Bakery

Bakery Project Start-Up Business Plan
Bakery Project Start-Up Business Plan from Saved
FEASIBILITY STUDY
2018
BEDILU KASSAHUN BAKERY
Page 1
BAKERY PROJECTFEASIBILITY 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+251-936-690-978E-mail:bimasconsult@gmail.com Website: www.bimasconsult-

et.com
SEPTEMBER, 2018ADDIS ABABA
FEASIBILITY STUDY
2018

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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…………………………………..………………………
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I.
EXECUTIVE SUMMARY
Awareness of high quality baked goods is on the rise. Good bread is a rare combination ofnutrition,
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
carbohydratesin a convenient, low fat form that is portable anddelicious. Good bread never goes out of
style. In this regard, the envisaged project is a newly established Ethiopian owned business
foundedbyMr. Bedilu Kassahun Alemu , who has been engaged in hotel services business for morethan 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 theintended business
is an attractive investment. The planned production capacity of the project isassumed 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 productioncapacity 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 ofits
products due to specialization and artisan manufacturing. The main marketing focus will beof all
community inclusive and having an eye catching sign, the scent of fresh bread wafting outof the
storefront, and periodic printed advertisements. After establishing the operation, the company will
explore the possibility of making takeout anddelivering wholesale bread and baked goods to area
restaurants and specialty retailers will alsobe considered. Hence, the market for the products under
consideration is projected to growrapidly in the coming years. The products will be supplied to high
demanding domestic marketand also will improve the supply of breads to and improve the lives of local
community throughemployment creation.
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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 ofthe total estimated
initial investment costs, approximately,Birr 4,646,818will be expected fromowners’ equity contribution
and Birr 2,159,818 for Purchase of Baking Machine withaccessories 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 interestrate of 11 .5%.
Furthermore, the financial analysis result, the business will generate positive net profit through
entireyears of operations.During 1
st
,2
nd
,3
rd
,4
th
and 5
th
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 theoperation years. The net cash in-flow for considered life span (i.e.1st year
to 5th year is indicated below,whereas Details are shown in annex.
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 onthe
overall development of the country in many aspects. In this regard, the company with itsinitial
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;
179,214 2,696,982 3,114,754 3,510,292 5,087,874422,444.33 4,801,507 10,167,307 18,017,833

28,702,779 43,097,107
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II.BACKGROUND INFORMATION
2.1Establishment
Project Name:….Bedilu Kassahun Bakery
Address:……………………...Addis Ababa City AdministrationArada 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
2.2Project Ownership
The business is a newly established Ethiopian
owned business founded by Mr. BEDILU KASSAHUNALEMU having the main focuses on bakery of breads
and pastries, The business promoters is at themiddle 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 usingmodern production
techniques. In addition the company’s objective is to generate income for the
company by participating actively in the business environment with creating employmentopportunities

for surrounding community. He is educated and has acquired pertinent workingexperiences of
undertaking quality hospitality services and capable to implement proper businessmanagement.
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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 techniquesand technology
and efficient management and distribution channels.To contribute in the food sector
developmentProducing breads and pastries using modern production techniques and technology
throughcreation of employment.To generate sustainable income for the company in order to expand
the operation and otherrelated 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
bytranslating
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 businessThe company recognizes
and rewards performanceThe company believes that staff development is integral part of its successThe
company strongly believes that teams, not individuals are the essential unit of theorganization for
achieving high performance and accelerating growth.The company believes in societal support and
community development, hence, all its personnelwill obey to this core value.
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2.6KEY 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
2.7FUNDING REQUIRMENT
The envisaged business requires total investment of
ETB 6,805,818
. Out of this, the total equitycontribution 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.
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2.8PRODUCTS DESCRIPTION
Products of the envisaged bread bakery will stand out from the competition due to theiruniqueness 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 thesourdough method
which uses no added yeast. This method imparts a rich flavor, which can betangy or mild, as well as a
toothsome inner crumb and a crackly crust. By using this method, askilled 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 fordays without the use of preservatives.The
project will also offer specialty breads, which will be made in the sourdough way with theaddition of
such luxurious ingredients as pastry with fresh ground pepper and dried spices withroasted green fruits.
Spent Grain Bread, made with barley leftover from beer brewing, is anotherunique product that BEDILU
KASSAHUN ALEMU bakery will offer. Two varieties of productstyle 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 atender crumb for traditional Ethiopian Style food. As
the needs of the customer change, so willthe lineup of its products. The bakery equipment is chosen
with versatility in mind.
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III.MARKET ANALYSIS
3.1PAST SUPPLY AND TREND ANALYSIS
3.1.1Bread 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
profitabilityof bakeries.According to CSA, 2013/14 report in Ethiopia there are 217 bakeries making
same products of which57% are held in sole ownership, 30% are PLC and 5% are share companies as
shown in the followingfigure.
FIGURE 1: Bakery Businesses
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 AddisAbaba suppliers of
production in the total supply.
Public, 1%Individualownership, 57%Partnership, 4%share company,5%PLC, 30%Co-operatives,2%Others,

2%
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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
thoroughanalysis of the set of factors that influence the marketing forces are essentially important
andnecessary. The first step in the process involves the analysis of the underlying characteristics of
thetarget 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 underconsideration.
Performance of the national economy;
Rate of population growth and
UrbanizationAccordingly, a throughout assessment of current status and future prospect of these

factors isdone as follows.
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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 annualgrowth rate
of 10.9 % during the last 11 years ending in 2013/14 which places Ethiopia amongthe 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 have6.6 %, 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 andservice were 5.4 %, 21.2 % and 11.9%;
respectively and their shares out of the total GDP wereabout 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 theseactivities by major industrial classification shows that Agriculture;
Industry and serviceindustries 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 forthe years 2017/18 to
2020/21.
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PERCENTAGE SHARE OF ETHIOPIA’S GDP IN EACH SUB
-SECTORIndustry\Year 2017 /18 2018 /19 2019 /20 2020 /21Agriculture, Hunting and Forestry
CropAnimal Farming and HuntingForestry
44.630.99.64.143.129.89.33.942.029.48.93.740.128.48.33.5
Fishing
0.0 0.1 0.1 0.1
Mining and Quarrying
1.4 1.5 1.4 1.3
Manufacturing
Large and Medium Scale
4.02.64.12.84.43.14.43.2
Manufacturing
Small Scale and Cottage Industries
1.41.01.31.11.21.11.21.1
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:
MoFEDPositive performance of the Ethiopian economy is expected to continue in the future.

Accordingto the
government’s “Growth and Transformation Plan” during the period 2016 –
2020 the GDPof the country is expected to grow at an average annual growth rate of 11%. As a result,
demandfor the products under consideration is also reasonably expected to increase as
economicexpansion continues which in turn will increase the demand for Flours.
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B.POPULATION GROWTH
Population is a key driver of good and service demand. According to CSA, the population of Ethiopiagrew
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
inyear 1995.
FIGURE 2: ETHIOPIA: POPULATION PROJECTION, 1995-2030
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 st
andard, it is a major factor for a higher demand of goods andservices. In Ethiopia, urban population
growth rate is projected to increase by 4% annually, the majorcontributing factor being the rural-urban
migration. By the end of the 2009/10, the total urban populationreached 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 areassumed to be major urban areas of the
country. As Addis Ababa is a capital city of Ethiopia, the cityholds the highest number of population
followed by Dire Dawa and Hawassa. The table below explainsthe number of population in major urban
areas of the country.
- 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000

140,000,00019952000200520102015202020252030
NO. of population
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URBAN POPULATION NUMBERTowns Number Of Population in Town
Addis Ababa 4,041,002Dire Dawa 387,000Hawassa 328,875Mekele 273,601Bahirdar 240,422 Nazareth

127,842Gondar 112,249Desse 97,314Jimma 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
ofurbanization.
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, universitiesand
hospitals as well as establishment of other business organizations creates a demand.
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3.3. Target Markets and Strategy3.3.1 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 ofa 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 alevel that comply with the
quality of competing products. Consistency refers to the consistentdelivering 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 determiningrevenue.
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 outof the market.
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Therefore, pricing strategy will be:Affordable pricing.continuously monitoring competitors’ price
Price revision is going to be performed when the need arises, andThe right price has to be fixed.
C. Channels of Distribution
The following are the main alternative distribution channels commonly used by producers to
reachconsumers.
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, atleast 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
forend 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 creditfor one to two weeks.
As the product of the envisaged project is entering a competitive market it has been assumed thatthe
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.
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IV.PRODUCTION PLAN AND TECHNICAL STUDY
4.1LOCATION 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.
4.2PROJECT STATUS
The business is a new establishment intended to establish bakery project mainly to produce
anddistribute high quality breads and pastry for domestic market.
4.3PRODUCTION CAPACITY AND PROGRAM
The envisaged bakery project is assumed to be installed with high quality bread and pastry
bakingmachine having capacity of 5,000 Pcs of (250g) bread in 8 (eight) hours. With the assumption of
16hours/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 1st, 2nd, 3rd
and4th 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 500In grams (250/pcs) grams 2,500,000 25,000In Kg Kg 2,500 125
Table-4. 2- Production Capacity in (Kg)/AnnumProducts in Kgs Yr-1 Yr-2 Yr-3 Yr-4Total 420000 480000
540000 600000
Breads 70% 252000 288000 324000 360000Pasteries 30% 168000 192000 216000 240000Capacity
utilization (%) 70% 80% 90% 100%
Table-4. 3- Production Capacity in (Tons)/AnnumProducts in Kgs Yr-1 Yr-2 Yr-3 Yr-4Total
420 480 540 600Breads 70% 252 288 324 360Pasteries 30% 168 192 216 240Capacity utilization (%) 70%
80% 90% 100%
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4.4PRODUCT TECHNOLOGY AND MACHINERIES
The envisaged production technologies are well-developed and in standardized process. The listof
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 perPro-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.
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4.5SOURCES OF BASIC RAW MATERIALS, AUXILLIARY AND UTILITIES
The basic raw material for bread baking project is different kinds of flour products. Flour for baking
breadis produced from hard wheat or a blend of hard and soft wheat, while flour for cakes and biscuits
is milledfrom 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. Theestimated annual cost of raw and auxiliary materials is given in the tables below.
Table- 4.5 : Flour consumptionDescription 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 consumptionDescription 70% 80% 90% 100%
UOM qub. Ltrs. qub. Ltrs. qub. Ltrs. qub. Ltrs.
Water (0.001 Cub/kg) 420 480 540 600Table
4.7: Electric consumptionDescription 100% 90% 80% 70%

UOM KW/hr KW/hr KW/hr KW/hrOVEN 3.60 3.24 2.88 2.52Volumetric Dough Divider 1.50 1.35 1.2
1.05Conical Rounding Machine 1.50 1.35 1.2 1.05Spiral Mixer with Fixed Bowl 3.40 3.06 2.72 2.38Bread
Slicing Machine 0.55 0.495 0.44 0.385
Total 10.55 9.50 8.44 7.39Table- 4.8: Consumption of Auxiliary materialsDescription100% 90% 80% 70%
Salt (0.010g/kg) 3,600 3,240 2,880 2,520Sugar (0.05g/kg) 12,000 10,800 9,600 8,400Yist (0.010g/Kg)
6,000 5,400 4,800 4,200Oil (0.025ltr/kg) 15,000 13,500 12,000 10,500Baking 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
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Table- 4.9:
Basic Raw Materials Costs at Different Capacity Utilization Rate
Description UOM Unit price 70% 80% 90% 100%
wheat flour Qtl. 1,750 378,000 432,000 486,000 540,000white 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 72,000Sugar Birr
50.00 420,000 480,000 540,000 600,000Yist Birr 5.00 21,000 24,000 27,000 30,000Oil Birr 90.00 945,000
1,080,000 1,215,000 1,350,000Baking pouder Birr 10.00 84,000 96,000 108,000 120,000others 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

DescriptionUOM Unit price 70% 80% 90% 100%
Electricity KWH 1.25 32,916 35,590 40,039 44,487Water Qub. Ltrs. 4.8 2,016 2,304 2,592 2,880
Total 34,932 37,894 42,631 47,367
4.6Other Investment Activities and Costs
4.6.1Building and Civil Works
The total plot area required for the envisaged bakery project for production plant is about 150 m2, out
ofwhich the total area on which baking plants to be installed including spaces for storage of raw
materials aswell as finished products is estimated to be
120 m2, 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.
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4.6.2Office Equipment & Furniture
The business will have standard office spaces for employees at Administrative level to meet
businessrequirement 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 5,500wooden selves with glasses 1 4,500 4,500Counters with
shelves 3 3,200 9,600Computer & Accessories 4 12,500 50,000Computer desk 4 1,800 7,200Clerical
Table 4 2,500 10,000Clerical Chair 4 2,300 9,200Managerial Chair 2 3,500 7,000Managerial Table 2 4,200
8,400First Aid Kit, Metallic, Small 1 950 950Guest chair with arm rest, leather 10 2,100 21,000Printer,
LaserJet 1 7,500 7,500
TOTAL 140,850
4.6.3VEHICLES
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 1 900,000 900,000ISUZI-FSR (Truck) 1 1,100,000 1,100,000
Total 2 2,000,000
4.6.4Power 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
FEASIBILITY STUDY
2018
Page 23
V.ORGANIZATION AND MANAGEMENT
5.1ORGANIZATION
In the proposed organization structure, the G/Manager will oversee the overall performance ofthe plant
while the day-to-day operation of the plant is led by Operations unit supervisor. Thereshall 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 isimportant to establish and staffing a market
research division, whose main activities focuses onmarket research and promotion. Thus, the proposed
bakery business
Organizational structure isindicated below.
5.2HUMAN RESOURCE
According to the organizational structure, the human resource by category and qualificationincluding
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
.Owner/G/ManagerAdministration &Finance Dep'tProduction &Technical Dep'tProcurment &Marketing

Dep't
FEASIBILITY STUDY
2018
Page 24
To ensure and improve the competence of the company and to increase the market share of
thefactory/bakery project, it is important that all the senior positions proposed be run by qualifiedand
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 Birr1,113,420
per annum including benefits. Table below shows Human Resource Requirements andRelated 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 9,500 114,000Executive Secretary 1 3,500 3,500 42,000
Sub Total
13,000 156,000
B. Production & Technical Dep't
Store Keeper 1 4,000 4,000 48,000Production Forman 2 3,500 7,000 84,000Mixer Operator 2 2,000
4,000 48,000Machine 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
24,000Sub Total
21,500 258,000
D. Administration & Finance Dep't
Admin & Finance Head 1 6,500 6,500 78,000Personnel Officer 1 3,750 3,750 45,000Standby Electrician 1
2,500 2,500 30,000Accountant/Cashier 2 3,100 6,200 74,400Drivers 2 2,750 5,500
66,000Cleaner/Janitors 2 1,100 2,200 26,400Guards 2 1,100 2,200 26,400
Sub Total 11 28,850 346,200Total Salary 28 84,350 1,012,200Employees Benefit 10% 8,435
101,220Grand Total 28 92,785 1,113,420
FEASIBILITY STUDY 2018
Page 25
VI.FINANCIAL ANALYSIS
6.1 BASIC ASSUMPTIONS FOR FINANCIAL ANALYSES
6.1.1PROJECT LIFE
The operational life of the project, a standard assumption of 5 years is considered. Hence, thecosts and
benefits of the project are computed over 5 years.
6.1.2REPAIR & 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.
6.1.3DEPRECIATION AND AMORTIZATION
Based on the Business Income Tax Proclamation Number 286/94, the following depreciation rates
areapplied 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%
6.1.4WORKING CAPITAL
The working capital requirement of the project during operation is calculated on the basis of the
minimumdays of coverage needed for the different elements of the working capital. Hence, the
minimum days arespecified as follows:-
Table-5.1: Minimum Days for Working Capital Need
Operating Costs/Year Working Days
Raw Material Cost 90Utility (Electricity cost + water) 90Salary and wages 90Administrative expenses
90Selling Expenses 90Fuel, Oil and Lubricants 90Repair and Maintenance 90Accounts Receivable
30Accounts Payable 30
FEASIBILITY STUDY 2018
Page 26
6.1.5DISCOUNTING
The total investment and equity capital of the project are discounted at 11.5% over the project years
6.1.6INCOME 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
typeof 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.
6.2RESULT OF FINANCIAL ANALYSIS
Projections are made based on above assumptions and all complete set of financial projectionsare
provided in this section. These projections include profit/loss statement, statement of cashflow and
balance sheets. The projections are prepared on an annual basis. Accordingly, thefinancial 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 ofthis, cost of fixed investment is assumed to be
ETB 5,006,574
as the major breakdown of the total fixedinvestment 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
Page 27
6.2.2Working Capital Summary
The envisaged bakery project needs to have sufficient finance to cover initial working capital
forsmoothest flow of activities. Hence, Summary of related working capital break-down is tabulated
below
Table-6.2: WORKING CAPITAL SUMMARYDescription Total Cost
Raw Material Cost 1,041,000Salary & Benefits 278,355Utilities 17,795Fuel, Oil & Lubrications
47,375Insurance 18,212Repair & Maintenance 60,707Other General Expenses 120,000
GRAND TOTAL
1,463,444
6.3FINANCIAL STRUCTURE AND SOURCES6.3.1 Investment Cost Structure
As shown in table below, the total investment costs required for the project is estimated to
beapproximately 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 twosources. These are partly based on equity contribution of the promoters, i.e,
about ETB
2.16million and
partly on the basis of funds to be received from external financer expected as bank’sterm loan facility of
Birr
4.65 Million.
SUMMARY OF INVESTMENT
DescriptionEquityInvestmentBank LoanNeededTotalInvestment
Building Remodeling works 285,000 285,000Machinery & Equipment 463,324
1,853,200
2,316,524Vehicles 400,000
1,600,000
2,000,000Power Supply Generator 90,000
360,000
450,000Office Furniture & Equipment 140,850 140,850
Pre- production Expenditure* 150,000.00150,000
Total Fixed Investment 1,529,174 3,813,219 5,342,374
Working Capital (Raw Material) 208,200 832,800 1,041,000Working Capital (Admin & General) 422,444
422,444
Total Investment Cost 2,159,818 4,646,000 6,805,818
FEASIBILITY STUDY
2018
Page 28
6.3.2LOAN 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 toend of November 2018;
which is repayable in quarterly basis with equal installment amount ofETB 308,686 at 11.5% interest per
annum. The table below presents Loan repayment schedule.
Table-6.4: Bank loan Repayment Schedule
YearsPrincipalPaymentInterest11.5%T/annualPaymentRemainingBalance0
4,646,000
731,246 503,500
1,234,745
3,914,754
819,035 415,710
1,234,745
3,095,719
917,365 317,381
1,234,745
2,178,354
1,027,499 207,246
1,234,745
1,150,856
1,150,856 83,890
1,234,745
-TOTAL4,646,000 1,527,726 6,173,726

6.4FINANCIAL VIABLITY AND STATMENTS6.
4.1PROFITABILITY
According to projected annual net profit from sales of its products, the envisaged project willgenerate a
net profit after tax of Birr 179,214 during its first year of operation and raises to Birr2,696,982 in the 2nd
year and it reaches Birr 5.09 million at the 5th year of operation. Net profit toequity and net profit to
total investment or return on investment (ROI
) are all attractive. The table below presents summary of projected income statement.
6.4.2CASH FLOW
The projected cash flow of the project shows that the project would generate positive net cash
flowsthroughout the operation years. The net cash flow generated by the project at the end of year-5
willamounts to Birr 43.10 million which has been birr 4.80 million in the first year and 10.17 million
duringyear-2 of operation. This implies the pay-back period of the project will be expected during
3rdperiod ofoperations. Details are shown in annex.
Page 29
6.4.3 BALANCE SHEET
The positive financial performances of the project are manifested in the balance sheet as well. As can
beseen from the projected balance sheet depicted in annex, the net worth of the project, which was
aboutBirr 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
6.4.5ECONOMIC AND SOCIAL BENEFITS
The economic impact of the project can be viewed in a number of ways. It can be viewedthrough its
specific impact such as employment generation and increasing government revenue.Moreover, other
benefits such as the creation of attractive environment for the development ofthe 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
ofcorporate tax and also contributes in the form of payroll tax. Furthermore the project will haveforeign
currency saving effect to the country by exporting value added agri-products.
Page 30
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
253,050Employees Benefits 101,22025,305
Total 1,113,420 278,355
OTHER GENERAL EXPENSES
Descriptions Ann.Costs Cts / 90 dys
Product Outlate (Sales) Shops 300,000 75,000Professional Expense(Audit, consultancy etc) 75,000
18,750Stationary & P.T.T 10,000 2,500Miscellaneous Expense 20,000 5,000Promotional & 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 1,250Electricity Consumption 1.25Br/Kwh 50,640
63,300 15,825Water consumption 4.8 Br/Cb.Lr 600 2,880 720Total
71,180 17,795FUEL, OIL AND LUBRICANTSDescription Cost/Litter Cons'n(Ltrs) Total Cost Cts / 90
dysVehicles/Generator 18.95 10,000 189,500 47,375INSURANCEDescription T/Asset Cost/year Cts / 90
dys
Fixed Assets 4,856,574 72,849 18,212
Total 4,856,574 72,849 18,212REPAIR & MAINTAINACEDescription 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
Power Supply Generator 114,200
5,710 1,428
Office Furniture & Equipment 140,850
7,043 1,761
Total4,856,574242,829 60,707
Page 31
WORKING CAPITAL SUMMARYDescription Total Cost
Raw Material Cost 1,041,000Salary & Benefits 278,355Utilities 17,795Fuel, Oil & Lubrications
47,375Insurance 18,212Repair & Maintenance 60,707Other General Expenses 120,000
GRAND TOTAL
1,463,444
DEPRECIATION & AMORTIZATIONDESCRIPTION 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
DescriptionEquityInvestmentBank LoanNeededTotalInvestment
Building Remodeling works 285,000 285,000Machinery & Equipment 463,305
1,853,219
2,316,524Vehicles 400,000
1,600,000
2,000,000Power Supply Generator 90,000
360,000
450,000Office Furniture & Equipment 140,850 140,850
Pre- production Expenditure* 150,000.00150,000
Total Fixed Investment 1,529,155 3,813,219 5,342,374
Working Capital (Raw Material) 208,200 832,800 1,041,000Working 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
FEASIBILITY STUDY
2018
Page 32
Projected Profit/ Loss Statement

Description Revenues year 1 year 2 year 3 year 4 year 5Capacity Rate 70% 80% 90% 100% 100%
Sales of Bread 2,817,010 4,200,000 4,725,000 5,250,000 8,092,810Sales 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 12,686,560Less: 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 11,218,626Expenses
Salary & Benefits1,113,420 1,280,433 1,472,498 1,693,373 1,947,379Utilities 71,180 81,857 94,136
108,256 124,494Fuel, Oil & Lubrications 132,650 152,548 175,430 201,744 232,006Insurance 50,994
58,643 67,440 77,556 89,189Repair & Maintenance 169,980 195,477 224,799 258,518 297,296Other
General Expenses 240,000 276,000 317,400 365,010 419,762Dep'n Working Premises
Remodelingworks14,250 14,250 14,250 14,250 14,250Dep'n Machinery & Equipment 92,661 92,661
92,661 92,661 92,661Dep'n Vehicles 80,000 80,000 80,000 80,000 80,000Dep'n Power Supply Generator
4,568 4,568 4,568 4,568 4,568Dep'n Furniture & Equipment 5,634 5,634 5,634 5,634 5,634Interest
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 7,827,498Tax (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
FEASIBILITY STUDY
2018
Page 33
Projected Cash Flow Statement
Description Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Equity Capital 2,159,818Loan 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 21,394,933Cash payment
Capital Investment 5,192,374Direct Material Purchase1,041,000Pre-Operating Expenses150,000Salary &

Benefits 1,113,420 1,280,433 1,472,498 1,693,373 1,947,379Utilities 71,180 81,857 94,136 108,256
124,494Fuel, Oil & Lubrication 132,650 152,548 175,430 201,744 232,006Insurance Expenses 50,994
58,643 67,440 77,556 89,189Repair and Maintenance 169,980 195,477 224,799 258,518 297,296Other
General Expenses 240,000 276,000 317,400 365,010 419,762Loan repayment
731,246 819,035 917,365 1,027,499 1,150,856Tax payment 96,500 1,452,221 1,677,175 1,890,157
2,739,624
Total payment6,383,374 2,605,969 4,316,214 4,946,241 5,622,113 7,000,605
Cash surplus/ deficit422,444 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
FEASIBILITY STUDY
2018
Page 34
Projected Balance Sheet
Description Inv't Year (1) Year (2) Year (3) Year (4) Year (5)
AssetsCurrent Assetsworking capital 1,463,444 1,609,789 1,770,768 1,947,844 2,142,629

2,356,892Cumulative Increase179,214 2,696,982 3,114,754 3,510,292 5,087,874Other Current
Assets150,000 187,500 234,375 292,969 366,211 457,764
Total Current Assets 1,613,444 1,976,502 4,702,124 5,355,567 6,019,131 7,902,529
Fixed AssetsWorking Premises 285,000 285,000 285,000 285,000 285,000 285,000Machinery &
Equipment 2,316,524 2,316,524 2,316,524 2,316,524 2,316,524 2,316,524Vehicles 2,000,000 2,000,000
2,000,000 2,000,000 2,000,000 2,000,000Power Supply Generator 450,000 450,000 450,000 450,000
450,000 450,000Office Furniture & Equipment 140,850 140,850 140,850 140,850 140,850
140,850T/Fixed Assets Befor Depn5,192,374 5,192,374 5,192,374 5,192,374 5,192,374
5,192,374Accumulated 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 EquityCurrent LiabilitiesDeduction Payable 392,970 1,043,925 1,799,095 2,671,922

3,677,742Tax 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 DebtBank loan Principal payable 4,646,000 3,914,754 3,095,719 2,178,354 1,150,856Total
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' EquityInvestment Capital 2,159,818 2,159,818 2,159,818 2,159,818 2,159,818

2,159,818Retained earning 170,253 2,562,133 2,959,016 3,334,777 4,833,480Capital Description
(197,113) (197,113) (197,113) (197,113) (197,113)Legal Reserve (5%) 8,961 134,849 155,738 175,515
254,394Total 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
FEASIBILITY STUDY
2018
Page 35
Internal Rate of Return (IRR) and Net Present Value (NPV)
Title/Years Project YearsTitle/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 RecoveryFixed 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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Bakery Project Start-Up Business Plan

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BEDILU KASSAHUN BAKERY

BAKERY PROJECTFEASIBILITY STUDY

PROPOSED LOCATION:-ADDIS ABABA CITY ADMINISTRATION

ARADA SUB-CITY; WOR.-05; H.N.083

BIMAS CONSULTING SERVICES PLC

: +251-911-547-774+251-936-690-978E-mail:bimasconsult@gmail.com Website: www.bimasconsult-

SEPTEMBER, 2018ADDIS ABABA

BEDILU KASSAHUN BAKERY

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

IV. Production Plan &Technical Analysis……

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

BEDILU KASSAHUN BAKERY

business environment with creating employment opportunities for surrounding community.Currently,

BEDILU KASSAHUN BAKERY

years respectively. Detail is annexed.

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;

179,214 2,696,982 3,114,754 3,510,292 5,087,874422,444.33 4,801,507 10,167,307 18,017,833

Project Name:….Bedilu Kassahun Bakery

Address:……………………...Addis Ababa City AdministrationArada 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.: ………………...

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

The business is a newly established Ethiopian

techniques. In addition the company’s objective is to generate income for the

company by participating actively in the business environment with creating employmentopportunities

BEDILU KASSAHUN BAKERY

2.3 BUSINESSES OBJECTIVES

The major objectives of the business are:

activities in the country.

2.4. VISION & STRATEGY

2.5. COMPANY VALUES AND CULTURE

Macro level Successes

Access to credit provision at lower interest rate as compared to the business’s

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;

Availability of raw materials relatively with low-cost and nearest locations

The envisaged business requires total investment of

. Out of this, the total equitycontribution is expected to

BEDILU KASSAHUN BAKERY

BEDILU KASSAHUN BAKERY

3.1PAST SUPPLY AND TREND ANALYSIS

3.1.1Bread Production and supply

Source: CSA, 2016

Public, 1%Individualownership, 57%Partnership, 4%share company,5%PLC, 30%Co-operatives,2%Others,

BEDILU KASSAHUN BAKERY

TABLE 3: TOTAL SUPPLY OF Bread 2007-2016