1.

PROJECT ECONOMICS
Description Details
Internal Rate of Return (IRR) 25%
Payback Period (Yrs.) 4.91
Net Present value (Birr) 6,037,434

2 Project Financing
Description Details
Total Equity (50%) Birr 9,731,770
Bank Loan (50%) Birr 9,731,770
Markup to the Borrower (%age / 12%
Tenure of the Project (Years) 5

3 Project Cost
Description Cost (Birr)
Capital Cost
Land 1,283,941
Building and infrastructure 6,640,000
Machinery and Equipment 1,395,100
Cows 8,750,000
Furniture & Fixture 256,360
Office Equipment 83,000
Office Vehicles 63,000
Pre-operating Cost 285,000
Total Capital Cost 18,756,401
Working Capital
Raw Material Inventory 271,415
Upfront Insurance Payment 72,905
Cash 362,819
Total Working Capital 707,139
Total Project Cost 19,463,540

4 Space Requirement
Description Estimated AreUnit Cost (BTotal Cost (Birr)
Shed for Wet Cows 4,000 1,000 4,000,000
Open Paddock for Wet Cows 8,000 10 80,000
Shed for Dry Cows 2,000 500 1,000,000
Open Paddock for Dry Cows 4,000 10 40,000
Shed for Calves 1,000 500 500,000
Open Paddock for Calves 2,000 10 20,000
Stores (fodder, concentrate & m 400 700 280,000
Room (chillers, utensils & milk st 144 1,000 144,000
Residence (Manager) 120 1,500 180,000
Admin / Accounts Room 120 1,500 180,000
Washroom (Executives) 24 2,000 48,000
Rooms (Workers) 120 1,000 120,000
Washrooms (Workers) 48 1,000 48,000
Total Infrastructure 21,976 6,640,000

5 Machinery & Equipment Requirement

Description Quantity (No.Unit Cost (BTotal Cost (Birr)
Calf Feeder (New born calves) 3 1,200 3,600
Calf Cages 3 12,000 36,000
Cooling System 1 200,000 200,000
Water Turbine 1 100,000 100,000
Milking Line 2 150,000 300,000
Generator (30 KVA) 1 250,000 250,000
Milk Chiller (1,000 litres) 1 300,000 300,000
Milk Testing Machines 1 20,000 20,000
Velocity Meter 1 1,500 1,50 1,500
Surgery Kit 1 10,000 10,000
AI Equipment 1 50,000 50,000
Dystocia Kit 1 20,000 20,000
Energy Savers-Farm 10 400 4,000
Miscellaneous 1 100,000 100,000
Total machinary & Equipment co 1 1,395,100 1,395,100

6 Office Vehicle
Description No. Cost / Unit Total Cost (Birr)
Motor Cycle 1 60,000 60,000
Registration fee 1 3,000 3,000
Total cost 63,000 63,000
It is assumed that Birr 10,000 per month will be required to cover travelling expenses in order to carry out essential operation

7 Furniture & Fixtures Requirement

Description Quantity Unit Cost (BTotal Cost (Birr)
Tables 2 20,000 40,000
Chairs 4 5,000 20,000
Fans 4 4,000 16,000
Energy Savers 2 180 360
Misc. Furniture for Workers 1 100,000 100,000
Air Conditioner (2 ton split) 1 80,000 80,000
Total Furniture & Fixtures 256,360
8.Office Equipment
Description Quantity Unit Cost (BTotal Cost (Birr)
Computer 1 60,000 60,000
Printer 1 20,000 20,000
Cellphone 1 3000 3,000
Total Office Equipment 83,000

9 Human Resource Requirement

Description No. of Emplo Monthly SaTotal Salary Year 1 (Birr)
Farm Manager 1 50,000 600,000
Farm Supervisor 1 25,000 300,000
Workers: Cows 2 15,000 360,000
Workers: Calves 1 15,000 180,000
Security Guard 1 16,000 192,000
Total Human Resource Require 6 1,632,000
y out essential operations of the farm, translating to an expense of Birr 120,000 per annum.
10 Raw Material Requirement

A. Feeding Requirements for one Cow in Year 1

Description Daily Feed Allowance (Kgs)
Total Mixed Ration (TMR) 22.75 (@ 3.5 % of Live BW)

Average adult Live Body Weight (BW) of cow is assumed to be 700 kg with 35 liters of daily milk pr
For the calculation purpose, the total milk production of 9,750 litres in one lactation period is distr
One lactation period of Holstein Friesian cow is estimated to be 305 +_ 5 days.

B. Feeding Requirements of One Female Calf (from birth till one year of age) in year 1
Description Daily Feed Allowance (liters)
Milk Replacer (First 3 months of age per calf) 6
TMR (from 4th to 12th months of age) 8.3 (@ 3 % of live BW)
Total
Average birth weight of the new born calf is 35-40 kgs.
At the time of weaning at three months of age, it is 150 kgs which increases up to 400 kgs at the a

C. Feeding Requirements of One Heifer (1 year older)-in year 2

Description Daily Feed Allowance (Kgs)
Total Mixed Ration (TMR) 13.5 (@3% of Live BW)

Average Live body weight (BW) of heifer, older than one year is assumed to be 550 kgs.

D. Total Cost of Feeding in Year 1 and 2

Total Cost (Birr)
Description No. of Animals Year 1 No. of Animals
Lactating Cows 22 5,418,197 19
Female Calves (younger th 12 1,064,742 9
Heifers (Female calves olde 0 0 9
Total 34 6,482,939 37

Prices are rounded off to near decimal point for 365 days of feeding.
The number of animals are calculated after mortality count which is--- 7% in new born,
---3 % in female calves older tha
---and 2% in adult cows

E. Total Cost of Vaccination, Medication and AI in Year 1

Description Birr/ Animal Total Cost in year 1 (Birr)
Vaccination and Medication 1,000 31,013
Artificial Insemination (AI) 5,000 108,750
Total 6,000 139,763
 Rate Birr/ Kg Daily Feed Cost (Birr) Total Cost in Year 1 (Birr/ Cow)
30 683 249113

ith 35 liters of daily milk production for one lactation.

one lactation period is distributed in 365 days.

Rate Birr/ Kg Daily Feed Cost (Birr) Total Cost in Year 1 (Birr/ Calf)
40 240 21600
30 249 68,063
89,663

ases up to 400 kgs at the age of one year.

Rate Birr/ Kg Daily Feed Cost (Birr) Total Cost in Year 1 (Birr/ Cow)
30 405 155216

d to be 550 kgs.

Year 2
5,006,414
1,058,303
1,437,691
7,502,408

7% in new born,
in female calves older than one year
2% in adult cows
11. Miscellaneous Expenses

A. Electricity
Description Per month (Birr) Per year (Birr)
Connection fee(one time) 35,000
Electricity bill (Barn) 59,793 717,513
Electricity bill (Office & residence) 5,000 60,000
Total 812,513

B. Fuel Cost o the generator

Description Per month (Birr) Per year (Birr)
Fuel cost 48,900 586,800
Total 586,800

C.Machinary Maintenance cost

Description Per month (Birr) Per year (Birr)
Machinary maintenace cost 10,000 120,000
Total 120,000

D. travelling,communication &Vehicle running cost

Description Per month (Birr) Per year (Birr)
Travelling 120,000 1,440,000
Communication 60,000 720,000
Vehicle running cost 42,000 504,000
Total 2,664,000

E.Business promotion and office routine task

Description Per month (Birr) Per year (Birr)
Business promotion 748,286 8,979,432
office expense 39,600 475,200
Legal fees 416 4992
Audit Fees 416 4992
Technical cosultation fees 416 4992
Total 9,469,608

F. Insurance of machinary & Equipment

Description Per month (Birr) Per year (Birr)
Insurance (Per Year) 6,075 72,905
Total 72,905
INCOME STATEMENT

Revenue from
Sales of milk
Other incomes
Total

Cost of sales
Cost of feed
Cost of vaccination / medication
Cost of artificial insemination
Direct labor cost
Machinery maintenance cost
Direct electricity cost
Diesel cost
Total cost of sales
Gross Profit

General administration & selling expenses

Administration expense
Electricity expense
Travelling expense
Communications expense (phone, fax, mail, internet, etc.)
Office vehicles running expense
Office expenses (stationary, entertainment, janitorial services, etc.)
Promotional expense
Insurance expense
Professional fees (legal, audit, consultants, etc.)
Depreciation expense
Amortization of pre-operating costs
Subtotal
Operating Income

Gain / (loss) on sale of machinery & equipment

Gain / (loss) on sale of office equipment
Gain / (loss) on sale of office vehicles
Earnings Before Interest & Taxes

Interest expense on long term debt (Project Loan)

Interest expense on long term debt (Working Capital Loan)
Subtotal
Earnings Before Tax

Tax
NET PROFIT/(LOSS) AFTER TAX

Balance brought forward

Total profit available for appropriation
Dividend
Balance carried forward
BALANCE SHEET

ASSETS
Current assets
Cash & Bank
Accounts receivable (for milk only)
Raw material inventory
Pre-paid insurance
Total Current Assets

Fixed assets
Land
Building/Infrastructure
Animals
Machinery & equipment
Furniture & fixtures
Office vehicles
Office equipment
Total Fixed Assets

Intangible assets
Pre-operation costs
Total Intangible Assets

TOTAL ASSETS

Liabilities & Shareholders' Equity

Current liabilities
Accounts payable (feed only)
Total Current Liabilities

Other liabilities
Long term debt (Project Loan)
Long term debt (Working Capital Loan)
Total Long Term Liabilities

Shareholders' equity
Paid-up capital
Gain / Loss on Net value of Animals
Retained earnings

Total Equity

TOTAL CAPITAL AND LIABILITIES

CASH FLOW STATEMENT

Operating activities
Net profit
Add: depreciation expense
amortization of pre-operating costs
Accounts receivable
Raw material inventory
Advance insurance premium
Accounts payable
Cash provided by operations

Financing activities
Project Loan - principal repayment
Working Capital Loan - principal repayment
Additions to Project Loan
Additions to Working Capital Loan
Issuance of shares
Cash provided by / (used for) financing activities

nvesting activities
Capital expenditure
Cash (used for) / provided by investing activities

NET CASH

Cash balance brought forward

Cash available for appropriation
Dividend
Cash balance
Cash carried forward