1.

NEED ASSESSMENT AND FUTURE ACTION PLAN

1.1. Past Supply and Present Demand

In spite of lacking statistical data for regional past supply of bread, based on our simple survey
results we understood that the present demand for bread is increasing in Harar city and its
surrounding areas. This might be due to the following reasons:
 High population growth (5% birth rate per annum)
 High scarcity and presence of limited numbers of modern bakery in the region
 High demand of bread for commercial purpose in addition to home consumption by
hotels, café and restaurants…
 Artificial shortage of teff(due to long distance from its source) and increasing of its price
will create more demand of bread(close substitute)
 Increasing demand for complimentary products of bread like pasta, rice and macaroni
also increase the demand of bread.
Based on the above-mentioned rationale the projected demand for bread of this project is
presented as follow.

1.2. Projected Demand

As a result, the demand for bread is forecasted to grow at a rate of 4%which is equivalent to the
growth rate of urban population, personal communication. Moreover, according to the national
census report of 2007, Harari region has the total population of 230,000.

Therefore, this project assumed will have the projected demand of the first year(base year 2007)
bay taking 10% of the population will be its target market and each target market will purchase
and consume 2 bread per day. And the project also assumes the projected demand for bread will
increase by 4% for each year.

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Ayichew and Amsale Bread, Cake, Biscuit and Injera Manufacturing Sharing Enterprise
Assumptions

 The total population of Harar town in 2007 230,000

 An estimated daily consumption of bread per person
2
 Annual consumption of bread
167,900,000
 Annual estimated consumption of bread by ½ of the total population
83, 950,000

Table 11. Projected Demand of the region

Year Estimated Annual estimated Annual bread Projected

population bread consumption by demand demand of
½ of the total growth (4%) bread (pcs)
population
2007 230,000 83,950,000 3,358,000 87,308,000
2008 239,200.00 87,308,000 3492320 90,800,320
2009 248,768.00 90,800,320 3632012.8 94,432,333
94,432,333 3777293.31 98,209,626
2010 258,718.72 2
98,209,626 3928385.04 102,138,011
2011 269,067.47 4
102,138,011 4085520.44 106,223,532
2012 279,830.17 6
106,223,532 4248941.26 110,472,473
2013 291,023.37 4
110,472,473 4418898.91 114,891,372
2014 302,664.31 5
114,891,372 4595654.87 119,487,027
2015 314,770.88 1
119,487,027 4779481.06 124,266,508
2016 327,361.72 6
124,266,508 4970660.30 129,237,168
2017 340,456.19 9
129,237,168 5169486.72 134,406,655
2018 354,074.43 1
2019 368,237.41 134,406,655 5376266.19 139,782,921
2020 382,966.91 139,782,921 5591316.83 145,374,238

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Ayichew and Amsale Bread, Cake, Biscuit and Injera Manufacturing Sharing Enterprise
 8
145,374,238 5814969.51 151,189,207
2021 398,285.59 1
151,189,207 6047568.29 157,236,776
2022 414,217.00 1
157,236,776 6289471.02 163,526,247
2023 430,785.69 3
163,526,247 6541049.86 170,067,296
2024 448,071.12 4
170,067,296 6802691.85 176,869,988
2025 465,937.80 9

1.3. Current supply and identified gaps

As we have indicated on the above projected demand figures, the current demand of bread and
supply are not matched; i.e. there is a gap in providing bread as per the existed demand. To
show the current supply of bakeries we used the following information obtained from different
stakeholders.

Assumptions

i. Number of small and medium bakeries in the town= 205

ii. Number of 100 gm of breads per 1 quintal of flour= 1,600
iii. Daily bread baking capacity of a bakery = 1,600
iv. Total daily bread product of bakeries = 328,800

Table 12. Shows projected demand and supply gaps

Year Total Annual Daily Annual bread Daily Production
number of Projected Projected production bread gaps per
enterprises bread bread capacities of productio day
in the town demand demand all enterprises n
capacities

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Ayichew and Amsale Bread, Cake, Biscuit and Injera Manufacturing Sharing Enterprise
 of all
enterprise
s

2021 205 151,189,207 414,217 120, 012,000 328,000 86,217

To make this more clear, in 2021 the annual projected bread demand is 151,189,207 (414,217
bread demand per day). However,the total daily bread baking capacity of bakeries found in the
town is 328,000.

Thus, when we subtract the daily bread baking capacity of all enterprises from the projected
demand (328,000-414,217), there is a clear gap on the production capacity of those enterprises(-
86.217 production deficit).

So, to fill the production gaps we have prepared a proposal to expand out enterprise to the
highest level. We planned a new bakery oven with 16,000 bread baking capacity which is
equivalent to 10 quintals per day. The expansion of our enterprise will help for the production of
16,000 breads at a daily basis. This means that the project will cover around 18.56%
(16,000*100/86,217) production deficits.

Year Bread Bread The proposed The proposed project

production production project bread contribution to fill the
gaps per day gaps per year baking gaps
capacity per
day

2021 86,217 31,469,205 16,000 18.56%

(16,000*100/86,217)

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Ayichew and Amsale Bread, Cake, Biscuit and Injera Manufacturing Sharing Enterprise
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Ayichew and Amsale Bread, Cake, Biscuit and Injera Manufacturing Sharing Enterprise