printing
MANUFACTURED
MARKET Domestic
COST OF THE PROJECT 3,076,300
PROJECT LIFE 10 YEARS
NUMBER OF WORKING 312 DAYS
DAYS
FINANCIAL VIABILITY ( AT 10% DISCOUNT RATE )
NPV (NET PRESENT VALUE) 25,019,268
IRR (INTERNAL RATE OF 40%
RETURN)
PBP ( PAY BACK PERIOD) 2.5 year
ANALYSIS RESULT
THE PROJECT IS TECHNICALLY FEASIBLE, FINANCIALLY
AND COMMERCIALLY VIABLE AS WELL AS SOCIALLY AND
ECONOMICALLY ACCEPTABLE. HENCE, THE PROJECT IS
WORTH IMPLEMENTING.

INTRODUCTION

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 This feasibility study is to introduce the subject matter and provide a general idea and
information on the said matter. Although, the material included in this document is based on data
/ information gathered from various reliable sources; however, it is based upon certain
assumptions, which may differ from case to case. The information has been provided on as is
where is basis without any warranties or assertions as to the correctness or soundness thereof.
Although, due care and diligence has been taken to compile this document, the contained
information may vary due to any change in any of the concerned factors, and the actual results
may differ substantially from the presented information.
The contained information does not preclude any further professional advice. The
prospective user of this memorandum is encouraged to carry out additional diligence and gather
any information which is necessary for making an informed decision, including taking
professional advice from a qualified consultant / technical expert before taking any decision to
act upon the information.

Background of the Manufacturer

ASHENAFI MENGISTE KEFYALEW printing was established in 2014 with an objective to

produce printing products to the economy and with rich experiences on printing and design.

1. Objective of study

The objective of the feasibility study is primarily to facilitate the entrepreneurs in project
identification for investment. The project feasibility may form the basis of an important
investment decision and in order to serve this objective, the document / study covers various
aspects of project concept development, start-up, and production, marketing, finance and
business management. The purpose of this document is to facilitate potential investors in Printing
Press Unit by providing them with a general understanding of the business with the intention of
supporting potential investors in crucial investment decisions. The need to come up with
feasibility reports for undocumented or minimally documented sectors attains greater imminence
as the research that precedes such reports reveal certain thumb rules; best practices developed by
existing enterprises by trial and error, and certain industrial norms that become a guiding source
regarding various aspects of business set-up and it’s successful management. Apart from
carefully studying the whole document one must consider critical aspects provided later on,
which form basis of any Investment Decision.

2.1 General Objective

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 The major goal of this project is to contribute towards the growth of the printing
manufacturing sector in Addis Ababa. Its specific objectives include the following.

2.1.1 Specific objective

 To produce and develop modern printing products that enables to provide standard and
quality printing products to customers.
 To undertake manufacturing and other refuted business activities that enable to generate a
reasonable to the invested capital.
 To develop modern printing products manufacturing that would model for Ethiopia.
 To create employment opportunities.
 Contribute towards to modernization of the people through the technology transfer of modern
printing products manufacturing and facilities.
 To establish economically viable, socially acceptable and environmentally friend printing
products manufacturing.

2.3 Project description

The long-term goal of the project is become the best modern printing products manufacturing
company in the country. The proposed project will have a total area of 20 M2, designed to reader
a modern printing products manufacturing business, which will in turn plays significant role
towards solving shortage of modern printing products in Addis Ababa.

The historical nature of the city as business unique location in one of the most attractive
center in Ethiopian (100% urban center). The owners plan the project to produce modern printing
products high quality class to satisfy the interest of customers in the city. Based on
environmental and other considerations, the entrepreneur has determined the type and size of the
manufacturing which is already determined by the site; conceptual planning and preliminary
analysis have been carried out by analysts. In order to attract its clients to the products, the
project will develop high standard modern printing products.

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2.4 Project Rationale

The existing promising investment opportunities, the demands of service needs along with
relatively sound investment support made by the government in such kinds of feasible projects,
compelled the project promoter to initiate the multipurpose oriented business project to be
established. Despite the promising business opportunities of the city, the trend on such kinds of
investment found to not enough. The mismatch between the demand for and supply of such kind
of manufacturing industry in easily observed in the city.

Therefore, the existing shortage or absence in the supply of these products, along with its
commercial and administrative access, better location and infrastructure access, escalating trend
of urbanization and business activities, thus it is with such reason that this project is identified
and proposed and assumed to be more profitable.

In general, the country’s privatized and free market economy; good governance creates a
favorable environment for the development of investment for private investors.

2.5 The significance of the project

The envisaged project deemed to add to the economic development of the city in general in
specific with following ways:

A. Source of Revenue
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 income tax and VAT are collected from undertaking business activities.
Therefore, this manufacturing industry will serve as sources of revenue for the city.
B. Employment opportunity
One of the problems that our country faced is unemployment. Therefore, the current
objective of the government is working on tackling the problem of unemployment and fostering
the development process either through creating self employment or employment in other
organization. Hence, this project will hire 15 individuals and more than 15 individual during
distributors of the products.

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2.6 Project Location

The projects area is located in Ethiopia, Addis Ababa Sub city kirkos, WOREDA 01 H.n
232/10 The total area of the project is 20 M2.

3. The market Study

3.1 Market Analysis

There are a number of factors which affects the demand of standardized printing products of
these factors, the most important to have influence is population growth and the level of income.
The currently expanding manufacturing industry in Addis Ababa and from every corner of the
city has been inviting skilled and unskilled labor forces to the company; in addition, the number
of both national and international offices has been increasing. Above all the increase in the
number of population increases for the provision of different services. Nowadays, most of the
people need modern way of life.

As clearly indicated in the introductory part of this proposal, Addis Ababa is the dynamically
growing urban center of Ethiopia. Though the market demand gap for manufacturing industry is
not clearly understand there is wider gap for such demand as many merchants, organizations are
flouring to the city every day. From prior business experiences, the demand of printing products
is very high and hence the demand and the supply gap is very wide.

3.2 The Demand-Supply Gap

There has been a significant growth in the number of local and international trades across the
country. This increase is mainly associated with the stimulation of economic activist and partly
due to an increase in the flow of international and local people in to the Addis Ababa. Since
Addis Ababa is an important place for manufacturing industry in addition there is a significant
increase in business activates and hence increasing the number of the people . Even though there
is a lack of quantitative estimates that depict the actual demand and also the annual growth rate
printing products are scarce in the city. As a result there is a large gap between the demands and
that of the supply for modern printing products hence this manufacturing industry would not face
any problem of demand scarcity for products and it would provide good products to customers.

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3.3 Current printing products supply

Printing products manufacturing industry sector has shown a dynamic change in the past few
years. The reason for this could be rapid economic growth and a supporting public infrastructural
development. Other factors relevant in the specific case of manufacturing industry are the large
increases in national and international businesses, particularly firms in the manufacturing
industry sector.
The business of printing products manufacturing industry sector in Addis Ababa in increase
due to the recent rapid growth experienced in Ethiopia. As a result, a good number of local and
international people are coming in place.

3.4 Future market or the worldwide capacity of printing products

From 2015 to 2020, the worldwide capacity of printing products has increased by 20% and in
2020 it was projected that the market size of printing products increases internationally.

3.6 Marketing strategy

In order to penetrate and gain considerable market share, one of the major marketing
strategies for the products is consistently rendering quality printing products to its buyers. Due
emphasis must be placed on improving quality of the products. The major marketing strategies to
promote the products and gain considerable market share include:

 Advertising through different means focusing on the existing service and facilities
 Promote in association to the key location and nearby places
 Working on sustained promotional work.
 Working on public relations to reach and influence key personas and organization with a
capacity of making decision.
 Keeping the quality of its products / packaging and consistently improving with
changing situations.
 Seasonal discount pricing different others customer centric marketing strategies will be
used by the company.

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  Competition

There are different forms of competition that may face the ASHENAFI MENGISTE
KEFYALEW printing. These are price and non price based competition. Moreover, there are
many local printing press manufacturers and other few importers can be identified as main
competitors that will compete with the project either directly or indirectly. But the printing press
business under discussion has diversified marketing strategies that could enable it Cope up with
the different competitors in the market. Moreover it will frequently conduct competitors research
which focuses on, the strength and the weaknesses, the different competitors’ strategies, the
techniques they use marketing strategies, their customer handling methods, and others. Generally
the products have many other substitute products all over Addis Ababa or the country which
compete with it.

 BRIEF DESCRIPTION OF PROJECT & PRODUCT

The importance of printing and graphic arts sector is often under-estimated. However, due to
continual increase in advertisement and promotion trends vis-àvis massive expansion of
educational sector, the business of printing press is experiencing a large scale of turnover in
Ethiopia. Currently, print media is recognized as one of the most effective and economical mode
of communication and promotion by all type of businesses. There is huge variety of printing
materials / products which are being produced by the printing presses mainly for business users
of industrial as well as educational sector. Educational text books have the largest share in the
local printing industry followed by the promotional materials. Accordingly, the proposed
printing press would mainly cater for the printing requirements of following four business
categories:
 Promotional Material; Printing material such as, Brochures, Product Catalogues,
Posters, Annual Reports, Calendars, Diaries, etc.
 Office Stationary; Company Letter Heads, Files, Vouchers, Invoices, Visiting
Cards, Book of Accounts, etc.
 Publishing Material; Text Books, Literature Books, etc.
 Packaging Material; Printing of packing material of all kinds, such as, Boxes,
Cartons, Shopping Bags, etc.
The project is proposed to be set up in any of the four provincial capitals or major urban city of
Ethiopia.

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The business legal status of the proposed project can either be sole proprietorship or partnership.
However, this feasibility assumes the legal status to be partnership.

5.1 Production Process

5.1.1 The Design / Creative Stage

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

5.1.2 The Prepress Stage

In the Pre-press Stage the artwork is taken from its delivered state (either reflective art or
digital file) all the way to the press plates. In pre-press stage:
 The artwork is transformed to negative film either by imaging a digital file through an
image setter, or by shooting reflective artwork with a copy camera.
 The pages are stripped together into a flat that reflects how the pages will be printed
on the press sheet.
 The flat is burned onto a metal plate.
After the flat is burned onto the plate, the plate is washed in the developing chemical. This
developed plate is wrapped around the press cylinder. For the purpose of this feasibility, this
process will be outsourced because of the high capital cost of machinery and equipment used in
the process and the infrequent use of machinery.

5.1.3 The Printing Stage

The Printing Stage covers the transfer of an image to paper. Offset lithography is based upon the
principle that, “the ink and water do not mix”. The paper is fed through the press from a pile of
paper already cut to the size of the machine. Offset printing presses print at a high speed. When a
printing plate is made, the printing image is rendered ink-receptive and water-repellent, while the
non-printing areas are rendered water-receptive and ink-repellent. The ink is distributed to the

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plates through a series of rollers. On the press, the plates are dampened, first by water rollers,
and then ink rollers. The rollers distribute the ink from the ink fountain onto the plates. The
image area of the plates picks up ink from the ink rollers. The water rollers keep the ink off of
the non-image areas of the plate. Each plate then transfers its image to a rubber blanket that in
turn transfers the image to paper. The plate itself does not actually touch the paper. All of this
occurs at a high speed. During the process the machine man checks the blending of inks to
maintain the color control. Print quality is checked frequently by the press operator.

5.1.4 The Bindery Stage

The Bindery Stage is when any trimming, folding, perforating, collating, stitching, or gluing is
performed as required. Mostly, Printing Press performs the trimming and folding in-house, and
works closely with an outside bindery on the collating, stitching and gluing.
A typical job such as an 8.5 x 11 newsletter may include:
i. A post press cut
ii. A half fold
iii. A double parallel fold
For the purpose of this feasibility, this process will be outsourced because the process is labor
intensive and to perform the process in-house the business requires steady orders of binding.

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 Table 2: Production Process Flow Diagram
Getting order

Conceiving idea

Sketching

Approval of sample

Image setting

Plate making

Water & inks Press paper

run

Printing material

Binding

Packing

Delivering

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 5.1. Installed and Operational Capacities

The proposed printing press unit has an installed capacity of printing 4200 impressions per hour
printing technologies. The installed production capacities of printing mainly comprises of 4200
imp / hr, The project would initially operate at 60% production capacity in year 1, and 5%
capacity utilization growth is assumed in the subsequent years. The maximum capacity
utilization of the unit is worked out at 95% of installed capacity, because of the wastage of time
during cleaning and trial runs of the machines. The unit will operate on 8 hours single shift basis
with 312 operational days in a year. Details of operational and installed capacity according to
product mix are provided in the table below:
Table 3: Installed and Operational Capacity
Maximum Capacity
Installed Capacity Utilization
Description of Production Capacity Utilization in Year 1
Machine / Product Mix Proportion (Units) (95%) (60%)
100% 95% 60%
Magazine, poster, 12.00% 1,198,080.00 1,138,176.11 718,848.00
Brochure, certificate 5.00% 499,200.00 474,240.05 299,520.00
envelop, Invitation cards 9.00% 898,560.00 853,632.09 539,136.00
Pamphlet, flayer 4.00% 399,360.00 379,392.04 239,616.00
Letterhead 2.00% 199,680.00 189,696.02 119,808.00
Voucher 17.00% 1,697,280.00 1,612,416.16 1,018,368.00
t-shirt, bed sheets
and pillow cover 23.00% 2,296,320.00 2,181,504.22 1,377,792.00
Packing Material 20.00% 1,996,800.00 1,896,960.19 1,198,080.00
Banner, billboard , car
branding 5.00% 499,200.00 474,240.05 299,520.00
other Prints 3.00% 299,520.00 284,544.03 179,712.00
Total 100.00% 9,984,001.00 9,484,801.90 5,990,400.60

6. CRITICAL FACTORS

Following are the factors critical for the success of this business venture;
 Relations in business sector are important in success of a printing press, as it is an
order-based business.
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  Technical skills are vital for effectively operating the business, as skilled workers can
reduce wastage; insure lower machine maintenance cost, in-time delivery and quality
finish of the product.
 Order size is of a great importance for profitability of the business, as major cost of
printing is the designing, image setting and plate making i.e. fixed costs. So, if the
order size is large the cost per unit will be lower.
 Well-organized company profile with client’s information and nature of job done is
very effective from marketing point of view. Normally Multi National companies go
through the profile of company before ordering any assignment.
 Trained staff should be engaged and comprehensive staff training programs to be
adopted for capacity building.
 Careful selection of good location and rent the store at 8competitive price.

7. GEOGRAPHICAL POTENTIAL FOR INVESTMENT

As the major customers of printing press are industrial buyers, so the unit can be established
in any major city comprising of large industrial and educational sector bases. Therefore, cities
like Addis Ababa, Awassa, Mekelle , Bahirdar …. can be suitable locations for setting up
printing press. Subsequently, availability of skilled labor, raw material and close customer
proximity is extremely important for the success of this business. Concerning to that Addis
Ababa are considered as the most appropriate location for the proposed venture.

8. POTENTIAL TARGET CUSTOMERS / MARKETS

Potential target customers for the produced printed material will mainly comprise of buyers
from local business enterprises, educational institutions and other organizations. As majority of
the target customer belongs to business segments, therefore, the business clients operating in
major big cities, such as Addis Ababa, Awassa, Mekelle , Bahirdar will be key potential markets
for the proposed venture

9. PROJECT COST SUMMARY

A detailed financial model has been developed to analyze the commercial viability of the
proposed Printing Press Unit. Various costs and revenue related assumptions along with results
of the analysis are outlined in this section. The projected Income Statement, Cash Flow
Statement and Balance Sheet are also attached as annexure.

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9.1. Project Economics

All the figures in this financial model have been calculated on the basis of printing capacity
of 2,000 impressions per hours, while unit will operate on 8 hours single shift basis for 312 days
per year. The capacity utilization during year one is worked out at 60% with 5% increase in
subsequent years up to the maximum capacity utilization of 95%. The following table shows
internal rate of return, payback period and net present value of the proposed venture.
Tabel. 4 Project Economics
NO Description Details Remark
1 Internal Rate of Return (IRR) 40%  
2 Payback Period (years) 2.5  
3 Net Present Value (birr) 28,197,433.59  

9.2 Project Financing

Financial Requirement

The financial resource is a prime resource for undertaking any activities, loan (machinery
leasing) and sale of shares. Hence for implementing this the first phase printing press
manufacturing industry a total of 3 ETB is required. From this 48% 1.48 million birr will be
covered by the promoter of the project while the rest 52% (birr 1.59 million ) will be covered
through loan from bank (machinery leasing) at the prevailing interest rate.
Following table provides details of the equity required and variables related to bank loan;
Table 3: Project Financing
N Percentag Remar
O Description Details e k
1 Total Equity 1,480,000.00 48%  
1,596,300.0
2 Bank Loan and machine leasing 0 52%  
3 Markup to the Borrower (Percentage / annum) 14%    
4 Repayment of the Loan (Years) 5 Years    

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9.3 Project Cost

Following fixed and working capital requirements have been identified for operations of the
proposed business.
Table 4: Project Cost
N Percentage Remar
o Description Amount Share k
Capital Cost
1 Plant and Machinery 1,550,000.00 50.39%
2 Furniture & Fixture 78,500.00 2.55%
3 Office Equipment 136,300.00 4.43%
4 Vehicle 900,000.00 29.26%
5 Pre-operating Cost 16,500.00 0.54%
Total Capital Cost 2,681,300.00 87.16%
Working Capital
1 Raw Material Inventory 100,000.00 3.25%
2 Up-front Building Rent 45,000.00 1.46%
3 Cash 200,000.00 6.50%
4 Equipment Spare parts Inventory 50,000.00 1.63%
Total Working Capital 395,000.00 12.84%
Total Project Cost 3,076,300.00 100.00%

9.4. Space Requirement

In order to reduce the initial capital expenditure, the proposed printing press manufacturing
unit will be established in a rental premises. Therefore, the total space required for the
envisioned first phase project is estimated to be 20 m2 space may be acquired in the Addis Ababa
or in outskirts of identified cities where skilled workers are available. The rent of the building
will depend on the area and geographical location of the unit. An estimated area of 20 m 2 will be
required for the proposed venture. The space requirement for the proposed expansion is
estimated considering various facilities including management office, production hall, storage,
open space, etc. For establishing the proposed printing press unit with installation of four (1)
machines approximately 20 m2 areas is required. Detail of covered area requirement for the
project is given in below table:

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 Table 5: Space Requirment
Estimated Area
No Description Remark
(m2)
1 Design Section 5  
2 Printing Hall 5  
3 Cutting Hall 5  
4 Owner’s Office 2.5  
5 Accounts & Admin. Office 2.5  
  Total 20  

Estimated rent of the building is assumed as Birr. 30,000 per month with a 10% increase
annually.

9.5 Machinery & Equipment Requirement

The project is machine oriented and nature of jobs to be undertaken mostly depends upon the
availability of machinery. Therefore, selection of machinery is the most important aspect of this
project. Following is the detail of machinery required for this project:
Table 9: Technical Specification of Machines
Table 6: Machinery & Equipment
S Measureme Qt Unit cost in Total cost
N Description nt y Birr in Birr.
1 Set 1 1,400,000.0 1,400,000.0
kingjet printer 0 0
2 Diesel Generator Set 1 120,000.00 120,000.00
3 Machinery Installation Set 1 30,000.00 30,000.00
Total 1,550,000.0
0

In addition to the above stated machinery, latest more efficient alternative technologies (i.e.
Offset Printing Machines) from Ronald and Hamada brands are also available in the market.
However, the prices of these machines are higher compared to the proposed machines. It is
suggested that, initially project should be started with above proposed mix of machines and later
on adaptation of latest technologies would be considered as business grows.

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9.6 Furniture & Fixtures Requirement

Details of the furniture and fixture required for the project are given below;
Table 10: Furniture & Fixture
No Description Quantity Unit Cost Total Cost Remark
1 Executive Table & Chair 1 15,000.00 15,000.00  
2 Computer Table 1 7,000.00 7,000.00  
3 Sofa (Guest chairs ) 1 7,000.00 7,000.00  
4 Office table with chair 1 9,000.00 9,000.00  
5 Fans, Lights & Wiring 1 8,000.00 8,000.00  
6 Carpets, Curtains, etc 2 3,000.00 6,000.00  
7 Filing cabinets 1 4,000.00 4,000.00  
8 Fire extinguisher 1 4,500.00 4,500.00  
9 workig table 2 3,000.00 6,000.00  
10 Finishing goods shelf 1 4,000.00 4,000.00  
11 Raw material shelf 1 4,000.00 4,000.00  
12 Air Conditioner 1 4,000.00 4,000.00  
Total 78,500.00  

9.7 Office Equipment Requirement

Following office equipment will be required for printing manufacturing unit:

Table 11: Office Equipment Requirement
SN Description Measurement Qty Unit cost Total cost in
in birr Birr
1 Laptop Unit 1 25,000.00 25,000.00
2 Color Printer (DeskJet HP) Unit 1 18,000.00 18,000.00
3 Desktop Computers with UPS Unit 3 20,000.00 60,000.00
4 Printer Mono Laser Jet (HP) Unit 2 6,000.00 12,000.00
5 Fax & Telephone machine Unit 1 1,300.00 1,300.00
6 Scanner- Flat Bed (BEN Q) Unit 2 4,000.00 8,000.00
7 stablizer Unit 4 3,000.00 12,000.00
Total 136,300.00

Feasibility study Page 20

9.8 Raw Material Requirement

Papers, plates and ink of different colors are the major raw material used for the printing
purposes. Imported as well as local paper and board is being used by the industry. Imported
paper is normally used in annual reports, brochures, catalogues, prospectus and visiting cards etc.
Imported paper is also readily available in local markets. Majority of business is done on order
basis; therefore raw material inventory is maintained on the nature and scope of ongoing orders.
The list of different types of papers and other raw material required by the unit is provided in the
following table:

9.8 Human Resource Requirement

The project is machine oriented but skilled labor (machine man) is required to operate the
machines efficiently and effectively. Skilled machine man will result in lower wastage of paper
and ink, lower maintenance cost of machines and also longer life of machines. This will enhance
quality of product and timely delivery of order and hence, help in creating a good image among
customers.
The table below shows Human Resource requirement and the proposed salary
Table 11: Human Resource Requirement
Monthly
S salary in Annual
N Position No Qualification Months Birr salary in Birr
1 Owner / Manager 1 BA in management 12 30,000.00 360,000.00
2 Finance and 1 BA in Accounting 12 6,000.00 72,000.00
Administration
3 Production Manager 1 BSC Mechanical Enginer 12 8,000.00 96,000.00
4 Marketing manager 1 BA in Marketing 12 6,000.00 72,000.00
management
5 sales agent 1 Diploma in marketing 12 4,000.00 48,000.00
6 Technical and 1 BSC Mechanical Enginer 12 7,000.00 84,000.00
Maintenance
7 Graphic Designer 3 10+2 Graphic Designer 12 5,000.00 180,000.00
8 Account Officer 2 Diploma 12 5,000.00 120,000.00
9 Supervisor 2 TEVT Machine OPERATOR 12 5,000.00 120,000.00
10 Composer 1 TEVT Machine OPERATOR 12 4,000.00 48,000.00
11 Machine operator 2 TEVT Machine OPERATOR 12 3,000.00 72,000.00
12 2 Diploma in General 12 3,500.00 84,000.00
Cutting Master mechanic
13 Accountant 1 Diploma in accounting 12 3,000.00 36,000.00
14 Guards/Security 4 Basic skill 12 2,500.00 120,000.00
15 Purchaser 1 Diploma in purchasing 12 3,000.00 36,000.00
&Sup Mgt

Feasibility study Page 21

 16 Casher 1 10+1 in bookkeeping 12 2,500.00 30,000.00
17 Cleaner 2 Unskilled 12 2,500.00 60,000.00
18 Driver 1 10 completed grade 3 12 3,500.00 42,000.00
driving
Total 28 1,680,000.00
Pension (11%) 184,800.00
Grand Total 1,864,800.00

9.10 Utilities and Other Costs

The other essential cost to be borne by the project is the cost of electricity and diesel
expenses for generator, which are assumed as Birr. 46,800.00 During first year of operations. An
increase of 10% in electricity and diesel expenses is assumed in subsequent years. Similarly,
travelling expenses are estimated as 10% of administrative expenses and communication
expenses are estimated at birr. 60,000 per month. Furthermore, promotional expense being
essential for marketing of the unit is estimated as 1% of total revenue.
Table 13: Utilities
No Description units Qty. Unit cost Cost (Birr)
1 Electricity supply kWh 120,000 1.30 156,000.00
2 Water Supply M3 12,000 3.15 37,800.00
Telephone and Internet
3 Broadband Month 12 5,000.00 60,000.00
4 Fuel, Oil and lubricant Lit 1800 26.00 46,800.00
Total 300,600.00

9.11 Revenue Generation

Based on the capacity utilization of 60%, sales revenue during the first year of operations is
estimated as under:
Table 12: Revenue During 1st Year of Operations
Unit price
No Products Measure Qty in Birr Total
1 Magazine,poster, A4 179,712 8.00 1,437,696.00
2 Brochure,certificate A4 74,880 8.00 599,040.00
envelop, Invitation cards A4 134,784
3 8.00 1,078,272.00
4 Pamphlet,flayer A4 59,904 8.00 479,232.00
5 Letterhead A4 29,952 8.00 239,616.00
6 Voucher A4 254,592 2.00 509,184.00
t-shirt,bed sheets A4
344,448
7 and pillow cover 50.00 17,222,400.00

Feasibility study Page 22

 8 Packing Material A4 299,520 35.00 10,483,200.00
Banner,billbord, car A4
74,880
9 branding 140.00 10,483,200.00
10 other Prints A4 44,928 16.00 718,848.00
Total price before VAT     43,250,688.00
VAT     6,487,603.20
Total price wit VAT     49,738,291.20

10. CONTACT DETAILS

In order to facilitate potential investors, contact details of private sector Service Providers
relevant to the proposed project be given.
10.1 Machinery Suppliers
Machinery importer
10.2 Raw Material Suppliers
A few of the prominent suppliers of papers, plates and ink are listed below:

11. USEFUL WEB LINKS

www.googel.com
www.alibaba.com

11. Depreciation and Amortization

The following depreciation rates are applied to depreciate the assets of the project:
 Amortization 5%, pre services cost
 Machinery and Equipment’s 10%, straight line method
Table 15. Amortization
SN Description Cost in birr Economic Amortization Remark
life in year
1 Project proposal 14,000.00 5.00 2,800.00
2 Licensing fee and others 2,500.00 5.00 500.00
Total 16,500.00 3,300.00

Table 16. Depreciation

SN Description Cost in birr Economic Depreciation Remark

Feasibility study Page 23

 life in year
1 Machinery & Equipment 5,669,360.00 10 566,936.00
2 Furniture & Fixture 78,500.00 10 7,850.00
3 Office Equipment Requirement 136,300.00 10 13,630.00
4 Vehicle 900,000.00 10 90,000.00
Total fixed asset 6,784,160.00 678,416.00

9.14. Project implementation

The project’s implementation is expected to take 5 months. The major activities include Bank
loan processing and importing the machine, Procurement of equipments and start production.
The time schedule for major activities is presented below:

Table 9: Project Implementation Schedule

SN Activities Date
1 Preparation Project Proposal Jan 20- 30, 2022
2 Bank loan Or Machinery leasing processing Jan 31 - Feb 30, 2022
3 Acquisition of the machine Mar 1 - 30, 2022
4 Machine installation April 1 - 5 , 2022
5 Giving training for employees May 6- 15 2022
6 Preparation for production May 16-20, 2022
7 Service execution 1-Jun-22

9.15. Organization and management

Organizational Structure

The organizational structure 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 company. 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.

Feasibility study Page 24

 As clearly shown in the organizational structure, the center organization has one general
manager and three main sections. Under the general manager there are the, Marketing
Department, Maintenance and Administration department. Under production Administration
department dept there exist two sections i.e., HRM & finance and general service. Further sub
sections are also organized under technical and maintenance manager. The following section
deals with the duties and responsibilities of each department.

A. The General Manager’s Duties and Responsibilities

 He/she will plan, organize, direct and control the overall activities of the company.
 He/she will devise policies and strategies that will enable the quality products for
profitable of the company.
 He/she will incorporate modern technological innovation that will facilitate quality
products deliver to increase customer’s satisfaction.
 He/she will plan, organize, direct and control the human and non-human resources of the
production so as to achieve the short and long run objectives of the organization.
B. Finance and Administration Department
The Finance and Administration Department has three main sections (HRM, Finance and
General Service section). It has responsible for undertaking the following activities;

 Manage the human resources and control employee’s activity

 Well non human resources of the company, which include; effective handling of the
different resources of the company, and devise strategies of controlling against fraud
and damage.
 Will provide the right material or inventory to the center with right price at the right
time.
 Will plan, organize direct and control the financial transaction of the company by
using all the necessary documents.
 Accountant and casher that will collect money from the customers.
 Will develop sound financial control system by developing modern financial control
systems.
 Will prepare the annual financial statements and prepare condensed reports for both
the General Manager and other concerned government body.
 Follow the overall status of the business and provide maintenance and repair services

Feasibility study Page 25

 C. The marketing Department
 Will handle the overall marketing activities of the organization which include
planning, organizing, directing, and controlling.
 Will develop the marketing strategies for future business and development
 Will develop effective customer handling strategies.
 Execute the promotion methods.
D. Technical and maintenance manager
 Will handle the overall physical maintenance and related issues of the machine.
 Will make sure electricity and back up is organized.
 Follow up security issues and educate tenants
 Works in collaboration with general service to make sure machines periodically well
maintain.

Owners

General Manager

Finance and Production Manager Marketing Technical and

administration Department maintenance
manager

Sales agents
Personnel
Accountant
&Property

IT, Mechanical Machine Operator

engineers

Feasibility study Page 26

 Figure 1.organizational structure

10.1. Financial analysis

The financial analysis of this printing manufacturing project is based on the data presented in
the previous chapters and the following assumptions: -

Source of finance 29 % equity

Debt finance 71 % loan and machinery leasing
Bank interest 12%
Discount cash flow 10%
Accounts receivable 15 days
Account Payable Cycle 15 days
Raw material Inventory 15 days
Finished goods Inventory 15 days
Cash on hand 5 days
Repair and maintenance 5% of equipment cost

10.2. Repair and Maintenance Cost

The annual repair and maintenance cost of the plant is estimated based on the following rates.

Table 18: Repair and Maintenance Cost

Item Rate
Machinery and equipment 5% of the total cost or Book value
Building and civil works 2% of the total cost or Book value
Utilities 5% of the total cost or Book value

10.4. Total Revenue

Based on the projected profit and loss statement, the project will generate a profit throughout
its operation life. Annual net profit after tax increases from Birr 1.6 million at the beginning of
the project to Birr 13.8 million during the last year of operation year. The detail is presented in
Annex.

10.5. Discounted Payback Period

The payback period, also called pay–off period is defined as the period required recovering
the original investment outlay through the accumulated net cash flows earned by the project.
Feasibility study Page 27
Accordingly, based on the projected cash flow it is estimated that the project’s initial investment
will be fully recovered within 3 year.

10.6. Cash flow

The projected cash flow of the envisaged project shows that the project would generate
positive net cash flows throughout the operation years. Cumulative cash flow generated by the
project towards the end of the first operation year will amount to Birr -1.08 million At the end of
the project life, this amount will rise to Birr 19.3 million

The detail is presented in Annex.

10.7. Benefit cost ratio

The BCR is defined as the ratio of the sum of the project’s discounted benefits to the sum of
its discounted investment and operating costs.

When BCR > 1, accept the project

When BCR < 1, reject the project

When BCR = 1, be indifferent

n
Bt
 (1  r ) t
t 0
BCR  n
Ct
 (1  r ) t
t 0

BCR is 5 and positive this indicates this project would return 5 birr in benefits for each birr
spent

10.8. Internal Rate of Return

The internal rate of return (IRR) is an indicator of the efficiency or quality of an investment.
A project is a good investment proposition if its IRR is greater than the rate of return that could
be earned by alternate investments or putting the money in a bank account. Accordingly, the IRR
of the project after tax is computed to be 40% indicating the viability of the project.

10.9. Net present value

Feasibility study Page 28
 Net present value (NPV) is defined as the total present (discounted) value of a time series of
cash flows. NPV aggregates cash flows that occur during different periods of time during the life
of a project into a common measuring unit i.e. present value. It is a standard method for using the
time value of money to asses’ long-term projects. NPV is an indicator of how much value an
investment or project adds to the capital invested. In principle a project is accepted if the NPV is
non-negative. Accordingly, the net present value of the project at 10% discount rate is found to
be Birr 25 million which is acceptable.

11. Conclusions and Recommendations

Conclusion

Feasibility study Page 29

 The objective of this proposed feasibility study is primarily to facilitate the entrepreneur with
the investment information and provide an overview about project. The proposed feasibility may
form the basis of an important investment decision and in order to serve this objective, the
document covers various aspects of Concept Development, Start-up, Production, Marketing,
Finance and Business Management.

The feasibility is based on the information obtained from various primary and secondary data
sources as well as discussions with businessmen. For financial model, since the
forecast/projections relate to the future periods, actual results are likely to differ because of the
events and circumstances that don’t occur frequently as expected.

Whilst due care and attention has been taken in performing the data analysis, no liability can
be inferred for any in-accuracy or omissions reported from the results thereof. It is essential that
our report be read in its entirety with financial model in order to fully comprehend the impact of
key assumptions on the range of values determined.

The project is implemented in Ethiopian and African capital city of Addis Ababa that is
accessible and has the necessary infrastructure such as road, telephone, water and electric power.
The proposed project clearly identifies all the necessary Machinery, equipment, inputs,
management of the company and the required man power. The highest authority in the project
will be vested in the hand of the owner. He will control the overall activities of the proposed
project. Demand projection divulges that there is high demand for printing products in the
country. Accordingly, the planned project is set to provide quality products.

The proposed project possesses wide range of economic and social benefits such as
increasing the level of production of printing products , substitute imports and increases
exports , tax revenue and employment creation for both women and youths. It will have also
environmental concerns to protect it by planting trees around its working area and by utilizing
environmental friendly raw materials. Generally, the project is technically feasible, financially
and commercially viable as well as socially and economically acceptable. Hence the project is
worth implementing.

Recommendations

Feasibility study Page 30

 Financial sensitivity analysis shows that the project is highly sensitive to decrease in sales
revenue but relatively less sensitive to increase in raw material and investment costs. Therefore,
it is recommended that the company should give a great attention for the possible reasons for
sales reduction. In this case, different mechanisms should be selected and implemented to
increase sales. In addition to this, the company should decrease its cost that lowers profitability.
The project must utilize modern promotional styles to capture the planned market share. To do
so, it has to design effective strategy to achieve this plan.

Although, due care and diligence has been taken to compile this document, the contained
information may vary due to any change in any of the concerned factors, and the actual results
may differ substantially from the presented information. In this case, any delaying to implement
the project creates some problem on its profitability as there is always change like change in
price of services and goods, cost of raw materials, customers preference and purchasing power
etc.….So, it is recommended that investors should implement the project as soon as possible
before any change occurred.

Feasibility study Page 31

Annex 12.1. Income statement
Operating years of the project
Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 43,250,688.00 49,954,544.64 57,697,499.06 66,640,611.41 76,969,906.18 88,900,241.64 102,679,779.10 118,595,144.85 136,977,392.31 158,208,888.11

Cost of goods sold 36,763,084.80 42,399,092.74 48,970,952.11 56,561,449.69 65,328,474.39 75,454,387.92 87,149,818.05 100,658,039.84 116,260,036.02 134,280,341.60

Gross Profit 6,487,603.20 7,555,451.90 8,726,546.95 10,079,161.73 11,641,431.79 13,445,853.72 15,529,961.05 17,937,105.01 20,717,356.29 23,928,546.51

General administration & selling expenses

Administration expense

Rental expense 180,000.00 198,000.00 217,800.00 239,580.00 263,538.00 289,891.80 318,880.98 350,769.08 385,845.99 424,430.58

Utilities expense 300,600.00 330,660.00 363,726.00 400,098.60 440,108.46 484,119.31 532,531.24 585,784.36 644,362.80 708,799.08

Repair expense 134,065.00 147,471.50 162,218.65 178,440.52 196,284.57 215,913.02 237,504.33 261,254.76 287,380.23 316,118.26

Office vehicles and Generator running expense 46,800.00 51,480.00 56,628.00 62,290.80 68,519.88 75,371.87 82,909.05 91,199.96 100,319.96 110,351.95

Office expenses (stationary, cleaning etc.) 42,000.00 46,200.00 50,820.00 55,902.00 61,492.20 67,641.42 74,405.56 81,846.12 90,030.73 99,033.80

Promotional & Comm. expense 1,297,520.64 1,427,272.70 1,569,999.97 1,726,999.97 1,899,699.97 2,089,669.97 2,298,636.96 2,528,500.66 2,781,350.72 3,059,485.80

Insurance expense 26,813.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00

Professional fees (legal, audit, etc.) 10,000.00 11,000.00 12,100.00 13,310.00 14,641.00 16,105.10 17,715.61 19,487.17 21,435.89 23,579.48

Depreciation expense 266,480.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00

Amortization expense 3,300.00 2,100.00 2,100.00 2,100.00 2,100.00

Human Resource expense 1,864,800.00 2,051,280.00 2,256,408.00 2,482,048.80 2,730,253.68 3,003,279.05 3,303,606.95 3,633,967.65 3,997,364.41 4,397,100.85

Miscellaneous expense 12,000.00 13,200.00 14,520.00 15,972.00 17,569.20 19,326.12 21,258.73 23,384.61 25,723.07 28,295.37

Subtotal 4,184,378.64 4,748,237.20 5,175,893.62 5,646,315.69 6,163,779.96 6,730,890.65 7,357,022.42 8,045,767.36 8,803,386.79 9,636,768.17

Operating Income 2,303,224.56 2,807,214.70 3,550,653.32 4,432,846.04 5,477,651.84 6,714,963.07 8,172,938.63 9,891,337.65 11,913,969.49 14,291,778.34

Other income

Gain / (loss) on sale of assets

Earnings Before Interest & Taxes 2,303,224.56 2,807,214.70 3,550,653.32 4,432,846.04 5,477,651.84 6,714,963.07 8,172,938.63 9,891,337.65 11,913,969.49 14,291,778.34

Interest expense 223,482.00 178,785.60 134,089.20 89,392.80 44,696.40 - - - - -

Earnings Before Tax 2,079,742.56 2,628,429.10 3,416,564.12 4,343,453.24 5,432,955.44 6,714,963.07 8,172,938.63 9,891,337.65 11,913,969.49 14,291,778.34

Tax 623,922.77 788,528.73 1,024,969.24 1,303,035.97 1,629,886.63 2,014,488.92 2,451,881.59 2,967,401.30 3,574,190.85 4,287,533.50

NET PROFIT/(LOSS) AFTER TAX 1,455,819.79 1,839,900.37 2,391,594.89 3,040,417.27 3,803,068.81 4,700,474.15 5,721,057.04 6,923,936.36 8,339,778.65 10,004,244.84
12.2 Balance Sheet      
  year 0 year 1 year 2 year 3 year 4 year 5 year 6 year 7 year 8 year 9 year 10
Assets                      
Current assets                      
1,455,819.7 1,839,900.3 2,391,594.8 10,004,244.8
Cash & Bank 200,000.00 9 7 9 3,040,417.27 3,803,068.81 4,700,474.15 5,721,057.04 6,923,936.36 8,339,778.65 4
Accounts receivable
Finished goods inventory
Equipment spare part
inventory
Raw material inventory
Pre-paid annual Machine
lease 319,260.00 319,260.00 319,260.00 319,260.00 319,260.00 - - - - -
Pre-paid building rent 180,000.00 198,000.00 217,800.00 239,580.00 263,538.00 289,891.80 318,880.98 350,769.08 385,845.99 424,430.58
Pre-paid lease interest 223,482.00 178,785.60 134,089.20 89,392.80 44,696.40 -
Pre-paid insurance 26,813.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00 12,193.00 -
2,190,754.7 2,548,138.9 3,074,937.0 10,428,675.4
Total Current Assets 226,813.00 9 7 9 3,700,843.07 4,442,756.21 5,002,558.95 6,052,131.02 7,286,898.44 8,737,817.63 2
Fixed assets
Land
Building/Infrastructure
1,550,000.0 2,944,562.4 2,944,562.4 2,944,562.4
Machinery & equipment 0 0 0 0 2,944,562.40 2,944,562.40 2,944,562.40 2,944,562.40 2,944,562.40 2,944,562.40 2,944,562.40
Furniture & fixtures 78,500.00 84,500.00 84,500.00 84,500.00 84,500.00 84,500.00 84,500.00 84,500.00 84,500.00 84,500.00 84,500.00
Office vehicles 900,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00
Office equipment 136,300.00 25,300.00 25,300.00 25,300.00 25,300.00 25,300.00 25,300.00 25,300.00 25,300.00 25,300.00 25,300.00
(266,480.00 (532,960.00 (990,340.00 (1,447,720.00 (1,905,100.00 (2,362,480.00 (2,819,860.00 (3,277,240.00 (3,734,620.00 (4,192,000.00
Accumulate Depreciation ) ) ) ) ) ) ) ) ) )
2,664,800.0 3,087,882.4 2,821,402.4 2,364,022.4
Total Fixed Assets 0 0 0 0 1,906,642.40 1,449,262.40 991,882.40 534,502.40 77,122.40 (380,257.60) (837,637.60)
Intangible assets
Pre-operation costs 16,500.00
Legal, licensing, & training
costs
Total Intangible Assets 16,500.00 - - - - - - - - - -
2,908,113.0 5,278,637.1 5,369,541.3 5,438,959.4
TOTAL ASSETS 0 9 7 9 5,607,485.47 5,892,018.61 5,994,441.35 6,586,633.42 7,364,020.84 8,357,560.03 9,591,037.82
 12.3 Cash Flow Statement
Project Years
Investment Operating years
Description
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Year
00 00 00 00 00 00 00 00 00 00
Operating activities                      
Net profit 1,455,819.79 1,839,900.37 2,391,594.89 3,040,417.27 3,803,068.81 4,700,474.15 5,721,057.04 6,923,936.36 8,339,778.65 10,004,244.84
Add: depreciation expense 266,480.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00 457,380.00
amortization expense 3,300.00 2,100.00 2,100.00 2,100.00 2,100.00 - - - - -
Deferred income tax 623,922.77 788,528.73 1,024,969.24 1,303,035.97 1,629,886.63 2,014,488.92 2,451,881.59 2,967,401.30 3,574,190.85 4,287,533.50
Accounts receivable
Finished good inventory
Equipment inventory
Raw material inventory
Pre-paid building rent (180,000.00) (198,000.00) (217,800.00) (239,580.00) (263,538.00) (289,891.80) (318,880.98) (350,769.08) (385,845.99) (424,430.58)
Pre-paid lease interest (223,482.00) (178,785.60) (134,089.20) (89,392.80) (44,696.40) - - - - -
Advance insurance premium (26,813.00) (12,193.00) (12,193.00) (12,193.00) (12,193.00) (12,193.00) (12,193.00) (12,193.00) (12,193.00) (12,193.00)
Accounts payable
Other liabilities
Cash provided by operations - 1,919,227.56 2,698,930.50 3,511,961.92 4,461,767.44 5,572,008.04 6,870,258.27 8,299,244.65 9,985,755.58 11,973,310.51 14,312,534.76
Financing activities
Change in long term debt - - - - - -
Change in short term debt
Change in export re-finance facility
Add: land lease expense
Machine lease payment 1,550,000.00 (319,260.00) (319,260.00) (319,260.00) (319,260.00) (319,260.00) -
Change in lease financing
Issuance of shares 200,000.00
Purchase of (treasury) shares
Cash provided by / (used for) 1,750,000.00 (319,260.00) (319,260.00) (319,260.00) (319,260.00) (319,260.00) - - - - -
financing activ
Investing activities
Capital expenditure (2,681,300.00)
Acquisitions
Cash (used for) / (2,681,300.00) - - - - - - - - - -
provided by investing activ
NET CASH (931,300.00) 1,599,967.56 2,379,670.50 3,192,701.92 4,142,507.44 5,252,748.04 6,870,258.27 8,299,244.65 9,985,755.58 11,973,310.51 14,312,534.76

Feasibility study Page 1

13.1 Production Cost Assumptions  
  Description Details
Account Receivable Cycle 15 days
Account Payable Cycle 15 days
Raw material Inventory 15 days
Finished goods Inventory 15 days

13.2 Production Cost Assumptions

Description Amt Percentage  
No Raw Material Cost Per PC      
1 Magazine,poster, 207.22 59%
2 Brochure,certificate 36.22 10%
3 envelop, Invitation cards 19.80 6%
4 Pamphlet,flayer 5.59 2%
5 Letterhead 2.68 1%
6 Voucher 2.23 1%
t-shirt,bed sheets
7 and pillow cover 1.99 1%
8 Packing Material 6.85 2%
9 Banner,billbord, car branding 37.06 11%
10 other Prints 31.97 9%
Total Direct Cost 351.60 100%
Cost of Goods Sold Growth Rate 10%
 13.3 Revenue Assumptions  
  Description Details
  Growth in Sales Price 10%
  Days Operational / Year 312
  Per Day Production Capacity 4200
  Production Capacity in First Year 60%
  Percentage Increase in Production Capacity every Year 5%
  Maximum Production Capacity 95%

13.4 Financial Assumptions  

  Description Details
  Project Life Years 10
  Machine lease 1.4 mill
  Debt 1.4 mill
  Equity 300,000.00
  Interest Rate on Debt & Machine lease 12%

Feasibility study Page 3