PROJECT PROPOSAL

ON

CONCRETE and Hollow Blocks MANUFACTURING PROJECT

Project TO BE IMPLIMENTED: AT OROMIA NATIONAL REGIONAL STATE,

ADAMA CITY ADMINISTRATION, Industry Zone

PROMOTER: IYOB YOHANIS General contractor

AUGUST, 2021

Adama/ETHIOPIA

Table of Contents
1. Executive Summary.....................................................................................................................3
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2. Introduction..................................................................................................................................4
3. Project Justification.....................................................................................................................5
3.1.Back ground of project Promoter..............................................................................................7
4. Market Study and Plant Capacity................................................................................................7
4.1. Market Study............................................................................................................................7
4.1.1.Cement concrete and hollow blocks demand.........................................................................7
4.1.2.Projected Demand...................................................................................................................8
4.1.3.Competition............................................................................................................................8
4.2. Plant Capacity and Production Programme..............................................................................9
4.2 .1 .Plant Capacity.......................................................................................................................9
4.2.2 Production Programme...........................................................................................................9
5. Project description and production Technology..........................................................................9
5.1.Handling Of Concrete batch at construction site.......................................................................9
5.2.Handling Of Concrete Making Materials................................................................................10
5.3. Raw Materials.......................................................................................................................10
6. The Manufacturing Process.......................................................................................................12
6.2. Machinery &Equipment’s......................................................................................................12
5.2.1. Machinery and equipment for concrete batch and hollow blocks manufacturing...............12
6.3. Production processes..............................................................................................................12
6.3.1. Production concrete batch....................................................................................................12
7. Objectives of the project............................................................................................................15
8.1. The Economic Significance of the Project.............................................................................15
8.1.1.Supply of Products...............................................................................................................15
8.1.2.Source of Revenue................................................................................................................15
8.1.3.Employment opportunity......................................................................................................16
8.1.4.Save the resource wastage and increase the quality of construction...................................16
8.1.5.Benefit For The Local Community.......................................................................................16
8.1.5.Stimulate The Local Economy.............................................................................................16
9. Basic features of project area....................................................................................................16
9.1. Location..................................................................................................................................16
9.2. Topography.............................................................................................................................17

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9.3. Drainage Pattern.....................................................................................................................18
9.4. Soils........................................................................................................................................18
10. Land Layout action..................................................................................................................18
11. Organizational structure...........................................................................................................19
12. Financial requirement..............................................................................................................22
12.1 Fixed Investment...................................................................................................................22
12.1.1. Building & construction....................................................................................................22
12.1.2.Machinery and equipment..................................................................................................23
12.1.3.Vehicles..............................................................................................................................23
12.1.4. Office equipment’s............................................................................................................23
12.1.5. Generate.............................................................................................................................24
12.2. Operating Expenses/Working capital/..................................................................................24
12.2.1 Direct production cost.........................................................................................................24
12.2.2 Indirect production cost......................................................................................................25
12.3. Summary of financial requirement and its source................................................................27
12.3.1.Sources of Fund..................................................................................................................27
12.4. Loan repayment schedule.....................................................................................................28
12.5. Annual depreciation schedule of the fixed asset...................................................................29
12.6. Production and the sales plan for concrete and hollow blocks............................................29
Production capacity and revenue projection of Concrete and Hollow blocks..............................29
12.7.Assumption............................................................................................................................29
13. Financial Statement.................................................................................................................30
13.1.Balance Sheet.........................................................................................................................30
13.2. Forecast of annual net profit/or loss (Birr)...........................................................................31
13.3. Cash Flow Analysis..............................................................................................................32
13.4. Financial viability...............................................................................................................33
13.5. Pay Back Period of the project.............................................................................................33
14. Environmental and Social Impacts of the Project....................................................................33
15. Project Implementation Action Plan........................................................................................35
16.Summary...................................................................................................................................36
17. Future Development& Exit Strategies.....................................................................................36

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 18. Annex’s....................................................................................................................................37

1. Executive Summary

1.Project Name Eyob concrete and hollow blocks manufacturing project

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2.Project Owner Eyob Yohanis GC micro enterprise
3.Nationality Ethiopian
4.Project In Oromia National Regional State, Adama City
location Administration, Industrial Zone area
5.Project Concrete and hollow blocks manufacturing project
Composition
6.Primeses 10,000m2
7.Startup Capital Hence for implementing this project a total of 27,720,353.39
ETB required. From this 70% /19,404,247.37/ will be covered
by the financial institutions and while 30% / 8,316,106.02/ will
be covered by promoter.
8.Eployement This project deemed to employ 68 workers 53 on a
Opportunity permanent, 15 workers are temporary basis.
 Among the permanent workers 40 skilled & 13 unskilled workers

 The temporary workers totally unskilled workers

9. For The Source of revenue for the government as form of tax, create
region/ Country job opportunity for unemployment, stimulate the construction
industry economy, minimize wastage, increase quality of
concrete, etc.

2. Introduction
The establishment of a construction material producing plant can do much toward aiding
the economic development of a country. Aside from the obvious employment
opportunities, it will provide in the plant itself, a number of other jobs will also be
created. Many people will be employed to production, loading and unloading and

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transport the raw materials needed for manufacturing of concrete batch and hollow
block meet with national and international standard

A concrete plant, also known as a batch plant or batching plant or a concrete batching
plant, is equipment that combines various ingredients to form concrete. Some of these
inputs include water, air, admixtures, sand, aggregate (rocks, gravel, etc.), fly ash, silica
fume, slag, and cement. There are two main types of concrete plants: Dry mix plants
and Wet mix plants, and also plants that contain both a transit mix side and a central
mix side while utilizing common material storage points. A concrete plant can have a
variety of parts and accessories, including: mixers (either tilt drum or horizontal or in
some cases both), cement batchers, aggregate batchers, conveyors, radial stackers,
aggregate bins, cement bins, heaters, chillers, cement silos, batch plant controls, and
dust collectors.

The construction activity accounts for 6-9% of the Gross Domestic Product (GDP) of
many countries. In addition, the total annual value of construction works in the world
ranges from 1-1.5 trillion dollars. It is also believed that construction accelerates the
economic growth of a nation. However, there is a vast scope for improving performance
through knowledge in the construction industry, where men, materials, machinery,
money and management work together to build a facility [1].

It is a known fact that, resource planning and management is one of the most important
parameters for competitiveness and profitability in today’s construction technology. One
important aspect of resources management is management of construction materials in
construction projects [2]. Good project management in construction must vigorously
pursue the efficient utilization of labor, material and equipment. Improvement of labor
productivity should be a major and continual concern of those who are responsible for
cost control of constructed facilities.

Material handling, which includes procurement, inventory, shop fabrication and field
servicing, requires special attention for cost reduction with acceptable standard quality
[1].

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Hence being one of the construction materials manufacturing industries, that is planned
to provide: - concrete and hollow blocks for the construction site to minimizing of the
speed of construction, increase quality and decrease non quality of products and
minimize waste of the products and minimize the environmental pollution.

The present economic policy of our country is highly inviting the private sector to
respond to the government invitation special on construction materials manufacturing.
Therefore, the promoter also investing your own resource, time and skill on selected
project, to share his contribution to the development process of the country.

3. Project Justification
Concrete is a composite material that consists essentially of binding medium within
which are embedded particles or fragments of relatively inert mineral filler [8]. In some
cases, admixtures may be added to give the concrete special properties [9]. The usual
concrete in use in Ethiopia and throughout the world is Portland cement concrete. In
Portland cement concrete the binder or matrix, either in the plastic or in the hardened
state, is a combination of Portland cement and water. The filler material, called
"aggregate," is generally graded in size from fine sand to pebbles or fragments of stone
which, in some concretes, may be several inches in diameter [8].
When these materials are mixed and placed in forms and allowed to cure, the chemical
reaction between the water and cement forms a hardened binding medium or cement
paste which surrounds and holds the aggregates together[9].

There are three different ways of producing concrete:

1. On site mixing – concrete ingredients batched and mixed on site
2. Ready-mixed concrete – concrete is delivered for placing from a central plant
3. Precast concrete – both mixing and placing is done in a central plant
For practical concrete mixes, the cement, water and aggregates should be so
proportioned that the resulting concrete has the following properties [9]:

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A. When freshly mixed it is workable enough for economical and easy uniform
placement, but not excessively fluid,
B. When hardened it posse’s strength and durability adequate to the purpose for which
it is intended.
C. It involves minimum cost consistent with acceptable quality. This is a project proposal
prepared to establish Construction materials manufacturing in Oromia, Adama City
Administration. The site of the project is the zone which will have plan and is accessible
throughout the year. A plot of land covering an area of 10,000m2 will be secured from
the relevant Oromia, Adama Administrative zone or the investment Board of Oromia
National Regional state, Adama City Administration, Industry zone.

To implementing this project a total initial project cost of 27,720,353.39 ETB required.
From this 70% /19,404,247.37/ will be covered by the financial institutions and while
30% /8,316,106.02/ will be covered by promoter.

3.1.Back ground of project Promoter.

Eyob Construction micro enterprises are to establish by private company in Oromia
National Regional state, Adama City Administration, They were working for a long
period of time in different sector. Among the sector:-
 Working on the construction areas for 4 year before

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  The initial Capital of enterprises was 3,000 birr contributed, currently; the capital
is more than 7 million birr.

 The members of organization was 1 / only one male / at initial point.

 Currently, the members of enterprise 1/ only male/

 Business sector previously ; service sector on construction

 Currently ; on manufacturing sector, construction materials manufacturing

 Business entity; private micro enterprise

Besides, the enterprises is envisioned factory have by using the accumulating

experiences and skill to diversified business which is related the earlier one into
industry with diversified to this business (Construction materials Manufacturing
factory).

4. Market Study and Plant Capacity

4.1. Market Study

The demand for construction materials increases time to time as modernization and
standard leaving increases. As in general the demand of concrete batching materials is
entirely met through import the machine plant.
The concrete batches demand always increase time to time.

4.1.1.Cement concrete and hollow blocks demand

Cement concrete hollow blocks are modern construction materials and as such are
used in all the constructions viz. residential, commercial and industrial building
constructions. Construction industry is a growing a sector. The demand for this product
is always high in all cities and other urban centers due to construction of residential
apartments, commercial buildings and industrial buildings.
Growing public awareness of the advantages of the product coupled with increase in the
government and financial institutions support for housing which is a basic human
necessity would ensure a healthy growth in the demand.

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4.1.2.Projected Demand
According to Ministry of Economic Development and Cooperation (MEDaC), annual
growth rate of the industrial sector during 2000 and 2005 was 7.6. The demand
projection executed using this growth rate.
Due to the fast growth of the construction sector and shortage of construction materials
a number of iron and steel, concrete, and glass producing plants are either becoming
operational or under implementation. Moreover, efforts are underway to establish
fertilizer plants and a number of chemical industries that would substitute import.
Although the PASDEP document forecasted the manufacturing sector to grow by an
average of about 11.5% per annum a 15% yearly growth rate is applied to project the
future demand for concrete demand since its end users have direct linkage mainly with
the fast growing sector of construction.

4.1.3.Competition

There are different forms of competition that may face the integrated project such as
price and non-price based competitions. Moreover, there are different competitors that
will compete with the project under discussion either directly or indirectly. But the project
under discussion has diversified marketing strategies that could enable it come up with
the different competitors in the market. Moreover hollow blocks and concrete
manufacturing Project will frequently conduct competitors research which focuses on,
the strength and the weaknesses, the different competitor’s strategies, the techniques
they use in rendering services, their customer handling methods, price, promotion and
others.

4.2. Plant Capacity and Production Programmer

4.2 .1 .Plant Capacity

The envisaged plant capacity is 50m3/ hour and 9100 pcs per day’s concrete batching
and hollow blocks respectively. The annual concrete batching and hollow blocks

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produced 128,400m3 and 2,912,000 at full capacity on a single shift per day which is 8
hours per day and 320 working days per annum basis respectively. The capacity can be
increased farther without increasing any significant fixed investment cost, by increasing
the number of shifts and supply inputs.

4.2.2 Production Programme

The production programme is related to the forecasted demand. Therefore, the capacity
utilization rate will be 70%, 85% and 100% from the first year to the 3 rd year
respectively, and in the 3rd year and thereafter full capacity production will be
maintained. The Production program is set by deducting Sundays and public holidays in
a year and assuming that repair and maintenance works will be carried out during off-
production hours.

5. Project description and production Technology

5.1.Handling Of Concrete batch at construction site
1. General
It is generally accepted that the initial selection of materials plays major part in
achieving a satisfactory construction product. Unfortunately, it is not always so easily
recognized that the methods adopted on site for handling and storing these materials
are equally important. In addition, the production method followed by material producers
and the means of selecting material sources is not usually given the attention it
requires. Further, manufacturers and suppliers might go to great lengths to provide
products that comply with recognized standards, but much of their effort can be eroded
if the same importance is not attached to the product when it is transferred to the care of
the construction team [7].

5.2.Handling Of Concrete Making Materials

1. General
Concrete is a composite material that consists essentially of binding medium within
which are embedded particles or fragments of relatively inert mineral filler [8]. In some

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cases, admixtures may be added to give the concrete special properties [9]. The usual
concrete in use in Ethiopia and throughout the world is Portland cement concrete. In
Portland cement concrete the binder or matrix, either in the plastic or in the hardened
state, is a combination of Portland cement and water. The filler material, called
"aggregate," is generally graded in size from fine sand to pebbles or fragments of stone
which, in some concretes, may be several Inches in diameter [8].
When these materials are mixed and placed in forms and allowed to cure, the chemical
reaction between the water and cement forms a hardened binding medium or cement
paste which surrounds and holds the aggregates together [9].
There are three different ways of producing concrete:
1. On site mixing – concrete ingredients batched and mixed on site
2. Ready-mixed concrete – concrete is delivered for placing from a central plant
3. Precast concrete – both mixing and placing is done in a central plant
For practical concrete mixes, the cement, water and aggregates should be so
proportioned that the resulting concrete has the following properties [9]:
A. When freshly mixed it is workable enough for economical and easy uniform
Placement, but not excessively fluid,
B. When hardened it posse’s strength and durability adequate to the purpose for which
it is intended.
C. It involves minimum cost consistent with acceptable quality.

5.3. Raw Materials

A. For concrete batch

Mobile concrete plant is kind of special construction equipment, which is developed for
construction and emergency repair of airport runways, roads, bridges and other
concrete work.
A concrete plant, also known as a batch plant or batching plant or a concrete batching
plant, is equipment that combines various ingredients to form concrete. Some of these
inputs include water, air, admixtures, sand, aggregate (rocks, gravel, etc.), fly ash, silica
fume, slag, and cement. There are two main types of concrete plants: Dry mix plants
and Wet mix plants, and also plants that contain both a transit mix side and a central

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mix side while utilizing common material storage points. A concrete plant can have a
variety of parts and accessories, including: mixers (either tilt drum or horizontal or in
some cases both), cement batchers, aggregate batchers, conveyors, radial stackers,
aggregate bins, cement bins, heaters, chillers, cement silos, batch plant controls, and
dust collectors.
The heart of the concrete batching plant is the mixer, and there are many types of
mixers such as Tilt Drum, Pan, Planetary, Single Shaft and Twin shaft mixer. The twin
shaft mixer can ensure an even mixture of concrete through the use of high horsepower
motors , while the tilt mixer offers a consistent mix with much less maintenance labor
and cost.[1] In North America, the predominant central mixer type is a tilt drum style,
while in Europe a Twin Shaft is more prevalent. A Pan or Planetary mixer is more
common at a precast plant. Aggregate bins have 2 to 6 compartments for storage of
various sand and aggregate (rocks, gravel, etc.) sizes, while cement silos are typically
one or two compartments, but at times up to 4 compartments in a single silo. Conveyors
are typically between 24-48 inches wide and carry aggregate from the ground hopper to
the aggregate bin, as well as from the aggregate batcher to the charge chute.
The basic raw materials needed for concrete batch manufacturing

1. Cement
2. Aggregate
3. Silica fume
4. Water
B. For hollow blocks
The concrete commonly used to make concrete blocks is a mixture of powdered port
land cement, water, sand, and gravel. This produces a light gray block with a fine
surface texture and a high compressive strength. A typical concrete block weighs 38-43
lb (17.2-19.5 kg). In general, the concrete mixture used for blocks has a higher
percentage of sand and a lower percentage of gravel and water than the concrete
mixtures used for general construction purposes. This produces a very dry, stiff mixture
that holds its shape when it is removed from the block mold.
The basic raw materials required as follows;
1. Cement

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2. Gravel
4. Sand
5. Water

6. The Manufacturing Process

6.2. Machinery &Equipment’s
5.2.1. Machinery and equipment for concrete batch and hollow blocks manufacturing
1. One batching plant
2. Three mixer
3. One excavator
4. One loader
5. One Dum truck
6. One Crasher
7. One Crane
8. One set hollow blocks machine

6.3. Production processes

6.3.1. Production concrete batch
The concrete manufacturing is the steps include:
 making concrete with a range of different aggregates
 measuring the force required to break the concrete
 analysis of the strength of the concrete and selection of the best mix
 creating a product from concrete/concrete pipe, rebid, precast, precast, etc/

6.5.3.2. Hollow blocks productions

The process of manufacture of hollow blocks involves the following processing;

1) Proportioning
(2) Mixing
(3) Compacting
(4) Curing
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(5) Drying
(1) Proportioning:
The determination of suitable amounts of raw materials needed to produce concrete of
desired quality under given conditions of mixing, placing and curing is known as
proportioning. As per Indian Standard specifications, the combined aggregate content in
the concrete mix used for making hollow blocks should not be more than 6 parts to 1
part by volume of Portland cement. If this ratio is taken in terms of weight basis this may
average approximately at 1:7 (cement: aggregate). However, there have been instances
of employing a lean mix of as high as 1:9 by manufacturers where hollow blocks are
compacted by power operated vibrating machines. The water cement ratio of 0.62 by
weight basis can be used for concrete hollow blocks.
(2) Mixing
The objective of thorough mixing of aggregates, cement and water is to ensure that the
cement-water paste completely covers the surface of the aggregates. All the raw
materials including water are collected in a concrete mixer, which is rotated for about 1
½ minutes. The prepared mix is discharged from the mixer and consumed within 30
minutes.
(3) Compacting
The purpose of compacting is to fill all air pockets with concrete as a whole without
movement of free water through the concrete. Excessive compaction would result in
formation of water pockets or layers with higher water content and poor quality of the
product.
Semi-automatic vibrating table type machines are widely used for making cement
concrete hollow blocks. The machine consists of an automatic vibrating unit, a lever
operated up and down metallic mould box and a stripper head contained in a frame
work.
Wooden pallet is kept on the vibrating platform of the machine. The mould box is
lowered on to the pallet. Concrete mix is poured into the mould and evenly leveled. The
motorized vibrating causes the concrete to settle down the mould by approximately 1 ½
to 1¾ inches. More of concrete is then raked across the mould level. The stripper head
is placed over the mould to bear on the leveled material. Vibration causes the concrete
come down to its limit position. Then the mould box is lifted by the lever. The moulded
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hollow blocks resting on the pallet is removed and a new pallet is placed and the
process repeated. The machine can accommodate interchangeable mould for
producing blocks of different sizes of hollow or solid blocks.
4. Curing

Hollow blocks removed from the mould are protected until they are sufficiently hardened
to permit handling without damage. This may take about 24 hours in a shelter away
from sun and winds. The hollow blocks thus hardened are cured in a curing yard to
permit complete moistration for at least 21 days. When the hollow blocks are cured by
immersing them in a water tank, water should be changed at least every four days.
The greatest strength benefits occur during the first three days and valuable effects are
secured up to 10 or 14 days. The longer the curing time permitted the better the
product.
5. Drying
Concrete shrinks slightly with loss of moisture. It is therefore essential that after curing
is over, the blocks should be allowed to dry out gradually in shade so that the initial
drying shrinkage of the blocks is completed before they are used in the construction
work. Hollow blocks are stacked with their cavities horizontal to facilitate thorough
passage of air.
Generally a period of 7 to 15 days of drying will bring the blocks to the desired degree of
dryness to complete their initial shrinkage. After this the blocks are ready for use in
construction work.

7. Objectives of the project

Since the project promoters have a great interest in the field, the envisaged project is
deemed to have the following objectives:
 To undertake the concrete batch and hollow blocks production through scientific
methods and using modern technology.
 To serve as the source of government revenue through, tax.

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  To introduce modern technology of concrete and hollow blocks manufacturing
area. To serve as a role model for other investors and micro enterprise that
wants to invest in similar business undertakings.
 Reducing the problem of un-employment through creating wide employment
opportunities to the citizens.
 To bridge the demand gap for in the area of engagement.
 Save the resource waste and environment pollution concrete batch
manufacturing.
 Increase the quality of construction and decrease the time waste.

8.1. The Economic Significance of the Project

The envisaged project deemed to contribute to the economic development of the nation
and stimulate construction sector. In generally; the project is many purposes for the
country as well as the region. Among them listed as follows:

8.1.1.Supply of Products

By producing and supplying variety, high quality and cost efficient concrete and hollow
blocks it will satisfy the need of the consumers.

8.1.2.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, VAT and payroll tax are collected from undertaking business
activities. Therefore, the project will serve as sources of revenue for both the region and
nation in general.

8.1.3.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 wills hire 68 citizens.

8.1.4.Save the resource wastage and increase the quality of construction

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By producing and supplying Concrete products by using update technology, the factory
will save the concrete wastage of the nation as well as improved quality of construction
works.

8.1.5.Benefit For The Local Community

As a corporate responsibility the company will engage in different development activities
on the surrounding areas. This will better worse the community and contribute for the
development of the nation.

8.1.5.Stimulate The Local Economy

This factory has positive externality in the district that will encourage the economic
movement of local economy. There will be economic relationship and transactions
among different actors.

9. Basic features of project area

9.1. Location
The envisaged project will be located in oromia National Region State, Adama City
Administration industrial Zone. As the major customers of concrete & hollow blocks are
real state building company, GC, BC, private who participating on construction,
promoter by itself, etc. So the unit can be established in or around the Adma city with a
large business cluster, so, satellite areas of the country could be suitable locations for
setting up this concrete batching plant and hollow blocks manufacturing. The promoter,
therefore, identified Adama to be the future site of its investment. Key Success factors
to obtain higher profits, it is important to acquire order of all different construction
materials manufacturing jobs of a company. Relations in business sector are important
in success of a manufacturing industry as it is an order based business. Technical skills
are really important 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 raw materials (cement, sand, aggregate and water) i.e. fixed costs. Adama city is
located in the Ethiopia rift valley. It is located at about 100km southeast of Addis Ababa
on the high way to Djibouti. Adama town has a total area of 9,616,399.5 m sq

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The following Figure: shows the location of Request place.

9.2. Topography
Topography of the city is characterized by flat land that is surrounded by ridges. The
plain land is covered by lacustrine sediments and reworked volcanic, while the ridges
are made of volcanic rocks. The nature of topography has created three drainage sub
catchments. One that drain to Awash river and the others two closed basins, absence of
appropriate drainage network, lack of natural out let and un planned human intervention
have made the city vulnerable to flooding.

9.3. Drainage Pattern

The Awash is the only significance river in Adama and flows along the eastern part of
the district. It forms part of the boundary between Adama and Arsi zone. The Awash
River irrigates the Wonji Sugar Plantation. The river is source of irrigation for medium
and small-scale farms as well as source of drinking water for both human and animals.
Among irrigation schemes that utilize the Awash River on the Koka Dam and the Wonji
Sugar Plantations are in Adama District. The Koka Dam is also one of among lakes with

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high fish potential and production. This lake also used for generating electrical energy.
Hot spring sites in the wereda are Sodere, Gergedi and Adama town.

9.4. Soils
Sediment of alluvial and lacustrine origin covers the catchment of the city basin. The
laboratory analysis made on the soil samples taken at the bed and bank of the main
canal that drain to the western catchment indicated that the bed of the channel is
covered by sandy soil ( 6% silt and 94% sand) while the bank is covered by sandy loam
soil ( 38% silt and 64% sand).

10. Land Layout action

The project requires about 10,000 m2 of land and it is allocated as follows.
Land
No. Description required M2
1 Office Construction  
1.1 General manager 50
1.2 Marketing, accountant and purchasing, and supporting staffs 32
1.3 Café and dining room for workers and guests 45
1.4 Product laboratory testing room 500
 2 Production buildings /plant installed area/ 3,200
3 Resting rooms 120
4 Terminal of machinery 1,400
5 Raw martial and product loading and unloading space 2,800
6 Guard house 24
7 Generator Room construction 25
8 Parking area 1262
9 Green area & others 542
  Total land required 10,000

11. Organizational structure

The organizational structure of the project is designed by including all the necessary
personnel under the right division. At the top of the organizational structure, there will be
manager with the responsibility of supervising the overall activity of the plant.
Depending up on the nature of the center and the amount of work to be performs; there
exist auxiliary units under the general manager.

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Employees under each unit will be supervised by the department head that is
accountable for the general manager. General Manager is appointed by board of
director.

Owners

General
Secretary Manager

Production Admin. & Marketing &

Dept. Finance Dept. Sales Dept.

Technical Admin. & HRM Finance

Quality
&production Control
Section Dept.
section
workers

Marketing Sales Section

Section
Fig: Organizational Structure

Hence the following section deals with the duties and responsibilities of some
departments.
1. Manager
Duties and responsibilities
 She/he will plan, organize, direct and control the overall activities of the plant.
 She/he will devise policies and strategies that will enable the plant to be
profitable.

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  She/he will incorporate modern technological innovation that will facilitate the
service delivery of the project center and increase customer’s satisfaction.
 He/he will plan, organize, direct and control the human and non-human
resources of the plant so as to achieve the short and long run objectives of the
organization.
2. The Production Department Duties and responsibilities:-
It is the core department of the project center it has two main sections ( Hollow Blocks
and concrete batch) and has the following responsibilities.
 Designs and prepared prototypes of Hollow Blocks and concrete batch based on
the plant standard and customer preferences
 Use modern manufacture and processing technologies that will enhance the
quality of concrete batch and hollow bollocks
 Produce quality product that will enable the center competent both in the
domestic and international market.
 Use appropriate technology to manage maintenance of its products.
 Control on the quality of raw materials, inputs, quality of the product and also the
overall production process.
 Produce products in least cost so that the profitability of the center is guaranteed.
 Moreover control over the quality of the final products (hollow Blocks and
concrete).

3. Administration and Finance Department

It has two main sections, i.e. Administration and HRM section and Finance section
Administration and HRM Duties and responsibilities:-
 Will control the human and non-human resources of the plant, which include:
effective handling of the different inventories of the machineries, equipment’s,
raw materials, finished products, and devise strategies of controlling against
fraud and damage.

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  Administer and control the company logistic resource
 Provide and manage general supportive service to the plant.
Finance section
Duties and responsibilities:-
 Will develop sound financial control system by developing modern financial
control systems.
 Will prepare the annual financial statements and prepare condensed reports for
the general manager, owner and other concerned government body.
 Manage and execute the company national and international procurement
procedure
4. Marketing and Sales Department
It has two main sections, i.e. marketing and sales section and Finance section with the
following duties and responsibilities
 Will handle the overall marketing activities of the organization which include
planning, organizing, directing, and controlling.
 Provide cost estimates in preparation for securing the profitability of the factory.
 Gather information on new product design, type and profile
 Approval of new products profile & brand plan analyzes market research.
 Plan and execute sales.
 Will develop effective customer handling strategies
 Will develop the marketing strategies for future project center’s development.
 Conduct both foreign and domestic market research for expanding the sales of
the company.

12. Financial requirement

Finance is an important factor for undertaking any activities. Hence for implementing
this project a total of 27,720,353.39 ETB required. From this 70% /19,404,247.37 / will
be covered by the financial institutions and while 30%/8,316,106.02 will be covered by
promoter.

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 12.1 Fixed Investment
12.1.1. Building & construction
No Land Unit cost in Total cost in
. Description required M2 birr birr

1 Office Construction      
1,1
1.1 General manager 50 50.00 57,500.00
Marketing, accountant and purchasing, and 1,1
1.2 supporting staffs 32 50.00 36,800.00
1,2
1.3 Café and dining room for workers and guests 45 00.00 54,000.00
1,1 550,000.0
1.4 Product laboratory testing room 500 00.00 0
1,1
 2 Production buildings /plant installed area/ 3,200 50.00 3,680,000.00
1,2 150,000.0
3 Resting rooms 120 50.00 0
1 168,000.0
4 Terminal of machinery 1,400 20.00 0
Raw martial and product loading and
5 unloading space 2,800 land level 65,000.00
8
6 Guard house 24 50.00 20,400.00

7 Generator Room construction 25 65.00 1,625.00

8 Parking area 1262 land level 15,000.00

9 Green area & others 542 20.00 10,840.00

  Total land required 10,000   4,809,165.00

12.1.2.Machinery and equipment

No Description Unit Qty Unit cost Total cost

 1 Machinery        
1.1 Concrete batch plant ( euro No 3,967,775. 3,967,77
161,950.00 for single) 1 00 5.00
1.2 Mixer shutter (51,900 USD for " 1,386,500. 4,159,50
each) 3 00 0.00

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1.3 Sino truck (40,200 USD for each)   944,700. 1,889,40
2 00 0.00
1.4 Dum truck ( 40, 000 USD for each) “ 940,000. 1,880,00
2 00 0.00
1.5 Loader (60,000 USD for each) “ 1,410,000. 1,410,00
1 00 0.00
1.6 Concert Hollow blocks /17,872.34   419,999. 419,99
USD for single/ 1 99 9.99
  Total machinery price     9,068,974.99 13,726,674.99
Note: Rate of currency
1. 1 USD= 23.50 birr
2. 1 Euro= 24.50 birr

12.1.3.Vehicles
No Description Qty Unit Price Total Price
1 Pick up 1 810,000.00 810,000.00
2 Employment service 1 650,000.00
Total Cost     1,460,000.00

12.1.4. Office equipment’s

No Description Qty Unit cost Total cost
1 Managerial Tables 4 8,000 32,000
2 Managerial chairs 4 2,500 10,000
3 Computer Tables 10 1500 15,000
4 Secretarial chairs 2 1000 2,000
5 Computer with its accessories 10 10,000 100,000
6 Shelf 10 4000 40,000
7 Filing Cabinets 10 1,500 15,000
8 Guest chairs 20 1000 20,000
9 Cash register 1 10,000 10,000
10 TV set 2 12000 24,000
11 Photo copy Machine 1 25,000 25,000
Total cost     293,000.00

12.1.5. Generate
150kw of generate =420,000.00 birr

12.2. Operating Expenses/Working capital/

12.2.1 Direct production cost
 Cost Purchasing raw material concrete manufacturing
No Description Measure raw Unit of cost Annual total cost (cost

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 Concrete ment required in birr of day * 320 days)
manufacturing /day(400 m3)
1 Cement Quintal 116.6 182.5 6,809,440.00
2 Sand M3 132 150 6,336,000.00
3 Aggregate “ 200 320 20,480,000.00
4 Water “ 20 8 51,200.00
5 Hollow blocks raw estimation 14,560,000.0
materials 0
  Total Annual cost of raw materials 48,236,640.00

Cost of raw materials for hollow blocks manufacturing

Sand
Cement
Pumice
Water
Note: Water common need for, concrete and hollow blocks
In general the total cost raw material price annually around 48,236,640.00 ETB
Their fore you can take only 30 working day of raw material only 4,522,185.00 birr

12.2.2 Indirect production cost

 Salary expense
S Monthly Annual Salary
N Description No Qualification Salary in Br. in Br.
1 General Manager 1 BA in management 4,000.00 48,000.00
2 Production Manager 2 BSC in industrial Engineering 3,000.00 72,000.00
3 Engineers 2 BSC in industrial Engineering 2,000.00 48,000.00
4 Machine Operators 4 10+3 in General Mechanic 1,050.00 50,400.00
5 Forman 2 10+3 in manufacturing 1,200.00 28,800.00

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 6 Machine drivers 8 8th completed 8500 816,000.00
7 Stitchery 3 10+2 in General mechanic 900 32,400.00
8 Hydraulic worker 3 10+2 in machine 900 32,400.00
9 Helpers/Laborer 15 Basic 550 99,000.00
10 Marketing head 1 BA in Marketing Management 2,500.00 30,000.00
11 Personnel 1 BA in HRM 1,300.00 15,600.00
21,600
12 Sales person 2 Diploma in Marketing 900 .00
30,000
13 Admin & Finance head 1 BA in Accounting/Management 2,500.00 .00
43,200
14 Accountant 2 BA in Accounting 1,800.00 .00
10,800
15 Electrician 1 10+2 in General Electricity 900 .00
18,000
16 Cashier 2 10+2 in Bookkeeping 750 .00
10,800
17 Purchaser 1 Diploma in Purchasing Mgt 900 .00
21,600
18 Store keeper 2 10+2 in Store management 900 .00
19,200
19 Cleaner 4 Basic 400 .00
7,200
20 Office Boy 1 Basic 600 .00
19,200
21 Driver 2 8th 800 .00
39,600
22 Guards/Security 6 Basic 550 .00
10,800
23 Gardner 2 Basic 450 .00
1,524,600
  Total 68   37,350.00 .00

 Pre -service expense

Description Total Cost
Project proposal 10,000.00
Licensing fee 15,000.00
Other fee 5,000.00
Land lease fee 520,000.00

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 Total cost 550,000.00
 Other operating expenses
No List of Items Qty Unit of Unit Total cost
Measure cost Per annum
1 Computer paper 20 Pack 90 1,800.00
2 Staples 20 “ 7 140
3 Pens, pencils, and others 10 pack 70 700
4 Detergents 100 pcs 30 3,000.00
5 Uniforms 60 pcs 200 12,000.00
6 Water (used for compound) - - - 50,000.00
7 Electricity - - - 120,000.00
8 Fuel and lubricants cost (5% cost - - - 560,,945.00
vehicle and machine used oil)
9 Telephone - - - 20,000.00
10 Fixed asset repair 1 % of fixed asset       207,088.40
cost
  Total Cost       414,728.40

12.3. Summary of financial requirement and its source

No Description  Total cost

  Fixed Investment  
1 Building &Construction 4,809,165.00
2 Machine and equipment 13,726,674.99
3 Office Equipment 293,000.00
4 Vehicles 1,460,000.00
5 Generator 420,000.00

27 | P a g e
 Total Fixed Investment Cost 20,708,839.99
1 Raw material purchase 4,522,185.00
2 Salary Expense 1,524,600.00
3 Other operating cost 414,728.40
4 Pre- Service Expense 550,000.00
Total working capital 7,011,513.40
Total investment cost 27,720,353.39

12.3.1.Sources of Fund

Source of fund to finance the project is planned to be from two sources. These are
promoter’s equity and bank loan. Since the project is expected to take some times to
repay all its debts, the bank loan is assumed to obtain on long term credit basis.
Accordingly, the total financial requirement from the two sources will be:
No Description % share Amount(in birr)
1 Owners Share 30 8,316,106.02
2 Bank Loan 70 19,404,247.37
Total cost 100 27,720,353.39

12.4. Loan repayment schedule

The loan will repaid with interest rate of 10% in ten years

Period Beginning Repayment Principal Interest Ending balance

0 19,404,247.37       19,404,247.37
1 18,434,035.00 1,891,914.12 970,212.37 921,701.75 18,434,035.00
2 17,463,822.64 1,845,829.03 970,212.37 875,616.66 17,463,822.64
    3,737,743.15 1,940,424.74 1,797,318.41  
3 16,493,610.27 1,799,743.94 970,212.37 829,531.58 16,493,610.27
4 15,523,397.90 1,753,658.86 970,212.37 783,446.49 15,523,397.90
5 14,553,185.53 1,707,573.77 970,212.37 737,361.40 14,553,185.53
6 13,582,973.16 1,661,488.68 970,212.37 691,276.31 13,582,973.16
    3,369,062.45 1,940,424.74 1,428,637.71  
7 12,612,760.79 1,615,403.59 970,212.37 645,191.23 12,612,760.79

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 8 11,642,548.42 1,569,318.51 970,212.37 599,106.14 11,642,548.42
    3,184,722.10 1,940,424.74 1,244,297.36  
9 10,672,336.06 1,523,233.42 970,212.37 553,021.05 10,672,336.06
10 9,702,123.69 1,477,148.33 970,212.37 506,935.96 9,702,123.69
    3,000,381.75 1,940,424.74 1,059,957.01  
11 8,731,911.32 1,431,063.24 970,212.37 460,850.88 8,731,911.32
12 7,761,698.95 1,384,978.16 970,212.37 414,765.79 7,761,698.95
    2,816,041.40 1,940,424.74 875,616.66  
13 6,791,486.58 1,338,893.07 970,212.37 368,680.70 6,791,486.58
14 5,821,274.21 1,292,807.98 970,212.37 322,595.61 5,821,274.21
    2,631,701.05 1,940,424.74 691,276.31  
15 4,851,061.84 1,246,722.89 970,212.37 276,510.53 4,851,061.84
16 3,880,849.47 1,200,637.81 970,212.37 230,425.44 3,880,849.47
    2,447,360.70 1,940,424.74 506,935.96  
17 2,910,637.11 1,154,552.72 970,212.37 184,340.35 2,910,637.11
18 1,940,424.74 1,108,467.63 970,212.37 138,255.26 1,940,424.74
    2,263,020.35 1,940,424.74 322,595.61  
19 970,212.37 1,062,382.54 970,212.37 92,170.18 970,212.37
20 0.00 1,016,297.46 970,212.37 46,085.09 0.00
    2,078,680.00 1,940,424.74 138,255.26  

12.5. Annual depreciation schedule of the fixed asset

Description Initial value Annual depreciation

Rate Value

Building &Construction 4,809,165.00 5% 240,458.25

Machine and equipment 13,726,674.99 10% 1,372,667.50
Office Equipment 293,000.00 10% 29,300.00
Vehicles 1,460,000.00 20% 292,000.00
Generate 150 kw 420,000.00 10% 42,000.00
Total Cost - - 1,976,425.75

12.6. Production and the sales plan for concrete and hollow blocks

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The project under discussion shall produce Concrete and Hollow Blocks which is used
for constriction buildings and houses. The products will be distributed to the different city
of the country likes: Adama City Administration and the surrounding areas but for the
future the marketing linkage attention on both at national level as well as globally
penetrates.

Production capacity and revenue projection of Concrete and Hollow blocks

12.7.Assumption

 The annual gross profit of sales 35% of raw materials cost 16,882,824.00 birr
Formula =annual cost of raw material*35/1000
If TR= Total Revenue
TRC= Raw materials cost
TR= Raw material cost*35/100 TR=TRC*35/100 = 48,236,640.00 birr *35/100
= 16,882,824.00 birr

 Revenue increase by 15% after year 2010

 Deprecation of building 5%
 Deprecation of Vehicles 20%
 Deprecation of Machineries and equipments 10%
 Raw material purchase assumed to be increased by 5% starting from 2011,
 Salary and operating expenses will increase by 5% starting from 201108
 Sales discount using 2% of total sales

13. Financial Statement

13.1.Balance Sheet
Eyob General Contractor Concrete Batch and Hollow blocks Manufacturing Micro
Enterprise
Balance Sheet at the end year of production 2010

Asset

Current Asset  
Cash 2,489,328.40

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 Inventory of raw materials 4,522,185.00
Total Current Asset 7,011,513.40
Fixed Asset  
Building &Construction 4,809,165.00
Machines and Equipment’s 13,726,674.99
Vehicles 1,460,000.00
Generator 150 kw 420,000.00
Office equipment 293,000.00
Total fixed Asset 20,708,839.99
Total Asset 27,720,353.39
Liability  
Account payable 19,404,247.37
Owners’ Equity  
Capital 8,316,106.02
Total Liability & Owners’ Equity 27,720,353.39

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 13.2. Forecast of annual net profit/or loss (Birr)

Revenue Year 1 Year 2 Year 3 Year 4 Year 5-10

Sales 16,882,824.00 19,415,247.60 22,327,534.74 25,676,664.95 29,528,164.69

Purchase of Raw Material 4,522,185.00 4,748,294.25 4,985,708.96 5,234,994.41 5,496,744.13

Sales discount 2% of sales 337,656.48 388,304.95 446,550.69 513,533.30 590,563.29

Gross Profit 12,022,982.52 14,278,648.40 16,895,275.08 19,928,137.24 23,440,857.27
Expenses          
Salary Expense 1,524,600.00 1,600,830.00 1,680,871.50 1,764,915.08 1,853,160.83
Operating Expenses 414,728.40 435,464.82 457,238.06 480,099.96 504,104.96
Deprecation Accum. 1,976,425.75 389,694.40 389,694.40 389,694.40 389,694.40
104,000.0 104,000.0 104,000.0 104,000.0
Pre operating Expense 550,000.00 0 0 0 0
Interest Expense 1,797,318.41 1,428,637.71 1,244,297.36 1,059,957.01 875,616.66
Total Expense 6,263,072.56 3,958,626.93 3,876,101.32 3,798,666.45 3,726,576.85
Profit Before Tax 5,759,909.96 10,320,021.47 13,019,173.76 16,129,470.79 19,714,280.42
Government tax (30% of profit ) 1,727,972.99 3,096,006.44 3,905,752.13 4,838,841.24 5,914,284.12
Net Profit 4,031,936.97 7,224,015.03 9,113,421.63 11,290,629.55 13,799,996.29

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13.3. Cash Flow Analysis.
The liquidity position of the project can be seen from the project cash flow statement. According to this projection the
project will be healthy financial position to repay all its debts. This is because the analysis shows that the project will have
positive cash flow throughout the anticipated life.

Cash flow statement

Revenue Year 1 Year 2 Year 3 Year 4 Year 5-10
Cash Beginning on hand 2,489,328.40 6,557,266.38 12,230,551.07 19,793,242.37 29,533,141.59
Gross Profit 12,022,982.52 14,278,648.40 16,895,275.08 19,928,137.24 23,440,857.27
Cash available to use 14,512,310.92 20,835,914.78 29,125,826.16 39,721,379.61 52,973,998.85
Expenses          
Salary Expense 1,524,600.00 1,600,830.00 1,680,871.50 1,764,915.08 1,853,160.83
Operating Expenses 414,728.40 435,464.82 457,238.06 480,099.96 504,104.96
Pre operating Expense 550,000.00 104,000.00 104,000.00 104,000.00 104,000.00
Interest Expense 1,797,318.41 1,428,637.71 1,244,297.36 1,059,957.01 875,616.66
Principal payment expense 1,940,424.74 1,940,424.74 1,940,424.74 1,940,424.74 1,940,424.74
Total government tax 1,727,972.99 3,096,006.44 3,905,752.13 4,838,841.24 5,914,284.12
Total Expense 7,955,044.54 8,605,363.71 9,332,583.79 10,188,238.03 11,191,591.32
Cash Surplus 6,557,266.38 12,230,551.07 19,793,242.37 29,533,141.59 41,782,407.54
Cumulative Cash 6,557,266.38 12,230,551.07 19,793,242.37 29,533,141.59 41,782,407.54

33 | P a g e
13.4. Financial viability
As it is a private firm established with the primary objective of generating profit the
project should be financially viable for the promoter. These financial measures for this
study are income statement cash flow analysis

13.5. Pay Back Period of the project

Hence as clearly observed from cash flow statement the project at full capacity
production 3-10 years and it will return its initial investment cost at the end of 4 th year.

14. Environmental and Social Impacts of the Project

Currently the issue of Environment and development has got a due emphasis and the
government has enshrined environmental policy within the constitution. In line with this
environmental policy the envisaged project deemed to mitigate the different impacts that
may be caused by actions of the project.
The Concrete and hollow blocks manufacturing plant will employ a wide range of
environmentally sound practices, ranging from basic pollutant gases to high-tech
systems that control, dust pollute, solid, liquid and gaseous wastes
Water Conservation

• The project will reuse and treat water responsibly during manufacturing production
process. For example, waste water is recycled to use and treated before discharged.

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Waste Management

 Solid, liquid and gaseous wastes management plans. These plans take into account
the types of wastes, and recommended mitigation measures.
Air Quality

 The project protects air quality by following proper waste gases management
practices and maintaining clean facilities. During production and row material and
product handling
 The project will accommodate the entire possible impact assessment document and
implementation as well as management program.

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15. Project Implementation Action Plan
The envisaged project has the following implementation schedules.
Activities Time plan

Project Location identified Starting from September /Four month/

Preparation of project study

Land requisition
Site identified

Land Acquisition
Two month

Demarcation of land

Land clearance Three month

Design preparing
6 year
Building and Construction

Import of Machineries 3 months

Office structuring One month

Hiring employees Two month

Production One month

Total time utilized to start the work One year within nine moths start the operation

36 | P a g e
16.Summary
As clearly the project income statement shows the promoter of the project has sufficient
amount of money that enable him pay the bank loan with in short period of time and
invests in other business of his interest. In general, the financial statement of the project
shows that the project under discussion will cover its entire investment costs with in
short period of time. Hence the promoter of the project has a long term plan engaging
in other others finishing construction materials manufacturing industries enterprises.
Hence in the coming future the project owner has a plan to engage in:
 Production of many construction materials that supports the construction sectors
 It will expand the production capacity as well as it will divert the product based
on demand of the country market. Especially, the promoter is in a short period of
time expanding his project in finishing construction manufacturing.
 If, after the current project replace 50 percent by finishing construction materials
manufacturing factory engage also star up and wire manufacturing also.

17. Future Development& Exit Strategies

Every business undertakings be it large or small should have to have future
development plan. It is a plain fact that business activities are undertook in a dynamic
and turbulent environment. Hence, to overcome or minimize the risks of uncertain future
businesses should devise effective strategies that enable them to be successful in their
operation. Likewise the, concrete and hollow blocks factory has devised strategies to
overcome the future risk of operation. The first strategy is diversification of its activities
to different other business forms. The second future development plan of the project is
expanding its branches in many other parts of the region. The third strategy of the
center is making a joint venture with other similar business undertakings either in the
domestic country or from abroad. The final strategy of the center is selling to other
organization or individuals.

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18. Annex’s
Performa of machine and legal entity of promoter attached.
a. For concrete batching plant

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39 | P a g e
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 b. Sino truck

　
　 報 價 單
QUOTATION　SHEET
www.sinotrukchina.com
Issuing Date: 2016/8/16 Date of Expiry: Valid for 30 days

From: sinotruk Lily yuanli1209@aliyun.com 0086-13864191689 howo@sinotrukchina.com

To : mobile +251930107545 e-mail eyobyohannes1234@yahoo.com
It Unit Price
e FOB Shanghai Qty Total
m Descriptions & Specifications China
HOWO 6×4 Tipper 自卸 USD
1 Engine：CNHTC brand WD615.47, 371hp $40,200.00 4 160800.00
发动机：中国重汽 WD615.47, 371hp

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 Transmission： 10speed
变速器：　 10 档
Steering：ZF8098 hydraulic steering with power assistance
方向机：德国 ZF8098 液压助力方向机
Cab：HW70 standard cab, air conditioner, no bunk
驾驶室：HOWO70 标准驾驶室，空调，无卧铺。
轮辋/轮胎：12.00-20 斜胶轮胎
Brake: NO ABS system
刹车： 没有 ABS 系统
Carriage Internal Dimensions：5400×2300x 1400mm
货厢内部尺寸：5400×2300x 1400mm,
Steel thickness of Carriage：Floor: 8mm, Side:4mm
货厢钢板厚度：底 8mm 边 4mm
Hydraulic Lift of Carriage: F model (ventral lift)
货厢液压举升形式： F 式腹举
English panel，英文仪表盘

Whole truck dimensions: 8214x2496x3370mm;

Dead weight:13060, Gross vehicle weight:32000
Color: howo red (optional)
颜色：豪沃红
Fuel Tank: 300L
油箱容积：300L

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 HOWO 6×4 Mixer （H7/290//6×4）
Engine：CNHTC brand WD615.87, 290hp
发动机：中国重汽 WD615.87,290hp
Transmission： HW15710
变速器：　 HW15710
Steering：ZF8098 hydraulic steering with power assistance
方向机：德国 ZF8098 液压助力方向机
FOB China
Cab：HW76standard cab, air conditioner, one bunk
驾驶室：HOWO76 标准驾驶室，空调，一个卧铺。 $51900.00( sinot
ruk mixer tank)
Rim/Tyres： 12-20 tyre
1 6 311400.00
轮辋/轮胎：12-20 轮胎 Tank can be
8,9,10CBM
Brake: NO ABS system
刹车： 没有 ABS 系统
Cubage: 10m3
罐体：10m3
English panel; Fuel tank: 300L tank
英文仪表盘; 油箱：300 升油箱
Color: Chassis howo red，mixer white
颜色： 底盘豪沃红 罐体白色
Whole truck dimensions:; 8900×2500×3840 Dead
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 weight:13500。
整车尺寸; 8900×2500×3840；车身重量:13500

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