Muley Addisu Import Export

Business Plan Prepared for Export loan

Request

BUSINESS ADDRESS: ADDIS ABABA

CITY ADMINISTRATION

TEL: +251-911 066677 (Mobile)

PREPARED BY: Muley

Addisu

December, 2017
ADDIS ABABA
 [Muley Addisu Import Export]

Contents
EXECUTIVESUMMARY..................................................................................................3
1. Introduction..................................................................................................................4
2. Background and Description of the business...................................................................8
2.1 Products and services.................................................................................................9
2.2 Operational history of our business.........................................................................10
2.3 Mission, vision and objective of our company........................................................12
2.3.1 Vision.................................................................................................................12
2.3.2 Mission.............................................................................................................12
2.3.3 OBJECTIVE OF THE COMPANY.................................................................12
2.3.3 COMPANY VALUES AND CULTURE..........................................................13
3. Organization & Management........................................................................................15
3.1 Organization & Management..................................................................................15
3.2 Organizational Structure of Muley Addisu import and Exporter Sole Proprietorship
Company........................................................................................................................16
4. Marketing Plan...............................................................................................................17
4.1 Marketing Budget...............................................................................................17
4.2 Marketing strategies...............................................................................................17
4.3 SWOT Analysis.......................................................................................................21
5. Financial plan.................................................................................................................23
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EXECUTIVESUMMARY

The Ethiopian economy continued to register a notable growth similar with the growth
registered during the past one decade. A remarkable performance has been registered in the
GDP and per capita income. Besides, the export performance of the country has also shown
a robust performance though a slight decrement has been registered recently due to
international market fluctuation in oil seeds and other exportable items.

Muley Addisu import and export is a sole proprietorship company established in the year
2003 E.C with the objective of exporting Agricultural Commodities: Soya bean, white
sesame seeds, red sesame seeds, cotton, chickpeas (Kabuli), red kidney beans, Niger seeds,
dry Ginger, cereal, paper, live animals and other food products to oversee markets with
competitive prices.

The company has registered a significant improvement in its export performance and
running a profitable venture since its establishment. The sales amount has drastically
increased in the year 2009 E.C where the company has exported diversified exportable items
to the different parts of the world. Besides, significant amount revenue has been also
generated from the import business. In the recent completed fiscal year of the country, our
company has exported, sesame, Niger seed, live animals and pulses where the company has
generated a sale of more than birr 352 million. The company has made significant
contribution to the national economy through foreign currency generation and creation of
employment opportunity which vital ingredient to the national economy.

In the year 2010 E.C budget year the company has planned to procure different exportable
items at a cost of birr569.1 million and planned to generate a sale of birr587.1 million. The
gross profit of the company expected to be around Birr 13.6 million and to pay tax around
Birr 4.5 million to the government. The products are expected to reach the common
destinations of the company where a strong relationship has been created. However, the
commitment of the company to rich new market centers will continue through participating
in different international trade fairs.
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1. Introduction
The Ethiopian economy continued to register a notable growth similar with the growth
registered during the past one decade. As per NBE report, in recent fiscal year, the real
GDP grew by10.2percent, higher in the sub Saharan African countries. The growth was
majorly registered in the industrial sector (21.6%) and the growth registered in the service
and agricultural sector was 10.2% and 4.4% respectively. Besides, it is stated in the NBE
report that Nominal GDP per capita went up to USD 691 from USD 639.6 and real per
capita GDP to USD 418 against the preceding year.

It is hardly factual that Ethiopia is endowed with high potential for agricultural production.
Ethiopia is becoming the hub of agricultural production in Africa due to its continual
economic growth and unreserved effort made by the government to boost the agricultural
sector in particular and the whole economy in general. As per NBE report, in the recent
fiscal year, the agricultural sector depicted a moderate growth rate of 6.4
percentmainlydueto7.2percentincreasein crop production, in general and 7.5 percent
expansion in grain crop production in particular. The total grain production reached
270.4million quintals, of which cereal production accountedfor87.3 percent while pulses
and oil seeds comprised 12.7 percent. Cereals and oil seeds production went up by 9.4 and
6.9 percent over the preceding year owing to the 3and 4.9 percent expansion in cultivated
land area respectively. In contrast, the production of pulses declined by 6.5percent while
cultivated land area contracted by 10.6 percent during the same period.

Recently, Ethiopia is exporting different types of agricultural products with a progressive

increment in volume and value during the last one decade. The share of pulses and oil seeds
to the total export of the country is immensely increased in the recent periods. The interest
of foreign buyers on the oilseeds and pulses of Ethiopia has increased due to the quality of
the products offered to the international market. However, a slight decrement in the export
of oil seeds and some other items were registered.

As per the report of NBE, total export earnings declined by 5% over the same of last year
due to lower export earnings from coffee (8.8%), oil seeds (6.4%), gold (8.8%), chat (3.7%),
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live animals (0.5%), leather and leather products (12.4%), and electricity (26.5%). As a
result, the ratio of export earning to GDP declined to 4.1% from 4.9% a year ago. Generally,
oilseeds, pulses and spices export value have shown an oscillating trend Still the country
could expand its global presence due to suitable climate condition, availability of cheap
labor and huge global demand for quality agricultural commodities in order to manufacture
quality food products.
Values of Major Export Items (In Millions of USD)
2012/13 2013/14 2014/15
Particulars
A %share B %share C %share
Coffee 746.6 24.0 714.4 21.6 780.5 25.8
Oilseeds 443.5 14.2 651.9 19.8 510.1 16.9
Leather and Leather products 121.1 3.9 129.8 3.9 131.6 4.4
Pulses 233.3 7.5 250.7 7.6 219.9 7.3
Meat& 74.3 2.4 74.6 2.3 92.8 3.1

MeatProducts 43.9 1.4 45.9 1.4 47.6 1.6

166.40 5.3 186.68 5.7 148.51 4.9
Fruits&Vegetables
271.27 8.7 297.35 9.0 272.42 9.0
Live Animals
578.8 18.6 456.2 13.8 318.7 10.6
Chat Gold 186.7 6.0 199.7 6.1 203.1 6.7
Flower 34.6 1.1 45.3 1.4 42.8 1.4
Electricity 215.4 6.9 247.4 7.5 251.4 8.3

Total Export 3,115.8 100.0 3,300.1 100.0 3019.3 100.0

Total Export excluding 3,081.2 3,254.8 2976.5
Source: NBE report, 2015
As disclosed in the table above, total export proceeds, including electricity, amounted
to USD3billion down by 8.5percentvis-à-vis the previous fiscal year. The poor
performance in exports was due to slow down in export earnings from oilseeds
(21.8percent), gold (30.2percent), chat (8.4percent), pulses (12.3percent), live-animals
(20.4percent) and electricity (5.5 percent) owing to lower global commodity prices
and/or volume of exports. Similarly, the in the year 2015/16 and 2016/17, the total
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export proceed of the country has declined due to lower international commodity price.
Volume of Major Exports (In mill of kg)
2012/13 2013/14 2014/15
Particulars A B C
Coffee 199.1 189.7 183.9
Oilseeds 283.9 313.5 319.5
Leather and Leather products 4.61 5.57 6.17
Pulses 357.5 353.0 340.7
Meat&MeatProducts 15.5 15.0 19.0
Fruits&Vegetables LiveAnimals 135.2 145.4 150.1
Chat 100.9 105.8 77.9
Gold(in mill of grams) Flower 47.2 51.7 49.2
Electricity 12.31 12.35 9.04
42.4 44.7 46.3
Source: NBE report, 2015
As indicated above, the volume of coffee export has declined while the volume of oil
seeds has increased. The overall volume of export has not significantly declined.
However, the proceeds generated has decline due to lower international commodity price.
When we look at the composition of export commodities, coffee has taken the major
share which has covered 25.8% of the total export proceed of the country. Next to coffee,
oil seeds covered 16.9% of the proceed, gold 10.6%, chat 9%, pulses 7.3%, flower 6.7%,
leather & leather products 4.4% and others 19.3%.

Source: NBE report, 2015

Despite the reduction in the value of export, the consumption of oil seeds and pulses has
increased dramatically in Europe and south Asia. Europeans are the largest importers and
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processors of edible oils. The various usage potential of oil seeds makes them a valuable
commodity in Europe, especially for the food industry, but also for cosmetics and industrial
purposes. It is needless to state that the enormous growth potential of the Ethiopian oil seeds
and pulses sector in combination with Europe’s and Asia increasing demand of quality oil
seeds and pulses products bring great opportunities. Hence, there is an appealing market for
the agricultural commodities of Ethiopia.

In addition to the favorable international market, the working policy of the government and
the due attention given to the export business is another opportunity for the Ethiopian export
business. Moreover, the government has taken the following measures so as to bring
economic growth:
1. Abolishing of almost all export taxes
2. Strengthening and enhancing institutional support for the transport sector
3. Liberalization of the foreign exchange
4. Enhancing private sector development and private public partnership through providing
effective industry association and creating a forum for consultation between the private
sector and development

As a result of the favorable policies and attractive incentive of the government on the one
hand and untapped business opportunities of the export sector on the other hand, the founder
and owner Ato Muley has strongly engaged in the export sector.
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2. Background and Description of the business

Muley Addisu import and export is a sole proprietorship company established in the year
2003 E.C with the objective of exporting Agricultural Commodities: Soya bean, white
sesame seeds, red sesame seeds, cotton, chickpeas (Kabuli), red kidney beans, Niger seeds,
dry Ginger, cereal, paper, live animals and other food products to oversee markets with
competitive prices.
The company is managed by the founder himself together with other supportive qualified
and experienced management team. The owner/manager of the business has acquired
adequate experience in both the import and export business and the remarkable performance
registered is the witness for the caliber of the founder

The company has located its head office in Addis Ababa, Guarad building, 2 th floor, Kirkos
sub city, Woreda 04, House number 2432-2-12. The facility of the head office
includes reception areas and office rooms. Moreover, the company has warehouses and
branch offices at Humera, Kality and Alemgena.

The company owns a land with an area of 2,750m 2. Out of the total area The
Company has built a warehouse in 1,600m 2. The warehouse and the building
associated with it are estimated to worth birr 31.8 million. The warehouse has
its own cleaning machine.

Our company also owns a commercial farm which mainly produces cotton, sesame and
Green mung beans. The farm is 1000 ha. The farm is equipped with the necessary farm
machineries and man power.

Agri Commodities being one of Ethiopia’s best known and largest export commodities, they
have always been of interest to our company. Prior to entering the Agri Commodity
business, we conducted a study that revealed there are gaps throughout the entire supply
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chain, from farmtoport, that can be filled to create efficiency and cut costs within the local
market in Ethiopia. Doing so has made us competitive and a top choice from Ethiopia for
exporters globally.

2.1 Products and services

Our company is fully engaged in import and export business. Some of the import and export
items of the company are stated below.
Export
✓ Oilseeds
✓ Sesame Seed, Humera Type
✓ Sesame seed, Wollega Type
✓ Soyabean Seed
✓ Linseeds
✓ Niger Seed
✓ Cotton
✓ Pulses
o White pea Beans
o Red Kidney Beans
o Black Kidney Beans
o Chickpeas, Kabuli
o Chickpeas, Desi G2
o Chickpeas, Desi G3
o Green Mung Beans
✓ Spices
✓ Coffee
✓ Live cattle
Import
✓ Sino truck
✓ Iveco trucker
✓ Sino truck 371HP-shasi for fuel
✓ Triper truck 336
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✓ Sino truck 371HP and 420HP

✓ Toyota revo 4 wheel drive construction support
✓ Dosan execavator, loader
✓ XCMG machine

2.2 Operational history of our business

Year Sales
2014 57,127,000.00
2015 56,240,804.00
2016 206,622,289.00
2017 352,762,595.00

Year Sales Export Sales Share

2015 57,126,747.00 34,583,399.00 0.61
2016 206,622,289.00 87,807,796.00 0.42
2017 352,762,595.00 139,508,862.00 0.40

Our company sales performance is continuously increasing from year to year. The company
sales both in the import and export business are continuously increasing. The export share
from the total sales was 40% in the year 2017.
Profitability
Year Profit
2015 (1,857,260.00)
2016 (1,390,445.00)
2017 14,345,053.00
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As depicted in the table above, our company has been operating in loss for the past two year
mainly because the huge finance made in the commercial farming. However, the company is
seeing the fruit of the commercial farming as it has started giving more yield per hectare.
The other contributor for the loss was the export sector. Our company purchases sesame at
birr 4,000 per quintal from ECX, however, the commodity was sold quickly to minimize
loss as the international market was continuously falling.

Despite, the loss our company made in the past years our company has jumped to profit in
the year 2017. The profit earned during the year was birr 14.3 million. The company
exported its own farm products and purchase made from ECX.
To summarize, our Company has managed the expenses in an efficient manner which has
increased the net profit generated. In all the profitable yardsticks, our company has
registered a remarkable performance. Experience in the line of business we are engaged in
and efficient management style allow the company to run a profitable business.

Our company export performance through commercial Bank of Ethiopia is depicted as

follow.

Export performance through Commercial Bank of Ethiopia as per

information from the export proceed receipts

year FCY Generated FCY Generated in Birr

2016 355,290.00 6,042,490

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2017 189,450 3,258,870

Total 544,740.00 9,301,360.40

2.3 Mission, vision and objective of our company

2.3.1 Vision
To be a leading importer to Ethiopian market and exporter of commodity products to the
global market by 2020.

2.3.2 Mission
To provide the best products and services to our customers; the best working environment to
our employees and a good return to our stakeholders

2.3.3 OBJECTIVE OF THE COMPANY

The Ethiopian export market holds significant potential. The current free
market system of economy has encouraged private investments in the export
industry. Therefore, the increasing numbers of such business enterprises
gives an indication that there will be a growing demand for exportable items.
It is this conviction that has initiated the owners to continue commercial
farming and export. The principle objectives of this garment industry are;
✓ to open a new export destination to Asia and Europe for our commodity
products
✓ to achieve compound annual growth rate of 46%
✓ to be one of the top five importer of trucks and buses & exporter of
commodities
✓ To expand exportable items;
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✓ To enhance productivity, value addition and competitiveness of farm

products;
✓ To contribute and strengthen the development of the export industry sub-
sector;
✓ To generate foreign currency;
✓ To transfer the latest technology in the respective field;
✓ To generate revenues in the form taxes for the government;
✓ To provide additional employment opportunities; and
✓ To explore domestic and foreign markets.
Having those objectives the company will contribute much in meeting the
countries demand for various goods and raising employment rate. It will
also enable the owners of the company to increase their business effort
and to re-invest on potential investment areas.

2.3.3 COMPANY VALUES AND CULTURE

The following are components of the company’s values and cultures.

The company respects the values and contributions of every

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

Keys to success
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➢ Trading and management experience: Muley Addisu import/export has two

divisions one importing trucks and buses, the other is exporting commodities. It has
grown the company from zero to half a billion birr turnover in short period of time
➢ Financial strength: Muley Addisu import/export has cash and has been working
with different banks and financial institutions and till time, it has a good credit
history among them, moreover, it is successful on making profits and is able to raise
funds.
➢ Product quality and customer satisfaction: the experience that our company has
accumulated over the last thirteen years has made it highly efficient in meeting
customers need and lead time. We closely monitor the quality of imported items and
exported commodities. We have an enduring relationship with key suppliers that
have enabled the company to respond to customers enquiries quickly and effectively.
➢ Improved manpower and fair labor cost: Ethiopia has more than 30 million
students in its educational system, which will provide an abundance of easily
trainable promoters and sales graduates that will earn a substantial income.
➢ Government regulations: Devaluation of currency, abolishing of almost all export
taxes, duty free privileges and financially support.
➢ Export market: Muley Addisu import and export has a successful export company
that generate foreign currency that will be used to finance import and capital
expenditure for the hotel and manufacturing business
Strategy
We aim to add value to Ethiopian agricultural products by becoming dependable and
professional partners. To do so we have the following strategy:
➢ Ensure that we purchase quality Agri Commodities at market price
➢ Track the volumes, qualities and prices of Agri Commodities being traded
globally in general, but more specifically Ethiopian Agri Commodities such as
Sesame, Sorghum, soybeans,etc
➢ use our subscriptions to industry specific publications such as
AgriMoney&AGLook to gather data
➢ improve our productive working relationship with farmers and cooperatives
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➢ Develop a successful relationship with all the stakeholders of the Ethiopian

Commodity Exchange & implement an analytical purchasing strategy based on all
pertinent variables.

3. Organization & Management

3.1 Organization & Management
It is clear that the organization structure of a certain business should be designed in a
view of accomplishing the mission and vision of that business. Accordingly, the overall
organizational structure set up of the company is tailored to distribute a high
competitive agricultural commodities based on customers’ requirement. Functional
departments which have a direct role linked to the objective of the organization and
the support units are identified and organized accordingly. In this connection, the
human resource planning is conducted considering the required complexity, volume of
production capacity and general production flow. The business has already established
a governing structure in order to accomplish the pre-determined objectives of the
organization. At the apex of the Organization Chart there is a General Manager who
supervises and manages the overall activities of the company. Under the General
Manager there are functional departments so as to accomplish the objectives of the
company. Moreover, in order to meet the opportunities of the growing export market
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and to strengthen the strong relationship created with the foreign buyers, the company
has broaden its staff base and employed qualified and experienced employees. The
management composition and Organizational Structure is presented below
Experienc
No. Name Position Academic e
1 Muley Addisu G/Manager 7th Grade 13 years

2 Yeshi Kabeda Accountant BA in Accounting 11 years

BA in business 8 years
3 Sisay G/Tsedike Senior Account Administration

Import and M.P.H ( Master of

4 Asfaw Alemaw export Public Health) 10 Years
coordinator
5 Mulugeta HR manager 12+2 39 Years

As indicated in the table above, the company’s staff profile in general and management
members in particular has a acquired ample experience in the line of export and import
which will contribute significantly to the success of the company. Moreover, in order to
create self-belongingness among the employees and the management members, an intensive
work has been made to build a shared vision and mission. The dramatic performance shift
registered during the last years is the realistic witness for the work done in enhancing the
work culture and commitment of the employees. Upgrading the efficiency of the employees
and the management members through intensive training and education is one of the pillars
of the company aiming to keep the success journey of the company.

3.2 Organizational Structure of Muley Addisu import and Exporter

Sole Proprietorship Company
As depicted below the organization structure of the company is designed so as to achieve the
vision and mission of the company. The general manager is responsible for all activities of
the organization and supported by procurement, marketing and export, finance and
administration heads. The governing structure of the company is indicted below
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4. Marketing Plan
4.1 Marketing Budget
In the budget year the company has allocated a significant amount of Birr for Export
business promotion from its own source. Aggressive marketing strategies will be deployed
so as to accomplish the stretched plan of the company. Besides, the company will continue
its effort to get sponsors who have an intention to support Export or companies to promote
their business.

4.2 Marketing strategies

✓ On line marketing and sales: Muley Addisu has been developing a fully
interactive website where all the company cars will be posted, with detail
specification and price. Customer could browse through the website to find the
product they need. The online marketing and sales platform will create
transparency and visibility of products. Customers can compare our company
product against the competitors.
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✓ To use the media: TV, radio and print Medias are the strategic channels to reach
the customers. The company has allocated sufficient fund for creative and
targeted marketing campaign emphasizing the company’s strong points such as
the quality of products it will import and export.
✓ Use recruited distributors to reach the customers easily
✓ Agents
✓ Use the company’s marketing staff
✓ To subscribe and contact, globally known market promoting companies that give
business opportunity to their members.
✓ To explore market opportunities through the use of ICT and enhancing our
accessibility through our web site www. Degengebremeskel.com.
✓ To use buyers e-mail & web address to offer to them our prices & products on
daily basis.
✓ To contact and convince representatives of Ethiopian Agri-commodities buying
companies who are located in Addis.
✓ Contact Ethiopia mission in abroad to bridge us to Agri-commodities buyers.
✓ To travel to some important trade fairs & locations where we can able to contact
the buyers face to face.
✓ Give special attention to the quality & quantity all agri-commodities, we offer to
buyers.
✓ We have to focus on Research & Development (RD) program which enable us to
maintain the cleanliness and quality of our products which may maximize the
buyers’ satisfaction.
✓ To keep our documentation service up to date, clear & timely.
✓ Avoid long sales contract, to keep away from high stock carrying costs, interest
rate and also carefully to observe the availability of the supply in the market for
the goods we plan to sell in short span of time.
✓ To make an effort to match the purchasing price of the raw material & the rest of
production costs & profitability of the company in the meantime strengthen our
cost control mechanism.
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✓ To exploit our networking skills to build the reputation & image of our company
and country.
Target market segment strategy
Target market segmentation strategy is crucial to bring customer satisfaction that is
considered as the foundations of any business venture. Accordingly our company has
three market segments
Individual consumers: the first are individual customers who need export items and
imported trucks, buses and other vehicles for existing and new businesses. These
customers are concerned about the quality and price of products, whether the products
can be trouble free, whether the product can feet in to their needs and above all they want
to know whether it is good value for money. The marketing strategy of our company is
first to let its self known to these category of customers through media advertising,
testimonials and words of mouth from existing customers who are satisfied with the
product they bought and the service they received. One of the major client complaints-
particularly who come from advanced economies is to do business. Our company is quite
aware that customer experience is vital for purchase decision. Hence, it will select its
sales team to understand the product completely to answer the entire range of questions
that the customer might raise, and help the customer to select the right product, to achieve
that the company will provide extended training to sales team on building relationship,
understanding the customer need and help the customer to make the right decision for its
particular needs. It will also provide after sales follow up to avoid post purchase anxiety
or what is known as buyer’s remorse.
Distributors: the second customers are distributors. Our company cannot have show
rooms all over the country. The distributors are living in different cities of the countries.
Hence, Muley Addisu does not expect all the distributors, individual buyers or
construction companies to travel its show rooms. Our company will have marketing
promotions through TV, printing media and Radio but also make its products easily
accessible through agents and distributors in selected regional big towns like Mekele,
Gonder, Humera, Bahirdar, Semera, Hawassa, Diredawa, Jimma, Gambella, Assela etc.
the truck, bus and other vehicle buyers need to feel, test drive before buying, these agents
and partners will also be partners in after sales maintenance and spare part suppliers.
 [Muley Addisu Import

Institutional buyers: the third categories are institutional buyer at the local and
international level. There are a number of construction companies, schools, transport
service providers, government owned companies, government construction and logistics
companies, mining, cement factories etc. these companies usually buy through
competitive bidding. They consider two things for purchase. The first is technical
evaluation of the products by buying committee. This often account between 50 to 70%.
However, under Ethiopian procurement principle, companies assembling or
manufacturing inside the country get 25% compared to importers. Hence, this is a big
help to win the bid. Our company has Chinese products with European standard product
compared to other Asian suppliers. As far as the international importers the countries
agricultural products is concerned, the company is committed to export quality products
so that there is a possibility of retaining customers.

Competitive advantage
Threat of new entrants

Bargaining power of buyers

Bargaining power of suppliers
Rivalry among the existing competitors

Threat of substitute products or services

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Barraging power of suppliers: our company secured a reliable source of suppliers for
the exported items and for trucks and buses. The relationship maintained with the
suppliers is based on win-win approach.
Bargaining power of buyers: bargaining power of buyers is very low. The sector is not
new and our company is not going to be dependent on a single or few big buyers.
However, a maximum possible effort is exerted to retain potential buyers of the company.
Threats from new entrants: threat from new import and export entrants could be higher
when the business becomes attractive and the industry develops. More local and
international companies may come to join the market to compete the same level as our
company. Nevertheless, our company will have early start advantage to create a market
brand, which will be recognized for quality products, good customer service at an
affordable price.
Rivalry among exiting competitors: currently, there are hundreds of existing importers
and exporters in Ethiopia. Being that there are some 10 to 15 competitors, and if they
attempt to, our company will easily win by providing superior products and excellent
customer experience at the lowest price.

4.3 SWOT Analysis

Strengths
❖ The company has strong financial resource
❖ Strong supplier relationship
❖ Healthy relationship with creditors and financial institutions
❖ Strong commitment of the owner and top level management
❖ Strategic office and warehouse location
❖ Personalized customer handling and treatment
❖ Sufficient number of warehouse and resources
❖ Selling trucks by adding additional features/Chasis/to satisfy the customer need
Weaknesses
❖ Traditional organizational structure and owner dependent decision making system
❖ Lack of branding, promotion advertisement
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❖ Highly centralized controlling and decision making system

❖ No formal delegation of duties and responsibilities among staffs
Opportunities
❖ Highest international demand to Ethiopian organic products
❖ Attractive government policy towards exporting local products
❖ High demand and supply gap in both import and export items
❖ Willingness of financial institutions and creditors to give loans
Threats
❖ Foreign currency limitations
❖ Existing competitors capacity
❖ New business entrants
❖ Price competition among competitors
All the above issues being the case, the company has adjusted itself to curve the
weakness and to maximize the strength and opportunities.
Strategies

The main strategy of the company is to broaden customer base and enhance customer
satisfaction. The following are the tactics to grow customer base.
❖ Promoting and marketing our imported products and export products
❖ Providing consistently high quality exportable and imported items
❖ Offering good value products and fast treatment to our customers

Value proposition
Muley Addisu import/export will use their branch offices and warehouse to promote and
increase sales at their market centers. Its value proposition is to have high quality,
competitive price and excellent customer base services.

Quality product Low price Excellent customer service

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Competitive Edge
To run a successful business the following competitive edges are to be considered;
✓ Be first in the market
✓ Customer service
✓ Price
✓ Quality of products
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5. Financial plan
Financial performance
As shown in the financial statement, the sale of our company has registered a significant
increment. The total sale of the company was birr 206.6 million and the export sale was Birr
87.7 million in the year 2008E.C and increased astonishingly by 71% and the total sale
reached to birr 352.7 million while the export sale has reached to birr 139.5 million in the
year 2009 E.C. the export sale has not increased as expected due to the international market
fluctuation. However, unlike with other exporters the company has shown an increased
export performance albeit the international market fluctuation. Though the international
market has shown unfavorable situation and the country’s export has declined, we have
registered a remarkable sales increment due to our engagement in diversified export items
and an exemplary commitment exerted by the staff and management members of our
company. As clearly verified by the external auditor, the amount of sale generated during
the last three years is depicted in the table beneath.
Year Total Sales Export Sales
2015 57,126,747.00 34,583,399.00
2016 206,622,289.00 87,807,796.00
2017 352,762,595.00 139,508,862.00

As disclosed above, we have registered a remarkable performance in both our local and
export sales. By scaling up our lessons, we are encouraged to boost our sales in general and
export sales in particular.
Profitability
It is well known that customers are the foundations of any business venture. Being
customers are the foundations; maintain strong bond through meeting their expectations is
the cornerstone for enhancing financial performance. The ultimate objective of any business
venture is profit optimization. When we rate our company in profitability measures, it has
registered remarkable in the year 2017. A net profit of birr 14.4 million was registered in the
year 2017.
Our company was in loss for the past three years mainly due to huge investment made in
commercial faming and fluctuating local and international export market.
 [Muley Addisu Import

Since last year the commercial farming is producing at full capacity. The farm is supporting
the export business of our company. The farm produces cotton, sesame and green mung
beans. This will give our company competitive advantage in export business.
Besides, the profitability of the business is expected to increase in the forthcoming period
due to decline in the production of oilseeds and pulses at a global level which leads the
selling price to rise.

Export plan
As it is described above, the company has set all the necessary preconditions so as to boost
its export performance. The strategic objectives are designed so as to fulfill the broader
vision and mission of the company. A maximum effort has been exerted so as to create a
shared vision among the employees and management members of the company. The
manpower is furnished with employees who have possessed the necessary experience and
qualification in which the financial performance achieved so far is the witness. Similar with
the last year accomplishment, in the coming fiscal year, all items that were exported in the
past year will be exported in an increased quantity to the esteemed customers of our
company. The export products are clearly defined based on product specification and
packaging. As part of its diversification strategy, the company was exporting and is going to
export the following items to the foreign market
❖ Oil seeds
✓ Sesame
❖ Pulses
✓ Soya bean
✓ Chick peas
✓ Red Kidney Beans
✓ Green Mung Beans
✓ White Pea Beans
✓ Kabuli
 [Muley Addisu Import

Sales forecast
The company has been exporting different agricultural products to the different parts of the
world. The business has been exporting chick peas, sesame, kabuli, and black soya beans to
the Middle East, south Asia and Europe. As stated above, a significant amount of foreign
exchange has been generated from the exported agricultural commodities. After
accumulating the necessary experience and maintain the required reputation, Mulye Addius
import export has planned to enhance his export business. The following basic assumptions
are being deployed in order to enhance the export in a drastic manner
1. Ample experience has been acquired so far from the export business
2. The business has got the necessary reputation from the well-known middle east,
south Asia and Europe agricultural commodity importers
3. The business is established and operated by qualified and experienced personnel
4. Our company is dedicated to finding new markets and new customers by
participating in trade fairs. Trade fairs help us stay in touch with the global
industry and find new opportunities. So far we have been participating in different
trade fairs and recruited potential customers.
5. In 2009 E.C the company has made a remarkable export performance albeit
international market fluctuations and declined export proceed of the country.
Hence, it is presumed that the company’s sales performance is expected to
increase with a similar pace assuming the favorable conditions created.
6. We have contracts at hand
7. The export market of the country has shown favorable improvement after the
foreign exchange devaluation made by the government.

Considering all the above assumptions in to account, the company is going to deploy its full
effort so as to enhance its sales performance. Hence, for the coming one year the business
has intended to accomplish the following export sales performance.
 [Muley Addisu Import

Planned Export sales

Planned
export Price (Birr
Items volume (MT) /MT) Revenue
Sesame 8,250 34,500 284,625,000.00
Soya bean 3,500 12,243 42,850,500.00
Chick peas 1,250 24,487 30,608,750.00
Green Mung 3,300 21,767 71,831,100.00
White Pea
Beans 2,500 20,300 50,750,000.00
Kabuli 800 28,569 22,855,200.00
Red Kidney
Beans 4100 20,406.00 83,664,600.00
Total 23,700 587,185,150

NB: it is assumed that 2% of the commodities purchased are going to be rejected at the
process of cleaning.

As can be seen above, our plan is to export 22,900 MT of various commodities and generate
revenue of birr 587.7to the business. Besides, it plays a pivotal role in curving the foreign
exchange problem of the country since it has a potential to generate a significant amount of
foreign exchange.

Projected cost
An equivalent volume of commodities has to be procured in order to meet the above
stated planned export, sesame, soya bean, chick peas, green Mung, , Kabuli, White Pea
Beans the items to be exported in the coming export periods of the business.

Projected purchase cost

Planned purchase
Items volume (MT) cost (Birr/MT) Total purchase cost
Sesame 8415 32,500.00 273,487,500.00
 [Muley Addisu Import

Soya bean 3570 10,000.00 35,700,000.00

Chick peas 1275 20,000.00 25,500,000.00
Green Mung 3366 17,000.00 57,222,000.00
White Pea
Beans 2550 16,000.00 40,800,000.00
Kabuli 816 24,000.00 19,584,000.00
Red Kidney
Beans 4182 15,000.00 62,730,000.00
Total 24,174.00 515,023,500.00

Planned cost of goods sold

It is well known that there are additional costs every exporter bears in addition to the main
purchase cost of the commodities. Hence, the following assumptions are deployed in order
to determine the total planned cost of goods sold of the business
➢ Packing cost is assumed to be 2% of the purchase cost
➢ Loading and unloading cost is assumed to be 1% of the purchase cost
➢ Clearing cost is assumed to be 1.5% of purchase cost
➢ Documentation and certification and others are assumed to be birr 2% of purchase cost
➢ Transit charge is assumed to be 2% of purchase cost
➢ Transportation cost is assumed to be 2% of the purchase cost
Taking in to account the above stated assumptions, the annual cost of goods sold of the
business can be depicted in the table beneath
 [Muley Addisu Import Export]

Cost of goods sold (annual)

Document
Purchase certification
Item cost Packaging Un/loading and Others Clearing Transit Transport Total
Sesame 273,487,500 5,469,750 2,734,875 5,469,750 4,102,313 5,469,750 5,469,750 302,203,688
Soya bean 35,700,000 714,000 357,000 714,000 535,500 714,000 714,000 39,448,500
Chick
peas 25,500,000 510,000 255,000 510,000 382,500 510,000 510,000 28,177,500
Green
Mung 57,222,000 1,144,440 572,220 1,144,440 858,330 1,144,440 1,144,440 63,230,310
White Pea
Beans 40,800,000 816,000 408,000 816,000 612,000 816,000 816,000 45,084,000
Kabuli 19,584,000 391,680 195,840 391,680 293,760 391,680 391,680 21,640,320
Red
Kidney
Beans 62,730,000 1,254,600 627,300 1,254,600 940,950 1,254,600 1,254,600 69,316,650
Total 515,023,500 10,300,470 5,150,235 10,300,470 7,725,353 10,300,470 10,300,470 569,100,968

As disclosed above, the total cost of goods sold is assumed to be birr 565.6 million in the first year of the plan period.
 [Muley Addisu Import

Working capital requirement

The business has been operating its export business from the own source and debt finance
obtained from banks. A similar approach is going to be implemented in order to maximize
the export proceed that has been in the previous periods. As described above, the business is
expected to incur a total cost of goods sold amount of birr 565.6 million. This amount is
expected to be covered from own source and bank finance. As a result, the total working
capital amount is expected to be financed by debt source of finance from a bank taking the
reasonable working capital cycle. Hence, the business require a working capital of birr 150
million so as to support its plan.

Other financial plans

Assumptions
The following assumptions are developed considering the historical performance of the
business and other market parameters
 The plan life is assumed to be 5 years
 The export volume of the business is expected to increase by 10% on wards the
second year and, the cost of procuring the exported items and the selling price is
assumed to increase similarly by 10%
 Salary and wage is assumed to be 2,023,585per a um and assumed to increase by
5% per annum
 Marketing and communication cost is assumed to be 2% of sales
 Administrative costs are 10% of salary expense
 Office rent is assumed to be 180,000 and expected to increase by 5%.
 Interest rate is assumed to be 7.5% per annum
 Income tax is assumed to be 35%

Profit and loss statement

As per the projected profit and loss statement, the business is profitable in all the periods
considered.

Projected profit and Loss statement

 [Muley Addisu Import

Year
Item 2010 2011 2012 2013 2014
Export sales 587,185,150.00 704,622,180.00 845,546,616.00 1,014,655,939.20 1,217,587,1
2
Cost of sales 569,100,967.50 682,921,161.00 819,505,393.20 983,406,471.84 1,180,087,7
6
Gross Profit 18,084,182.50 21,701,019.00 26,041,222.80 31,249,467.36 37,499,360.
8
Administrative
cost 202,358.50 212,476.43 223,100.25 234,255.26 245,968.02
Salary expense 2,023,585.00 2,124,764.25 2,231,002.46 2,342,552.59 2,459,680.2
1
Marketing and
communication 40,471.70 42,495.29 44,620.05 46,851.05 49,193.60
Office rent 180,000.00 189,000.00 198,450.00 208,372.50 218,791.13
Utilities 217,151.00 217,151.00 217,151.00 217,151.00 217,151.00
Other expenses 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00
Total expense 2,713,566.20 2,835,886.96 2,964,323.76 3,099,182.40 3,240,783.9
7
Profit before
interest and tax 15,370,616.30 18,865,132.04 23,076,899.04 28,150,284.96 34,258,576.
8

Projected cash flow statement

Items per year 2010 2011 2012 2013 2014

cash inflow
Beg. Cash Bal. 832,360.07 9,285,675 243,193,744 431,695,576 556,444,390
Sales 587,185,150 927,805,500 1,020,586,049 1,122,644,654 1,234,909,120
Total Inflow 588,017,510.07 937,091,174.61 1,263,779,793.39 1,554,340,229.72 1,791,353,509.69
Cash outflow
C.G.S 569,100,968 682,921,161 819,505,393 983,406,472 1,180,087,766
 [Muley Addisu Import

Administrative
cost 202,358.50 212,476.43 223,100.25 234,255.26 245,968.02
Salary expense 2,023,585.00 2,124,764.25 2,231,002.46 2,342,552.59 2,459,680.21
Marketing and
communication 40,471.70 42,495.29 44,620.05 46,851.05 49,193.60
Office rent 180,000.00 189,000.00 198,450.00 208,372.50 218,791.13
Utilities 217,151.00 217,151.00 217,151.00 217,151.00 217,151.00
Other expenses 50,000.00 50,000 50,000 50,000 50,000
Interest 2,365,517.00 2,365,517.00 2,365,517.00 2,365,517.00 2,365,517.00
Tax 4,551,785 5,774,865 7,248,984 9,024,669 11,162,571
Total outflow 578,731,835 693,897,430 832,084,218 997,895,840 1,196,856,638
Net cash flow 9,285,675 243,193,744 431,695,576 556,444,390 594,496,872
[Muley Addisu Import
[Muley Addisu Import