YESHI TEKILU BUSINESS COMPLEX BUILDING

PROJECT (G+6)

PROPOSAL FOR
INVESTMENT FEASIBILITY FOR CONSTRUCTION OF
BUSINESS COMPLEX BUILDING (G+6)

APPLICANT: W/ro.YESHI TEKILU

PEOJECT LOCATION: SIDAMA REGIONAL STATE,

Hawassa City Administration

YOYA DEVELOPMENT CONSULTANCY AND TRAINING PLC,

(0911384833

NOVEMBER /2023

0
 PROJECT AT AGLANCE
The Applicant
Promoter W/ro. YESHI TEKILU
Region: Sidama Nationality Regional State,
Zone: Hawassa City Administration
Nationalities Ethiopian
The Project
Name BUSINESS COMPLEX BUILDIN (G+6)
Address: Mobile: 09-16-82-25-38
Region: Sidama Regional State
Town: Hawassa Town Administration
Project Details
Type of the project MALL BUSINESS BUILDING CENTER (G+6)
Products To offer a complete BUSINESS COMPLEX BUILDING SERVICE, with
international standard shopping, marketing, bead room and Hotel and
Restaurant amenities for customers
Status of the business: New
Investment Request
Date of Applications November 2023
Deal Manager W/ro. YESHI TEKILU
Land Total 5,000m2
Main terrace Building 4,300M2
other Facilities 7,00 m2
Description of Project /Purpose
To serve as a place where Hawassa town dwellers, gust, tourists, visitors, vacationers and leisure
travelers could stay overnight, dine, and enjoy the breathtaking view of Hawassa Lake’s city side shore
of the lake with various endemic birds and gust and customers attractions. To offer a complete package
MALL Business Complex Building Center for customers,
Ground Floor for different Financial institution, bank, pharmacy, super market and shop rent
Parking area
Floor 6th
 Conference hall for different clients for holding meetings/seminars.
  Will have also healthiness and recreational facilities like
 Sauna and massage
 Gymnasium and Swimming Pool
 Beauty salon, shops, and front desk services.
 Travel Agency
 Individual Heating Plant,
 Ventilation and conditioning,
 Autonomous firefighting system, fire tank,
 Pump plant,
 Fire-alarm system,
 Fire-alarm protection system,
 Power supply and electric lighting system, outdoor lighting system,
 Lighting protection and grounding,
 Communication and alarm system,
 Water supply and drainage,
 Indoor and outdoor advertising alert etc..
BUSINESS COMPLEX BUILDIN (G+6) Centers represents a unified architectural complex combining
the features of upgrading and planting with hard landscaping.
Benefiters of the project Job Creations for 27 skilled permanent and 100 semiskilled totally 127 Employees

Project Duration One Year

Project Investment cost
Project Source of Finance
70.998 million ET.Birr
$1,314,784.66 USD in foreign currency
It is estimates as Project Investment Cost for the establishment
of the Project is;
70% Finance from bank loan------------- 49.698 Million Eth. Birr
30 % Entrepreneurs Equity (Cash)……. Birr 21.299 Million Birr
TABLE OF Contents
PROJECT AT AGLANCE i
Tables vi
Annex vii
Figure viii
1. EXECUTIVE SUMMARY 1
2. INTRODUCTION4
2.1 RATIONAL BEHIND THE PROJECT 4
2.2 SOCIO-ECONOMIC JUSTIFICATIONS 5
2.3 COMPANY / APPLICANT PROFILE 5
2.4 PROMOTER’S PROFILE 5
2.5 VISION AND POSITIONING 6
2.6 PRODUCT AND SERVICES 6
2.7 PROJECT START-UP STRATEGIES 7
3. BACKGROUND INFORMATION 8
3.1 ETHIOPIA BUSINESS COMPLEX BUILDING AND MARKET SERVICE 8
3.1.1 SERVICE INDUSTRY AND MARKETING OVERVIEW..........................................................................8
3.2 PROJECT COMPETITION 9
3.2.1 POTENTIAL OF THE MARKET..........................................................................................................9
3.3.2 PRICE SENSITIVITY......................................................................................................................9
3.3.3 CUSTOMER POWER.........................................................................................................................9
3.3.4 COMPETITORS..............................................................................................................................10
4. GENERAL DESCRIPTION 0F THE PROJECT 11
4.1 LOCATION OF PROJECT AREA 11
4.2 LOCATION ADVANTAGES 11
4.3 PHYSICAL AND NATURAL CONDITION OF PROJECT SITE 11
4.3.1 TOPOGRAPHIC FEATURES.............................................................................................................11
4.4 SOCIO-ECONOMIC ENVIRONMENT 12
4.4.1 POPULATION PROFILE..................................................................................................................12
4.4.2 INFRASTRUCTURES.......................................................................................................................12
5. THE PROJECT 13
5.1 PROJECT DESCRIPTION 13
5.2 THE PROJECT PURPOSE AND OBJECTIVES 13
5.2.1 PURPOSE OF THE PROJECT...........................................................................................................13
5.2.2 OBJECTIVE AND SCOPE OF THE PROJECT......................................................................................14
5.3 PROJECT ORGANIZATIONAL PLAN 14
5.3.1 DEVELOPMENT PLAN THE PROJECT 14
5.3.2 RENTAL LOGISTIC SUPPORT..........................................................................................................14
5.5 TECHNOLOGY AND PROCESSING 14
 5.5.1 ENGINEERING SUPPORT FACILITIES..............................................................................................14
5.5.1.1 HEATING, VENTILATION AND CONDITIONING SYSTEM.........................................................14
5.5.1.2 WATER SUPPLY AND SEWAGE SYSTEM.................................................................................15
5.5.1.4 POWER SUPPLY.....................................................................................................................16
5.5.1.4 ELECTRICAL EQUIPMENT AND LIGHTING...............................................................................16
5.5.2 INSTALLATION OF TELEPHONES...................................................................................................17
5.5.3 PRINCIPLES AND STANDARDS OF FINISHING................................................................................17
5.6 COST OF MARHINERY, EQUIPMENT AND FURNITURE 18
5.6.1 COST OF MARHINERY & EQUIPMENT............................................................................................18
5.6.2 FURNITURE & FIXTURE..................................................................................................................19
5.6.3 SOURCE OF TECHNOLOGY.............................................................................................................20
5.7 BUILDING PRODUCTION PLAN 20
5.7.1 BUILDING CAPACITY AND PRODUCTION PROGRAM.....................................................................20
5.7.1.1 PLANT CAPACITY....................................................................................................................20
5.7.1.2 PRODUCTION PLAN...............................................................................................................20
5.8 MATERIALS AND INPUTS 21
5.8.1 RAW MATERIALS..........................................................................................................................21
5.8.2 UTILITY.........................................................................................................................................21
5.8.2.1 ELECTRICITY...........................................................................................................................21
5.5.4 WATER SUPPLY AND DRAINAGE...............................................................................................21
6. MARKET STUDAY AND APPLICATION23
6.1 GENERAL OVER VIEW 23
6.2 MARKET STUDY AND MARKET ANALYSIS 24
6.2 THE DEMAND-SUPPLY GAP 24
6.3 ADDIS ABABA CITY MIXED USE BUILDING DEMAND 24
6.4 FUTURE MARKET OR DEMAND OF COMMERCIAL BUILDING CENTERS 25
6.5 TARGET CUSTOMERS 26
6.6 MARKETING PLAN 26
6.6.1 MARKETING AND SELLING PRICE PLAN.........................................................................................26
6.7 MARKETING PROMOTION AND STRATEGY 27
6.8 COMPETITION 27
7. LAND USE, BUILDING AND CIVIL WORKS 29
7.1 GENERAL LAND UTILIZATION PLAN 29
7.1.1 THE BUILT-UP LAND USE PLAN APPLICATION................................................................................29
7.1.2 CIVIL ENGINEERING COST.............................................................................................................30
7.2 OPERATING ACTIVITIES 30
7.2.1 PRE-OPERATING ACTIVITIES..........................................................................................................30
7.2.2 PRE- PRODUCTION EXPENSES.......................................................................................................31
8.HUMAN RESOURCE AND TRAINING REQUIREMENT 32
8.1 HUMAN RESOURCES REQUIREMENTS 32
8.2 ORGANIZATIONAL STRUCTURE 32
8.3 MANPOWER REQUIREMENTS AND LABOR COSTS 33
9. ENVIRONMENTAL IMPACTS OF THE PROJECT 34
10. FINANCIAL STUYD OF THE PROJECT 35
10.1 UNDERLYING ASSUMPTION 35
10.2 TOTAL INVESTMENT 35
10.3 SOURCE OF FINANCE 36
10.4 TOTAL PRODUCTION AND ADMINISTRATIVE COSTS 37
10.5 FINANCIAL VIABILITY 37
10.5.1 INCOME STATEMENT.................................................................................................................37
10.5.2 CASH FLOW STATEMENT AND BALANCE SHEET..........................................................................37
10.6 FINANCIAL EVALUATION 37
10.6.1 PROFITABILITY.............................................................................................................................37
10.6.2 INTERNAL RATE OF RETURN.......................................................................................................38
10.6.3 PAY BACK PERIOD........................................................................................................................38
10.6.4 NET PRESENT VALUE (NPV).........................................................................................................38
10.6.5 LOAN REPAYMENT SCHEDULE.....................................................................................................38
10.6.7 RISK AND UNCERTAINTY..............................................................................................................39
10.7 ECONOMIC AND SOCIAL BENEFIT AND JUSTIFICATION 39
11. CONCLUSIONS AND RECOMMENDATIONS 40
11. ANNEXURE 41
 Tables
Table 1: Bed Room Machinery and Equipment and Related Cost............................................19
Table 2: Bed Machinery and Equipment and Related Cost..............................................................19
Table 3: Capacity and Production Plan............................................................................................21
Table 4: Business Complex Building Business Center Data at 2008 (For Market Analysis)...............25
Table 5: Office Space and Business Room Demand Forecast...........................................................26
Table 6: Project Marketing and Sales Price Plan.............................................................................26
Table 7: General Land Utilization Plan.............................................................................................29
Table 8: Building Civil Work Cost.....................................................................................................29
Table 9: General and shortened constructional schedule...............................................................30
Table 10: Pre-operating Expense..................................................................................................31
Table 11: Manpower Requirements & Estimate Cost.......................................................................33
Table 12: Project Total Initial Investment........................................................................................36
Table 13: Total production costs......................................................................................................37
Table 14: Project loan repayment Schedule.....................................................................................38
 Annex
Annex 1: Projected Operating Expense..........................................................................................41
Annex 2: REVENUE ASSUMPTIONS ON AND PROJECTIONS.............................................................41
Annex 3: Projected Cost of Goods...................................................................................................41
Annex 4: Projected Income Statement (birr)....................................................................................41
Annex 5: Projected balance sheet ( birr)......................................................................................... 42
Annex 6: Projected cash flow statement ( birr)...............................................................................42
Annex 7: Payback Period and Internal Rate of Return...................................................................43.
 Figure
Figure 1 Tourism circuit of Ethiopia.................................................................................................8
Figure 2: Organization Structure of the project...................................................................32
1. EXECUTIVE SUMMARY
The project objective is the acquisition of gains during the execution of the
constructional project of the public multiuse building services of BUSINESS
COMPLEX BUILDIN (G+6), located in Hawassa administrative City, Sidama Regional
State.
The constructional project of the public multiuse building center will not only give
service to the citizens of Hawassa town as opportunity of purchasing of consumer
goods and products, but also enjoying the family entertainment in the leisure
center and shopping services.
Total investment outlay is about 70.998 million, including all the construction
costs and putting into operation. It should be noted that project proponent has
invested equity funds in the following works:
Acquisition of building land;
Purchasing of water supply networks;
Purchasing of the sewage networks;
Purchasing of the heating main pipeline;
Purchasing of telephone cable;
Making of Avant-project;
Development of project documentation;
Execution of examination of design solutions to check the conformance to the fire
safety requirements, the calculation for the evaluation of people security
assurance in fire condition for the adopted space-planning decisions, the
development of proposal concerning the complex of additional fire precautions
measures oriented to safe evacuation control in fire condition;
The allocation of investment cost is mainly on Site and building development
accounts 77% of total investment. The proposed project is specialized in
commercial public multiuse building service industry with G+6 Mall Business
Complex Building centres of Ground floor 4,300 M2, from 1-4rd floor
17,200M2, 5th -6th floor 8,600M2 office, financial institutions, restaurant and 30
rental rooms for bar facility which can serve 500 persons, conference room,
sauna and steam, and bathrooms, 56 bed rooms and 98 rental rooms and 700 M2
parking area service at established on a total of 5,000M2, of which built-up 4,300
M2 areas at Hawssa Town.

According to federal Culture and Truism Minister the present number of national
gust & tourists expected to visit Hawassa town and the region this is important for
the proposed service-rendering project is estimated at 500 persons per annum.
The Business Complex Building canters will mainly target domestic and foreign
tourist travels along the southern tourist’s circuit route and also,
Indigenous affluent Ethiopians seeking to escape from daily routine of
work, home and urban life.
Local foreign residents working with Non-government organizations, foreign
missions and business.
Local newly married couples seeking to purchase beautiful materials and
classic bed rooms to spend honeymoon time.
Foreign tourists from seeking to have the sun, lake side and admire diverse
Nationality southern Ethiopia people
Corporate organizations seeking for quiet places for retreats.
Business people with differing interests
Hawassa and nearby residents how want to have enjoy at Hawassa town.

The allocation of investment cost is mainly on Site and building development accounts 86% of total
investment. The breakdown of total investment (‘000 Birr) is

The financial studies show the project provides an internal rate of return (IRR) of
34% after tax and a payback period of 6 years. These results demonstrate that the
project is viable and provides healthy returns to the promoters.
The sources of financing include: equity funds (own funds) of the project
proponent 30%, Ethiopia bank financing, by means of Ethiopia contractor
financing 70%.
SOME OF SOCIAL ECONOMIC BENEFITS
 The project will employ 27 workers in permanent and 100 semi-skill totally
127 employment bases and for more than 50 casual laborers every year.
The envisage project is will be contribute to the national economy by,
 increasing the foreign exchange income of the country by directly or
indirectly contributing to the tourism industry of the county
 Benefit from the tax of the building operations.
 Benefiting all the actors’ in the chain of service industry from the rural
community at gust & tourism, tour operators, traveler agency owners, and
others who participate in the chain will benefit from this project.
OTHER STRATEGIC SIGNIFICANCE OF PROJECT
 Mall Business Complex Building enter industry services plays important
role in economic development of the country by creating revenue tax
from occupancy and other gust activities in the project service chain.
 The Business Complex building center sector is growing fast and
stands as the third foreign income earner, service industry.
 Increase the present number of the national and international standard
Business Complex Building Servicers at Hawassa the capital city of
Sidama Regional State
Some of opportunities and government strategies considered by the owner when
planning to invest of Business Complex Building Service enter are,
 Strong effort is underway to improve Ethiopia’s image for the any gust &
tourists,
 The government commitment to use Business Complex building service
industry for the fight against poverty,
 The long-term vision of the government is to make Ethiopia one of the top
ten tourist destinations in Africa by the year 2030, with an emphasis on
maximizing the poverty-reducing impacts of tourism,
To full fill his desire after looking the gaps and opportunities YESHI TEKILU
BUSINESS COMPLEX BUILDIN has Proposed new investment on Mall Business
Complex Building(G+6) Service Industry over 5,000square meter area and
investment of Et. Birr 70.998 million birr for the envisaged project.
2. INTRODUCTION
At the Kick-Off Meeting of the exciting project feasibility study BUSINESS COMPLEX BUILDIN
(G+6) we observed that the principal allows us to think of an own solution how the building should
be built, look like, and be operated. Additionally, we decided to create a business plan for a
Business Complex Building Service center as stated in the title. Reasons for this are discussed in
the conclusion of this paper. Furthermore, we define why potential clients will choose BUSINESS
COMPLEX BUILDIN (G+6) Service center W/ro. Yeshi Tekilu and why our Business Complex
Building service center is superior to its competitors.
In general, a stable macroeconomic condition leads to economic and business growth and develops
investors’ confidence. This certainly spurs large demand in the property market for service centers,
office space, shopping malls, catering services, apartment and residential houses. Following
growing demand trends, and with the expectation of high return on their investment capital, large
number of land developers pooled their financial resources and invested in the property market.
To this effect, the owner of the envisioned Business Complex Building, W/ro. Yeshi Tekilu was
planned to construct Business Complex building construction at Hawassa City Administration and
undertaken this project study to check the market, technical and financial feasibility of this project.
The promoter is very ambitious and committed to realize the project. Hence, it expects to get the
necessary support from the city administration to make the project to be operational.

2.1 RATIONAL BEHIND THE PROJECT

The some of the rational for establishment of the envisage project for the production of high
standard public Business Complex building service with using high value attractive technology
rather than normal public service of which will established top quality shopping and Business
Complex service center to offer a complete services are,
Policy: Government the next ten years strategic plan, which promotes new investment in service
industry sector and encourages new Business Complex Mixed building service center introduction
in one window to offer complete public service of high standard which have a great advantage for
others investment development currency generating directly or indirectly contributes to fill full the
Ethiopia supply gape to national gust and termism industry ones.
Labor: There is plenty of skilled and semi-skilled labor in Ethiopia. The country has a good
education system that churns out a number of graduates in most key professions at all levels.
Therefore for the project has an opportunity to employees’ cheap labor.
Market: High market demand supply gap at the regional and national levels and to fill full this
gape there is availability of high potential of customers for this envisage project at the local level.
 2.2 SOCIO-ECONOMIC JUSTIFICATIONS
Based on the earlier assessment and analyses, we can learn that the proposed project possesses a
wide range of benefits that complement the financial feasibility obtained later. The project has
various socio-economic benefits in that it would generate profit to the promoters; provide
employment opportunity, increasing the foreign exchange income, benefiting all the actors’ in the
chain of the project. Some of these benefits are briefed as follow:
Some of social economic benefits
 The project will employ 27 skilled workers in permanent and 100 semi-skilled totally 127
employment bases and for more than 50 casual laborers every year.
The envisage project will contribute to the national economy by,
 increasing the foreign exchange income of the country by directly or indirectly
contributing to the service industry of the county.
 Benefit from the tax of the project operations.
 Benefiting all the actors’ in the chain of the project operation from the urban community
costumers to traveler agency, and others who participate in the chain will benefit from this
project.
2.3 COMPANY / APPLICANT PROFILE
Name of Owner W/ro. Yeshi Tekilu
Nationality: Ethiopian
Type of business: Business Complex Building service
Full Address : Hawassa town, Mobile: 09-16-82-25-38, E-mail: --------
Project Name: BUSINESS COMPLEX BUILDIN (G+6)
Status of the Project: New
Proposed Site: Sidama Regional State, Hawasssa City Administration
Specific location: Hawasssa town
Size of proposed land: 5,000M2
Total estimated capital: 70.998 Million Birr
Legal Form of organization: Proprietors
Registering office: Hawassa Investment Unit
Taxpayer Identification No. ----------------
Right of Occupancy: Lease agreement
Contract Period: 25 years
Project period 10 ears (2024-2034)

2.4 PROMOTER’S PROFILE

The anticipated “Yeshi Tekilu Business Complex Building (G+6)” established project is initiated by
the newly established by W/ro. Yeshi Tekilu. She was born in Ethiopian-and currently she has an
Ethiopian citizenship. In view of her education and work experiences, she brings a wealth of experience
to public multidimensional investment. W/ro. Yeshi Tekilu is the general manager of the project. Her
educational back ground, she have BA degree in Accounting and more than 8 years of work experience
in the area of others business, and vastly involved in financial management and administrations. This is
feasible for the current project business marketing. Thus, the project will create better employment
opportunities for the local communities and facilitates a good deal of technological transfer to the
country. The promoter is expected to introduce advanced Business Complex building business
management skill and knowledge in service industry sectors.

2.5 VISION AND POSITIONING

BUSINESS COMPLEX BUILDIN (G+6) is a place for people to relax and recharge their inner
batteries. We offer our guests silence, recovery, well-being, and pleasure. Business travelers, driving
through tourists and long-range drivers will find the right place to recover. The project at Hawassa is
being one of gust & tourist destination, location advantage of being on tourist circuit paths of Southern
Ethiopia, and customer’s attraction potential of Hawasssa Lake.
The existing competition in the Business Complex building service industry, especially in the Business
Complex building segment, is no any tense and therefore expectations of customers are on a high level.
We are ready to face this challenge on Shopping and Business Complex Marketing center service at
Hawassa will compete on an optimal price-performance ratio and attract numerous customers.

2.6 PRODUCT AND SERVICES

The Project has rental rooms and bead rooms, cafeteria and restaurants facilities with different
shopping services, such as bed room service, cafeteria and other services are provided in an efficient,
cordial and pleasant manner and style. The Shopping and Leisure center will be built at one of the
busiest intersections of Hawassa town in the central area. It will become the new dominating symbol
among the surrounding buildings, representing an architectural element that has no parallels in the
city.
The project operation will be perfectly visible on each side; there are many transport and transitional
routes in the area of proposed project. It is connected not only with the large quantity of nearby
enterprises, institutions, small shops and residential areas, but also with urban public momentum
routes often used by local people.
The envisaged project at Hawassa will have a plan to provide accommodation and amenities.
The project will offer high level of MALL USE G+6 BUILDING service. Additionally several
purpose marketing will be available to business customers. If requested we can offer different
service, like weeding prepared through an external catering firm. With a sufficient number of parking
lots we can ensure that the customers park their cars safely and closely.

2.7 PROJECT START-UP STRATEGIES

In order to realize objectives the overall development program will incorporate the following major
strategies in relation to this envisaged project.
 First the certificate of investment and land is received to the project
 Temporary fencing works followed with building constructions
 The required machineries for the activities of the project are purchased and imported
 Furnishing with different cultural and modern furniture’s
 Employing of 127 employees and training
 Launch different marketing and promotional activities
 Start up
3. BACKGROUND INFORMATION
3.1 ETHIOPIA BUSINESS COMPLEX BUILDING AND MARKET SERVICE
3.1.1 SERVICE INDUSTRY AND MARKETING OVERVIEW
The service sectors defined as included market and grand moll, hotels, transport, distributive trade,
public multipurpose service, finance and business service etc.., based on this assumption the
envisaged project Shopping and Multipurpose Market center is comprised as service sectors. The
service industry is vital for the Ethiopia economy providing 9.2 % of GDP and 7.1 % of the total
employments in year 2010, according to World tourism organization report valued at around US $
1426 million.
In general, a stable macroeconomic condition leads to economic and business growth and develops
investors’ confidence. This certainly spurs large demand in the property market for service centers,
office space, shopping malls, catering services, apartment and residential houses. Following growing
demand trends, and with the expectation of high return on their investment capital, large number of
land developers pooled their financial resources and invested in the property market
Nowadays the coming of gust and tourism movement increase is a potential demand of Business
Complex Building products service in Ethiopia could be split into two distinct directions: the one is a
northern historic circuit and the other is a southern ethnological and nature based circuit. These two
direction account for more than 95% of potential source of service industry market in Ethiopia

Figure 1 Tourism circuit of Ethiopia

Most international and national tourist comes to the southern Ethiopia to appreciate the untouched
culture of the diverse ethnic communities and the associated natural attractions. The ethnic
communities in Debub Omo including Hammer, Bena, Mursi, Ari and their cultural practices as well
as the Dorze and Konso people cultural practice are very well-known and visited by many foreigners.
Besides, NechSar and Mago National Parks are among the natural attraction found along the
destinations visited by the tourist together with the cultural practices of the communities.
This is triggering the present Business Complex Building service demand at Hawassa town. To this
effect, the owner of the envisioned Business Complex Building, is planned to construct at Hawassa
City Administration

3.2 PROJECT COMPETITION

Business Complex Building service industry competition in the town of Hawassa there is small
several booking sites to gain quick access to similar businesses. We decided to use Business
Complex Building service center forces for the theoretical approach of an industry analysis. In
addition to this eight mixed building business centers were chosen to conclude an in depth study of
establishments which come the closest to our conception of the Business Complex building
Marketing center services and as a further support to create a benchmark. For the detail market
computation analysis is described in the next section.

3.2.1 POTENTIAL OF THE MARKET

The following analysis were overviewed is based on the five forces of Michael Porter. According to
Michael Porter, Professor at Harvard University, the five forces model is a good way to assess the
attractiveness of a market (On competition, Michael E. Porter). The model breaks the market down
in five categories or forces such as customer power, supplier power, threat of substitutes, threat of
new entrants and rivalry in the industry. We asses these forces on the following section whereas the
main focus is on customer power and competitors (rivalry) due to the high importance of these two
forces.
3.3.2 PRICE SENSITIVITY

Based on the conducted on-site visits, we conclude that most customers are business people.
Therefore, we believe that there is certain flexibility in the price sensitivity for this customer segment
due to the fact that most customers daily use. Hence, the average business costumer is less price-
sensitive. On the other side, we think that the average shopping customer travelling through other
areas prefers low or moderate prices. Therefore, the average costumer is rather price sensitive.

3.3.3 CUSTOMER POWER

The relative high supply of Mall Multipurpose Marketing center in the Hawassa city implies a high
customer power. This results in tense competition and price pressure. Nevertheless, this is most
likely only true in low demand periods such as Christmas holidays. Most interviewees stated that
during expositions and similar events most Shopping and Multipurpose marketing center is
frequently daily shopping and therefore customer power is lowered.
Conclusively, the customer powers in the Shopping and Multipurpose Marketing center business
depends to certain extend on seasonal events. Though the customer power for local costumer is
relatively high, since they are not bound to a certain location and do not mind driving a few miles
further. As mentioned the majority of customers are business people and therefore the costumer do
not take a big influence on the customer power.

3.3.4 COMPETITORS
The data obtained from Hawassa municipality seven small Shopping and Multipurpose Marketing
center service currently operating at Hawassa and that could have a market share with the envisage
Project Marketing center are seven in number such as Beshu Tulu Shopping and Multipurpose
Marketing center, Husen Multi-Purpose Market Centers, Sheger Building Market Center, Shenikoru
Building, Awash Bank Building, Aliyans Building, Central Grand Moll and Admas Mall are some of
the listed at Hawassa municipality and tourism bureau information’s and there is no standard
registered Multipurpose Marketing. The total high class multipurpose buildings number are eight in
number and more than 200 rental rooms, and bed room, bar restaurant considered as compotators.

The threat of entry of new competitors is low since the entry barriers as well as the exit barriers are
relatively high. The profitability of the building service industry is very attractive since the whole
gastronomy business is known for its easy to survive.
The intensity of competition is very low in this town and very less Shopping and Multipurpose
Marketing center of found in the Hawassa town. It is not hard to create a competitive advantage
since the number of existing Shopping and Multipurpose Marketing center does not enough for the
present demand related to Hawassa population growth pressure. The requirements of the customer
are clear and simple and that is exactly what this projects intends to offer.
4. GENERAL DESCRIPTION 0F THE PROJECT
4.1 LOCATION OF PROJECT AREA
The project is located at Hawassa city Administrative Sidama Regional State. Hawasssa town is the
capital city of the Sidama Peoples Regional State located at the 273 km south of Addis Ababa. It lies
at an elevation of 1708 m.a.s.l and has a plain topography. The city, which is the economic and
cultural hub of the region, has a total area of about 50 km2 divided in to 8 sub-towns (Kifele ketema)
and 32 kebeles. The total population of the town (in 2007) is estimated about 258,808. The town full
fills all infrastructural facilities vital for any type of investment.

4.2 LOCATION ADVANTAGES

The project area of location advantages are commercial, business, infrastructure advantages being at
Hawassa town capital city of Sidama Regional State.
Being located at along the international high way of Addis- Moyale;
Availability of well-developed social and economic infrastructure facilities such as modern
telecommunication, electric power, higher education and financial institutions, airport and etc.
The presence of abundant, easily trainable and inexpensive labor force in the city and
surrounding rural area;
An ideal transit spot for tourists;
Site location on the shores of the beautiful Lake Hawassa
The availability of abundance and variety of the lake’s birdlife
Presence of hippos across the lake for visitors how tours at the lake with boats.
The sun sets over the volcanic hills to the west of the lake are most rewarding pleasures for
guests.
The new Hawassa airport and industry park has also significant impact

4.3 PHYSICAL AND NATURAL CONDITION OF PROJECT SITE

4.3.1 TOPOGRAPHIC FEATURES
The project site is located within the Hawasssa town, its location topographic features of the
proposed project area are characterized by slightly too gently sloping terrain. The average altitude of
the project area is 1750-1800 m.a.s.l; with general land gradient of 1.5 to 2.5%. The topography of
the project area generally indicates availability of favorable opportunity for low cost installation of
infrastructures and site development requirements.
4.4 SOCIO-ECONOMIC ENVIRONMENT
4.4.1 POPULATION PROFILE
Based on the 2007 Census conducted by the Central Statistical Agency of Ethiopia, this zone has a
total population of 258,808, of whom 133,123 are men and 125,685 women. While 157,879 or 61%
are living in the city of Hawassa, the rest of population of this zone is living at surrounding rural
kebeles.

4.4.2 INFRASTRUCTURES
Road: Generally, the project area can be accessed by all-weather roads. It has 49 kilometers of dry-
weather roads, for an average road density of 237 kilometers per 7, 00 square kilometers.
Electric Power: The project site of Hawasssa town has an access to hydroelectric power.
Water Resources: Generally, rivers and shallow well are the main sources of water supply in the
project area. Currently, access to safe drinking water is not much a problem in the project area.
However, the Water Resource Bureau and other stakeholders in collaboration with the community
has established different safe water generating schemes such as hand dug well, hand pump,
developing spring water, deep well and shallow well to alleviate the problem.
Telecommunication: According to the data collected from the Bureau of Finance and Economy, of
Hawssa town in the project area have access to different telephone services, such as, mobile
telephone service, and wireless.
Financial Institutions: There are government or private banks in the project area and surrounding.
Hence, the project can get bank services in the project town of which is found at a distance of
approximate 3-7 km.
Health Services: The project area can get hospital service at Hawasssa town and other health centers
are available at project area. The availability of Hawassa Lake and city which attract international
and domestic
 5. THE PROJECT
5.1 PROJECT DESCRIPTION
BUSINESS COMPLEX BUILDIN (G+6) center Project was established at Hawassa town
and it is located in the Sidama Regional state.
The company holed and operated and managed by W/ro. Yeshi Tekilu general
manager. The project was planning to introduce new modern Shopping and Business
Complex Marketing center for the public market service. In line with this service
industry primary for the company itself and will serve for others as working place by
provide rental room. The data obtained from Hawassa municipality seven standard
Shopping and Multipurpose Marketing center and more than 200 medium market
and other public service centers currently operating at Hawassa town and that could
have a market share with the envisage project to create strong enough to business.
The listed information that was obtained from Hawassa municipality and tourism
bureau information’s and there is also some smaller additional registered public
mixed building service considered as compotators.
Hawassa town is lies on the Trans-African Highway 4 Cairo-Cape Town, and has a
latitude and longitude of 7°3′N 38°28′E geographical coordination respectively and an
elevation of 1708 meters above sea level.
Thus the project locality is technically feasible for the establishment of BUSINESS
COMPLEX BUILDIN (G+6) Project investment as it full files public multipurpose
building center service demand and land a equations.

5.2 THE PROJECT PURPOSE AND OBJECTIVES

5.2.1 PURPOSE OF THE PROJECT
 To serve as a place where different Mall services, and other such
cafeteria, bed room and other services are provided in an efficient, cordial
and pleasant manner and style stay overnight, dine, and enjoy
 To serve as a place where tourists, visitors, vacationers and leisure
travelers could stay overnight, dine, and enjoy
 To offer a complete package operation of Business Complex Building
Marketing service shopping, lodging, dining, and recreational services for
tourists/visitors to international and domestic ones
 5.2.2 OBJECTIVE AND SCOPE OF THE PROJECT
The prime goal is to be project facility center construction and others include:-
 To maximize the owners profit earning from over all activities of the project,
 To generate foreign exchange by gust and tourism products sales ,
 To fulfills government plan targets 2030.

5.3 PROJECT ORGANIZATIONAL PLAN

5.3.1 DEVELOPMENT PLAN THE PROJECT
Land ownership: The land ownership is acquired through a lease contract from
the Hawssa City Administrative lease period. The total land area is assumed to be
5,000M2 of which 4,300M2 is Main terrace Building. The detailed information is
shown the proposed land space program with the various planned outlets and
their respective areas in square meters and its cost is located in land utilization
plan section.

5.3.2 RENTAL LOGISTIC SUPPORT

The mission of the Mall Business Complex Building center’s directory is to create
high quality service. For this purpose it is necessary to supply standard bed room
service and rental room, which is through operation activities shopping center
with all the required manufacturing equipment, means of communication, leisure
material, gymnasium, office service, internet cafe and other safety. The
professional manufacturing equipment will be used in the shopping center for the
provision of services. The equipment and fittings meet all the standards specified
for modern shop equipment. Lightening’

5.5 TECHNOLOGY AND PROCESSING

5.5.1 ENGINEERING SUPPORT FACILITIES
5.5.1.1 HEATING, VENTILATION AND CONDITIONING SYSTEM

The lightening, heating and conditioning facilities of the building are provided
with the help of central plant air conditioning system, with water circuit based on
the two built-in dual-purpose lithium bromide absorption machines, operating by
the heat pump cycle using the thermal value of natural gas. It is planned to use
urban network as a backup heat supply source.
The heating and conditioning system in the Bulging Center would be installed
with the help of fan coils connected according to the scheme of the dual-purpose
lithium bromide absorption machine. Such scheme allows to operate the system
both centrally (by temperature changing of the dual-purpose lithium bromide
absorption machine circuit), and locally (by changing the productivity of fan
coils). Warm air heating equipment will be used for the heating system.

The ventilation system and conditioning system in the Bulging Center is the
jointly operated systems. All these systems are called the environmental control
system which is able to set not only the temperature parameters, but also the
parameters of humidity, air purity and air changes.
It is necessary to equip the used air system with the fan coils both with cold
(conditioning) and hot (heating) water line, operating in summer and winter time.
After being heated or cooled in the air inlet units, the air is delivered through air
ducts.
The ventilation in the Bulging Center consists of the following systems:
1) Story general exhausts ventilation consisting of exhaust ventilation units.
General exhaust ventilation is characterized by its high degree of automation–
quick response of the air quality sensors. The automation system of the general
combined exhaust and inlet ventilation makes it possible to adjust the air
balance between large spaces depending on the number of visitors.
2) Local exhaust ventilation units built in cooking spaces (restaurant and café’s
kitchen, kitchen in the food-court area and food preparatory workshop), in the
engineering building rooms (individual heating plant, transformer substation), in
amenities (bathroom units, shower cubicles, smoking areas).
5.5.1.2 WATER SUPPLY AND SEWAGE SYSTEM

The one input of the city cold water conduit, located at Hawassa town is used as
water supply. The water supply system is designed as the down distribution, with
floor-by-floor offsets. Main and sectional conduits (hot and cold water), sewage
pipelines (sanitary and storm water drain) are made of polypropylene pipes.
The design project provides a separate public water supply system and fire-
fighting water conduit.
For the necessary water height in inner fire line we use pressure-holding pumps
installed in the pumping plant. The inner fire pipelines are made of steel gas-
water pipes.
For collecting and pumping of sewage effluent formed at the first basement floor
(bathroom units, shower cubicle, food preparatory workshops, and washing
plants in the supermarket) we arrange pumping plants at the second basement
floor. Every pumping plant is equipped with two pumps (operating and standby).
Storm water is collected from the roof (3, 4 floors) via intake head equipped with
heating coils for frosting prevention. Storm water drain is installed indoor. Storm
water collection from the roads is made through the surface water conduit with
storm water inlets equipped with storm water gratings.
5.5.1.4 POWER SUPPLY

Power is received from the main and standby power supply-bus section I and II 6
kV ПС 110/6 kV of «К» and Hawassa substations. The connection of power
receivers to the building of the shopping center according to the power receive
scheme meet the requirements of customer contract demand (3800kW), as well
as the safety requirements to the 1 class of power receivers according to its
energy saving. The substation of the shopping center is designed as a double-
transformer substation 2×2500 kVA with two backup bus sections 0.4kW,
without automatic transfer circuit breaker. The loading of 1st category is to be
connected through the fast-acting automatic transfer circuit breaker.
The main load of electrical consumers is proportionally connected to the both bus
sections РУ-0,4kV. The maximum available load of the transformer substation is
defined by the power of transformers and its non-reserved power makes
5000kVA.
The installation of static compensators on the side of 0,4kV allows to decrease
costs and to unload the power transformers from inductive component of the
consumed energy.
5.5.1.4 ELECTRICAL EQUIPMENT AND LIGHTING

For indoor power supply we designed switch boards on each floor, the switch
boards installed in separate rooms are available for maintenance personnel only
(two switch boards per story with zoning of the north and south side of the
building).
The switch boards are allocated overlapped and carry the load from main bus bar
wired from transformer substation РУ-0, 4 ТП of the shopping center. For the
customers’ security there is a separate section specially designed for the
customers of the first security factor, the section is connected through the
automatic circuit breaker from the inlets of the transformer substation РУ-0,4kV.
The switch boards are connected according to the main power supply diagram.
For working lighting in common areas it is necessary to use energy-saving
luminous tube lamps. Within the space of bowling, billiards, café and restaurant
we use combined lighting with incandescent lamps.

5.5.2 INSTALLATION OF TELEPHONES

The external telecommunications networks are manufactured and laid at the
expense of Network proved Close Corporation according to the technical
conditions provided by ETC. The installation of telecommunication networks
provides quick net connection, connection to the urban telephone network and
access to the internet.

5.5.3 PRINCIPLES AND STANDARDS OF FINISHING

The principles of finishing presuppose various approaches; each approach is
used due to the agreement between the tenant and the lessor.
Space finishing at the expense of tenant: This approach means the lease of
gross leasable areas with no “fine” finish, final finishing is executed at the
expense of the tenant and according to his project. The areas are leased
according to the following standard of shell and core fit-out:
Rental Area: thermal contour, open plan of the shopping area, flat waterproof
floor with the heating system, naked walls, operating ceiling;
Utility Rooms (Bed Rooms): flat waterproof floor with the heating system, naked
walls, operating ceiling;
System Assembly (in the rental area and in the utility rooms): ventilation
system, conditioning system for the shopping area (main routes without end-use
devices), heating system, sewerage and water supply system, fire-fighting system,
security and fire alarm;
Electricity: terminal only (without interconnection wiring). This approach
provides less fine finish expenses for the lessor, but includes the expenses
incurred by the tenant, dealing with the lease rent - less expense than when
leasing with the fine finish.
Finishing anchor area is at the expense of the tenant, fine thread and total areas
at the expense of the lessor. In this case anchor areas are leased according to
“shell & core” standard and “fine” finish is executed by their independent projects
subject to their technologies. For this period there is a “leasing vacation”.
In the project calculation we accept the term that the anchor areas are
transferred according to the standard “shell & core”, subject to its technology
concept by the approved decision of the lessor, and the final finish is executed at
the expense of the tenant.
The rest areas are finished according to the common interior design developed for
the shopping center. In the case when franchise raises special demands to the
design they pay for the finishing works at their expenses. The signing contracts
with the anchor tenants at an early stage of designing allowed make the project
oriented to the technologies of concrete tenants.

5.6 COST OF MARHINERY, EQUIPMENT AND FURNITURE

5.6.1 COST OF MARHINERY & EQUIPMENT
For the purpose of this study we are assuming that good foreign manufactured
machinery costing and equipment around USD 141,588 (Ethiopia birr
7,645,764) will be able to give the desired quality of output. These foreign
manufactured equipments are installed state-of-art, eco-friendly as service
industry international standards. For the detailed information the total
machinery and equipment cost show below the table 1.

Table 1: Bed Room Machinery and Equipment and Related Cost
Units UOM Quantity Rate Cost
USD USD
GENERAL
TV Set Set 3 4,500 13,500
M ultimedia (DSTV) set 2 2,045 4,090
Conference Room Equipment Set 2 4,500 9,000
Internet Eq Set 1 2,200 2,200
Sound and Security Systems Set 2 3,682 7,364
Health club equipment set 1 5,000 5,000
Sub-Total 41,154
FRONT OFFICE
Fax machines set 2 409 818
M oney Safe set 40 164 6560
Office Requirements sets 1 1,136 1136
Computers set 6 682 4092
Printers set 2 227 454
Sub-Total 13,060
BED ROOM S
TV Set Set 36 540 19,440
Refrigerator set 36 800 28,800
Fridge M edium Set 36 545 19,620
Sub-Total 67,860
KITCHEN FACILITY
Kitchen equipment set 2 8,818 17,636
Cold Rooms Set 1 5,318 5,318
Dish W ashing Eq Set 2 3,500 7,000
Restaurant equipment set 1 5,455 5,455
Sub-Total 35,409
OTHER FACILITY EQUIPM ENT
Generator set 1 9,333 9,333
Laundry and W ashing machines Set 1 4,545 4,545
Solar Systems set 1 4,545 4,545
Children outdoor and indoor game
set 1 5,000 5,000
equipment’s and accessories
Others set 1 1,136 1,136
Sub-Total 24,559
Total Cost In USD 182,042
Grand Total in Ethiopia BIRR 7,645,764


5.6.2 FURNITURE & FIXTURE

For the purpose of this study we are assuming that good foreign manufactured
building furniture & Fixture costing and equipment around USD 241,624
(Ethiopia birr 13,047,720) will be able to give the desired quality of output. These
foreign manufactured equipments are installed state-of-art, eco-friendly as service
industry international standards. For the detailed information the total machinery
and equipment cost show below the table 2.
Table 2: Bed Machinery and Equipment and Related Cost
Quantit
Units UOM rate Cost
y
Bed Room Furniture Single Set 20 2,000.00 40,000
 12,000.0
Bed Room Furniture double Set 10 120,000
0
25,110.0
Bed Room Furniture Suite Set 6 150,660
0
Total In USD 310,660
13,047,720.0
Total Cost in Ethiopia Birr
0

5.6.3 SOURCE OF TECHNOLOGY

The main cost components in account of Mall Business Complex center while
setting up a service industry units typically comprise on all level of building
floors were installed INTERNATIONAL STANDARDS art of designs and
manufactures machines and equipment with highest engineering qualities and
standards. These new and reconditioned machines are available and will be
delivered 75% from foreign and 25% from country manufactures delivers efficient
and controlled technology processes, equipment and machine manufactures.

5.7 BUILDING PRODUCTION PLAN

5.7.1 BUILDING CAPACITY AND PRODUCTION PROGRAM
5.7.1.1 PLANT CAPACITY

The annual production is formulated on the basis of the market forecast, project
capacity and selected Multipurpose building service capacity. It is assumed that
the multipurpose building will start operation at a lower production capacity to
allow time for market penetration and skill development of workers.
For this envisaged project of BUSINESS COMPLEX BUILDIN (G+6) industry has
installed capacities of Ground floor 4,300 M2, from 1-3rd floor 12,900M2, 4th
to 6th floor 12,900M2 office, financial institutions, restaurant and 30 rental
rooms for bar facility which can serve 500 persons, conference room, sauna and
steam, and bathrooms, 56 bed rooms and 98 rental rooms and parking area
service to generate the project revenues. Mall Building (G+6) business center will
operate one shift at the begging of five years and the shift will changed after five
years, 8 hours each shift per day and for 365 working days in a year.
 5.7.1.2 PRODUCTION PLAN

The annual production program is assumed that the Building service will start
operation at a lower production capacity to allow time for market penetration and
skill development of workers. The project volume will be required of office, financial
institutions, restaurant and rental rooms for bar facility which can serve 500 persons, conference
room, sauna and steam, boots and Bed Room. The sales price will increase with 5% of
growth rate throughout the project life. The detail of production program is as
shown in Table 3 below at full production capacity.
Table 3: Capacity and Production Plan

Building Description Unit Quantity

Parking Parking Service 5/hour M2 700
Ground Floor Supermarket, Pharmacy, Banking & Insurance M2 4,300

1st floor -4rd floor Beauty salon, shop, Computer Center, M2 17,200
Cafeteria and Restaurant
5-6th floor Hall conference, Bed Room gymnasium and M2 8,600
other offices
Total
5.8 MATERIALS AND INPUTS
5.8.1 RAW MATERIALS
The envisaged project of Multipurpose Building center were selected are Bead
Room and Rental Rooms, consumable goods Quantity inputs are required. The
quantity is mentioned in the production plan section. Taking the above
mentioned the annual requirement for this project will be increased by 5%grouth
rate throughout the project life.

5.8.2 UTILITY
5.8.2.1 ELECTRICITY
Due to the calculation of the required power supply in public places of the
building center the consumption is expected to be 553kW/h. The fare is specified
in 2022 in the amount of 3.53 Birr (excluding VAT), thus annual power supply
expenses (public places and main operating equipment) are 553kW/h *
24h/day*365 days* 3.53Birr is total 171,000 Birr. Power supply costs for
lighting, supporting and capital equipment required for trading activities and
rendering of services are to be paid by tenants according to the consumed power.
 5.5.4 WATER SUPPLY AND DRAINAGE

Due to the calculation of consumers the required volume of water supply is as

follows:
 Cleaning: it is planned to use a floor-cleaning machine with the tank
capacity of 170 liters. One cleaning of the shopping center requires 2
fillings. According to the schedule it is required to clean the shopping center
3 times. It means that the water supply volume makes 1020 liters/day or
400m3/year.
 Required measures for the sanitary public places are 37m3/day or13,
320 m3/year. The water supply fare in Hawassa town is 15.38 Birr/m3
(excluding VAT). These expenses would be (400 + 13 320) * 15.38 Birr is
about 211,000 Birr/year.
• Required expenses for drainage system are as follows: Cleaning
drainage - 10% of the consumed volume, i.e. 40m3/year. The specified
fare is 6.34 birr/m3 (excluding VAT), thus annual drainage expenses are
(40) *6.34 is about 84,700.birr/year. Totally is about 295,700 birr/year
6. MARKET STUDAY AND APPLICATION
6.1 GENERAL OVER VIEW
Nowadays the sphere of service industry commercial activity is being developed
rapidly in Ethiopia. Originally the development took place in multi-million-strong
cities, and then this extended to the cities with the population over 500,000
citizens, and now Hawassa is concerned the cities with the population about
300,000 people. It is caused by high consumer demand, and also the will of
commercial operators to open Business Complex Building service in these cities.
There are several operating modern Shopping centers in large cities, the large
amount of projects are in development and are going to entry into the market in
the next two years. As for the cities with the population of 300-700,000 people,
here some modern forms of trading are being created; mainly there is a tendency
for reconstruction of Business Complex Building center plants or out-of-repair
department stores existing in the new democratic period.

As government plan small Shopping Centers are often developed in district and
Zone town with the total area from 100 to 1000 sq., as a rule, they are located in
restructured buildings, often not quite suitable for commercial purpose.
It is in line with the rapid growth of population in the urban center and the rural
transport route sustainable markets are essential to the success of the public
multipurpose building market center service industry. The markets include local
municipality or community based market; domestic markets provides a
foundation for export market; and tourism markets contributes to country
development competiveness and foreign currency earnings for local economies.

The envisaged project expectations of the proponents collectively point to a high-

volume, high-value destination. In order to maximize revenue yield, the feasibility
study recommends a cautious approach of focusing on the proven market
demand from the existing public multipurpose building service demand, through
the establishment of BUSINESS COMPLEX BUILDIN (G+6) a phased approach is
envisaged to the development of public multipurpose service.
6.2 MARKET STUDY AND MARKET ANALYSIS
There are a number of factors which affects the demand of standardized mixed use
building. Of these factors, the most important to have influence is population
growth and the level of income. The currently expanding service industry in
Hawassa and from every corner of the country the city has been inviting skilled
and unskilled labor forces to the center; in addition, the number of both national
and international offices has been increasing. Above all the increase in the
number of population increases for the provision of different services. Nowadays,
most of the private business organizations need their own small-medium offices in
order to give their services and provide their products, and they prefer the place
that found in the center or close to the road.
As clearly indicated in the introductory part of this proposal, Hawassa is the
dynamically growing urban center of Ethiopia. Though the market demand gap for
mixed use building is not clearly understand there is wider gap for such demand
as many merchants, organizations are flouring to the city every day. From prior
business experiences, the demand of mixed use building is very high and hence
the demand and the supply gap is very wide.

6.2 THE DEMAND-SUPPLY GAP

There has been a significant growth in the number of local and international
trades across the country. This increase is mainly associated with the stimulation
of economic activist and partly due to an increase in the flow of international and
local trader’s departs to the Hawassa town. Even though there is a lack of
quantitative estimates that depict the actual demand and also the annual growth
rate commercial facilities are scarce in the city. As a result there is a large gap
between the developed and that of the supply for modern Bank and cafeteria
accommodation hence this project would not face any problem of demand scarcity
for it business center and it would provide good service to customers.

6.3 ADDIS ABABA CITY MIXED USE BUILDING DEMAND

Commercial building/office sector has shown a dynamic change in the past few
years. The reason for this could be rapid economic growth and a supporting public
infrastructural development. Other factors relevant in the specific case of
commercial buildings are the large increases in national and international
businesses, particularly firms in the services sector. The business of multipurpose
buildings in Hawassa in booming highly due to the recent rapid growth
experienced in Ethiopia. As a result, a good number of local and international
organizational are coming in place. Government offices which used to operate in
limited spaces all over the city are also concentrating on leasing new and modern
buildings. Increasing numbers of international organization which in the past had
typically converted residences into office space are now moving towards renting
whole floors or even multiple floors in modern city-center commercial buildings.
This phenomenon can be observed everywhere, and not only along the building
line, but also in “bedroom suburbs”. There is lack of real estate, lack of reasonable
credit resources, remoteness from the capital part of the regional capital city
caused the unavailability of modern shopping and multifunctional centers, high-
grade shopping malls that satisfy recent demands and have modern conception.
Therefore to make the sales area calculation we have to use the active commercial
projects data
Table 4: Business Complex Building Business Center Data at 2008 (For Market Analysis).
Name of object Complex sales area, m²
Merkato 5000
Kera 2250
Bola 1600
Megenagn 6000
Colife 6100
Total 20,950
Population size of Addis Ababa (million people) 2.7
Space area provision, square meter/million people 0.0078M2
6.4 FUTURE MARKET OR DEMAND OF COMMERCIAL BUILDING CENTERS
The demand for office space is a derived demand because firms rent space as an
input to the production of services or goods they provide to businesses and
households in the local or national economy. Following our survey of office space
users in several areas are mainly firms providing banking, offices, cafeteria and
restaurants, supermarkets, computer center service. Future demand for office
space is actually driven from growth in number of offices in the city which in turn
is influenced by the macro-economic growth in the country. Assuming that
demand for office space is directly related to the growth in the economy, the
forecast for office space demand is shown in the following table 5.
Table 5: Office Space and Business Room Demand Forecast
Years (E.C) Office space demand under Office space demand under high
base case economic case economic
2010/2011 9,916,543 11,304,859
2011/2012 11,007,363 12,057,416
2012/2013 12,218,173 12,953,878
2013/2014 13,562,173 13,963,577
2014/2015 15,054,011 14,554,534
2015/2016 16,709,952 14,987,431
Source: Estimation based on GTP’s forecasted Ethiopian Economic Growth

6.5 TARGET CUSTOMERS

The target customers of this envisaged project include:-
Business Community
Business organization
The government bureau
Non-governmental organizations
6.6 MARKETING PLAN
6.6.1 MARKETING AND SELLING PRICE PLAN
There are also many convenient reference of Business Complex Building
Business Center price considered to determine the project price.

The general situation in the market for Business Complex Building Business are
going towards full fledged competition through quality and standard construction
and quality service of products offered, delivery to customers. The price of
delivered service varies with the customers living standards.
Based on the current Business Complex Building Business center market price
level and taking in to account a margin of 20% for gust and tourist and the
annual price growth rate is 5% through the project life. For the detailed
information which is given below table 6.
Table 6: Project Marketing and Sales Price Plan
Building Description Measure Quantity Unit price
in Birr
Parking Parking Service 5/houre M2 700 2,585
Ground Floor Supermarket, Pharmacy, Banking M2 4,300 1,074
& Insurance
1st floor -4rd floor Beauty salon, shop, Computer M2 17,200 516
Center, Cafeteria and Restaurant
5-6th floor Hall conference, Bed Room M2 8,600 336
 gymnasium and other offices

Since the project will be engaged in mixed building the main sources of its annual
revenue would be from the rental of building spaces such as shops, offices, and
banking, café and restaurant. Therefore, the sources of revenue have been
classified in to one category namely the rental of banking and supermarket,
offices, shops, bedrooms restaurant and café based on these classifications. Based
on the market price of similar mixed use building in the area, the envisioned
buildings set the following fair price (Before VAT) for its service, hence when the
building construction fully get operational it is assumed to generate a yearly
income of ETB 18,195,120

6.7 MARKETING PROMOTION AND STRATEGY

In order to penetrate and gain considerable market share, one of the major
marketing strategies for the project is consistently rendering quality service to its
tenants. Due emphasis must be placed on improving quality of service and
facilities. The major marketing strategies to promote the project and gain
considerable market share include:
Advertising through different means focusing on the existing service and
facilities
Promote in association to the key location and nearby business
Working on sustained promotional work.
Working on public relations to reach and influence key personas and
organization with a capacity of making decision.
Keeping the quality of its service/ facilities and consistently improving with
changing situations.
Seasonal discount pricing different others customer centric marketing
strategies will be used by the company.

6.8 COMPETITION
There are different forms of competition that may face the envisaged mixed use
building. These are price and non-price based competition. Moreover, there are
different competitors that will compete with the project either directly or indirectly.
But the mixed use building under discussion has diversified marketing strategies
that could enable it Cope up with the different competitors in the market.
Moreover it will frequently conduct competitors research which focuses on, the
strength and the weaknesses, the different competitors’ strategies, the techniques
they use in rendering the service, their customer handling methods, and others.
Generally the project has many other projects all over Hawassa city villages which
compete with it.
7. LAND USE, BUILDING AND CIVIL WORKS
7.1 GENERAL LAND UTILIZATION PLAN
The total land area is assumed to be 5,000m2 of which 4,300 M2 is the built-up area and 700M2 for
parking. The following table shows the proposed space program with the various planned outlets and
their respective areas in square meters. The detailed information stated below table-7:
Table 7: General Land Utilization Plan
Building Description Measure Quantity
Parking Parking Service 5/hour M2 700

Ground Floor Supermarket, Pharmacy, Banking M2 4,300

& Insurance
1st floor -4rd floor Beauty salon, shop, Computer M2 17,200
Center, Cafeteria and Restaurant
5-6th floor Hall conference, gymnasium and M2 8,600
other offices
Total 30,100

7.1.1 THE BUILT-UP LAND USE PLAN APPLICATION

The total land required for BUSINESS COMPLEX BUILDIN (G+6) is 5,000M2 of which the
Main terrace Building Project area is estimated to be 4,300M2, the built area, totally from ground to
6th floor area are 30,100M2 are allocated to purchased based on the judgment of the entrepreneur.
The project Main terrace Building facilities includes bed room and rental room.
The built-up building area will have bed Room and rental room, with this rental room may have
Cafeteria and restaurant, laundry, Storage, and maintenance facility, Staff Kantian and gymnasiums
and other facilities. The total land area required for the envisaged project is estimated of building
structure cost of 31,134,996.30 birr. The details breakdown and others details on building area cost
specification will supported at the engendering plan and bill of quantities. The following table-8
shows the proposed space program with the various planned outlets and their respective areas in
square meters.
Table 8: Building Civil Work Cost
No Description Total price
A. SUB-STRACTURE
1 excavation and earth works 279,570.67
2 concrete work 3,936,546.34
Sub total 4,216,117.01
B. SUPER STRACTURE 0
1 Concrete work 5,221,700.10
2 Block work 551,534.40
3 Roofing 171,108.00
 4 Carpentry and joinery 323,760.00
5 Metal works 825,860.00
6 Finishing 6,121,279.44
7 Painting 275,198.88
8 Electrical installation 7,236,330.00
9 Sanitary installation 2,131,022.00
Subtotal 22,857,792.82
A+B 27,073,909.83
Vat (15%) 4,061,086.47
Grand total 31,134,996.30

7.1.2 CIVIL ENGINEERING COST

Civil engineering structures are created to serve some specific functions like human habitation,
transportation, bridges, storage etc. in a safe and economical way. A structure is an assemblage of
individual elements like pinned elements (truss elements), beam element, column, shear wall slab
cable or arch. Structural engineering is concerned with the planning, designing and thee construction
of structures. Structure analysis involves the determination of the forces and displacements of the
structures or components of a structure. Design process involves the selection and detailing of the
components that make up the structural system.

7.2 OPERATING ACTIVITIES

7.2.1 PRE-OPERATING ACTIVITIES
During the implementation period of the BUSINESS COMPLEX BUILDIN (G+6) project
implementation the different activities likely to be undertaken have been classified as follows
based on activities category and schedule in one-year period as shown in the activity chart shown at
table 9.
Table 9: General and shortened constructional schedule
year and months
ACTIVITIES
1 2 3 4 5 6 7 8 9 10 11 12
Preparation phase -1
Acquiring investment certificate
Finalizing the necessary formalities and securing
the land
Preparing Design and BOQ
Machineries , Vehicle, and Equipment Bid
Construction phase -2
Excavation works
Installation of base slab
Construction of the building substructures
Finishing works
Finishing works
Completion
Goods Scale Services

7.2.2 PRE- PRODUCTION EXPENSES

It is estimated that an additional amount of 494,699 Birr will be required in cash for pre-
production investment expense before starting production and generate revenue. The table
10 show below describes the assumption and estimated pre-production operational cost
estimate of the envisaged plant.
Table 10: Pre-operating Expense
Working Capitals
WORKIN
DESCRIPTIONS COST (Et Birr '000 ) REQ G
ANNUAL Daily(300dys) CAPITAL
Mall Production
Dail
Raw Material-Local 10,999,075 36,664 60 y 2,199,815
Dail
Goods -in- process(Bed Room Facility) 10,999,075 36,664 30 y 549,954
Dail
Accounts Receivable( credit Rent) 28,054,763 93,516 30 y 2,805,476
Dail
Cash in Hand for Maintenance & Others 10,214,114 34,047 30 y 1,021,411
Total cost of Goods/raw material 6,576,657
Administrative and Marketing Expenses/income
4,819,632 1,339 60 daily 80,327
Operative Expense
80,327
Working Capitals 6,656,984
8.HUMAN RESOURCE AND TRAINING REQUIREMENT
8.1 HUMAN RESOURCES REQUIREMENTS
The investment will is categorized public multipurpose Commercial building
Industry and is planned to register under the name BUSINESS COMPLEX
BUILDIN (G+6). The firm is as a proprietorship and owned by W/ro. Yeshi Tekilu.

8.2 ORGANIZATIONAL STRUCTURE

After a thorough assessment of the organizational structures of the existing
similar Mall BUSINESS COMPLEX BUILDING BUSINESS and the advice given by
the selected expertise on Multipurpose Marketing Center and pension service
fields and after revise of standards of the Country in the criteria of commercial
building the consultant has proposed the following organizational structure and
following manpower. Figure 2: Organizational Structure of the project BUSINESS
COMPLEX BUILDING BUSINESS Center

TECHINC AND
PRODUCTOIN
DEPARTEMENT
Figure 2: Organization Structure of the project
8.3 MANPOWER REQUIREMENTS AND LABOR COSTS
Due to the calculation of labor costs it is expected that the managing staff of the
shopping center will be the Management Company, according to the regulations
and retail experience the following personnel structure is provided below in table
11 bellow with annual salary of Birr 1,218,000.
Table 11: Manpower Requirements & Estimate Cost
Title/Designation NO OF SALARY
PERSONS Monthly Annual
MANAGER OFFICE
General manager 1 10,000.00 120,000.00
Accounts/Admin Officer 1 5,000.00 60,000.00
Residents Hotel manager 1 7,000.00 84,000.00
Secretary casher 1 5,000.00 60,000.00
Messenger and cleaner 1 1500 18,000.00
Sub-Total 5 342,000.00
ADMINISTRATION AND ACCOUNTS
Accounting Clerk 2 5,000.00 120,000.00
Purchaser 2 5,000.00 120,000.00
Driver 4 3,000.00 144,000.00
Store 2 3,000.00 72,000.00
Sub-Total 10 456,000.00
Maintenance and Security
Plumber 2 3,500.00 84,000.00
Electrician 2 6,000.00 144,000.00
Guard 5 1800 108,000.00
Technician 1 2,000.00 24,000.00
Gardener 2 2500 60,000.00
Sub –total 12 420,000.00
Total Salary Cost Birr 27 1,218,000.00

Thus the payroll of the company is the total premiums will be 1.218,000 birr 0er
year. It is planned to make annual indexation of the salary in the amount of 20%.

33
9. ENVIRONMENTAL IMPACTS OF THE PROJECT
During the constructional works the waste is formed up from the drives of the
building machinery (BM) and truck transport, caused by the main manufacturing
activity affecting the environment, and also during installation and finishing works
(Operation of high-speed reducing station, welding works and painting). There is a
wide range of methods for environmental protection during the construction
arrangements and during the period of construction, the methods are as follows:
 Atmospheric air protection;
 Land conservation;
 Environmental protection against waste;
 Surface and ground water protection against waste;
 Environmental protection during the construction arrangements;
 Environmental protection against production and consumption waste.
It is planned to install the ready mix station on the site. The temporary water
supply system on the site is supposed to be provided from the public waterworks
system. The forming waste is collected at the site before being sent to professional
organization for dumping, utilization and processing.
In order to minimize the waste there are special places for waste accumulation,
waste containers, and the waste is removed to the solid domestic waste landfill.
Temporary storage is available according to the existing sanitary and ecological
requirements. There will be short-term pollution during the period of construction.
According to the calculation of the section “Environmental protection methods” in
the design documentation, the atmospheric emissions resulted from the
constructional process are characterized as permitted (maximum permitted
emissions). The devastation of solid soil inflicted at the site would be neutralized
by the completion. Environmental Impact Assessment (EIA) poses as a widely
spread tool, potentially efficient in the prevention of environmental damage and in
the promotion of sustainable development will done prior to with project design.
The impact mitigation measures and monitoring plan will keep the Environment
BUSINESS COMPLEX BUILDIN (G+6).

34
10. FINANCIAL STUYD OF THE PROJECT
10.1 UNDERLYING ASSUMPTION
The YESHI TEKILU BUSINESS COMPLEX BUILDIN (G+6) Private Limited company
investment business feasibility plan is calculated in accordance with the following assumptions and
conditions:
 The Mall center construction is to be financed using bank credit;
 Amortization is made in accordance with Ethiopia Accounting Standard ;
 Expenses for administrative personnel (overhead costs and labor costs) are in proportion to
the total investment of the company investment activity.
A. Construction and Finance
Construction period 1 year
Source of finance 30% equity and 70% loan
Tax holidays 2 years
Bank interest rate 10.5%
Discount for cash flow 10%
Value of land Based on lease rate of Hawassa town
Spare Parts, Repair & Maintenance 3% of fixed investment
B. Depreciation
Building 75%
Machinery and equipment 4%
Office furniture 1%
Pre-production (amortization) 1%
C. Working Capital (Minimum Days of Coverage)
Raw Material-Local 15 days
Raw Material-Foreign 15 days
Building Supplies in Stock 15 days
Work in Progress 15 days
Finished Products 15 days
Accounts Receivable 5%
Cash in Hand 15 days
Accounts Payable 3%
Repayment of interest on bank credit before starting Due to the delay of payment on
bank credit before starting (1 year)

10.2 TOTAL INVESTMENT

The total investment cost of the project including working capital is estimated at Birr 70.998
million as shown in table 12 below. The Owner shall contribute 30% of the finance in the form of
equity while the remaining 70% is to be financed by bank loan.

Table 12: Project Total Initial Investment

35
Items Total Cost (Eth.Birr)

Land acquisitions cost 2,310,000

Technology Installation Cost 982,000
Building and civil works 31,134,996 44%
Bed Room Furniture & Fixture 13,047,720 18%
Bed Room Machinery & equipment. 7,645,764 11%
Company Vehicles 6,600,000 9%
Total fixed investment cost 61,720,480 86.9%

Pre-production capital expenditure 2,620,908 3.7%

Total initial investment 64,341,389
Initial Working capital at full capacity 6,656,983.8 9.4%
Total Project Cost 70,998,372

Pre-production capital expenditure includes all expenses for pre-investment studies,

consultancy fee during construction and expenses for company‘s establishment, project
administration expenses, commission expenses, preproduction marketing and interest
expenses during construction.

10.3 SOURCE OF FINANCE

The project construction will be financed at CBE Close Corporation equity funds, and the debt
funds offered by the co-investor in the amount of 30% and bank loan 70%. Before obtaining the
targeted credit the project was financed at CBE is 49,698,861birr and Close Corporation equity
funds in the amount of 21,299,512 ET.BR. The interest rate in the calculation is bases on 11.5%
SOURCE OF FINANCE
BANK
DESCRIPTION EQUITY BANK LOAN
LOAN
Land acquisitions and development cost 693,000 1617000 2,310,000
Installation Cost 294,600 687400 982,000
Building and civil works 9,340,499 21794497.41 31,134,996
Furniture & Fixture 3,914,316 9133404 13,047,720
Vehicles 2,293,729 5352034.8 7,645,764
Machinery & equipment. 1,980,000 4620000 6,600,000
Sub-total Fixed Asset 18,516,144 43,204,336 61,720,480

Pre-production costs 786,272 1,834,636 2,620,908

Sub-total Initial investment 786,272 1,834,636 2,620,908

Working Capital 1,997,095 4,659,889 6,656,984

Total Investment Cost 21,299,512 49,698,861 70,998,372
Percentage Share 30% 70% 100.00%

36
 10.4 TOTAL PRODUCTION AND ADMINISTRATIVE COSTS
The summary of the Transaction/operational cost at full capacity is show in Table 9. The total
project cost and operating expense including depreciation will amount to about Birr 10,670,666
birr. Of the total production and administrative cost, raw materials will account for 39%.
Table 13: Total production costs
Production and Administrative Cost at full Capacity(year 3)
Items Cost
Total project goods Cost 8,330,376
Total operating expense 2,340,290
Total Transaction Cost 10,670,666
10.5 FINANCIAL VIABILITY
10.5.1 INCOME STATEMENT
It may be seen from the profitability estimates that the unit would earn a net profit after taxation of
birr 6,272,192 during the first years of operation at 80% of the capacity. The net profit after tax will
increase gradually from to ET. Birr 17,629,602 in the second year and 14,457,408birr in the third
year when the unit expects to achieve 100% utilization of capacity. On the above basis, there is
adequate generation of funds out of the farm operation to service the repayment of term loan and
interest liabilities, as also to meet additional requirement of margin money for working capital in the
second and subsequent years. Further, adequate surplus cash is available with the unit for promoter
withdrawal, Annexure-4.

10.5.2 CASH FLOW STATEMENT AND BALANCE SHEET

Cash flow on hand at a given period in time (i.e., projection) is critical component of a business
initiative. The cash flow is positive starting Year one. The cash end balance clearly shows that the
accumulated or free cash fund is sufficient to finance the expansion activities, strengthen the public
multipurpose service and invest on the establishment of other services.

10.6 FINANCIAL EVALUATION

10.6.1 PROFITABILITY
According to the projected income statement, the project will start generating profit in the first year
of operation. Important ratios such as profit to total sales, net profit on total investment) show an
increasing trend during the life-time of the project. The income statement and the other indicators of
profitability show that the project is viable.

10.6.2 INTERNAL RATE OF RETURN

Based on the cash flow statement on the Annexure-7, the calculated IRR of the project is before tax
26% and 34% after tax and the net present value at 10 % discount rate is Birr 138.970 million and

37
Birr 107.267 million before and after tax respectively. The internal rate of return is calculated as the
rate of discount which equates the present worth of the costs and benefits streams, Annexure-7.

10.6.3 PAY BACK PERIOD

The computation of the payback period is given at Annexure-7. The pay- back period would be much
less in case calculated on the basis of profit before tax. Therefore, the investment cost and income
statement projection are used to project the pay-back period works out to years 5 and 6 years on the
basis of before tax and profit after tax respectively. The project’s initial investment will be fully
recovered within 8 years.

10.6.4 NET PRESENT VALUE (NPV)

The NPV is calculated by subtracting the present value of all the costs incurred for the project from
the present value of the stream of benefits. As shown below annexure 10, the resulting NPV value is
greater than zero; which implies that the project is acceptable (profitable). This is critical stage for
paying out dividends to shareholders who have invested in the business enterprise. Nevertheless, the
payment of dividend is delayed until the enterprise fully pays out its loan (both interest and
principals).

10.6.5 LOAN REPAYMENT SCHEDULE

The loan repayment period is simply defined as the period (i.e. the number of years) required paying
the principal and interest of the original investment cost throughout the project life. The business
result obtained reveals that the investment is financially viable and has a healthy cash flow forecast.
The outcome of the financial analysis reveals that: based on the following repayment schedule the
annual payment was described on the base of bellow the given table 14 bellows throughout the
project life.
Table 14: Project loan repayment Schedule
Year Amount of Principal Instalment Interest Total
Outstanding due Payable at 11% Amount

1 49,698,861 4,969,886 5,466,875 10,436,761

2 44,728,975 4,969,886 4,920,187 9,890,073

3 39,759,088 4,969,886 4,373,500 9,343,386

4 34,789,202 4,969,886 3,826,812 8,796,698

5 29,819,316 4,969,886 3,280,125 8,250,011

6 24,849,430 4,969,886 2,733,437 7,703,323

7 19,879,544
38
Year Amount of Principal Instalment Interest Total
Outstanding due Payable at 11% Amount
4,969,886 2,186,750 7,156,636

8 14,909,658 4,969,886 1,640,062 6,609,948

9 9,939,772 4,969,886 1,093,375 6,063,261

10 4,969,886 4,969,886 546,687 5,516,574

Total 49,698,861 30,067,811 79,766,671.2

10.6.7 RISK AND UNCERTAINTY

The following risks and uncertain incidents that might affect the project could occur during
operating period of the project. If the global economic crisis and inflation is prolonged and
intensified, it will affect the project cost benefits analysis. Besides, it may also affect the production
cost and both inland and offshore markets. Due to the price fluctuation the producer discourage
results the supply of raw material of project inputs will be problems of efficiency of project income
was affected when ethnic conflict and political instability.

10.7 ECONOMIC AND SOCIAL BENEFIT AND JUSTIFICATION

Based on the foregoing presentation and analysis, we can learn that the proposed project service
wide range of benefits that complement the financial feasibility obtained earlier. In general the
envisaged project promotes the socio-economic goals and objectives stated in the strategic plan of
the Sidam Regional State as well as promote tourisms of the country. These benefits are listed as
follows
A. Profit Generation
The project is found to be financially viable and earns on average a profit of birr 3.686 million at
the beginning year of 80% production capacity and birr 4.455 million at second year of 90%
production capacity and 5.379 million Birr at 100% production capacity of year 3 and will
increased within the project life. Such result induces the project promoters to reinvest the profit
which, therefore, increases the investment magnitude in the region.
B. Tax Revenue
In the project life under consideration, the region will collect about birr 10.624 million in average
for 10 years of the project from corporate tax payment alone (i.e. excluding income tax, sales tax
and VAT). Such result create additional fund for the regional government that will be used in
expanding social and other basic services in the region
C. Employment and Income Generation

39
The proposed project is expected to create employment opportunity to 23 citizens of the country as
27 permanent base and 100 as temporary base and total 127 employment opportunity. This would
be one of the commendable accomplishments of the project.

11. CONCLUSIONS AND RECOMMENDATIONS

Based on the framework set out in this feasibility study the following conclusions were made
regarding the feasibility of proposed Business Complex Building center service by YESHI
TEKILU BUSINESS COMPLEX BUILDIN (G+6).
• A market opportunity was identified for the domestic Business Complex Building center
market. The demand trend confirms the products are marketable
• The analysis of technical feasibility of the proposed high quality customer preference
Business Complex Building center business revealed that the machinery, equipment’s,
production facilities and services and the human resource could be integrated for efficient
customer preference Business Complex Building center industry.
• The analysis on financial feasibility of the proposed business plan revealed that based on the
assumptions made, the owner is profitable. The industry is projected to have a healthy cash
flow and is viable over long term. The positive financial feasibility is, however, dependent
on stable inflation and macro-economic conditions. The profitability of the business plan
can be further by developing more customer preference Business Complex Building center.
Based on the framework set out in this business plan study where feasibility is assessed in three
core areas, it can be concluded that the proposed Business Complex Building center service of
YESHI TEKILU BUSINESS COMPLEX BUILDIN (G+6) establishment and high quality
customer preference Business Complex Building center business project is feasible. The results of
the business plan study, however, are heavily dependent upon the assumptions made during the
study and other operating environments (political, environmental and economic conditions) remain
relatively stable.

40
 11. ANNEXURE
Annex 1: Projected Operating Expense
Items Y0 Y1 Y2 Y3
utilization capacity Period 80% 90% 100%
(moths)
Mesilaneaouse Expense 12 3,032,464 2,425,971.48 2,729,217.91 3,032,464
Tel Communications 12 68,894 55,115.20 62,004.60 68,894
Laundry Service. 12 4,409 3,527.20 3,968.10 4,409
Housekeeping supplies 12 344,469 275,575 310,022.10 344,469
Commission 12 137,788 110,230.40 124,009.20 137,788
Utilities: Electricity, Water, Tele 12 696,516 557,212.80 626,864.40 696,516
Salary Of Managerial & 12 1,740,000 1,392,000.00 1,566,000.00 1,740,000
Administrative
Total costs 6,024,540 4,819,632 5,422,086 6,024,540

Annex 2: REVENUE ASSUMPTIONS ON AND PROJECTIONS

Production years Y-1 Y-2 Y-3
Summary Revenue unit
Revenue of Bed Rooms Rent ( Birr ) 11,814,513 19,846,307 23,442,962
Food Revenues 7,227,000 7,967,768 8,784,464
Beverage 7,537,250 11,181,319 12,327,404
Other Operation Departments Revenues 1,476,000 1,659,218 1,866,593
G/Total Revenue 28,054,763 40,654,610 46,421,422

Annex 3: Projected Cost of Goods

Sr. Items Y0 Y1 Y2 Y3
No
utilization capacity 80% 90% 100%
1 Restaurant Food cost 2,847,000 2,277,600 2,562,300 2,847,000
2 Soft Beverage Cost 1,154,313 923,450.40 1,038,881.7 1,154,313
0
3 Commission 92,163 73,730.40 82,946.70 92,163
4 Salary of Hotel Service & 677,004 541,603.20 609,303.60 677,004
Production
5 Maintenance & Spar Part 637,067 509,653.97 573,360.72 637,067.46
6 Utilities:/Overhead Cost 637,067 509,653.97 573,360.72 637,067.46
7 Deprecation 7,704,228 6,163,382.6 6,933,805.4 7,704,228.2
0 3 6
Sub-total Factory costs 13,748,843 10,999,075 12,373,960 13,748,844
 Annex 4: Projected Income Statement (birr)
INCOME STATEMENTS( Et birr '000)
Year Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Gross revenue 28,054,763 40,654,610 46,421,422 49,992,420 53,875,276 58,100,139 62,700,313 67,712,614 73,177,762 79,140,834
Oile Seed Oil Processing
Cost Of Production/Less COGS 10,999,075 12,373,960 13,748,844 13,748,844 13,748,844 13,748,844 13,748,844 13,748,844 13,748,844 13,748,844
Gross Profit 17,055,688 28,280,651 32,672,578 36,243,576 40,126,431 44,351,295 48,951,469 53,963,770 59,428,918 65,391,989
(In % of Total Income) 61% 70% 70% 72% 74% 76% 78% 80% 81% 83%

Administrative & Marketing Expense/V 4,819,632 5,422,086 6,024,540 6,024,540 6,024,540 6,024,540 6,024,540 6,024,540 6,024,540 6,024,540
Total Operating Expenses: 4,819,632 5,422,086 6,024,540 6,024,540 6,024,540 6,024,540 6,024,540 6,024,540 6,024,540 6,024,540
Operating Profit 12,236,056 22,858,564 26,648,038 30,219,035 34,101,891 38,326,754 42,926,929 47,939,229 53,404,377 59,367,449
(In % of Total Income) 44% 56% 57% 60% 63% 66% 68% 71% 73% 75%
Other Income 0 0 0 0 0 0 0 0 0 0
Total Operating Profit 12,236,056 22,858,564 26,648,038 30,219,035 34,101,891 38,326,754 42,926,929 47,939,229 53,404,377 59,367,449
Financial & Other Charges 0 0 0 0 0 0 0 0 0 0
Less Cost of Finance 5,963,863 5,228,962 4,405,872 3,484,012 2,451,529 1,295,147 0 0 0 0
Total Financial & Other Charges 5,963,863 5,228,962 4,405,872 3,484,012 2,451,529 1,295,147 0 0 0 0
GROSS PROFIT 6,272,192 17,629,602 22,242,166 26,735,023 31,650,362 37,031,607 42,926,929 47,939,229 53,404,377 59,367,449
Income (Corporate) Tax 0 0 7,784,758 9,357,258 11,077,627 12,961,062 15,024,425 16,778,730 18,691,532 20,778,607
Profit after Taxation 6,272,192 17,629,602 14,457,408 17,377,765 20,572,736 24,070,545 27,902,504 31,160,499 34,712,845 38,588,842
Accumulated Profits - brought forward 0 6,272,192 23,901,795 38,359,202 55,736,967 76,309,703 100,380,247 128,282,751 159,443,250 194,156,095
Accumulated Profits - carried to the Balance Sheet 6,272,192 23,901,795 38,359,202 55,736,967 76,309,703 100,380,247 128,282,751 159,443,250 194,156,095 232,744,937

RATIOS (%)
Gross Profit/Sales 22% 43% 48% 53% 59% 64% 68% 71% 73% 75%
Net Profit After Tax/Sales 22% 43% 31% 35% 38% 41% 45% 46% 47% 49%

Annex 5: Projected balance sheet ( birr)

Production Years 0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Assets
Cash 6,656,984 12,556,535 30,332,550 44,454,932 60,754,346 79,200,655 99,971,291 135,348,014 173,962,126 216,105,943 262,100,859
Inventory - 879,926 989,917 1,099,908 1,099,908 1,099,908 1,099,908 1,099,908 1,099,908 1,099,908 1,099,908
Accounts receivable - 1,402,738 2,032,731 2,321,071 2,499,621 2,693,764 2,905,007 3,135,016 3,385,631 3,658,888 3,957,042
Total current assets 6,656,984 14,839,199 33,355,197 47,875,911 64,353,875 82,994,326 103,976,205 139,582,937 178,447,665 220,864,738 267,157,808
Gross property, plant & equipment 64,341,389 64,341,389 64,341,389 64,341,389 64,341,389 64,341,389 64,341,389 64,341,389 64,341,389 64,341,389 64,341,389
Less: Accumulated depreciation expense - -7,704,228 -15,408,457 -23,112,685 -30,816,913 -38,521,141 -46,225,370 -53,929,598 -61,633,826 -69,338,054 -77,042,283
Net property/equipment 64,341,389 56,637,160 48,932,932 41,228,704 33,524,475 25,820,247 18,116,019 10,411,791 2,707,562 -4,996,666 -12,700,894

Total assets 70,998,372 71,476,359 82,288,129 89,104,614 97,878,350 108,814,574 122,092,224 149,994,728 181,155,227 215,868,072 254,456,914
Liabilities Ini tial bal ance Year 1 Year 2 Year 3 Year 4 Year 5 Year 5 Year 5 Year 5 Year 5 Year 5
Accounts payable - 329,972 371,219 412,465 412,465 412,465 412,465 412,465 412,465 412,465 412,465
Notes payable/short-term debt - 0 0 0 0 0 0 0 0 0 0
Total current liabilities - 329,972 371,219 412,465 412,465 412,465 412,465 412,465 412,465 412,465 412,465
Long-term debt from 49,698,861 43,574,683 36,715,604 29,033,435 20,429,406 10,792,894 0 0 0 0 0
Shareholders equity 21,299,512 27,571,704 45,201,306 59,658,714 77,036,479 97,609,214 121,679,759 149,582,263 180,742,762 215,455,607 254,044,449
Total long-term debt and shareholders equity 70,998,372 71,146,387 81,916,910 88,692,149 97,465,885 108,402,108 121,679,759 149,582,263 180,742,762 215,455,607 254,044,449
Total liabilities 70,998,372 71,476,359 82,288,129 89,104,614 97,878,350 108,814,574 122,092,224 149,994,728 181,155,227 215,868,072 254,456,914

Annex 6: Projected cash flow statement ( birr)

Year 0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10

Net income 6,272,192 17,629,602 14,457,408 17,377,765 20,572,736 24,070,545 27,902,504 31,160,499 34,712,845 38,588,842
Plus depreciation 7,704,228 7,704,228 7,704,228 7,704,228 7,704,228 7,704,228 7,704,228 7,704,228 7,704,228 7,704,228
Less increase in inventory - (879,926) (109,991) (109,991) - - - - - - -
Less increase in accounts receivable - (1,402,738) (629,992) (288,341) (178,550) (194,143) (211,243) (230,009) (250,615) (273,257) (298,154)
Plus increase in accounts payable - 329,972 41,247 41,247 - - - - - - -
Cash flow from operations - 12,023,729 24,635,094 21,804,551 24,903,443 28,082,821 31,563,530 35,376,723 38,614,112 42,143,816 45,994,917
Less investment (64,341,389) - - - - - - - - - -
Cash flow from operations and invests (64,341,389) 12,023,729 24,635,094 21,804,551 24,903,443 28,082,821 31,563,530 35,376,723 38,614,112 42,143,816 45,994,917
Plus net new equity capital raised 21,299,512 - - - - - - - - - -
Less dividends paid - - - - - - - - - - -
Plus net new long-term debt 49,698,861 (6,124,178) (6,859,079) (7,682,169) (8,604,029) (9,636,512) (10,792,894) - - - -
Plus net new bank borrowings - - - - - - - - - - -
Cash flow from ops, invests, and fin 6,656,984 5,899,551 17,776,015 14,122,382 16,299,414 18,446,309 20,770,636 35,376,723 38,614,112 42,143,816 45,994,917
Beginning cash balance - 6,656,984 12,556,535 30,332,550 44,454,932 60,754,346 79,200,655 99,971,291 135,348,014 173,962,126 216,105,943
Ending cash balance 6,656,984 12,556,535 30,332,550 44,454,932 60,754,346 79,200,655 99,971,291 135,348,014 173,962,126 216,105,943 262,100,859

Annex 7: Payback Period and Internal Rate of Return

42
 PROJRCT W ORTH MAESURE ( NPV, IRR, PB ) before tax . Birr '000
Year 0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Cash flow (64,341,389) 12,236,056 22,858,564 26,648,038 30,219,035 34,101,891 38,326,754 42,926,929 47,939,229 53,404,377 59,367,449
PV factor 100% 90.09% 82.64% 75.13% 68.30% 62.09% 56.45% 51.32% 46.65% 42.41% 38.55%
PV of cash flow (64,341,389) 11,023,462 18,890,318 20,020,671 20,639,601 21,173,864 21,635,453 22,030,100 22,363,650 22,648,796 22,886,152
NPV 138,970,679
IRR ( befor Tax ) 26%
Cash flow (64,341,389) 12,236,056 22,858,564 26,648,038 30,219,035 34,101,891 38,326,754 42,926,929 47,939,229 53,404,377 59,367,449
Cumultaive cash (64,341,389) (52,105,333) (29,246,769) (2,598,731) 27,620,305 61,722,196 100,048,950 142,975,879 190,915,108 244,319,485 303,686,934
Pay Back Period 5.00 Years 10 M onths

PROJRCT W ORTH M AESURE ( NPV, IRR, PB ) AFTER TAX . Birr '000

Year 0 1 2 3 4 5 6 7 8 9 10
Cash flow (64,341,389) 12,023,729 24,635,094 21,804,551 24,903,443 28,082,821 31,563,530 35,376,723 38,614,112 42,143,816 45,994,917
PV factor 100% 90.09% 82.64% 75.13% 68.30% 62.09% 56.45% 51.32% 46.65% 42.41% 38.55%
PV of cash flow (64,341,389) 10,832,177 20,358,442 16,381,759 17,009,052 17,436,624 17,817,612 18,155,334 18,013,483 17,873,192 17,731,040
NPV 107,267,328
IRR ( After Tax ) 34%
Cash flow (64,341,389) 12,023,729 24,635,094 21,804,551 24,903,443 28,082,821 31,563,530 35,376,723 38,614,112 42,143,816 45,994,917
Cumultaive cash (64,341,389) (52,317,660) (27,682,566) (5,878,015) 19,025,429 47,108,250 78,671,779 114,048,503 152,662,615 194,806,431 240,801,347
Pay Back Period 6.00 Years 8 Months

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