Feasibility Study For Integrated Food Production in Ethiopia

START-UP BUSINESS PLAN 2023
BUSINESS PLAN
FOR
THE ESTABLISHMENT OF INTEGRATED FOOD PRODUCTION
(BRADE, PASTRY, COOKIES, INJERA, AND OTHER DRY FOOD ITEMS)
APRIL, 2023
ADDIS ABABA, ETHIOPIA
BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 0

Table of Content
I. Executive Summery ………………………………………….….2
II. Background Information ……………………………...…………4
III. Market Analysis..……………………………………………..….11
IV. Technical Analysis…………………………………………..…...22
V. Organization and Management …………………………….........27
VI. Financial Analysis………………………………………………..29
VII. Annexes…………………………………..………………………34

I. EXCUTIVE SUMMARY
Today's consumer has less time to create wholesome, handmade/baked food, but increasingly appreciates
the nutritional and sensory benefits it provides. In this regard, the Underlying Company, “BETESEB
Bakery and Dry Food Production is an Ethiopian based company legally established as a Partnership
Company by young Ethiopian entrepreneurs who have been engaged in private services business
operations for many years.
During previous years of business operations, Founders/Promoters of BETESEB Bakery and Dry Food
Production has been providing acceptable trade service operations with expert manner of business
personality and gained the reputation among the community. However, by considering the current fast
and dynamic economic growth of Ethiopia especially in urban area, they have deeply understood and
inspired to engage in what the market necessitates for equivalent growth of Consumer goods trade Service
sector as well as strongly inspired to play a role in the agro-processing industry, mainly to participate on
Integrated Food Production; such as, Bread, Pastry, Cookies, Injera, and Other Dry Food Items along
with related commodity trade operations through both domestic and export markets.
Accordingly, the management of BETESEB Bakery and Dry Food Production has forwarded the other look
of business diversity, and hence, with this diversified business attitude the company has intended to implement
strategically planned business set-up with multiple product line. Moreover, the founders have motivated to
create leading company through uses of modern production technology, manufacturing/Production of quality
dry food products and applying best marketing techniques that enables service efficiency to distribute in the
local markets as a short-run plan as-well-as supply to export market in the long-term.
Regarding the market opportunity for the underlying Integrated Food Production Firm, although there
are many established competitors with in the city administration, the trend indicates that the demand for
and prices of most food commodities especially the staple food item have been continuously increasing at rate
higher than that of its supply. This is mainly driven by a rapid population growth and has caused shortage of
the products and rapid increase of their prices in the market. Hence, there is a huge market demand which
is all community inclusive and having an eye catching sign, the scent of fresh product wafting out of the
storefront, and periodic printed advertisements and will avail sample of its products liberally. In addition,
after implementing planned establishment, the company will explore the possibility of making takeout and
product marketing to Institutions, Wholesalers, Retailers and Households. Hence, the market for the
products under consideration is projected to grow rapidly in the coming years.

Regarding the investment cost on financing the establishment of intended food production, the total fund
required for planned capital investment along with initial working capital is estimated to be ETB
17,468,380. Out of this total investment value about ETB 12,183,380 is expected from firm’s Equity
Contribution and intended to cover investment costs of working premises remodeling, additional
machinery purchase, vehicles purchase, purchase of office furniture & equipment and working capital
fulfillments. On the other hand, the remaining project cost about ETB 5,285,000 will be sought from
external source as Capital Lease Financing facility for which It is projected that principal and interest on
the loan will be paid over five years period.
Furthermore, the envisaged business after expansion will generate a net profit after tax of ETB 17.25 ML;
ETB 23.26 ML; ETB 31.29 ML; ETB 32.32 ML; and ETB 33.30 ML; during its 1st ; 2nd, 3rd, 4th and 5th
year of operations respectively. Net profit to equity and net profit to total investment or return on
investment (ROI) are all attractive. Whereas, the project shows that the project would generate positive
net cash flows throughout the operation years. The cumulative cash flow generated after implementing
planned expansion project over five years will be ETB 576,000; ETB 16.93 ML; ETB 23.28 ML; ETB 31.72
ML; ETB 33.25 ML; and ETB 34.86 ML; during its Year-0; 1st; 2nd, 3rd, 4th and 5th year of operations
respectively.
On the other hand, 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 2.46 years. Whereas, based on the
cash flow statement, the calculated IRR before and After Tax as well as the net present value (NPV) are
all acceptable and computed at 68%; 62% and 12,846,905 Million respectively.
Finally, Introduction and uses of this new production technology has reliable positive impacts on the
overall development of the country in many aspects. In this regard, the company with its initial production
capacity after expansion intended to move forward, so that;
 It creates employment opportunity for about 38 permanent employees;

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

II. BACKGROUND INFORMATION

2.1 INTRODUCTION
As in all developing countries, the basis of the economy and industry is mainly based on agriculture in
Ethiopia and mainly grains have an important place in the agricultural production. Over 50% of average
daily caloric intake of an average household is from wheat, sorghum, and corn. Cereal production
accounts for roughly 60% of rural employment and 80% of total cultivated land. Households spend an
average of 40% of their total food budget on cereals. According to the World Food Program, 46% of the
Ethiopian population is malnourished, underscoring the importance of increasing domestic grain
production. Since, the basis of the economy is based on agriculture; the food production constitutes a
significant part of the manufacturing industry.
On the other hand, although the potential of Ethiopia in terms of agricultural production is well known, the
desired production level has not been obtained due to the lack of agricultural mechanization,
underdeveloped irrigation system, and low usage of fertilizers, pesticides, and certified seed. However, as
a result of improved policies and efforts made by Ethiopian government towards the agriculture and food
sector improvement by making a special focus for engaging private investment activities, the food
processing and production industries have been indicating ever promising developments in recent years,
and hence such Food processing industries include Flour Milling and Secondary processing
(Baking/Production). In both cases, the milling and secondary processing are major sources of income for
thousands of people in Ethiopia.
In custom milling, customers bring their grain to a mill and have it ground for either a small fee or a
proportion of the flour. It is popular in rural areas and in less affluent districts of urban centers, where it
provides a service to low-income customers who may not be able to afford packaged flour from retailers.
However, in major cities like Addis Ababa the majority of millers pack their flour into retail bags. Retail
packs compete with flour that is sold in open markets from sacks, usually at a lower price. The miller must
therefore offer potential consumers a reason to buy more expensive flour in packets. Benefits such as
guaranteed quality; freedom from stones or other contaminants; and a guaranteed weight can be promoted as
positive benefits to consumers. Wholesale or institutional markets are more diverse and include sales to
schools and colleges, other government institutions (prisons, army barracks etc.), international food relief
operations, bakeries and wholesalers (who in turn supply retailers and/or bakeries).

While considering the baking and/or production final consumer focused outputs, Bread is one of the most
popular wheat-based food products, and is a staple food in many countries. Bread and Pastry products are
made by adding basic ingredients, such as water, wheat flour, yeast, sugar, milk powder, improver,
shortening, and salt; although only flour, water and yeast are required. Flour and water are the most
important ingredients in Bread and Pastry products recipe, as they affect the crumb texture. Refined flour
of hard red spring wheat is traditionally used to measure quality due to hard red wheat breeding programs
primary objective, which is to produce good bread quality.
Standard methods for measuring the important parameters were developed by Food and Drug Quality
Control Authority of Ethiopian and based on the proper application of Food Science, which is a discipline
concerned with all technical aspects of food, beginning with harvesting or slaughtering, and ending with
its cooking and consumption. It is considered one of the agricultural sciences, and is usually considered
distinct from the field of nutrition. To this accord, the aims of the food industries (food processing) today
are strictly performing through uses of enhanced food processing technologies to meet the national and
international standard, which includes: extended shelf life (i.e., storage longevity), product variety and
fulfilling required food nutrients.
Thus, having all facts above in mind and considering such golden opportunities, promoters of the
underlying company have inspired to participate in the development activities of the country by taking
part on sustainable food production as-well-as agro-processing sector by making significant start-up
investment funding on such kind of profitable businesses with further strategic plan to engage also in large
scale Food items manufacturing activities in the country. To this effect and with this business plan
document, the ongoing establishment of integrated food production project is intended to produce and sale
bread and pastry products of high quality ingredients using modern production techniques and enthused to
contribute on sustainable development of the country at large and generating reasonable return on
investment for business promoters as well.
2.2 PROJECT BERIEF AND OWNERSHIP
The underlying Company, BETESEB Integrated Food Production Project is a newly established
manufacturing business under-formation and legally be formed as a Domestic Partnership firm in
accordance with the applicable Ethiopian Commercial Code. BETESEB Integrated Food Production is
founded and lawfully incorporated as a company by sector experienced individuals who have been
engaged in multiple services business operations for many years and having their main focus on modern
trading activities with high service quality standard of all the time.

The founders/promoters are visionary Ethiopian entrepreneurs and envisioned to partake in Agro-
processing sector in general and with a specific focus on Integrate Food manufacturing industry in
particular. During previous years of business operations, they have been acceptable trade service
operations with expert manner of business personality and gained the reputation among the community.
However, by considering the current fast and dynamic economic growth of Ethiopia especially in urban
area, they have deeply understood and inspired to engage in what the market necessitates for equivalent
growth of Consumer goods trade Service sector as well as strongly inspired to play a role in the agro-
processing industry, mainly to participate on Integrated Food Production; such as, Bread, Pastry, Cookies,
Injera, and Other Dry Food Items along with related commodity trade operations in the local market.
Furthermore, having a clear sets of strategic plan, the envisaged company/project is going to take part on
the development activity of the country by involving in the international trade activities having priority
aim to Export Agricultural Products in general, and Fully fabricated food products in particular from
Ethiopia and which basically Raw inputs are abundantly available in the country. Hence, with this
business plan each member as an individual entrepreneur and the partnership as a company has ultimate
objectives to establish multiple business lines on Phase-by-Phase basis. Accordingly, the strategic
implementation for every production line of the project will follow the two phases application; such as,
 Phase-I: The first phase of an envisaged project evolves production of limited food products that
planned as immediate activity upon completion of plant installation. Hence, products considered
by phase-I includes; Bread, Pastry and Cookies that intended to fulfill the local demand with the
vicinity.
 Phase-II: After attaining certain target for first phase implementation, the Phase-II production
process will begin and be implemented on the bases of potential market explored by first phase
operations. Thus, the second phase comprises production of well-known Ethiopian staple food
(Enjera) and Other Dry Food Items along with related commodity trade operations partly for the
local market and at-least about 50% of products to be supplied to Export Market.
Accordingly, the envisaged Integrated Food Production and Trading business line has planned to take
place with-in the locality where all basic infrastructure and utilities are available, which is located in
Addis Ababa City Administration, N/S/Lafto Sub-city, Woreda 07, H.No. New; this is specifically located
on the way from Lebu Mebrathail – to – Lafto Condominium.

2.3 BUSINESSES OBJECTIVES
The primary objectives of the business plan for the underlying expansion activities are below:
 To raise Total Investment Capital of ETB 17,468,380, partially from Owners equity contribution and
partly by securing Lease Financing Facility from local Bank for purchase of new machineries.
 To fully engage in the production of High quality Food products for commercial purposes with new
quality manner.
 To embark on a sustainable plan to achieve a reliable source of food products for the local, regional,
national and international market places and become the leader in the supply of quality dry food
products, through modern production techniques and technology with efficient management and
distribution channels.
 To achieve business branding activity as planned to make “BETESEB Integrated Food Production
Firm” be the best choice in the city with the production of quality food items for commercial purposes.
 To contribute in the food sector development by using modern production techniques and
technology through creation of employment.
 To generate sustainable income for the company in order to expand the operation and other related
development activities in the country.
2.4 VISION AND STRATEGY
BETESEB Integrated Food Production Company aspires to be one of the

world Champions of Food Items Supplier by ensuring quality products and
efficient services to every customer for sustained Profitability.
To achieve this vision, it has to be resolved upon a set of strategies and executing these strategies by
translating directly into the ability to serve the business vision and objectives. The company‟s vision will
be realized through a team of professionals who have extensive work experience in the industry.
2.5 GUIDING PRINCIPLES
The Company is committed to values such as excellence, passion, quality, integrity and leadership which
allow them to navigate challenges and provide for future opportunities. These core beliefs start with its
commitment to service products and firm employees. The Firm rewards excellence and cherishes loyalty
and will work with its employees to build strong businesses and a secure future.

2.6 KEY SUCCESSES FACTORS
The business under consideration will stand-out from the competition in surrounding vicinity due to the
following Key variable to success:
 The Great Products and Services: Its providing exemplary products and services at affordable prices,
will make customers want to return again and again,
 Employee Retention Level: The firm pay employees rates similar to the larger chains with
opportunities for long term careers and opportunities for advancement with a plan to open other
facility at different places
 Convert walking customer as-well-as casual visitors to connoisseurs and making them loyal for long.
 Access to credit provision at lower interest rate as compared to the business‟s ROI
 Attractive investment policy and other packages with Availability of required infrastructure;
 Continuous increment in household income and associated expenditure patterns;
 Long years of pertinent work experience of Project founders/business management team;
 Well established business good-will and social acceptances that promoters have earned so far.
 Availability of raw materials relatively with affordable-cost and in nearest locations
2.7 PRODUCTS DESCRIPTION

2.7.1 Description of Products Considered by Phase-I
Products considered by phase-I includes; Bread, Pastry and Cookies, which will stand out from the
competition due to their uniqueness and outstanding quality. Most of the breads are unique in style,
including Sourdough, and traditional Ethiopian whole wheat bread, and flavored pastries. These breads are
made by the sourdough method which uses no added yeast. This method imparts a rich flavor, which can
be tangy or mild, as well as a toothsome inner crumb and a crackly crust. By using this method, a skilled baker
can create truly delicious breads without added fats or sugars, making many of products 100% fat free.
Sourdough breads also have an extended shelf life, remaining fresh for days without the use of preservatives.
The project will also offer specialty breads, which will be made in the sourdough way with the addition of
such luxurious ingredients as pastry with fresh ground pepper and dried spices with roasted green fruits.
Spent Grain Bread, made with barley leftover from beer brewing, is another unique product that the
envisaged bakery project will offer. Two varieties of product style will be offered fresh daily, a high
demand product that is available nowhere else in the area. The bakery project will also produce White and
Wheat Sandwich Breads with soft crust and a tender crumb for traditional Ethiopian Style food. As the

needs of the customer change, so will the lineup of its products. The bakery equipment is chosen with
versatility in mind. In general, whole products and services of bakery business under consideration will
fulfill the following features:
 The baked products are going to have a whitish color others but ours shall be of varying sizes and
shapes to attract customers with varying consumption patterns.
 The baked breads shall be classified into plane sweet (little and high sugar) content.
 Our cakes shall also have different shapes and sizes dependent on how the customers values
 Some of the cakes shall also be iced but entirely dependent on the customer demand.
 The company shall also produce as products both creamed and non-creamed Pastry whichshall
also be served with yogurt
 The breads and pastry products from company‟s wholesale shall be packaged in both fuel and
polyline papers
On the other hand, The Hard Biscuits and Cookies Products are oven baked food items with greater
nutritive value than plain bread of equal weight. They are classified as hard, sweet, plain, baked, filled
of coated (or a mixture of several of these options). Some Cookies and Hard biscuits satisfy special dietary
needs, such as those for high fiber, protein or extra vitamins (as in infant rusks). Cookies and Hard
Biscuits also contain fat and often sugar, and are cut or molded into thin layers and baked rapidly and
thoroughly. If packed in a moisture proof material, Cookies biscuits can have a long shelf life. Cookies
and Hard Biscuit are largely consumed by children and teenagers.
2.7.2 Description of Products Under Phase-II

As mentioned under section 2.2 above, the Phase-II production process will begin by producing the well-
known Ethiopian traditional staple food (Enjera) and Other Dry Food Items along with related commodity
trade operations partly for the local market and at-least about 50% of products to be supplied to Export Market.
Enjera is spongy unleavened bread that is the staple of every meal in Ethiopia, a country with an ever-
growing population of more than 110 million. Enjera is typically served with meat or vegetable sauces
(“wot”) and it is torn into bite sized pieces by hand and used to grab the wot. The most desirable grain
used to make injera is teff, a tiny grain that is rich in iron, protein, calcium and fiber. However, because
teff is expensive and the demand is higher than the availability, other grains are often mixed in including
wheat, barley, sorghum or corn. Making the injera batter requires the flour to be mixed with water and
allowed to ferment for several days. This fermentation is a delicate process and is temperature and
humidity sensitive.

Traditionally the batter prepared is cooked either on a specialized electric stove or a pan made of clay
using fire. However, there were no attention observed on sanitary, health care issues and other related
aspects while making and distributing Enjera in such traditional ways so far by many consumers as well as
business operators. Whereas, the intention of BETESEB Integrated Food Production, in producing
„Enjera‟, pancake-like fermented bread prepared from white or red Teff flour, has a plan to consider
support of modern production technology of all features. The fate of the major components of the bran and
endosperm during the two-stage fermentation and baking will be examined by light and electron
microscopy. Every experimental step will be applied to use the quality tef grain as a primary raw material.
After many production processes, the company will commercialize three types of „Enjera‟ products, (i.e,
White Injera, Brown Injera and Dirkosh Injera). In addition, the firm has engaged on supply of other dry
food items; such as: Berbere, Mitmita, Shiro, Kollo and So many others.
2.7.3 Basic Raw Material Products
The other product type of underlying integrated food production project is Wheat flour and Teff Flour,
which are used as Final Outputs Augmenting Products. The project will use its Own Mini-Flour Milling
Technology that enables sustainable supply of Flour as raw material for both Phase-I and Phase-II
products from own source. Accordingly, types of Wheat flour intended to be produced on commencement
of operations at each phase are; All-purpose flour, Bread Flour, Cake Flour which is fine-textured, and
Composite flour that to be used as main raw input for Phase-I products. Whereas, the second phase
production plan (i.e. Enjera Product) mainly uses Teff Flour that will be prepared as Pleasingly light,
uniquely flavored, 100% whole grain flour.

III. MARKET ANALYSIS
3.1 GENERAL MARKET OVERVIEW

The basis of the economy is based on agriculture in Ethiopia; therefore food production constitutes a
significant part of the manufacturing industry. As one of the important elements of the food industry, the
number of the grain mills in the country is around 210 according to some sources. Having 3,7 million-ton
production capacity, these mills supply a part of the wheat they need with imports via government
agencies and supply another part from the domestic market. As in all developing countries, the basis of the
economy and industry is mainly based on agriculture in Ethiopia. Grains have an important place in the
agricultural production. Over 50% of average daily caloric intake of an average household is from wheat,
sorghum, and corn. Cereal production accounts for roughly 60% of rural employment and 80% of total
cultivated land. Households spend an average of 40% of their total food budget on cereals. According to
the World Food Program, 46% of the Ethiopian population is malnourished, underscoring the importance
of increasing domestic grain production.
The potential of Ethiopia ----------------------------------------------------------
3.2 THE NATIONAL ECONOMY Vs MARKET TREND

Among the factors that influence the demand for Flours, one of the critical factors is identified to be economic
growth leading to ------------------------- by major industrial classification shows that Agriculture; Industry and
service industries have contributed 2.3 %, 2.7% and 5.3 % respectively, for the years 2017/18 to 2020/21.
Table-2: PERCENTAGE SHARE OF ETHIOPIA’S GDP IN EACH SUB-SECTOR
Industry\Year 2017/18 2018/19 2019/20 2020/21

Agriculture, Hunting and Forestry 44.6 43.1 42.0 40.1
Crop 30.9 29.8 29.4 28.4
Animal Farming and Hunting 9.6 9.3 8.9 8.3
Forestry 4.1 3.9 3.7 3.5
Fishing 0.0 0.1 0.1 0.1
Mining and Quarrying 1.4 1.5 1.4 1.3
Manufacturing 4.0 4.1 4.4 4.4
Large and Medium Scale 2.6 2.8 3.1 3.2
Manufacturing 1.4 1.3 1.2 1.2
Small Scale and Cottage Industries 1.0 1.1 1.1 1.1
Electricity and Water 4.0 4.9 6.1 7.6
Construction 14.9 15.4 15.5 16.1
Whole Sale and Retail Trade Hotels and 3.6 3.6 3.9 4.5
Restaurants Transport and Communications 4.2 4.3 4.5 4.7
Financial Intermediation 2.5 2.9 2.4 2.6
Real Estate, Renting and Business Activities 9.3 8.8 8.4 7.9
Public Administration and Defense 5.4 5.1 5.0 4.7
Education 2.3 2.2 2.2 2.2
Health and Social Work 0.9 0.9 0.9 0.9
Other Community , Social & Personal Services 2.3 2.4 2.6 2.4
Private Households with Employed Persons 0.2 0.3 0.2 0.2
Total 100.7 100.6 100.6 100.7
Source: MoFED

3.3 MARKET SUPPLY ANALYSIS
3.3.1 Bread Production and Supply
The bakery business in the country comprises a large number of players that can be segmented on the
basis of their ---------------------------------- -.
Table-1: Medium and Large Scale Bread Supply By Regions (2019/20-2021/22)

Rank Regional Supply Trend For The Last Three Years T/Supply Of 3 Yrs
Cap States 2019/20 Share % 2020/21 Share % 2021/22 Share % Vol.(Tons) Share %
1 A/ Ababa 880,244 32.80% 1,320,366 35.19% 1,584,439 35.21% 3,785,049 34.61%
2 Oromia 492,937 18.37% 640,818 17.08% 909,961 20.22% 2,043,715 18.69%
3 SNNPR 320,409 11.94% 480,613 12.81% 538,287 11.96% 1,339,309 12.25%
4 Amhara 288,368 10.75% 389,297 10.38% 436,012 9.69% 1,113,677 10.18%
5 Somali 201,858 7.52% 272,508 7.26% 305,209 6.78% 779,574 7.13%
6 Tigray 131,207 4.89% 150,888 4.02% 168,995 3.76% 451,091 4.13%
7 D/Dawa 90,836 3.39% 122,628 3.27% 137,344 3.05% 350,808 3.21%
8 Benishangul 83,569 3.11% 112,818 3.01% 126,356 2.81% 322,744 2.95%
9 Afar 71,034 2.65% 95,895 2.56% 107,403 2.39% 274,332 2.51%
10 Hareri 69,613 2.59% 93,978 2.50% 105,255 2.34% 268,845 2.46%
11 Gambela 53,275 1.99% 71,922 1.92% 80,552 1.79% 205,749 1.88%
TOTAL SUPPLY 2,683,349 100% 3,751,730 100.00% 4,499,813 100.00% 10,934,892 100.00%
Source: CSA-Annual Report on Food Processing Industries in Ethiopia (December, 2022)
3.3.2 Supply Of Biscuit Products

3.3.2.1 Domestic Production
Cookies Biscuits are very popular food items. They are pleasant in taste and do not require cocking and
hence ready to be served. Although the supply of Biscuit products is from local production and through
import, still there is un-met demand for biscuits in both cases. For this study purposes, we considered supply
situation from Domestic production for the period covering 2012/12-2021/22 as shown in Table 2-below.
Table 2: Domestic Production of Cookies/Dry Biscuits (Tons)
Year Production
2012/13 20,115
2013/14 20,429
2014/15 23,994
2015/16 39,546
2016/17 89,259
2017/18 113,773
2018/19 154,251
2019/20 194,236
2020/21 223,548
2021/22 249,800
AVERAGE 112,895
Sources:- (CSA), Large and Medium Scale Manufacturing Report (2022))

3.3.2.2 Supply through Import
In addition to the domestic production, Cookies/Hard Biscuits are imported from various parts of the
world. Import of biscuits for the period covering 2012/13-2021/22 is shown in Table-3 below.
Table-3: Imports Of Biscuits (Tons)
Year Import
2012/13 11,470
2013/14 11,039
2014/15 7,759
2015/16 11,531
2016/17 8,565
2017/18 9,636
2018/19 15,426
2019/20 24,500
2020/21 12,397
2021/22 10,250
AVERAGE 12,257
Source: Ethiopian Revenue and Customs Authority
3.3.2.3 Total Cookies/Hard Biscuit Supply
During the years considered as a base for this study purpose, the country consumed a significant amount
of the products out of which the local market contributed an average of 70.5%. The table below presents
the total supply of cookies biscuit in Ethiopia for the years 2012/13 to 2021/22 and the share of local
production in the total supply.
Table-4: Total Supply of Cookies Biscuit during 2012/13-2021/22 (in Tons)
Domestic Total Average Share of Local
Year Import
Production Supply Growth Rate Production
2012/13 20,115 11,470 31,585 0 63.7%
2013/14 20,429 11,039 31,468 -0.4% 64.9%
2014/15 23,994 7,759 31,753 0.9% 75.6%
2015/16 39,546 11,531 51,943 63.6% 76.1%
2016/17 89,259 8,565 97,824 88.3% 91.2%
2017/18 113,773 9,636 123,409 26.2% 92.2%
2018/19 154,251 15,426 169,677 37.5% 90.9%
2019/20 194,236 24,500 218,736 28.9% 88.8%
2020/21 223,548 10,250 233,798 6.9% 95.6%
2021/22 249,800 12,685 261,331 11.8% 95.6%
The supply projection is made by taking in to consideration the installed production capacities of the
existing local factories and import has been excluded to show the available local capacity. Hence, for this
study purposes consumption of Cookies and/or Hard Biscuit Products during the period of years 2012/13
to 2021/22 are taken as a trend. Assuming all other things remain constant, the local production of
Cookies Biscuit Products are projected to grow by an average of 19.3% each year; which is the average
growth rate of the manufacturing sector during the projection period.

3.3.3 Enjera/Injera Production and Supply Trend
3.3.3.1 Supply Trend in Domestic Market
In spite of high daily demand, currently, there are very few wholesale bakers and sellers of Injera bread in
Addis Ababa. --------------------------------------- per` month.
3.3.3.2 Injera Export Market Supply and National Benefit
Nation is benefitting from the sharp improvement of „Injera‟ export. The performance has shown an
increment with annual income of over 15 million USD, ----------------------------------------------------------------
. Thus, the major commercial oriented Injera producers in the country, which taken as a sample are tabulated
below.
Table-5: List of Major Commercial Oriented Injera Producers and Suppliers
Company Name Capacity /day Shift Local Market Export No. Emp
EtTeff Flour &Injera Factory 21,000 Pcs 3 55% 45% >250
Mama Fresh Injeraplc 50,500 Pcs 3 60% 40% >120
AstuInjera 12,800 Pcs 3 80% 20% >75
YegetaInjera 18,600 Pcs 2 60% 40% >50
Bisrat Injera 21,000 Pcs 3 60% 40% >51
Nobel Teff Flour & Injera PLC 45,000 Pcs 2 60% 40% >52
Women Co-opratives in (Lafto) 14,400 Pcs 2 100% >150
Women Co-opratives (Yeka ) 9,600. Pcs 2 100% >100
Women Co-opratives in (Lideta) 24,600. Pcs 2 100% >60
Women Co-opratives (Kirkos) 32,600. Pcs 2 100% >100
Women Co-opratives in (Kolfe) 45,600. Pcs 2 100% >100
Others >/100,000 Pcs 2 NA NA NA
The implication resulted from sample companies with figures listed in the above table is telling the market has
to do on mitigating large unmet demand when compared to the general assumptions of about 3.5 million daily
Injera consumption in Addis Ababa as well as remaining demands throughout the country‟s urban regions.
3.4 GENERAL DEMAND ANALYSIS

3.4.1 Demand for Bread and Pastry Products
The market for bakery is huge and ever increasing. There is always huge demand of different types
of baked goods. The market for a bakery includes individuals, families, hotels, guest houses,
supermarkets, companies and organizations. In the process of demand analysis and estimation for the
product under consideration, a thorough analysis of the set of factors that influence the marketing forces
are essentially important and necessary. The first step in the process involves the analysis of the underlying
characteristics of the target markets and their general macroeconomic environmental aspects.

Accordingly, the demand for bakery product is a derived demand, which depends directly on the
performance of its major end users and other general factors, which commonly affects the products. The
following factors are identified to be determent of the demand position of the products under consideration,
such as; Performance of the national economy, Rate of population growth and Urbanization. Hence, a
throughout assessment of current status and future prospect of these factors is done as follows.
i. Performance of The National Economy
Among the factors that influence the demand for Flours, one of the critical factors is identified to be
economic growth leading to construction and infrastructure development. Growth in Flours products
consumption has been correlated to economic growth in the developing world. In Ethiopia as a result of
the appropriate policy adopted by the government in recent years the country‟s economy is on a higher
growth trajectory. According to the Ministry of Finance and Economic Development (MOFED), the GDP
of the country has registered an average annual growth rate of 10.9 % during the last 11 years ending in
2021/22, which places Ethiopia among the top performing economies in Sub-Saharan Africa. The agriculture,
industry and service sectors‟ annual average growth was 9.0%, 13.8 % and 12.2% respectively.
According to MOFED, in the last four (2011-2014) Growth and Transformation Plan (GTP)
implementation period, the Ethiopian economy has also registered robust growth. In this period, the
GDP annual average growth rate was 10.1%. Agriculture, Industry and Service sectors have 6.6 %, 20.0%,
and 10.7% annual average growth rates respectively. The economic growth (GDP at constant basic price)
for 2020 is estimated to be 10.3 %. As per MOFED‟s estimates, annual growth rates of the major sectors,
i.e. Agriculture, industry and service were 5.4 %, 21.2 % and 11.9%; respectively and their shares out of
the total GDP were about 40%, 14% and 46 %, respectively. The registered economic growth (10.3%) was
obviously based on the contribution of wide range of economic activities.
ii. Population Growth
Population is a key driver of good and service demand. According to CSA, the population of Ethiopia
grew at an average annual rate of 2.6 percent between 1994 and 2007. As shown below, the number of
population is expected to be 129 million in year 2030 from the current number of 85.3 million. From the
projection, the number of population in year 2030 will be doubled of number of population which was in
year 1995. 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.

iii. Urbanization
As urbanization indicate people‟s living standard, it is a major factor for a higher demand of goods and
services. In Ethiopia, urban population growth rate is projected to increase by 4% annually, the major
contributing factor being the rural-urban migration. By the end of the 2019/20, the total urban population
reached to 14.4 million, amounting 17.2% from the level of 11.7 million by the end of 2014/15. According
to different literatures, the current status of urbanization in most cities, especially in Addis Ababa city
Administration is highly motivating for the project under consideration. In this regards, the table below
shows the number of population in major urban areas of the country such as; Addis Ababa, Dire Dawa,
Harar, Nazareth, Gondar, Dessie, Mekele, Bahir Dar Jimma and Hawasa are assumed to be major urban
areas of the country. As Addis Ababa is a capital city of Ethiopia, the city holds the highest number of
population followed by Dire Dawa and Hawassa.
Table-5: Urban Population Number
Urban Population Urban Population

Major Cities/Towns
Estimate of (2010/11) Estimate of (2020/21)
Addis Ababa 4,041,002 6,061,503
Dire Dawa 387,000 483,750
Hawassa 328,875 394,650
Mekele 273,601 314,641
Bahirdar 240,422 276,485
Nazareth 127,842 191,763
Gondar 112,249 123,474
Desse 97,314 104,613
Jimma 88,867 133,301
Arba-Minch 95,867 105,454
Debrezeyit (Bushoftu) 84,867 106,084
Total 4,697,172 7,045,758
Sources: World Bank Estimate report by (August 2021) based on CSA of 2007
Accordingly, the above table illustrates that Addis Ababa holds 80% share of the total urban population
which increased by 50% during the last 10 years. The data further shows that urbanization of Adama has
also increased by 50%, followed by Dire dewa and Debrezeyit cities that registered about 25% increase of
the urbanization level in both cities. Consequently, the demand for goods and services is assumed to grow
with the average growth rate of urbanization. Thus, the markets for breads and related baking products are
derived from the different factors, such as:
 Increasing number of population,
 Increase in household income & life style,
 Number of commercial and service rendering sectors, hospitality service providers, universities
and hospitals as well as establishment of other business organizations creates a demand.
 Establishment of other business organizations creates a demand.

3.4.2 Cookies/Dry Biscuit Demand
The biscuits and crackers market in Ethiopia was equal to 370 million USD (calculated in retail prices) in
2020/21. Until 2029/30, the biscuits and crackers market in Ethiopia is forecast to reach 1.62 billion USD
(in retail prices), thus increasing at a CAGR of 14.09% per annum for the period 2020-2025. In order to
forecast the demand for the next ten years, per capita consumption rate is applied. Other things being constant,
apparent consumption/demand is the amount purchased and consumed. This equals Production + Import-
Export. The third variable is almost zero in Ethiopian case as there is no data on significant exports so far.
Therefore, Demand equals Local Production plus Import. According to the Business Development
Service of Ethiopia‟s report, the per capita consumption for Wheat Flour is 4.8 Kg and Biscuit 1.2 Kg.
These rates are considered for the forecast. Population growth of 2.4% plus 6% annual increase due to the
increment of expending power of the population is applied to forecast the demand as shown below: The
average consumption per capita in value terms reached 3.80 USD per capita (in retail prices) in 2020/21.
In the next ten years, it is expected to grow at a CAGR of 15.96% per annum. In the medium term (by
2025), the indicator is forecast to slow down its growth and increase at a CAGR of 10.84% per annum.
3.4.3 Demand for Injera Products

Injera, the spongy flatbread that‟s central to Ethiopian cuisine, has been a staple within Ethiopia for
centuries. But now, many companies have started to produce the food item for consumers in Ethiopia and
abroad. Companies like Astu Injera, Mama Fresh Injera and others have gained nationwide as well as
worldwide popularity for providing the popular dish for food lovers around the world. In the previous
time, buying injera was usually regarded as something that only people who couldn‟t cook for themselves
did because of its tiresome fermentation and baking process and lack of space in their homes. Recently,
injera – the spongy flatbread made of teff that‟s central to Ethiopian cuisine – has begun appearing at a
number of markets in Ethiopia and around the world and it‟s become increasingly common for people
from all walks of life to purchase injera, regardless of their culinary skill level.
Changes in lifestyle, especially people living in condominiums with tiny kitchen facilities, as well as the
vast and expansive Ethiopian Diaspora, have contributed to the popularity of injera being sold
worldwide. As a result, the number of markets and shops in Ethiopia and aboard that sell injera has grown
exponentially. Many storeowners say that injera has become one of their most sought after products. It‟s
not just households; institutions also have an increased demand for injera. The booming number of hotels
and higher learning intuitions in the country has also contributed to this surge in demand for injera.
According to the secondary data obtained from student facility desk, For instance, Addis Ababa
University, the country‟s largest university, consumes more than 40,000 injera pieces per day. The
University buys one injera piece for roughly ETB 4.45 and spends, on average, more than ETB 25 million
for injera annually. Outsourcing labor is not only used by universities to avoid the cumbersome injera-
making process; hotels, hospitals, event organizers, and most restaurants do this as well. Therefore, there
will be no fear for the underlying Food production Project to produce and avail it-self to the market with

the quality Injera product.
3.5 TARGET MARKET AND STRATEGIES

3.5.1 Target Market
The markets for company‟s product are derived from the different factors, such as increasing number of
population, increase in household income and life style, number of commercial and service rendering
sectors, hospitality service providers, universities and hospitals as well as establishment of other business
organizations creates demand for baked products. Given the annual production capacity and its proximity
to central market places and its neighboring towns, thus, the Local Market destination for the products
under consideration is mainly in Addis Ababa city administration and its export market destination is
going to be USA, Europe, UAE and Canada where most Ethiopian Diasporas are residing densely.
3.5.2 Marketing Strategies
Market strategies can be defined as the set of controllable, tactical marketing tools that a company blends
to produce as per the response it wants in the target market. Marketing strategy includes, but not limited to
the best possible mix of four variables, namely; the nature of the product, the price of the product, the
channels of distribution which take the product to the consumer from the producer and the promotional
activities. A combination of these four elements affects the ultimate sales success of a product.
3.5.2.1 Products Quality

Product quality is one of the basic and most important marketing mixes that affect the success of a new
product. Product quality has two dimensions, i.e., level and consistency. Level means the producer must
first choose a quality level that will be acceptable in the target market and in a level that comply with the
quality of competing products. Consistency refers to the consistent delivering of established quality
through strict quality control measures. The envisaged products will have Bood Quality and Fulfill the
standard criteria set for food product commercialization,
3.5.2.2 Pricing Strategy

While setting a price for certain products, it is very important to consider different factors that affect the
production process from different perspectives. If a lower price is fixed, it will affect the profitability of
the company, and if a higher price is fixed, the product will not be able to stand in market competition and
may be forced out of the market. Therefore, the right price has to be fixed and determination of sales price
for every product depends on a complex series of factors such as the marketing costs, delivery techniques,
the prevailing competitors‟ price and market conditions. In general, price setting is done by selecting one
of the two frequently used pricing approaches. The simplest method is cost-based approach (Cost-plus
pricing), which involves adding a standard mark-up to the cost, and competition based approach (going-
rate pricing), which bases its price largely on competitors‟ prices.

Thus, proposed selling price for BETESEB Integrated Food Production will be the Cost-Plus approach
and expected price is going to be Direct Production Cost + 35% for products supplied in domestic
market; whereas, selling price for export products will be Direct Production Cost + 45% margin. In
general, product pricing is an important and critical activity since it is the major factor in determining
revenue. Therefore, pricing strategy for the underlying food processing business will be:
 Affordable pricing as compared to other competitors
 Continuously monitoring competitors‟ price
 Price revision is going to be performed when the need arises and the right price has to be fixed.
3.5.2.3 Channels of Distribution
An ideal distribution system has economic benefits for both the manufacturer and the consumer and it
involves the manufacturer or the intermediaries offering the right product, in the „right quantities‟ at the
„right price‟ at the „right time‟ with the „right appeal‟. Accordingly, for the envisaged food factory by
taking the nature of its product marketing under consideration all methods including direct distribution to
end users is going to be applicable as appropriate. Therefore, at least one factory-outlet shop is required to
be built in the premises of the envisaged plant. Whatsoever, the cases will arise; the company will use its
own means of transportation to deliver the product.
3.5.2.4 Promotion Strategy

In a competitive market, trade promotion should be made to persuade or to make a product attractive for
end users. Such trade promotional tools include; credit and discount with the volume of products sold etc.
The envisaged factory is recommended to offer discounts with the volume of product bought and credit
for one to two weeks. The other promotional strategy, is selecting of the media channel that involves
choosing among available advertising media and deciding how they can be used; given the type of
message, target audience and the budget available. As a new entrant to the food making business, it is
recommended that intensive promotional activities be planned and executed at the beginning phase of the
project to harness the required market share. So far advertisement on television is one and the most
successful medium of communication with customers in Ethiopia. Therefore, it is recommended that the
project is going to be advertised intensively on television at least for the first year.

IV. TECHNICAL ANALYSIS
The company‟s strategy on top is to become customer focused product delivery. As one part the Food
Production Project is intended to consolidate its good customer/client service efficiency by making timely
deliveries, hiring the best divers and having a competitive pricing structure. On the other hand, all type
product differentiations of the company is going to be undertaken in different forms, size and styles to
become leading in the market.
4.1 LOCATION AND SITE
The location of the envisaged Integrated Food Production factory is strategically determined as it is
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 of the location. There are many factors which
determine the location of any project. Some of these factors are;
 Proximity to raw material source and supply,
 Proximity to market,
 Availability of infrastructure, power, and skilled human resource,
 Availability of water,
 Availability of social amenities,
 Federal and regional policies,
 Environmental issues, and
 Delimitation of industrial zones.
4.2 PROJECT STATUS

The project is a new start-up with a main focus to initiate its operation produce and distribute high quality
dry food products, such as: Bread, Cookies, Enjera and other food items. Currently, project promoters are
processing legalization and documentation of project establishment and on the final track to implement as
planned.
4.3 PRODUCTION CAPACITY AND PROGRAM
After planned expansion activities, the envisaged food manufacturing business is assumed to have annual
full production capacity of 7000 Tons of integrated food items per annum. Whereas, with the assumption

of 16 hours/day in two shifts for 300 days in a year, it expected to start food production of a total 4600
Tons for the 1st year of operation, which will be 70% capacity utilization. Furthermore, the project has
planned to start production program at 70%, 85% and 100% during 1st, 2nd and 3rd years respectively.
Table-6: Installed Production Capacity over Projected Five Years

Table-4. 3- Production Capacity in (Tons)/Annum
Capacity utilization (%) 70% 85% 100% 100% 100%
Products in Kgs Yr-1 Yr-2 Yr-3 Yr-4 Yr-5
PHASE-I: PLANNED PRODUCTION CAPACITY
Breads 55% 2100 2550 3000 3000 3000
Pastries and Cookies Products 40% 1750 2125 2500 2500 2500
Sub-Total 3,850 4,675 5,500 5,500 5,500
PHASE-II: PLANNED PRODUCTION CAPACITY
Capacity utilization (%) 50% 75% 100% 100% 100%
Enjera/Injera Products 500 750 1000 1000 1000
Other Dry Food Items 250 375 500 500 500
Sub-Total 750 1125 1500 1500 1500
Grand Total 4600 5800 7000 7000 7000
4.4 SOURCES OF RAW MATERIALS AND ANNUAL REQUIRMENT

4.4.1 Sources Of Raw Materials
As clearly discussed under section 2.7 above, the supplementary product of underlying integrated food
production project is Wheat flour and Teff Flour, which intended to be used as Final Outputs Augmenting
Products. The project will use its Own Mini-Flour Milling Technology that enables sustainable supply of
Flour as raw material for both Phase-I and Phase-II products from own source. Thus, in order to use its
own flour as raw material for the integrated food production project is going to have reliable suppliers for
Durum Wheat and Quality Teff grains that locally available.
Durum wheat, a basic ingredient of pasta, couscous and bread, is widely grown in Ethiopia's highlands
where it was introduced some 2000 years ago. Farmers grow many local varieties of durum wheat
(Triticum turgidum ssp. durum) as a result of both natural evolution and farmers' domestication. Hence,
Flour for baking bread and Pastries are produced from hard wheat or a blend of hard and soft wheat, while
flour for cakes and biscuits is milled from soft wheat. On the other hand, the basic raw materials required
for Enjera/Injera production is the unique grain flour of Ethiopia, i.e, Teff Flour of different color (white,
red and Sergegna). Mostly Teff grain is produced by small holder farmers at the central, eastern and
northern highlands of the country on fragmented lands with rain fed conditions in both, Meher and Belg,
seasons. Amhara, Oromia, SNNPR and Benshangule-Gumz regions are the major Teff producing regions in
the country. Accordingly, since there are many teff grain producers and suppliers operating in the market, it is
not difficult to obtain and hold stock of teff grain and convert to teff flour by own plant, then in turn to be
sourced as raw material for intended Injera production. Hence, sources of both basic and auxiliary inputs are
available from local/domestic market.
4.4.2 Required Material and Costs

The amount and cost of basic raw materials at initial production stage that covering production of intended
products for year-1 operation at full capacity is shown in Table below.

Table-7: Annual Input Required and Material Costs
Flour consumption in (Tons)
Yr-1 Yr-2 Yr-3 Yr-4 Yr-5
Description
70% 85% 100% 100% 100%
Wheat flour of All Types 3975 4750 5650 5650 5650
Teff Flour of All Types 525 750 1050 1050 1050
Grains Used For Other Items 250 350 525 525 525
Total Raw Material 4750 5850 7225 7225 7225
water consumption
Description 70% 85% 100% 100% 100%
UOM qub. Ltrs. qub. Ltrs. qub. Ltrs. qub. Ltrs. qub. Ltrs.
Water (0.001 Cub/kg) 4 5 6 6 6
Electric consumption
Description 60% 75% 95% 100% 100%
UOM KW/hr KW/hr KW/hr KW/hr KW/hr
OVEN 2.59 3.15 3.7 3.7 3.7
Volumetric Dough Divider 1.05 1.28 1.5 1.5 1.5
Molding Machine 0.88 1.06 1.25 1.25 1.25
Spiral Mixer with Fixed Bowl 3.22 3.91 4.6 4.6 4.6
Bread Slicing Machine 0.39 0.47 0.55 0.55 0.55
Total 8.12 9.86 11.6 11.6 11.6
Consumption of auxiliary materials
Description 70% 85% 100% 100% 100%
Salt (0.010g/kg) 75 90 95 100 100
Sugar (0.05g/kg) 150 160 175 200 200
Yist (0.010g/Kg) 25 50 60 75 75
Oil (0.025ltr/kg) 1,000 1200 1,320 1,500 1500
Baking powder 500 550 600 750 750
others 0.05% of flour 250 300 350 400 400
Total 2,000 2,350 2,600 3,025 3,025
On the other hand, based on annual consumption volume of raw materials and auxiliaries, estimated
annual cost of raw and auxiliary materials as well as related production costs is given below
Table-8: Summary Of Direct Input Material Costs (Cgs)
Years Year-1 Year-2 Year-3 Year-4 Year-5

UOM
Description 70% 85% 100% 100% 100%
Basic Raw Material Purchase ETB 203,631,250 265,664,438 347,392,927 364,762,573 383,000,702
Auxiliary cost ETB 435,625 504,700 554,900 655,000 664,825
Utility Cost ETB 45,813 56,466 67,428 68,102 83,909
Total ETB 204,112,688 266,225,603 348,015,254 365,485,675 383,749,436
DIRECT RAW MATERIAL COST DISTRIBUTION BY PRODUCT TYPES
Year-1 Year-2 Year-3 Year-4 Year-5
PARTICULAR UOM
70% 85% 100% 100% 100%
Direct Cost of (Phase-I) (70%) ETB 142,878,881 186,357,922 243,610,678 255,839,972 268,624,605
Direct Cost of (Phase-II) (30%) ETB 61,233,806 79,867,681 104,404,576 109,645,702 115,124,831
Total Direct Input Cost ETB 204,112,688 266,225,603 348,015,254 365,485,675 383,749,436
4.5 CAPITAL INVESTMENT ACTIVITIES AND COSTS

4.5.1 Building/Premises and Civil Works
The underlying food processing project requires working premises/space with a minimum plot area of 500
M2 on the existing location that planned for the envisaged Production plant erecting, warehouse and other

purposes. Out of which the working area needs remodeling/renovation within new premises internal
partitioned according to the need, and hence, the total cost of new building remodeling investment is
estimated to be about ETB 1,500,000.
4.5.2 Production Technology and Machineries
The envisaged project requires modern food production technologies that enable to be well-developed for
standardized process. The list of machinery and equipment with respect to the strategic plan on food
production line based on Pro-forma invoices collected from both Foreign and Domestic suppliers as
attached in the annex part is about US$ 88,316.-; which is equivalent to ETB 4,857,380, by computing
current exchange rate US$ 1.00 = ETB 55.00.
Table-8: Production Process Machineries and accessories.
U/Cost T/Cost T/Cost
Model Description Of Goods Qty Uom
(USD) (USD) (ETB)
ALRO 200 Rotary Rack Oven with Burner 1 PCS 13,500.00 13,500 742,500
ALRO 200T Tray trolley: 4 PCS 450 1,800 99,000
Baking trays- perforated/non-perforated: 32 PCS 28 896 49,280
Baguette trays 32 PCS 35 1,120 61,600
ALSP100 Spiral Mixer with Fixed Bowl: 2 PCS 5,000.00 10,000 550,000
ALCR 2000 Volumetric Dough Divider 1 PCS 4,500.00 4,500 247,500
ALFP 20-4 Dough Proofer With Steam Generator 1 PCS 4,500.00 4,500 247,500
AD/PCS Cake Display Cabinet 1 PCS 1,800.00 1,800 99,000
ALBS 500 Bread Slicing Machine 1 PCS 900 900 49,500
6F2260 500kg/H Wheat Milling 1 PCS 5,300.00 5,300 291,500
Spare Parts And Accessories Set L/S 3,500 192,500
Cookies Special Equipment & Accessories Set L/S 14,500 797,500
Injera Special Equipment & Accessories Set L/S 12,500 687,500
ALGD 32 Stand-by Generator (60KV) 1 PCS 13,500 13,500 742,500
TOTAL FOB VALUE (ASSUME US$ 1.00 ==> ETB 55.00) 88,316 4,857,380
4.5.3 Warehouse and Office Equipment
The Project needs to acquire standard warehouse and office equipment and furniture for employees at
Administrative level to meet business requirement for convenience of work environment and smooth
operation. Hence, Expected additional investment costs on equipment, furniture, fixtures, computers &
software, and others are about ETB 1,130,000, detailed in the annex part.
4.5.4 VEHICLES
It is very crucial that the company has to avail at least One- Delivery VAN automobile and One-Isuzu
(FSR) for delivery of output products as well as in connection with sourcing raw material, facilitating service
delivery and performing marketing activities which have a cost estimate about ETB 5,925,000 in lump sum.
4.5.5 HEAVY-DUTY POWER SUPPLY-GENERATOR
In order to overcome power interruption happening due to the fluctuation of Electric power system, the project
needs to have stand-by Heavy Duty power supply generator, which costs the project about ETB 1,750,000.
4.6 FUTURE EXPANSION PLAN
In the coming years, commencing 2024/2025, BETESEB-Integrated Food Production Company has a plan to

 Owning a total Land area about 10,000 M2 through long term leasing for the entire enhancement of
company‟s expansion
 Starting the share of its product marketing from only domestic market to export abroad.
 Raise the number of employees from initial stage capacity to a number greater than 100.
 Increase production dramatically the company will start 3-shift production.
 Increase its production machineries by tri-fold within the coming three (3) fiscal years.
 Since the daily consumption of Baked food products like, Bread, Cookies, Injera and other dry
food items are increasing from time-to-time, the company has a long term plan to increase its daily
production to 15,000 Tons/Year by 3rd year and out of total production plan, about 50% will be
supplied for export
 The envisaged food production project (BETESEB-Integrated Food) is a 100 years project, within
these years the company plan is to franchise its business throughout the continent like that of
McDonalds.
 As a Medium Term Strategic plan, the firm has an intension to enhance the diversity of processed
food commodities from initial concept limited to baked food products to full-fledged Agro-
processing operations; Such as: Commercial Flour Milling, Pasta and Macaroni Production.
Furthermore, the project is going to consider Concentrated Animal Feed Production from By-
Products (Waste Bran) of enhanced implementation (i.e., from the commercial flour milling).
 As one of its diversification strategy, The Company is in the verge of to commence Wheat and
Teff Grain production through its own farm land.
 The company has planned to work with professional Consultants and experts from related
disciplines to switch the traditional management system (Family) to modern management.

V. ORGANIZATION AND MANAGEMENT
5.1 ORGANIZATIONAL STRUCTURE

In the proposed organizational structure, the G/Manager will oversee the overall performance of the plant
while the day-to-day operation of the project is led by Operations Manager. There shall be three
departments: Production & Technical, Administration & Finance, and Marketing &Procurement
Departments. All the departments shall have two divisions. Quality controllers shall be deployed under
Production and Technical Department and will report to the general manager.
Profitability and success of any business organization depends on its success in sales. Sales performance, in
turn, depends on good knowledge and experience of the market. Therefore, it is important to establish and
staffing a market research division, whose main activities focuses on market research and promotion. Thus,
hereunder, the proposed Organizational Structure of THE COMPANY is indicated below.
FIG.-1: ORGANIZATIONAL STRUCTURE
GENERAL MANAGER
LEGAL ADVISOR AUDITOR
PRODUCTION & ADMINISTRATION & PROCUREMENT &

TECHNICAL FINANCE DEPARTMENT MARKETING DEPARTMENT
DEPARTMENT
FINANCE PROCUREMEN
DIVISION T DIVISION
PRODUCIO
N DIVISION
PERSONNEL &
TECHNICAL GENERAL SERVICE MARKE SEARCH &
DIVISION DIVISION SALES DIVISION

5.2 MANAGEMENT AND MANPOWER
According to the organizational structure, the human resource by category and qualification including
monthly and annual salary is summarized in table below. It is estimated that the employee‟s benefit will be
10% of the basic salaries and wages per annum. To ensure and improve the competence of the company and
to increase the market share of the factory, it is important that all the senior positions proposed will be run by
qualified and well versed professionals in the industry. For the smooth operation of the envisaged factory a
total of 38 employees are required which will cost the factory a total of ETB 4.42 Million during the first
year of startup and expected to increase by 12.5% per annum.
Table-9: Manpower and Annual Costs
Description Title No Pos. Salary Monthly Salary/Yr.

A. General Manager's Office
General Manager 1 35,000 35,000 420,000
Office Secretary 1 7,500 7,500 90,000
Sub Total 2 42,500 510,000
B. Operational & Technical Units
Store Keeper 2 12,000 24,000 288,000
Production Forman 2 15,000 30,000 360,000
Mixer/Machine Operators 2 12,000 24,000 288,000
Support Machine Operators 2 8,000 16,000 192,000
Other Production Staffs 6 6,500 39,000 468,000
Sub Total 14 133,000 1,596,000
C. Procurement & Marketing Dep't
Marketing Officer 2 12,000 24,000 288,000
Sales Staffs 4 6,000 24,000 288,000
Purchasing Officers 2 12,000 24,000 288,000
Sub Total 8 72,000 864,000
D. Administration & Finance Dep't
Admin & Finance Head 1 22,500 22,500 270,000
Personnel Officer 1 10,000 10,000 120,000
Accountant/Cashier 2 12,000 24,000 288,000
Drivers 2 5,000 10,000 120,000
Cleaner/Janitors 3 3,500 10,500 126,000
Guards 5 2,000 10,000 120,000
Sub Total 14 87,000 1,044,000
Total Salary 38 0 334,500 4,014,000
Employees Benefit 10% 38 33,450 401,400
Grand Total 38 367,950 4,415,400

VI. FINANCIAL RSOURCE ANALYSIS

The financial analysis of the project is based on the estimated data presented in the previous chapters and
the following assumptions. Since the total project costs are all estimates; then all of them are subject to
revision after the detailed project study and design will be conducted including the financial viability of
the project itself.
6.1 BASIC ASSUMPTIONS
6.1.1 Project Life

The operational life of the project, a standard assumption of 5 years is considered. Hence, the costs and
benefits of the project are computed over 5 years.
Table-10: Basic Assumptions for Analysis
S.No. Description Scenario
1 No of shifts / day 2
2 No of Hrs per shift 8
3 Total Hrs per day 16
4 No of working days per year 300
5 No of hrs per year 4,800
6 Product composition
6.1 Products of Phase-I
Bread Products 60%
Pastry and Cakes 20%
Cookies Products 20%
6.2 Products of Phase-II
Enjera/Injera Products 50%
Other Dry Food Items (Baltina Mirtoch) 40%
6.3 Overall Products Composition
Phase-I Products in Total 70%
Phase-II Products in Total 30%
7 Accounts Receivable 30% of sales
8 Accounts Payable 30% of CGP
9 Depreciation Expenses
Building & Premises 5%
Machinery and equipment 20%
Vehicles 20%
Office furniture & equipment 15%
10 Repair & Maintenance 5% of dep
11 Insurance 1% of Cost
12 oil & Lubricants 10000Ltr/Annum
13 Uniforms & outfits 1% of salaries
14 Stationery and printing 10000 Br/Annum
15 Cleaning and sanitary 5000 Br/Annum
16 Borrowing cost 11.5%/Annum
17 Term of loan 5 years
18 Repayment Quarter
19 Profit Tax Rate 35%
20 Working Capital Assumed as percentage of CGS 30%

Feasibility Study For Integrated Food Production in Ethiopia

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Feasibility Study For Integrated Food Production in Ethiopia

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START-UP BUSINESS PLAN 2023

ADDIS ABABA, ETHIOPIA

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 0

II. Background Information ……………………………...…………4

III. Market Analysis..……………………………………………..….11

IV. Technical Analysis…………………………………………..…...22

V. Organization and Management …………………………….........27

VI. Financial Analysis………………………………………………..29

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 1

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 2

 It creates employment opportunity for about 38 permanent employees;

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 3

II. BACKGROUND INFORMATION

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 4

2.2 PROJECT BERIEF AND OWNERSHIP

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 5

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 6

2.4 VISION AND STRATEGY

BETESEB Integrated Food Production Company aspires to be one of the

2.5 GUIDING PRINCIPLES

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 7

2.6 KEY SUCCESSES FACTORS

2.7 PRODUCTS DESCRIPTION

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 8

2.7.2 Description of Products Under Phase-II

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 9

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 10

III. MARKET ANALYSIS

3.1 GENERAL MARKET OVERVIEW

The potential of Ethiopia ----------------------------------------------------------

3.2 THE NATIONAL ECONOMY Vs MARKET TREND

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

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 11

Table-1: Medium and Large Scale Bread Supply By Regions (2019/20-2021/22)

Source: CSA-Annual Report on Food Processing Industries in Ethiopia (December, 2022)

3.3.2 Supply Of Biscuit Products

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 12

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 13

3.3.3.2 Injera Export Market Supply and National Benefit

Table-5: List of Major Commercial Oriented Injera Producers and Suppliers

3.4 GENERAL DEMAND ANALYSIS

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 14

i. Performance of The National Economy

ii. Population Growth

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 15

Urban Population Urban Population

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 16

3.4.3 Demand for Injera Products

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 17

3.5 TARGET MARKET AND STRATEGIES

3.5.2 Marketing Strategies

3.5.2.1 Products Quality

3.5.2.2 Pricing Strategy

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 18

3.5.2.4 Promotion Strategy

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 19

IV. TECHNICAL ANALYSIS

4.1 LOCATION AND SITE

4.2 PROJECT STATUS

4.3 PRODUCTION CAPACITY AND PROGRAM

BETESEB INTEGRATED FOOD PRODUCTION PROJECT Page 20

Table-6: Installed Production Capacity over Projected Five Years

4.4 SOURCES OF RAW MATERIALS AND ANNUAL REQUIRMENT