Professional Documents
Culture Documents
MAY, 2022
Assosa, Ethiopia
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
Table of Contents
Executive Summary.........................................................................................................................2
1 INTRODUCTION.....................................................................................................................2
2 BACKGROUND INFORMATION..........................................................................................2
2.1 The Applicants Background................................................................................................2
2.2 The Project Overview..........................................................................................................2
2.3 Goal and Objective..............................................................................................................2
3 CONTRIBUTION OF THE PROJECT FOR THE SOCIETY.................................................2
3.1 Technology Transfer............................................................................................................2
3.2 Development of Infrastructure.............................................................................................2
3.3 Job Opportunity...................................................................................................................2
3.4 Environmental protection plan............................................................................................2
4 DESCRIPTION OF THE PROJECT AREA.............................................................................2
4.1 Location...............................................................................................................................2
4.2 Physical and Natural Condition of the Project Site.............................................................2
5 PROPOSED DEVELOPMENT................................................................................................2
5.1 Justifications for Selection of Investment............................................................................2
6 TECHNICAL ASPECTS...........................................................................................................2
6.1 Land Development...............................................................................................................2
6.2 Land Preparation..................................................................................................................2
6.3 Sowing/ Planting and Fertilizing.........................................................................................2
6.4 Plant Protection....................................................................................................................2
6.5 Harvesting............................................................................................................................2
6.6 Post-Harvest Management...................................................................................................2
7 PROJECT IMPLEMENTATION PLAN (5 YEAR).................................................................2
8 ORGANIZATIONAL STRUCTURE AND MANAGEMENT................................................2
8. FINANCIAL ANALYSIS.........................................................................................................2
8.1 Fixed investment Capital.....................................................................................................2
8.2 Working Capital...................................................................................................................2
8.2.1Direct Production Costs.............................................................................................................2
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
III
BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
Executive Summary
1. Project Title/Name: KIDIST HAILU AGRICULTURAL DEVELOPMENT
PROJECT.
2. Project Intervention Area: Crop Production
3. Total Size of the Land required: 500 hectors
4. Duration of the project: 30 years
5. Promoter’s Profile:
The anticipated “Crop Production Project” is initiated by the Proponent KIDIST HAILU
AGRICULTURAL DEVELOPMENT PROJECT.
6. Location of the Project:
The area identified for implementing the anticipated project is located in the north-Western
part Kurmuk, Bambasi or Homosha woreda of Benishangul Gumuz Regional State, of. The
plots should be located near the main roads in the region.
7. Project Goal and Purpose:
The overall goal of the project is to contribute towards the economic development of
Ethiopia through using the existing investment opportunities in the Country and taking
advantage of the expressed policy incentives that emphasize on greater commercialization of
agriculture and enhancing private sector development.
The project’s main objective is to implement an agricultural investment project using
partially mechanized farming for the production of export-focused oil seeds; which primarily
involves sesame, and soybean cultivation with high standards and quality of production;
while ensuring optimal economic returns as well as socially and environmentally acceptable
production system that will attain full production level within one or two years’ time starting
from the 2021/2022 production season.
8. Estimated Cost of the Project
At the beginning of the production year the project will have the following costs:
Initial Capital of the Project: 4,500,722.00 ETB.
Investment Cost: 3,738,722.00 ETB
Operating Cost: 762,000.00 ETB
9. Project Component
Total Production area: 500ha
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KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
1 INTRODUCTION
This investment proposal is prepared and submitted to the Benshangul Gumz Regional State,
Investment Office, as a partial fulfillment of the application, on the basis of which our company
hopes to receive the necessary approvals from your good offices and other concerned bureaus,
particularly for land acquisition and investment certification. The purpose of the proposal is to
describe the promoter’s view in regard to his envisaged investment project that is mainly
focusing on agricultural production and basically intended as a business entity.
The proposal document comprises mainly of the technical, financial and market analysis and
justification to meet the necessary requirements of investment and obtain approval of the land
acquisition that the project requires.
A brief description of the background information of the project & applicant, the project area,
including the physical features (location, climate, land and water resources etc), and availabilities
of existing infrastructures, services and facilities, is presented in the first section of the proposal.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
2 BACKGROUND INFORMATION
Ethiopia is endowed with immense natural resources that offer it greater comparative advantages
of producing different type’s agricultural products and it is a country of great agro-ecological
diversity having areas of different physical features and altitude. This variation is mainly
correlated with great diversity of climate, soil and vegetation cover that are favorable conditions
for agricultural development.
Considering the suitability of the country for agriculture, a big leap forward can be made
encouraging potential investors to bring the capital and technologies to the country. To this end,
the Country’s successive Development Programs during the past decades have given; foremost
among others, a particular emphasis on greater commercialization of agriculture and enhancing
private sector development.
Overall Goal
The overall goal of the project is to contribute towards the economic development of Ethiopia
through using the existing investment opportunities in the Country and taking advantage of
expressed policy incentives that emphasize on greater commercialization of agriculture and
enhancing private sector development.
The project's contributions to the economy, upon realization of a full production level; include
creation of jobs and permanent employment opportunities to the local people as well as bringing
considerable annual income in hard currency and tax revenues; part of which will be reinvested
in the immediate community infrastructure.
General objective
The project’s main objective is to implement an agricultural investment project using intensive
mechanized farming for the production of export-focused oil seeds and food crop for local
consumption.
Specific objective
The specific objectives of the project are:
To help increase income of the investor and improve living standards of his family
To generate hard currency through export of high quality oil seed products.
To raise the standard and quality of oil seeds& sorghum crop.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
environmental impacts like pollution, land degradation, vegetation removal and etc. so the
project in addition to agricultural activities, planned to perform environmental protection
activities as follows.
Table 2. Environmental protection plan
No. Activities Measur Quantity in 5 consecutive years
ement 2022 2023 2024 2025 2026
1 Development of nursery site No. 1 1 1 1 1
2 Germination of indigenous and
agroforestry plant seedlings like
Cordia No. 1000 2000 4000 8000 16000
Bamboo
Mango
Neem
gravilia
3 Plantation of different plant
seedlings No. 1000 2000 4000 8000 16000
4 Soil protection activity like hectare 50 100 150 200 300
tracing, fled protection s
4.1 Location
The area to be identified for implementing the anticipated project will be located in the north-
western part of Benishangul Gumuz Regional State, within Assosa Zone in
Homosha/Bambasi/kurmuk/MengaWeredas.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
Climate
The climatic conditions of the project area could be broadly categorized as sub-tropical, hot
lowland to warm sub humid moist lowlands. According to traditional classification of agro-
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
climatic zones in Ethiopia; and, considering the high rainfall, low altitude (below 900 m.a.s.l.);
the project area might be classified as wet kolla.
Temperature
According to the climatic data obtained from the Ethiopian Meteorology Agency (Assosa
Branch); the average minimum and maximum temperatures of the project area are 20.97 0C and
34.190C respectively.
Rainfall Trends
The project area has average annual rainfall of 942.64 mm; which is higher than the average
precipitation requirements of most field crops. The monthly rainfall distribution of the project
area shows that the area has a mono-modal rainfall pattern where the wet months are May –
October, during which 95.77% of the annual rainfall occurs.
Soil Conditions of the Project Area
Results of soil sample analysis from the project area should be clay and sandy loam with strong
coarse structure. The PH of surface soil ranges from 7.1 - 7.9, which implies moderately alkaline
soils. These soils are chemically and physically suitable for soybean and sesame cultivation. In
addition, the proposed investment area refers to well drained soils that occur on almost flat to
gentle slope. The proportion of the land is suitable to most of annual crops.
Existing Infrastructures
Road:
Generally, the project area can be accessed by all-weather roads up to its capital town, Assosa as
well as the woreda towns.
Electric Power
The capital town of the districts of the project area has access to hydroelectric power. However
there are great problems regarding the supply of continuous power supply. Providing continues
power supply for the town has been a great constraint.
Water Supply
Generally, rivers, shallow well and boreholes are the main sources of water supply in the region.
Currently, access to safe drinking water is a problem in the project area. However, the Water,
Irrigation and Energy resource Development Bureau and other stakeholders in collaboration with
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
the community has established different safe water generating schemes such as hand dug wells,
hand pump, developing spring water, deep well and shallow well to alleviate the problem,
5 PROPOSED DEVELOPMENT
The proposed development will mainly focus on production of sesame, soybean and sorghum
crops; for which improved seed varieties will be used and optimal application of fertilizers will
be made. As a result, there will be improved productivity of each commodity where the
anticipated production per ha of each crop with and without project are described as below.
Table 3: Anticipated production per ha of each planned crop with and without project
Production per ha (Yield = Qtls/ha)
Crop Without project With project Increment
Sesame 5 8 60%
Soybean 10 15 50%
Sorghum 25 30 20%
The production of the oil seeds, sesame & soybean are meant for export market whereas the
sorghum crop production is to be used for local consumption particularly to meet the food
requirement of laborers at the project site.
Area of land for investment might be expanded in the future with possibility of available land
within the vicinity of the project area. The land ownership is to be acquired through a lease
contract from the Ethiopian Government for a period of 30 years.
Availability of suitable land for sesame, soybean and sorghum production with good
combinations of topography, climate and soil characteristics that allow optimal production of
these crops;
Minimal requirements for infrastructure development because of the topography and visible
prospects of on-going development initiatives in the area including power supply,
telecommunication and other basic infrastructures;
The land is more convenient for minimum land development.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
Low population density in the area and minimal competition for land – i.e. no visible
adverse effects on the community and settlement patterns in the area;
Accessibility of the area by all-weather roads and ease of making choices between
marketing options (e.g. transporting to the major export markets in Ethiopia and/or the
Sudan;
Profitability of the business
6 TECHNICAL ASPECTS
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
Transporting will be done by tractor driven trailers and trucks, from the farm and stores,
respectively.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
9.1 Weighing & bagging Qt. 4,500 10,500 10,500 10,500 10,500
General Manager
Secretary (1)
Driver (1)
Foreman (1)
Cashier & Store
Keeper (1)
Time Keeper (1)
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
Land leveling -- --
Layout of land -- --
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
DAP -
4 Chemical -
Herbicide 25,000.00 1,750.00 26,750.00
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
4th year
1 Sesame 300 15 3,000
2 Soya bean 150 25 3,750
3 Sorghum 150 30 4,500
Total 500 11,250
5th year
1 Sesame 300 15 3,000
2 Soya bean 150 25 3,750
3 Sorghum 150 30 4,500
Total 500 11,250
11.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
Teaching how to use crop residual for cattle and goat feed after the residual is treated for
certain months with urea fertilizer;
Facilitating better market service for major crops together with project product sales;
The project will also be committed to provide agricultural machinery and implements
rental services and other related technical support like the use of modern agricultural
practices and supply of inputs etc;
To implement all the above mentioned innovations the project will promote project crop
out growers and create good linkages with the surrounding farmers and the use of the
project facilities knowledge and experience there by increasing the economic activities of
the inhabitants of the project area;
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
KIDIST HAILU AGRICULTURAL DEVELOPMENT PROJECT
There are also indirect but essential contributions that the enterprise could contribute as a
socially responsible company. The company’s commitments to the latter, among others, are
demonstrated by its steadfastness towards maintaining higher standards of corporate
responsibilities in all its internal operations and management system. Likewise, it will work
persistently through making sure that all the company’s external communications, self-
promotion and business dealings are conducted in a traceable, transparent and accountable
manner. This corporate values and principles shall be demonstrated in implementing the
anticipated project, and thus; help realizing of tangible influences on the corporate culture and
mode of operations of other companies of relevance. As observed from experiences of other
countries, the long term benefits of internalizing such higher standards of corporate
responsibilities among companies within a given production sector often lead to a more prudent
and systematic exposition of a country's export market opportunities in relation to specific
products. As described below KIDIST HAILU AGRICULTURAL DEVELOPMENT
PROJECT. believes to accomplish the latter scenario with the sesame and soybean crops it
intends to produce through the project.
In view of its anticipated commitment to ascertain high standards and quality of its productions;
the project would likely grasp a share among the high vale niche markets in the US, Japan and
Europe. This will apparently influence production and quality standard other producers of
relevance; which in turn improves the Country’s production quality standards, and therefore,
enhances its share of export market opportunities.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT