Best Business Plan PDF

FEASIBILITY STUDY 2018
BAKERY PROJECT
FEASIBILITY STUDY
PROPOSED LOCATION:-ADDIS ABABA CITY ADMINISTRATION

ARADA SUB-CITY; WOR.-05; H.N.083
CONTACT PERSON:-
PREPARED BY: BIMAS CONSULTING SERVICES PLC
Tel: +251-911-547-774
+251-936-690-978
E-mail: bimasconsult@gmail.com
Website: www.bimasconsult-et.com
SEPTEMBER, 2018
ADDIS ABABA
BEDILU KASSAHUN BAKERY Page 1

Table of Content
I. Executive Summery ………………………………………….…..
II. Background Information ……………………………...…………
III. Market Analysis..……………………………………………..….
IV. Production Plan &Technical Analysis………………………..
V. Organization and Management …………………………….....
VI. Financial Analysis……………………………………………….
VII. Annexes…………………………………..………………………
BEDILUKASSAHUNBAKERY Page 2
I. EXECUTIVE SUMMARY
Awareness of high quality baked goods is on the rise. Good bread is a rare combination of
nutrition, convenience, and luxury. Today's consumer has less time to create wholesome,
handmade bread, but increasingly appreciates the nutritional and sensory benefits it provides.
Good bread provides fiber and carbohydrates in a convenient, low fat form that is portable and
delicious. Good bread never goes out of style.
In this regard, the envisaged project is a newly established Ethiopian owned business founded
by Mr. Bedilu Kassahun Alemu, who has been engaged in hotel services business for more
than a decade. The new bakery project has intended to produce and sale bread and pastry
products of high quality ingredients using modern production techniques. In addition the
company’s objective is to generate income for the company by participating actively in the
business environment with creating employment opportunities for surrounding community.
Currently, the project promoter has finalized researching the market and has concluded that the
intended business is an attractive investment. The planned production capacity of the project is
assumed initially based on two shifts with capacity utilization rate at 70%, 80%, 90%, and 100%
during 1st, 2nd, 3rd, and 4th-10th years respectively. Accordingly, it will have a total production
capacity for each item per annum as follows.
Although there are many established competitors with in the vicinity where the underlying
project has planned to be located; it will possess an advantage that lies with the high quality of
its products due to specialization and artisan manufacturing. The main marketing focus will be
of all community inclusive and having an eye catching sign, the scent of fresh bread wafting out
of the storefront, and periodic printed advertisements.
After establishing the operation, the company will explore the possibility of making takeout and
delivering wholesale bread and baked goods to area restaurants and specialty retailers will also
be considered. Hence, the market for the products under consideration is projected to grow
rapidly in the coming years. The products will be supplied to high demanding domestic market
and also will improve the supply of breads to and improve the lives of local community through
employment creation.
Regarding project financing, the total investment cost required for the project is estimated to be
Birr 6,805,818, which intended to cover investment costs of working premises, machinery,
vehicles, working capital requirements, office furniture & equipment and raw material. Out of
the total estimated initial investment costs, approximately, Birr 4,646,818 will be expected from
owners’ equity contribution and Birr 2,159,818 for Purchase of Baking Machine with
accessories will be sought from external source as bank lease financing loan for which It is
projected that principal and interest on the loan will be paid over five years with annual interest
rate of 11 .5%.
Furthermore, the financial analysis result, the business will generate positive net profit through entire
years of operations.
179,214 2,696,982 3,114,754 3,510,292 5,087,874
During 1st, 2nd, 3rd, 4th and 5th years respectively. Detail is annexed. On the other hand, projected cash flow
of the business shows that the project would generate positive net cash flows throughout the operation
years. The net cash in-flow for considered life span (i.e.1 st year to 5th year is indicated below, whereas
Details are shown in annex.
422,444.33 4,801,507 10,167,307 18,017,833 28,702,779 43,097,107
Furthermore, the investment cost and income statement projection are used to project the pay-back
period. The project’s initial investment will be fully recovered within 3 years. Whereas, Based on the
cash flow statement, the calculated IRR before and After Tax as well as the net present value (NPV)
discounted at 11.5% are shown below.
IRR After Tax 32%
IRR Before Tax 49%
NPV @ 11.5% inter. rate 4,185,223
Finally, Introduction and uses of this new producing technology has reliable positive impacts on
the overall development of the country in many aspects. In this regard, the company with its
initial production capacity intended to move forward, so that;
 It creates employment opportunity for about 28 permanent employees;

 It generates income to the promoters and enhances self-employment;
 The business contributes its best role in the socio-economic development;
 It generates revenue to the government in the form of income tax;
II. BACKGROUND INFORMATION

2.1 Establishment
 Project Name...................................Bedilu Kassahun Bakery
 Address.............................................Addis Ababa City Administration
Arada Seb-City, Woreda-05, H.No. 083
 Type of Business...............................Food Processing and Manufacturing
 Legal form of Business.....................Sole proprietorship
 Status of Business.............................New Project;
 TIN Certificate No...........................0005957543
 Trade Registration No:...................AA/AR/05/1/0000708/2005; DD:22/5/2005 E.C
 TradeLicense No..............................Under Process
 Required Initial Investment.............ETB 6,808,818
2.2 Project Ownership
The business is a newly established Ethiopian owned business founded by Mr. BEDILU KASSAHUN
ALEMU having the main focuses on bakery of breads and pastries, The business promoters is at the
middle age of life, with having a good character and well appreciated personality among the society.
Besides, he has been engaged in hotel services business for more than a decade. The new bakery
project has intended to produce and sale bread and pastry products of high quality ingredients using
modern production techniques. In addition the company’s objective is to generate income for the
company by participating actively in the business environment with creating employment
opportunities for surrounding community. He is educated and has acquired pertinent working
experiences of undertaking quality hospitality services and capable to implement proper business
management.
2.3 BUSINESSES OBJECTIVES

The major objectives of the business are:
 To fully engage in the production of quality food items for commercial purposes.
 To embark on a sustainable plan to achieve a reliable source of products for the local, market,
To be leader in the supply of quality breads and pastries, using modern production techniques
and technology and efficient management and distribution channels.
To contribute in the food sector development
Producing breads and pastries using modern production techniques and technology through
creation of employment.
To generate sustainable income for the company in order to expand the operation and other
related development activities in the country.
2.4. VISION & STRATEGY
Become one of best quality food producers with sustainable profitability.

This will be through performing as a multifaceted business committed in
providing maximum customer satisfaction.
To achieve this vision, it has to be resolved upon a set of strategies and executing these strategies by
translating directly into the ability to serve the business vision and objectives. The company’s vision is to be
realized through a team of professionals who have extensive work experience in the industry.
2.5. COMPANY VALUES AND CULTURE
The following are components of the business values and cultures.

The company communicates openly and honestly.
Unethical and dishonest practices have no place in the business
The company recognizes and rewards performance
The company believes that staff development is integral part of its success
The company strongly believes that teams, not individuals are the essential unit of the
organization for achieving high performance and accelerating growth.
The company believes in societal support and community development, hence, all its personnel
will obey to this core value.
2.6 KEY SUCCESSES

 Macro level Successes
 Access to credit provision at lower interest rate as compared to the business’s ROI
 Attractive investment policy and other packages;
 Secured peace and stability throughout the country;
 Continuous increment in household income and associated expenditure patterns;
 Sector Level key Successes

 Availability of the required infrastructure;
 Availability of distribution outlets;
 Government incentive and encouragement.
 Firm level successes factors
 Well trained &motivated personnel;

 Long years of pertinent work experience of the owners/promoters;
 Well established business with plenty of good-will as well as social acceptances that the
promoters earned so far.
 Availability of raw materials relatively with low-cost and nearest locations
2.7 FUNDING REQUIRMENT
The envisaged business requires total investment of ETB 6,805,818. Out of this, the total equity
contribution is expected to ETB 990,675.94 including the initial owners’ equity. The remaining
investment cost about ETB 4,646,000, is sought to be found from external source as bank lease financing,
which break-down is, partly for machinery import, equipment and vehicle purchase. On the other hand,
the remaining loan amount will be used to fulfill working capital requirement in connection to planned
production.
2.8 PRODUCTS DESCRIPTION
Products of the envisaged bread bakery will stand out from the competition due to their
uniqueness and outstanding quality. Most of the breads are unique in style, including Sourdough,
and traditional Ethiopian whole wheat bread, and flavored pastries. These breads are made by the
sourdough method which uses no added yeast. This method imparts a rich flavor, which can be
tangy or mild, as well as a toothsome inner crumb and a crackly crust. By using this method, a
skilled baker can create truly delicious breads without added fats or sugars, making many of
products 100% fat free. Sourdough breads also have an extended shelf life, remaining fresh for
days without the use of preservatives.
The project will also offer specialty breads, which will be made in the sourdough way with the
addition of such luxurious ingredients as pastry with fresh ground pepper and dried spices with
roasted green fruits. Spent Grain Bread, made with barley leftover from beer brewing, is another
unique product that BEDILU KASSAHUN ALEMU bakery will offer. Two varieties of product
style will be offered fresh daily, a high demand product that is available nowhere else in the area.
The bakery project will also produce White and Wheat Sandwich Breads with soft crust and a
tender crumb for traditional Ethiopian Style food. As the needs of the customer change, so will
the lineup of its products. The bakery equipment is chosen with versatility in mind.
III. MARKET ANALYSIS

3.1 PAST SUPPLY AND TREND ANALYSIS
3.1.1 Bread Production and supply
The bakery business in Addis Ababa comprises a large number of players that can be segmented on the
basis of their production capacity and a type of services they provide. The major partakers are those
considering the industry’s high fixed cost requirement, profitability is largely dependent on the
company’s ability to increase volumes of sales. The shortage of quality wheat bread in the domestic and
regional market is making the sector challenging and it adversely affecting the operations and profitability
of bakeries.
According to CSA, 2013/14 report in Ethiopia there are 217 bakeries making same products of which
57% are held in sole ownership, 30% are PLC and 5% are share companies as shown in the following
figure.
FIGURE 1: Bakery Businesses
Co-operatives, Others, 2% Public, 1%

2%
PLC, 30%
Individual
ownership, 57%
share company,
5%
Partnership, 4%
Source: CSA, 2016
During the years 2007 – 2016, the country consumed an average of 1,375,380 tons of bread
products out of which the Addis Ababa market contributed an average of 64%. The table below
presents the total supply of breads in Ethiopia for the years 2007 to 2016 and the share Addis
Ababa suppliers of production in the total supply.
TABLE 3: TOTAL SUPPLY OF Bread 2007-2016
Year Total Supply Supply in A.A

2007 97,220 62,221
2008 104,512 66,888
2009 112,350 71,904
2010 120,776 77,297
2011 129,834 83,094
2012 139,572 89,326
2013 150,040 96,026
2014 161,293 103,228
2015 173,390 110,970
2016 186,394 119,292
Total Supply 1,375,381 880,244
3.1.2 General Demand Analysis
In the process of demand analysis and estimation for the product under consideration, a thorough
analysis of the set of factors that influence the marketing forces are essentially important and
necessary. The first step in the process involves the analysis of the underlying characteristics of the
target markets and their general macroeconomic environmental aspects.
Accordingly, the demand for Flours is a derived demand, which depends directly on the
performance of its major end users and other general factors, which commonly affects the products.
The following factors are identified to be determent of the demand position of the products under
consideration.
 Performance of the national economy;
 Rate of population growth and
 Urbanization
Accordingly, a throughout assessment of current status and future prospect of these factors is
done as follows.
BEDILUKASSAHUNBAKERY Page
A. PERFORMANCE OF THE NATIONAL ECONOMY

Among the factors that influence the demand for Flours, one of the critical factors is identified to
be economic growth leading to construction and infrastructure development. Growth in Flours
products consumption has been correlated to economic growth in the developing world.
In Ethiopia as a result of the appropriate policy adopted by the government in recent years the
country’s economy is on a higher growth trajectory. According to the Ministry of Finance and
Economic Development (MOFED), the GDP of the country has registered an average annual
growth rate of 10.9 % during the last 11 years ending in 2013/14 which places Ethiopia among
the top performing economies in Sub-Saharan Africa. The agriculture, industry and service
sectors’ annual average growth was 9.0%, 13.8 % and 12.2% respectively.
According to MOFED, in the last four (2011-2014) Growth and Transformation Plan (GTP)
implementation period, the Ethiopian economy has also registered robust growth. In this period,
the GDP annual average growth rate was 10.1%. Agriculture, Industry and Service sectors have
6.6 %, 20.0%, and 10.7% annual average growth rates respectively.
The economic growth (GDP at constant basic price) for 2014 is estimated to be 10.3 %. As per
MOFED’s estimates, annual growth rates of the major sectors, i.e. Agriculture, industry and
service were 5.4 %, 21.2 % and 11.9%; respectively and their shares out of the total GDP were
about 40%, 14% and 46 %, respectively. The registered economic growth (10.3%) was obviously
based on the contribution of wide range of economic activities. The contribution of these
activities by major industrial classification shows that Agriculture; Industry and service
industries have contributed 2.3 %, 2.7% and 5.3 % respectively.
The following table depicts the detail value added as percentage of GDP in each sub sectors for
the years 2017/18 to 2020/21.
PERCENTAGE SHARE OF ETHIOPIA’S GDP IN EACH SUB-SECTOR
Industry\Year 2017 /18 2018 /19 2019 /20 2020 /21
Agriculture, Hunting and Forestry 44.6 43.1 42.0 40.1

Crop 30.9 29.8 29.4 28.4
Animal Farming and Hunting 9.6 9.3 8.9 8.3
Forestry 4.1 3.9 3.7 3.5
Fishing 0.0 0.1 0.1 0.1
Mining and Quarrying 1.4 1.5 1.4 1.3
Manufacturing 4.0 4.1 4.4 4.4

Large and Medium Scale 2.6 2.8 3.1 3.2
Manufacturing 1.4 1.3 1.2 1.2

Small Scale and Cottage Industries 1.0 1.1 1.1 1.1
Electricity and Water 4.0 4.9 6.1 7.6
Construction 14.9 15.4 15.5 16.1
Whole Sale and Retail Trade Hotels and 3.6 3.6 3.9 4.5
Restaurants Transport and Communications 4.2 4.3 4.5 4.7
Financial Intermediation 2.5 2.9 2.4 2.6
Real Estate, Renting and Business Activities 9.3 8.8 8.4 7.9
Public Administration and Defense 5.4 5.1 5.0 4.7
Education 2.3 2.2 2.2 2.2
Health and Social Work 0.9 0.9 0.9 0.9
Other Community , Social & Personal Services 2.3 2.4 2.6 2.4
Private Households with Employed Persons 0.2 0.3 0.2 0.2
Total 100.7 100.6 100.6 100.7
Source: MoFED
Positive performance of the Ethiopian economy is expected to continue in the future. According
to the government’s “Growth and Transformation Plan” during the period 2016 – 2020 the GDP
of the country is expected to grow at an average annual growth rate of 11%. As a result, demand
for the products under consideration is also reasonably expected to increase as economic
expansion continues which in turn will increase the demand for Flours.
B. POPULATION GROWTH
Population is a key driver of good and service demand. According to CSA, the population of Ethiopia
grew at an average annual rate of 2.6 percent between 1994 and 2007. As shown below, the number of
population is expected to be 129 million in year 2030 from the current number of 85.3 million. From the
projection, the number of population in year 2030 will be doubled of number of population which was in
year 1995.
FIGURE 2: ETHIOPIA: POPULATION PROJECTION, 1995-2030
NO. of population
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
-
19952000200520102015202020252030
If population increases then there will be high demand of goods and services. As the population increases,
the demand for the residential houses will also increase which in turn increases the demand for the
products under consideration.
C. URBANIZATION
As urbanization indicate people’s living standard, it is a major factor for a higher demand of goods and
services. In Ethiopia, urban population growth rate is projected to increase by 4% annually, the major
contributing factor being the rural-urban migration. By the end of the 2009/10, the total urban population
reached to 14.4 million, amounting 17.2% from the level of 11.7 million by the end of 2004/05.
Addis Ababa, Dire Dawa, Harar, Nazareth, Gondar, Dessie, Mekele, Bahir Dar Jimma and Hawasa are
assumed to be major urban areas of the country. As Addis Ababa is a capital city of Ethiopia, the city
holds the highest number of population followed by Dire Dawa and Hawassa. The table below explains
the number of population in major urban areas of the country.
URBAN POPULATION NUMBER
Towns Number Of Population in Town
Addis Ababa 4,041,002
Dire Dawa 387,000
Hawassa 328,875
Mekele 273,601
Bahirdar 240,422
Nazareth 127,842
Gondar 112,249
Desse 97,314
Jimma 88,867
Total 4,697,172
Sources: CSA, 2007
Addis Ababa holds 65% share of the total population, 8% of the country lives in Diredewa and 7% of the
population lives in Hawassa. And Jimma holds the least number of populations of the country with 2%.
Consequently, the demand for goods and services is assumed to grow with the average growth rate of
urbanization.
3.2.1.2 Bread Demand
The markets for breads are derived from the different factors, such as
 increasing number of population,

 increase in household income & life style,
 Number of commercial and service rendering sectors, hospitality service providers, universities
and hospitals as well as establishment of other business organizations creates a demand.
3.3. Target Markets and Strategy
3.3.1 Target Market
The markets for business are
 Households
 Cafes
 Hospitality service providers,
 universities and hospitals as well as establishment of other business organization
3.3.2 Marketing Strategies
A. PRODUCTS QUALITY
Product quality is one of the basic and most important marketing mixes that affect the success of
a the business. Product quality has two dimensions, i.e., level and consistency. Level means the
producer must first choose a quality level that will be acceptable in the target market and in a
level that comply with the quality of competing products. Consistency refers to the consistent
delivering of established quality through strict quality control measures.
The products by the envisaged bakery will have;
 Good quality,
 Fulfill the standard criteria set for product commercialization,
 Brand will be developed to create independent identity and image.
 Brand positioning statements will also be developed
B. Pricing
Pricing a product is an important and critical activity since it is the major factor in determining
revenue. If a lower price is fixed, it will affect the profitability of the company, and if a higher
price is fixed, the product will not be able to stand in market competition and may be forced out
of the market.
Therefore, pricing strategy will be:
Affordable pricing.
continuously monitoring competitors’ price
Price revision is going to be performed when the need arises, and
The right price has to be fixed.
C. Channels of Distribution
The following are the main alternative distribution channels commonly used by producers to reach
consumers.
 Direct sale to consumers:

- Manufacturer Consumer
 Indirect sale through the medium of third party:

- Manufacturer Wholesale Retailer Consumer
- Manufacturer Agent Wholesaler Retailer Consumer
- Manufacturer Retailer Consumer


Accordingly, for the envisaged bakery by taking the nature of its product marketing under consideration;
both direct and indirect distribution is selected as the most appropriate distribution channel. Therefore, at
least one factory-outlet shop is required to be rented in the premises of the envisaged bakery.
D. Promotion Strategy
In a competitive market, trade promotion should be made to persuade or to make a product attractive for
end users. Such trade promotional tools include; credit and discount with the volume of products sold etc.
The envisaged factory is recommended to offer discounts with the volume of product bought and credit
for one to two weeks.
As the product of the envisaged project is entering a competitive market it has been assumed that
the cost of promotion will be 1% of the annual sales revenue throughout the operation life of the
project. This promotion expense has been included in the financial analysis part of this study.
IV. PRODUCTION PLAN AND TECHNICAL STUDY

4.1 LOCATION AND SITE
The location of the envisaged bakery will be strategic as it is to be situated in an area where the
basic utilities such as electricity, water and telephone lines are available at reasonable cost.
Availability of infrastructure for transporting the raw material to the factory site and finished
product to the market are another advantage that the location selection will consider. In this regard,
the project will be located in Addis Ababa city administration, Arada Sub-city; Wor.-05, H.No. 083.
4.2 PROJECT STATUS

The business is a new establishment intended to establish bakery project mainly to produce and
distribute high quality breads and pastry for domestic market.
4.3 PRODUCTION CAPACITY AND PROGRAM

The envisaged bakery project is assumed to be installed with high quality bread and pastry baking
machine having capacity of 5,000 Pcs of (250g) bread in 8 (eight) hours. With the assumption of 16
hours/day in two shifts, it expected to produce 10,000 Pcs/day as tabulated below. Furthermore, the
project has planned to start production program at 70%, 80%, 90% and 100% during 1 st, 2nd, 3rd and
4th years respectively. able-4.1: Daily Production Capacity
PARTICULAR UOM TOTAL CAP. CAP/Hr.

Max production hrs per day Hrs 16
Max capacity Hourly
In Pcs PCS 10,000 500
In grams (250/pcs) grams 2,500,000 25,000
In Kg Kg 2,500 125
Table-4. 2- Production Capacity in (Kg)/Annum
Products in Kgs Yr-1 Yr-2 Yr-3 Yr-4
Total 420000 480000 540000 600000
Breads 70% 252000 288000 324000 360000
Pasteries 30% 168000 192000 216000 240000
Capacity utilization (%) 70% 80% 90% 100%
Table-4. 3- Production Capacity in (Tons)/Annum
Products in Kgs Yr-1 Yr-2 Yr-3 Yr-4
Total 420 480 540 600
Breads 70% 252 288 324 360
Pasteries 30% 168 192 216 240
Capacity utilization (%) 70% 80% 90% 100%
4.4 PRODUCT TECHNOLOGY AND MACHINERIES
The envisaged production technologies are well-developed and in standardized process. The list
of machinery for the production of 5,000 Pcs of breads per 8 hours or 10,000 Pcs/16 hours for
breads with 250g each is shown in the Table below and related total cost of machineries as per
Pro-forma invoices shows that total of US$ 82,733.00 that equivalent to ETB 2,316,524.00 at
prevailing exchange rate.
Table-4. 4- Production Process Machineries and accessories.
4.5 SOURCES OF BASIC RAW MATERIALS, AUXILLIARY AND UTILITIES
The basic raw material for bread baking project is different kinds of flour products. Flour for baking bread
is produced from hard wheat or a blend of hard and soft wheat, while flour for cakes and biscuits is milled
from soft wheat. On the other hand, Auxiliary materials required are input materials used in bakery
business. Hence, sources of both basic and auxiliary inputs are available from local/domestic market. The
estimated annual cost of raw and auxiliary materials is given in the tables below.
Table- 4.5 : Flour consumption

Description 100% 90% 80% 70%
UOM Kg Kg Kg Kg
Wheat flour 360000 324000 288000 252000
white flour 240000 216000 192000 168000
Table -4.6: water consumption

Description 70% 80% 90% 100%
UOM qub. Ltrs. qub. Ltrs. qub. Ltrs. qub. Ltrs.
Water (0.001 Cub/kg) 420 480 540 600
Table – 4.7: Electric consumption

Description 100% 90% 80% 70%
UOM KW/hr KW/hr KW/hr KW/hr
OVEN 3.60 3.24 2.88 2.52
Volumetric Dough Divider 1.50 1.35 1.2 1.05
Conical Rounding Machine 1.50 1.35 1.2 1.05
Spiral Mixer with Fixed Bowl 3.40 3.06 2.72 2.38
Bread Slicing Machine 0.55 0.495 0.44 0.385
Total 10.55 9.50 8.44 7.39
Table- 4.8: Consumption of Auxiliary materials

Description 100% 90% 80% 70%
Salt (0.010g/kg) 3,600 3,240 2,880 2,520
Sugar (0.05g/kg) 12,000 10,800 9,600 8,400
Yist (0.010g/Kg) 6,000 5,400 4,800 4,200
Oil (0.025ltr/kg) 15,000 13,500 12,000 10,500
Baking powder 12,000 10,800 9,600 8,400
others 0.05% of flour 300 270 240 210
Total 48,901 44,011 39,121 34,231
Table- 4.9: Basic Raw Materials Costs at Different Capacity Utilization Rate
Description UOM Unit price 70% 80% 90% 100%

wheat flour Qtl. 1,750 378,000 432,000 486,000 540,000
white flour Qtl. 1,700 285,600 326,400 367,200 408,000
Total 663,600 758,400 853,200 948,000
i.
Table-4.10: AUXILIARY MATERIALS COST Vs CAPACITY RATE
Description UOM Unit Cost 70% 80% 90% 100%

Salt Birr 20.00 50,400 57,600 64,800 72,000
Sugar Birr 50.00 420,000 480,000 540,000 600,000
Yist Birr 5.00 21,000 24,000 27,000 30,000
Oil Birr 90.00 945,000 1,080,000 1,215,000 1,350,000
Baking pouder Birr 10.00 84,000 96,000 108,000 120,000
others 1% of flour Birr 10.00 2,100 2,400 2,700 3,000
Total 1,522,500 1,740,000 1,957,500 2,175,000
Table- 4.11: UTILITIES REQUIREMENTS & COST
UOM Unit price 70% 80% 90% 100%

Description
Electricity KWH 1.25 32,916 35,590 40,039 44,487
Water Qub. Ltrs. 4.8 2,016 2,304 2,592 2,880
Total 34,932 37,894 42,631 47,367
4.6 Other Investment Activities and Costs

4.6.1 Building and Civil Works
2
The total plot area required for the envisaged bakery project for production plant is about 150 m , out of
which the total area on which baking plants to be installed including spaces for storage of raw materials as
2
well as finished products is estimated to be 120 m , which needs partitioned according to the need. Thus,
the total building construction/remodeling investment cost at a rate of Birr 1,900/m2 is about ETB 285,000.
4.6.2 Office Equipment & Furniture

The business will have standard office spaces for employees at Administrative level to meet business
requirement that listed here under with financial requirements,
Table-4.12: List of Office Furniture and Equipment

DESCRIPTION QTY UNIT PRICE TOTAL PRICE
Metal File Cabinet 4 Drawer 1 5,500 5,500
wooden selves with glasses 1 4,500 4,500
Counters with shelves 3 3,200 9,600
Computer & Accessories 4 12,500 50,000
Computer desk 4 1,800 7,200
Clerical Table 4 2,500 10,000
Clerical Chair 4 2,300 9,200
Managerial Chair 2 3,500 7,000
Managerial Table 2 4,200 8,400
First Aid Kit, Metallic, Small 1 950 950
Guest chair with arm rest, leather 10 2,100 21,000
Printer, LaserJet 1 7,500 7,500
TOTAL 140,850
4.6.3 VEHICLES
The company needs vehicles in connection with production process and performing marketing activities.
Table-4.13: Vehicle Type and Related costs

Description Quantity UNIT PRICE Total Cost
Mini Van 1 900,000 900,000
ISUZI-FSR (Truck) 1 1,100,000 1,100,000
Total 2 2,000,000
4.6.4 Power Supply Generator

The project needs automatic power supply generator, which will be necessary to overcome
problems related to electric power interruption.
Table-4.13: Power Supply Generator and Related costs

Description Quantity UNIT PRICE Total Cost
Power Supply Generator 1 450,000 450,000
Total 1 450,000
V. ORGANIZATION AND MANAGEMENT

5.1 ORGANIZATION
In the proposed organization structure, the G/Manager will oversee the overall performance of
the plant while the day-to-day operation of the plant is led by Operations unit supervisor. There
shall be three departments: Production & Technical, Administration & Finance, and Marketing &
Procurement Departments. All the departments shall have two divisions. Quality controllers shall
be deployed under Production and Technical Department and will report to the general manager.
Profitability and success of any business organization depends on its success in sales. Sales
performance, in turn, depends on good knowledge and experience of the market. Therefore, it is
important to establish and staffing a market research division, whose main activities focuses on
market research and promotion. Thus, the proposed bakery business Organizational structure is
indicated below.
Owner/
G/Manager
Administration & Production & Procurment &

Finance Dep't Technical Dep't Marketing Dep't
5.2 HUMAN RESOURCE

According to the organizational structure, the human resource by category and qualification
including monthly and annual salary is summarized in table below. It is estimated that the
employee’s benefits will be 10% of the basic salaries and wages per annum.
To ensure and improve the competence of the company and to increase the market share of the
factory/bakery project, it is important that all the senior positions proposed be run by qualified
and well versed professionals in the industry. For the smooth operation of the envisaged bakery
project a total of 28 permanent employees are required that will cost the company a total of Birr
1,113,420 per annum including benefits. Table below shows Human Resource Requirements and
Related Costs.
Table-5.1: Human Resource Requirements and Related Annual Costs
Description Title No Pos. Salary Monthly Salary/Yr.

A. General Manager's Office
General Manager 1 9,500 9,500 114,000
Executive Secretary 1 3,500 3,500 42,000
Sub Total 2 13,000 156,000
B. Production & Technical Dep't
Store Keeper 1 4,000 4,000 48,000
Production Forman 2 3,500 7,000 84,000
Mixer Operator 2 2,000 4,000 48,000
Machine Operators 2 3,000 6,000 72,000
Sub Total 7 21,000 252,000
C. Procurement & Marketing Dep't
Marketing Officer 1 4,500 4,500 54,000
Sales Staffs 4 1,500 6,000 72,000
Purchasing Officers 2 4,500 9,000 108,000
Liaison Staff 1 2,000 2,000 24,000
Sub Total 8 21,500 258,000
D. Administration & Finance Dep't
Admin & Finance Head 1 6,500 6,500 78,000
Personnel Officer 1 3,750 3,750 45,000
Standby Electrician 1 2,500 2,500 30,000
Accountant/Cashier 2 3,100 6,200 74,400
Drivers 2 2,750 5,500 66,000
Cleaner/Janitors 2 1,100 2,200 26,400
Guards 2 1,100 2,200 26,400
Sub Total 11 28,850 346,200
Total Salary 28 84,350 1,012,200
Employees Benefit 10% 8,435 101,220
Grand Total 28 92,785 1,113,420
VI. FINANCIAL ANALYSIS

6.1 BASIC ASSUMPTIONS FOR FINANCIAL ANALYSES
6.1.1 PROJECT LIFE
The operational life of the project, a standard assumption of 5 years is considered. Hence, the
costs and benefits of the project are computed over 5 years.
6.1.2 REPAIR & MAINTENANCE, SPARE PARTS AND INSURANCE COST
The annual repair & maintenance and Annealed parts costs of all fixed assets except vehicles as
percentage of total cost has assumed to be 1.5% while for vehicles it has been taken to 3% of total cost.
6.1.3 DEPRECIATION AND AMORTIZATION
Based on the Business Income Tax Proclamation Number 286/94, the following depreciation rates are
applied to depreciate the assets of the project:
 Buildings and associated civil works 5%

 Machinery and equipment 20%
 Vehicles 20%
 Office furniture and equipment 20%
 Pre-Operating interest 20%
6.1.4 WORKING CAPITAL
The working capital requirement of the project during operation is calculated on the basis of the minimum
days of coverage needed for the different elements of the working capital. Hence, the minimum days are
specified as follows:-
Table-5.1: Minimum Days for Working Capital Need
Operating Costs/Year Working Days

Raw Material Cost 90
Utility (Electricity cost + water) 90
Salary and wages 90
Administrative expenses 90
Selling Expenses 90
Fuel, Oil and Lubricants 90
Repair and Maintenance 90
Accounts Receivable 30
Accounts Payable 30
6.1.5 DISCOUNTING
The total investment and equity capital of the project are discounted at 11.5% over the project years
6.1.6 INCOME TAX
The income tax rate taken is 35% of income before tax.
6.1.7 SOURCE OF FINANCE
The project is assumed to be financed from external source as bank loan and equity contribution. The type
of loan is further assumed to be a constant principal bank loan, with a loan repayment period of Five (5)
years at annual interest rate considered to be 11.5 percent.
6.2 RESULT OF FINANCIAL ANALYSIS

Projections are made based on above assumptions and all complete set of financial projections
are provided in this section. These projections include profit/loss statement, statement of cash
flow and balance sheets. The projections are prepared on an annual basis. Accordingly, the
financial analysis results are as discussed below.
6.2.1 TOTAL FIXED INVESTMENT COST
The total investment cost of the project including working capital is estimated at Birr 5,941,459. Out of
this, cost of fixed investment is assumed to be ETB 5,006,574 as the major breakdown of the total fixed
investment cost is shown in table below.
Table-6.2: SUMMARY OF FIXED INVESTMENT COSTS
Description Total Costs

Building Remodeling works 285,000
Machinery & Equipment 2,316,524
Vehicles 2,000,000
Power Supply Generator 450,000
Office Furniture & Equipment 140,850
Pre-Production Expenses 150,000
Total Fixed Investment 5,342,374
6.2.2 Working Capital Summary

The envisaged bakery project needs to have sufficient finance to cover initial working capital for
smoothest flow of activities. Hence, Summary of related working capital break-down is tabulated below :
Table-6.2: WORKING CAPITAL SUMMARY

Description Total Cost
Raw Material Cost 1,041,000
Salary & Benefits 278,355
Utilities 17,795
Fuel, Oil & Lubrications 47,375
Insurance 18,212
Repair & Maintenance 60,707
Other General Expenses 120,000
GRAND TOTAL 1,463,444
6.3 FINANCIAL STRUCTURE AND SOURCES
6.3.1 Investment Cost Structure

As shown in table below, the total investment costs required for the project is estimated to be
approximately Birr 6.81 Million. Theses financial plan is based on conservative estimates and
assumptions. The company’s investment cost structure is assumed to be a combination of two
sources. These are partly based on equity contribution of the promoters, i.e, about ETB 2.16
million and partly on the basis of funds to be received from external financer expected as bank’s
term loan facility of Birr 4.65 Million.
SUMMARY OF INVESTMENT
Equity Bank Loan Total
Description
Investment Needed Investment
Building Remodeling works 285,000 285,000
Machinery & Equipment 463,324 1,853,200 2,316,524
Vehicles 400,000 1,600,000 2,000,000
Power Supply Generator 90,000 360,000 450,000
Office Furniture & Equipment 140,850 140,850
Pre- production Expenditure* 150,000.00 150,000
Total Fixed Investment 1,529,174 3,813,219 5,342,374
Working Capital (Raw Material) 208,200 832,800 1,041,000
Working Capital (Admin & General) 422,444 422,444
Total Investment Cost 2,159,818 4,646,000 6,805,818
6.3.2 LOAN REPAYMENT SCHEDULE
The total amount of bank loan including interest (at an interest rate of 11.5%) will be fully paid
back within five years’ time. Hence, the project expects disbursement of ETB 4,646,000 up to
end of November 2018; which is repayable in quarterly basis with equal installment amount of
ETB 308,686 at 11.5% interest per annum. The table below presents Loan repayment schedule.
Table-6.4: Bank loan Repayment Schedule

Principal Interest T/annual Remaining
Years
Payment 11.5% Payment Balance
0 4,646,000
1 731,246 503,500 1,234,745 3,914,754
2 819,035 415,710 1,234,745 3,095,719
3 917,365 317,381 1,234,745 2,178,354
4 1,027,499 207,246 1,234,745 1,150,856
5 1,150,856 83,890 1,234,745 -
TOTAL 4,646,000 1,527,726 6,173,726
6.4 FINANCIAL VIABLITY AND STATMENTS
6.4.1 PROFITABILITY
According to projected annual net profit from sales of its products, the envisaged project will
generate a net profit after tax of Birr 179,214 during its first year of operation and raises to Birr
2,696,982 in the 2nd year and it reaches Birr 5.09 million at the 5 th year of operation. Net profit to
equity and net profit to total investment or return on investment (ROI) are all attractive. The table
below presents summary of projected income statement.
6.4.2 CASH FLOW
The projected cash flow of the project shows that the project would generate positive net cash flows
throughout the operation years. The net cash flow generated by the project at the end of year-5 will
amounts to Birr 43.10 million which has been birr 4.80 million in the first year and 10.17 million during
year-2 of operation. This implies the pay-back period of the project will be expected during 3 rd period of
operations. Details are shown in annex.
6.4.3 BALANCE SHEET
The positive financial performances of the project are manifested in the balance sheet as well. As can be
seen from the projected balance sheet depicted in annex, the net worth of the project, which was about
Birr 6.80 Million at the beginning of the operation year, will rise to Birr 12.11 Million at the end of the
project life. Important financial efficiency ratios like current ratio, quick ratio, net working capital ratio,
assets to current liabilities, etc. all show that the project is highly liquid and has sound financial
performance as shown in annex.
6.4.4 FINANCIAL MEASURMENT
A. Pay Back Period

The investment cost and income statement projection are used to project the pay-back period.
The project’s initial investment will be fully recovered within 3 years.
B. Internal Rate of Return and Net Present Value
Based on the cash flow statement, the calculated IRR before and after Tax as well as the net
present value (NPV) discounted at 11.5% are shown below.
IRR After Tax 32%
IRR Before Tax 49%
NPV @ 11.5% inter. rate 4,185,223
6.4.5 ECONOMIC AND SOCIAL BENEFITS
The economic impact of the project can be viewed in a number of ways. It can be viewed
through its specific impact such as employment generation and increasing government revenue.
Moreover, other benefits such as the creation of attractive environment for the development of
the country should also be taken into account.
The project creates employment opportunities for 28 persons. Moreover, during the life of the
project it will generate an approximate of Birr 7.86 million over five year period in terms of
corporate tax and also contributes in the form of payroll tax. Furthermore the project will have
foreign currency saving effect to the country by exporting value added agri-products.
VII. ANNEXES
WORKING CAPITAL REQUIERMENT
INITIAL RAW MATERIAL COSTS
Description of Costs Total Costs Cost 90 dys
Annual Raw Material Costs (wheat flour) 540,000 180,000
Annual Raw Material Costs (white flour 408,000 136,000
Annual Raw Material Costs (Auxiliaries) 2,175,000 725,000
Total Costs 3,123,000 1,041,000
HUMAN RESOURCE REQUIREMENT (SALARY & BENEFITS)
Descriptions Year 1 90 dd Salary
Employees Salary 1,012,200 253,050
Employees Benefits 101,220 25,305
Total 1,113,420 278,355
OTHER GENERAL EXPENSES
Descriptions Ann.Costs Cts / 90 dys
Product Outlate (Sales) Shops 300,000 75,000
Professional Expense(Audit, consultancy etc) 75,000 18,750
Stationary & P.T.T 10,000 2,500
Miscellaneous Expense 20,000 5,000
Promotional & Selling Expense 75,000 18,750
Total Other Expenses 480,000 120,000
UTILITIES
Description Rate (Birr) Usage/Year T/CostYr. Cts / 90 dys
Telephone Cosumption 0.50 Br/Mnt 10,000 5,000 1,250
Electricity Consumption 1.25Br/Kwh 50,640 63,300 15,825
Water consumption 4.8 Br/Cb.Lr 600 2,880 720
Total 71,180 17,795
FUEL, OIL AND LUBRICANTS
Description Cost/Litter Cons'n(Ltrs) Total Cost Cts / 90 dys
Vehicles/Generator 18.95 10,000 189,500 47,375
INSURANCE
Description T/Asset Cost/year Cts / 90 dys
Fixed Assets 4,856,574 72,849 18,212
Total 4,856,574 72,849 18,212
REPAIR & MAINTAINACE
Description Total cost Cost/year Cts / 90 dys
Building Remodeling works 285,000 14,250 3,563
Machinery & Equipment 2,316,524 115,826 28,957
Vehicles 2,000,000 100,000 25,000
Office Furniture & Equipment 140,850 7,043 1,761
Total 4,856,574 242,829 60,707
WORKING CAPITAL SUMMARY

Description Total Cost
Raw Material Cost 1,041,000
Salary & Benefits 278,355
Utilities 17,795
Fuel, Oil & Lubrications 47,375
Insurance 18,212
Repair & Maintenance 60,707
Other General Expenses 120,000
GRAND TOTAL 1,463,444
DEPRECIATION & AMORTIZATION

DESCRIPTION T/Asset Depn. Rate Depn cost
Building Remodeling works 285,000 5% 14,250
Machinery & Equipment 2,316,524 20% 92,661
Vehicles 2,000,000 20% 80,000
Power Supply Generator 114,200 20% 4,568
Office Furniture & Equipment 140,850 20% 5,634
Total 4,856,574 197,113
SUMMARY OF INVESTMENT
Equity Bank Loan Total
Description
Investment Needed Investment
Building Remodeling works 285,000 285,000
Machinery & Equipment 463,305 1,853,219 2,316,524
Vehicles 400,000 1,600,000 2,000,000
Office Furniture & Equipment 140,850 140,850
Pre- production Expenditure* 150,000.00 150,000
Total Fixed Investment 1,529,155 3,813,219 5,342,374
Working Capital (Raw Material) 208,200 832,800 1,041,000
Working Capital (Admin & General) 422,444 422,444
Total Investment Cost 2,159,799 4,646,019 6,805,818
INVESTMENT STRUCTURE
Capital Contribution 2,159,799
Bank Financing 4,646,019
TOTAL INITIAL INVESTMENT 6,805,818
Projected Profit/ Loss Statement

Description Revenues year 1 year 2 year 3 year 4 year 5
Capacity Rate 70% 80% 90% 100% 100%
Sales of Bread 2,817,010 4,200,000 4,725,000 5,250,000 8,092,810
Sales of Pasteries and others 1,811,340 3,675,000 4,134,375 4,593,750 4,593,750

Total Revenue 4,628,350 7,875,000 8,859,375 9,843,750 12,686,560
Less: Direct Costs of Good Sold 1,873,800 1,068,017 1,201,251 1,334,486 1,467,934
Gross Profit 2,754,550 6,806,983 7,658,124 8,509,265 11,218,626
Expenses
Salary & Benefits 1,113,420 1,280,433 1,472,498 1,693,373 1,947,379
Utilities 71,180 81,857 94,136 108,256 124,494
Fuel, Oil & Lubrications 132,650 152,548 175,430 201,744 232,006
Insurance 50,994 58,643 67,440 77,556 89,189
Repair & Maintenance 169,980 195,477 224,799 258,518 297,296
Other General Expenses 240,000 276,000 317,400 365,010 419,762
Dep'n Working Premises Remodeling
14,250 14,250 14,250 14,250 14,250
works
Dep'n Machinery & Equipment 92,661 92,661 92,661 92,661 92,661
Dep'n Vehicles 80,000 80,000 80,000 80,000 80,000
Dep'n Power Supply Generator 4,568 4,568 4,568 4,568 4,568
Dep'n Furniture & Equipment 5,634 5,634 5,634 5,634 5,634
Interest Expenses 503,500 415,710 317,381 207,246 83,890
Total Expense 2,478,837 2,657,781 2,866,195 3,108,816 3,391,128
Profit before Tax 275,713 4,149,203 4,791,929 5,400,449 7,827,498
Tax (35%) 96,500 1,452,221 1,677,175 1,890,157 2,739,624
Net profit 179,214 2,696,982 3,114,754 3,510,292 5,087,874
Projected Cash Flow Statement

Description Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Equity Capital 2,159,818
Loan principal 4,646,000
Net Increment 179,214 2,696,982 3,114,754 3,510,292 5,087,874

Total Cash in flow 6,805,818 6,985,032 9,682,014 12,796,767 16,307,059 21,394,933
Cash payment
Capital Investment 5,192,374
Direct Material Purchase 1,041,000
Pre-Operating Expenses 150,000
Salary & Benefits 1,113,420 1,280,433 1,472,498 1,693,373 1,947,379
Utilities 71,180 81,857 94,136 108,256 124,494
Fuel, Oil & Lubrication 132,650 152,548 175,430 201,744 232,006
Insurance Expenses 50,994 58,643 67,440 77,556 89,189
Repair and Maintenance 169,980 195,477 224,799 258,518 297,296
Other General Expenses 240,000 276,000 317,400 365,010 419,762
Loan repayment3
731,246 819,035 917,365 1,027,499 1,150,856
Tax payment 96,500 1,452,221 1,677,175 1,890,157 2,739,624
Total payment 6,383,374 2,605,969 4,316,214 4,946,241 5,622,113 7,000,605

Cash surplus/ deficit
422,444 4,379,063 5,365,800 7,850,526 10,684,946 14,394,328
Cumulative cash in flow 422,444.33 4,801,507 10,167,307 18,017,833 28,702,779 43,097,107
Projected Balance Sheet
Description Inv't Year (1) Year (2) Year (3) Year (4) Year (5)
Assets
Current Assets
working capital 1,463,444 1,609,789 1,770,768 1,947,844 2,142,629 2,356,892
Cumulative Increase 179,214 2,696,982 3,114,754 3,510,292 5,087,874
Other Current Assets 150,000 187,500 234,375 292,969 366,211 457,764
Total Current Assets 1,613,444 1,976,502 4,702,124 5,355,567 6,019,131 7,902,529
Fixed Assets
Working Premises 285,000 285,000 285,000 285,000 285,000 285,000
Machinery & Equipment 2,316,524 2,316,524 2,316,524 2,316,524 2,316,524 2,316,524
Vehicles 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000
Power Supply Generator 450,000 450,000 450,000 450,000 450,000 450,000
Office Furniture & Equipment 140,850 140,850 140,850 140,850 140,850 140,850
T/Fixed Assets Befor Depn 5,192,374 5,192,374 5,192,374 5,192,374 5,192,374 5,192,374
Accumulated Depn. (197,113) (197,113) (197,113) (197,113) (197,113)
Net Fixed Assets 5,192,374 4,995,261 4,798,148 4,601,035 4,403,922 4,206,809
TOTAL Assets 6,805,818 6,971,763 9,500,272 9,956,602 10,423,054 12,109,338
Liabilities and Equity
Current Liabilities
Deduction Payable 392,970 1,043,925 1,799,095 2,671,922 3,677,742
Tax payable 522,120 700,941 901,693 1,127,279 1,381,017
Total Current Liabilities 915,090 1,744,866 2,700,788 3,799,201 5,058,759
Long-term Debt
Bank loan Principal payable 4,646,000 3,914,754 3,095,719 2,178,354 1,150,856
Total Long-term Debt 4,646,000 3,914,754 3,095,719 2,178,354 1,150,856 -
Total Liabilities 4,646,000 4,829,844 4,840,585 4,879,142 4,950,057 5,058,759
Owners' Equity
Investment Capital 2,159,818 2,159,818 2,159,818 2,159,818 2,159,818 2,159,818
Retained earning 170,253 2,562,133 2,959,016 3,334,777 4,833,480
Capital Description (197,113) (197,113) (197,113) (197,113) (197,113)
Legal Reserve (5%) 8,961 134,849 155,738 175,515 254,394
Total Owners' Equity 2,159,818 2,141,919 4,659,687 5,077,459 5,472,997 7,050,579
Total Liabil. & Equity 6,805,818 6,971,763 9,500,272 9,956,602 10,423,053 12,109,338
Internal Rate of Return (IRR) and Net Present Value (NPV)

Title/Years Project Years
Title/Years 0 1 2 3 4 5
Gross Revenue 4,754,050 7,875,000 8,859,375 9,843,750 12,686,560

Working Capital Recovery
Fixed Asset Recovery
TOTAL BENEFIT - 4,754,050 7,875,000 8,859,375 9,843,750 12,686,560
Initial Inv't. 6,805,818

Operating Costs 3,117,257 3,479,037 3,876,690 4,315,788 4,802,975
TOTAL COST EXCL.TAX 6,805,818 3,117,257 3,479,037 3,876,690 4,315,788 4,802,975

Income Tax 96,500 1,452,221 1,677,175 1,890,157 2,739,624
TOTAL COST 6,805,818 3,213,757 4,931,258 5,553,865 6,205,945 7,542,599
Net Benefit After Tax (6,805,818) 1,540,293 2,943,742 3,305,510 3,637,805 5,143,961
Net Benefit Before Tax (6,805,818) 1,636,793 4,395,963 4,982,685 5,527,962 7,883,585
IRR After Tax 32%
IRR Before Tax 49%
NPV @ 11.5% inter. rate 4,185,223

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FEASIBILITY STUDY 2018

PROPOSED LOCATION:-ADDIS ABABA CITY ADMINISTRATION

PREPARED BY: BIMAS CONSULTING SERVICES PLC

BEDILU KASSAHUN BAKERY Page 1

I. Executive Summery ………………………………………….…..

II. Background Information ……………………………...…………

III. Market Analysis..……………………………………………..….

IV. Production Plan &Technical Analysis………………………..

V. Organization and Management …………………………….....

VI. Financial Analysis……………………………………………….

179,214 2,696,982 3,114,754 3,510,292 5,087,874

422,444.33 4,801,507 10,167,307 18,017,833 28,702,779 43,097,107

 It creates employment opportunity for about 28 permanent employees;

II. BACKGROUND INFORMATION

 Project Name...................................Bedilu Kassahun Bakery

 Address.............................................Addis Ababa City Administration

Arada Seb-City, Woreda-05, H.No. 083

 Type of Business...............................Food Processing and Manufacturing

 Legal form of Business.....................Sole proprietorship

 Status of Business.............................New Project;

 TIN Certificate No...........................0005957543

 Trade Registration No:...................AA/AR/05/1/0000708/2005; DD:22/5/2005 E.C

 TradeLicense No..............................Under Process

 Required Initial Investment.............ETB 6,808,818

2.2 Project Ownership

2.3 BUSINESSES OBJECTIVES

2.4. VISION & STRATEGY

Become one of best quality food producers with sustainable profitability.

2.5. COMPANY VALUES AND CULTURE

The following are components of the business values and cultures.

2.6 KEY SUCCESSES

 Sector Level key Successes

 Firm level successes factors

 Well trained &motivated personnel;

2.7 FUNDING REQUIRMENT

2.8 PRODUCTS DESCRIPTION

III. MARKET ANALYSIS

FIGURE 1: Bakery Businesses

Co-operatives, Others, 2% Public, 1%

Source: CSA, 2016

TABLE 3: TOTAL SUPPLY OF Bread 2007-2016

Year Total Supply Supply in A.A

3.1.2 General Demand Analysis

 Performance of the national economy;

 Rate of population growth and

A. PERFORMANCE OF THE NATIONAL ECONOMY

PERCENTAGE SHARE OF ETHIOPIA’S GDP IN EACH SUB-SECTOR

Industry\Year 2017 /18 2018 /19 2019 /20 2020 /21

Agriculture, Hunting and Forestry 44.6 43.1 42.0 40.1

Fishing 0.0 0.1 0.1 0.1

Mining and Quarrying 1.4 1.5 1.4 1.3

Manufacturing 4.0 4.1 4.4 4.4

Manufacturing 1.4 1.3 1.2 1.2

Electricity and Water 4.0 4.9 6.1 7.6

Construction 14.9 15.4 15.5 16.1

Restaurants Transport and Communications 4.2 4.3 4.5 4.7

Financial Intermediation 2.5 2.9 2.4 2.6

Public Administration and Defense 5.4 5.1 5.0 4.7

Education 2.3 2.2 2.2 2.2

Health and Social Work 0.9 0.9 0.9 0.9

Private Households with Employed Persons 0.2 0.3 0.2 0.2

Total 100.7 100.6 100.6 100.7