Feasiblity Study For Mproved Maize Seed Production Project

Project Feasibility Study for the Production of Improved Maize Seed
FEASIBLITY STUDY FOR MPROVED MAIZE SEED PRODUCTION PROJECT
LOCATION: OROMIA REGION, EAST WOLLEGA ZONE, SASIGA WOREDA, MILKI
GUDINA KEBELE.
PROJECT OWNER: - Mr. TAMIRU BULTI KUMSA
Phone: - +251917031004
Consultant: sileshi angerasa econ, business and investment development

consultancy service
Address: Mobile: 0911896145/0966109246

Consultant Name & Signature:
September, 2021G.C
NEKEMTE, OROMIA
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TABLE OF CONTENTS
I. EXECUTIVE SUMMARY ............................................................................ 5
1. INTRODUCTION ....................................................................................... 6
1.1. General Background ............................................................................................................. 6
1.2. Stakes in Agricultural Production ........................................................................................ 8
1.3. The Agriculture Sector .......................................................................................................... 9
1.4. Need (problem statement) problem justification ...........................................................10
1.5. Project Objectives ...............................................................................................................11
1.6. Project Description ..............................................................................................................12
1.7. Project Rationale .................................................................................................................12
1.8. Project Location ..................................................................................................................13
1.9. The Significance of the Project ..........................................................................................13
2. BACKGROUND INFORMATION ............................................................... 14
2.1. The Applicant ......................................................................................................................14
2.2. Brief History of the promotrr.............................................................................................14
2.3. Past Performance of the Company ..................................................................................15
2.4. The Seed Industry................................................................................................................16
2.5. Brief Description of the sesame seeds ............................................................................16
2.6. The Reasons and Motives for forming this business .....................................................17
2.7. The Main Expectations of the project ..............................................................................18
2.8. Rationale Behind the main assumption contained in the plan.....................................18
2.9. Product Description ............................................................................................................18
3. THE MARKET STUDY ............................................................................... 19

3.1. Market Analysis ...................................................................................................................19
3.2. Market attributes of maize.................................................................................................20
3.3. The Demand-Supply Gap ......................................................................................................21
3.4. Future market or Demand of fruits and vegetables .............................................................22
3.5. Target Customers ................................................................................................................22
3.6. Marketing Promotion and Strategy ..................................................................................22
3.7. Competition.........................................................................................................................23
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3.8. The Project Facilities and Services Plan ............................................................................23

3.9. Past and Present Intervention ..............................................................................................24
3.10. Justification of the Project ....................................................................................................25
3.11. Support for the Project .........................................................................................................25
4. TECHNICAL STUDIES ................................................................................ 26
4.1. Description of the Project Product....................................................................................26
4.2. Construction work and Technology ......................................................................................27
4.3. Utilities ..................................................................................................................................29
4.4. Engineering and civil works...................................................................................................31
5. ORGANIZATION AND MANAGEMENT ..................................................... 32

5.1. Manpower requirement .....................................................................................................32
5.3 Project implementation ...............................................................................................................33
5.4 Organizational Structure .............................................................................................................34
6 FINANCIAL ANALYSIS............................................................................... 40
6.1 Repair and Maintenance Cost .....................................................................................................40
6.2 Depreciation and Amortization ...................................................................................................40
6.3 Total Revenue ..........................................................................................................................41
6.4 Discounted Payback Period ....................................................................................................41
6.5 Cash flow ..................................................................................................................................41
6.6 Benefit cost ratio ......................................................................................................................41
6.7 Internal Rate of Return............................................................................................................42
6.8 Net present value .....................................................................................................................42
7 MONITORING AND EVALUATION ........................................................... 42
8 ENVIRONMENTAL IMPACT ASSESSMENT .................................................. 43
9 CONCLUSIONS AND RECOMMENDATIONS .............................................. 44
9.1 Conclusion ...........................................................................................................................44
9.2 Recommendations ..............................................................................................................45
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List of table
Table 1: Office Space Demand Forecast…………………………………………. 12
Table 2: The plan is that the ground will be partitioned in to different rooms…14
Table 3: land utilization Plan ………………………………………….……….…..16
Table 4: Utilities…………………………………………………………………… 20
Table 5: List of Building and Civil Works and Their Costs ……………………..21
Table 6: Manpower Requirement and Annual Labor Cost………………………22
Table 7: project Implementation schedule………………………………………. 23
Table 8: Repair and Maintenance Cost ……………………………………………3
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I. EXECUTIVE SUMMARY
KEY INFORMATION HIGHLIGHTS
PROJECT OWNER Tamiru Biru
PROJECT TITLE Improved maize seed Production
LAND REQUIREMENT 57 ha
PROJECT AREA Oromia region, East Wollega Zone, Saisga Woreda,

Milki Gudina Kebele
PRODUCTION CAPACITY 5700 quintal
PRODUCTS TO BE Produced
Improved Maize Seed
MARKET Domestic
COST OF THE PROJECT
PROJECT LIFE 10 YEARS
NUMBER OF WORKING DAYS 365 DAYS
FINANCIAL VIABILITY ( AT 10% DISCOUNT RATE )
NPV (NET PRESENT VALUE) 54,439,417 BIRR
IRR (INTERNAL RATE OF RETURN) 34.13%
PBP ( PAY BACK PERIOD) 3 year and 9 months
ANALYSIS RESULT
THE PROJECT IS TECHNICALLY FEASIBLE, FINANCIALLY AND COMMERCIALLY VIABLE

AS WELL AS SOCIALLY AND ECONOMICALLY ACCEPTABLE. HENCE, THE PROJECT IS
WORTH IMPLEMENTING.
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1. INTRODUCTION
1.1. General Background
Agriculture plays significant role in the Ethiopian economy. The sector recruits the majority
of the working force and serves as the source of food for the increasing human population
and feed for the livestock sector. The country is endowed with ample genetic recourses,
which would be useful for tapping genes for genetic improvement and develop suitable
technologies for the diverse eco systems. In spite of the fact that agriculture has been
practiced for many years in Ethiopia, the traditional way of farming, characterized by low
use of improved technologies, inputs, and mechanization, is dominant. In relation to the
diverse ecological niches, several biotic and abiotic factors and limited available
technological options constrained crop production and productivity. In addition,
introduction of new pest is threatening production of a number of crops. These factors have
contributed for the lower agricultural productivity, which has resulted for prevalent food
insecurity.
Ethiopia has an overarching policy framework called Agriculture Development Led

Industrialization (ADLI), which aims to increase productivity of the crops and secure the food
demand of the country, produce export commodities and fetching foreign currency, and
expected to produce raw materials for the emerging agro processing industries. In the past
decade, agricultural productivity has shown an increasing trend, which was associated to the
increasing use of improved technologies such as improved varieties, management practices
and fertilizer. However, the growth has not been commensurate with the growing
population and there is still considerable gap between the demand and what is being
produced. Despite the huge potential, the country is importing agricultural products to fill
the deficit of which wheat and rice are the dominant ones. A number of factors are
contributing for the disparity including lack of improved technologies and lack of integration
among the different actors along the value chain are of the major challenges to bring
transformation in the sector.
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Ethiopia is one of the developing countries and around 85% of the total population
depends on agriculture which most of the agricultural practice is rain fed crop production.
However, due to the backward method of farming, unreliable rainfall, including population
and drought, the nation faced a series of food shortage. These food shortages were followed
by severing famines that resulted in the loss of the lives of millions of citizens.
Most of Ethiopia’s cultivated land is under rain-fed agriculture. Due to lack of water storage
and large spatial and temporal variations in rainfall, there is not enough water for most
farmers to produce more than one crop per year and hence there are frequent crop failures
due to dry spells and droughts which have resulted in food shortage currently facing the
country.
The major source of growth for Ethiopia is still conceived to be the agriculture sector.
Hence, this sector has to be insulated from drought shocks through enhanced utilization of
the water resource potential of the country, (through the development of small-scale
irrigation, water harvesting, and on-farm diversification) coupled with strengthened linkages
between agriculture and industry (agro-industry), thereby creating a demand for agricultural
output.
In line with the above, different regions of the country are working hard so as to promote
irrigated agriculture and boost agricultural production both in quantity and quality. Ministry
of Water, Irrigation and Energy have been widely engaged in promoting irrigation to make
true the country dream. The ministry is working on the development and application of
water resources for sustainable development. Identifying irrigation projects, undertaking
feasibility studies and going to implementation are among the duties considered helpful in
using the water resources. In parallel, the Ministry of Water, Irrigation and Energy and
Ministry of Agriculture have been widely allowing investors to participate in farming
investment whereby the investors together with the existing farmers feed the fast-growing
and hungry industrialization of the country. The investors play a wide role in transforming
the agriculture-based economy of our country to industry based economy.
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It is not only about transforming the economy but also the government is working very hard
on quality production to make our country competing in international markets. In this point
of view, the investors also play a very great role. Hence, it is obvious that the agricultural
system has to be improved and irrigation practice should be spread extensively to bring
about sustainable food self-sufficiency and to earn foreign exchange. Ethiopia has ample
source of surface and subsurface water, resulting from this it is named as” The water tower
of East Africa.” Moreover, the irrigation potential is estimated to be about 4025 million
hectares of which only 5.8% is irrigated. (Source; a study carried out by international water
management institute-IWMI). Nowadays, the implementation of small and medium scale
irrigation scheme is being given priority in the water sector development strategy of
Ethiopia. These are the reasons where the government provided farm land in a different part
of the country including proposed area exists in Oromia National Regional State, East
Wollega Zone, Sasiga Woreda, Milki Gudina Keble.
1.2. Stakes in Agricultural Production
For Ethiopia to achieve middle-income status by 2025 and make substantial inroads against
food insecurity, concerted and strategic investment and strategic choices in the agricultural
sector are vital. Concentrations of food insecurity and malnutrition are endemic in rural
areas, with a population of six to seven million chronically food insecure, and up to 13
million seasonally food insecure. Over 90 percent of agricultural output is driven by
smallholder farmers. Without expanding cultivated land, and given forecast population
growth, the average land holding size in highland areas will be reduced to 0.7 hectares by
2020, placing further pressure on rural incomes and food security.
Agriculture contributes substantially to the overall Ethiopian economy. On a nominal GDP
of USD 25.6 billion, 43 percent was driven by the agricultural sector. Crop production
accounts for 29 percent, with livestock at 12 percent, followed by the forestry sector with 4
percent. The sector contributed USD 1.4 billion to export earnings. The sector also drives
aggregate employment figures. Estimates show 83 percent of the population relies on
agriculture for their livelihoods (with many more dependent on agriculture related cottage
industries such as textiles: crops and forestry account for 60 percent of overall export value,
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livestock for 28 percent, and remaining exports, a combination nonagricultural industry,

primarily extractives and industrial production.
The role of gender in the Ethiopian agricultural system is also critical: in post-harvest
activities for cereals, women contribute as much as 70 percent of on-farm labor; in
marketing, particularly in cereals, participation of women is as high as 60 percent of labor
market share. While MoARD strategies do identify the role of women in the agricultural
value chain, the gap is in the implementation of these strategies. PASDEP II has already
identified targets for the participation of women in cooperatives and unions (>30 percent),
as well as the number of women targeted by public extension in male-headed and female-
headed households, 50 percent and 100 percent, respectively. Given the stakes of women in
production systems, specific strategies that target increasing the opportunity of women to
participate in income generation and decision-making, and the disaggregation of data sets to
capture the participation of women are critical.
1.3. The Agriculture Sector
In spite of disproportionately high employment in the sector (fairly above 84 percent of the
rural population) and high poverty reduction power of the sector, the contribution of the
agriculture to GDP of the nation has been declining. Such declining role of the sector is
explained mainly by the small sizes (land holding share of 83 percent by smallholders
farming setup less than 2 hectares and the average size of the small farms is 1.25 hectare)
characterized by low utilization of agricultural inputs, dependence on inconsistent, uneven &
unpredictable rains, poor irrigation system, low technology, little access to know-how (risk
management, technology, skill, etc.), limited capital, fragmented plots hampering economic
scale production and productivity, that is vulnerable to natural and man-made changes.
About a third of rural household’s farm less than 0.5 hectares which, under rain fed
agriculture at current yield levels, cannot produce enough food to meet their requirements.
Most agricultural production is used to meet household consumption needs and, for a very
large number of households, there is a prolonged hunger season during the pre-harvest
period. This period is also characterized by rising in food item prices. When there are
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surpluses, smallholder farmers are often constrained by lack of access to markets, and hence
sale their outputs at very depressed prices.
Owing to these characteristics of smallholder farmers and the related constraints, crop
production couldn’t keep in pace with the growing demand for such outputs for food and as
input for industrial sector for industrial sector. As a result, Ethiopia has been net importer of
cereals and fruit products despite of decades unreserved government effort to increase the
productivity and production of the smallholder agriculture sector.
Hence, food security remains a critical issue for many households, and for the country as a
whole. Moreover, expansion of the cropped area to more marginal lands has led to severe
land degradation in some areas. To fill such growing gap between the supply of crop
products and demand for such items, the government has declared its commitment to
increase the national food production by directing investment in areas with high agricultural
potential, including efforts to attract private agricultural investment in areas with under-
utilized land and water resources.
1.4. Need (problem statement) problem justification
Agriculture plays a critical role in the entire life of a given economy. Agriculture is the
backbone of the economic system of a given country. In addition to providing food and raw
material, agriculture also provides employment opportunities to very large percentage of the
population. Hence, the key constraints to agricultural productivity in Ethiopia include low
availability of improved or hybrid seed, lack of seed multiplication capacity, low profitability and
efficiency of fertilizer use due to the lack of complimentary improved practices and seed, and lack of
irrigation and water constraints.
Indeed, at the close of the century of greatest agricultural expansion, the dilemma of the
farmer had become a major problem. Several basic factors were involved-soil exhaustion,
the vagaries of nature, overproduction of staple crops, decline in self-sufficiency, and lack of
adequate legislative protection and aid. Some of the environmental issues that are related to
agriculture are climate change, deforestation, dead zones, genetic engineering, irrigation
problems, pollutants, soil degradation, and waste.
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Ethiopian agriculture has been suffering from various external and internal problems. It has
been stagnant due to poor performance as a result of factors such as low resource utilization;
low-tech farming techniques (e.g. wooden plough by oxen and sickles); over-reliance on
fertilizers and underutilized techniques for soil and water conservation; inappropriate
agrarian policy; inappropriate land tenure policy; ecological degradation of potential arable
lands; and increases in the unemployment rate due to increases in the population.
Agriculture progresses technologically as farmers adopt innovations. The extent to which

farmers adopt available innovations and the speed by which they do so determine the
impact of innovations in terms of productivity growth. It is a common phenomenon that
farmers like any other kind of entrepreneurs do not adopt innovations simultaneously as
they appear on the market. Diffusion typically takes a number of years, seldom reaches a
level of 100% of the potential adopter’s population and mostly follows some sort of S-
shaped curve in time. Apparently, some farmers choose to be innovators (first users), while
others prefer to be early adopters, late adopters or non-adopters. Therefore, the project tries
to address the aforementioned problems through by accomplishing the following objectives
1.5. Project Objectives

1.5.1. General Objective
The major goal of this project is to contribute towards the growth of the Agricultural sector.
Its specific objectives include the following.
1.5.2. Specific objective
 To produce quality and quantity improved maize seed that enable to provide standard
goods to farmers and investors.
 To undertake trading and other refuted business activities that enable to generate a
reasonable to the invested capital.
 Initiate the transfer of modern agricultural technology exposure to the farmer
 To develop modern business center that would provide quality product on standard.
 To create employment opportunities.
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 Contribute towards the eradication of poverty.

 To establish economically viable, socially acceptable and environmentally friend farm.
1.6. Project Description
Seed production covers a wide range of products which can be grouped into cereals, pulses
and Oilseed and flowers. The East Wollega Zone has great potential and suitable natural
resources for the production of these groups of Cereal crops. In fact, this project refers to
only Improved Maize Seed production of recommended variety. This product can be
supplied to the enterprises with which the multiplication agreement will be made and
packed depending on the market location and requirement.
East Wollegga Zone in general and Sasiga Woreda specifically, has large areas and water
resources suitable for the production of improved seeds. Compared to other cereals, pulses
and oil crops, Maize production is very high in productivity per unit of land which can play
a substantial role to increase the food supply area. With a growing urban population, which
is totally market dependent, and the current food supply shortage, expansion in Maize seed
production will play a significant role in increasing the food supply of the zone.
Planned land use on farm site includes the construction of the house for residence and store,
planting of different verities of permanent and annual tree and crop species. Specifically:
Improved maize seed production (55ha), 2ha for construction and environmental
protection/conservation. Besides production, the organization also plant tree species within
farm like following irrigation and drainage channel.
1.7. Project Rationale
Agriculture is the cornerstone of the development policy of the Government of Ethiopia.
According to the Rural Development Policy and Strategy document, the basic ingredient and
resource the country has for agricultural development is the abundant land and labor. Most
of the western lowlands are endowed with water resources are virgin and fertile. Up to
recently, the areas were not developed due to lack of capital and technology. Therefore,
there is a strong commitment from the government to make these fertile lands available for
investors that have the capital and technology to develop.
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The existing promising investment opportunities, the demands of goods needs along with
relatively sound investment support made by the government in such kinds of feasible
projects, compelled the project promoter to initiate the multipurpose oriented business
project to be established. Despite the promising business opportunities, the trend on such
kinds of investment found to not enough.
Therefore, the existing shortage or absence in the supply of improved maize seed product,
along with its better location and infrastructure access, the escalating trend of urbanization
and business activities, thus it is with such reason that this project is identified and proposed
and assumed to be more profitable. In general, the country’s privatized and free market
economy; good governance creates a favorable environment for the development of
investment for private investors.
1.8. Project Location
The license area is located in Oromia National Regional State, East Wollega Zone, Sasiga
Woreda, Milki Gudina Kebele. The total area of the project is 57ha.
1.9. The Significance of the Project
The envisaged project deemed to add to the economic development of the region in general
in specific with following ways:
A. Source of Revenue
As public policy of any nation, the government collects different forms of taxes from
different business organizations and individuals. Among the different forms of taxes, business
income taxes, payroll income tax are collected from undertaking business activities.
Therefore, the farm will serve as sources of revenue for the woreda.
B. Employment opportunity
One of the problems that our country faced is unemployment. Therefore, the current
objective of the government is working on tackling the problem of unemployment and
fostering the development process either through creating self-employment or employment
in other organization. Hence, this project will hire 20 individuals and more than 50
individual during every season.
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2. BACKGROUND INFORMATION
2.1. The Applicant
2.1.1. Name: - Tamiru Biru, Nationality: - Ethiopian
2.1.2. Address:-
A. The Promoter: - East Wollega Zone, Sasiga Woreda, Milki Gudina Kebele
B. The Project: Oromia Regional State, East Wollega Zone, Sasiga Woreda, Milki
Gudina Kebele
C. Contact Person: - Ato Tamiru Biru, Owner/General Manager of the Project.
2.1.3. Types of Project: - Improved Maize Seed Production
2.1.4. Legal Forms of Business: - Private Limited Company
2.1.5. Status of Business: - New
2.1.6. Registration Agency: - Ministry of Trade and Industry
2.1.7. Licensing Agency: - Ministry of Trade and Industry
2.1.8. Registration Number Date
2.1.9. License B=Number 007635 Date 24/12/86
2.1.10. Tax Paying Identification number (TIN) 0016091779
2.1.11. Value Added Tax Registration Certificate
2.2.Brief History of the promotrr
Ato Tamiru Biru is one of the model farmers in Sasiga woreda,
leading players in import-export - wholesale distribution and business representation in the

nation established in November 1994 under the Commercial code of Ethiopia. The
Company also is engaged in the distribution of goods produced by domestic industries.
The product mix of the Company has been optimized as a result of the vast experience
gained during the last 16 years. Operations can be categorized as follows:
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 Import and distribution of fertilizers, agro-chemicals and veterinary drugs to the

agricultural sector. The company has acquired ample experience in import and
distribution of agro-chemicals and steadily holds over 50% the market share.
 Supply of both imported and locally produced materials and inputs to the
agricultural, industrial, transport and trade sectors; which includes;
technological materials, such as irrigation materials, water pumps, hose,
walking tractors & agricultural tools like suckles, machetes, fork and different
machineries for the agricultural sector in line with the current government
policies and strategies to enhance the development of the sector.
 Export of oil seeds, pulses and forestry products to the international market;
and it has been generating big foreign currency for the country in its export and
is awarded for standing 1st – 3rd for a number of times.
 Representation services to reputable international and local suppliers.
 Import and distribution of cash sales register.
Managed by well experienced and organized team and dedicated staff, the Company is
operating reasonably well despite the highly volatile business environment and strong
competition.
Since its establishment, the Company has played a prominent role in the national economy
in general and in the development efforts of the agricultural sector in particular.
2.3. Past Performance of the Company
2.3.1. Operational Performance

Some of the major achievements exhibited in the past three years are briefly described
below.
i) Agricultural inputs
The Company has been supplying various agricultural inputs, equipment, machinery and
tools covering considerable portion of the country’s annual requirement. Fertilizers, agro-
chemicals, selected seeds, veterinary medicines are the major items supplied by the
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Company. During the last three years alone, apart from fertilizer, the Company has
performed gross sales value of Birr 79.61 million in this business category.
ii) Agricultural Products
The Company is engaged in the export of oil seeds, pulses, spices, and natural gum.
During the last three years, the Company has generated total gross revenue of about USD
10.85 million, the equivalent value of which is about Birr 103.34 million.
This amount was generated only from the export of sesame seeds and gum-olibanum
commodities. Had the company been engaged in coffee, pulses, beverages and spices
export commodities; the foreign currency generation would have been much more than the
aforementioned amount. The sesame seeds and gum-olibanum commodities export
experiences are enhancing the company’s decisions to increase export commodities.
2.4. The Seed Industry

The Ethiopian seed industry is composed of formal and informal sectors as well as public and
private organizations. The formal sector includes federal and regional agricultural research
establishments, universities, the National Seed Industry Agency (NSIA), the Ethiopian Seed
Enterprise (ESE), and a few private companies. The informal sector encompasses millions of
farmers who continue to practice seed selection and preservation, just as their ancestors did.
Today, the bulk of the national seed demand is met through this informal system of local
seed maintenance and exchange.
The maize seed industry comprises two sequential processes: 1) varietal development,
testing, and release; and 2) seed multiplication, processing, certification, marketing, and
distribution. At a minimum, seven years are required to release a variety. Release may be
unnecessarily delayed because of stringent varietal release requirements.
2.5.Brief Description of the sesame seeds

Ethiopia is one of the maize seed producers to the international market. Maize has been
used by producers for food and source of income and importers for the making of Tahina,
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backing of cake and bread and for edible oil extraction. The bulk of Ethiopian whitish
sesame seeds grow in the North-Western low lands basin of Humera and Metema area. Of
the diverse varieties of sesame seeds in, Ethiopia, the whitish Humera and Wellega type.
Wellega type amount much of exportable sesame seeds amount naturally is grown in the
low lands of Wellega mainly used for oil extraction.
Tahina, the processed paste, is highly demanded and consumed mostly by the Middle East
and North African Countries. The hulled sesame seed is used by Europeans and Americas
for bread and baking purpose. The whitish sesame seeds are the only seeds that can be
used as an input to this end.
Most of processing plants of tahina and hulled sesame are located in the main consuming
countries such as Egypt, Israel, Jordan, Turkey, Greece, etc. The line share of these
productions is for consumption purpose and the remaining small amount is export to the
rest of the world.
As far as major producers of sesame seeds are concerned, sixteen countries accounts 87%
of total world sesame seeds production which includes 8 African countries, 6 Asian
countries, and 2 Latin American countries.
2.6.The Reasons and Motives for forming this business

The main reasons for establishing improved Maize seed production sesame agro-processing
plant at Metama Woreda and entering tahina export business are:-
 Proximity of raw materials from agro-processing plant,

 Nearness to port Sudan,
 Availability of communication facilities, which includes telephone, fax,
internet, postal office and like
 Availability of transport, customs office and warehouse
 Availability of land which will be used for construction cleaning and hulling
plant in order to get raw tahina input.
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2.7. The Main Expectations of the project
2.7.1. Short term Expectation

To produce Seeds of improved maize varieties which are important in raising yields and
ensuring food security, proper nutrition and prosperity for not only smallholder farmers but
the general populations
2.7.2. Long term Expectation

 To add value for raw sesame seeds to export value added sesame seeds that is raw
tahina, Humus Salad, and Hallwa.
 To set up huge and complex Agro-Processing Plant and expand the value addition of
sesames like extraction of sesame oil which is used for food processing.
2.8.Rationale Behind the main assumption contained in the plan
Rationale Behind the main assumptions contained in the plan are:-
 To increase the volume of export,

 To added value for raw sesame seeds
 To increase the volume of foreign currency,
 To expand the tahina plant in to huge agro processing project or plant
 To get additional revenue from rent of warehouse;
 To reduce warehousing problem especially in related to Ethiopian Commodity
Exchange transactions.
2.9.Product Description
Sesame seeds (Sesamum indicum) are small, thin, tear-shaped black or tan seeds with a
pleasing nutty flavor that’s intensified by toasting. Black and red sesame seeds are similar
in flavor, while white sesame seeds are more delicate. Used as a seasoning and for their
oil, they are about 50 percent oil by weight. Popular the world over, sesame probably
originated in Africa and is now grown mostly in India, China, Mexico, and the Sudan.
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In India, the seeds are sprinkled on baked goods and added to rice dishes, sauces, and
stuffing. In China, they coat small deep-fried tidbits and sweets and are toasted and
ground to make the potent Chinese sesame paste zhi ma jiang. In Japan, where sesame is
used extensively, the seeds are always lightly toasted. They are mixed with salt as a
condiment (gomasio), ground and made into sesame tofu (goma-dofu), and mixed with
dressings and dipping sauces.
In the Middle East, sesame seeds are ground and compressed with sweet syrup and honey
to make hallwa, or ground into tahini, a paste used in making hummus and baba ghanouj.
Sesame seeds are sprinkled on simit, ring-shaped Turkish breads sold by street vendors.
The seeds were introduced to America by West African slaves, who called them benne.
Cold-pressed sesame oil is gently heated to preserve natural aromas; hot-pressed sesame
oil yields greater quantities of less flavorful oil and is the preferred frying oil in southwest
India and Burma. Asian sesame oil extracted from toasted seeds is called “fragrant oil” in
China; it’s a common flavoring in Korea, Japan, and the Chinese province of Sichuan,
where it’s seasoned with crushed dried chiles. Japanese tempura is made by deep-frying
battered vegetables in a mixture of one part toasted sesame oil and ten parts soy oil.
3. THE MARKET STUDY
3.1. Market Analysis

Maize is the largest and most productive crop in Ethiopia. Currently maize production was
4.2 million tons, 40 percent higher than teff, 56 percent higher than sorghum, and 75
percent higher than wheat production. With an average yield of 1.74 tons per hectare (equal
to 3.2 million tons grown over 1.8 million hectares). Maize has been the leading cereal crop
in Ethiopia since the mid-1990s in terms of both crop yield and production. Wheat and
sorghum yields have averaged 1.39 and 1.36 tons per hectare, respectively.
In addition to the highest total production per annum and the highest per-hectare yield,
maize is also the single most important crop in terms of number of farmers engaged in
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cultivation. The vast majority of Ethiopian farmers are small-scale producers. Maize is
instrumental for the food security of Ethiopian households, and is the lowest cost caloric
source among all major cereals, which is significant given that cereals dominate household
diets in Ethiopia.
3.2. Market attributes of maize

Market fundamentals determine both tradability and fluctuations of prices in maize. When a
commodity plays a critical role in households' diets, such as maize in Ethiopia, variations in
tradability and price can have serious implications for food security. The next two sub-
sections examine the tradability and price volatility of maize.
3.2.1. Non-tradability of maize

In Ethiopia, most cereals are non-tradable – meaning they are neither exportable nor
importable. As a result, with the exception of food aid import, all major cereals are
domestically grown and consumed. In Ethiopia, cereals are non-tradable due to high costs of
transporting cereals both from the main port in Djibouti to primary consumption areas and
from the main production areas to the port. Thus, the cost of transport is so high that it is
not profitable to import or export cereals
3.2.2. Price volatility

While price volatility is endemic to all markets, there has been excessive volatility in the
Ethiopian maize market as demonstrated by the high standard deviation and Coefficient of
Variation (CV) in maize prices in Addis relative to other geographies
Maize Product have a large domestic market in Ethiopia, significantly higher than the exported
volumes. The size of the Ethiopian population is currently estimated at about 100 million. This is a
strong indication of the existence of large potential demand for fresh fruit and vegetable crops in
the country. The other customer of Ethiopian fresh fruits and vegetables is processing plants, i.e.,
tomato processing plants and vegetable canning factories which require tomato and various types
of vegetables for processing. The demand for fruit on the local market is high. This is a strong
indication of the existence of investment opportunities in fruit supply for the local market
20
Ethiopia exports fresh fruits and vegetables to the international markets. The major markets for
Ethiopian fresh fruits and vegetables are the European Union, the Arab countries and the regional
markets. Thus, there is a reliable demand for these Ethiopian products during a particular period
and a great volume. Therefore there is a strong business image for vegetables and fruit markets.
3.3.The Demand-Supply Gap
There has been a significant growth in the number of local and international trades across the
country. This increase is mainly associated with the stimulation of economic activist and partly due
to an increase in the demand of fruit and vegetable production. Even though there is a lack of
quantitative estimates that depict the actual demand and also the annual growth rate commercial
facilities are scarce in the region. As a result there is a large gap between the developed and that of
the supply for fruit and vegetable production hence this project would not face any problem of
demand scarcity for it market and it would provide good goods to customers.
The price of fruits and vegetables is volatile and seasonal. Generally, fruits and vegetables are much
cheaper in rainy seasons. However, even in the rainy seasons the average price of fruits and
vegetables at major towns is estimated on average at birr 25 and 15 per kg respectively. It is based
on cost and competitors price.
2009 2010 2011

Tomato 951,920Kg 1,509,352 Kg 1,558,240 Kg
Mixtures 339,039 Kg 980,419 Kg 1,237,883 Kg
Source: Ethiopian Customs Authority
21
3.4. Future market or Demand of fruits and vegetables

The future demand for improved maize seed is promising due to two main factors. First, an
increase in population in general and urbanization, in particular, is expected to amplify the
domestic consumption of food products. At the same time, an increase in income inevitably
improves the per capita consumption of maize product in the future. Consequently, with a
conservative growth rate of 3% per annum, the future demand for vegetables is forecasted
as shown below.
Table 1: Future Demand
Year Projected Demand (qts)

2006 100,000
2007 103,000
2008 106,423
2009 109,615
2010 112,904
2011 116,291
2012 119,780
2013 123,373
2014 127,074
2015 130,886
2016 134,698
2017 139,198
3.5. Target Customers

The target customers of this envisaged project include:-
 The surrounding community
 District, regional and federal government
 Agricultural research institutes
 Agricultural technology and equipment suppliers
 Seed enterprises
3.6. Marketing Promotion and Strategy
In order to penetrate and gain considerable market share, one of the major marketing
strategies for the project is consistently rendering quality seed product. Due emphasis must
22
be placed on improving quality of improved maize seed. The major marketing strategies to
promote the project and gain considerable market share include:
3.7. Competition
There are different forms of competition that may face the envisaged improved maize seed
production farm. These are price and non-price based competition. Moreover, there are
different competitors that will compete with the project either directly or indirectly. But the
improved maize seed production farm under discussion has contractual agreement strategies
with seed enterprises that could enable it to cope up with the different competitors in the
market. Moreover, it will frequently conduct competitors research which focuses on, the
strength and the weaknesses, the different competitors’ strategies, the techniques they use in
producing the quality seed, their customer handling methods, and others.
3.8. The Project Facilities and Services Plan
In order to provide improved maize seed farm of a high standard, it has been planned to
construct and develop the infrastructure and facilities that would viable to meet the
requirements of national standard farm. Accordingly, various facilities will be constructed
phase by phase starting with the most needed ones that are essential to commence the
operation of its farm activities.
Since the project will be engaged in improved maize seed production by contractual
agreement the main sources of its annual revenue would be from the sale of the seed. Based
on the agreed price with the seed enterprise, the envisioned project delivers the seed.
3.8.1. Feature of the sector
Agriculture is the backbone of the economy and the most volatile sector mainly owing to its
dependency on rainfall and the associated seasonal shocks that affect productivity. More
than 85% of the Ethiopian population depends on agriculture for their livelihood. Within
the context of the Ethiopian economy, the Agriculture sector traditionally includes economic
activities such as crop and livestock production in which the crop sector has been the major
driving element.
23
The Ethiopian economy is basically comprised of smallholder farming as well as medium and
large scale commercial farming. Relatively speaking, commercial farms are not significant in
terms of area cultivated and volume of production, even though the role has slightly
increased in view of the recent phenomena associated with the establishment of flourishing
cut flower farms in the country which is largely dominated by foreign investment.
Ethiopia is potentially a wealthy country, endowed with abundant resource conducive to

agricultural development such as fertile soil and good rainfall over large regions. Agriculture
accounts for the lion share of the foreign exchange earnings. The sector contributes about
90% of the total export of commodities. The country’s industrial development programs are
closely tied to value-added processing of agricultural outputs with equal emphasis to both
large & medium scale as well as small scale manufacturing industries. The sector registered
significant growth for the last four consecutive years due to good climatic condition
accompanied by increasing crop productivity through agriculture input intensification and
area expansion.
3.8.2. Beneficiaries
The country will get a contribution to its national income through domestic consumption
and export. This project will provide employment opportunity to the local population, this
will raise the living standards of the people working in this project, and they also learn the
latest technologies in crop production and also make use of them in their own farm. The
regional government will also generate revenue in the form of land rent will be an
additional source of income on land resources.
The investor, which is making an investment on the land and doing a lot of agricultural
production (improved maize seed) activities in developing the land will be benefitted in
terms of return on their investment during the lease period.
3.9.Past and Present Intervention
Fruit and vegetable production project has a technically strong, knowledgeable and experienced
team to execute the project on time. With the vast knowledge base in agri-business activities, the
24
company has tangible experience in making this project a success. Conflict in the area may retard
plan of project.
3.10. Justification of the Project
Ethiopia has huge investment potentials for agricultural development. Currently, investment
in the agriculture sector is found to be more attractive and profitable in diverse sub-sectors
ranging from food products, industrial raw materials to bio-fuel. The agriculture sector
accounts for 47% of the Gross Domestic Products of the country, provides 85% of
employment and 90% of foreign currency earning.
Moreover, the country has a huge market potential for crop and livestock produced with
comparative advantage to the Middle East, Europe, and Asia. For the past five consecutive
years, the agriculture sector was growing faster with more than 11% average annual growth.
In addition to the contribution to the national growth, the growth has triggered the increase
in the domestic market has for both livestock and food crops.
Looking at the agro-climatic condition i.e. average temperature, rainfall, physic-chemical

properties of the soil and the distribution of the rainfall give an indication that the proposed
land is suitable for cultivation of various crops but especially fruit and vegetables. The
physic-chemical properties of the soil indicated in the information sheet provide further
confidence for the success of the project. Moreover, the planning on the financial part of
the project i.e. investment, cash flow, return on investment, profitability and the cost-benefit
ratio will show a positive trend.
3.11. Support for the Project
The financial support i.e., the equity infusion in the form of cash and kind for this project on
investments shall be received from promoters. The promoter/investor shall receive equity
infusion in the form of cash or kind from company hereby for its project. The company shall
take the financial support in the form of project loan from development bank of Ethiopia.
In addition to our in-house team, we will also interact with the Government and Private
25
Seed enterprises, Ethiopian Institute of Agriculture Research to get timely support and
valuable advice in this project based on their experiences.
We are also expecting support from Agricultural office and responsible government officials
for identification of suitable land and facilitation of the documentation and import of farm
machinery and equipment, farm inputs for the success of this project. It appears to be a joint
project of improved maize seed production farm project and Ministry of Agriculture,
Government of Ethiopia, as we need lots of support from the Ministry of Agriculture at
various level of implementation of activities in this project. Without their help and support,
it will not be possible to make this project a success.
4. TECHNICAL STUDIES
4.1. Description of the Project Product
The envisioned improved maize seed farm will provide improved maize seed to the dealer/
Pioneer Hybrid seed PLC which will be distributed to the local investors and small holder
farmers in large. Hence, the project products contribute and take share part in mitigation of
the shortage of improved maize seed encountered.
4.1.1. Land Use Plan
The total land envisioned for the project is 57 ha. The total area for the production is 55 ha,
1 ha for green area and the remaining 1 ha (10,000 m2) will be allocated for construction of
the warehouse, residential, offices and, as revealed below.
Table 3: land utilization Plan
No Description Land M2
Basement Ground First floor-Twelve floor
1 Building (G+12)
1.1 Basement 1100
1.2 Ground 1100
1.3 First floor-Twelve floor 1100
Total 1100
26
4.2. Construction work and Technology

4.2.1. Construction schedule
The construction project is proposed to be started on July 2019, and is expected to be

finished on July 2022. As seen in the abbreviated construction schedule above, a majority of
the schedule’s time is made up of five major activities; concrete, building Enclosure,
masonry, mechanical and Electrical install. Concrete activities include processes such as
placing foundations and slab on deck. The Building Enclosure Phase includes erecting the
scaffolding that will allow for exterior sheathing installation and bricklaying.
Mechanical and Electrical install coincide with each other due to the need for coordination between
the two divisions. There are several periods of construction during the schedule in which there are
multiple construction activities occurring at the same time.
The construction site must be organized accordingly as these processes take place. As with any
construction project, the goal of the schedule will to complete all construction activities before the
required Date of completion.
This date of completion is practical based on the time of year in which the building will be
completed. The team allowed a two week contingency for any setbacks. Typically, winter
construction tends to cause unforeseen delays that negatively impact a construction project. These
conditions can and will almost undoubtedly impact the project schedule by causing unforeseen
delays and project inefficiency.
4.2.2. Architectural Design & Layout
Although functional spaces for the project were laid out in significant detail, the rest of the building
had designated spaces but set layouts. It was at the discretion of the project promoter to devise
typical layouts for the non-detailed commercial and office spaces. To make sure that the building’s
layouts were practical, the project owner researched typical architectural layouts for laboratory and
executive office spaces. The walls and partitions throughout the floor will congruent with the
structural frame and column locations.
27
4.2.3. Structural design
One of principle deliverables of the project is the structural design of the building. The structural
bays were coordinated with the layout of the building adjustments will be made to the bays if
specific layouts are necessary. The frame will be made up of a grid with repeating standard structural
bays. Included in the structural system are bay sizes, shape and size of structural members, floor
compositions and curtain walls. These elements were established to resist gravity ad lateral loads as
appropriate.
The gravity load design will completed for two frames; one of structural steel and one of reinforced
concrete. The structural steel frame will chosen for further design based on cost per square foot,
local availability of material and constructability considerations, such as erection and fabrication.
The steel system will then designed for lateral loading with necessary adjustment being made to
framing.
4.2.4. Reinforced concrete
The project group prepared hand structural design calculations for a typical bay of a reinforced
concrete frame. In all reinforced concrete bay designs, a superimposed dead load of 8 pounds per
square foot will be assumed for mechanical equipment, floor coverings and ceilings.
Similarly, the design of the typical bay accounted for the use of different commercial space, in which
a live load of 1000 pounds per square was assumed. Loads will be calculated based on the
requirements of the minimum Design loads for Buildings and other Structures.
4.2.5. Foundation Design
The design of a superstructure may be accurate, have considered all possibilities and still fail
because the substructure is incapable of distributing the applied loads to the supporting soil.
Foundation design takes more into consideration than merely the loading from the columns. While
the main part of the project focused on the structural frame and its alternate designs, a preliminary
foundation plan was designed based upon maximum load carried from the superstructure through the
columns. The foundation design conducted by the project team consisted of the selection of
28
foundation type, determination of the bearing capacity and the design for typical interior and exterior
spread footings.
4.2.6. Construction Plan and process
The construction process for this project is normally a disjointed three mages development by which
the conceptualized need of the promoter of this project is translated into a functional facility that will
meet their needs in terms of time, cost and quality.
Based on a general program of the project owners the consultant who is going to be hired makes site
studies, develops structural designs, prepares drawings and specifications, determines quantities
involved and estimated the resultants costs. All these activities will be done in the first phase of the
project which is the design stage after the document are produced by the designers have been
received, and the works secured the project is supposed to enter the tendering stage. At this stage
contractors study the project document analyze and subsequently determine the construction
methods, built up their unit rates and submit their bids for the works. The promoter of this project
intends to compare the bids and award the contract for the lowest responsible bidder. This, is of
course, presupposes that the favorable proposal does not exceed the allocated budget.
After the award is made and the contract signed between this project owners and the contractor, the
project constructor is expected to prepare and submits a detailed construction program which
includes material schedule, manpower requirement and cash flow forecast.
After the award is made and the contract signed between this project owner and the contractor, the
project constructor is expected to prepare and submits a detailed construction program which
includes material schedule, manpower requirement and cash flow forecast.
4.3. Utilities
A number of utilities world be put in place in order to ensure smooth functioning of the
project. These utilities include:
Table 4: Utilities
No Description Qty. Unit cost Cost (Birr)
29
1 Electricity supply, kWh 100,000 1.30*10,000 130,000

2 Water Supply m3 50,000 10*500,000 500,000
20,000
3 Telephone and Internet Broadband
2000 19*2000 38,000

4 Fuel, Oil and lubricant
1,188,000
Total
30
4.4.Engineering and civil works
4.4.1. Land, Building and Civil Works
The Mixed use building has a total site area of 1174 m2. The building floor area has covered 74 m2
and the remaining 1100 m2 is left for construction. The type of buildings and its corresponding civil
construction cost is given on Table 5.
Table 5: List of Building and Civil Works and Their Costs

No Description Total price
A. SUB-STRACTURE
1 excavation and earth works 279,570.67
2 concrete work 1,936,546.34
Sub total 2,216,117.01
B. SUPER STRACTURE
1 Concrete work
7,753,358.45
2 Block work
551,534.40
3 Roofing
171,108.00
4 Carpentry and joinery
323,760.00
5 Metal works
820,860.00
6 Finishing
3,111,379.44
7 Painting
275,798.88
8 Electrical installation
7,236,330.00
9 Sanitary installation
1,151,022.00
Subtotal
21,395,151.17
A+B
23,611,268.18
Vat (15%)
3,541,690.23
Grand total
27,152,958.40
As shown on Table 5, the total cost of building and civil work is estimated at Birr 27,152,958.40 and
out of which the proponent has worked more than birr 23.6 million.
5. ORGANIZATION AND MANAGEMENT
5.1. Manpower requirement
The list of manpower and the annual cost of labor is indicated in Table 6.
Table 6: Manpower Requirement and Annual Labor Cost
Position No Qualification Monthly Annual

SN salary in salary in
Birr Birr
1 General manager 1 BA in management 120,000
10,000
2 Building admin 1 BA in Acct/Mgt 96,000
8,000
3 Secretary 1 10+2 in secretariat science 36,000
3,000
4 HRM Officer 1 10+2 in HRM/Management 48,000
4,000
5 Technical and 1 Diploma in building maintenance 96,000
maintenance manager 8,000
6 Finance head 1 BA in Accounting 72,000
6,000
7 IT Technician 1 Diploma in computer science/IT 72,000
6,000
8 Marketer 1 Diploma in marketing 60,000
5,000
9 Accountant 1 Diploma in accounting 48,000
4,000
10 Guards/Security 4 Basic 30,000
2,500
11 General Service head 1 Diploma in Management 72,000
6,000
12 Purchaser 1 Diploma in purchasing &Sup Mgt 42,000
3,500
13 Electrician 1 10+2 in general electricity 48,000
4,000
14 Plumber 1 10+2 in general mechanic 42,000
3,500
15 Casher 1 10+1 in bookkeeping 42,000
3,500
16 Cleaner 5 Unskilled 36,000
3,000
17 Maintenance officer 1 10+2 in General mechanic 42,000
3,500
18 Driver 1 10 completed 30,000
2,500
Total 26 1,032,000
86,000
Benefit (20%) 206,400
17,200
Grand Total 1,238,400
103,200
5.2.2 Labor Availability
Workers for this type of plant are available throughout the year. No foreseeable problems are
expected as most of the work requires no previous skills.
5.3 Project implementation
The project’s implementation is expected to take 24 months. The major activities include Bank loan
processing construction of the building, cleaning the area around the building, Procurement of
equipments and start rendering services. The time schedule for major activities is presented below:
Table 7: project Implementation schedule
SN Activities Date
1 Preparation Project Proposal May 2019
2 Bank loan processing June-July 2019
3 Site Development July 2019
4 Building and construction work August, 2019-July 2022
5 Preparation for service September, 2022
6 Service execution February, 2022
5.4 Organizational Structure
1. 5.4.1 Organization and management
Organizational Structure
The organizational structure of the project is designed by including all the necessary personnel under
the right division. At the top of the organizational structure, there will be a manager with the
responsibility of supervising the overall activity of the building. Depending upon the nature of the
center and the amount of work to be performed; there exist auxiliary units under the general
manager.
Employees under each unit will be supervised by the department head that is accountable for the
general manager. General Manager is appointed by the owners
As clearly shown in the organizational structure, the central organization has one general manager
and three main sections. Under the general manager, there are the Marketing Department,
Maintenance and Building administration department. Under building admin dept there exist two
sections i.e., HRM & finance and general service. Further subsections are also organized under
technical and maintenance manager. The following section deals with the duties and responsibilities
of each department.
A. The General Manager’s Duties and Responsibilities
He/she will plan, organize, direct and control the overall activities of the building.
He/she will devise policies and strategies that will enable the center to be profitable.
He/she will incorporate modern technological innovation that will facilitate the service
delivery of the building to increase customer’s satisfaction.
He/she will plan, organize, direct and control the human and non-human resources of the
building so as to achieve the short and long run objectives of the organization.
B. Building Administration Department

The building Administration Department of the multipurpose building has two main sections (HRM
and Finance and General Service section). It has responsibility for undertaking the following
activities;
manage the human resources and control employee’s activity
Well, non-human resources of the project, which include; effective handling of the different
resources of the building, and devise strategies of controlling against fraud and damage
will provide the right material or inventory to the center with the right price at the right time.
will plan, organize direct and control the financial transaction of the building by using all the
necessary documents.
Accountant and casher that will collect money from the customers
will develop sound financial control system by developing modern financial control systems.
will prepare the annual financial statements and prepare condensed reports for both the
General Manager and another concerned government body.
Follow the overall status of the business and provide maintenance and repair services
C. The Marketing Department
will handle the overall marketing activities of the organization which includes planning,
organizing, directing, and controlling.
will develop the marketing strategies for future multipurpose building development
will develop effective customer handling strategies.
Execute the promotion methods.
A. Technical and maintenance manager
 Will handle the overall physical maintenance and related issues

 Will make sure electricity and back up is organized.
 Follow up security issues and educate tenants
 Works in collaboration with general service to make sure tenants are well served
Owners
General Manager
Building Maintenance Marketing

administration Department Department
Personnel Promotion
Finance
&Property
Officers
Figure 1.organizational structure
IT, Supervisors
Electricity
5.6 Financial Requirement and Analysis

The financial resource is a prime resource for undertaking any activities. Hence for implementing
this mixed use building a total of 34,512,183.20 ETB is required. From this 30% 10,353,655 birr will
be covered by the promoter of the project while the rest 70% (24,158,528) will be covered through
loan from bank at the prevailing interest rate.
Therefore the said amount of finance is needed for undertaking the following.
5.1 fixed Investment

A. Land, Building & Construction
S.N Description of works Total Cost in birr
1 Building construction 27,152,958.40
2 Site Development 50,000
3 Design and supervision 120,000.00
4 1st Year land lease 422,640
Total 27,745,598.40
B. Building Machineries and Equipments

SN Description Measure Qty Unit cost in Total cost in
ment Birr Birr.
1 Generator Unit 1 300,000.00 300,000.00
2 Carpentry tool box Set 1 27,000.00 27,000.00
3 Electrician tools box Set 1 18,500.00 18,500.00
4 Plumber tools kit Set 1 12,300.00 12,300.00
5 Fire extinguisher Unit 12 16,000.00 192,000.00
(Security Equipment)
6 Elevator Unit 1 750,000 750,000
Total 1,123,800 1,299,800
C. Vehicle
SN Description UOM Qty Unit Cost in Total cost in Birr Remark
Fr.
1 Mini-Bus Unit 1 300,000.00 300,000.00 Duty Free
Total 300,000.00
D. Office Equipment’s
SN Description Measurement Qty Unit cost in Total cost in
birr Birr
1 Managerial tables Unit 1 12,600.00 12,600.00
2 Managerial chairs Unit 1 19,500.00 19,500.00
3 Office table with chair Unit 7 12,000.00 12,000.00
4 Secretarial table with chairs Unit 1 8,500.00 8,500.00
5 Computer with chairs Unit 1 15,000.00 15,000.00
6 Shelf Unit 3,500.00 3,500.00
7 Filing cabinets Unit 1 1,500.00 1,500.00
8 Guest chairs Unit 1 4900 4900
9 Fax & Telephone machine Unit 1 1,300.00 1,300.00
10 Carpet and Curtain LS 1 23,000.00
Total 101,800.00
Working Capital
Operating Expenses
SN List of Items Annual cost in birr Assumptions Used

1 Audit and legal fee 48,000.00 4000 br/per ,month
2 Stationery supplies 12,000.00 1000 br/month
3 Promotional Cost 40,000.00 Lump sum annual cost
4 Property Insurance 84,009.00 1% of the building
5 Cleaning Supplies 12,000.00 1000 br. Per month
6 Uniforms 12,000.00
7 Water consumption 5,000.00 2500 m3 by 3.15 br
8 Electric consumption 130,000.00 100,000KWH By Br.1.30
9 Fuel 38,000.00 2000 lit per year by Br.19
11 Telephone & fax 20,000.00 1800 per month
12 Repair expense 72,018.00 2% of building cost
13 Miscellaneous costs 40,000.00 6000 per month
Total 513,027.00
Pre-service Expenses
SN Description Cost in birr
1 Project proposal 100,000.00
2 Licensing fee and others
Total 100,000.00
Summary of Total initial investment cost

SN Description Cost in Birr Percentage Share
1 Land, building & construction 27,745,598 80.39%
2 Building machines & Equipments 1,299,800.00 3.77%
3 Vehicle 300,000.00 1%
4 Office Equipment 101,800.00 0.29%
5 Total fixed investment cost 29,447,198.00 85.32%
6 Salary expense 1,238,400.00 3.59%
7 Operation Expense 513,027.00 1.49%
8 Pre service Expense 100,000.00 0.29%
9 Total Working capital 731,836.00 2.12%
10 Sub total 4,604,532.00 7.49%
11 Contingency (10%) 460,453.20
Total initial investment capital 34,512,183.20
6 FINANCIAL ANALYSIS
The financial analysis of this mixed use project is based on the data presented in the previous
chapters and the following assumptions: -
Finishing period 2 years

Source of finance 30 % equity
Debt finance 70 % loan
Bank interest 13%
Discount cash flow 10%
Accounts receivable 30 days
Raw material (perishable) 3 days
Raw Material (nonperishable) 30 days
Cash in hand 5 days
Accounts payable 30 days
Repair and maintenance 5% of equipment cost
6.1 Repair and Maintenance Cost
The annual repair and maintenance cost of the plant is estimated based on the following rates.
Table 8: Repair and Maintenance Cost

Item Rate
Machinery and equipment 5% of the total cost or Book value
Building and civil works 2% of the total cost or Book value

Utilities 5% of the total cost or Book value
6.2 Depreciation and Amortization
The following depreciation rates are applied to depreciate the assets of the project:
 Buildings and associated Civil works 5%, linear to scrap Value

 Machinery and Equipment’s 10%, linear to scrap Value
6.3 Total Revenue
Based on the projected profit and loss statement, the project will generate a profit
throughout its operation life. Annual net profit after tax increases from Birr 8,810,480 at
the beginning of the project to Birr 22,502,429 during the last year of operation year. The
detail is presented in Annex.
6.4 Discounted Payback Period
The payback period, also called pay–off period is defined as the period required
recovering the original investment outlay through the accumulated net cash flows earned
by the project. Accordingly, based on the projected cash flow it is estimated that the
project’s initial investment will be fully recovered within 3 year 9 months.
6.5 Cash flow
The projected cash flow of the envisaged project shows that the project would generate
positive net cash flows throughout the operation years. Cumulative cash flow generated by
the project towards the end of the first operation year will amount to Birr 9,259,139. At
the end of the project life, this amount will rise to Birr 23,618,548. The detail is presented
in Annex.
6.6 Benefit cost ratio
The BCR is defined as the ratio of the sum of the project’s discounted benefits to the sum of
its discounted investment and operating costs.
When BCR > 1, accept the project
When BCR < 1, reject the project
When BCR = 1, be indifferent

n
Bt
 (1  r ) t
t 0
BCR  n
C
 (1  tr ) t
t 0
BCR is 5 and positive this indicates this project would return 5 birr in benefits for each birr
spent.
6.7 Internal Rate of Return
The internal rate of return (IRR) is an indicator of the efficiency or quality of an investment.
A project is a good investment proposition if its IRR is greater than the rate of return that
could be earned by alternate investments or putting the money in a bank account.
Accordingly, the IRR of the project after tax is computed to be 34.13% indicating the
viability of the project.
6.8 Net present value
Net present value (NPV) is defined as the total present (discounted) value of a time series
of cash flows. NPV aggregates cash flows that occur during different periods of time during
the life of a project into a common measuring unit i.e. present value. It is a standard
method for using the time value of money to asses’ long-term projects. NPV is an indicator
of how much value an investment or project adds to the capital invested. In principle a
project is accepted if the NPV is non-negative. Accordingly, the net present value of the
project at 10% discount rate is found to be Birr 54,439,417 which is acceptable.
7 MONITORING AND EVALUATION

Monitoring of the project will be continuous and ongoing by the project promoter.
Monitoring and Evaluation of the project will be handled by the promoter on daily basis.
Tamiru Biru, and pioneer Hybrid seeds plc will develop a guideline for monitoring and
evaluation. The amount of input (Financial, material and manpower) will be evaluated
through a technical team that will be established containing members of Tamiru Biru, and
pioneer Hybrid seeds plc, Zonal and Woreda agriculture offices and Kebele administrative
organs and community members.
Moreover, during the final year of Project implementation the M&E data collected over the
Project implementation period will be used as part of a thorough assessment of Project
achievements. The Project is scaling up the development of efficient and sustainable village
organizations in region including the field testing of innovative technology and associated
capacity building of supporting institutions. The experiences so derived will be scaled
up/replicated in other parts of the region. This also involves major potential for scaling up
and synergies in relation to subsequent investment programme
8 ENVIRONMENTAL IMPACT ASSESSMENT

Consistent with the government’s high priority of encouraging private investment in the
agriculture sector, these integrated projects aim at agricultural production with due care to
reduce degradation and improve productivity of natural resources. Given the fact that these
projects intend to utilize the rain fed cultivation, certainly these reliefs the existing
degradation pressure on rural farm land imposed by the traditional farming system.
More importantly, the projects aim at reversing the environmental degradation trends
widely observable in the area by breaking the nexus between poverty and degradations. In
essence, the projects aim at solving the key problem area by breaking the nexus between
rural poverty, natural resource management and climate change mainly by creating
alternative and more lucrative income source for the local resource poor smallholder
farmers, who, otherwise should depend on the natural resource bases and hence causes the
degradations. The project promoters believe:
 environment and natural resource degradation is often a direct cause of rural poverty;
 rural poverty often exacerbates environment and natural resource degradation; and
 Climate change increases the vulnerability of rural people and the ecosystems they
depend on for their livelihoods.
Thus, opening alternative source of income by creating job opportunities within the project
can relieve the current pressure on the rural land in the project area. Besides, the project
promoters are fully aware of the Oromia Rural Land use and Administration Proclamation
No. 130/ 2007, which force any investor to cover at least 2 percent of the allotted land area
by indigenous trees.
9 CONCLUSIONS AND RECOMMENDATIONS
9.1 Conclusion
The objective of this proposed feasibility study is primarily to facilitate the promoter of the
project with investment information and provide an overview of the project. The proposed
feasibility may form the basis of an important investment decision and in order to serve this
objective, the document covers various aspects of Concept Development, Start-up,
Production, Marketing, Finance, and Business Management.
The feasibility is based on the information obtained from various agricultural sources as well
as discussions with businessmen. For financial model, since the forecast/projections relate to
the future periods, actual results are likely to differ because of the events and circumstances
that don’t occur frequently as expected.
Whilst due care and attention has been taken in performing the exercise, no liability can be
inferred for any inaccuracy or omissions reported from the results thereof. It is essential that
our report is read in its entirety with the financial model in order to fully comprehend the
impact of key assumptions on the range of values determined.
The project is accessible and has the necessary infrastructure such as road and telephone. The
proposed project clearly identifies all the necessary equipment, inputs, management of the
company and the required manpower. The highest authority in the project will be vested in
the hand of the owner. He will control the overall activities of the proposed project.
Demand projection divulges that there is high demand for seed production in the country.
Accordingly, the planned project is set to provide quality seed product in the area.
The proposed project possesses a wide range of economic and social benefits such as
increasing the level of investment, tax revenue and employment creation for both women
and youths. It will have also environmental concerns to protect it by planting trees around
its working area and by utilizing environmental friendly raw materials. Generally, the project
is technically feasible, financially and commercially viable as well as socially and
economically acceptable. Hence the project is worth implementing.
9.2 Recommendations
Financial sensitivity analysis shows that the project is highly sensitive to a decrease in
productivity/yield but relatively less sensitive to an increase in raw material and investment
costs. Therefore, it is recommended that the promoter should give great attention to the
possible reasons for yield reduction. In this case, different mechanisms should be selected and
implemented to increase production. In addition to this, the investor/promoter should
decrease its cost that lowers profitability. The project must utilize modern technological
styles to capture the planned market share. To do so, it has to design an effective strategy to
achieve this plan.
Although due care and diligence have been taken to compile this document, the contained
information may vary due to any change in any of the concerned factors, and the actual
results may differ substantially from the presented information. In this case, any delaying to
implement the project creates some problem on its profitability as there is always change like
change in the price of services and goods, cost of raw materials, customers preference and
purchasing power, etc... So, it is recommended that investors should implement the project
as soon as possible before any change occurred.
Annex 1. Sales Revenue
Description Project year
1 2 3 4 5 6 7 8 9 10
Ground floor Rent
9,240,000 10,164,000 11,180,400 12,298,440 13,528,284 14,881,112 16,369,224 18,006,146 19,806,761 21,787,437
Size
1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price
350 385 424 466 512 564 620 682 750 825
Rent for shop and office 1-3 floor
2,956,800 3,252,480 3,577,728 3,935,501 4,329,051 4,761,956 5,238,152 5,761,967 6,338,163 6,971,980
Size
1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price
224 246 271 298 328 361 397 437 480 528
Rent for shop and office 4-7 floor
2,890,800 3,179,880 3,497,868 3,847,655 4,232,420 4,655,662 5,121,229 5,633,351 6,196,687 6,816,355
Size
1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price
219 241 265 291 321 353 388 427 469 516
Rent for shop and office 8-12 floor 1,980,000 2,217,600 2,439,360 2,439,360 2,683,296 2,683,296 2,951,625 2,951,625 3,246,787 3,246,787
Size 1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price 150 165 182 200 220 242 266 292 322 354
Parking
91,250 100,375 110,413 121,454 133,599 146,959 161,655 177,820 195,602 215,163
Size
1110 1110 1110 1110 1110 1110 1110 1110 1110 1110
unit price
5 5.50 6.05 6.66 7.32 8.05 8.86 9.74 10.72 11.79
Total Sale
17,158,850 18,914,335 20,805,769 22,642,409 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
Annex 2. operating cost
Operating years of the project
Description 1 2 3 4 5 6 7 8 9 10
A. Direct cost
Raw Material
Cost
513,027 538,678 565,612 593,893 623,588 654,767 687,505 721,881 757,975 795,873
Sub-total
Total Direct cost
B. Indirect cost
 Wages and 1,238,400 1,300,320 1,365,336 1,433,603 1,505,283 1,580,547 1,659,574 1,742,553 1,829,681 1,921,165
Salary
 Repair and 667,449.00 667,450.00 667,451.00 667,452.00 667,453.00 667,454.00 667,455.00 667,456.00 667,457.00 667,458.00
Maintenance
 Property
Insurance 4,275.00 4,275.00 4,275.00 4,275.00 4,275.00 4,275.00 4,275.00 4,275.00 4,275.00 4,275.00
 Utility 1,188,000 1,247,400 1,309,770 1,375,259 1,444,021 1,516,222 1,592,034 1,671,635 1,755,217 1,842,978
 Land lease 422,640 422,641 422,642 422,643 422,644 422,645 422,646 422,647 422,648 422,649
 Advertising
and Promotion 50,000.00 50,001.00 50,002.00 50,003.00 50,004.00 50,005.00 50,006.00 50,007.00 50,008.00 50,009.00
 Miscellaneous
Expense 40,000.00 40,001.00 40,002.00 40,003.00 44,003.30 48,403.63 53,243.99 58,568.39 64,425.23 70,867.75
Total operating 4,123,791 4,270,766 4,425,090 4,587,130 4,761,271 4,944,319 5,136,739 5,339,022 5,551,686 5,775,275
cost
Annex.3 income statement
Operating years of the project

Description 1 2 3 4 5 6 7 8 9 10
Sales
Revenue 17,158,850 18,914,335 20,805,769 22,642,409 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
Less: 4,123,791 4,270,766 4,425,090 4,587,130 4,761,271 4,944,319 5,136,739 5,339,022 5,551,686 5,775,275
Operating
cost
Income 13,035,059 14,643,569 16,380,679 18,055,279 20,145,379 22,184,667 24,705,145 27,191,888 30,232,314 33,262,446
before
Depreciation
and interest
Less: interest 448,658.00 448,658.00 448,658.00 448,658.00 448,659.00 448,660.00 448,661.00 448,662.00 448,663.00 448663
Income 12,586,401 14,194,911 15,932,021 17,606,621 19,696,720 21,736,007 24,256,484 26,743,226 29,783,651 32,813,783
before
Depreciation
Less: 0.00 0.00 667,449 667,450 667,451 667,452 667,453 667,454 667,455 667,455
Depreciation
Profit /Loss 12,586,401 14,194,911 15,264,572.00 16,939,171.00 19,029,269.00 21,068,555.00 23,589,031.00 26,075,772.00 29,116,196.00 32,146,328.00
Before Tax
Less: Tax 3,775,920.30 4,258,473.30 4,579,371.60 5,081,751.30 5,708,780.70 6,320,566.50 7,076,709.30 7,822,731.60 8,734,858.80 9,643,898.40
(30%)
Net Profit or 8,810,480.70 9,936,437.70 10,685,200.40 11,857,419.70 13,320,488.30 14,747,988.50 16,512,321.70 18,253,040.40 20,381,337.20 22,502,429.60
Loss After
Tax
Annex. 4 loan disturbance
Installment Periods (in years )
Item 0 1 2 3 4 5 6 7 8 9 10
Loan disbursed
24,158,528
Principal 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218
24,158,528
Interest (13%) 4,486,583 448,658 448,658 448,658 448,658 448,658 448,658 448,658 448,658 448,658 448,658
Total 28,645,111 448,658.00 448,658.00 448,658.00 3,899,876.00 3,899,876 3,899,876 3,899,876 3,899,876 3,899,876 3,899,876
Outstanding
Balance
Annex. 5 Man power
SN Position No Qualification Monthly salary Annual salary

in Birr in Birr
1 General manager 1 BA in management 10,000 120,000
2 Building admin 1 BA in Acct/Mgt 8,000 96,000
3 Secretary 1 10+2 in secretariat science 3,000 36,000
4 HRM Officer 1 10+2 in HRM/Management 4,000 48,000
5 Technical and maintenance manager 1 Diploma in building maintenance 8,000 96,000
6 Finance head 1 BA in Accounting 6,000 72,000
7 IT Technician 1 Diploma in computer science/IT 6,000 72,000
8 Marketer 1 Diploma in marketing 5,000 60,000
9 Accountant 1 Diploma in accounting 4,000 48,000
10 Guards/Security 4 Basic 2,500 30,000
11 General Service head 1 Diploma in Management 6,000 72,000
12 Purchaser 1 Diploma in purchasing &Sup Mgt 3,500 42,000
13 Electrician 1 10+2 in general electricity 4,000 48,000
14 Plumber 1 10+2 in general mechanic 3,500 42,000
15 Casher 1 10+1 in bookkeeping 3,500 42,000
16 Cleaner 5 Unskilled 3,000 36,000
17 Maintenance officer 1 10+2 in General mechanic 3,500 42,000
18 Driver 1 10 completed 2,500 30,000
Total 25 86,000 1,032,000
Benefit (20%) 17,200 206,400
Grand Total 103,200 1,238,400
Annex 6. discounted cash flow
Investme
Project Life years
Description nt Year
0 1 2 3 4 5 6 7 8 9 10
INFLOW
Net sales 17,158,85 18,914,33 20,805,76 22,642,40 24,906,65 27,128,98 29,841,88 32,530,91 35,784,00 39,037,72
0
revenue 0 5 9 9 0 6 4 0 0 1
TOTAL 17,158,85 18,914,33 20,805,76 22,642,40 24,906,65 27,128,98 29,841,88 32,530,91 35,784,00 39,037,72
0
INFLOWS 0 5 9 9 0 6 4 0 0 1
OUTFLOWS
Investment cost
34,512, - - - - - - - - - -
183
Operating cost 0
4,123,79 4,270,76 4,425,09 4,587,13 4,761,27 4,944,31 5,136,73 5,339,02 5,551,68 5,775,27
1 6 0 0 1 9 9 2 6 5
Income tax 0 3,775,920 4,258,473 4,579,371 5,081,751 5,708,780 6,320,566 7,076,709 7,822,731 8,734,858 9,643,898
TOTAL
34,512,183 7,899,711 8,529,239 9,004,461 9,668,881 10,470,051 11,264,885 12,213,448 13,161,753 14,286,544 15,419,173
OUTFLOWS
NET CASH 10,850,695 10,385,096.0 11,801,308.0 12,973,528.0 14,436,599.0 15,864,101.0 17,628,436.0 19,369,157.0 21,497,456.0 23,618,548.0
9,259,139.00
FLOW .00 0 0 0 0 0 0 0 0 0
NET PRESENT VALUE (NPV) 54,439,417.00
INTERNAL RATE OF RETURN (IRR) 34.13%
DISCOUNTED PAYBACK PERIOD (DPBP) 3.9years
Annex 7 undiscounted cash flow
Project Years
Investment
Description Operating years
Year
0 1 2 3 4 5 6 7 8 9 10
INFLFOWS
Inflow Funds
Own Equity
10,353,655
Long-term Loan
24,158,528 0 0
Inflow Operations
17,158,850 18,914,335 20,805,769 22,642,409 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
Sales revenue
0
17,158,850 18,914,335 20,805,769 22,642,409 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
TOTAL INFLOWS
34,512,183 17,158,850 18,914,335 20,805,769 22,642,409 24,906,650 27,128,986 29,841,884 32,530,910 35,784,000 39,037,721
OUTFLOWS
Investment cost 0 0 0 0 0 0 0 0 0 0
34,512,183
Operating cost 0 4,123,791 4,270,766 4,425,090 4,587,130 4,761,271 4,944,319 5,136,739 5,339,022 551,686 5,775,275
Financing Cost
· Principal 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218 3,451,218
0 0 0 0
·Interest 448,658 448,658 448,658 448,658 448,658 448,658 448,658
0 448,658 448,658 448,658
Income Tax 0 4,258,473 4,579,371 5,081,751 5,708,780 6,320,566 7,076,709 7,822,731 8,734,858 9,643,898
3,775,920
TOTAL
OUTFLOWS 34,512,183 8,348,369 8,977,897 9,453,119 13,568,757 14,369,927 15,164,761 16,113,324 17,061,629 13,186,420 19,319,049
NET CASH FLOW
0 8,810,481 9,936,438 11,352,650 9,073,652 10,536,723 11,964,225 13,728,560 15,469,281 22,597,580 19,718,672
BEGINNING
CASH BALANCE 0 0 8,810,481 18,746,919 30,099,569 39,173,221 49,709,944 61,674,169 75,402,729 90,872,010 113,469,590
ENDING CASH
BALANCE 0 8,810,481 18,746,919 30,099,569 39,173,221 49,709,944 61,674,169 75,402,729 90,872,010 113,469,590 133,188,262
Annex. 8 Civil works
No Description
Total price
A. SUB-STRACTURE
1 excavation and earth works 279,570.67
2 concrete work 1,936,546.34
Sub total 2,216,117.01
B. SUPER STRACTURE
1 Concrete work 7,753,358.45
2 Block work 551,534.40
3 Roofing 171,108.00
4 Carpentry and joinery
323,760.00
5 Metal works 820,860.00
6 Finishing 3,111,379.44
7 Painting 275,798.88
8 Electrical installation 7,236,330.00
9 Sanitary installation 1,151,022.00
Subtotal 21,395,151.17
A+B 23,611,268.18
Vat (15%) 3,541,690.23
Grand total
27,152,958.40

Feasiblity Study For Mproved Maize Seed Production Project

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Project Feasibility Study for the Production of Improved Maize Seed

FEASIBLITY STUDY FOR MPROVED MAIZE SEED PRODUCTION PROJECT

LOCATION: OROMIA REGION, EAST WOLLEGA ZONE, SASIGA WOREDA, MILKI

Consultant: sileshi angerasa econ, business and investment development

Address: Mobile: 0911896145/0966109246

3. THE MARKET STUDY ............................................................................... 19

3.8. The Project Facilities and Services Plan ............................................................................23

5. ORGANIZATION AND MANAGEMENT ..................................................... 32

Table 3: land utilization Plan ………………………………………….……….…..16

Table 6: Manpower Requirement and Annual Labor Cost………………………22

Table 7: project Implementation schedule………………………………………. 23

Table 8: Repair and Maintenance Cost ……………………………………………3

PROJECT OWNER Tamiru Biru

PROJECT TITLE Improved maize seed Production

PROJECT AREA Oromia region, East Wollega Zone, Saisga Woreda,

PRODUCTION CAPACITY 5700 quintal

COST OF THE PROJECT

PROJECT LIFE 10 YEARS

NUMBER OF WORKING DAYS 365 DAYS

FINANCIAL VIABILITY ( AT 10% DISCOUNT RATE )

NPV (NET PRESENT VALUE) 54,439,417 BIRR

IRR (INTERNAL RATE OF RETURN) 34.13%

PBP ( PAY BACK PERIOD) 3 year and 9 months

THE PROJECT IS TECHNICALLY FEASIBLE, FINANCIALLY AND COMMERCIALLY VIABLE

Ethiopia has an overarching policy framework called Agriculture Development Led

livestock for 28 percent, and remaining exports, a combination nonagricultural industry,

Agriculture progresses technologically as farmers adopt innovations. The extent to which

1.5. Project Objectives

 Contribute towards the eradication of poverty.

2.1.6. Registration Agency: - Ministry of Trade and Industry

2.1.7. Licensing Agency: - Ministry of Trade and Industry

2.1.8. Registration Number Date

2.1.9. License B=Number 007635 Date 24/12/86

2.1.10. Tax Paying Identification number (TIN) 0016091779

2.1.11. Value Added Tax Registration Certificate

2.2.Brief History of the promotrr

Ato Tamiru Biru is one of the model farmers in Sasiga woreda,

leading players in import-export - wholesale distribution and business representation in the

 Import and distribution of fertilizers, agro-chemicals and veterinary drugs to the

2.3. Past Performance of the Company

2.3.1. Operational Performance

ii) Agricultural Products

2.4. The Seed Industry

2.5.Brief Description of the sesame seeds

2.6.The Reasons and Motives for forming this business

 Proximity of raw materials from agro-processing plant,

2.7. The Main Expectations of the project

2.7.1. Short term Expectation

2.7.2. Long term Expectation

2.8.Rationale Behind the main assumption contained in the plan

Rationale Behind the main assumptions contained in the plan are:-

 To increase the volume of export,

3. THE MARKET STUDY

3.1. Market Analysis

3.2. Market attributes of maize

3.2.1. Non-tradability of maize

3.2.2. Price volatility

3.3.The Demand-Supply Gap

2009 2010 2011

3.4. Future market or Demand of fruits and vegetables

Year Projected Demand (qts)

3.5. Target Customers

3.8. The Project Facilities and Services Plan