Quarit trading plc Crop Development Project Proposal

Project Owner : Quarit trading plc

Phone Number፡-0918765028
Location of the Project፡ Amhara Region
West Goncer Administration Zone ,Metema Woreda
Land Notification Number--------------------32
Area-------------------------------------------------60ha
Specific Site/ Block------------------------------10
Kebele------------------------------------------------Tumet
Project Type-----------------------------------------Crop Development
April, 2014 E.C

Bahir Dar, Ethiopia

1
 Date----------------------

To: Amhara National Regional State Bureau of Land

Bahir Dar

Subject: Provide Project Proposal Documents for the Rural Land Investment
Notification

Dear/sir;

As mentioned from the above, I have applied for the rural land investments notification that
announced from bekur gazzeta by your organizations. Thus please find the attached ------pages of
project proposals, three months legal bank statements, and other related documents for the
notification of rural land investment that your bureau announced at bekur gazzeta newspaper date on
April 10/08/2014E.C. Based on the land investment advertisement information, I have applied on the
specified land location stated as follows:

 Bekur Gazzeta Paper No---------------19

 Land Notification Number---------------32
 Region------------------------------------ Amhara
 Zone:-------------------------------------- West Gonder
 Woreda------------------------------------ Metema
 Kebele--------------------------------------- Tumet
 Specific location/ Block------------------- 10
 Area(ha)------------------------------------- 60
 Project /Land use/ type--------------------- Crop Production
 Distance to Woreda Center(km)---------- 75

“With warm regards”

Admassu Atalel

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 Table of Contents
1. PROJECT EXECUTIVE SUMMARY........................................................................................................6
2. Introduction.....................................................................................................................................................7
2.1. Background of the study...........................................................................................................................7
3. Description of the location of the project Area................................................................................................8
4. General and Specific Objectives......................................................................................................................9
4.1. General Objectives of the project..............................................................................................................9
4.2. Specific Objectives of the Project.............................................................................................................9
5. Internal and external situational analysis for the feasibility of the project.................................................10
5.1. Internal situational analysis.....................................................................................................................10
5.2. The external situation of the organization...............................................................................................11
5.2.1. Political situation.............................................................................................................................11
5.2.2. Economic situation..........................................................................................................................11
5.2.3. Social Status....................................................................................................................................11
5.2.4. Technological situation....................................................................................................................11
5.2.6. Ecological conditions.......................................................................................................................11
6.The main advantages of the project................................................................................................................12
7. Market Study, plant Capacity and Production Program.................................................................................13
7.1. Current supply and current demand........................................................................................................13
8. Marketing Strategy........................................................................................................................................13
8.1. Previous Demand and Supply of the market...........................................................................................13
8.2. Product Advertising and promotion........................................................................................................13
8.3. Prices and distribution conditions...........................................................................................................13
9. Establishment Value Added...........................................................................................................................14
10. New technology transfer to the local community.......................................................................................15
11. Support the development of social services to the local community............................................................15
12. Organize local farmers to be involved in crop development (Out grower)..................................................16
13. Establishment of a safe work environment for project workers (food, water, health, shelter, transport, etc.)
........................................................................................................................................................................... 17
14. Provide housing, entertainment, office space, warehouse, accommodation, etc. for the employees of the
organization.......................................................................................................................................................18
14.1. Staff housing, leisure, office ፣warehouse construction and equipment purchases.................................18
15. Support the community in watershed development and work on natural resources.....................................18
16. Machinery supply, work experience and educational background...............................................................20

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 16.1. Machinery and equipment supply situation...........................................................................................20
16.2. Work Experience..................................................................................................................................20
16.3. Educational Background.......................................................................................................................20
17. Production Process, Project Program, Input Supply and Product Type........................................................21
17.1. Project production process....................................................................................................................21
17.2. Provision of project inputs....................................................................................................................21
17.3. The production program of the project/Land Use of the Project...........................................................22
17.4. Land Utilization Plan of the Project......................................................................................................22
17.5. The type of product that the project produces.......................................................................................23
18. Crop development and environmental sustainability...................................................................................23
19. The duration and capacity of the project......................................................................................................24
20. Manpower Organization..............................................................................................................................24
21. Manpower, training needs and other administrative expenses.....................................................................26
21.1. Manpower Requirement Cost/Planned Recruitment of the employees.................................................26
22. Office for office supplies and stationery......................................................................................................27
23. Other miscellaneous service costs...............................................................................................................27
24. Expenditure summary program required for the implementation of the project...........................................28
25. Action Plan..................................................................................................................................................28
26. Source Funds...............................................................................................................................................30
27. The loan repayment of the project is expressed in interest, annual and monetary terms..............................30
28. Summary.....................................................................................................................................................31
29. Annexes for Financial Analysis...................................................................................................................32

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List of Tables

Table 1: SWOT Analysis of the Project.............................................................................................................10

Table 2: Planting of Agro-processing industry Budget Plan..............................................................................15
Table 3: plan to transfer the improved technologies the local farmer................................................................15
Table 4: The local farmers funded the construction of various services............................................................16
Table 5: Budget to engage local farmers in out growers....................................................................................17
Table 6: Budget Action Plan for Employee Safety............................................................................................17
Table 7: Staff housing, leisure, warehouse office, guard house construction and equipment costs....................18
Table 8: Budget Plan for Physical and Biological Soil and Water Conservation...............................................19
Table 9: Price estimate of machinery and equipment required for the project...................................................20
Table 10: List of Inputs and supplies.................................................................................................................22
Table 11: Man power Requirements for the Project..........................................................................................26
Table 12፡Office and office costs and stationery costs........................................................................................27
Table 13፡ Statement of payment for various project service costs.....................................................................27
Table 14፡ Summary of total initial investment Cost..........................................................................................28
Table 15፡ Project Annual Activity Action Plan.................................................................................................29
Table 16፡ describes the project loan repayment year and amount......................................................................30

Annexes

Annex 1: Projects Annual Production Amounts................................................................................................32

Annex 2: Project Annual Income.......................................................................................................................33
Annex 3: Project Costs......................................................................................................................................34
Annex 4: Profit and Loss Analysis....................................................................................................................35
Annex 5: Discount Cash flows Analysis............................................................................................................36

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 1. PROJECT EXECUTIVE SUMMARY
1 PROJECT TYPE/LAND USE TYPE
2 PROJECT OWNER
3 PROJECT LOCATION
4 TYPE CROP GROWN
5 PREMISES REQUIRED LAND
6 TOTAL INVESTMENT COST
7 SOURCES OF FINANCE
8 EMPLOYMENT OPPORTUNITY
9 MARKET SHARE
1 TECHNOLOGY USE
0
1 BENEFITS OF THE PROJECT
1  Improved basic infrastructure and
1 PAYBACK PERIOD OF THE
2 PROJECT
1 IRR OF THE PROJECT
3
1 NPV OF THE PROJECT
4
Crop production/Development
Quarit trading plc
Metema
Sesame, Soybeans
60 hectars
ETH Birr 16,377,380.87
Equity in percent and Birr: 30%, 4,913,214.26
Loan in percent and Birr: 70%, 11,464,166.61
8.1 Permanent =6
8.2 Temporary =5
8.3.Causal Laborer/workers =600
Grand Total = 611employees
70% Domestic and 30% for Export
Labour Intensive
11.1. To the local community
 Create employment opportunity
 Creation of business opportunities
11.2 .To the local authority /Region
 Increase tax collection
 Reduced level of unemployment
facilities
11.3. To the local SMEs:
 Job opportunity during
construction
 New business opportunity
11.4. To the country
 Bring foreign exchange
 Bring tax collection
3 years
36
257,364,708.83birr
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2. Introduction
2.1. Background of the study
Ethiopia is chronically food insecure and suffers significant food deficit each year. To tackle this
challenge, the government of Ethiopia strives to increase agricultural production, access to markets
and employment opportunities. Large-scale investments in commercial agriculture are considered one
of the key elements in advancing economic development and supporting the country in achieving
food security. In the past, Ethiopia promoted foreign and domestic activities in large scale farming
and identified approximate 3,000,000hectars for commercial agriculture purposes. To facilitate
economic development the benefit of such investments need to be shared with local communities.

In addition, the Ethiopian government is currently developing and implementing development

policies, strategies and plans to guide the country's overall development activities with the aim of
accelerating development and eradicating poverty. In particular, it is known that the development
plans that have been implemented in the past years have not been achieved with significant results in
the agricultural development sector. Accordingly, after the change of government in the country, the
current government will be able to grow the economy and ensure sustainable economic growth.
Therefore, the private sector has an irreplaceable role to play in achieving the domestic economic
plan and can be a key player in the transition from agricultural-led economic development to
industrial-led economic development with the participation of the private sector. It has been two
decades since a national investment proclamation was issued to encourage the private sector to play
its due role in the investment sector. During this time, many foreign and domestic investors in
agriculture, hotel and tourism, etc. were participated. As a result of this, the agricultural sector plays
an important role in the economic development of our country, and the growth and improvement of
the agricultural sector will contribute significantly to the growth of other sectors of the economy in
general.

The project area,Metema Woreda, where the project is being implemented, has the resources to
alleviate poverty and backwardness, just like any other part of the country, due to the lack of proper
and traditional practices, despite the fact that it has suitable natural resources, suitable for agricultural
purposes. As result of these and other factors Quarit trading PLC development project proposal is not
only to achieve high productivity with the help of modern technology, but also to engage in safe crop
development for local cities.

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3. Description of the location of the project Area
The project will be established in the Amhara regional state, West Gonder Zone, Metema Woreda,
kebele Tumet ,Block 10 and land use for crop development,60 hectares of land notification No.32.
The project is 75 km far from the woreda center.

The project is conducted in Metemma district. Metemma district is located at 36°17' E and 12°39 N'
in West Gondar about 900 km northwest of Addis Ababa and about 180 km west of Gondar town.
Metemma is one of the west most Districts of the Amhara Regional State. The District has an
international boundary of more than 60 km long distance between Ethiopia and Sudan. Metemma is
found North of Quarra and Alefa, west of Chilga south of Tach ArmaChoho Districts’ and east of
Sudan border. It is one of the 21 Districts’ in North Gondar Zone. The district is subdivided in to 18
PAs and two town associations.

The altitude of Metemma ranges from as low as 550 to 1608 m asl while the minimum annual
temperature ranged between 22oC and 28oC. Daily temperature becomes very high during the
months of March to May, where it may get to as high as 43oC. Mean annual rainfall for the area
ranges from about 850 to around 1100 mm. It has a unimodal rainfall. The rainy months extend from
June until the end of September. However, most of the rainfall is received during the months of July
and August. Rainfall during these months is erratic. The soils in the area are predominantly black and
some are soils with vertic properties. There are about 9 types of soils in the area where about a quarter
of the size of the District is Haplic Luvisols and about 22% are Vertisols or soils with vertic
properties (IPMS, 2005). Seasonal waterlogging, especially during the heavy rainfall months, is so
high and it is the major production problem in the area. However, the soils in the area are believed to
be fertile and consequently, farmers do not apply fertilizer (IPMS, 2005).

The area is characterized by mixed farming system (i.e. crop and livestock production). Sesame,
cotton and sorghum are the dominant crops grown in the area. These crops cover around 90% of
cultivated area of the district (IPMS, 2005). Livestock production is an integral part of production
system of the area. Production of cattle (milk, meat), goat (meat) and poultry is a common practice.
Cattle are exported to the Sudan while goats are mainly used for the local market. Transhumance
cattle production system is a common phenomenon with highland cattle moved to the lowlands
during the main rainy seasons from June to October in search of feeds (Azage et al., 2009).

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4. General and Specific Objectives
4.1. General Objectives of the project
The goal of this project is to enable the individual / company to engage in a feasible and profitable
agricultural sector, especially in the field of crop development. In addition to his production amount
the project will organized farmers in the form of out growers and providing training through
technology and supporting in different extension services. Besides to increasing the quality and
quantity of the product, it also contributes to the balance of the sector. Finally the project will plan to
established Oil processing and packing factory in Bahir Dar and Burie town industrial village and
increasing foreign exchange earnings of the country by collecting locally sourced products.

4.2. Specific Objectives of the Project

To develop crop farming with modern technologies and up-to-date knowledge

 Increase the country foreign exchange earnings by processing the product of the
agricultural enterprise and the product of the local farmers.
 Facilitate local crop development potential to facilitate market linkages with the region
and the country
 Encourage local crop development potential to accelerate market linkages with the region
and the country
 Carry out specialized environmental and natural resource development activities to ensure
that agricultural development is in line with the environment.
 Support the economy by creating job opportunities for local residents
 Improved crop production and productivity by modernizing crop production and
processing technology by deploying state-of-the-art crop production and marketing
techniques in the area where the project will be implemented.

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5. Internal and external situational analysis for the feasibility of the project

5.1. Internal situational analysis

In order to increase the competitiveness of the crop development, it is important to look at the
following in order to ensure its sustainability by analyzing its internal strength, weaknesses as well as
external opportunities and threats (SWOT).

Table 1: SWOT Analysis of the Project

1. STRENGTH 2. OPPORTUNITIES
 Excellent and stable staff  Increase demand for food products
 Provide good service for customers  Availability of land at an affordable price
 Good location for easy access to potential  Favorable government policy Measures
customers  Availability of raw materials in the
 Create good relationship with the surrounding area
surrounding community  Suitable agro-ecological condition to meet the
 Use of new technology objective of the project.
 Production of more marketable products.  The high wide gap b/n demand and supply of
 Planned to provide his product with fair project products
price to the customers  Availability of infrastructure near to the
 Providing of transportation service for the project area like water, road etc.
customers.  Availability of cheap labors; technical
 High founder loyalty in managing fund assistance, professionals and non-professional
and resources of the company person
 The company planned to produced large  availability of land for expansion
scale products

3. THREAT 4. WEAKNESS
 High price increase for raw materials  Out of control of current price fluctuation
 High investment cost due to current price  Low disease and pest control mechanism
increase  Lack of electricity supply
 Stiff competition

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5.2. The external situation of the organization
Crop development like sesame, cotton, wool,soybeans,masho/Mung bean and sorghum is favorable in
terms of political, economic, socio-technological, legal and ecological conditions.

5.2.1. Political situation

The government is strongly encouraging the sector to improve agricultural productivity as it is crucial
for the development of other development programs. Therefore, agricultural production is one of the
priority development programs of the government. Modernization of the agricultural sector is also
being implemented as one of the basic development examples of the poverty alleviation program.
Therefore, agricultural production is one of the priority development programs of the government.

5.2.2. Economic situation

With the growth of the per capita income and the expansion of higher education, the public nutrition
system is also improving. As a result, the demand for starch products has grown exponentially.

5.2.3. Social Status

According to local demographics, there are many potential young men and women who can work.
Therefore, the development of crop (sesame, cotton, wool,soybeans,masho/Mung bean and sorghum )
is especially desirable, as the crop requires a lot of labor and has the potential to involve many young
people. It is located in an area with scattered settlements, so it is easy to rent land and expand it when
needed. It is located in an area with scattered settlements, so it is easy to rent land and expand it when
needed.

5.2.4. Technological situation

Crop development (sesame, cotton, wool,soybeans,masho/Mung bean and sorghum) is an industry
that can be easily accomplished without the need for advanced technology. However, efforts will be
made to increase productivity by using certified varieties at research stations.

5.2.5. Legal status

The enterprise is registered with the Metema Woreda Investment office and has been approved by
the sub-committee on rural land use bureaus regarding matters related to rural investment land.

5.2.6. Ecological conditions

The local ecology is conducive to crop development (sesame, cotton, wool,soybeans,masho/Mung
bean and sorghum). Temperature, climate, and humidity have a positive effect on crop production
(sesame, cotton, wool,soybeans,masho/Mung bean and sorghum). In terms of productivity, the

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positive aspect is significant: it has good soil fertility for crop development (sesame, cotton,
wool,soybeans,masho/Mung bean and sorghum) and contributes to increased production and
productivity.

6.The main advantages of the project

 Introducing modern and integrated farming to local farmers
 Introduce and implement new technologies and improved practices that are
environmentally friendly and cost-effective.
 Seeing and believing through teaching is persuasive and convincing local farmers to
act in a practical way. This means that we are providing a high level of technology
transfer to the local people to enable them to gain experience and evaluate the
technology themselves so that they can use the required technologies to improve
productivity for crop development (sesame, cotton, wool,soybeans,masho/Mung bean
and sorghum).
 We support the local community through social services. As mentioned earlier, there
is an adult education center in the area where this project was established, so we will
create a conducive environment for local residents to learn.
 Provide improved agricultural products for local farmers nearby
 Provide job opportunities for local residents
 Provide government revenue sources
 Make a significant contribution to the environment and ecological protection by
providing external and local resources to the local population at low cost to the
neighboring woredas.
 Agricultural products
 Direct delivery to the consumer
 Improving the market by distributing at a reasonable price to distributors
 Earn foreign exchange earnings for the country by exporting the product
 Extensive mobilization of individuals into crop development (sesame, cotton,
wool,soybeans,masho/Mung bean and sorghum).

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7. Market Study, plant Capacity and Production Program
7.1. Current supply and current demand
In these areas, individuals engaged in the cultivation of modern crops (sesame and soybeans) have
fallen asleep and have not been able to meet the market demand. In addition, according to studies
conducted in our country, the increase in population in all cities and the improvement of the nutrition
system of the society has been widely analyzed as the market for agricultural products continues to
grow. Given the current state of production, it is safe to assume that the market demand is still high.
Crops are the foundation for the livelihoods of human beings on earth. At the same time there is no
substitute for a quality crop production as quality seed is essential for growing of quality crops.

8. Marketing Strategy

8.1. Previous Demand and Supply of the market

In terms of the market, the first market is the local community, and in the process of crop
development (sesame, cotton, wool,soybeans,masho/Mung bean and sorghum), the search for foreign
markets will be the focus. Although the demand is high in all areas, choosing a market that can sell at
a high price will be the focus of the project.

8.2. Product Advertising and promotion

The promotion of this project will start with local means of communication and will further improve
the quality of the information that is considered in the international market. It also focuses on
promoting telephone, in-person communication and other communication options with potential
buyers. As the project well known, the promotion will no longer be necessary.

8.3. Prices and distribution conditions

As a beginner, the first step is to create awareness and motivate the distribution to be competitive in
the market. Thus, the purpose of the pricing policy is to take into account the significant market share
in the market and take into account the low-profit margins that will not affect the consumers of the
product, especially in the first place. The selling price is estimated at 7,000 birrs per quintal of
sesame, 2000 birrs per quintal of sorghum, wool, 4200, maize 2500, 4600 birrs per quintal of cotton
and and 8000 birr per quintal of Masho/Mungbean. In addition, the project will have a production
capacity of 300 days a year and a capacity of 1,000 liters of oil in just one day after four years. It is
also planned to sell one liter of oil for 100 Birr. Since the project is established edible oil factory after

13
four years, sesame and soybean are not present to local oil processing industries rather the factory
itself uses the raw material for its factory.

9. Establishment Value Added oil processing and packaging factory

Due to the current regional, national and international market prices fluctuations, the project will cost
a lot of money to set up a factory in the next two years. This means the investor will planned to
established Oil processing factory in Bahir Dar city and Burie town after four years. This
manufacturing industry will produces various types of processed flour products in various sizes and
avail to the local/domestic and international market through changing to the secondary products. In
addition to using his own products,this processing factory purchase raw materials from the
surrounding farmers to the factory and final products will be avail to the domestic and
international markets. This means that the project able to convert the product into a secondary
product and create value addition concepts. It is planned to be replaced and used for domestic
consumption as follows. In addition to production, a budget plan for the subsequent establishment and
construction of oil processing plant in Bahir Dar city .The product of this factory will substitute the
imported items from other foreign countries. The company plans to open a new oil refinery in two
years' time by producing its own raw materials. It is planned to do some work. In addition to the
raw material it produces, it is planned to organize local farmers in out grower to harvest and
collect from them and convert it into secondary products to replace imported products with
local industrial products or use them for domestic consumption. For future oil processing plan
factory establishment this project will allocate a budget of 12,132,000 birr.

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Table 2: Planting of Agro-processing industry Budget Plan

No List of Activities unit plan Unit Price/Birr/ Total Price/birr/

Construction of Flour
1 number 1 12,000,000.00 12,000,000.00
processing Factory

2 Supply of Flour processing number 12 3,500.00 42,000.00

factory spare parts
3 Machine plant lay-out and general 1 90,000.00 90,000.00
consultancy service
Total 12,132,000

10. New technology transfer to the local community

Introduces and expands various technologies to the local community where a project is being
implemented. To this end, the project aims to change the lives of local farmers and provide them with
the opportunity to learn and practice new and improved technologies. The estimated budget for new
technology transfer to the farmer will be 148,225 birr.

Table 3: plan to transfer the improved technologies the local farmer

unit total
No List of Activities unit plan
price/birr/ price/birr/
1 Seed sowing Technology number 25 2000 50,000.00
Supplying of the improved seeds to the
2 quintal 2 4,000.00 8,000.00
farmers
Supplying of irrigation Technology to
3 number 2 40,000.00 80,000.00
the local farmers
Natural Fertilizer (Compost
4 number 25 409 10,225.00
Preparation Technology)
Total 148,225

11. Support the development of social services to the local community

The effectiveness of a project is measured by the number of social services provided to local
community in the area where the project will be implemented. In addition to the work that a project
does, performing various social activities for the local community will further enhance the
organization's acceptance, sustainability and profitability. In particular, the project will provide
financial support for the development of social services such as schools, roads, clinic, safe drinking
water and watershed management developments. Therefore, the detailed budget for social service
activities were presented in the Table 4 below and the estimated budget for support the development
of social services activities for the local community will be 75,500birr.

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Table 4: The local farmers funded the construction of various services

unit Total
N pla
List of Activities price/birr price/birr
o n
unit / /
numbe
1 Budget Support to the surrounding School 1 8,000.00 8,000.00
r
Budget Support to Road construction to the surrounding 12,000.0
2 km 3 4,000.00
Community 0
numbe 25,000.0 25,000.0
3 Support Budget to the community Clinic 1
r 0 0
Budget Support construction of hand dug well to supply numbe 28,000.0 28,000.0
4 1
clean water r 0 0
5 Budget Support to water shade management ha 0.5 5,000.00 2,500.00
Total 75,500

12. Organize local farmers to be involved in crop development (Out

grower)
Out grower schemes are systems that link networks of unorganized smallholder farmers with
domestic and international buyers. Also known as contract farming, these schemes provide benefits to
players along the supply chain. Buyers can improve their control over crop supply, often at pre-
agreed prices, as well as crop quality standards. And farmers can access more secure markets, often
receiving technical and financial support by cultivating within out grower schemes. When effectively
designed and well managed; out grower schemes can address numerous sustainable agriculture
objectives. They can facilitate greater private sector investment in developing countries, improve
sustainable sourcing practices by bringing smallholder farmers into mutually beneficial partnerships
with large buyers, and increase smallholder farmer incomes by improving yields and quality through
training, access to credit and markets.The project will provide training on new technology to the
out grower farmers for 34 farmers, supplying of improved seed to out grower farmers 5quintal,
supplying of pesticides and herbicides to out grower farmers 20 litters and give extension
services to the out grower for 34 farmers.

As mentioned earlier, the main objective of this project is not only to produce and sell cotton,
oilseeds, pulses, and cane crops, but also will take responsibility for the value chain by establishing
an out grower scheme . Besides it has an integrated various components that will positively
contribute to the environment and reduce negative environmental effects. This crop production
requires relatively small amounts of pesticides and fertilizers like nitrogen, phosphate, and potassium.
It organizes the production and packaging of the products from the local farmers and neighboring

16
woredas by setting up a processing plant and organizing the youths and individuals in the area to
strengthen the existing ones and provide the new ones with material, training and technology support.
On the other hand, the project will organize local farmers in cluster with the out grower system and
provides various support and training to the beneficiaries of the modern farming and production
methods used by the project. The estimated budget for out grower service will be 38,900birr.

Table 5: Budget to engage local farmers in out growers

unit
No List of Activities unit plan Total price
price
Provide training on new technology to the out
1 number 34 150 5,100.00
grower farmers
Supplying of Improved seed to out grower
2 quintal 5 4000 20,000.00
farmers
Supplying of pesticides and herbicides to out
3 Liter 20 350 7,000.00
grower farmers
Supporting in extension services to the out
4 number 34 200 6,800.00
grower
Total 38,900

13. Establishment of a safe work environment for project workers

(food, water, health, shelter, transport, etc.)
The project area is so remote from the city or the village .Thus the project owner will provide pre-
existing accommodation like clean water, shelter, health service, food and transportation, as well
as a low-cost recreation club and an educational and training center will be set up to expand my
horizons. The estimated budget for establishments of conducive environments for project workers
will be 183,011.00birr.

Table 6: Budget Action Plan for Employee Safety

unit Total
No List of Activities unit plan
price/birr/ price/birr/
1 Supplying Food for the employees quintal 11 2,000.00 22,000.00
Supplying Health Care Service for the
2 number 11 250 2,750.00
employees
Supplying Shelter for the employees(Female
3 number 11 250 2,750.00
and Male Separated)
4 Supplying clean water for the employees number 611 250 152,750.00
Provide Transportation Service for
5 number 11 251 2,761.00
employees

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 Total 183,011.00

14. Provide housing, entertainment, office space, warehouse,

accommodation, etc. for the employees of the organization
14.1. Staff housing, leisure, office ፣warehouse construction and equipment
purchases
The main components of this project are staff housing and recreation, storage for input and product
storage, office, leisure club, fence construction and guarding centers for adults and education and
training centers for adults. It is estimated that it will cost 351,000 birr. The details are as follows.

Table 7: Staff housing, leisure, warehouse office, guard house construction and equipment costs

No List of Activities Unit quantity unit price Total price

1 6 Office Room block 1 51,000.00 51,000.00
2 Staff housing block 1 80,000.00 80,000.00
2.1 men block 1 40,000.00 40,000.00
2.2 women block 1 40,000.00 40,000.00
3 clinic block 1 40,000.00 40,000.00
4 warehouse room 1 40,000.00 40,000.00
Education and Training Centers
5 room 1 40,000.00 40,000.00
for Adults
6 Recreation Club room 1 40,000.00 40,000.00
7 Building a toilet block 2 50,000.00 50,000.00
7.1 men block 1 25,000.00 25,000.00
7.2 women block 1 25,000.00 25,000.00
8 Guard House room 1 10,000.00 10,000.00
Total 351,000.00

15. Support the community in watershed development and work on

natural resources
It is clear that the first step when starting a farm is to maintain the fertility of the land. Therefore,
before we start farming, we will carry out expertly trained and suitable soil and water conservation as
well as integrated soil fertility management for the area, since this project will plan to access 60
hectares of land for this project. We will carry out the necessary physical and biological soil and
water conservation activities so that our work on this field does not negatively affect the local

18
environment. It will also work with the local community and investors on top, side and bottom basin
projects to increase soil fertility and soil moisture.

Awareness of the importance of conservation and conservation of project resources to project staff to
volunteer for four hours a day in the affected areas, for this 10% employee incentive mechanism will
be effective to make the natural resource activities sustained. The project will provide Birr 37,225
per year to support the community in watershed development.

 In addition to purchasing locally grown and productive local seedlings in the field safety field,
as well as purchasing seedlings every 10 meters in the form of agroforestry, we can provide
professional support to local farmers.
 To produce organic and non-polluting products by collecting local materials and by-products
and preparing compost. Integrated pest management is our priority, rather than using
chemicals to clean the environment of pests and diseases, even in the field. In general, we will
use these and other things to focus on natural resource development and environmental
protection and to contribute to the production of pollution-free products. The budget for this
implementation is estimated to be 37,225 birr and described as Table 8 below.
Table 8: Budget Plan for Physical and Biological Soil and Water Conservation

Unit
No List of Activities Unit Plan Total price
price
Budget Plan for Physical and Biological
A
Soil and Water Conservation
1 Gully Treatments and protection ha 1.5 1250 1,875.00
2 stone bund construction km 2 1250 2,500.00
3 soil bund construction km 3 1250 3,750.00
4 Area closure ha 1 100 100.00
sub total 8,225.00
Seedling Production and Nursery
B
establishments
1 Nursery Establishments number 1 10000 10,000.00
2 seedling Production number 2,000 2 4,000.00
3 Planting seedlings in the project area number 2,000 1.25 2,500.00
Affordable supply of seedlings to the
4 number 2,000 2.5 5,000.00
local farmer
C Compost preparation m3 50 150 7,500.00
sub total 29,000.00
Total 37,225

19
16. Machinery supply, work experience and educational background
16.1. Machinery and equipment supply situation
It is known that tractor is the most important type of machinery for crop production. As a result of,
the project has planned to purchase 1 /one/ tractors with full accessories for facilitating the crop
production. The project also plans to purchase 1/one/ cars personnel service vehicles to facilitate the
project works.

Table 9: Price estimate of machinery and equipment required for the project

List of supply of vehicles and

unit quantity unit price Total Price Remark
machinery
1 Machinery and spare parts no
1.1 Tractor(MF 4654WD) no 1 1200000 1200000
1.2 Spare parts no 1 25000 25000
1.3 Sprayer(knapsack 20liters) no 1 800 800
sub total no 1225800
2 Vehicle no
2.2 Personnel Service no 1 860000 860000
sub total no 860000
Total no 2,085,800.00

16.2. Work Experience

This project owner has experience in agricultural and health and other investment sectors.The
organization has also participated in cereal crop value addition and exporting of cereal crops. In the
last cropping season, has provided various support to the community in which it invests. This
organization has very known maize production in East Gojjam zone.

16.3. Educational Background

Even though the investor(Quarit plc) has degree in pharmacy and accounting study, The PLC will
plan to recruit the BSC degree professional on his project sites. This will create permanent job
opportunities for jobless youths. These are;

 Manager (Bsc in Agronomy)

 Agronomist (Bsc in Agronomy)
 Accountants (Bsc in Accounting)

20
17. Production Process, Project Program, Input Supply and Product
Type
17.1. Project production process
 Cleansing
 Divide the field into blocks
 Field preparation (repeated plowing)
 Provide input
 Sowing
 Debugging
 Pest and disease control
 Harvesting
 Crushing
 Transportation and storage

17.2. Provision of project inputs

The main inputs provide timely quality inputs for the production of high quality and productive
cotton, oilseeds, pulses, and cane crops such as cotton, sesame, sunflower soy, wheat and sorghum in
accordance with expert advice and research. Thus, the type and amount of inputs required for
production are shown in Table 10 below. The estimated cost of the supplement of different inputs will
be 403,336.87 birr.

21
 Table 10: List of Inputs and supplies

unit Area in
No List of required inputs unit quantity price ha Total price
1 oil seed
1.1 Sesame quintal 0.7 7000 20 98000
1.2 Cotton quintal 0.6 7000 0 0
1.3 Wool/Sun flower quintal 0.7 3400 0 0
Sub total 98000
2 Cereals
2.1 Soybeans quintal 0.8 3000 26 62400
2.2 Masho/Mungbean quintal 1.5 4500 12 81000
Sub total 143400
NPSB quintal 0.25 1810.35 58 26250.075
5 Artificial Fertilizers UREA quintal 0.25 1757.71 58 25486.795
Sub total 51736.87
Chemicals
Herbicides litter/ha 2 350 58 40600
6 pesticides litter/ha 2 600 58 69600
Sub total 4 950 110200

Total 403,336.87

17.3. The production program of the project/Land Use of the Project

The company's production capacity is 75% in the first year and 100% in the second year.

17.4. Land Utilization Plan of the Project

The target area for this crop development project is 60 hectares, which is divided as follows:

 For camp construction facilities : 1.3 hectare of land for store,office,shelter,recreational

clubs and for fence constructions
 For oil seeds :20 hectares of land for sesame crops
 For cereal crops ፡38 hectare land for soybeans and Masho/Mungbean production
 For internal road construction, the remaining 0.7ha is used for internal road construction and
canals, etc.

22
17.5. The type of product that the project produces
17.5.1. Carrying out crop development
The land is conducive to crop development (sesame, cotton, wool,soybeans,masho/Mung bean and
sorghum). The project, as well as the method of production, will share knowledge with the local
community by raising awareness among the farmers.

18. Crop development and environmental sustainability

18.1. Sesame
The ecological environment is conducive to sesame crops, so it is a high-yielding crop that is widely
grown by local farmers and all the farmers in the woreda. Sesame is a major source of oil and is a raw
material for various industries, which has led to a rapid increase in market demand in recent years.

18.2. Soybean

Soybeans are the world’s most popular crop of protein and fat but they are rare in Africa. Soybeans
are high in nutrients and it has high protein content, soybeans are higher in fiber and rich in calcium
and magnesium. Soybeans have high biological value and contain all the essential amino acids.
Soybeans can be grown at an altitude of 520-1900 meters above sea level, with a suitable temperature
of 20 to 32 degrees Celsius but b20 to 25 degrees Celsius is more suitable during the growing
seasons. Soybeans require an average rainfall of 460-1500mm per year to produce and they can grow
in a variety of soils if sown in soybeans, excess water should be added and compost prepared.

18.3.Mung Bean/Masho/Production
Mung bean (Vigna radiata L.) commonly known as green gram is an ancient and well-known pulse
crop that belongs to the family Papilionoideae and originated from South East Asia (Mogotsi, 2006).
Mung beans are mainly grown for human food, in the form of boiled dry beans, stew, flour, sprouts,
and immature pods as a vegetable. The dry beans are sometimes used for animal food, mainly poultry
when they are either roasted or boiled while their biomass is used as fodder (Winch, 2006). Thus, it
has great value as food and fodder. It is a cheap source of protein for human consumption.
Moreover, the crop can be successfully grown on marginal lands where other crops perform poorly
and are most suitable for green manure use (Dainavizadeh & Mehranzadeh, 2013). Mung bean is a
recent introduction to Ethiopia pulse production and it is mostly produced by small-scale farmers of
the Amhara National Region. Particularly, the crop is grown in some areas of North Shewa, Debere
Sina, Qallu, and South Wollo as well as in some districts of Benishangul Gumuz Regional State
23
(CSA, 2018). The crop is also produced in moisture stress areas of the country such as Gofa, Konso,
South Omo Zone, and Konta special district (Asrate et al., 2012; Wedajo, 2015)

19. The duration and capacity of the project

According to the directive issued by the regional land bureau, the roof will be up to 30 years old and
will be calculated from the date of approval by the regional land bureaue.

20. Manpower Organization

The project will have its own organizational set up (structure) to run the production, finance &
administration and marketing of the farm. The organizational chart, shall serve as a fundamental
guide to the reporting responsibilities of the senior officers and the work force. The proposed
organizational structure for startup of the project is as shown below.

24
 General
Manager

Secretary

Production& Admin&
Technical Finance Marketing &Research
department Dept.

Technical Farm Administrative

Finance
Division
Division Division division

Store

Supervisor Account
Tractor ants
Operator Guard

Agronomist
HRM
Drivers

Pest &Disease
Control Cashier
Expert

Sales Purchasing
person

Research
disseminatio
nn

Fig 1: The structure of the organization

25
 21. Manpower, training needs and other administrative expenses
21.1. Manpower Requirement Cost/Planned Recruitment of the employees
This project will recruit both temporal and permanent employees based on the rules states on
proclamation number 12/2012.The total number of manpower required for the project is 6 permanent
5 temporary and varies from season to season, with an average of 600 causal laborers /workers. The
owner will hire professional and experienced agronomist project manager with first degree in
agronomy. Totally this project will hire 611 employees with full capacity operations and the total
cost of manpower per year is estimated at 713,400 per year. The owner will hire a professional
and experienced agronomist project manager with a first degree in agronomy,1 farm
supervisor with a first degree in agronomy/plant science,1accountant,1 Tractor
operator/Driver, and 1 Farm Guards are among the permanent employees.

Table 11: Man power Requirements for the Project

Type of Position no qualification monthly Total Annual
Recruitment required salary salary

General Manager 1 BSC in agronomy or MA in 7,000.00 84,000.00

managements
Farm Supervisor 1 BSC in Agronomy/Plant Science 5,000.00 60,000.00
Permanent Workers

Agronomist 1 BSC in Agronomy/Plant Science 5,000.00 60,000.00

Accountants 1 BA in Accounting 4,500.00
/Finance/Economics or related 54,000.00
Guards 1 Grade 8 and above 2,000.00 24,000.00
Drivers/Tractor operators 1 Grade 12 and 3rd level driving 3,500.00
license
42,000.00
Permanent Total 6 324,000.00
Farm assistance 1 diploma in crop production 2,000.00 24,000.00
Temporal Workers

secretary/Cashier 1 diploma in IT/Secretary science 2,000.00 24,000.00

sales clerk 1 diploma in Accounting 2,000.00 24,000.00
store keeper 1 Diploma in supply managements 2,000.00 24,000.00
messengers 1 grade 12 complete 1,500.00 18,000.00
Daily Laborers 600 100 60,000.00 240,000.00
Total Temporal 605 354,000.00
Total permanent and 611 678,000.00
Temporal
Benefit Package (10%) 35,400.00
Grand Total 713,400

26
22. Office for office supplies and stationery
It costs 99,083 birr for office and stationery and the details are described as Table 12 below

Table 12፡Office and office costs and stationery costs

unit
No List of item unit quantity price total price
A Office furniture
1 Table number 3 1200 3600
2 Chair number 3 2000 6000
3 Guard Bed number 1 2500 2500
4 computer number 3 15600 46800
5 Shelf number 3 8700 26100
6 File Folder number 3 3500 10500
sub Total 95,500.00
B Stationery
1 pen paco 2 450 452
2 note book derzen 2 2750 2752
3 Paper paco 2 260 262
4 carbon paco 2 115 117
sub total 3,583.00
Total 99,083.00

23. Other miscellaneous service costs

It costs 109,000 birr only for the cost of various services and the details are described as Table 13
below

Table 13፡ Statement of payment for various project service costs

No Type of device Total price

1 Project proposal preparation fee 15000
Environmental impact assessment service
2 15000
fee
3 Advertising service fee 4000
4 For License Fees 10000
5 Phone and fax 5,000.00
6 Oil and grease 5,000.00
7 Naphtha 15,000.00
8 Repair and spare parts 10,000.00
9 Depreciation 10,000.00
10 Property Insurance 10,000.00
11 Pre-production costs 10,900.00
Total 109,900.00

27
24. Expenditure summary program required for the implementation of
the project
The total cost of this crop development (sesames and soybean) project is estimated to be birr
16,377,380.87 when the project starts at full operation..
Table 14፡ Summary of total initial investment Cost

No List of Expense Activities unit Price Remarks

1 Construction of Flour processing Factory 12,132,000.00

New technology transfer to the local community and
2 learn from the process 148,225.00
Support local farmers with the construction of
3 various social services to the community 75,500.00
Budget required to organized local farmers in out
4 grower Schemes 38,900.00
Providing nutritious food, health, transportation,
5 shelter and clean drinking water to staff 183,011.00
Staff housing, leisure, warehouse office, guard house
6 construction and equipment costs 351,000.00
Budget Plan for Physical and Biological Soil and
7 Water Conservation 37,225.00
Budget estimate of machinery and equipment
2,085,800.00
8 required for the project
9 Required Budget for Various of inputs Purchase 403,336.87
10 Required Manpower budget of the project 713,400.00
11 Budget required for office and stationery supplies 99,083.00
12 Miscellaneous Costs 109,900.00
Total 16,377,380.87

25. Action Plan

The various stages of the project are presented in the action plan and the life cycle of the project and
its implementation are detailed in the following Table 15 below.

28
 Table 15፡ Project Annual Activity Action Plan

Fiscal Year 2014

ma ap ma j ju ag se oc no de fe
No Project Annual Activity Action Plan r r y u l u p t v c jan b
List of Activities
1 Pre-construction
1.1 Preparing project proposal
1.2 Contract with the relevant body
1.3 Land handover
1.4 Finding a Source of Finance
2 Project construction
Creating a comfortable work environment for
employees or providing housing, entertainment,
office and warehouse construction,
accommodation, etc.
2.1
Funding development projects that provide social
2.2 services to the local community
Supply of machinery and equipment (tractor
2.3 rental)
2.4 Supply of office furniture
2.5 Meet different expenses
2.6 Paying salaries to employees of the organization
3 Product Chapter
3.1 Clearing
3.2 Divide the field by block
3.3 Providing input
3.4 Sowing
3.5 Debugging
3.6 Protecting crops from pests and diseases
3.7 Harvesting
3.8 To fall/crushing
3.9 Marketing
3.1 Organize local farmers with outsourcing and
0 technology transfer
Provide training to local farmers organized by
3.1 Out Grower
3.1 Paying salaries to employees of the organization
Working on natural resources and supporting the
3.1 community in watershed development

29
26. Source Funds
The total budget required for this project will be Birr 16,377,380.87 from this total estimated budget,
30% of which will be covered by the project owner and 70% by loan from the Bank.

S.N Types Amount in Birr Percent

1 Capital 16,377,380.87 100
1.1 Equity 4,913,214.26 30
1.2 Bank loan 11,464,166.61 70

27. The loan repayment of the project is expressed in interest, annual

and monetary terms
Table 16፡ describes the project loan repayment year and amount

year principal 11.5% Total outstanding

interest Payment(principal+interest)

0 0 0 0 11,464,166.61
1 1,042,196.96 119,852.65 1,162,049.62 10,302,116.99
2 936,556.09 107,703.95 1,044,260.04 9,257,856.95
3 841,623.36 96,786.69 938,410.05 8,319,446.91
4 756,313.36 86,976.04 843,289.39 7,476,157.52
5 679,650.68 78,159.83 757,810.51 6,718,347.00
6 610,758.82 70,237.26 680,996.08 6,037,350.92
7 548,850.08 63,117.76 611,967.84 5,425,383.08
8 493,216.64 56,719.91 549,936.56 4,875,446.52
9 443,222.41 50,970.58 494,192.99 4,381,253.53
10 398,295.78 45,804.01 444,099.79 3,937,153.74
11 393,715.37 45,277.27 438,992.64 0.00

30
28. Summary
As mentioned above, this project is based on a total investment capital of Birr 16,377,380.87. The
government receives an average of 747,421.2071annually from the first year of this project.
Therefore, this project will fulfill its national duty not only to the individual but also to increase
government revenue. Overall, the project is so lucrative that it can be extended depending on the
market situation and market demand in ten years or by considering other options. According to the
project feasibility study, the NET PRESENT VALUE (NPV) is 20,558,609.13 ,theINTERNAL
RATE OF RETURN (IRR) is 36% and the DISCOUNTED PAYBACK PERIOD (DPBP) is 3 years.
Based on these project feasibility assessments, it indicates that the project is a viable and acceptable
sector in the area where the project will be implemented.

31
29. Annexes for Financial Analysis
Annex 1: Projects Annual Production Amounts

Projects production Years Projects production Years

Yearly production amount
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
No

1 Oil seeds

1.1 Sesame
20 20 20 20 20 20 20 20 20 20 20
total area
productivity per ha
5 5.05 5.1005 5.1515 5.203 5.255 5.308 5.3607 5.4143 5.4684 5.52

Total production in Qt 100 101 102.01 103.03 104.1 105.1 106.2 107.21 108.29 109.37 110

2 Cereals
2.1 Soybeans

total area 26 26 26 26 26 26 26 26 26 26 26
productivity per ha
18 18.18 18.362 18.545 18.73 18.92 19.11 19.298 19.491 19.686 19.9
Total production in Qt
468 472.7 477.41 482.18 487 491.9 496.8 501.76 506.78 511.84 517
Grand Total 568 573.7 579.42 585.21 591.1 597 602.9 608.97 615.06 621.21 627

32
Annex 2: Project Annual Sales Income

yearly income Projects production years

sources 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
No
1 Oil Seed
1.1 Sesame
Total production in
100 101 102 103 104 105 106 107 108 109 441
Qt
price per quintal 7000 7070 7777 8555 9410 10351 11386 12525 13777 15155 16671
total income 700000 714070 793332 881392 979226 1087920 1208679 1342843 1491898 1657499 7351774
2 Cereals
2.1 Soybeans
Total production in
Qt 468 473 477 482 487 492 497 502 507 512 882
price per quintal 4500 4545 5000 5499 6049 6654 7320 8052 8857 9743 10717
total income 2106000 2148331 2386795 2651730 2946072 3273086 3636398 4040038 4488482 4986704 9452281

income from Flour

(factory products)
3
total working days
300 300 300 300 300 300 300
daily production
amount 500 550 605 666 732 805 886
price per quintal 3500 3535 3570 3606 3642 3679 3715
Total income 0 0 525000000 583275000 648018525 719948581 799862874 888647653 987287542
Grand Total 2806000 2862401 3180127 3533121 3925298 4361006 4845077 5382881 5980381 6644203 16804056

Annex 3: Project Costs

33
 years years
Descriptions
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
A. Direct Cost
Raw material cost 403337 423504 444679 466913 490258 514771 540510 567535 595912 625708 656993
Factory cost 12132000
Sub Total 403337 423504 12576679 466913 490258 514771 540510 567535 595912 625708 656993
B. Indirect Cost
Salary and wage 713400 749070 786524 825850 867142 910499 956024 1003825 1054017 1106718 1162053
Maintenance Cost 10000 10500 11025 11576 12155 12763 13401 14071 14775 15513 16289
Depreciation cost 10000 10500 11025 11576 12155 12763 13401 14071 14775
Property insurance 10000 10500 11025 11576 12155 12763 13401 14071 14775 15513 16289
Utility 25000 26250 27563 28941 30388 31907 33502 35178 36936 38783 40722
Promotion 4000 4200 4410 4631 4862 5105 5360 5628 5910 6205 6516
pre-production cost 10900 11445 12017 12618 13249 13911 14607 15337 16104 16909 17755
Sub Total 773300 811965 862563 905691 950976 998525 1048451 1100874 1155917 1213713 1274399
Total Cost 1176637 1235469 13439242 1372604 1441234 1513296 1588961 1668409 1751830 1839421 1931392

Annex 4: Profit and Loss Analysis

34
 years
Descriptions
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
sales revenue 2806000 2862401 3180127 3533121 3925298 4361006 4845077 5382881 5980381 6644203 16804056

Total costs 1176637 1235469 13439242 1372604 1441234 1513296 1588961 1668409 1751830 1839421 1931392

minus total costs 1629363 1626932 -10259115 2160517 2484063 2847709 3256116 3714472 4228551 4804782 14872664

total interest 119853 107704 96787 86976 78160 70237 63118 56720 50971 45804 45277

minus interest 1509510 1519228 -10355902 2073541 2405903 2777472 3192999 3657752 4177581 4758978 14827386

depreciations 0 0 10000 10500 11025 11576 12155 12763 13401 14071 14775
minus
1509510 1519228 -10365902 2063041 2394878 2765896 3180843 3644989 4164180 4744907 14812612
Depreciation
Tax(30%) -3109771 618912 718463 829769 954253 1093497 1249254 1423472 4443784

Minus Tax: (Net

1509510 1519228 -7256131 1444129 1676415 1936127 2226590 2551492 2914926 3321435 10368828
profit)

Annex 5: Discount Cash flows Analysis

35
 years
Descriptions
2015 2016 2017 2018 2019
Cash inflows
Net Sales Revenue 2,806,000.00 2,862,400.60 3,180,127.07 3,533,121.17 3,925,297.62
Total Cash inflows 2,806,000.00 2,862,400.60 3,180,127.07 3,533,121.17 3,925,297.62
Cash OUTFLOWS
Operating cost 773,300.00 811,965.00 862,563.25 905,691.41 950,975.98
Tax Revenue - - (3,109,770.53) 618,912.26 718,463.50
TOTAL OUTFLOWS 773,300.00 811,965.00 (2,247,207.28) 1,524,603.68 1,669,439.48
NET CASH FLOW 2,032,700.00 2,050,435.60 5,427,334.35 2,008,517.49 2,255,858.14

years
Descriptions
2020 2021 2022 2023 2024 2025
Cash inflows
Net Sales Revenue 4,361,005.66 4,845,077.28 5,382,880.86 5,980,380.64 6,644,202.89 16,804,055.70
Total Cash inflows 4,361,005.66 4,845,077.28 5,382,880.86 5,980,380.64 6,644,202.89 16,804,055.70
Cash OUTFLOWS
Operating cost 998,524.78 1,048,451.02 1,100,873.57 1,155,917.25 1,213,713.11 1,274,398.77
Tax Revenue 829,768.78 954,253.04 1,093,496.72 1,249,253.88 1,423,472.07 4,443,783.55
TOTAL OUTFLOWS 1,828,293.57 2,002,704.06 2,194,370.30 2,405,171.13 2,637,185.18 5,718,182.32
NET CASH FLOW 2,532,712.09 2,842,373.23 3,188,510.57 3,575,209.51 4,007,017.71 11,085,873.37
Net Present Value (NPV) 257,364,708.83
Internal Rate of Returns (IRR) 36.00%
Discounted Pay Back Period (DPBP) 3 years

36