PROJECT FEASIBILITY STUDY FOR THE

ESTABLISHMENT
Of
CIVET FARM & PROCESSING, PLC

PROMOTER: Civet Farm & Processing, PLC

COFFEE AND SPICES FARM & PROCESSING INDUSTRY ESTABLISHMENT PROJECT

PEOJECT LOCATION: Project Location: OROMIA REGIONAL STATE,

OROMIA SPECIAL ZONE AROUND FINIFENE
Specific Location: GELAN/DIKUM TOWN
PREPARED BY: Abrham Astatike ( 0911384833)

AGUST/2021

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TABELS OF CONTENTS
ANNEXTURE ......................................................................................................................................................................... IV
FIGURE................................................................................................................................................................................... IV
TABLES .................................................................................................................................................................................. IV
ACRONYMS........................................................................................................................................................................... VI
1. EXECUTIVE SUMMARY .............................................................................................................................................. 1
1.1 PURPOSE OF REPORT ..................................................................................................................................1
1.2 GENERAL DESCRIPTION OF THE PROJECT.........................................................................................1
2. INTRODUCTION...............................................................................................................................................4
2.1 RATIONAL BEHIND THE PROJECT .........................................................................................................5
2.2 SOCIO-ECONOMIC JUSTIFICATIONS .....................................................................................................6
2.2.1 SOCIO-ECONOMIC BENEFIT FOR THE SOCIETY ............................................................................................ 6
2.2.2 POVERTY ALLEVIATION ..................................................................................................................................... 6
2.2.3 ECONOMIC BENEFIT FOR THE COMMUNITY.................................................................................................. 6
2.2.4 ECONOMIC BENEFIT FOR THE COUNTRY ....................................................................................................... 7
2.3 THE APPLICANT / THE PROJECT PROMOTER ....................................................................................8
2.4 PROMOTER’S PROFILE ...............................................................................................................................8
2.5 CAPITAL STRUCTURE OF THE COMPANY ...........................................................................................9
3. BACKGROUND INFORMATION ................................................................................................................................... 10
3.1 AFRICA CIVET CAT PRODUCTION OVER VIEW ...............................................................................10
3.1.1 ETHIOPIA AFRICA CIVET CAT PRODUCTIONS ............................................................................................. 10
3.1.2 ETHIOPIA CIVET MUSK MARKETING ............................................................................................................. 11
4. GENERAL DESCRIPTION 0F THE PROJECT............................................................................................................. 12
4.2 PROJECT LOCATION ADVANTAGE ......................................................................................................12
4.2 PROJECT LAND ACQUISITION & UTILIZATION ...............................................................................12
4.3 CLIMATICA CONDTION OF THE PROJECT AREA ............................................................................13
4.4 WATER RESOURCES ..................................................................................................................................13
4.5 SOCIO-ECONOMIC ENVIRONMENT ......................................................................................................13
4.5.1 INFRASTRUCTURE AND SERVICES .............................................................................................................. 13
5. MARKET STUDAY AND APPLICATION ..................................................................................................................... 14
5.1 GENERAL OVERIEW ..................................................................................................................................14
5.1.1 GLOBAL AFRIC CIVET CAT MUSK SUPPLY AND CONSUMPTION ........................................................... 14
5.1.2 ETHIOPIA EXPORT OF CIVET MUSK ............................................................................................................... 14
5.2 PAST SUPPLY AND PRESENT DEMAND ANALYSIS...........................................................................15
5.2.1 ETHIOPIA SUPPLY OF CIVET MUSK TO WORLD .......................................................................................... 15
5.2.2 DEMAND PROJECTION OF CIVET MUSK ........................................................................................................ 16
5.3 THE CIVET MUSK MARKET CHANNEL................................................................................................17
5.4 INSPECTION AND QUALITY CONTROL ...............................................................................................17

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5.5 MARKETING PLAN .....................................................................................................................................18
5.6 MARKETING STRATEGIES.......................................................................................................................18
5.6.1 TARGET MARKETS .............................................................................................................................................. 18
5.6.2 PROMOTIONAL STRATEGIES............................................................................................................................ 19
5.7 COMPANY PRICING ................................................................................................................................................ 19
6. THE PROJECT ................................................................................................................................................................... 20
6.1 PROJECT DESCRIPTION AND APPLICATION.....................................................................................20
6.2 PURPOSE OF THE PROJECT ....................................................................................................................20
6.3 PROJECT OBJECTIVES..............................................................................................................................21
6.4 FARM STRUCTURE AND LAND DEVELOPMENT ...............................................................................21
6.5 AFRICAN CIVET COMMERCIAL FARM ...............................................................................................21
6.5.1 AFRICA CIVET CAT HABITATS AND ECOLOGY ........................................................................................... 22
6.5.2 CIVET FEEDING METHODS ............................................................................................................................... 22
6.5.3 HUSBANDRY AND MANAGEMENT ................................................................................................................. 23
6.5.3.1 CIVET HOUSING AND CAGES ........................................................................................................................................ 23
6.5.3.2 DESIGN PREPARATION AND CAGE PRODUCTION ................................................................................................... 23
6.5.3.3 CAPTIVE BREEDING AND REPRODUCTION ............................................................................................................... 24
6.5.3.4 COLLECTION AND EXTRACTING THE CIVET MUSK ............................................................................................... 25
6.5.3.5 CARE OF THE CIVET MUSK YELD ................................................................................................................................ 25
6.6 TECHNOLOGY ENGINEERING AND PROCUREMENT .....................................................................26
6.6.1 CIVET MUSK MANUFACTURING PROCESS ................................................................................................... 26
6.6.2 FARM MACHINERY AND EQUIPMENT............................................................................................................ 28
6.6.3 CIVET MUSK PROCESSING MACHINERY ....................................................................................................... 30
6.6.4 SOURCE OF TECHNOLOGY................................................................................................................................ 30
6.6.5 AFRICA CIVET CAT PROJECT INITIAL STOCK .............................................................................................. 30
6.6.6 COMPANY VEHICLES ......................................................................................................................................... 31
6.6.7 OFFICE FURNITURE & EQUIPMENT ................................................................................................................ 31
6.7 PROJECT BUILDING AND CIVIL WORKS ...........................................................................................32
6.7.1 LAND REQUIREMEN ........................................................................................................................................... 32
6.7.2 BUILDING CIVIL WORKS AND RELATED COST ........................................................................................... 32
6.8 PRODUCTION ...............................................................................................................................................33
6.8.1 PLANT CAPACITY AND PRODUCTION PROGRAM ........................................................................33
6.8.1.1 CIVET FARM AND PLANT CAPACITY .......................................................................................................................... 33
6.8.1.2 PRODUCTION PLAN (PROGRAME) ............................................................................................................................... 34
6.9 REVENUE DETERMINATION ...................................................................................................................34
6.10. MATERIALS AND INPUTS ......................................................................................................................35
6.10.1 RAW MATERIALS .............................................................................................................................................. 35
6.10.2 AUXILIRY MATERIALS .................................................................................................................................... 35
6.10.3 UTILITIES............................................................................................................................................................. 36
6.11 PROJECT OPERATING ACTIVITIES ....................................................................................................36
7.3.1 PRE- PRODUCTION EXPENSES.......................................................................................................................... 36
6.1.2 PRE-OPERATING ACTIVITIES ........................................................................................................................... 37
7. ORGANIZATION, MANAGEMENT & MANPOWER REQUIREMENT .................................................................. 38

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7.1 ORGANIZATION AND MANAGEMENT..................................................................................................38
7.2 ORGANIZATIONAL STRUCTURE ...........................................................................................................38
7.3 MAN POWER REQUIREMENT .................................................................................................................41
7.3.1. SKILLED MAN POWER ....................................................................................................................................... 41
7.4 TRAINING REQUIREMENT.......................................................................................................................42
8. FINANCIAL STUDY OF THE PROJECT ....................................................................................................................... 43
8.1 INTRODUCTION...........................................................................................................................................43
8.2 OBJECTIVES .................................................................................................................................................43
8.3 INVESTMENT OUTLAY(COST ESTIMATES) ........................................................................................43
8.3.1 TOTAL PROJECT INITIAL INVESTMENT COST.............................................................................................. 43
8.3.2 FINANCIAL REQUIREMENT AND SOURCES .................................................................................................. 44
8.4 PRODUCTION, REVENUE AND OPERATION COST ...........................................................................45
8.4.1 PRODUCTION AND MARKETING PLAN .......................................................................................................... 45
8.4.1.1 CIVET MUSK PRODUCTION ........................................................................................................................................... 45
8.4.2 PROJECTED GROSS REVENUE .......................................................................................................................... 45
8.4.3 OPERATION AND ADMINISTRATIVE (DIRECT & INDIRECT) COST .......................................................... 45
8.5 FINANCIAL ANALYSIS KEY ASSUMPTIONS .......................................................................................45
8.6 PROJECT FINANCIAL RESLTS ................................................................................................................46
8.6.1 PROFITABILITY - PROFIT / LOSS FORECAST ................................................................................................. 46
8.6.2 CASH FLOW FORECAST(LIQUIDITY) .............................................................................................................. 46
8.6.3 BALANCE SHEET PROJECTION (CAPITAL GROWTH).................................................................................. 46
8.7 FINANCIAL EVALUATION(VIABILITY) ................................................................................................................... 46
8.7.1 PROJECT WORTH(NPV & FIRR) ..........................................................................................................46
8.7.1.1 THE NET PRESENT VALUE (NPV) ................................................................................................................................. 46
8.7.1.2 THE FINANCIAL INTERNAL RATE OF RETURN (FIRR) ............................................................................................ 47
9.7.2 BENEFIT : COST’ RATIO (BCR) .......................................................................................................................... 47
8.7.3 PAY BACK PERIOD .............................................................................................................................................. 47
8.7.4 SENSITIVITY ANALYSIS .................................................................................................................................... 47
8.8 PRINCIPAL LOAN REPAYMENT SCHEDULE ......................................................................................48
9. SOCIO-ECONOMIC IMPACT ASSESSMENTPROJECT ........................................................................................... 49
9.1. POSITIVE IMPACT ON SOCIAL & ECONOMY ...................................................................................49
9.1.1 CREATION OF EMPLOYMENT OPPORTUNITY ......................................................................................... 49
9.1.2 SOURCE FOR THE COUNTRIES FOREIGN CURRENCY .......................................................................... 49
10.1.3 LINKAGE EFFECT .............................................................................................................................................. 50
10. CONCLUSION AND RECOMMENDATIONS ............................................................................................................. 51
10.1 CONCLUSION .............................................................................................................................................51
10.2 RECOMMENDATION ................................................................................................................................51
11. ANNEXTURE .................................................................................................................................................................... 52

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ANNEXTURE
Annex 1 PROJECTED INCOME STATEMENT (Birr) ......................................................................................... 52

Annex 2 PROJECTED BALNCE SHEET (Birr) .................................................................................................... 53

Annex 3. PROJECTED CASH FLOW STATEMENT (Birr) ................................................................................. 53

Annex 4 INTERNAL RATE OF RETUREN (Birr) ................................................................................................ 54

Annex 5 Assumptions used in Financial Projections ............................................................................................... 55

FIGURE
Figure 1: Illustrations of housing cage for African civets ................................................................................... 24

Figure 2: Illustrations of breeding cage for African civets ................................................................................. 24

Figure 3 : Civet Perfume Aging Process Diagram ............................................................................................... 28

Figure 4 : Organization Structure............................................................................................................................. 39

TABLES

Table 1: Ethiopia Civet Production (kg) and Revenue ($) from 2007-2020 ............................................................ 11

Table 2: Ethiopia Export Civet Musk (kg) and Revenue (USA) from 2002-2020 .................................................. 16

Table 3: Projected Demand of Export Civet Musk (kg) .......................................................................................... 17

Table 4: Marketing Plan of the project .................................................................................................................... 18

Table 5: Assumption of Project price ...................................................................................................................... 19

Table 6: The Planned Estimated cost of Machinery and Equipment ................................................ 28

Table 7: Farm Tools & Workshop Equipment......................................................................................................... 29

Table 8: Civet musk processing machinery ............................................................................................................. 30

Table 9: Project Civet Cat Initial stock .................................................................................................................... 30

Table 10: Company Motor and Vehicles Cost ........................................................................................................ 31

Table 11: Company Furniture and Fixture Cost ..................................................................................................... 31

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Table 12: Project Land Use Plan ................................................................................................................... 32

Table 13: Land Use Plan and Related Cost ............................................................................................... 33

Table 14: Civet Cat Musk Annual Production Plan ............................................................................... 34

Table 15: Project Gross Revenue (seals) ..................................................................................................... 34

Table 16: The Project Auxiliary Material Cost .......................................................................................... 35

Table 17: project Pre-operational Expenditure .................................................................................................. 36

Table 18: Project Implementation Schedule .............................................................................................. 37

Table 19: Minimum Qualification and Experience of Proposed Management ........................................................ 39

Table 20: Man Power requirements ............................................................................................................. 42

Table 21: Project Initial Investment Outlay Foreign & local Cost component ............................... 44

Table 22: Total financial Requirement, project Investment cost & Sources of finance ............... 44

Table 23: Revenue Determination (seals) ................................................................................................... 45

Table 24: Projected Operation estimated cost (direct and indirect) ................................................... 45

Table 25: loan repayment Schedule ............................................................................................................. 48

Table 26: Civet Export in Ethiopia Volume (Kg) and Volume(USD) .................................................. 49

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Acronyms
ADLI Agricultural Development-Led Industrialization

ECX Ethiopian Commodity Exchange

ETB Ethiopian Birr

FDRE Federal Democratic Republic of Ethiopia

GDP Gross Domestic Product

GTP Growth and Transformation Plan

Ha Hectare

KA(s) Kebele Administration(s)

KM Kilo Meter

m.a.s.l. Meters above sea level

Mm Millimeter

MoARD Ministry of Agriculture and Rural Development

MoFED Ministry of Finance and Economic Development,

o
C Degree Cellicious

PIF Policy and Investment Framework (of Ethiopian Agricultural Sector)

PLC Private Limited Company (Pvt. Ltd. Co)

Qtl(s) Quintal(s)

USA United States of America

USD United States Dollars

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1. EXECUTIVE SUMMARY

1.1 PURPOSE OF REPORT

The present investment feasibility study is established with view to establish new CIVET FARM AND
PROCESSING INDUSTRY to produce exportable high quality Civet Musk and Semi-Processed
Civet Musk (musk ketone, civetone). This investment is initiated by newly established CIVET FAR
AND PROCESSIN (PLC) investment with land of 20 ha at Oromia Regional State, Oromia Special
Zone, around Finifene. This summary highlights the key points of investment business plan.

1.2 GENERAL DESCRIPTION OF THE PROJECT

The proposed project is specialized in fragrance industries to use natural civet musk production for
export and domestic market at acquired farm land of 20 ha, out of this 5h Civet commercial cage
production and processing building area, the remaining of 15ha for the establishment of wild forest for
the civet dry season feeding, recreation farm.
Civet musk is a substance found in a pouch near the sexual organ of the true civet cat, that is of the
consistency of butter or honey, clear yellowish or brownish in color with a strong musky odor, used in
perfume and chemically a complex mixture chiefly of fats and volatile oils.

The envisaged plant is expected to establish 3280 civet cat farms to produce 3,017 kgs musk export
standard per annum and 1,005,648 semi-processed civet musk for demotic consumption at full
production company (year four). It would therefore be appropriate to start civet farming and musk
production at lower capacity. Thus, at the initial year, the project will be operated at 65% of capacity.
Then, production can be increased to 75%, 85% and then to full capacity (100%) during the second,
third and fourth year of operation, respectively.
CIVET FAR AND PROCESSIN (PLC) is a sophisticated facility that handles commercialization functions
such as farming, Capturing, Housing, feed supply, musk extraction, processing and quarantine systems, to
meet the quality and specifications required by the international market.

CIVET FAR AND PROCESSIN (PL) business is to reduce poverty and improve quality of life in rural areas.
Further through job creation and exports of Africa Civet cat products, it will serve us one of model of sustainable
economic growth in Ethiopia by foreign currency source. In addition to this company so far there have been
attempts to improve the traditional farming practices and handling system and processing in Ethiopian

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Africa Civet Cat farming will reduce the post-harvest loss and increase value-addition of civet musk products,
which will greatly contribute to fulfillment of government policy.

CIVET FAR AND PROCESSIN (PL) is a private limited company, by acquiring investment land 20 hectares
and investing a capital investment of 84.512 million birr. The objective of this investment proposal study are to be
used as a basis for developing the business idea of envisaged Civet Musk and Semi-Processed Civet Musk
(musk ketone, civetone) project and to seek 20 ha investment land, investment license permit, leased base for
export items to the foreign countries.

The allocation of investment cost is mainly on Site, wild life forest establishment, Africa Civet Cat Animals, and
building development accounts 70% and Machinery, vehicles, farm tools and furniture 18%, pre-production cost
1% and the working capital is 3% of total investment. The breakdown of total investment (Birr) is:

The financial studies show of the project its profit and/ or loss, cash flow statements, was tested
carefully. The financial Internal Rate of Return (FIRR) shows 37 % after tax. The net present value of
project capital investment at 10 % discount rate is ET, Birr 153.649 million after tax. These results
demonstrate that the project is viable and provides healthy returns to the promoters. The sources of

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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 employment bases for more than 450
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
perfume industry of the county
 Benefit from the tax of the Africa civet farm operations and export.
 Benefiting all the actors’ in the chain of Africa civet cat farm from the rural community at different area of
local people of smaller civet cat farm by made market linkage and others who participate in the chain will
benefit from this project.
 The smaller civet cat musk producer frames motivated to produce more civet musk and create market
barging power to sell their products.
 The project has an advantage for the Africa civet cat farm by preserving traditional civet cat farm trapping
and handling technology transfer to local small farm and a model civet farm should be established by
company to maintain civets under suitable conditions and to collect the civet musk on a
sustainable way.
 Based on filed survey information that obtained from different civet cat farm producers, it is an important
technology especially method of Africa cat civet commercial production system and traders
 To introduce Modern way of trapping, handling, health care, feeding and extraction of civet musk should
be advocated among civet farmers.

Government Strategic Significance of the Project

 The Africa Civet farm and Processing Plant industry plays important role in economic development
of the country by creating value addition revenue tax from occupancy and other activities in the
farm operation.
 The Africa Civet cat musk Processing Plant is new and important in the country to civet musk export to
the international market
Some of opportunities and government strategies considered by the owner when planning to invest of farm and
Processing Plant are,

 Strong effort is underway to improve Ethiopia’s image for the Africa civet cat farm and musk processing
and quality,
 The government commitment to use this Africa civet cat musk processing industry for the fight against
poverty,
To full fill his desire after looking the gaps and opportunities the company have Proposed new investment
on AFRICA CIVET CAT FARM AND PROCESSIN (PL) establishment over 20 ha area and investment of
Et. Birr 84.512 million birr for the envisaged project.

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2. INTRODUCTION
The African civet cat (Viverra civetta) is one of the most expensive products of Ethiopia, perhaps
second only to gold, is civet (Amharic: Ziuad) the secretion from the musk glands of the Civet cat
(Amharic: Tirin). This material has been collected and exchanged as a choice item of trade since ancient times.

History reflects that the trade in civet was well established before the time of the Queen of Sheba.
Among the prized gifts presented to King Solomon during the Queen's historic visit were
frankincense, myrrh spices, ivory and civet, according to Ethiopian history.

This material is used as a base for perfumes and although synthetic materials have been developed in
recent years, Ethiopian civet continues to be much in demand. Perhaps the greatest demand comes from
France, a country noted for her perfume industry. Other countries such as the United States, England,
Switzerland and Germany are importers of Ethiopian civet. Civet is closely associated with the same
trade channels dealing in such commodities as coffee, tea, and spices. It has no doubt been an item of
commerce with countries of southern and eastern Asia since trade was established between the two
continents centuries ago.

During the era of the barter system in Ethiopia, civet, gold, silver and diamonds were used in foreign
trade. This was particularly true of trade between Ethiopia, Yemen, and Egypt. These precious items
were also used in domestic trade for the purchase of cereals, cloth, and other merchandise. Another
indication of the value of civet is the Ethiopian custom of naming a daughter "Zibadi," meaning "my
civet."

It is believed that the high value caused the traders to develop a more precise system of weights and
measures than was generally employed with less expensive items. In addition to use as a perfume base,
civet is also used in the preparation of certain medicines by the village medicine men.

The peak year for civet production in Ethiopia was from 2020 when 6,000 kg per year, valued at
$3,300,000 were exported. New techniques are being developed to test civet for purity and quality and
with better market controls, the civet industry should continue to grow.

The proposed investment area for this envisage project found at Oromia Regional State, at Oromia
Zone Around Finifene Galan wereda, at the specific locality known Galan town. Location of the
Project area is situated between 6°50΄north latitude and 35°00΄ East Longitude, coordinates and

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elevation 1100 mts - 2160 mts above sea level ranging from low to high altitude. The project area in
Galan woreda has an altitude of 1570 masl. This project area is suitable for Africa Civet Cat farm and
processing.

2.1 RATIONAL BEHIND THE PROJECT

The some of the rational for establishment of the envisage project for the production of exportable high
quality standard civet musk products using high value added technology which will established top
modern farm and processing that are a Ethiopia origin of civet musk Supply for the world export market
are,

Policy: Government the new ten years strategic plan, which promotes new investment in agro-industrial
sector and specially encourages Civiculture agro processing using high value added technology which
have a great advantage for others Africa civet farm investment development and it can foreign currency
generate directly or indirectly contributes to fill full the Ethiopia GDP contribution.

The core policy of the Government of Ethiopia, ADLI (Agricultural Development Led Industrialization)
is based on the sector where the country has comparative advantage. According to the strategy,
agricultural sector is not only the sector where the country’s comparative advantage is the greatest, but
also it is engines of growth to incorporate a parallel and co-ordinate development of agriculture and
industry.

LABORS: In Ethiopia, farm labor is cheap that can be engaged in various agricultural sectors. Different
Government and nongovernmental institution and universities have been training students on
agricultural and other related disciplines which fill the gap on trained man power requirement.
Availability of skilled & un-skilled labor at manageable cost as well as the presence of professionals in
the sector in order to manage the farm is a factor since professional farm management is the key success
factor to increase the farm productivity.

 The farming sector in the country has a potential to engage investors on civeculture Africa
Civet cat farm by availing arable land in various respects.
 Availability of suitable improved varieties for each ecological zone.
 Exportability of the product with the support of well known, developed & sustainable market
arrangement.

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AVAILABILITY OF RAW MATERIALS: The principal row material is Africa Civet Cat for civet
musk produce are produced by the company on 20 ha of land at Oromia Special zoene Around
Finifene which are processed by the company and marketing according to Ethiopia Wild life
Conservation(EWC) marketing legislation at national and international levels.

MARKET: High market demand supply gap at the national and international levels and to fill full this
gape there is availability of high potential of Civet Musk and Semi-Processed Aroma Keteon supply to
the international levels.

2.2 SOCIO-ECONOMIC JUSTIFICATIONS

2.2.1 SOCIO-ECONOMIC BENEFIT FOR THE SOCIETY

The socio-economic impact of the project is expected to be positive, as the operational area is devoid of
major settlements. The positive impacts are more pronounced in view of the development of an
abandoned rural area, bringing large employment opportunities to the surrounding population. As the
project requires labour for undertaking its operational activities, a number of people will have the
opportunity of being employed in the project. In this regard, the project will create new employment
post for about 27 individuals on permanent basis and for up to 450 casual labourers.

2.2.2 POVERTY ALLEVIATION

The project will undoubtedly play its role in alleviating the existing poverty level through the creation of
employment opportunity, provision of training on the uses of modern farming system, and other social
benefits for the unemployed youth, women and the poor sector of the community around the project area.

2.2.3 ECONOMIC BENEFIT FOR THE COMMUNITY

The creation of substantial direct and indirect employment opportunities with potential for Africa Civet
Cat out-growers will have impact for increasing incomes and skill of the rural community. There will
also be good opportunities for Civet Musk Producers linkages with the civet cat farmers in West and

East Wollega as well as West Shoa zones and Jima and Illubabora (Bedele town) zone Civet farmers
and the use of the project’s facilities, knowledge and experience, thereby increasing the economic
activities of the inhabitants of the area. Promotion and transfer of new Civet cat farm and processing
technology that could be adaptable to the regional Civet cat farm local community and improve their

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skills through training and sharing of the project experiences will also be another benefit for the
community.

2.2.4 ECONOMIC BENEFIT FOR THE COUNTRY

This investment project will have significant socio-economic benefits, both to the national economy of
the country at large, and the region in particular in which the project is to be established. The specific
direct benefits will include;

Development of high level of Africa Civet Cat investment part of the country and exploitation of
hitherto abandoned physical resources of the particular area through the establishment of modern
Africa Civet cat farm and processing & supply of civet musk commodities to the export markets,
thereby enlarging the export and domestic basket of commodity items and contributing to the
foreign exchange balance of the country, both through generation of foreign exchange and
import substitution.
Provision of physical and social infrastructure, thereby creating conducive and suitable
environment for regional development & Substantial increase in federal and regional government
revenue, through direct & indirect taxation.

Upon realization of its full production stage within four years, the project's economic contributions to
the country’s economy will primarily for 27 individual and create 450 casual jobs for farm and for
Africa Civet Farm and Processing Plant; which provide direct employment opportunities.

Exports of the Civet Musk produced by the project will bring more than $ 2.561 Million annually in
hard currency. The project will also reinvest about 8% of it’s before government tax profit, which
amounts about ETB 21.974 Million fat full capacity year four or immediate development of community
infrastructure within the locality.

In view of its anticipated commitment to ascertain high standards and quality of its productions; the
project would likely grasp a share among the high value niche markets in the France (85%) the
remainder to Japan, North America, Switzerland, Germany, the United Kingdom, China Hong
Kong, Korea and India is included. This will apparently influence production and quality standards
other producers of relevance; which in turn improves the Country’s production quality standards; and
therefore, enhances its share of export market opportunities.

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 2.3 THE APPLICANT / THE PROJECT PROMOTER
Name:
Address: Company Office
Nationality:
Legal form of ownership of the business
Certificates & Business Licenses
Investment Certificate/ Licenses
Tax Identification Number (TIN)
Africa Civet Cat Farm and Processing, PLC
Region: Oromia Region, Oromia Special Zone Around Finifene, Galan
Town
Cell phone No.:
E-mail: =================
Ethiopian
Private limited company Date Establishment: new
Investment License Number:- ------------------------
Date Investment license Issued;- -----------------------
Licensing Agency:- Ethiopian, Oromia Region Investment Agency
No ---------------------

Tax payer Registration Certificate No; No-----------------------

The project
Name Africa Civet Cat Farm and Processing( PLC) Development project
Project Address Region –Oroima, Zone – Oromia Special zone Around Fenifene,
Woreda:- Galan Town
Status of the Project New – to be established
Project Sector Category Civiculture – Africa Civet Cat
Type of Project Africa Civet Cat Farm and Processing
Project Objective The primary objective of the project is to engage in the development
of modern Africa Civet Cat Farm and Processing to produce Civet
Musk for export market.
To successfully develop a Africa Civet Cat Farm and Processing
using improved production technology and export quality Civet Musk
thus making a profitable business venture
Project’s land holding;- Total area 20 Ha
Right of Occupancy of the project Land The promoter has acquired the land on lease basis from Oromia
Regional State, Oromia Special zone Around Fenifene, Woreda:-
Galan Town (Investment office)
Land Lease Agreement
Lease amount or rent fee The land is owned by the company property the land value is
considered the government current leas value per hectare per year is
birr 70. The total land lease payment for 20 ha for 35 years amounts to
birr 4,90,000.
Project period 10 years (2022-2031)

2.4 PROMOTER’S PROFILE

Africa Civet Cat Farm and Processing project was established as new by Africa Civet Cat Farm
and Processing, PLC’s family members nationals all are Ethiopian with a general objective of
participating on Civiculture – Africa Civet Cat sector and with a particular objective of participating on

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developing Africa Civet Cat farm and processing plant using the latest husbandry technology and related
with the objective of the Company with a paid up capital of Birr 25.353 million equity.

Mr.Muhaba Awol is the general manager of the project. In view of his work experiences have a very
reputable experience in the field of Africa Civet Cat farm and musk businesses, management; he
managed commutative more than 9 years. And thus, the project will create better employment
opportunities for the local communities and facilitates a good deal of technological transfer to the
country.

2.5 CAPITAL STRUCTURE OF THE COMPANY

As indicated in the minutes of the shareholders meeting dated on September 20,2021,
family members individual joined at the beginning of the company equal contribution
shares & the capital was start-up at birr 25,353,774. The details of the company’s
capital structure are presented in the table as follows.

Value of a Total paid-up share

No. of
Sr. No. Name of shareholder single share Capital (Birr)
Shares
(par value) Cash Kind
1 PLC’s family members 1 25,353,774 25,353,774 -
Total 1 - 25,353,774 -
Capital Adequacy: - The required equity capital contribution to the project is birr 25,353,774 (30%) of
the total project cost. The company’s registered capital of birr 25,353,774 is adequate. Hence, the
company’s capital no need of raised to fulfill the requirement.

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3. BACKGROUND INFORMATION
3.1 AFRICA CIVET CAT PRODUCTION OVER VIEW
3.1.1 ETHIOPIA AFRICA CIVET CAT PRODUCTIONS
Thus, civet cat production in captivity has been almost characterized by husbandry practice gained and
transferred through many generations of family successors with little improvement. Like any other
sector of the economy, civet farming has not been opened to outside information and consequently, its
technological progress has been restrained for long time with insignificant research regarding
husbandry, housing, handling of the animals and its product. Even though the farming activity is
restrained with many short falls, civet cat production is not as such much known in other continent and
parts of Africa, except in Ethiopia. It seems that the country almost has monopoly of the trade, about
90% of the world trade.

Wild civet cat occupies a wide area in Ethiopia. They inhabit both forest area of the west and the more
open area of central plateau. They are found to be successful to live in altitude from 750- 3250m above
sea level. Though this is the fact so far, almost all legal farmers keeping civets in captivity in Ethiopia
are found in the regional state of Oromia and SNNPS. According to survey result of Ethiopia Wild life
conservation Organization, there are about 125 legal farmers keeping civets in western part of the
region each having 2000-3000 civet cats.

These farmers, who engaged on the domestication cleaned or extracted the musk of their civet cats every
8-10 days. Civet musk is produced from the anal glands of the male civet cat, this is because males
produce larger quantity and better quality musk than females. Each male produces approximately from
11.1 to 28g per month and up to 1kg per annual. According to the documentation of the Ethiopian
Wildlife Conservation Organization, on the average 1kg of musk costs up to 450 USD. From 1kg of
musk about 3000 liters of perfume can be produced.

Mean-while there is a high need or demand of the musk extracted from the civet animal in the world
market for the extraction of perfumes, soap cosmetics and traditional medicine. From 2002 to 2020
about 26,499.44 kg of civet musk was exported, and about 12,935,684.00 USD incomes were earned
from the sale. When the income from civet cat farming compared with the income earned from other
wild animal products like crocodile skin export and wild life filming, large mammals export, reptiles
live export and national park visit fee it has got the first rank. On average about 5,290.17 kg of musk is
officially exported from the country per year and currently Ethiopia export reached at 6,000kg civet
musk by the year 2020(see below )table 1.

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3.1.2 ETHIOPIA CIVET MUSK MARKETING
Civet from the smaller producers is normally collected by a broker. The broker establishes contact with
an exporter usually located in Addis Ababa. Each horn full of civet usually constitutes a lot. The
exporter removes a small sample of the material and delivers it to the Pasteur Institute of Addis Ababa
for analysis. The Institute makes an analysis for impurities and issues an official report on purity. The
exporting firm then sends a sample to an importing firm in Europe or America for a price quotation.
When the quotation is received the exporter and broker agree on a price. The broker receives a
percentage fee for his services and the producer receives the rest.

Another method of marketing is accomplished by exporters who have developed a good judgment of
quality. When the broker brings in several lots of civet, the exporter will examine the material (civet
musk). Then will insert a long spatula into each container and stir the contents and then examines the
civet, noting the color, texture, consistency, odor and taste. Finally he then offers a price according to
the quality of the civet.

Ethiopia has a worldwide monopoly for civet musk production and annually exports about 2,000 kg of
musk worth about US$ 900,000 (FAO, 2000). This civet is exported to Europe and the United States for
perfumery (Dannenfeldt, 1985). A new market has also opened to Far East countries such as China,
Japan and Korea (Kumera, 2005). Exporters receive around $400 for each kilogram of civet musk.

Table 1: Ethiopia Civet Production (kg) and Revenue ($) from 2007-2020
Year Musk in kg/y ear Revenue (US$)
2007 975.83 439,123.50
2008 820.00 369,000.00
2009 580.50 261,225.00
2010 1,157.70 520,965.00
2011 1,116.00 502,200.00
2012 1,745.00 785,250.00
2013 2,890.00 1,589,500.00
2014 3,560.00 1,958,000.00
2015 4,789.00 2,633,950.00
2016 4,989.00 2,743,950.00
2017 4,650.00 2,557,500.00
2018 5,275.00 2,901,250.00
2019 5,890.00 3,239,500.00
2020 6,000.00 3,300,000.00
Total 44,438.03 23,801,413.50

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4. GENERAL DESCRIPTION 0F THE PROJECT
4.1 LOCATION OF PROJECT AREA
The project is located Oromia Region, Oromia Special Zone around Finifene city. It is where near to
the African Union is headquartered and where its predecessor the Organization of African Unity (OAU)
was based. It also hosts the headquarters of the United Nations Economic Commission for
Africa (ECA), as well as various other continental and international organizations. Finifene city is
therefore often referred to as "the political capital of Africa" for its historical, diplomatic and political
significance for the continent.

4.2 PROJECT LOCATION ADVANTAGE

The project area of location advantages are commercial, business, infrastructure
advantages being at Oromia Special Zone around Finifene Galan town.
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 urban area;
Preferential market access: serious of initiative s have been taken to produces new export
opportunities for company that enjoy the benefits of favorable global market such as COMESA
(common market for east and southern Africa), AGOA, and has the result of multilateral trade
agreements accomplished with the developed countries which are free of duty and without quota
restriction for all export product;
Abundant Human resource: as a Oromia Special Zone around Finifene has significantly
wider in the part the youth age group, which has plentiful supply of skilled workers in different
types of fields;
Oromia Special Zone town has a huge potential in Hydro power sub-station, for the company a
power supply,
Finfinine Bole industrial parks so far distance for the Fininine Zurria town dwellers to access
to job opportunity, even if it very cost and unaffordable to join the job at distance area.

4.2 PROJECT LAND ACQUISITION & UTILIZATION

The project acquired a total land size of 20,000M2 from the Oromia regional state, Oromia Special
Zone Galan town lease agreement. The company will secured the required land by made negation
agreement government official company at rent value of birr 4,900,000 for 70 years period, from year
2014 E.C to 2054 E.C, (2022 to 2062 G.C). The company was paid 10% of birr 490, 000 the total lease
amount in the first year.

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4.3 CLIMATICA CONDTION OF THE PROJECT AREA

The project area similar to Finfine City which as has a subtropical highland climate with precipitation
varying considerably by the month. The city has a complex mix of alpine climate zones, with
temperature differences of up to 10 °C (18 °F), depending on elevation and prevailing wind patterns.
The high elevation moderates temperatures year-round, and the city's position near the equator means
that temperatures are very constant from month to month. As such the climate would be maritime if its
elevation was not taken into account, as no month is above 22 °C (72 °F) in mean temperatures.
Mid-November to January is a season for occasional rain. The highland climate regions are
characterized by dry winters, and this is the dry season in Finifene. During this season the daily
maximum temperatures are usually not more than 23 °C (73 °F), and the night-time minimum
temperatures can drop to freezing. The short rainy season is from February to May. During this period,
the difference between the daytime maximum temperatures and the night-time minimum temperatures is
not as great as during other times of the year, with minimum temperatures in the range of 10–15 °C (50–
59 °F). At this time of the year, the city experiences warm temperatures and a pleasant rainfall. The long
wet season is from June to mid-September; it is the major winter season of the country. This period
coincides with summer, but the temperatures are much lower than at other times of year because of the
frequent rain and hail and the abundance of cloud cover and fewer hours of sunshine. This time of the
year is characterised by dark, chilly and wet days and nights. The highest temperature on record was
30.6 °C (87.1 °F) 26 February 2019, while the lowest temperature on record was 0 °C (32 °F) recorded
on multiple occasions.

4.4 WATER RESOURCES

The project is used water for processing from the underground water. So water is not a big problem in
this area and the project will support for the surrounding dwellers by developing ground water.

4.5 SOCIO-ECONOMIC ENVIRONMENT

4.5.1 INFRASTRUCTURE AND SERVICES

Road:. There is a Ring Road near Finifine Zuran town which is an important for the project to connect
with all other regions (Jimma, Bishoftu, Dessie, Gojjam and Ambo).
Air: The project is served by Finifene Bole International Airport, where a new terminal opened in 2003.
Railway: The also serve by new Finifene-Djibouti Railway started operation in September 2016.
Financial Institutions: There is one Government Bank and the private bank is available in the
administrative center of the town.

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5. MARKET STUDAY AND APPLICATION
5.1 GENERAL OVERIEW
5.1.1 GLOBAL AFRIC CIVET CAT MUSK SUPPLY AND CONSUMPTION

Only 2% of the civet musk produced in Ethiopia is used nationally. Ninety eight per cent is exported,
the majority to France (85%) the remainder to Japan, North America, Switzerland, Germany, Japan,
Hong Kong and the United Kingdom (Girma 1995). Tamiru (1995) notes that Arabian countries import
small quantities of civet musk for medicinal purposes and India imports small quantities for use in its
tobacco industry.

One kilogram of musk can produce 3000 litres of good quality perfume (Pugh 1998). With the demand
for civet musk growing yearly Ethiopia should be increasing its output as it has the capacity to produce
approximately 6000kg of civet musk annually. Unfortunately only approximately 1000kg is produced
and in most cases this musk is classified as impure.

Demands for a synthetic alternative have been growing in recent years. The British Fragrance
Association (BFA) and the International Fragrance Association (IFRA) are of the opinion that perfume
industries are more likely to use artificial musk (Pugh 1998).

5.1.2 ETHIOPIA EXPORT OF CIVET MUSK

There are a total of five civet musk exporters in the country who are licensed by the
government though the Ethiopian Wildlife Conservation Organisation. In addition to
paying license fees, exporters are also required to pay fees for quality control and per
kilogram of exported musk. Licenses are renewed annually.

Exporters fix prices by observing musk colour noting its odour (Hillman 1992). In some
instances will exporters taste the musk (Pugh 1998) to determine if it has been mixed other
substances (Hillman 1992). Ethiopian exporters have an impact on the global price of civet
musk. During their census WSPA found that exporters operate alone. However, the
opportunity to create a cartel and fix prices exists (Pugh 1998).

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According to Pankhurst (1968) civet musk was exported directly from Gondar. It was a major Ethiopian
export in the 1800s and in 1840 accounted for 13% of the export trade that year (Woodford 1990).
Today the districts of Sidamo, Shoa, Wollega, Keffa, and Illubabora that produce the highest yields of
civet musk (EWCO 1992).

During the period 2007-2020, the cumulative average growth rate of 20% in terms of green coffee bean
export and value(USD) increased by 22% and for more information given below table 2.

5.2 PAST SUPPLY AND PRESENT DEMAND ANALYSIS

5.2.1 ETHIOPIA SUPPLY OF CIVET MUSK TO WORLD

The civet (Viverra civeta) cat is a native of Africa, and Asia. In Ethiopia it is found in various areas. The
civet cat has long dark gray hair, marched with black spots and bands with noticeable ridge on the neck
and the back. This nocturnal animal possesses very rough fur, weights between 16 and 20 kilograms
and having an overall length of 146 cm or it is about as large as a fox, but more heavily built. Civet cats
of the same village defecate in the same place.

Civet musk is generally used as a fixative or a base in high quality perfumes, and continues to be highly
demanded in spite of the development of synthetic substitutes for perfume processing.

In Ethiopia, the animal is found in altitudes between 750-3,250 masl. The animal is abundantly found in
south and western part of the country.

In Oromia Regional State Civet cat are found in most zone of East Wollega as well as West Shoa zones
and Jima and Illubabora (Bedele town) zone Civet farmers and the use of the project’s facilities,
knowledge and experience, thereby increasing the economic activities of the inhabitants of the area

In SNNPR civet cats are found in most of the zones and special woredas. Nevertheless, civet farm are
found only in Sidama, Gedeo, Kaffa and Bench maji zones. In addition to these many farmers of the
region collect musk traditionally and sale to collectors. In Sidama region and Gedeo zones functional, at
present there are two registered farms each with 25 civets.

According to survey result of Ethiopia Wild life conservation Organization, there are about 125 legal
farmers keeping civets in western part of the region each having 2000-3000 civet cats in Ethiopia. The

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production of civet musk in Ethiopia is mainly for export as the user industries are not developed in the
country. Export of civet musk during the period 2007 -2020 is presented in Table 2.

Table 2: Ethiopia Export Civet Musk (kg) and Revenue (USA) from 2002-2020
Growth Growth
Year Musk in kg/y ear Rate% Revenue (US$) rate %
2007 975.83 439,123.50
2008 820.00 -16% 369,000.00 -16%
2009 580.50 -29% 261,225.00 -29%
2010 1,157.70 99% 520,965.00 99%
2011 1,116.00 -4% 502,200.00 -4%
2012 1,745.00 56% 785,250.00 56%
2013 2,890.00 66% 1,589,500.00 102%
2014 3,560.00 23% 1,958,000.00 23%
2015 4,789.00 35% 2,633,950.00 35%
2016 4,989.00 4% 2,743,950.00 4%
2017 4,650.00 -7% 2,557,500.00 -7%
2018 5,275.00 13% 2,901,250.00 13%
2019 5,890.00 12% 3,239,500.00 12%
2020 6,000.00 20% 3,300,000.00 20%
Total 44,438.03 2.73 23,801,413.50 3.099
Average GR% 20% 22%
Source: Ethiopian Wildlife Conservation Organization (EWCO)

The above Table 1 reveals that excluding year 2008 and 2011 export which is exceptionally increased
the average annual export growth rate was about 20% for export civet musk and correspondingly
average growth rate of income (SUD) is about 22% from the year 2007 to 2020 civet musk production
and export trade Statistics. Accordingly, it is assumed that the export demand for civet musk is
estimating the 2021 export levels the average of last four years (2017-2020) has been taken.
Accordingly, export of civet musk for 2021 has been estimated at 5, 453.75 kilogram per year.

5.2.2 DEMAND PROJECTION OF CIVET MUSK

Demand for Civet Musk in Ethiopia has two sources; smallholder farm collection and commercial
private farm component and export. At present, Ethiopia with over 90% export share, Ethiopia is the
world's leading musk supplier to the perfume industries. In Ethiopia, only 2% of the civet musk
produced is used nationally; the rest is exported, essentially to France (85%), for the perfume industry
(Girma 1995). Small quantities of civet musk are also exported to Arabian countries for medicinal

Page 16 of 64
purposes and to India for use in the tobacco industry. Moreover, the product’s superior convenience
will have a positive effect on the level of demand. Since the product is high valued export good type,
major consumers are expected to be the high level living standards of Europe, Asia, France, India, Far
East countries such as China, Japan and Korea and America country and those prosperous among the
rich society. However, it has been assumed for this purpose that the export market will be major target
consumers of the product. With such understanding assuming that the past trend in export will also
continue in the future the export demand for the product is projected by applying an annual average
growth rate of the last four years i.e., 10% (See Table 1 above). The demand projection for Civet Musk
export is depicted below in Table 3.

Table 3: Projected Demand of Export Civet Musk (kg)

Year Projected Export Demand(in Kg/year)
2021 5,453.75
2022 5,999.13
2023 6,599.04
2024 7,258.94
2025 7,984.84
2026 8,783.32
2027 9,661.65
2028 10,627.82
2029 11,690.60
2030 12,859.66
2031 14,145.62
Source: Consultant Analysis

5.3 THE CIVET MUSK MARKET CHANNEL

The production and supply of Civet Musk for national and international market depends upon the
feeding system and production at farm level. A sufficient production of Civet musk will result in large
quantity of processed products availability in all seasons and the company may collect additional civet
musk from different part of the country and directly export to international market.

5.4 INSPECTION AND QUALITY CONTROL

Chemists of the Pasteur Institute of Addis Ababa have developed chemical and visual tests to determine
the purity of civet. Common adulterants can be readily detected. A sample of every lot exported must be
tested by the Institute. Plans are underway to establish more rigid quality controls so that only pure civet

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may be exported. Once Ethiopia has established a good reputation for pure, good quality civet, this
commodity will find a much greater demand in world trade. Previously this institute was the only entity
to give the certificate for specialty Civet Musk export.

5.5 MARKETING PLAN

Considering the need for skill development and the time required for market penetration (export market)
the processing plant will be planned to start operation at 65% of the capacity in the first year, and will
grow to 75% 85%, and 100% in the second, third, fourth years respectively. The plant will operate at
full capacity operation in the fourth year and then after. It is estimated that the product is about 98% to
the export market and 10% for domestic market. The processing plant operates in one shifts of 8 hours
& has a production capacity of finished Products as shown in the following table 4.

Table 4: Marketing Plan of the project

Production Year Unit Y1 Y2 Y3 Y4-10
Total Farm Quantity of Civet Musk KG 2,179 2,514 2,849 3,352
Processing & Marketing
Raw Musk Market (90%) kg 1,961 2,263 2,564 3,017
Perfume Production Market (10%) kg 218 251 285 335
Conversion Ratio(300Lt perfumes/1kg musk) Lt 3,000 3,000 3,000 3,000
Semi-Processed Musk Lt/year 653,671 754,236 854,801 1,005,648

5.6 MARKETING STRATEGIES

5.6.1 TARGET MARKETS

A number of prospective customer groups will comprise Africa Civet Farm and Processing, PLC’s
principal target markets Export and Domestic. The type of marketing required to effectively connect to
the various groups will vary, and these differences will be noted.

Local Market: The Demotic market is not focus for the company. However, the Company plans to
target potential local market suppliers’ clients for 10% of semi-processed civet musk for fragrance
industry or the local consumption type of perfume industry.

Export Market: The Company will use the high grade civet musk the international market special the
niche market and the premium market, such as the niche market France (85%) the remainder to Japan,
North America, Switzerland, Germany, Japan, Hong Kong and the United Kingdom and others like
Saudi Arabia, Denmark, and South Africa Trade.

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5.6.2 PROMOTIONAL STRATEGIES
As a general statement, the principal objective behind Private Limited Company’s ongoing
promotional activities will be to introduce and reinforce the commodity brand name to the market.
Some of the promotional activity / tactics to be employed are rather straightforward, including:

Free sample giveaways in the international markets

Radio and newspaper ads.
Participate to a “bazaar” or exhibition in the local and international level
Offer a discount on buyers for those customers who agree to commit to longer-term, minimum
volume, supply contracts.
Pay competitive commissions to local brokers so that they remain motivated to sell the company
product lines.
Direct Export the company products
Internet: In addition to the direct sales efforts Internet plans to establish a presence on the internet by
developing a website. Plans are underway to develop a professional an effective site that will be
interactive and from which sales will be generated worldwide

5.7 COMPANY PRICING

According to Kumera, 2005, civet musk exporters receive around $400 for each kilogram of civet
musk.on average. According to the documentation of the Ethiopian Wildlife Conservation Organization,
on the average 1kg of musk costs up to 450 USD. From 1kg of musk about 3000 liters of perfume can be
produced and currently 2020 1kg of musk export receive around $600. There was a growing trend
towards the trade of processed civet musk during the periods, which fetch higher prices. In the
international market increasing demand of civet musk products soiled offer business opportunities for company.

Therefore, to this the envisage project price is calculate the existing price grow by 5% growth rate.
Hence, the proposed price for the project understudies are birr 18060/kg for export musk and 50 birr /lt
lower grade of semi-pressed civet musk. Therefore, the project is planed its selling price as the following
table indicated which is achieving by producing high speciality grad standard.
Table 5: Assumption of Project price
Description Unit Ethiopia USD Total
Musk for export Birr/kg 18060 /Kg 450 12.4
Demotic Musk Birr/Lt 50 l 4.13
Source: - Consultant Analysis

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6. THE PROJECT
6.1 PROJECT DESCRIPTION AND APPLICATION

Africa Civet Cat Farm and Processing (PLC) civet farm and processing plant were established at
Oromia Special Zone Around Finifene Galan Town, which is located in the Oromia regional state. The
project will produce exportable civet musk and Semi-processed domestic market. The project The company
owned and operated by the PLC members and managed by Mr. Muhaba Awol

Civet cat is a carnivorous mammal of 1.46cm long that produces civet. This animal is found in different
parts of Oromia and SNNPRS region. Civet musk is a substance found in a pouch near the sexual organ
of the true civet cat, that is of the consistency of butter or honey, clear yellowish or brownish in color
with a strong musky odor, used in perfume and chemically a complex mixture chiefly of fats and volatile oils.
These civet farmers keep 2132 civets at the beginning project year reach 3,280 civets at full production
capacity years in individual cages. The cages are placed in rows on trestles in dark rooms of airless
smoke-filled huts. Smoke is used to get rid of fly worry
The company was planning, considering that the civet cat farm to be established would consist of large
scale small animals, an average figure of about 14gms of civet musk every 5 days will be adopted. For
single civet cat animal, annual production of musk is estimated to be 1.022 kg. To secure annual
production of 3,352 kgs of civet must at full capacity (Year four), the farms to be established would
contain 3,280 civet cats. The animals can be housed at Oromia Special zone around finifene farms
located in place.

The envisaged project geographical coordination of the area is a longitude and latitude of between
6°50΄north latitude and 35°00΄east Longitude, coordinates. In the Civet cat animal sutable habitat is
found in altitudes between 750-3,250 masl. Therefore, the project localities is technically feasible for the
establishment of farm and processing plan as it full files parchment & green coffee and spices
production of land quality acquisitions.

6.2 PURPOSE OF THE PROJECT

The project envisages of the establishment of Africa Civet Cat Musk and processing plant for the
production of exportable high standard products by applying good farm and industrial management and
marketing to supply the international market.

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The overall goal of the project is to contribute towards the economic development of Ethiopia through
using the existing investment opportunities in the Country and taking advantage of the expressed policy
incentives that emphasize on greater Civicultur-agro-processing and enhancing private sector
development. The project’s main objective is to implement an Civicultur-agro-processing of Africa
Civet Cat modern farm and industrial investment project using new technology and the production high
quality Musk and Semi-processed for international and domestic market. Through this investment the
owner will ensuring optimal economic returns as well as socially and environmentally acceptable
processing system that will attain full production level within four years starting from the 2022
cropping season.

6.3 PROJECT OBJECTIVES

 The project objectives of the envisaged project is profitable production of high quality Civet musk
supping for export market
 As a business firm one of objective of the Company is to earn higher income from the demand
supply gap exists in the sector at large and while for the futures earn higher income at the
international markets.

6.4 FARM STRUCTURE AND LAND DEVELOPMENT

The main production process of Africa Civet Cat farm and Processing will be started with land
development activities, such as land clearing and surveying (for land parceling and access/ farm road
marking) and civet cat feed ecology establishment. Land development operation is the main activity &
also included in the project’s investment cost. Land development involves heavy duty machines hiring
cost, fuel cost for hired machine, tractor operation fuel & lubricant cost and Land development labor
operation cost.

6.5 AFRICAN CIVET COMMERCIAL FARM

Civets are grouped under order Carnivora and family Viverridae and their status was categorized under
not threatened (FAO, 2000). The civet cat is the one of the four vertebrate mammals producing an
aromatic medicinal product (Dannenfeldt, 1985). Civet cats are wild viverids of the tropics (Smithers,
1983); they are nocturnal and solitary animals that mixed only during mating (Kingdon, 1977). The

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African civet has a habit of following regular paths and uses dung middens, civetries (civet latrines), and
musk to mark its territory and announce its presence both in mates and adversaries (Abebe, 2003).

The envisaged project at start-up usually, the cats are purchased on the basis of the number of live males
and female civet cat which is about 3,280s are delivered to the commercial farm. A healthy male is
valued at about Eth. Birr 200 to birr 250 by the owner of a civet farm. Civet farms range in size from
one large scale cats managed by a farm family to 3,280 cats kept on a specialized farm at full production
capacity.

6.5.1 AFRICA CIVET CAT HABITATS AND ECOLOGY

African Civets occupy a wide variety of habitats including secondary forest, woodland, and bush area.
They inhabit both forest area of the west, southern and the more open area of central plateau. They are
found to be successful to live in altitude from 750- 3250m above sea level.

The envisaged project plan to established feeding ecology rather than protective feeding system. For this
purpose from the total land 20ha of which 15ha is used for the establishment of feed ecology of
environment with the best type of feed source of plant and developing earth micro-organism and insect
in the reserved ecology, some of the important civet cat feed source of plant and animals are Prunus
Africana, Cyprus rigidifolius, Cordia africana , Ficus spp, Dracaena steudneri, Bushbuck hair small
Insects, Rodents, Invertebrates and birds, Ants, Coleoptera, Miaze, Root crops, fruit and vegetables and
etc…

6.5.2 CIVET FEEDING METHODS

Cats in captivity are usually fed once each day. A typical ration on the larger farms consists of cooked
beef and a porridge made of cracked corn. Smaller farmers probably feed them table scraps and fresh
meat when it is available. The quality of civet is determined to a large degree by the rations fed to the
animals. The larger producers endeavor to provide a ration which produces a high quality civet.

Even though, civet cats are primarily carnivorous they are opportunistic omnivorous and in captivity
they fed on a mixture of fruit and vegetables, maize meal and meat (1kg/civet) or four eggs, every five
days, and they also fed on insects, rodents, invertebrates and birds

Civet has two seasonal feeding habit, the one is the wet season and the others the dry seasonal habit. The
most consumed food items during the wet season were Coffee Arabica Fruit, maize and worms &
insects (72%, 68%, 64% and 60%, respectively). Additional during the Wet season, the availability of
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such food items was high as the biodiversity of natural forest, coffee forest and farm lands of maize, teff,
sorghum and potatoes

During the Dry season, the food items of civets were less than the wet season. The most consumed food
types during the dry season were Ficus spp. and Cordia africana and the least observed remain of food
consumed was common bushbuck hair and eggs shell.

6.5.3 HUSBANDRY AND MANAGEMENT

6.5.3.1 CIVET HOUSING AND CAGES

Specialized farms with large numbers of cats house the animals in large buildings. These may range
from rather expensive buildings of stone or brick. Each cat is kept in a small cage made of bamboo or
eucalyptus. A typical cage has a trapdoor on either end to expedite the handling of the animals.
These civet farmers keep 3,280 civets for years in individual cages. The cages are placed in rows on
trestles in dark rooms of airless smoke-filled huts. Smoke is used to get rid of fly worry. For this purpose
fire is left smoldering to maintain high temperature, which farmers believe increase the amount of musk
production. No bedding is provided, and hypothermia is a common cause of death. Hygiene is usually
very poor and urine and feces are left to decay on the floor.

6.5.3.2 DESIGN PREPARATION AND CAGE PRODUCTION

The project will have a well design civet cat cage. Based on the design specification, three type of civet
cat cage were prepared and quantity of their materials were determined, the dimensions of the cage and
feeding box were decided and the material of construction for feeding box was determine. Based on the
current research result cage design were 4.5 m length x 2.5m width x 1.5 m height. Totally about
3,280 modern cages with the feed boxes were produced based on the design specification in the work
shop.

Page 23 of 64
Figure 1: Illustrations of housing cage for African civets

6.5.3.3 CAPTIVE BREEDING AND REPRODUCTION

Age at sexual maturity within 1 year and gestation length was 65 to 75 days with a maximum of, reported kit size
of 3 to 5 per litter. Females are polyestrous and are able to have 2 or 3 litters a year. The average lifespan of the
African civet is 15 to 20 years. Females are polyestrous and are able to have two or three litters a year.
Captive breeding: At the civet cat were age at sexual maturity (1year civet cat) breeding was held with
male and female and the male and female African civets should release together in a cage house of 4.5
m length x 2.5 m width x 1.5 m height modern housing . The breeding was made repeatedly with
considerable hygiene and with good feeding system, then the female civet were born the young civet cat
after 75 days. The civet breeding system is illustrated below figure 2.

Figure 2: Illustrations of breeding cage for African civets

Page 24 of 64
6.5.3.4 COLLECTION AND EXTRACTING THE CIVET MUSK

Civet musk is a foul smelling scent produced by the anal glands of the male civet cat, this is because
males produce larger quantity and better quality musk than females. Musk is collected using a spoon
made from cow horn every 8-10 days during the rainy season and 5-8 days during dry season, therefore,
a civet will yield about 300- 400g musk a year.

Cats are cleaned every 7 to 10 days. The male will produce more than the females produce much less
because of the loss of civet during urination. The envisaged project should be consider more male
population during the start-up. To clean the cat, one attendant will put a stick of wood through the cage
and confine the animal in a fixed position. Another attendant will reach through the trap door opening
and grab the tail and back legs of the animal. The trapper is then pulled backwards about a quarter of his
length clear of the cage. The trap door is then released to hold the cat in place. A third attendant opens
the gland by applying pressure to the underside with the thumb and forefinger of the left hand. When the
gland is open he can spoon out the secretion. This is done with a spoon made of ox horn. The secretion
is yellow in color and about the consistency of a heavy weight oil.

Metal containers (usually aluminum) must be lined with a special glass paint to prevent chemical
reaction with the metal. The horn used for collecting civet is kept covered with a parchment (usually the
dried bladder of an ox) to protect the excessive oxidation or loss through volatilization.

6.5.3.5 CARE OF THE CIVET MUSK YELD

The quality of civet depends to a large degree on the care and management of the cats. Civet will vary in
odor and consistency according to the diet of the animals. Once the secretion is collected, it must be
placed in a non-metal air tight container. The material oxidizes rapidly and turns darker in color. It also
loses quality through volatilization. The consistency changes to a thick paste by the time it reaches the
market. Ethiopian civet has developed an undesirable reputation during past years because of the
practice of some producers of adding adulterants. Common adulterants are flour, bananas, butter,
pureed potatoes, oil and even the stools from the cats. Some producers claim that these adulterants are
added to stabilize the civet; however, this claim has been proven invalid by the trade. A more reasonable
explanation is that the adulterating materials bring a much better price when sold as civet musk.

Page 25 of 64
6.6 TECHNOLOGY ENGINEERING AND PROCUREMENT

6.6.1 CIVET MUSK MANUFACTURING PROCESS

Some exporters export each lot on a sample basis. In many instances, the original container (ox horn) is
exported. In other cases the civet is repacked in lighter aluminum containers with special lining. Since
the civet is exported by air, it is desirable to keep the container weight to an rmmmum. A more up to
date system is for the exporter to blend various lots in order to achieve a uniform grade. For instance, an
exporter buying civet from three different districts (]imma, Gore, Nekempti) will find that the quality is
different from each district. Before shipping to a foreign market, he will blend the various lots to achieve
a uniform grade. Once he has established a reputation of a good standard quality, he is not required to
send samples to the foreign buyer.

In this study it is proposed that 3,352 kgs of civet musk will be produced per annum. For this about
3,280 civet cats are required. It is therefore essential to capture and cultivate 3,280 civet cats in cages to
be located in the farm production facility. Each civet will live in a cage having a size suitable to
accommodate its full length and size, and also appropriate space for feeding.
Musk Collection

Before the manufacturing process begins, the initial ingredients must be brought to the manufacturing
center. Perfumes substances are harvested from Civet cat animals, often hand-picked for their
fragrance. Animal products are obtained by extracting the fatty substances directly from the animal.

 The cages can be made from wooden sticks of proper thickness, and from twine.
 The cages will have sufficient access to extract the musk. Moreover, the cage needs to have a
gap to trap the civet by the neck during musk extraction.
 The cage will also have an opening to place the legs of the civet. Once the legs are secured, its
rear end is pulled out so that the perennial base of the animal’s tail exposed.
 The gland is opened up and squeezed until it exudes.
 The secretion is gathered by curetting the civet gland with a wooden. spoon and storing the
yellowish, somewhat greasy substance in aluminium containers, in which it is shipped.

Page 26 of 64
  Civet is extracted with alcohol to make a tincture which is added mostly to floral perfume to
impart a sweet and well-blended character. The important odor constituent of civet is a musk
ketone, civetone.
Extraction

Oils are extracted from civet cat animal’s substances by several methods: steam distillation, solvent
extraction, enfleurage, maceration, and expression.

 In steam distillation: steam is passed through plant material held in a still, whereby the essential
oil turns to gas. This gas is then passed through tubes, cooled, and liquified.

Under solvent extraction: the Cvet animal secretions parts dissolve in the solvents and leave a waxy
material that contains the oil, which is then placed in ethyl alcohol. The oil dissolves in the alcohol and
rises. Heat is used to evaporate the alcohol, which once fully burned off musk a higher concentration of
the perfume oil on the bottom.

During enfleurage: Civet musk are spread on glass sheets coated with grease. The glass sheets are placed
between wooden frames in tiers. Then the civet musk is removed by hand and changed until the grease
has absorbed their fragrance.

Maceration is similar to enfleurage except that warmed fats are used to soak up the civet musk ketone
smell. As in solvent extraction, the grease and fats are dissolved in alcohol to obtain the essential oils.

Blending

Once the perfume oils are collected, they are ready to be blended together according to a formula
determined by a master in the field, known as a "nose." It may take as many as many different
ingredients and several years to develop the special formula for a scent.

After the scent has been created, it is mixed with alcohol. The amount of alcohol in a scent can vary
greatly. Most full perfumes are made of about 10-20% perfume oils dissolved in alcohol and a trace of
water. Colognes contain approximately 3-5% oil diluted in 80-90% alcohol, with water making up about
10%. Toilet water has the least amount—2% oil in 60-80% alcohol and 20% water.

Page 27 of 64
Aging

Fine perfume is often aged for several months or even years after it is blended. Following this, a "nose"
will once again test the perfume to ensure that the correct scent has been achieved. Each essential oil and
perfume has three notes: "Notes de tete," or top notes, "notes de coeur," central or heart notes, and
"notes de fond," base notes. Top notes have tangy or citrus-like smells; central notes (aromatic flowers
like rose and jasmine) provide body, and base notes (woody fragrances) provide an enduring fragrance.
More "notes," of various smells, may be further blended.

Figure 3 : Civet Perfume Aging Process Diagram

6.6.2 FARM MACHINERY AND EQUIPMENT

For the purpose of this study we are assuming that good foreign manufactured farm machinery and farm
tools & workshop equipment costing around birr 5,963,990 will be able to give the desired quality of
output. For the information the total machinery and farm tools & workshop equipment cost show
below the table 6&7.
Table 6: The Planned Estimated cost of Machinery and Equipment
Description Qt/No. Coast (Birr)
FC LC TOTAL
Tractor 110 HP-125 HP 1 2,500,000 2,500,000
Disc Plough 5-6 furrow 5 300,000 300,000
Harrows 5 45,000 45,000
Trailer 2 100,000 100,000
Fuel tanker 2 35,000 35,000
Ditcher 1 20,000 20,000

Page 28 of 64
Disc Plough of set type 5 450,000 450,000
Planter 6 rows 5 5 1,000,000 1,000,000
Cultivator 1 25,000 25,000
Sprayers (manual) 50 50,000 50,000
Ringer 5 200,000 200,000
Trailers 4 360,000 360,000
Workshop (set) 1 50,000 50,000
Tools (set) 1 12,500 12,500
Generator 1 155,000 155,000
Sickles 83 2,200 0 2,200
Total FOB 1 5,304,700 0 5,304,700
Inland Cost (10% of FOB) 530,470 530,470
Grand Total - 5,304,700 530470 5,835,170
Table 7: Farm Tools & Workshop Equipment
Description Unit Quantity Unit Cost Total Cost
Shovel Pcs 50 120 6,000
Hoe Pcs 50 120 6,000
Rake Pcs 50 100 5,000
Axe Pcs 50 160 8,000
Sickle Pcs 50 90 4,500
Weighing scale Pcs 2 8,000 16,000
Electric generator (20 KVA) Pcs 1 40,000 40,000
Welder Pcs 1 5,000 5,000
Driller (portable) Pcs 1 1,500 1,500
Grinder (portable) Pcs 1 1,500 1,500
Hammer (med- & big) Pcs 2 100 200
Anvil (med.) Pcs 1 2,000 2,000
Vice (bench) med. Pcs 1 2,000 2,000
Hacksaw Pcs 2 90 180
File Pcs 4 45 180
Work bench Pcs 1 2,000 2,000
Pincers Pcs 4 90 360
Mechanics tools set (compl.) Box 3 4,000 12,000
Jack screw Pcs 1 1,000 1,000
Cross wrench (tyre) Pcs 4 500 2,000
Air compressor Pcs 1 4,000 4,000
Steel cable M 10 80 800
Plastic hose M 50 10 500
Grease gun Pcs 4 300 1,200
Water can Pcs 10 90 900
Fire extinguisher Pcs 3 2,000 6,000
Sum 128,820

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6.6.3 CIVET MUSK PROCESSING MACHINERY
For the purpose of this study we are assuming that good foreign Civet Musk and Perfume Processing
machinery and equipment costing around birr 7,691,238 will be able to give the desired quality of
output. For the information the total machinery and equipment cost show below the table 8.

Table 8: Civet musk processing machinery

Description of goods/items Processing Unit Total
Capacity price(USD) Price(USD)
Perfume Processing Machinery
Steam distillation, solvent extraction, enfleurage, 30950 30950
maceration.
steam distillation
Blending Equipment
Aging
Musk Collection $125,950 $125,950
Aluminium containers (5 kg capacity)
Wooden spoon (pcs
Feeding containers (metallic)
Musk collecting bowls (plastic)
Total FOB Price at port of Origin (USD) USD $156,900 $156,900
Grand Total in Birr(1USD= 43) 1USd=43 Birr 43 6,746,700
Estimated ocean freight (7%of FOB) 472,269.00
Estimated insurance (5% of FOB) 337,335.00
Estimated Inland Transport (2% of FOB) 134,934.00
TOTAL MACHINERIES COST 7,691,238

6.6.4 SOURCE OF TECHNOLOGY

Equipment required for civet cat farming and civet musk collection, packing and shipping to market are
not complex. They can be procured locally from companies engaged in metal and wood working. Bu the
perfume processing machinery and equipment can be purchase from India and France.

6.6.5 AFRICA CIVET CAT PROJECT INITIAL STOCK

For the purpose of this study we are assuming initial civet cat will purchased from different part of
Ethiopia civet farm, costing is around birr 779,000 will be able to give the desired quality of output. For
the information the total machinery and equipment cost show below the table 9.
Table 9: Project Civet Cat Initial stock
Civet Cat Animal Cost
Type Quantity Per Unit Cost(birr) Total Cost(Birr)
Female Civet Cat 820 200 164,000
Male Civet Cat 2460 250 615,000
TOTAL COST 3280 779,000

Page 30 of 64
6.6.6 COMPANY VEHICLES
A loading vehicle would be required for providing services for transportation of raw material(s), small
amount of inputs, facilitating farm operations manageral, transporting production staff in puts from far
places others, conducting marketing activities, transporting product sales to various market, mobilizing
casual laborers and other works.
Table 10: Company Motor and Vehicles Cost
Type Capacity Required Cost
Unit Qty LC( Birr)
FSR-Isuzu 50Qt 1 350,000 350,000
Double Cap (4WD) 5 person 1 3,700,000 3,700,000
Staff Service Bus 45 person 1 3,600,000 3,600,000
TOATL VECHEL PURCASE COST 7,650,000

6.6.7 OFFICE FURNITURE & EQUIPMENT

The company office furniture and fixture are computer, printer & Fax machines chair, shelf, table
scanner; copy machine will be acquired for the project. The cost of office furniture and fixture will be
birr 120,400 which is given above table 11.

Table 11: Company Furniture and Fixture Cost

Description of Work Unit Qty Cost ( Et. Birr)
Plant manager office
Executive Table Pcs 1 12000 12,000.00
Swivel Chair Pcs 2 5000 10,000.00
Chair normal Pcs 1 1200 1,200.00
Guest chair Pcs 2 5000 10,000.00
Computer Table Pcs 1 1200 1,200.00
Filing Cabinet Pcs 1 5,000 5,000.00
Shelf with locker Pcs 1 12000 12,000.00
Shelf ( 2 x 2) Pcs 1 4000 4,000.00
Table with sink and Drawer Pcs 1 25000 25,000.00
Computer with printer Set 1 40000 40,000.00
Sub Total 120,400.00

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6.7 PROJECT BUILDING AND CIVIL WORKS

6.7.1 LAND REQUIREMEN

Land for the proposed business can be acquired on lease or it can be purchased based on the judgment of
the entrepreneur. It is however recommended to purchase the land as the availability of the raw material
mainly depends upon this factor.
Table 12: Project Land Use Plan
Land Lease payment rate per Ha per year is Birr 7000
Africa Civet Cat Farm and Procession Building M2 5
Africa Civet Cat Farm Forest Area M2 15
Total Area or land holding M2 20
Lease period Years 35
Total lease payment for 35 years 4,900,000
The lessee shall pay a downpayment,100% of the total lease amount of birr Birr 4,900,000
4,900,000 (included in the initial Investment cost)
Remaining lease amount to be paid in equal installment Annually over 35 Birr 105,000
years beginning on the 1st year
Annual lease payment beginning on the first year(10%) = birr 1,225,000 Birr 1,225,000
years (included in annual operating cost)

6.7.2 BUILDING CIVIL WORKS AND RELATED COST

The total project land requirement is 20ha of which 15 ha for feed ecology rehabilitation and 5 ha for
civet cat housing. Total farm and processing area (built-up land) required for the company being
purchased based on the judgment of the entrepreneur land lease payment rate.

The project for farm and processing facility of the establishment of Civet musk processing plant,
processing building, storage, office and other facilities built-up area required for the envisaged project
is 5,000 M2,

Building will have walls made of hollow – block linings and properly cement plastered. The production
and storage hangars will have walls covered by corrugated iron sheets on columns and beams made of
metallic bars. The roofs will be of saw –tooth type with metallic trusses and covered with metal
cladding. Other buildings will be built by hollow-block walls properly finished, but mot cement
plastered. The cost estimated of building facility structure and feed ecology rehabilitation cost is
54,054,000 birr. The details breakdown and others details on floor area shown at the supporting plan and
bill of quantities.

Page 32 of 64
Table 13: Land Use Plan and Related Cost
Description Unit Qty Unit Total Cost (Birr)
Cost
(Birr)
Farm buildings and Feeding Ecology
Civet Feeding ecology Establishment M2 20000 2000 40,000,000.00
Cage (wooden) for Civet Cat(4.5 m length X 2.5Mwidth X No 3280 3000 9,840,000.00
1.5m height)
Office Complex m2 200 1,500 300,000.00
Product Store m2 900 1,000 900,000.00
Farm Input Store m2 50 500 25,000.00
Multi-Purpose Store m2 50 500 25,000.00
Workshop m2 100 300 30,000.00
Staff Residence m2 100 1,500 150,000.00
Temporary shade for daily laborers m2 100 500 50,000.00
Canteen & Cafeteria m2 64 1,000 64,000.00
Clinic (first aid) m2 20 1000 20,000.00
Others (guard houses, toilets, etc) m2 100 500 50,000.00
Sub total 1684 51,454,000.00
Civet Musk Extraction Factory Buildings
Civet Collection Shade m2 1000 2000 2,000,000.00
Laboratory Center m2 200 500 100,000.00
Finished product store m3 500 1000 500,000.00
Sub total 1700 2,600,000.00
Grand Total 3384 54,054,000.00

6.8 PRODUCTION
6.8.1 PLANT CAPACITY AND PRODUCTION PROGRAM

6.8.1.1 CIVET FARM AND PLANT CAPACITY

According to a study made by Hillman in 1987, an Ethiopian large male can produce up to 9 gms of
civet musk every 5 days. A smaller male can produce 8 gms every 5 days. This is according to the study
undertaken by the Ethiopian Wildlife Conservation Organization in 1997
The projected demand figure in Table 3 shows the demand will rise to 5,453.75 kgs, while this figure
will rise to 14,145.62 kgs in 2021 and 2021, respectively.
Considering large scale operation of civet farm musk collection and processing, the envisaged farm will
have an annual production capacity of 3,352 kgs of civet musk at full production capacity.
.

Page 33 of 64
For the purpose of this study, considering that the civet cat farm to be established would consist of large
and small animals, an average figure of about 14.022 gms of civet musk every 5-8 days will be adopted.
For single civet cat animal, annual production of musk is estimated to be 1,023.606 gms. To secure
annual production of 3,352 kgs of civet must, the farms to be established would contain 820 civet cats.

6.8.1.2 PRODUCTION PLAN (PROGRAME)

The envisaged farm is expected to establish 3,280 civet cat farms to produce 3,253 kgs if civet musk at
full production capacity year fourth. However, some time is needed to arrive at full scale production. It
would therefore be appropriate to start civet farming and musk production at lower capacity. Thus, at the
initial year, the project will be operated at 65% of capacity. Then, production can be increased to 75%,
85% and then to full capacity (100%) during the second, third and fourth year of operation, respectively.
Expressing this in terms of final civet musk production, the table below shows the production
programme of the envisaged farm.
Table 14: Civet Cat Musk Annual Production Plan
Description/Year Y1 Y2 Y3 Y4 & Y1o
Capacity utilization (%) 65% 75% 85% 100%
No Civet Cat 2132 2460 2788 3,280

Single Civet Annual Production 14.022 14.022 14.022 14.022

Total Production civet musk (kgs) 2,179 2,514 2,849 3,352

6.9 REVENUE DETERMINATION

The planned Production & Expected Revenue: The annual Civet Musk production during the first,
second, third and fourth to ten years respectively. The production expected to increase. Based on market
demanded and the revenue earned from civet musk was determined by international civet musk market price.

The project seals pricing rate the total expected project value for the first, second, third and fourth to ten
year and the gross income increase along the project life to 10 years respectively. For more detailed
information show below table 15.

Table 15: Project Gross Revenue (seals)

Production years Y-1 Y-2 Y-3 Y-4-10
Product Assumption unit
Africa Civet Musk Kg 1,961 2,263 2,564 3,017

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Africa Civet Perfume Lit 653,671 754,236 854,801 1,005,648
Sales Price ( Birr/kg)
Africa Civet Musk birr/kg 17200 18060 18060 18060
Africa Civet Perfume birr/Lt 50 52.5 55.13 57.88
Revenue
First Grade Musk birr 33,729,434 40,864,506 46,313,107 54,486,009
Low Grad Semi-processed birr 32,683,560 39,597,390 47,120,894 58,208,163
Total Revenue birr 66,412,994 80,461,896 93,434,001 112,694,172

6.10. MATERIALS AND INPUTS

6.10.1 RAW MATERIALS

The production process starts with capturing civet cats and domesticating them at fixed locations. Inputs
to civet farming and musk production consist of appropriate food items for the civets, which consist of
maize and ox meat. Studies indicate that in order to increase the musk extraction rate, the rate of feeding
of the civet will have to be increased. This is true particularly just after musk is extracted in order to
replenish and boost production. The annual feed raw material requirement and thus, the total annual
expenditure on raw material cost is given below table.

Civet Feed Requirement(plant-to-animal diet Y1 Y2 Y3 Y4-10

biomass ratio) Unit
Total civet cats No 2,132 2,460 2,788 3,280
Civet Feed 1kg/dy kg 2,132 2,460 2,788 3,280
Total Feed Requirement per year kg 7,782 8,979 10,176 11,972

Plant biomass (1%) Qt 78 90 102 120

Animal by-product (1.36%) Qt 106 122 138 163
four eggs, every five days No 622,544 718,320 814,096 957,760
Cost
Plant biomass 50birr/Qt birr/year 3,891 4,490 5,088 5,986
Animal by- product 10 birr/kg birr/year 105,832 122,114 138,396 162,819
Eggs, 10birr birr/year 6,225,440 7,183,200 8,140,960 9,577,600
Total Production birr/year 6,335,163 7,309,804 8,284,444 9,746,405

6.10.2 AUXILIRY MATERIALS

The major auxiliary materials in the production of Civet Musk comprise packing materials of 100mgs
EthylAlcohol and perfume oil. For more detailed information show below table 16.
Table 16: The Project Auxiliary Material Cost
Production year Y1 Y2 Y3 Y4-10
Additive Type Lt 653,671 754,236 854,801 1,005,648

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Perfume oils(20%) Lt 130,734 150,847 170,960 201,130
EthylAlcohol (5%) Lt 32,684 37,712 42,740 50,282
Price
perfume oils(20%) birr/unit Lt 50 50 50 50
EthylAlcohol (5%) birr/unit Lt 100 100 100 100
Cost
Perfume oils(20%) birr/year 6,536,712 7,542,360 8,548,008 10,056,480
EthylAlcohol (5%) birr/year 3,268,356 3,771,180 4,274,004 5,028,240
Total Cost Requirement birr/year 9,805,068 11,313,540 12,822,012 15,084,720

6.10.3 UTILITIES
Electricity and water are utilities required for the envisaged plant. Electricity consumption is estimated
to be 15000 kWh, and at the rate of Birr 0.474 per kw, the annual cost will be Birr 7110. Annual water
consumption is estimated to be 7500 m3 , and at the rate of Birr 10.0 per m3 , annual expenditure will be
Birr 75,000. Thus, the total annual expenditure on utilities will be Birr 82,110. Communication
devices: Like telephone, internet and fax are among important facilities that are supposed to be fulfilled
for smooth operation of every project

6.11 PROJECT OPERATING ACTIVITIES

7.3.1 PRE- PRODUCTION EXPENSES

It is estimated that an additional amount of 1,885,197 Birr will be required in cash for pre-
production investment expense before starting production and generate revenue. The described
assumption and estimated pre-production operational cost estimate of the envisaged farm and
processing plant. It can be seen below table 17.

Table 17: project Pre-operational Expenditure

TYPE OF EXPENSES ASSUMPTIONS COST
Feasibility Studies and Engineering 230,737
Installation Cost 3% Machinery and Equipment’s 381,293
Premium Insurance cost 0.50% Fixed Asset 402,023
Safety Wear& Uniforms One year Performa 75,000
Legal documentation, security 1% 137,011
deposits, stamp duty and other
legal expenses(1%0f bank loan)
Total in Birr 1,226,064

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 6.1.2 PRE-OPERATING ACTIVITIES

During the implementation period, the different activities likely to be undertaken

have been classified as follows on the basis of activities category and schedule in
twelve months period as shown in the activity chart shown at table 18 below.

Table 18: Project Implementation Schedule

2022 2023

September
Sr. No.

November

December
February

February
January

January
October
August
March

April
Type of Activities

June
May

July
1 Loan Processing
2 Water Well Drilling
Procurement of Farm Tools &
3
equipment
4 Land Development
5 Building and Construction
6 Installation of Electric Power
Procurement of Office Furniture &
9
equipment
10 Recruitment of Employee (Phase I)
Cycle Cycle Cycle
12 Feeding Ecology Establishment
2 3 1
13 Plowing
14 Seedling and Transplanting
15 Collecting Musk
16 Procurement of Vehicles
17 Recruitment of Employee (Phase II)
Civet Musk processing Plant
18
Procurement
19 Commencement of Operation

Page 37 of 64
7. ORGANIZATION, MANAGEMENT & MANPOWER REQUIREMENT

7.1 ORGANIZATION AND MANAGEMENT

AFRICA CIVET CAT FARM AND PROCESSING, PLC’s typical organizational structure is composed
of the General Manager at the top with other production mangers, Administration, finance & marketing
that are accountable to the general manager.

Nature, scale and size of business are the normal factors which determine forms of internal organization.
The Civet musk production firms of similar size as the envisaged project currently operating in Ethiopia
have line type of organizational structure, where each department is a complete self-contained unit.

Based on this experience, the organization structure is devised to incorporate owners at the top followed
by general manager and other line departments. The owner will have the power to control the overall
activities of the proposed farm and industry and decide on the highest level attention requiring issues
that impede the normal operation or that affect the future performance of the project. The General
Manager, there will be separate departments which are responsible for their respective units. The
organizational set up of the project at hand should be designed to have a functional structure which
establishes effective management system and enhances upward, downward, horizontal and lateral
communications and tasks in the line of order. The typical organizational structure for company is
shown below.

7.2 ORGANIZATIONAL STRUCTURE

A well-structured organizational management system is one of the success factors of an enterprise. The
decision-making process, coordination between different units and the communication process are
determined by the nature of the adopted organizational structure which affects the overall efficiency and
performance of the enterprise.

The enterprise is expected to have the following organizational structure which is functional and
production based. At the top, there will be a General Manager followed by five department managers for
Administrative and Finance, Production and Technical, Marketing and Supplies; and Planning. Under
each department there will be divisions to effectively and efficiently operate the activities of the farm
and industry. The detail of the Organizational structure (Organogram) is given as follows. The
organizational structure is depicted in the organization chart, figure 4.

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Figure 4 : Organization Structure

Management

Deferent sectors of the economy demand different skill level of management and workforce skill. In
order to work in managerial occupations in the company, a collage education is necessary and some
positions even require an advanced degree. Many workers in administrative and managerial occupations
shall be those having degrees in business and possess a combination of technical and business degrees

The organizational set up of Africa Civet Cat Farm and Processing PLC’s project shall be managed
by the first general manager of Mr. Muhaba Awol at the top together with the second production and
technical department manager (to be assigned), and Administration, finance and marketing department
manager that are accountable to the general manager. The project should be designed to have a
functional structure which establishes effective management system and enhances upward, downward,
horizontal and lateral communications and tasks in the line of order.

Table 19: Minimum Qualification and Experience of Proposed Management

Sr. Management No. Minimum Qualification & Experience
No. Position Requir Minimum Qualification Experience
1 General Manager 1 BA degree in management, Economics Minimum of 8 years of relevant
& related field experience
2 Administrative & 1 BA degree in management or any Minimum of 5 years of relevant
Finance Dep’t related field experience
3 Production 1 BSC degree in Agronomist Minimum of 8 years of relevant

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 &Technical Dep’t experience
4 Planning & MIS 1 BA degree in Economics, Management Minimum of 5 years of relevant
Dep't & related field experience
5 Marketing & 1 BA degree in marketing Minimum of 6 years of relevant
supplies Dep’t experience

General Manager
The company’s General Manager Mr. Muhaba Awol a 12+2 in vocational agriculture as well as 9 years
of relevant experience in the same line of business and these will enabled him to fit to the position & to
run the company under consideration. Moreover, the company has a plan to hire other qualified
technical staff since Civet Musk production and processing activities need experience and qualification
of the management especially agronomist are recommended to do on the system to improve civet musk
productivity through applying good and modernized husbandry practice integrated with research. Thus
the company shall recruit a natural resource farm Manager. So based on the experience gained from
the different positions on the same line of business of the general manager can run the project at its best
performance with the support of the project that would be recruited an agronomist farm manager &
other technical & qualified personnel

Production Department Manager

Production manager will serve as the company's Production Manager. He/she holds a B.Sc.in Natural
Resource, Agronomist, Horticulture and Animal Husbandry has held the position of Production Manager
at the farm and industry. Of particular significance, he/she will assume oversight responsibilities during
the initial plant setup stage, ensuring that the various section components are assembled and tested
properly. Once operational, he/she will manage all production staff training, and will establish quality
control policies and procedures.
Financial Department Manager
The Financial officer will direct the organization’s financial goals, objectives, and budgets. She/he will
oversee the investment of funds and manage associated risks, supervise cash management activities, and
execute capital-raising strategies to support a firm’s expansion.
Marketing Department Manager
B.Sc. in Business Administration from the known University and has been active in the Arts and Science
field. He/she is very familiar with the media and promotional venues

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Serving as the lead marketing and promotion strategist for the firm, he will develop and implement the
appropriate advertising campaigns essential to establish and then build the Garment brand. His/her job
will also include recruitment and training of all marketing and sales personnel, as well as ensuring that
sales targets are being met.
Distribution and delivery unit is directed under marketing department, He/she will manage the firm's
trucking fleet operations, including the recruitment and training of all delivery personnel. Once
operational, his job will be to ensure that delivery routes are properly planned and executed, and that
product is distributed on time and cost-effectively.
Administration Manager
He/she will serve as the company's Administration Manager, primarily managing the day-to-day affairs
of the firm's Luanda office, including reception, secretarial, payroll, human resources, and other
administrative tasks. He/She has got many years of experience in the administration and public relations
field.
STAFF CONSIDERATIONS
Africa Civet Cat Farm and Processing, plc will require a substantial workforce to adequately carry
out the range of activities envisioned. Some of the highlights for these staff members are highlighted
below table 20.

7.3 MAN POWER REQUIREMENT

7.3.1. SKILLED MAN POWER
Coffee and spices plantation farm is labor intensive where use of quality labor is the most determining
success factor. Availability of training is also crucial to improve productivity, speed and management. In
Ethiopia, though there is abundant labor, quality is a big problem. There is scarcity of designer, pattern
maker and marketing professionals with higher education.

The manpower requirement of the enterprise is estimated employment for about 27 skilled & 450 semi-
skilled totally 477. Operators are skilled and semi-skilled employees working in different positions. Of
the total manpower, of total works 4 are foreign expatriates with special coffee technical skills and are
expected to serve for the first four years; after the fourth year of operation, they will be replaced by
domestic employees. See table below for the detail manpower requirement: The total manpower
requirement planned for the project is given below the table 28.

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 Table 20: Man Power requirements
Sr. No Position No of Salary/month Salary/month Salary/
Personnel (Birr) (Birr) Year (Birr)

1 General Manager 1 8,000 8,000 96,000

2 Agronomist 2 4,500 9,000 108,000
3 Personnel & assistant mgr 1 2,300 2,300 27,600
4 Accountant 1 1,700 1,700 20,400
5 Farm manager 1 5,000 5,000 60,000
6 Farm supervisors 1 3,000 6,000 72,000
7 Foreman 1 2,500 2,500 30,000
8 Electrician & generator operator 1 2,500 2,500 30,000
9 Processing operator 2 5,000 10,000 120,000
10 Motorists 1 2,500 2,500 30,000
11 Civet Trapper 2 4,000 8,000 96,000
12 Motorists 1 2,500 5,000 60,000
13 Plumber 1 2,500 2,500 30,000
14 Machinist 1 2,500 2,500 30,000
15 Casher 1 2,000 2,000 24,000
16 Musk Extractor 6 2,000 8,000 96,000
17 Driver 1 3,000 3,000 36,000
18 Guards 2 2,000 4,000 48,000
Total 27 - 84,500 1,014,000

7.4 TRAINING REQUIREMENT

The skill of Africa Civet Farm and processing is well developed in the country since there is a farm and
Processing plant engaged in civet musk production and processing and for musk production. However,
farm and processing machinery operators will have to be provided training for two weeks per year in
Ethiopian with cooperation Ethiopia agricultural research Institution. A total of ETB 200,000 is
allocated for production technical staff on Civet Musk production and processing technology.

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8. FINANCIAL STUDY OF THE PROJECT
8.1 INTRODUCTION
The demand for Civet Musk is increasing rapidly in export markets year to year a big gap exists between supply
and demand. There is need to take advantage of this situation by encouraging its production which is a highly
viable venture as brought out below for “AFRICA CIVET FARM AND PROCESSING, PLC” putting hands
in commercial farm and processing in the country. Civet farm and processing movement in to large scale
production of civet musk would give fast returns to them and will contribute in the wealth of nation.

With the imbalance between supply and demand in the national form civet musk market coupled with a
high level of commercial for civet musk prices, there is less interest among private operators to invest in
for civet musk in Ethiopia. The civet musk plant for processing is a necessary investment to produce a
quality of civet musk, which is sold in the international as well as national market at good prices. This
chapter will assess the financial feasibility of investing in civet cat farm and industry processing and
marketing, using the “Africa Civet Cat Farm and Processing, PLC” establishment as feasibility studies.
Detailed information regarding economics of the project is provided as follows

8.2 OBJECTIVES
The purpose of this section is to find what should have been the profitability of the project if major
investments and operation costs were paid by them. The results of the analysis may therefore be a useful
guide for project implementation and weather it is feasible or not the analysis will:
i. Estimate the expected after-tax cash flows from the investment over a time frame of ten
years. The time frame of ten years was chosen because it was difficult to predict what the
clean green bean coffee market, a thin market, will look like in the long run.
ii. Compute the net present value and the internal rate of return.
iii. Propose a hypothetical model Civet Cat Farm & Processing is sales pricing related to world
price base analysis.
iv. Carry out sensitivity analysis to identify the impact of change of key parameters on profitability.

8.3 INVESTMENT OUTLAY(COST ESTIMATES)

8.3.1 TOTAL PROJECT INITIAL INVESTMENT COST

Africa Civet Cat Farm & Processing, plc’s total initial investment estimated cost including land value,
fixed asset, Pre-Production cost and initial working capital is estimated at ET. Birr 84,512,488 million.

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 The fixed investment component is estimated at about Birr 80,404,628 the initial working capital portion
is Birr 2,881,796.10 and Pre- Production cost is Birr 1,226,064 of the project. From the total investment
cost birr 21,176,408 (25%) is foreign currency required and the remaining of birr 63,336,080(75%) is
for local purchasing cost. The following table briefly summarizes the total investment cost of the
project. Broad break-up of the above cost under various heads is presented, table 21 below.
Table 21: Project Initial Investment Outlay Foreign & local Cost component
Items Total
Land lease payment 1,225,000
Land development Cost 2,921,000
Building and civil works 54,054,000
Office equipment 120,400
Vehicles 7,650,000
Farm machinery & equipment 5,835,170
Farm tools and Equipment 128,820
Plant machinery & equipment 7,691,238
Africa Civet Cat Animal Stock 779,000
Total fixed investment cost 80,404,628

Pre- production capital expenditure 1,226,064

Total initial investment 81,630,692
Working capital at full capacity 2,881,796.1
Total Initial Investment Cost 84,512,488

8.3.2 FINANCIAL REQUIREMENT AND SOURCES

The total cost of project including is birr 84,512,488 of which the project will finance through a long-term
loan from the Bank of Ethiopia birr 59,158,742 and the owner equity contribution is secured birr 17,785,891,
of which equity to be blocked- Cash birr 25,353,747. The debt equity ratio is assumed to be 75:25
and or it will be lease financing based on the agreement between the bank and owner.
The following table briefly summarizes the total investment cost of the project. Broad break-up of the above cost
under various heads is presented, below table 22.
Table 22: Total financial Requirement, project Investment cost & Sources of finance
Source of Fund
Description
Equity Contribution Bank Loan Total
INITIAL INVESTMENT COST 24,121,388 56,283,240 80,404,628
PRE-PRODUCTION COST 367,819 858,245 1,226,064
INITIAL WORKING CAPITAL COST 864,539 2,017,257 2,881,796
Total Cost 25,353,747 59,158,742 84,512,488
% Share 30% 70%

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8.4 PRODUCTION, REVENUE AND OPERATION COST
8.4.1 PRODUCTION AND MARKETING PLAN
8.4.1.1 CIVET MUSK PRODUCTION
Y-1 Y-2 Y-3 Y-4-10
Production years
Product Assumption unit

Africa Civet Musk Kg 1,961 2,263 2,564 3,017

Africa Civet Perfume Lit 653,671 754,236 854,801 1,005,648

8.4.2 PROJECTED GROSS REVENUE

The planned Expected Revenue: Based on the export and domestic market the revenue earned from
Civet musk and low grade civet musk from local market. The following table briefly summarizes the
projected revenue of the project gross revenue. The detailed calculation is given below table 23.

Table 23: Revenue Determination (seals)

Y-1 Y-2 Y-3 Y-4-10
Production years
Revenue determination

First Grade Musk Birr/year 33,729,434 40,864,506 46,313,107 54,486,009

Low Grad Semi-processed Birr/year 32,683,560 39,597,390 47,120,894 58,208,163
Total Revenue
Birr/year 66,412,994 80,461,896 93,434,001 112,694,172

8.4.3 OPERATION AND ADMINISTRATIVE (DIRECT & INDIRECT) COST

The total operating cost is estimated at Birr 42,777,095 at full production capacity ten years four and
will increase through project life. Operating costs are recorded on a year basis. It is divided into direct
and indirect costs. The direct cost component is estimated at about Birr 24,533,048 and, Birr 18,244,046
is the indirect cost and. Summary of operating costs is presented on below table 24.

Table 24: Projected Operation estimated cost (direct and indirect)

Production Year unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10

Production/Operating Cost bir/year 24,533,048.17 24,533,048.17 24,533,048.17 24,533,048.17 24,533,048.17 24,533,048.17 24,533,048.17 24,533,048.17 24,533,048.17 24,533,048.17

Admistrative Cost bir/year 16,160,905.34 18,244,046.84 18,244,046.84 18,244,046.84 18,244,046.84 18,244,046.84 18,244,046.84 18,244,046.84 18,244,046.84 18,244,046.84

Total Operating Cost bir/year 40,693,953.51 42,777,095.01 42,777,095.01 42,777,095.01 42,777,095.01 42,777,095.01 42,777,095.01 42,777,095.01 42,777,095.01 42,777,095.01

8.5 FINANCIAL ANALYSIS KEY ASSUMPTIONS

The project cost estimates for the proposed project have been formulated on the basis of discussions
with project manager. The projections cover the cost of infrastructures, building and civil works

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construction, machinery and equipment purchase, office furniture and fixtures, pre-operating expense
and working capital for the startup of the project. Assumptions regarding machinery have been provided
Performa base, however, specific assumptions relating to individual cost components are given as under.
It is given in the annexe-5.

8.6 PROJECT FINANCIAL RESLTS

8.6.1 PROFITABILITY - PROFIT / LOSS FORECAST

The projected profit and loss statement forecasted for 10 years shows that starting the first years there is
positive income in the case of civet farm and processing; hence the project runs in profit. The projection
of profit is shows positive net profits of Birr 18,105,611 in the 1st, project year, and at 100% capacity &
grows to birr 40,810,083 in the 10th year projection period. Further, adequate surplus cash is available
with the unit for promoter withdrawal. Annexure-1

8.6.2 CASH FLOW FORECAST(LIQUIDITY)

The cash flow projection shows positive cash balances beginning from the 1st year onwards with an
increasing cash flow to finance its operational cost at the same time meeting its debt obligation. Further,
adequate surplus cash is available with the unit for promoter withdrawal. Annexure-1

8.6.3 BALANCE SHEET PROJECTION (CAPITAL GROWTH)

The Balance sheet projection shows the project’s assets, its liabilities & Capital at a particular point in
time. The total asset of the project is expected to rise from Birr 99,982,976 during the first operational
year to birr 440,167,665 at the end of the tenth project year. The company will invest its capital during the
initial year & also in the 1st and 2nd investment period of the project for the successive land development
& plantation establishment investment costs. The successive capital invested shall grow to birr
440,167,665 at the 10th project year, with an increase of annual retained earnings in the 1st to 10th year.
Further, adequate surplus cash is available with the unit for promoter withdrawal. Annexure-1

8.7 FINANCIAL EVALUATION(VIABILITY)

8.7.1 PROJECT WORTH(NPV & FIRR)

8.7.1.1 THE NET PRESENT VALUE (NPV)
 Net Present Value (NPV) before Tax at 12 % interest rate; Birr 195,649,070
 Net Present Value (NPV) after Tax at 12 % interest rate; Birr 153,,649,763

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The net present value is the difference between the sum of discounted future cash flow, year 1 to 10 and
the amount of the initial investment at year o. The NPV’s computed at the prevailing 12% interest rate
results positive large cash amount indicating that the project is viable.

8.7.1.2 THE FINANCIAL INTERNAL RATE OF RETURN (FIRR)

The financial internal Rate of Return before and after tax, computed based on 10 years projection
period is FIRR before Tax; 44% and FIRR after Tax; 37 %. The rate is above the cost of debt of 12%
implying, that the project’s ability to cover what is invested during its life span after paying its cost of
debt & making return to stakeholders. Therefore the project is viable & hence bankable.

9.7.2 BENEFIT : COST’ RATIO (BCR)

The present value of benefits to the present value of costs; has been calculated by
dividing discounted benefits (or revenue) by discounted costs of the project. Again, a
discount rate of 11% has been used. That is:
B/C Ratio=PVB/PVC=

1,095,642,310/ 425,687,809 = 2.57

Given the BCR > 1; therefore, the project is considered economically sound

8.7.3 PAY BACK PERIOD

The computation of the payback period is given at Annexure-4. 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 4 years before tax and year 5 after tax a positive income on the
basis of profit after tax. The project’s initial investment will be fully recovered within
5 years.

8.7.4 SENSITIVITY ANALYSIS

The project's sensitivity to adverse circumstance is viewed & analyzed from two different scenarios:
by decreasing its sales revenue by 10 % and increasing its operating cost by 10%.
A) Sensitivity test Scenario I: – Increase in operating cost by 10 %
When operating cost increases by 10%, the result indicates that FIRR after tax decreases from 37% to
27%. It can be concluded that, the project can cover its costs, make profit for stakeholders & will
remain viable even if unforeseen costs would occur that should be incurred more than estimated.
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B) Sensitivity test Scenario II: – Decrease in Revenue by 10 %
When revenue decreases by 10%, the result indicates that FIRR after tax decreases from 32 % to 25 %.
It can be concluded that, the project will remain viable even if an adverse marketing problem would
occur that forces to reduce the selling price & hence reduce the revenue. It also shows that the project
is more sensitive and affected by decline in sales revenue when compared with the increase in
operating costs and indicates caution to be taken in selling the products.

8.8 PRINCIPAL LOAN REPAYMENT SCHEDULE

The principal loan shall be repaid every year, starting on, 2022 & ending on, 20231, whereby repayment
will be made in 10 annual instalments.
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 25 bellows throughout the project life.

Table 25: loan repayment Schedule

Year Amount of Principal Instalment Interest Total

Outstanding due Payable at 12% Amount
1 59,158,742 5,915,874 7,099,049 13,014,923
2 53,242,868 5,915,874 6,389,144 12,305,018
3 47,326,994 5,915,874 5,679,239 11,595,113
4 41,411,119 5,915,874 4,969,334 10,885,209
5 35,495,245 5,915,874 4,259,429 10,175,304
6 29,579,371 5,915,874 3,549,525 9,465,399
7 23,663,497 5,915,874 2,839,620 8,755,494
8 17,747,623 5,915,874 2,129,715 8,045,589
9 11,831,748 5,915,874 1,419,810 7,335,684
10 5,915,874 5,915,874 709,905 6,625,779
- -
Total 59,158,742 39,044,770 67,440,965.8

Interest Payment: 12% p.a. on the outstanding loan balance is to be paid every 31
on December in every production year. Pre- production interest shall be paid by the
promoter on the due date.
Commitment Charge Payment: Calculated @ 2% per annum on the balance in
commitment

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9. SOCIO-ECONOMIC IMPACT ASSESSMENTPROJECT

9.1. POSITIVE IMPACT ON SOCIAL & ECONOMY

The establishment of the Africa Civet Cat farm and Processing projecthas many socio-economic
benefits which include, among others:-

9.1.1 CREATION OF EMPLOYMENT OPPORTUNITY

The project is expected to create new employment for about 27 skilled & 450 semi-skilled in the initial
project year and more of these & large number of man days in the subsequent investment years &
projected operational years .Civet cat farm and processing is one of the labor intensive agricultural
production activities, it provides employment opportunity for the citizens; especially during harvesting
(during the peak operational month) and processing at wet or dry processing stations, it provides
employment opportunity for many rural households.

9.1.2 SOURCE FOR THE COUNTRIES FOREIGN CURRENCY

Coffee is the major agricultural export crop providing currently 2% of Ethiopian foreign exchange
earnings. The foreign currency earning of civet musk can be explain as follows;
Table 26: Coffee Export in Ethiopia Volume (Kg) and Volume(USD)
Year Musk in kg/y Growth Rate% Revenue (US$) Growth rate %
2007 975.83 439,123.50
2008 820.00 -16% 369,000.00 -16%
2009 580.50 -29% 261,225.00 -29%
2010 1,157.70 99% 520,965.00 99%
2011 1,116.00 -4% 502,200.00 -4%
2012 1,745.00 56% 785,250.00 56%
2013 2,890.00 66% 1,589,500.00 102%
2014 3,560.00 23% 1,958,000.00 23%
2015 4,789.00 35% 2,633,950.00 35%
2016 4,989.00 4% 2,743,950.00 4%
2017 4,650.00 -7% 2,557,500.00 -7%
2018 5,275.00 13% 2,901,250.00 13%
2019 5,890.00 12% 3,239,500.00 12%
2020 6,000.00 20% 3,300,000.00 20%
Total 44,438.03 2.73 23,801,413.50 3.099
Average GR% 20% 22%

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The foreign earning from this sub sector in the years 2010 onwards shows improvement and this shows
increase in the year to year. This indicates that the export amount of the country has been increasing in
this sector and also a great consideration should be given to the sector because civet musk is will be
one of the major source for the country’s Foreign Currency.

10.1.3 LINKAGE EFFECT

There is a high interdependence of foreword & backward activities of the project. This project has
forward and backward linkage effects, as it has forward linkage with improved production activities &
earnings of foreign currency, which increases the country’s foreign holding and on the backward side
the production & processing of civet musk creates employment to the poor rural house hold and semi
urban dwellers. The establishment of Africa Civet cat Farm and processing project establishment will
enable the sector to expand to different works area in the country. This creates mutual benefits in the
sectors.
 Technology and knowhow transfer: The Civet Cat farm & processing practice can transfer
new technology and know-how, especially in the project area for local small holder farmer
producer besides its vital role in the growing of the economy.
 Generate revenue to the Government: The project when it starts operation & begin production
will generate substantial revenue to the promoter & in turn to the government in the form of
taxes.

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10. CONCLUSION AND RECOMMENDATIONS

10.1 CONCLUSION
Africa Civet Cat Farm And Processing PLC had applied for a loan of Birr 84,512,488 to finance its
new coffee and spices plantation project to be established in Oromia Regional State Oromia Special
zone around Finifene.
The Promoter’s business objective is to engage in the production of civet musk for export market. The
project operation will start by developing land, establish Civet Cat Farm & processing for civet musk for
export. Moreover, Civet Musk produced & shall be sold at local market for local consumers. In order to
establish the project and achieve its objective; the promoter has approached Bank of Ethiopia for partial
finance which is in excess of its equity. A loan of Birr 59,158,742 is proposed to be financed by the
bank to be used for partial covering of the fixed asset investment cost & the working capital requirement
after assessing the viability of the project.
From the total investment cost Birr 84,512,488 out of which, is 80,404,628 on fixed Asset, Birr 2,881,796,
on initial working capital, Birr 1,226,046 is on pre-production costs. The project’s success & risk
factors are identified & the risk mitigating factors are proposed. As shown in the fund allocation table,
out of the total financial requirement (investment cost) of Birr 25,353,747 (30%) is the owner’s equity
contribution and Birr 59,158,742 (70%) is planned to be financed by Bank of Ethiopia term loan.
The projected financial statements & analysis indicates that the project will run in profit starting the
beginning project years when successive land development and farm and plant establishment to be
undertaken. The project will be profitable at beginning year of the project.
10.2 RECOMMENDATION
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 civet cat farm and processing plant establishment and
quality Civet Musk production 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).

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11. ANNEXTURE
Annex 1 PROJECTED INCOME STATEMENT (Birr)
INCOME STATEMENTS( Et birr '000)
Year 0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Gross revenue 66,412,994 80,461,896 93,434,001 112,694,172 115,604,580 118,660,509 121,869,234 125,238,395 128,776,014 132,490,515
Africa Civet Cat Musk Production Cost
Less Variable Cost 24,533,048 24,533,048 24,533,048 24,533,048 24,533,048 24,533,048 24,533,048 24,533,048 24,533,048 24,533,048
Gross Profit 41,879,946 55,928,848 68,900,953 88,161,124 91,071,532 94,127,461 97,336,186 100,705,347 104,242,966 107,957,466
(In % of Total Income) 63% 70% 74% 78% 79% 79% 80% 80% 81% 81%
Working Capital Cost
Less Fixed Costs 16,160,905 18,244,047 18,244,047 18,244,047 18,244,047 18,244,047 18,244,047 18,244,047 18,244,047 18,244,047
Operating Profit 25,719,040 37,684,801 50,656,906 69,917,077 72,827,485 75,883,414 79,092,139 82,461,300 85,998,919 89,713,420
(In % of Total Income) 39% 47% 54% 62% 63% 64% 65% 66% 67% 68%
Other Income 0 0 0 0 0 0 0 0 0 0
Total Operating Profit 25,719,040 37,684,801 50,656,906 69,917,077 72,827,485 75,883,414 79,092,139 82,461,300 85,998,919 89,713,420

Community ODevelopment Charges(2%) 514,381 753,696 1,013,138 1,398,342 1,456,550 1,517,668 1,581,843 1,649,226 1,719,978 1,794,268
Less Cost of Finance(interst) 7,099,049 6,694,516 6,241,438 5,733,992 5,165,651 4,529,110 3,816,184 3,017,707 2,123,413 1,121,803
Total Financial & Other Charges 7,613,430 7,448,212 7,254,576 7,132,333 6,622,201 6,046,779 5,398,027 4,666,933 3,843,391 2,916,071
GROSS PROFIT 18,105,611 30,236,590 43,402,330 62,784,744 66,205,284 69,836,635 73,694,112 77,794,367 82,155,528 86,797,348
Income (Corporate) Tax 0 0 15,190,816 21,974,660 23,171,849 24,442,822 25,792,939 27,228,028 28,754,435 30,379,072

Net Profit(Income) 18,105,611 30,236,590 28,211,515 40,810,083 43,033,435 45,393,813 47,901,173 50,566,338 53,401,093 56,418,276
Accumulated Profits - brought forward 0 18,105,611 48,342,200 76,553,715 117,363,798 160,397,233 205,791,046 253,692,218 304,258,557 357,659,650
Accumulated Profits - carried to the Balance Sheet 18,105,611 48,342,200 76,553,715 117,363,798 160,397,233 205,791,046 253,692,218 304,258,557 357,659,650 414,077,927

RATIOS (%)
Gross Profit/Sales 27% 38% 46% 56% 57% 59% 60% 62% 64% 66%
Net Profit After Tax/Sales 27% 38% 30% 36% 37% 38% 39% 40% 41% 43%

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 Annex 2 PROJECTED BALNCE 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 2,881,796 20,941,106 54,571,719 85,778,018 128,761,037 174,216,555 221,388,634 270,347,507 321,165,047 373,914,624 428,670,931
Inventory - 1,962,644 1,962,644 1,962,644 1,962,644 1,962,644 1,962,644 1,962,644 1,962,644 1,962,644 1,962,644
Accounts receivable - 3,320,650 4,023,095 4,671,700 5,634,709 5,780,229 5,933,025 6,093,462 6,261,920 6,438,801 6,624,526
Total current assets 2,881,796 26,224,399 60,557,457 92,412,362 136,358,390 181,959,428 229,284,303 278,403,613 329,389,610 382,316,069 437,258,100
Gross property, plant & equipment 81,630,692 81,630,692 81,630,692 81,630,692 81,630,692 81,630,692 81,630,692 81,630,692 81,630,692 81,630,692 81,630,692
Less: Accumulated depreciation expense - -7,872,113 -15,744,226 -23,616,338 -31,488,451 -39,360,564 -47,232,677 -55,104,790 -62,976,902 -70,849,015 -78,721,128
Net property/equipment 81,630,692 73,758,580 65,886,467 58,014,354 50,142,241 42,270,128 34,398,016 26,525,903 18,653,790 10,781,677 2,909,564

Total assets 84,512,488 99,982,979 126,443,924 150,426,716 186,500,631 224,229,556 263,682,319 304,929,515 348,043,400 393,097,746 440,167,665
Liabilities Initial balance Year 1 Year 2 Year 3 Year 4 Year 5 Year 5 Year 5 Year 5 Year 5 Year 5
Accounts payable - 735,991 735,991 735,991 735,991 735,991 735,991 735,991 735,991 735,991 735,991
Notes payable/short-term debt - 0 0 0 0 0 0 0 0 0 0
Total current liabilities - 735,991 735,991 735,991 735,991 735,991 735,991 735,991 735,991 735,991 735,991
Long-term debt from 59,158,742 55,787,630 52,011,986 47,783,263 43,047,095 37,742,585 31,801,535 25,147,559 17,695,105 9,348,358 0
Shareholders equity 25,353,747 43,459,357 73,695,947 101,907,461 142,717,545 185,750,980 231,144,792 279,045,965 329,612,303 383,013,397 439,431,673
Total long-term debt and shareholders equity 84,512,488 99,246,988 125,707,933 149,690,725 185,764,639 223,493,565 262,946,327 304,193,524 347,307,409 392,361,754 439,431,673
Total liabilities 84,512,488 99,982,979 126,443,924 150,426,716 186,500,631 224,229,556 263,682,319 304,929,515 348,043,400 393,097,746 440,167,665

Annex 3. 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 18,105,611 30,236,590 28,211,515 40,810,083 43,033,435 45,393,813 47,901,173 50,566,338 53,401,093 56,418,276
Plus depreciation 7,872,113 7,872,113 7,872,113 7,872,113 7,872,113 7,872,113 7,872,113 7,872,113 7,872,113 7,872,113
Less increase in inventory - (1,962,644) - - - - - - - - -
Less increase in accounts receivable - (3,320,650) (702,445) (648,605) (963,009) (145,520) (152,796) (160,436) (168,458) (176,881) (185,725)
Plus increase in accounts payable - 735,991 - - - - - - - - -
Cash flow from operations - 21,430,421 37,406,257 35,435,022 47,719,188 50,760,027 53,113,129 55,612,849 58,269,993 61,096,325 64,104,664
Less investment (81,630,692) - - - - - - - - - -

Cash flow from operations and invests (81,630,692) 21,430,421 37,406,257 35,435,022 47,719,188 50,760,027 53,113,129 55,612,849 58,269,993 61,096,325 64,104,664

Plus net new equity capital raised 25,353,747 - - - - - - - - - -

Less dividends paid - - - - - - - - - - -
Plus net new long-term debt 59,158,742 (3,371,111) (3,775,645) (4,228,722) (4,736,169) (5,304,509) (5,941,050) (6,653,976) (7,452,453) (8,346,748) (9,348,358)
Plus net new bank borrowings - - - - - - - - - - -

Cash flow from ops, invests, and fin 2,881,796 18,059,310 33,630,613 31,206,300 42,983,019 45,455,518 47,172,079 48,958,873 50,817,540 52,749,577 54,756,307
Beginning cash balance - 2,881,796 20,941,106 54,571,719 85,778,018 128,761,037 174,216,555 221,388,634 270,347,507 321,165,047 373,914,624

Ending cash balance 2,881,796 20,941,106 54,571,719 85,778,018 128,761,037 174,216,555 221,388,634 270,347,507 321,165,047 373,914,624 428,670,931

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 Annex 4 INTERNAL RATE OF RETUREN (Birr)

PROJRCT WORTH MAESURE ( NPV, IRR, PB ) before tax

Year 0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Cash flow (81,630,692) 21,430,421 37,406,257 35,435,022 47,719,188 50,760,027 53,113,129 55,612,849 58,269,993 61,096,325 64,104,664
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 (81,630,692) 19,306,667 30,912,531 26,622,332 32,592,205 31,516,901 29,982,361 28,540,514 27,182,952 25,910,952 24,712,348
NPV 195,649,070
IRR ( befor Tax ) 44%
Cash flow (81,630,692) 21,430,421 37,406,257 35,435,022 47,719,188 50,760,027 53,113,129 55,612,849 58,269,993 61,096,325 64,104,664
Cumultaive cash (81,630,692) (60,200,271) (22,794,014) 12,641,008 60,360,196 111,120,223 164,233,352 219,846,202 278,116,195 339,212,520 403,317,184
Pay Back Period 3.00 Years 14 Months

PROJRCT WORTH MAESURE ( NPV, IRR, PB ) AFTER TAX . Birr )

Year Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Cash flow (81,630,692) 18,105,611 30,236,590 28,211,515 40,810,083 43,033,435 45,393,813 47,901,173 50,566,338 53,401,093 56,418,276
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 (81,630,692) 16,311,345 24,987,518 21,195,311 27,873,287 26,719,460 25,624,807 24,582,882 23,589,197 22,647,404 21,749,246
NPV 153,649,763
IRR ( After Tax ) 37%
Cash flow (81,630,692) 18,105,611 30,236,590 28,211,515 40,810,083 43,033,435 45,393,813 47,901,173 50,566,338 53,401,093 56,418,276
Cumultaive cash (81,630,692) (63,525,082) (33,288,492) (5,076,977) 35,733,106 78,766,541 124,160,353 172,061,526 222,627,865 276,028,958 332,447,234
Pay Back Period 4.00 Years 10 Months

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 Annex 5 Assumptions used in Financial Projections
ECONOMIC ASSUMPTIONS
Operating Expenses for the project and there basis are taken as follows
Description Basis Basis
CONSTRUCTION AND FINANCE
Construction period 1 years 1year
Bank interest 12% 12%(BE)
Discounted cash flow 10% 10%
Source of finance 30% equity and 75% loan
Utilities price growth 5%
Material price growth rate 5%
Wage Growth Rate 5%
Tax rate 30%
EXPENSE
Salaries Expenses As per salary estimations
Staff Benefits 10% of Payroll
Insurance 1% of equipment Cost
Oil & Lubricants 10% of the fuel cost/annum
Production 99% of Sales
Selling Expenses 5 % of Sales
Community Development 2%
Utilities price growth
Water and electric city price growth rate % 5%
Loan period 10 years
CASH FLOW ASSUMPTIONS
Inventory (% of COGS) 8%
Minimum cash balance (% of sales) 2%
Accounts receivable (% of sales) 5%
Accounts payable (% of COGS) 3%
WORKING CAPITAL ESTIMATIONS
Local Raw material 4 Months
Auxiliary Raw Materials Local 4 Month
Stock of Finished Goods 4 Month
Goods in Process 4 Month
Administrative and Marketing Expenses 4 Months
PRODUCTION ASSUMPTIONS
Capacity starting 65% increase by 15% 100%
machine operation hour per day 8
available working day per year bot for farm and plant 250
Maximum annual volume Civet Musk at full capacity(Y4) 3,352 Kg

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