Mug Bean Farm Feasibility Study PROJECT

TOLTU TURE TRADING PLC
MUNG BEAN FARM AND PROCESSING
INVESTMENT FEASIBILITY STUDY PROJECT-I
Project Location: SNNPRS, Gurage Zone

Specific Location: Cheha Woreda
Promoters: Toltu Ture Trading Plc
CONSULTANT: ABRHAM ASTATIKE (09-11-38-48-33)
HAWASSA
May 2023
ACRONYMS
ADLI Agricultural Development-Led Industrialisation
EARO Ethiopian Agricultural Research Organization
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 Millimetre
MoARD Ministry of Agriculture and Rural Development
MoFED Ministry of Finance and Economic Development,
oC 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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TABLE OF CONTENTS
ACRONYMS ................................................................................................................................... i
List of Tables ................................................................................................................................ vii
List of Figures .............................................................................................................................. viii
1. EXECUTIVE SUMMARY ...................................................................................................... 9
1.2 Description of the Project ..................................................................................................... 9
1.3 PROFILE OF PROMOTER ................................................................................................. 9
1.4 OBJECTIVE OF THE PROJECT ........................................................................................ 9
1.5 Project Goal and Purpose .................................................................................................... 10
1.6 STATUS OF THE PROJECT............................................................................................. 10
1.7 MARKETING STRATEGY OF THE PROJECT .............................................................. 10
1.8 Building & construction and Technology of machineries .................................................. 10
1.9 Management Capacity and Availability of key skilled ....................................................... 11
1.10 Project THE PROJECT’S INITIAL INVESTMENT .................................................... 11
1.11 Source of Finance ............................................................................................................. 11
1.12 Expected Financial Results (VIABILITY) ....................................................................... 11
1.13 Sensitivity ......................................................................................................................... 12
1.14 Project Component............................................................................................................ 12
1.15 SOCIO-ECONOMIC JUSTIFICATIONS........................................................................ 12
1.16 Rational Behind the Project .............................................................................................. 12
1.17 Recommendations ............................................................................................................. 13
2. INTRODUCTION .................................................................................................................. 14
3. BACK GRONUD INFORMTIO OF THE PROJECT ........................................................... 16
3.1 World Production Scenario ................................................................................................. 16
2.2 Ethiopia Production ............................................................................................................ 17
2.4 Company Profile ................................................................................................................. 18
2.5 The Promoters ..................................................................................................................... 19
2.6 Goal and objective .............................................................................................................. 19
2.6.1 Overall goal ................................................................................................................... 19
2.6.2 Main and Specific objective .......................................................................................... 19
4. KEY SUCCESS & RISK FACTORS AND RISK MITIGATING MECHANISMS ............ 21
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4.1 Key Success Factors ........................................................................................................... 21
4.1.1 Macro level success Factors .......................................................................................... 21
4.2.2 Sector level success Factors .......................................................................................... 23
4.2.3 Firm level success Factors .......................................................................................... 23
4.2 Risk mitigating Mechanisms for risk factors indicated .................................................... 25
4.3 Analyzing the Business Environment using the SWOT Model.............................................. 26
5. MARKET STUDY AND APPLICATION ............................................................................ 27
5.1 Global Scenario .............................................................................................................. 27
5.1.1 Global Market over View.............................................................................................. 27
5.1.2 Global Mung Bean Importers........................................................................................ 28
5.2 Ethiopia Scenario ........................................................................................................... 29
5.2.1 Pulse Trade in Ethiopia ................................................................................................. 29
5.2.2 Market Destination ........................................................................................................ 29
5.3 Demand and Supply Analysis ............................................................................................. 30
5.3.2 Mug Bean Export from Ethiopia ................................................................................... 31
5.3.2 Present Demand projection of Mung Bean ................................................................... 32
5.4 Production Plan ................................................................................................................... 32
5.5 Market Distribution ............................................................................................................. 33
5.6 PRICING............................................................................................................................. 34
5.7 Marketing Strategies ........................................................................................................... 35
5.7.1 Target Markets .............................................................................................................. 35
5.7.2 Promotion Strategies ..................................................................................................... 35
5.8 Main Stake holder Actors ................................................................................................... 35
6. ENVIRONMENTAL IMPACT ASSESSMENT ..................................................................... 37
7. TECHNICAL STUDY OF THE PROJECT SITE ................................................................. 38
7.1 Descriptions of the Project area ..................................................................................... 38
7.2 Description of the project............................................................................................... 39
7.3 Land ownership .............................................................................................................. 39
7.4 The physical works ............................................................................................................. 39
7.5 Project Phasing.................................................................................................................... 40
7.6 Physical and natural condition of project site ................................................................ 40
7.6.1 Topographic Features .................................................................................................... 40
7.6.2. Climate ......................................................................................................................... 40
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7.6.3 Soil Conditions of the Project Area .............................................................................. 42
7.7 Area of land for investment in ha with expected expansion in the future ..................... 42
7.8 Production of each commodity per ha with and without project ................................... 43
7.9 Infrastructures ................................................................................................................ 43
7.10 AGRONOMICAL PRACTICS OF MUNG BEAN CROP .............................................. 44
7.10.1 Varieties ...................................................................................................................... 45
7.10.2 Climate Requirement .................................................................................................. 45
7.10.3 Soil Requirement ......................................................................................................... 45
7.10.4 Preparation of the Land ............................................................................................... 45
7.10.5 Manures and Fertilizers ............................................................................................... 45
7.10.6 Seed rate ...................................................................................................................... 46
7.10.7 Planting ....................................................................................................................... 46
7.10.8 Plant population .......................................................................................................... 46
7.10.9 Method of Sowing ....................................................................................................... 46
7.10.10 Irrigation.................................................................................................................... 47
7.10.11 Weed control ............................................................................................................. 47
7.10.12 Pest and Disease Control ........................................................................................... 48
7.10.13 Harvest maturity ........................................................................................................ 49
7.10.14 Sorting ....................................................................................................................... 49
7.10.15 Grading...................................................................................................................... 49
7.10.16 Packing ...................................................................................................................... 50
7.10.17 Storage ...................................................................................................................... 50
7.10.18 Production Technology Process Flow ....................................................................... 50
7.11 FARM STRUCTURE AND LAND DEVELOPMENT................................................... 50
7.11.1 FARM DESIGN .......................................................................................................... 51
7.11.2 PLAN OF OPERATION OF THE PROJECT ............................................................ 51
7.12 Pre-harvest Management .................................................................................................. 51
7.12.1 Harvesting ................................................................................................................... 52
7.12.2 Post-Harvest Management .......................................................................................... 52
7.13 Farming and Land preparation Cost ................................................................................. 52
7.14 Crop Maintenance ............................................................................................................. 53
7.14.1 Application of Fertilizers and Chemicals .................................................................... 53
10.14.2 Weed Control Operation ........................................................................................... 53
7.15.3 Crop Irrigation............................................................................................................. 54
7.16 Farm Yield and Yield Estimation ..................................................................................... 54
7.17 FARM TECHNOLOGY AND ENGINEERING ............................................................. 54
7.17.1 PRODUCTION MACHINERY AND EQUIPEMENTS ........................................... 54
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7.18 Materials and Inputs .......................................................................................................... 57
7.18.1 Plating Materials ......................................................................................................... 57
7.18.2 Utilities ........................................................................................................................ 58
7.19 Land, Building and Civil Works of the Project ................................................................ 58
7.20 Company Vehicles and Motors ......................................................................................... 59
7.21 Maintenance and Repairs Cost.......................................................................................... 59
7.22 Office Furniture and Equipment ....................................................................................... 60
4.23 Pre-Operating Activities................................................................................................. 60
8. ORGANIZATION AND MANAGEMENT......................................................................... 61
8.2 ORGANIZATIONAL STRUCTURE ................................................................................ 61
8.3 MAN POWER REQUIREMENT....................................................................................... 62
8.3.1. SKILLED MAN POWER ............................................................................................ 62
8.4 TRAINING REQUIREMENT............................................................................................ 64
7.5 BENEFITS .......................................................................................................................... 64
9. FINANCIAL STUDY OF THE PROJECT .............................................................................. 65
9.1 INTRODUCTION .............................................................................................................. 65
9.2 OBJECTIVES ..................................................................................................................... 65
9.3 INVESTMENT OUTLAY (COST ESTIMATES) ............................................................. 66
9.3.1 Total financial Requirement FOR project Investment cost ........................................... 66
9.3.3 Total Project initial investment cost .............................................................................. 66
8.3.4 SOURCES OF FINANCE (FUND ALLOCATION) ................................................... 66
8.4 Production, Revenue and operation cost ............................................................................. 67
8.4.1 Production ..................................................................................................................... 67
9.4.2 PROJECTED GROSS REVENUE ............................................................................... 68
9.4.3 OPERATION AND ADMINISTRATIVE (DIRECT & INDIRECT) COST .............. 68
9.5 FINANCIAL ANALYSIS KEY ASSUMPTIONS ............................................................. 68
9.6 PROJECT FINANCIAL RESLTS ...................................................................................... 69
9.6.1 Profitability - Profit / Loss forecast ............................................................................... 69
9.6.2 Cash Flow Forecast (Liquidity) .................................................................................... 69
9.6.3 Balance sheet Projection (Capital growth) .................................................................... 69
9.7 FINANCIAL EVALUATION (VIABILITY) ......................................................................... 69
9.7.1 Project worth (The NPV & FIRR) ................................................................................... 69
9.7.2 Benefit: Cost Ratio (BCR) ............................................................................................ 70
9.7.3 Pay Back Period ............................................................................................................ 70
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9.7.4 Sensitivity analysis ........................................................................................................ 70
10. SOCIO-ECONOMIC IMPACT ASSESSMENTPROJECT .................................................. 71
10.1. Positive impact on Social & Economy ............................................................................ 71
10.1.1 Creation of Employment Opportunity .................................................................... 71
10.1.2 Linkage Effect ............................................................................................................. 71
11. CONCLUSION AND RECOMMENDATIONS ................................................................... 72
11.1 Conclusion ........................................................................................................................ 72
101.2 Recommendation........................................................................................................... 72
11.2.1 Proposed Loan amount & Purpose .............................................................................. 72
11.2.2 Loan Disbursement ..................................................................................................... 73
11.2.3 Principal loan Repayment Schedule ............................................................................ 73
11. ANNEXTURE ........................................................................................................................ 75
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List of Tables
Table 1: Global pulses production and yield 2011–2016 (millions of tons) ................................................................ 16
Table 2: Ethiopia Pules Production form 2012-2016 (tons) ........................................................................................ 17
Table 3: World Pulse Export Quantity from 2011–2016 (metric tons) ....................................................................... 27
Table 4: major Importers Country in Year 2016 ......................................................................................................... 28
Table 5: Ethiopia Total export Value from 2012-2016 (Birr)...................................................................................... 29
Table 6: Ethiopia Total export Volume from 2011-2016(tons) ................................................................................... 29
Table 7 : Largest destinations for Ethiopia’s pulse exports, 2012-2016 (US $) .......................................................... 30
Table 8: Mung Bean production from 2012- 2016 ...................................................................................................... 31
Table 9: Mung Bean Export from 2012- 2016 ............................................................................................................. 31
Table 10: Demand projection for Mung Bean Crop (Tones) ....................................................................................... 32
Table 11: Production Plan of the project ..................................................................................................................... 33
Table 12: Bar diagram showing periods of supply of Mung Bean Seed...................................................................... 33
Table 13: Price and volume of mung bean exports from Ethiopia ............................................................................. 34
Table 14 : Average maximum and Minimum Monthly Temperatures (oC) of the project area .................................. 41
Table 15: Average monthly and annual rainfalls of the project area ........................................................................... 42
Table 16: Anticipated production per ha of each planned crop with and without project ........................................... 43
Table 17: Improved seed varieties commercially required .......................................................................................... 45
Table 18: Operation Plan of the Project....................................................................................................................... 52
Table 19: Farm Land preparation and Planting Cost (ET. Birr) .................................................................................. 53
Table 20: Farm Maintenance Cost Estimations (ET.Birr) ........................................................................................... 53
Table 21: The Farm Yield Estimation ........................................................................................................................ 54
Table 22: Farm Machinery Requirement .................................................................................................................... 55
Table 23: Farm tools and equipment’s ........................................................................................................................ 55
Table 24: Irrigation and farm structures Requirement and Cost ................................................................................ 56
Table 25: Water drilling Machinery Cost .................................................................................................................... 57
Table 26: Annual Requirement for Basic Seed Materials ........................................................................................... 57
Table 27: Annual Requirement of Utility .................................................................................................................... 58
Table 28: Land, Building and Civil Works cost Estimated ......................................................................................... 58
Table 29: Company Vehicles and Related Cost .......................................................................................................... 59
Table 30: Maintenance and Repairer Cost estimated................................................................................................... 59
Table 31: Office Furniture and Equipment Estimated Cost ......................................................................................... 60
Table 32: Pre-Operating Activities of Processing ....................................................................................................... 60
Table 33: Man Power requirements ............................................................................................................................. 63
Table 34: Total financial Requirement, project Investment cost & Sources of finance............................................... 66
Table 35: Total project Initial Investment Outlay by Existing & planned, Foreign & local Cost component ............. 67
Table 36: Revenue Determination (seals) .................................................................................................................... 68
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Table 37: Projected Operation estimated cost (direct and indirect) ............................................................................. 68
Table 38: Loan Disbursement Schedule (Plan) ........................................................................................................... 73
Table 39: loan repayment Schedule ............................................................................................................................. 73
List of Figures
Figure 1: Global pulses production and yield 2011–2016 (millions of tons) ............................................................... 17
Figure 2 : Google Map of Project area ........................................................................................................................ 38
Figure 3: Average maximum and Minimum Monthly Temperatures (oC) of the project area..................................... 41
Figure 4: Monthly Rainfall Distribution of the project area (Gurage Zone, SNNPRS) ............................................... 42
Figure 5: Prot Type Project Irrigation Schem .............................................................................................................. 47
Figure 6: Production flow of Mung Bean farming ...................................................................................................... 50
Figure 7: Organization Structure ................................................................................................................................. 61
List of Annex
Annex 1 PROJECTED INCOME STATEMENT ( Birr) ............................................................................................ 75

Annex 2 PROJECTED BALNCE SHEET (Birr) ........................................................................................................ 76
Annex 3. PROJECTED CASH FLOW STATEMENT (Birr) ..................................................................................... 76
Annex 4 INTERNAL RATE OF RETUREN (Birr) .................................................................................................... 77
Annex 5 Assumptions used in Financial Projections ................................................................................................... 78
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1. EXECUTIVE SUMMARY
1.1. PURPOSE OF REPORT
The present investment feasibility study business plan is established with view to establish new Toltu
Ture Trading, Plc Mung Bean Farm and Processing Project to produce export standard for export
market. This investment is initiated by newly established Mung Bean Farm investment with secured
1,999 ha land area at SNNPR Regional State, Gurage Zone, Cheha woreda and specific location of
Cheha low land adjacent to Give River. This summary highlights the key points of feasibility investment
business plan.
1.2 Description of the Project

The proposed project is specialized in Mung Bean Farm and Processing industry high value pulse crop
production for export market at acquired cultivated land processing building land of 1,999 ha and
capital requirements and to established new modern mechanized farm with installed capacity of three
times production per year.
The envisaged project Planned utilization capacity assumption is 70%, 80%, 90% and 100% for the
first, second, third and fourth later year respectively, with this assumption 1,398.955ha, 1,598.8 ha,
1,798.65 ha and 1,998.5 ha first, second, third and fourth respectively, 0.5 ha for farm facility
establishment and increased with respective utilization capacity seals and distributing to the export
market. The envisaged project farm has planned at full production capacity 23,982 Qt per annum as
raw material the company Processing Industry. The farm and processing Industry will be established at
SNNP Regional State, Gurage Zone, Cheha woreda. The specific location is located 70 km away from
Wiliket town the capital town of Gurage Zone. The specific location of the proposed investment area is
situated around the area described by geographic coordinates ° 10′ 0″ N, longitude and 37° 45′ 0″. E
latitude; which refers to the rural areas surrounding Cheha Woreda.
1.3 PROFILE OF PROMOTER

The anticipated “Mung Bean Farm and Processing Project” is initiated by the newly established Mung
Bean Farm, which is owned by W/r.Tigist Kasaaye. The company of the ownership is fully held by
W/r.Tigist Kasaaye.
The promotors ia Ethiopian-born and currently have a ethiopia citizenship. In view of their education
and work experiences, they bring a wealth of experience to the Company. W/r.Tigist Kasaaye has had
more than 10 years of related work experience and vastly involved in money management and
administrations.
1.4 OBJECTIVE OF THE PROJECT

To engage in the development of mung bean farm and processing project to produce export oriented
pulse crop production and export marketing with modern production and processing technology
1.5 Project Goal and Purpose
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 commercialization of agriculture and enhancing private improved
production sector development.
The project’s main objective is to implement an agricultural investment project using intensive
mechanized farming for the production of Pulse crops; which primarily involves Mung bean, cultivation
with high standards and quality of production; while ensuring optimal economic returns as well as
socially and environmentally acceptable production system that will attain full production level within
fourth years starting from the 2024 production season.
1.6 STATUS OF THE PROJECT

 New
1.7 MARKETING STRATEGY OF THE PROJECT

The mission of the project is to become Ethiopia’s and WTO premier provider of quality and safety
standards and associated cooler and size products. The company is dedicated to building long-term
relationships with customers through quality products and customer support. The best way to achieve
this, and the basis of the company’s initial marketing focus, therefore, is to promote the benefits for the
importer and international buyers company’s products.
Secondarily, promotional messaging should also play up the fact that Mung Bean is Gurage local
Origin-based Company.
The company will adopt creative and aggressive tactics to exclusively position its product into key target
markets. For instance, by offering low pricing and / or promotional supports to a particular product
profile will ensure that only Ethiopia Mung Bean appears on the shelf rather than some other country
products. Often, taking less revenue (or incurring a higher cost) when dealing with a certain customer
will incite that customer to agree to some sort of preferential agreement
1.8 Building & construction and Technology of machineries

The buildings & civil structure documents, the proforma invoices of machineries & equipment would be
evaluated & verified for their appropriateness of the technology & relevance to the project by the
Regional Construction Bureau’s civil engineering department. Similarly the project plant foreign
imported one would be verified for their appropriateness of the technology & relevance to the project by
the National Metrology and Standard and quality certified Agency.
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1.9 Management Capacity and Availability of key skilled
The company’s General Manager, W/r.Tigist Kasaaye has 15 years of relevant Real Estate investment,
Hotel and gust house service industry and has most relevant to this in the field of agriculture on 2000ha
of land abroad the country in Uganda experience in other line of business and this will enabled him fit
to run the company under consideration. In view of their education, he was pursued Business
Management (MB) Degree from Addis Ababa University. He will well managed the investment of
associated risks, supervise cash management activities, and execute capital-raising strategies to support
a firm’s expansion.
The company has also planned to hire other qualified technical staffs since agricultural farm and agro-
industry activities need experience and qualification of the management. Agronomist and industrial
Engineers, Machine Operators and quality Inspectors are the most recommended working on the system to
improve processing of Mung Bean standard and quality through applying modernized processing, grading &
packing practice integrated with agricultural research thus the company must recruit a General Manager.
Finance Manager, HR-manager, Marketing, Production Manager and Production & Technical unit head &
staff. So based on the experience gained from the different positions on the same line of business of the
general manager would be recruited with qualified personnel will enabled the company to run the
production and marketing process.
1.10 Project THE PROJECT’S INITIAL INVESTMENT

At the beginning of the production year the project will have the following costs
Description Amount Percentage
Total Initial Fixed Investment Costs 211,791,245 94.85%
Pre-production capital expenditure 4,235,825 1.90%
Working Capital 7,261,999 3.25%
Total 223,289,069 100.00%
1.11 Source of Finance

Description Amount D/E Ratio
Debt -DBE Loan 167,466,802 75%
Equity 55,822,267 25%
Total 223,289,069 100%
1.12 Expected Financial Results (VIABILITY)

Description Project Years
1 2 3 4-10
Gross Sales Revenue 60,000,000 63,000,000 66,150,000 69,457,500
Profit (Loss) 13,704,334 11,811,409 3,183,548 5,367,817
Cumulative Cash Balance 151,881,641 291,177,564 404,312,674 506,630,826
FIRR before Tax 17%
FIRR after Tax 15%
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1.13 Sensitivity
Description IRR Before Tax IRR After Tax
When Revenue decreased By 10% 11% 9%
When Operating Costs increased By 10% 14% 12%
1.14 Project Component

 Total Farm area: 1,999 ha including Farm Facility Establishment
 Types of investment: Buildings for office, stores, residence, workshop Agricultural
machineries & implements Vehicles
 Estimated production (Qt)
Type of Crop Unit Year 1 Year 2 Year 3 Year 4-10y
Utilization Capacity % 70 80 90 100
Mung Bean(ha) ha 1398.95 1598.8 1798.65 1998.5
Cultivation frequency No 3/year 3/year 3/year 3/year
Yield Qt/ha 12 12 12 12
Total Yield(quintals) Qt 16,787 19,186 21,584 23,982
1.15 SOCIO-ECONOMIC JUSTIFICATIONS

The project can create permanently employment for 24 persons and for more than 500 casual laborers
in daily base for more than ten months. The establishment of such processing plant will have a foreign
exchange earing effect to the country by supplying high quality of Mung Bean processed product for
international and national market. The project will also create backward linkage with the out-grower
producer farmers and also generates income for the government in terms of tax revenue and payroll tax.
In addition to supply of the product to domestic market the project will generate ETB 5.148 million in
terms of tax revenue at full capacity processing in the fourth year and growth with the ten years of
project periods
1.16 Rational Behind the Project

The some of the rational for establishment of the envisage project for the production of high quality
Mung bean using high value added technology which will established top modern processing and
grading industry that are a Gurage Zone land origin of product delivering.
Policy: Government the new ten years strategic plan, which promotes new investment in water
industrial sector and specially encourages farm and agro-processing processing using high value added
technology introduction for the production of high quality standard pulse crops which have a great
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advantage for others investment development currency generating directly or indirectly contributes to
fill full the Ethiopia supply gape of agricultural product export to global market ones.
The core policy of the Government of Ethiopia, ADLI (Agricultural Development Led Industrialization)
is based on the sector where the country has comparative advantage.
LABORS: In Ethiopia, skilled and unskilled labour is cheap that can be engaged in various industrial
sectors. Different Government and nongovernmental institution and universities have been training
students on different field education and related disciplines water technology 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 industry is a factor since professional
management is the key success factor to increase the factory productivity.
AVAILABILITY OF RAW MATERIALS: The principal improved variety row material of the project
Mung Bean seed has been purchase and the availability is optioned in the national market and the
pervious commercial farm based on the recommended rate of 24kg/ha a total 12 tons per year.
MARKET: High market demand supply gap at the global market and to fill full this gape there is
availability of high quality Mung Bean product supply to the international market.
1.17 Recommendations
All the aforementioned facts discussed above and the feasibility study on market, technical, financial,
and social point of view proves the project is viable business plan and one of the government's
priorities, which contributes for the government strategy on development worth deserving
encouragement and support from the pertinent government financial institution and banks
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2. INTRODUCTION
Mung bean (Vigna radiata L.) is one of the most important pulse crops, grown from tropical to
subtropical areas around the world (Kumar SG, Gomathinayajam P, Rathnaswmy R. Madras Agric J.
1997). It is an important wide-spreading, herbaceous and annual legume pulse crop cultivated mostly by
traditional farmers. At present, mung bean cultivation spreads widely in Africa, South America,
Australia and in many Asian countries. The world annual production area of mung bean is about 5.5
million hectare with an increase in rate of 2.5% per annum (Boca Raton: CRC Press; 2005). Its
requirement in growing in areas where the rainy season is short, and its wide adaptability together with
its digestibility makes mung bean cultivated all over the world Mung bean is utilized in several ways;
seeds, sprouts and young pods are all consumed and provide a rich source of amino acids, vitamins
and minerals.
Mung bean is used in several food products, both as a whole seed and in processed form. Whole seeds
are sold for use in soup mixes or to produce bean sprouts for salads. Processed mung beans are used for
soup bases or sometimes for bean flour. Like most legumes, mung beans are relatively high in protein,
around 25% of the seed by weight. The amino acid profile of mung beans, similar to other beans, is
complementary to cereal grains.
Mung bean is used in several food products, both as a whole seed and in processed form. Whole seeds
are sold for use in soup mixes or to produce bean sprouts for salads. Processed mung beans are used for
soup bases or sometimes for bean flour. Like most legumes, mung beans are relatively high in protein,
around 25% of the seed by weight. The amino acid profile of mung beans, similar to other beans, is
complementary to cereal grains.
Currently, mung bean is produced in diferent parts of Ethiopia. It is mainly cultivated in North Shewa,
Harerge, Illubabor, Gamo Gofa, Tigray and Gondar. Farmers in some moisture stress areas of Ethiopia
effectively use and produce it to supplement their protein needs. Ethiopia’s green mung bean export has
grown slightly from 822 tons in (2001) to 26,743 tons in 2014 to fulfill the demand of India, Indonesia,
Belgium and the UAE (MoARD (Ministry of Agriculture and Rural Development: annual report 2008).
In Ethiopia, mung bean covers about 27,086 ha of land and produces 216,305.1 tons (2016) in main
cropping season per annum with average productivity of 1.5 ton ha per hectors.
Globally, the volume of mung Bean and other pulse production has increased gradually over the last 6
years, from 56.48 million tons in 2011 to 81.80 million tons in 2016. The largest markets for food pulses
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are in India, Bangladesh, Pakistan and Sri Lanka. Six subsectors of pulses (peas, kidney beans,
chickpeas, lentils, gram beans and Mung Bean) account for four-fifths of the market share of all
traded pulses.
Despite being Ethiopia’s third commodity export, there has been low investment in pulse research
compared with that for cereals, both by the Government and donors. Similarly, pulse initiatives have
been given less priority. From a world market point of view, Ethiopia’s pulse exports represent 3 % of
world pulse exports of which currently mug bean reach 2%.
According to central static 2016 data (the most recent available), the most important export destinations
for pulses are Pakistan, India, Indonesia and Viet Nam. Pulses accounted for 6.93 % of export earnings
in Ethiopia, and contributed more than US $ 248 million to the country’s hard currency reserves in 2016.
In the last five years, the growth in exports in value has been 61 % annually, with broad beans
representing the bulk of this growth. At present, pulses account for 13 % of the cropped land in Ethiopia.
In terms of area, pulses are second in area coverage and production in Ethiopia after cereals, with over
1.5 million hectares and 2.67 million tons of production.
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3. BACK GRONUD INFORMTIO OF THE PROJECT
3.1 World Production Scenario
Pulses represent a global industry worth over US $ 100 billion at the retail level, underpinned by 81
million tons of production which is exported to over 55 countries. Rising income levels, along with
population growth and an increase in middle-income classes in developing countries, have increased
demand for foodstuffs, including pulses. Some econometric studies estimate the range of demand
elasticities for pulses to be between 1.5 and 2.3%. This indicates that an annual increase in per capita in-
come of around 6 % would lead to an increased demand of more than 10 % for pulses. The growth of
middle-income classes in non-traditional markets such as those in Africa and Asia, and the rise of a
supermarket culture in developing countries have led to increased demand for processed foods, which
also drives increased demand for pulses, especially pigeon peas, chickpeas, mung bean and dry peas
(Knight, R., ed. ( 2000 ).
Change in dietary patterns is another key driver of increased demand for pulses. With greater awareness
of coeliac disease and gluten sensitivity, demand is rising for pulses such as yellow peas, lentils and
chickpeas, which are some of the best available gluten-free options.
Table 1: Global
pulses production and yield 2011–2016 (millions of tons)
Area (ha
Year million) Production (million tons)
2011 70.84 56.48
2012 69.74 54.57
2013 67.76 56.23
2014 73.37 62.4
2015 79.6 69.8
2016 82.38 81.8
Total 443.69 381.28
Source: FAOSTAT (2016)
The global volume of pulses production has increased gradually in the last 6 years, from 56.48 million
tons in 2011 to 81.80 million tons in 2016. The world production of pulses is dominated by a few
countries which include India ( 21.47 % ), Canada ( 10.03 % ), China ( 5.19 % ), Myanmar ( 8.03 % )
and Nigeria ( 3.78 % ), which together account for more than half of the world’s output. African-origin
pulses have gained significant importance in recent years. For the detailed information see in Table 1
and Figure 1 below
16
Figure 1: Global pulses production and yield 2011–2016 (millions of tons)
2.2 Ethiopia Production

The overall acreage of production is over 1.5 million hectares of which Mung Bean is 27,086 ha in
2016 production season and overall output is almost 3 million tons of which 216,305.1 tons (2016) in
main cropping season per annum with average productivity of 1.5 ton ha per hectors .
Pulses are the third most important group of commodities export, after coffee and sesame, thereby
contributing significantly to the country’s foreign currency requirements. Ethiopia ranks among the top
ten countries in the world for pulses exports with an estimated value of USD 248 million and volume of
393,282 tons of which 216,305.1 tons is Mung Bean in 2016(see Table 2).
Despite Ethiopia’s growing exports of pulses in recent years, the country still remains a small player in
the global market representing only 3% of world pulses exports in 2016. The potential of the sector is
yet to be fully utilized as a result of various challenges along the entire value chain
Table 2: Ethiopia Pules Production form 2012-2016 (tons)
year Production Of Pulse Mung Bean Production Share of Mug Bean (%)
2012 356071 89017.75 25%
2013 353645 130848.65 37%
2014 341767 82024.08 24%
2015 375969 146627.91 39%
2016 393282 216305.1 55%
17
Total 1820734 664823.49
2.3 Commercial Farm in Ethiopia
Most of the commercial farmers are located in Gambela, Benishangul Gumuz and western Amhara.
Commercial farmers such as Saudi Star, Tracon or S & P have been planting mung bean recently. The
crop has also been adopted by farmers in the Humera and Metema areas as a rotational crop for sesame.
There are over 1,000 commercial farmers in these areas, with an average holding of 200 ha. In the past,
most of these commercial farmers were focusing on cotton and sesame, the former for the emerging
domestic textile industry and the latter as an important export commodity. They have recently switched
to beans, mainly soya and mung bean, for three reasons:
1) international market price for mung bean;

2) lower production costs of both soybean and mung bean;
3) valuable impact on soil fertility
2.4 Company Profile
Company Name: Toltu Ture Trading Plc,Munmg bean Farm And Processing
Ethiopian (i.e. Registered with the Investment Office of (Southern
Nationality:
Nation, Nationality, Regional State, Gurage Zone )
Owner(s): W/r.Tigist Kasaaye
Type of business: Crop Production (Mung Bean farming)
Full Address : Address: Gurage Zone, Cheha woreda
Mobile: 09-11-21-31-34
Project Name: Toltu Ture Trading Plc, Mung Bean Farm and Processing Project
Status of the Project: New
Proposed Site: Cheha woreda, Gurage Zone Administrative, SNNPRS
Specific location: Within the rural areas surrounding Cheha Woreda
Size of proposed land: 1,999 ha for Farm
Total estimated capital: 223.289 Million Birr
Legal Form of organization: Private
Registering Agency: Gurage Zone Investment Office
Taxpayer Identification No.: ------------------
Right of Occupancy: Lease agreement
Contract Period: 25 ears (2023-2048)
18
2.5 The Promoters
The anticipated “Toltu Ture Trading Plc,Mung Bean Farm and Processing Project” is initiated by the
newly established Mung Bean Farm and Processing Company, which is owned by Toltu Ture Trading
Plc. The company of the ownership is held by munbers of Toltu Ture Trading Plc.
The promotors were Ethiopian-born and currently have a ethiopia citizenship. In view of their education
and work experiences, they bring a wealth of experience to the Company. The compan mumbers have
had more than 10 years of agriculture, oil company hotele service and export and import experience and
vastly involved in money management and administrations.
The project envisages establishment of a new pulse crop production and processing with specific focus
on Mung bean farming as its immediate objective. Nevertheless, other crop types and/or enterprises
could be included based on results of future studies. The project is expected to introduce advanced
technologies and improved practices in Mung bean farming supported by the rich experiences of the
promoters gained in the Ethiopia. Thus, the project will create better employment opportunities for the
local communities and facilitates a good deal of technological transfer to the country.
2.6 Goal and objective
2.6.1 Overall goal
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 commercialization of agriculture and enhancing private sector
development.
The project's contributions to the economy, upon realization of a full production level within fourth
years; include creation of jobs and permanent employment opportunities to the local people as well as
bringing considerable annual income in hard currency and tax revenues; part of which will be reinvested
in the immediate community infrastructure.
2.6.2 Main and Specific objective
 Main objective
The project’s main objective is to implement an agricultural investment project using intensive
mechanized farming for the production of exportable pulse seed; which primarily involves mung bean
cultivation with high standards and quality of production; while ensuring optimal economic returns as
well as socially and environmentally acceptable production system that will attain full production level
within three years starting from the 2024 production season.
Through ascertaining high standards and quality of its production; the anticipated project will fulfilled
the Ethiopia pulse sectors and strive to complained exportable mung bean production regulation
adhering to their standards.
19
 Specific objective
The specific objectives of the project are:
 The production of mung bean in a socially and environmentally acceptable way;
 To make mung bean production traceable through transparent and accountable method;
 To involve buyers in the process of mung bean production through provision of inputs;
 To raise the standard and quality of mung bean through collaboration with the country’s
research and development organizations;
 Reduce the environmental impact of our operation by devising methods such as no till farming
and use of Bio-fuel;
 To allocate 3% of our profit to reinvest in the community; and,
 Create jobs and help locals acquire skill through training.
20
4. KEY SUCCESS & RISK FACTORS AND RISK MITIGATING MECHANISMS
4.1 Key Success Factors
4.1.1 Macro level success Factors
4.1.1.1 Favorable investment environment
The government gives due attention to the agricultural sector through its policies and Strategies such as
provision of low cost of lease land, low bank interest rate and low taxation rate. These provisions initiate
investors to invest their capital & create favorable business environment.
There are vast suitable pulse crop areas for Mung bean production; this gives Considerable
opportunities for new private investment in the production of coffee.
The government gives attention through the relevant organs to reduce and suppress major pulse crop
diseases that affect the productivity of the crop by improved varieties and chemicals. There is an
attractive investment and agricultural & industrial policy of the government
There is Access to land & low cost of rural land available for leasing and efficient investment
service
There is Secured peace and stability throughout the country
Government provides access to credit at lower interest rate as incentive
Conducive and stable macro- economic environment
Government provision of different incentives like tax holidays, low Bank interest rates, adequate
grace period, favorable remittance policy etc.
A continuously increasing GDP Growth which highlights a positive trend of economic growth.
Progressive improvement in infrastructure mainly transportation, that supports the production of
agricultural output to avail for the market in the preferable quality and quantity.
Provision of skilled, educated and specialized manpower from Universities, Technical and
Vocational Colleges and institutes.
Existence of trained and cheap manpower and sufficient availability of daily laborers in the
country.
4.1.1.2 Favorable Climatic Condition

 Suitable agro-ecological conditions, in which Ethiopia is endowed with agro-climatic conditions
that are suitable for the production of temperate, tropical and sub-tropical crops among which
Mung Bean is one.
21
4.1.1.3 Enhancement of Research and Development
The target of research and development is either to advance new technologies or adapt the
existing technologies to its most suitability to the producers and customers.
4.1.1.4 High Demand of Ethiopian Coffee in Domestic & Foreign Market

The demand for mung bean is very high in both foreign markets since Ethiopia is recognized as the
historic birth place and the origin of coffee Arabica, Ethiopia has immense potential to offer the world
top ten pulse crop producers and exporters market a wide variety of pulse crops. The growth of middle-
income classes in non-traditional markets such as those in Africa and Asia, and the rise of a supermarket
culture in developing countries have led to increased demand for processed foods, which also drives
increased demand for pulses, especially pigeon peas, chickpeas, mung bean and dry peas.
Today change in dietary patterns is another key driver of increased demand for pulses. With greater
awareness of coeliac disease and gluten sensitivity, demand is rising for pulses such mung bean, which
is one of the best available gluten-free options. Worldwide are appreciating the value of organic mung
bean products which have the greatest demand in foreign market. With the right policy environment and
investment in the pulse sector, the prospect of mung bean export by Ethiopia is increasing through the
great effort of the private sector.
4.1.1.5 Investor Friendly Policies in the Agricultural Sector

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.
The production and processing of mung bean crops is being placed by the government in the list of high
priority areas and various incentives have been provided for investors investing in this sub-sector. To
improve Mung Bean productivity various research institute in Amhar and Oromiya Region like
Mulikasa Agricultural Research Center have been established. The institutions are playing a great role in
identifying the most production Mung Bean varieties that are productive and disease resistant.
Moreover, the current emphasis is on the development of infrastructure and public service in the remote
rural areas.
22
4.2.2 Sector level success Factors
4.2.2.1 Support institutions

Availability of support institutions for this envisaged project investment development. Ethiopian
Agricultural Research Institute (EARO) works on the sector & also on pulse export association & has
identified the high yielding & disease resistant varieties through research. Agricultural Research
Institute provides developed and adapted variety of seeds.
4.2.2.2 Farm Labor availability at manageable cost

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 by availing arable land
in mung bean production 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 such as ECX (Ethiopian commodity exchange) and promoting export.
4.2.3 Firm level success Factors
4.2.3.1 Capacity (Competence) of the Applicant

The company’s General Manager W/r.Tigist Kasaaye has Business Management (MB) Degree from
Addis Ababa University as well as 15 years of relevant experience in the field of Real Estate investment,
Hotel and gust house service industry and has most relevant to this in the field of agriculture on 2000ha
of land abroad the country in Uganda those will enabled him to fit to run the company under
consideration. Moreover, the company has a plan to hire other qualified technical staffs since Mung Bean
production activities need experience and qualification of the management especially agronomist are
recommended to do on the system to improve mung bean productivity through applying good and
modernized agricultural practice integrated with research. Thus the company must recruit an agronomist
23
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 that
would be recruited an agronomist farm manager & other technical & qualified personnel.
4.2.3.2 Capital
The total capital of the Company is Birr 223,289,069.- The owner’s equity contribution requirement on the
project amounts to Birr 66,986,721 in cash to be deposited in blocked account. The promoter’s registered
capital is adequate to cover his equity contribution requirement to the project. Therefore, the company hasn’t
needs to raise its equity capital in order to realize this project.
4.2.3.3 Collateral for the Loan

This project is favored with the government policy incentive of holding the fixed asset on the project as
collateral for loans granted to government priority area of investment projects. The total project cost is birr
223,289,069 while the fixed asset investment cost, excluding the pre-operating birr 4,235,825 and working
capital costs amounts to birr 7,261,999. This amount can be held as first degree collateral by DBE which
accounts to 70 % of the loan amount. (Birr 156,302,348)
4.2.3.4 Compliance
All permits and licenses required for the project have been submitted. The Kind of business itself also adhere
the Government’s laws and regulations. Even in particular case with the bank’s financing policy; the project
is one of the priority areas. Thus, it is possible to say that the project complies with all national and local
laws and regulations as well as the bank’s policies and procedures.
4.2.3.5 The location of the project site

The project site is a firm level success factor. The selected project site or locality is well known for its
suitability for cultivation of mung bean crop for many years and the farmers have been harvesting high
quality specialty mung bean.
4.2.4 Firm Level Risk Factors

There is no business firm that operates without any of risk. All the businesses are truly rounded by
various types of risk even if their reacting mechanisms differ from one to the other. Since the company
is new for the international market, it will face market problem during the early age of establishment
24
which is obvious for the new entrant. The company will also face high competition from both existing
local mung bean exporters to the international market.
4.2 Risk mitigating Mechanisms for risk factors indicated
Mitigate the risk associated with mung bean pest and disease, the project will use chemicals to
control the disease & will hire professional farm manager and will co-work with the agricultural
offices for technical support at the project surrounding
To tackle the lack of well co-ordinate marketing system at the sector, the project shall develop
viable marketing strategy by its own directly export
Establish market relationship with local and international agents.
Implementing dynamic and appropriate marketing strategy in order to dominate its Competitors
and penetrate the market.
Using Intensive promotion and advertisement through different media to create brand awareness.
Conduct operation as per calendar of production to coincide the market high demand.
Preparing contingence plan for risk management
Every business and organization can experience unfavorable incidents that can prevent it from
continuing its normal operation. One of the first contingence planning task to be undertaken is to
prepare a comprehensive list of the potentially serious incident that could affect the normal operation
of the business, a major risk management technique to mitigate the undesirable effects.
Strengthen the connection with research and development to compact both pests and disease
Gradually decrease dependence on rain fed agriculture through developing & efficient utilization
of the existing irrigation system to mitigate the effect of climatic change.
Enrich soil through manuring and other techniques to compact soil exhaustion that possible
reduce productivity of mung bean.
Planning in advance of labor requirement and mobilizing from all concerns avoids the risk of
labor shortage too pick red cherries when they are ready
Volatility of the global Mug Bean market price is a major risk. This can be managed through
producing and exporting quality mung bean. Besides effective international marketing and
promoting is an important risk management tool together with quality control
25
4.3 Analyzing the Business Environment using the SWOT Model
Strength: (Internal Environment) Opportunity (External environment)
The company’s owner General Manager, Demand for mung bean in foreign market. High
W/r.Tigist Kasaaye has a Business Management international demand for Ethiopian mung bean.
(MB) Degree from Addis Ababa University as Ethiopian mung bean to be seeking for its organic
well as 15 years of relevant experience in the same nature. Thus, the high demand leaves Ethiopia
line business in Real Estate investment, Hotel and with a great opportunity for international market.
gust house service industry and has most relevant High foreign consumer preference of Ethiopian
to this in the field of agriculture on 2000ha of land mung bean. Growing demand of mung bean in
abroad the country in Uganda those will enabled international market by it quality.
him to fit to run the company under consideration. Provision of credit facilities from lending
Moreover, the company has a plan to hire other institutions at lower interest rates
qualified technical staff. Possession of virgin land Good government policies and incentives
& fertility of the land of the project area can be a to the agricultural sector
strength point. The increase of disposable income of the
people, population growth and urbanization
results in an increasing demand for dietary
preference of mung bean.
 Stable political environment, peace
and security for investment.
 Good government policy towards
agro- processing and marketing.
 Increase in population and consumer
demand.
 Favorable climatic condition almost
all the year round.
 High foreign consumer preference of
mung bean.
Weakness (Internal Environment) Threats ( External Environment)
Since the project is new establishment, there may The prevalence of disease is the main threat to the
be challenges arising from different angles of viability of the project.
operational & managerial activities.  Natural calamity that result in less
productivity
 Unhealthy Competition of Exporters
 Rain-fad nature of Ethiopian mung bean
production system
 World mung bean price fluctuation.
 Relatively weak competitive position of
developing country suppliers and less
response of developed country for
developing country.
 High Standards of Quality and food safety
requirement
26
5. MARKET STUDY AND APPLICATION
5.1 Global Scenario
5.1.1 Global Market over View
According to FAOSTAT estimate (2016) and National Pulse Strategy (2019-2024), reviled the global
trade in pulses accounts for 7.88 % of global production, with 92.12 % of production consumed locally.
Still, the global trade in pulses is not a residual market, as several countries produce pulses for export,
while many others rely on the world market to meet domestic demand. Since 2016, global trade in
pulses has expanded by an average of 7% per annum, reaching a volume of 12.091 million tons in 2016.
Global consumption of pulses can be categorized into two major markets. One concerns the demand
driven by human consumption, and the second by the alternate use of pulses for animal feed.
Traditionally, low-quality, cheap pulses have been consumed as animal feed. In addition, there is some
minor use of pulses in non-food sectors, including seeding and wastage. It can be safely assumed that
there is limited variation in stocks from year to year, and that the non-food uses of pulses are a small
percentage of total production. As a result, global consumption is more or less equal to global
production. The largest markets for food pulses are in India, Bangladesh,
Five subsectors of pulses (peas, kidney beans, chickpeas, lentils and mung beans) account for four-fifths
of the market share of all traded pulses. Figure 3 shows the main products which are imported within the
pulses sector. The most exported products are dried peas, which account for almost a quarter of global
pulse imports (with India being the highest importer at 41.9 % in terms of value).
Table 3: World Pulse Export Quantity from 2011–2016 (metric tons)

Year World Export (tons) GR%
2011 8,662,950.00
2012 9,048,662.00 4%
2013 9,456,367.00 5%
2014 10,038,948.00 6%
2015 11,250,207.00 12%
2016 12,091,459.00 7%
Total 35%
Average CGR% 6%
27
5.1.2 Global Mung Bean Importers
India has been by far the largest importer of pulses over the past decade and accounts for about 31.5 %
of world imports. Specifically, India’s imports increased from US $ 1.459 billion in 2008 to US $ 4.017
billion in 2016. The high demand for pulses in India is mostly due to its vegetarian population, the
increase of purchasing power across its poorest population and unfavorable local weather conditions
(Reddy, A. Amarender, Bantilan, M.C.S. and Mohan, Geetha (2013)
The lading pulse importer countries are Pakistan and China. Its share has risen at 15 % at 2016 and India
is the second lidding country, Bangladesh and USA are in the third level and another country that has
shown an impressive rise of demand for pulses during the past five years is China. Its share has risen at
7 % average at 2016. In fact, due to its growing use of dry bean protein to enrich vermicelli noodles and
the country’s slow expansion of pulse production, China is likely to change from being a net exporter to
a net importer of pulses. It may also overtake India as the number one importer of yellow peas in the
near future (Geetha , 2016 )
Table 4: major Importers Country in Year 2016

Importers Quantity Annual growth (%)
(tons)
India 6,180,000.00 14
Pakistan 890,000.00 15
Bangladesh 850,000.00 11
United Arab Emirates 480,000.00 10
China 1,070,000.00 7
Egypt 430,000.00 1
Turkey 470,000.00 15
Brazil 410,000.00 -4
Italy 310,000.00 3
Others 5,680,000.00 5
Total 16,770,000.00
Average CGR (%) 17.7%
28
5.2 Ethiopia Scenario
5.2.1 Pulse Trade in Ethiopia
Ethiopia’s most prevalent export goods are coffee, tea, mate and spices (US $ 1,049 million (21 %)), as
well as edible vegetables, to which pulses belong (US $ 897 million (18 %)). Ethiopian exports of pulses
reached US $ 240 million in 2016, and represented 5 % of Ethiopia’s total goods exported.
Out of the total Ethiopian production of 393,282 tons of pulses in 2016, nearly 48 % of pulses were
exported (see Table 6). From a world market perspective, Ethiopian exports of mug ban represent 2 % of
pulse exports. With this, Ethiopia ranks among the top 10 countries in world pulse exports with an
exported value of US $ 240 million (129,242,961 birr) see table 5 and exported volume of 393,282.00
tons of which mug bean is 159,160 tons with cumulative average growth rate 41% in 2016. Ethiopia’s
export trend in pulses reached a compound annual growth rate of 61 % between 2011 and 2016.
Table 5: Ethiopia Total export Value from 2012-2016 (Birr)

Commodity 2012 2013 2014 2015 2016
Pigeon peas 0 0 52756 599667 0

Broad beans 23,629,814.00 24,265,690.00 28,523,674.00 47,289,895.00 6,646,663.00
Lentils 835.00 10,776.00 10,722.00 - 874.00
Cowpeas - - - 27,400.00 -
Kidney beans 9,663,312.00 149,441,499.00 182,909,741.00 130,386,878.00 107,577,824.00
Mung beans 45,288.00 3,472,358.00 2,658,344.00 598,035.00 15,017,600.00
Chickpeas 55 096 562 40 710 798 26 849 862 29 971 309 67 238 315
Total 33,339,249.00 177,190,323.00 214,102,481.00 178,302,208.00 129,242,961.00
Mug bean Share Percent 0.14% 2% 1% 0.34% 12%
Source: Ministry of Trade (2016)
Table 6: Ethiopia Total export Volume from 2011-2016(tons)

year Total Production Of Pulse Mung Bean Export GR%
2012 356,071.00 16,712.00
2013 353,645.00 22,737.00 36%
2014 341,767.00 22,719.00 0%
2015 375,969.00 28,174.00 24%
2016 393,282.00 68,818.00 144%
Total 1,820,734.00 159,160.00 204%
CAGR% 364,146.80 31,832.00 41%
Source: Central Statistical Agency of Ethiopia (2016)
5.2.2 Market Destination

According to the most recent available data (2016 ), the most important export destinations for pulses
are Pakistan, India, Indonesia and Viet Nam, with export values of US $ 72.98 million, US $ 27.78
29
million, US $ 27.67 million and US $ 27.37 million respectively (see table 7). These countries already
represent more than half of Ethiopia’s export destinations in value, which means that market
concentrations have improved. Moreover, the number of markets with sales valued above US $ 1 million
grew from 6 in 2012 to 24 in 2016. Hence, Ethiopia has diversified its significant export market in the
past few years.
A closer look at Ethiopia’s pulses trade with India reveals that Ethiopia sold 11.17 % of its exported
pulses to India and between 2012 and 2016, pulse exports to India grew with an annual growth in value
of 61.3 %.
Table 7 : Largest destinations for Ethiopia’s pulse exports, 2012-2016 (US $)
Importing country Quantity Trade value Percentage of Ethiopian
exported (tons) (US$ ) pulse exports
Pakistan 85 294 72 980 447 29.34
India 33 696 27 789 588 11.17
Indonesia 22 174 27 671 834 11.12
Viet Nam 23 408 27 374 384 11
United Arab Emirates 12 975 12 689 443 5.1
Kenya 26 459 11 331 827 4.56
Sudan 12 483 8 798 218 3.54
South Africa 9 414 7 130 513 2.87
Yemen 8 750 6 666 530 2.68
Russian Federation 7 840 6 098 710 2.45
Malaysia 4 328 5 343 449 2.15
Other 49 336 34 867 473 14.02
Source: ITC calculations based on FAOSTAT (2016) and United Nations Comtrade statistics (2016)
5.3 Demand and Supply Analysis
5.3.1. Past Supply Mung Bean Crop
Ethiopia produces tropical and sub-tropical pulse crops which is 10 world producers and exporters. An
accurate estimate of production is 48 % of production export to difference world countries and the
reaming 52% of pulse crop is consumed locally. A production growth rate of mung bean according to
CSA, 2016 office of National Analysis average annual production increase by 27 percent, mug bean
export also increased by 41% from every year for the last 5 years(see Table 8 & 9) this is keep for the
future because of Ethiopia create new market a strong partnership with existing destination of Pakistan,
India, Indonesia, Viet Nam, United Arab Emirates, Kenya, Sudan, South Africa, Yemen, Russian
Federation and Malaysia and out of those countries show strong interest to import Ethiopian mung bean
30
Table 8: Mung Bean production from 2012- 2016
year Domestic Production GR%
2012 89,017.75
2013 130,848.65 47%
2014 82,024.08 -37%
2015 146,627.91 79%
2016 216,305.10 48%
Total 664,823.49 136%
CAGR% 132,964.70 27%
As can be seen from Table 8, domestic production of mung bean which was 89,017.75 tons at the
beginning of the period (2012) has grown to 216,305.10 tons at the close of the period (2016). It can also
be observed that exports amounted in the thousandth’s (132,964.70 tons on average) in 2012- 2016.
There were no more fluctuations within these intervals. So, it will be more appropriate to take the
average of last six years in estimating the year 2017 production level. Accordingly, the year 2017
domestic production of mug bean e is estimated at 132,964.70 tons
5.3.2 Mug Bean Export from Ethiopia

CSA, 2016 office of National Analysis compound average growth rate of mung bean export increase by
41 percent, every year for the last 5 years (see Table 9)
Table 9: Mung Bean Export from 2012- 2016
year Export GR%

2012 16,712.00
2013 22,737.00 36%
2014 22,719.00 0%
2015 28,174.00 24%
2016 68,818.00 144%
Total 159,160.00 204%
CAGR% 31,832.00 41%
It can be seen from Table 9 that export has been small in amount as compared to domestic production.
The pattern with exports has shown more or less similar situations to that of domestic production. In
estimating the 2017 export levels the average of five years has been taken. Accordingly, export of
compound average mung bean for 2017 has been estimated at 31,832 tons.
31
Thus, subs tract domestic production and that of export, the present effective domestic demand of
mung bean for 2017 is estimated at 101,132.7 tons (132,964.70 -31,832= 101,132.7).
5.3.2 Present Demand projection of Mung Bean

Demand for roasted coffee has two sources; domestic component and export. The domestic demand (D)
is obtained by the formula: D= PD + E where PD is domestic production, E export thus for year
2017 it is 101,132.7tons. The domestic demand for roasted coffee depends on level of income and
population growth rates. Moreover, the product’s superior convenience will have a positive effect on the
level of demand, since the product is high valued.
Types of major consumers are expected to be urban dwellers and those prosperous among the rural
society. However, it has been assumed for this purpose that the urban residents will be major target
consumers of the product. According to CSA (20217) the urban population is growing at more than 5%
per annum. The country’s economy is growing at 11%, the population and income effects are also
similar. With such understanding 4% is used to project demand growth. Domestic production is
expected to remain at year 2017 level (101,132.7tons). Export is forecasted to grow by its average
growth rate of the last four years i.e., 41%. The demand projection for roasted coffee is depicted in
Table 10: Demand projection for Mung Bean Crop (Tones)
Total
Export Total Domestic
Year Domestic Demand Unsatisfied
Demand Demand Production
Demand
2023 125,421 130850 256,271 132,965 123,306
2024 131,692 136084 267,776 132,965 134,811
2025 138,277 141527 279,804 132,965 146,839
2026 145,190 147188 292,379 132,965 159,414
2027 152,450 153076 305,526 132,965 172,561
2028 160,072 159199 319,272 132,965 186,307
2029 168,076 165567 333,643 132,965 200,678
2030 176,480 172190 348,670 132,965 215,705
2032 185,304 179077 364,381 132,965 231,416
2033 194,569 186240 380,809 132,965 247,845
5.4 Production Plan

Considering the need for skill development and the time required for market penetration (export market)
the production farm will be planned to start operation at 70% of the capacity in the first year, and will
grow to 80% , 90% and 100% in the second, third and fourth years respectively. The farm will operate
32
at full capacity operation in the fourth year and then after. It is estimated that the product is about 90%
to the export market and 10% for domestic market.
Available in a wide range of different packaging size such as 100kg, 50kg and 30kg, these products are
designed keeping in mind the most up-to date supplying trends. The different customers demand and are
tremendously comfortable to costumers. Our main products supply offered for all time are:
First grade for export
Low grade for local market.
The farm operates in one shift of 8 hours & 300 days per annum and has a production capacity of mung
bean Products as shown in the following table 11.
Table 11: Production Plan of the project
Type of Crop unit Year 1 Year 2 Year 3 Year 4-10y

Mung Bean(ha) ha 1398.95 1598.8 1798.65 1998.5
Yield Qt/ha 12 12 12 12
From the total company products export constitutes 90% and 10% for low grade products respectively of
the total products.
After start-up funding is secured, we will expand the types of value added mung bean items available
and the customization options. Additional items to the company couture product line will include mug
bean different products. The company will add a new product line of high-quality processed products.
5.5 Market Distribution

The supply of mung bean depends upon production capacity of the project for supplies. A full
production capacity production of the farm will result in large quantity of products availability in the
market. The company directly supplied to the company processing Industry for the value addition. For
this project seasonal availability calendar of the above mung bean is as shown below table-12:
Table 12: Bar diagram showing periods of supply of Mung Bean Seed
Segment/Products Months
Jan Feb Mar Apr May Jun Jul Aug. Sep Oct Nov Dec
Mung Bean Seed - -
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The company fare will supported by irrigation (production 3 times per year), so as there will not be a
shortage of supply. The medium used for supply period of mung bean preparation during July to August,
while the most prevailing marketing channels for supply to mung bean through October to august export
and local market and September to October more lees supplying seasons.
5.6 PRICING
Mung bean has recently emerged as a major export commodity. Ethiopia exported a total 180,060 Mt of
mung bean over the last three years. India, Malaysia and the Netherlands are the three major import
destinations of Ethiopian mung beans.
The table below shows the value of imports by Norway countries for that specific year is high. Its price
was 2,870 $/Mt, it is higher than the other countries. Ethiopian mung bean is considered good quality,
with a shiny green colour and a reasonable size. Table 13 summarises mung bean exports from Ethiopia
to different countries, including the price per Mt. The average price was 2,335$/Mt
However the company price determine after value addition processing cost incur, for this reason the
actual price can be seen in the processing section of the project.
Table 13: Price and volume of mung bean exports from Ethiopia
Volume ACGR%
Sr.no Destination Value ($) Price ($/Mt)
(Mt)
1 India 2,529,627 2,815,149 2,112.87
2 Malaysia 1,578,667 1,650,589 2,045.56 -3%
3 Thailand 105,333 107,323 2,018.89 -1%
4 Iraq 80,000 91,000 2,137.50 6%
5 Singapore 80,000 89,704 2,121.30 -1%
6 Kuwait 8,000 10,400 2,300.00 8%
7 Czech Republic 4,167 5,083 2,220.00 -3%
8 Netherlands 384,000 476,280 2,240.31 1%
9 Norway 120,000 140,400 2,870.00 28%
10 Germany 72,000 89,280 2,840.00 -1%
11 Italy 24,050 30,843 2,782.45 -2%
Total 4,985,844 5,506,051 25,688.88 32%
CA-Value Price 453,259 500,550 2,335
CAGR% 3%
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5.7 Marketing Strategies
5.7.1 Target Markets

A number of prospective customer groups will comprise mung bean principal target markets based on:
 Strongest growth as a consequence of the increasing attention to health food. The type of
marketing required to effectively connect to the various groups will vary, and these differences
will be noted.
 an increasing number of consumers are aware of the need for a healthy diet
 Organic: attention from European consumers to health, the environment and social responsibility
is leading to a rapid growth of the organic sector
 Ethnic foods: mung beans as well as their sprouts are typical ingredients in ethnic cuisines such
as the Asian cuisine, while they are also popular with other nationalities
Thus, the most important export destinations for mung bean Pakistan, India, Indonesia, Viet Nam,
United Arab Emirates, Kenya, Sudan, South Africa, Yemen, Russian Federation, Malaysia and Other
5.7.2 Promotion Strategies

As a general statement, the principal objective behind Toltu Ture Trading Plc, Mung Bean farm and
Processing Company’s ongoing promotional activities will be to introduce and reinforce the origin and
traceability of products. Promotional activity builds familiarity, reduces inhibitions, and often
discourages the entry into the marketplace of new, would-be competitors. Some of the promotional
activity / tactics to be employed are rather straightforward, including:
Free sample giveaways in export market.
Using company website.
Participation in different international bazaar and festival.
5.8 Main Stake holder Actors

Typically, export market systems are comprised of multiple actors with numerous, often conflicting,
interests and objectives. For this Envisage project actors range start from non-market actors, such as
public regulatory agencies, research institutes, extension services, and non-governmental organizations;
to market actors, including domestic and foreign private firms, cooperative unions, and trade
associations; and farmers themselves. Each of key stakeholders is introduced and discussed below.
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Non-market actors, such as public regulatory agencies
The Ethiopian Institute of Agricultural Research
Regional agricultural research institutes
Institute of Biodiversity and Conservation
Agricultural higher learning institutions
International agricultural research institutes
Ethiopian Pulse Association (EPA),
Ministry of Trade and Investment
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6. ENVIRONMENTAL IMPACT ASSESSMENT
This project is designed to cultivate and promote the production of high value Mung bean seeds, by
maintaining the existing environmental system. It also intends to protect the environment from the
possible risks. Thus, in order to establish environmental friendly farming, the new project site has been
thoroughly scrutinized particularly for its soil character, vegetation cover and agro ecology to identify
the expected negative impacts of the development.
The major expected threats identified due to the overall development farming activities are soil depletion
and loss of plantation cover in some undulated land form areas. Therefore, the environmental
management plan that will be realized by the company is using soil improving crops through
intercropping and rotation system. In addition buffer plantation and wind break tree plantation are going
to be planted in order to protect from soil erosion and minimize the misbalance effect of agro ecology.
Mung Bean scrop, by its nature does not improve the soil structure by the loosing effect of its dense root
system. Considering these effects, the company intends to cultivate a vise verse rotation plan with soil
improving crops like Haricot bean and Animal forage feed plant and others. has the ability to utilize
fertilizer residues that are normally not available to other crops. It also fixes atmospheric nitrogen that is
why nitrogen fertilizers are rarely required for the successful production of the crop Mung bean is
suitable as green manure crop, even if harvested for seed; it benefits the subsequent crop in a rotation
system.
In addition to cropping system and tree plantation programs, soil improving and conservation practices
as well as adopting good farming management activities will be practiced including planting of cover
crops, drainage structure and terrace making.
Furthermore the project will apply integrated pest management which is more environmentally friendly
form of pest control than the traditional pesticides as its goal is to reduce pesticide use to a minimum by
using a variety of less impact means with pesticides only as a last choice.
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7. TECHNICAL STUDY OF THE PROJECT SITE
7.1 Descriptions of the Project area
Cheha Woreda is situated on a very flat area that covers approximately 360 km2 and forms part of the
great Gurage hiland, which stands at 1900 to 3000 meters above sea level. Flat-topped hills in the
Gurage zone make a prominent quartzite horizon, and are probably remains of a cretaceous landform
denudation. The escarpments lie to the east and north of Sebat Bet Guregae, which ends in the Wabe
Rivers of Acho Falls. The site for the location of the proposed project is in between Endiber and
Wolikite constituency, asphalt Road. Cheha district shares district boundaries with Enemorina in the
south, Oromia Region in the west, Wabe River in the north and Abeshege and Kebena district in the
East. The central position of the City has made it to be one of the most important economic hubs of
Gurege Zone as it provides the market for the absorption of the agriculture produce from all provinces.
Global Position System Reference of the proposed site is Latitude: 8° 09' 60.00" N Longitude: 37° 44'
59.99" E averaging about 2,450 above sea level.
See Satellite Image in Figure2. The site is defunct smallholder farm on dried up semi-plain, now
unproductive. Built up environment include both farmland houses and industrial buildings in the
vicinity.
Figure 2 : Google Map of Project area
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7.2 Description of the project
The owner is planned to invest on Cheha district along the give river to established “Toltu Ture
Trading Plc, Mung Bean Farm and Processing Company” to to export quality mung bean seeds.
Regarding the Establishments of mung bean farm has a total capacity of 23,982 Qt mung bean at 1,999
Hectares (Ha) farm land, in Gurage zone Cheha Woreda. The project will involve the construction of
Office Complex, Product Store, Farm Input Store, and Multi-Purpose Store, farm Workshop Staff
Residence, Temporary shade for daily labourers, Canteen & Cafeteria, Clinic (first aid) and Others
(guard houses, toilets, etc).
The company has also planned to hire other qualified technical staffs since agricultural agro-processing
activities need experience and qualification of the management. Mung bean farm agronomist and processing
Machine Operators and quality Inspectors are the most recommended working on the system to improve
processing of production standard and quality through applying modernized processing & packing. Finance
Manager, marketing and Production Manager and Production & Technical unit head & staff will also recruit.
This envisaged project is basically a produce 23,982 Qt mung bean of which 90% for export market and
10% for domestic market. The project has socio economic importance by crating 28 permanent
employees and for 500 casual labor job opportunities. This is the main rationale for project. It is
envisaged that this will reduce poverty and earn foreign currency. Government though the lines are
committed to contributing towards export economic growth through adequate mung bean supplies,
hence this Private-Public Partnership investment with Toltu Ture Trading Plc, Mung Bean farming
and Processing Project.
7.3 Land ownership

The land ownership is acquired through a lease contract from Southern Nation, nationality People
Regional state, Gurage Zone for a period of 25 years.
7.4 The physical works

These are realized by different site preparations and putting the required infrastructures. The necessary
physical activities with the integration of certain biological engagements, if the need arises, are:
39
 Deep tillage with a twice plugging and harrowing of many times side by side with uprooting and
land clearance where ever undesirable stumps or shrubs exist. The frequency of the tillage will
be decreased in due time.
 Planting site marking, digging for woody plants and agro-forestry trees.
 Digging water supply wells that will be used for irrigation and consumption
 Construction of canals and water ways.
 Construction of the different infrastructures including inter and intra farm roads.
7.5 Project Phasing
Because of the number type of the schemes to be carried or to be diversified or expanded, financial and
other unforeseen circumstances, Mung Bean Farm Project execution and phasing out schedule may
not be decided at ease at this point in time. Being a function of many preconditions, the life span of the
project remains as the matter of joint communiqué between the responsible bodies under the lease and
legal definitions of Mung Bean FARM investment. For technical matters and activities to be
implemented annually as successions and rotations of pulse crops, produces to be harvested and
processed, the project is proposed to be of a 10 years.
7.6 Physical and natural condition of project site

7.6.1 Topographic Features
The project site is located within the Abaya Like basin. The topographic features of the proposed project area
are characterized by flat to gently sloping terrain. The average altitude of the project area is 1780 m.a.s.l;
with general land gradient of 1.5 to 2.5%. It generally drains towards a large rivers stream named Gibe.
 Located on the western side of the proposed land. The topography of the project area generally
indicates availability of favourable opportunity for low cost installation of infrastructures and land
preparation requirements.
7.6.2. Climate
The climatic conditions of the project area could be broadly categorized as sub-tropical, hot lowland to warm
sub humid moist lowlands. According to traditional classification of agro-climatic zones in Ethiopia; and,
considering the medium rainfall, low altitude (below 1780 m.a.s.l.); the project area might be classified as
40
″dry wet ″. The specific features of the project area in terms of temperature and rainfall patterns are
described below.
 Temperature
According to the climatic data obtained from the Ethiopian Meteorology Agency (Gurage Branch); the
average minimum and maximum temperatures of the project area are 20.97 o C and 34.19 o C respectively.
The Table 14 and Figure 3 below provide the details of the variations in the average temperature of the area
over the months of the year.
Table 14 : Average maximum and Minimum Monthly Temperatures (oC) of the project area
Description Jan Feb Mar Apr may Jun Jul Aug Sep Oct Nov Dec
Av. Max.
temperature (oC) 35.50 37.03 38.83 39.00 38.27 32.17 29.37 29.67 30.57 31.50 34.10 34.27
Av. Min.
temperature (oC) 19.30 23.03 23.47 25.20 23.83 20.93 19.73 19.57 19.40 19.27 18.53 19.40
Source: Ethiopian Meteorology Agency, Gurage Branch
50
Temperature (o C)
40
Av. Max. Temperature (oC)
30
20 Av. Min. temperature (oC)
10
0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Months
Figure 3: Average maximum and Minimum Monthly Temperatures (oC) of the project area
 Rainfall Trends
The project area has average annual rainfall of 1254.55 mm; which is higher than the average
precipitation requirements of most field crops. The monthly rainfall distribution of the Wereda shows
that the area has a mono-modal rainfall pattern where the wet months are May – October, during which
95.77% of the annual rainfall occurs. As described in Table 2 and Figure 2 below, the wettest months
are June – September; accounting for 79.43% of the annual rainfall; where the highest rainfall amounts
occur in August (291.79 mm). On the other hand, the driest months are December and January.
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Table 15: Average monthly and annual rainfalls of the project area
Months Total
Annual
Years Jan Feb Mar April May Jun Jul Aug Sep Oct Nov Dec RF (mm)
1999 1.5 1.78 3.93 26.77 100.17 221.37 266.03 287.05 213.63 137.55 10.6 2 1272.38
2000 2 1.9 4.2 30 98.2 206.7 280.9 300 211.5 100.5 12.5 5 1253.4
2001 3 3 2 18 101 219.2 301.4 291.2 201 99.6 10.3 8 1257.7
2002 7 2.3 5 27 79.9 199.2 308.3 288.9 189.8 103 14.3 10 1234.7
Total 13.5 8.98 15.13 101.77 379.27 846.47 1156.63 1167.15 815.93 440.65 47.7 25 5018.18
Average 3.38 2.25 3.78 25.44 94.82 211.62 289.16 291.79 203.98 110.16 11.93 6.25 1254.55
%ages 0.27% 0.18% 0.30% 2.03% 7.56% 16.87% 23.05% 23.26% 16.26% 8.78% 0.95% 0.50% 100.00%
300
Average Rainfall (mm)
250
200
150
100
50
0
Ja M Ma Jul Sep No
Months
Figure 4: Monthly Rainfall Distribution of the project area (Gurage Zone, SNNPRS)
7.6.3 Soil Conditions of the Project Area
Results of soil sample analysis from the project area indicate that the major soil textures are clay and sandy
loam with strong coarse structure. The PH of surface soil ranges from 7.1 - 7.9, which implies moderately
alkaline soils. These soils are chemically and physically suitable for Mung bean cultivation. In addition, the
proposed investment area refers to well drained soils that occur on almost flat to gentle slope. The proportion
of the land is suitable to most of annual crops.
7.7 Area of land for investment in ha with expected expansion in the future
Area of land for investment is 1,999 ha, which might be expanded in the future with possibility of
available land within the vicinity of the project area.
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7.8 Production of each commodity per ha with and without project
The project will mainly produce Mung Bean crops; for which improved seed varieties will be used and
optimal application of fertilisers will be made. As a result, there will be improved productivity of each
commodity where the anticipated production per ha of each crop with and without project are described
as below.
Table 16: Anticipated production per ha of each planned crop with and without project
Production per ha (Yield = Qtls/ha)

Crop Without project With project Increment
Mung Bean 4 12 200%
Animal Feed 15 25 66%
7.9 Infrastructures
Road:
When compared with others neighboring districts, Cheha district has good infrastructure services, such
as roads, Electricity, Mobile networks and access to water. Cheha has 87km 0f all-weather roads and
49kms 0f dry-weather roads, for an average road density of 237 kms per 1000 square kilometers.
Telecommunication: According to the data collected from the Bureau of Finance and Economy, the
district town and the surrounding PAs in the project area have access to different telephone services,
such as, wire line, mobile telephone service, and wireless.
Financial Institutions: There is one Government Bank and the private bank is available in the
administrative center of Indibir town. Those entire banks are found in the project district at a near
distance of the project specific location..
Electric Power
The capital town of the district of the project area has access to hydro electric power Gurage zone.
Water Resources
Generally, rivers, shallow well and boreholes are the main sources of water supply in the region.
Currently, access to safe drinking water is a problem in the project area. However, the Water Resource
Bureau and other stakeholders in collaboration with the community has established different safe water
generating schemes such as hand dug well, hand pump, developing spring water, deep well and shallow
well to alleviate the problem,
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Assessment conducted on accessibility of the project district for potable water reveal that Sodom has 25
hand dug wells, 20 shallow wells, 6 developed springs, and 2 deep wells. In addition, though the ground
water of the district is not explored, it is expected that the ground water can be found at a shorter depth.
This is because of the heavy rain lasting 5-6 months in the area, which is able to recharge the ground
water.
Settlement pattern
Most of inhabitants of the project area can be characterized as crop growers. As usual trend on the same
agro ecology of Ethiopia, Crops producers lives in a closest manner. Most of the crop producers are
engaged in cash crop production like crops teff and Niger seed, avocado fruit and vegetables others
cereal and horticultural crops, thus the project is not affected the inhabitants.
Health Facilities
Regarding community’s health facility, health post and private clinics are available in the project area.
In addition to that, project area near to Indibir town Hospital and Health centres as well as private clinics
are accessible within short distance. Therefore, most of the locality people have access for medium level
health services in their area.
7.10 AGRONOMICAL PRACTICS OF MUNG BEAN CROP
This investment project is intending to cultivate interchangeably three major pulse crops; Mung Bean
will take the lion’s share of production area with 100% coverage, will be planted two time per year. The
envisaged farm project will entirely apply a rain fed and irrigation technology farming system
MUNGBEAN (Vigna radiata (L.) R. Wilczek var. radiata) is one of the most important food legume
crops in South, East and Southeast Asia, where 90% of global production currently takes place.
Mungbean is a relatively drought-tolerant and low-input crop that can provide green manure as well as
livestock feed and thus is favoured by smallholder farmers.
Most of the commercial farmers are located in Gambela, Benishangul Gumuz and western Amhara.
Commercial farmers such as Saudi Star, Tracon or S & P have been planting mung bean recently. The
crop has also been adopted by farmers in the Humera and Metema areas as a rotational crop for sesame.
There are over 1,000 commercial farmers in these areas, with an average holding of 200 ha.
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7.10.1 Varieties
Ethiopia has released early maturing cultivars using germplasm from international and national sources.
The mung beans varieties released in Pakistan through National Testing Program are presented as under.
Table 17: Improved seed varieties commercially required
Variety Area of Adaption Maturity Yield(kg/ha)
Altitude(M) Rain Fall Days research Farmer
MH-97-6 (Boreda) 1660-2400 1000-1500 95 300-400 257-280
N-26 1700-2400 1000-1500 75 350-400 280-300
Shewarobit 1000-2000 1000-1500 90 400-500 300-350
Source: Ethiopia Agricultural Research Organization
7.10.2 Climate Requirement
Mungbean grows in a wide range of climatic conditions. A warm humid climate with temperature
ranging from 25⁰ C to 35⁰ C, with 400-550 mm rainfall, well distributed during the growing period of 60
- 90 days, is suitable for cultivation.
7.10.3 Soil Requirement

Mungbean is grown on a wide range of soils including red laterite soils, black cotton soils and sandy
soils. A well-drained loamy to sandy loam soil is best for its cultivation. The crop does not grow well on
saline and alkaline soil or waterlogged soils.
7.10.4 Preparation of the Land

Mungbean requires proper drainage and ample aeration in the field so that activities of the nitrogen
fixing bacteria are not hampered at any stage of plant growth. Prepare ridges and furrows in the field by
ploughing, harrowing and levelling by tractor drawn implements.
7.10.5 Manures and Fertilizers

The application of well decomposed 10-12 tons of farmyard manure (FYM) provides the desired
quality to the soil. The FYM is mixed with soil one month before sowing. Trichoderma inoculation: It
may be desirable to add Trichoderma viridae @ 5 kg/ ha with FYM and keep this mixture under partial
shade for 4-5 days. Then apply this to soil before sowing. In addition to the above, a fertilizer mix
containing N, P2 O5 and K2 O at the rate of 15, 60 and 100 kg/ha, respectively is broadcasted and
incorporated into the soil before planting. Top dressing of N at 15 kg/ha is done at flowering stage.
45
7.10.6 Seed rate
Seeds which are healthy, undamaged and free from insect pests and fungi should be selected. The seed
rate varies with seed size and season. In the case of bold-seed types a seed rate of 24 kg/ha is
appropriate in spring and autumn, and 16 kg/ha in summer. It is advised to establish a plant population
of 20-30 plants/m2 for obtaining good seed yield.
7.10.7 Planting
Seeds should be planted 4 cm deep in a well-prepared seedbed with good moisture content. If the
surface layers are dry this depth can be increased to 7.5 cm if the soil type is one which does not crust
easily. The seedlings of mung bean can have a hard time breaking through a thick crust and stands will
be reduced. Rain full Mung bean should be planted between May to end of June and irrigable Mung
bean is planted late November and early December like the other legumes (field bean and cowpea)
which are grown as the major crop on the field. Late planting dates will result in bloom and pod fill
during the hottest, driest period of the summer.
7.10.8 Plant population

Dryland: 200 000–300 000 plants/ha. Irrigated: 300 000–400 000 plants/ha. Target population of 20–
30 plants per square meter for dryland and 30–40 plants per square meter for irrigation should be
planned for when setting up your planter. Lodging can be a problem if plant populations exceed 40
plants/m2, especially on wider row spacings. If the emerged plant population is less than 10 plants per
square meter, consider resowing. Thin crops are short, yield poorly, mature unevenly, and can be
extremely difficult to pick up at harvest. Target populations on 1 metre-wide rows are ideally 20–30
plants/m2. Higher populations will the risky of lodging under, especially under irrigation.
7.10.9 Method of Sowing

Line sowing is more advantageous as it requires less seed, produces a more even crop that is easier to
manage and will have higher yield potential. The space between the ridges is kept at 30-45 cm and 10
cm between the plants. Broadcasting of seed, while an established practice makes weeding, crop
management and harvest much more labour intensive and significantly reduced crop productivity and
economic return
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7.10.10 Irrigation
Mung beans are frequently grown under irrigation. Because of their short growth duration they need less
water than many other crops. Since mung beans are sensitive to water-logging, laser-leveled fields with
a relatively steep position are preferred. Water should be applied quickly and drained away through the
relatively steep gradient. The most critical time for irrigation is during flowering and early pod fill. It is
essential to manage irrigation carefully to provide sufficient water to fill pods but not so much that
maturity is delayed.
Type of irrigation is Spray irrigation. This is an option has the advantage of allowing smaller amounts
of water to be applied more frequently. This helps reduce waterlogging and can lift yields. Avoid heavy
spray irrigation of young plants because the caked-on dirt from mud-splash can reduce growth and thin
the plant stand (especially in crusting soils). Approximately 50 mm water/week will normally be
required during flowering and pod fill.
Figure 5: Prot Type Project Irrigation Schem
7.10.11 Weed control

Mung beans are not as competitive with weeds as soya beans are. Furthermore, only a few herbicides
have been registered. Weed control in mung bean is essential, since competition between the mung bean
and the weed is reduced, thus ensuring higher yields. The presence of weed seed in a seed lot will result
in the seed being downgraded to a lower quality. Grain sorghum and thorn apple seed are extremely
difficult to remove from a mung bean seed lot, and their occurrence is not tolerated in premium grade
seed. Black nightshade, hairy nightshade, yellow nutsedge and summer annual grasses are the major
weeds that can create harvest and quality problems in mung bean, and therefore it is important to pay
special attention to them. Advice on suitable herbicides can be obtained from local traders and/or
47
chemical companies. Hand weeding at about 40 days after planting is beneficial. Mechanical: To
promote good cultivation practices, inter-tillage by hand should be performed once or twice. Rotary
hoeing should be performed as needed to remove weeds until flower initiation.
Late emerging weeds will have a smaller effect on yield than would early emerging weeds. Avoid
cultivation of damp plants, since this can result in the spreading of bacterial and fungal diseases. It is
recommended that first time growers of mung bean use wider row spacing so that mechanical weed
control can be performed when weeds become a problem.
7.10.12 Pest and Disease Control

Mugbean Pests are Plant/leaf bugs (Lygus), Bean fly (Ophiomyia phaseoli, Ophiomyia centrocematis,
Melanagromyza sojae), Bruchid beetle (Callobruchus maculates, Stink bug (Nezara viridula and Aphids,
cucumber beetles, mosquitoes and several species of worm are also attracted to mung bean are a serious
post-harvest pest. This pest attacks mung bean both in the field and in storage, with the greater losses
occurring in stored grains. The nutritional quality of the grains deteriorates as a result of bruchid
infestation, rendering them unmarketable.
Method of controlling: Chemical control involving the use of one or two sprays is usually necessary,
but care should be taken when choosing the insecticides and they should be applied at the right time in
order to achieve maximum control. Monocrotophos, omethoate or dimethoate are recommended by the
AVRDC. These are to be sprayed at 3, 7, 14, 21, 28 and 35 days after plant emergence. The first three
sprays are of extreme importance and must not be delayed.
Mud bean Disease: Mung bean, just like any other legume crop, is susceptible to diseases caused by
fungi, bacteria and viruses. Various leaf and stem pathogens, such as powdery mildew and bacterial
blight, are frequently seen, especially in growing crops, but do not cause much damage. The common
Mung bean disease are Yellow Mosaic Virus (MYMV), Mung bean Yellow Mosaic Virus (MYMV),
Powdery mildew, Cercospora leaf spot (Cercospora canescens), Sclerotium blight (Sclerotiniarolfsii),
Leaf blight (Thanatephorus cucumeris), Scab (Spaceloma glycine) and Charcoal rot (Macrophomina
phaseolina.
All are significance in crops that have been sown at the optimum time, but can cause significant damage
(up to 40% yield loss).
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Method of controlling: Use non susceptible cultivars are planted, spray with fungicides such as
chlorothalonil at 2 kg a.i./ha at two-week intervals and ethirimol must be sprayed at a rate of 200 ml
a.i./ha, starting three weeks after emergence.
7.10.13 Harvest maturity

Mung bean matures within 75 to 90 days. Pod maturity in mung bean is not uniform because the plants
flower over an extended period. This makes it difficult to decide when to harvest. Generally, harvesting
should begin when one half to two thirds of the pods are mature. Harvesting too early can result in the
loss of immature pods while harvesting too late can result in losses from pod shattering during the
harvest operation. Beans can easily split or be damaged during harvesting but the farmer can minimise
this by harvesting at the correct seed moisture content (14% to 16%), by avoiding harvesting during the
middle of the day, and by paying careful attention to harvester settings. Desiccation of the plants is
needed before mechanical harvesting. Spraying Diquat (2-3L/ha or Glyphosate to desiccate the plants.
7.10.14. Harvesting methods

Mung bean pods are thin and brittle when dry so shattering can be a probem during harvesting. When
harvesting is done manually, and harvester machine mung bean stalks are cut with a band saw and the
average manpower requirement for the task is about 32 men/ day/ha. Thereafter, the harvested mung
bean stalks containing the pods should be sundried for four to seven days (averaging 5-8 days).
7.10.14 Sorting
After combining, the seed should be cleaned rapidly to remove green pods, leaf material, debris, etc.,
prior to storage, since these could create drying and storage problems. Small cracks in the seed coat that
are not readily visible can occur with incorrect harvester settings or rough handling and can cause
downgrading of a seed lot because of high over-soak levels.
7.10.15 Grading
The graded seed is sampled for quality evaluation by an accredited laboratory and, following
classification, a sample is usually given to an exporter who arranges the sale. It has been common
practice for exporters to sell on sample, but the establishment of quality seed grades has resulted in an
increasing number of seed lots being sold on grading.
49
7.10.16 Packing
For some buyers, seed can be cleaned and bagged, while others will prefer taking the grain in bulk and
cleaning it themselves. The rasping is carried out in different ways and with varying degrees of
efficiency.
7.10.17 Storage
Mung beans with about 12% moisture can be stored in regular grain bins that have been fumigated to
control bean weevils. If beans are higher in moisture, above 12%, they can be dried slightly by moving
unheated air though thin layers until they are near or at the 12% value. Care should be taken to keep all
possible contaminants away from the storage area as the seeds will be sprouted and eaten directly.
7.10.18 Production Technology Process Flow
Figure 6: Production flow of Mung Bean farming
7.11 FARM STRUCTURE AND LAND DEVELOPMENT

The main production Mung Bean farm will be started with land development activities, such as land
clearing and surveying (for land parceling and access/ farm road marking). Land development (LD)
operation is the main activity & also included in the project’s investment cost. Land development
50
involves LD heavy duty machines hiring cost, fuel cost for hired machine, tractor operation fuel &
lubricant cost and Land development labour operation cost.
7.11.1 FARM DESIGN

The Mug Bean shall be placed using standard spacing between plants and between rows in order to
allow proper farm operation. This operation will discuss above in according to crops agronomic
practices.
7.11.2 PLAN OF OPERATION OF THE PROJECT
7.11.2.1 Land Development

The main production process of improved seedproduction farm will be started with land development
activities, such as land clearing and surveying (for land parceling and access/ farm road marking). The
land development activities are expected to be undertaken by machinery and equipment such as
Bulldozers, and surveying instruments. These machinery and equipment are expected to be rented from
other enterprises.
7.11.2.2 Land Preparation, Sowing and Fertilization

Generally, land development for improved seed production is followed by land preparation. It comprises
ploughing and harrowing. Ploughing operation may be omitted after the first year operation and be
replaced by minimum or no tillage practices. Sowing follows harrowing with fertilizer application. For
this purpose, tractors with various bottoms like disc plough, disc harrows and planters and fertilizer
drillers are employed in general.
Land preparation for mung bean is similar to that of simple farming crops like mung bean. They can be
achieved by one ploughing, disking and harrowing. The sowing time varies from place to place. The
best time for sowing in tropical and subtropical regions is just after the rains are well started, i.e. from
the end of May to early July. The crops should always be sown in rows.
7.12 Pre-harvest Management

The pre-harvest management in mung bean production usually involves weeding and cultivation, insect
pest and disease control.
51
7.12.1 Harvesting
Harvesting of bean and animal feed may be carried out either by machine (combine harvester) or
manually. In manual harvesting, the harvesting operation begins when two third of the plant and seed
pods turn yellow and is undertaken by cutting the stems near ground level. It is then bound and stocked
in the field to ripen the seed.
Harvesting is always done before the pods shatter. The best stage is when the pods are fully mature with
the seeds in the hard-dough stage. The seeds should have a moisture content of less than 15% and
should be stored at a moisture content of 10-12% or less. With the dehiscent type, the heads are also
cut and dry in bunches hanging down ward on racks for 1-2 weeks .The bunches and the dried heads
including the stocked is usually shacked by hand to dislodge the seeds on cemented floor where the
seed is collected.Harvesting of bean may be carried out manually or using machine harvester.
7.12.2 Post-Harvest Management

Post-harvest in mung bean crop has five steps such as threshing, packing/bagging, storing and
marketing. Harvesting & threshing are expected to be carried out manually by casual labour or using
combine harvester in mechanization. Transporting will be done by tractor driven trailers and trucks,
from the farm and stores, respectively.
Table 18: Operation Plan of the Project

Sr. No Major Activities Year 1 (ha) Year 2 (ha) Year 3 (ha) Year 4-Y10
A. Mung Bean 1398.95 1598.8 1798.65 1998.5
General operation
1 Clearing 1398.95 1598.8 1798.65 1998.5
2 Ploughing 1398.95 1598.8 1798.65 1998.5
3 Harrowing 1398.95 1598.8 1798.65 1998.5
4 Fertilizing 1398.95 1598.8 1798.65 1998.5
5 Sowing/planting 1398.95 1598.8 1798.65 1998.5
6 Weeding 1398.95 1598.8 1798.65 1998.5
7 Harvesting 1398.95 1598.8 1798.65 1998.5
7.13 Farming and Land preparation Cost

Seedlings should be planted at 7 -5 cm in depth. About 5 tone FYM or cow dung is to be added to the
soil. Farming may be done in single or double row following system. This ensures total weed control
and heavy crop. However, fertilizers may be applied during sowing and or after sowing, the cost of land
preparation cost is estimated at birr 10,177,500 is shown below table 19.
52
Table 19: Farm Land preparation and Planting Cost (ET. Birr)
LAND PREPARATION AND PLANTING COST unit QT unit Price in Birr/ha Total Cost in Birr
Land Preparation Cost & Planting ha 1,998.5 1,925.00 962,500.00
Fertilizer Application cost ha 1,998.5 9,500.00 4,750,000.00
Chemical Application cost ha 1,998.5 880.00 440,000.00
Harvesting Cost ha 1,998.5 5,170.00 2,585,000.00
Packing cost ha 1,998.5 2,880.00 1,440,000.00
Total 10,177,500.00
7.14 Crop Maintenance

7.14.1 Application of Fertilizers and Chemicals
The application of well decomposed 10-12 tons of farmyard manure (FYM) provides the desired
quality to the soil. The FYM is mixed with soil one month before sowing. Trichoderma inoculation: It
may be desirable to add Trichoderma viridae @ 5 kg/ ha with FYM and keep this mixture under partial
shade for 4-5 days. Then apply this to soil before sowing. In addition to the above, a fertilizer mix
containing N, P2 O5 and K2 O at the rate of 15, 60 and 100 kg/ha, respectively is broadcasted and
incorporated into the soil before planting. Top dressing of N at 15 kg/ha is done at flowering stage.
Estimated cost of birr 3,150,000 is shown below table 20.
Table 20: Farm Maintenance Cost Estimations (ET.Birr)
Farm Maintenance Cost unit QT unit Price in Birr/ha Total Cost in Birr
Manual Weeding ha 1,998.5 4,800.00 2,400,000.00
Chemical Weeding ha 1,998.5 600.00 300,000.00
Hoeing ha 1,998.5 500.00 250,000.00
Fertilizer applicant ha 1,998.5 200.00 100,000.00
Chemical spraying ha 1,998.5 200.00 100,000.00
Total 3,150,000.00
10.14.2 Weed Control Operation

As the mulch is rolled out on the farming bed, its edges are covered with soil. Farming holes are
punched through the mulch with a trowel. When nematicides are injected into the soil, crop mulch
makes them more effective by slowing their dissipation. The polyethylene mulching,
 increases soil temperature in the root zone,
 helps to conserve soil moisture,
53
 promotes rooting by concentrating moisture in the root zone,
 And controls weeds. Weeding should be done at least 3 to 4 times a year. Manual weeding is
recommend for such organic farming operations
7.15.3 Crop Irrigation

Mung bean seeds crops are mostly grown as a rain fed crop, but supplementary irrigation give higher
production. Irrigation in winter keeps the farms healthier. About 8 to 12 light irrigations during winter
and summer months are beneficial. Irrigation is essential after farming or after maturing if there is
deficiency in soil moisture. The envisaged farm irrigation water demand need will be covered with
planed motorized pump and perennial river water source after construction of the irrigation systems at
project implementation time.
7.16 Farm Yield and Yield Estimation

The average yield of improved varieties of Mung Bean is 15 tons per hectare. The yield from the farm
will expected first grade qt 16,787, 19,186, 21,584 and 23,982 quintal from 1,998.5 ha of land is for the
first, second, third and fourth to tenth year respectively. The project utilization capacity is 70%, 80%,
and 90%, for Y1, Y2,Y3 and Y4 respectively. Taking into consideration after harvest yield loss 20-30%
loss record and reported by similar to those crops farms case yield reduction. This envisaged project
should be avoided the post-harvest loss;
Table 21: The Farm Yield Estimation
Type of Crop Unit Year 1 Year 2 Year 3 Year 4-10y

Mung Bean(ha) ha 1398.95 1598.8 1798.65 1998.5
Yield Qt/ha 12 12 12 12
7.17 FARM TECHNOLOGY AND ENGINEERING

7.17.1 PRODUCTION MACHINERY AND EQUIPEMENTS
7.17.1.1 Farm Machinery Requirement
Farm required different farm machinery for the different purpose. Tractor and its accessories required
for the farming purpose. Most of the farm machinery were purchase from the foreign countries whilst,
54
some machinery purchase in the local market. The total cost of machinery is birr 44,609,620 estimated,
the detailed cost break-down is shown below table 22.
Table 22: Farm Machinery Requirement
Description Qty/No. Coast (Birr)
FC LC TOTAL
Tractor Jon Deer 110 HP-125 HP 1 5,500,000 5,500,000
Excavator JCB 106(140HP) 1 21,440,000 21,440,000
Baler 1 250,000 250,000
Disc Plough 5-6 furrow 5 300,000 300,000
Harrows 5 300,000 300,000
Trailer 2 300,000 300,000
Fork-lifet 1 300,000 300,000
Fuel tanker 2 250,000 250,000
Ditcher 1 120,000 120,000
Disc Plough of set type 5 450,000 450,000
Planter 6 rows 5 5 2,000,000 2,000,000
Cultivator 1 500,000 500,000
Sprayers (manual) 50 150,000 150,000
Ringer 5 500,000 500,000
Trailers 4 567,000 567,000
Workshop (set) 1 2,500,000 2,500,000
Tools (set) 1 125,000 125,000
Generator (60KV) 1 5,000,000 5,000,000
Sickles 83 2,200 2,200
Sub-total 1 40,554,200 40,554,200
Inland Cost (1% of FOB) 4,055,420 4,055,420
Grand Total (Birr) 40,554,200 4,055,420 44,609,620
7.17.1.2 Farm tools and Equipments
Farm required different farm tools for the different purpose. Different farm tools its accessories required
for the farm farming purpose. Most of the farm tools were purchase from the local market. The cost
estimated is shown below table 26. For this purpose a the farm tools has been proposed which will cost
around Et.Birr 2,995,200 without tax purchase from local suppliers, the cost breaks down as show at
Table 23 below,
Table 23: Farm tools and equipment’s
Description Unit Quantity Unit Cost Year 1

Shovel Pcs 120 200 24,000
Hoe Pcs 120 200 24,000
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Description Unit Quantity Unit Cost Year 1
Rake Pcs 120 200 24,000
Axe Pcs 120 160 19,200
Sickle Pcs 120 300 36,000
Weighing scale Pcs 2 8,000 16,000
Electric generator (20 KVA) Pcs 2 200,000 400,000
Welder Pcs 2 50,000 100,000
Driller (portable) Pcs 2 50,000 100,000
Grinder (portable) Pcs 2 50,000 100,000
Hammer (med- & big) Pcs 2 50,000 100,000
Anvil (med.) Pcs 2 50,000 100,000
Vice (bench) med. Pcs 2 50,000 100,000
Hacksaw Pcs 2 50,000 100,000
File Pcs 4 50,000 200,000
Work bench Pcs 1 50,000 50,000
Pincers Pcs 4 50,000 200,000
Mechanics tools set (compl.) Box 20 50,000 1,000,000
Jack screw Pcs 30 1,000 30,000
Cross wrench (tyre) Pcs 4 500 2,000
Air compressor Pcs 2 10,000 20,000
Steel cable M 50 2000 100,000
Plastic hose M 50 200 10,000
Grease gun Pcs 20 500 10,000
Water can Pcs 200 500 100,000
Fire extinguisher Pcs 3 10,000 30,000
Total cost (ET.Birr) 2,995,200
7.17.1.3 Irrigation and Farm Structure Requirements
A total of local of Birr 49,745,780.00with the works described at the table 24 below is recommend and
the cost also estimated as shown at the table below on water for supplementary irrigation and nursery
development works. Large farm structures like culverts and crossings also included at the cost estimates.
Table 24: Irrigation and farm structures Requirement and Cost
Cost item UNIT QAN. Unit cost Total Cost
IRRIGATION COST AND FARM WORK

Solar Pump 15 Kw, 300 m3/day, H=30m Set 1 450,000 450,000
50 M3 Masonry Reservoir Ls 1 1,565,780 1,565,780
10 m3 Collection Chamber No 3 500,000 1,500,000

uPVC 120 mm pipe line, riser Ml 859 10,000 8,590,000
56
uPVC 120 mm pipe line, distribution M3 1598 10,000 15,980,000
uPVC 100 mm pipe line , distribution Ml 1063 10,000 10,630,000
uPVC 80 mm pipe line , distributions Ml 1058 10,000 10,580,000
Sprinkler Gun with motor 3 HP. 30 m3/h, 50 m hose Set 3 150,000 450,000
Sub-total 49,745,780.00
4.17.1.4 Water drilling Machinery & Equipment
The farm has river with perennial yield at the north boundary and one cross at the middle 10 m3/se. The
planned farm is rain fall patter and amount matches the plat requirements of farm, due to matching of
growing periods determined at the location which matches crop calendar shown at the table more over
the annual water requirement of Mung Bean crops. The total cost of machinery is birr 21,780,000.00
estimated, the detailed cost break-down is shown below table 25
Table 25: Water drilling Machinery Cost

capa Unit Price Total Price
city Qt
Borehole (Drilling of deep water well) 1 13,500,000 13,500,000
Submersible water pump 1 5,700,000 5,700,000
Water Reservoir construction 1 2,580,000 2,580,000
Total Cost 21,780,000
7.18 Materials and Inputs
7.18.1 Plating Materials
The platelet purchased initially from the research institution and improve seeds from seed supply
company will be planted in the field as source of company farm. The proposed seed raw requirement
for the project is Mug bean Farm. The annual requirement of oil seed crops and related cost is shown
in Table 26 below. Other miscellaneous inputs are also required in the process of edible production.
All other raw materials are also found in locally. The raw material, refining chemicals and packing
materials requirement of the envisaged plant is indicated in Table 26. The total annual cost of bsic
seed materials is estimated to be Birr 1,200,000.
Table 26: Annual Requirement for Basic Seed Materials
BSIC SEED MATERIALS PRICE AND ASSOMTED COST

MATERIALS Unit Rate Qt Price/unit Total Cost
Mung Bean Seed kg/ ha 24 120 10,000 72,000
Total Seed Requirement Cost Birr/year 1,200,000
57
7.18.2 Utilities
Electricity, furnace oil and water are utilities of the proposed project. Table 27 which indicate the annual
utility requirement and cost at full capacity. Process water shall be supplied by submersible pumps
installed by the project
Table 27: Annual Requirement of Utility
Utility Unit Qty Unit price ( Birr) Total Cost(birr)

Electricity kWh 670,000 0.474 317580
Furnace oil tone 120,000 120,000
Water M3 7,200 10 72,000
Total 509,580
7.19 Land, Building and Civil Works of the Project

The total land required for the project is estimated from the farm land 1,999 ha, similar land lease rate of
Birr 200 per ha per year, and for a period of 25 years. From The total farm are 5000 M2 is used for farm
facilities land area, 3100 M2 will be covered by different types of buildings and the reaming 1900 M2
for future expansion. Office 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. Thus, the total cost of building will be Birr 20.0150 million. The details
breakdown and others details on floor area shown at the supporting plan and bill of quantities.
Table 28: Land, Building and Civil Works cost Estimated

Description Unit Qty Unit Cost (Birr) Total Cost (Birr)
Farm buildings
Office Complex m2 500 6,500 3,250,000.00
Product Store m2 900 6,500 5,850,000.00
Farm Input Store m2 200 6,500 1,300,000.00
Multi-Purpose Store m2 200 6,500 1,300,000.00
Workshop m2 300 6,500 1,950,000.00
Staff Residence m2 300 6,500 1,950,000.00
Temporary shade for daily labourers m2 200 6,500 1,300,000.00
Canteen & Cafeteria m2 200 6,500 1,300,000.00
Clinic (first aid) m2 200 6,500 1,300,000.00
Others (guard houses, toilets, etc) m2 100 6,500 650,000.00
Grand Total 3100 20,150,000.00
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7.20 Company Vehicles and Motors
Farm required different vehicles for the different purpose. FSR-Isuzu truck and Services bus and
Double Cap (4WD) required for the farm farming purpose, whiniest, a loading vehicle would be
required for providing services for transportation of raw material(s), small amount of inputs, facilitating
farm programmed, transporting locale raw materials from far places other than, conducting marketing
activates, transporting product sales to various market, mobilizing casual laborers and other work,
Insulated seed Transport FSR and Truck for product sales and Double Cap (4WD) For this purpose a
company service has been proposed which will cost around Et.Birr 10,300,000 without tax purchase for
local suppliers , the cost breaks down as show at Table 29 below,
Table 29: Company Vehicles and Related Cost
Vehicles
Equipment Capacity Required Cost
Capc Unit Qt LC( Birr)
FSR-Isuzu 50 tone 1 4,000,000 4,000,000
Truck 400 Qt 4 12,000,000 48,000,000
Double Cap (4WD) 4 person 1 4,500,000 4,500,000
Hard Top 6 person 1 4,500,000 4,500,000
TOATL VECHEL PURCASE 61,000,000
7.21 Maintenance and Repairs Cost

Spare parts for machinery and equipment of major farm production lines and auxiliaries systems will be
procured and stored. It is planned to hold a spare part for one production year. A total of price of ETB
3,894,108 is allocated for the purchase of spare parts below table 33. Maintenance costs are estimated at
a level to adequately maintain machinery and equipment in good working order over the project’s life.
Table 30: Maintenance and Repairer Cost estimated
Description Parameter (%) Investment cost Repair and

(Birr) maintenance
(Birr/Year)
Bldg & construction 2% 20,150,000 403000
Borehole (Drilling of deep water well) 2% 13,500,000 270000
Submersible water pump 2% 5,700,000 114000
Water Reservoir construction 2% 2,580,000 51600
Drip Irrigation system equipment 2% 49,745,780 994916
Machinery cost 2% 44,609,620 892192
Machinery Equipment and Tools 2% 2,995,200 59904
59
Vehicles 2% 61,000,000 1220000
Office Equipment and Furniture 2% 453,000 9060
Total 3,894,108
7.22 Office Furniture and Equipment

A total of ETB 453,000.00 is required for purchase of office furniture and related equipment. The
following table 31 gives an assumed breakup.
Table 31: Office Furniture and Equipment Estimated Cost
Description of Work Unit Qty Cost ( Et. Birr)
Plant manager office
Executive Table Pcs 1 30000
30,000.00
Swivel Chair Pcs 2 25000
50,000.00
Chair normal Pcs 1 12000
12,000.00
Guest chair Pcs 2 12000
24,000.00
Computer Table Pcs 1 12000
12,000.00
Filing Cabinet Pcs 1 50,000
50,000.00
Shelf with locker Pcs 1 60000
60,000.00
Shelf ( 2 x 2) Pcs 1 40000
40,000.00
Table with sink and Drawer Pcs 1 25000
25,000.00
Computer with printer Set 1 150000
150,000.00
Sub Total 453,000.00
4.23 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 2 years period as shown in the activity chart
shown at table below 32.
Table 32: Pre-Operating Activities of Processing

ACTIVITES years
Operation years 1 2
Building and Site Work Construction
Farm Machinery Purchase
Processing auxiliary machinery Purchase
Manpower recruitment
Training to technical staff
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8. ORGANIZATION AND MANAGEMENT
The typical organizational structure of a Mung bean production farm is composed of the General
Manager at the top with other mangers for the farm, Administration, finance, marketing& marketing that
are accountable to the general manager. There are also sections for the different categories of farm
management. One of the key factors for success of a project is good organizational set-up and
management structure. 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 Mung bean crops production farm is shown below.
8.2 ORGANIZATIONAL STRUCTURE

The owner will follow the performance and guidance, but the business will be managed by an
experienced one functional structures. The organizational structure is depicted in the organization chart,
figure 7.
Manager
Marketing Operational Plan and

Farm Finance & Logistics Administrati
production
departmen dep.
&Technical programmi
dep. on dedddddddep ng
departeo t
artdeparterte
den I
Manager
General Budget and
accounta cost control Huller section Pulpier section
nt section
General
Clinics Security Store Service
Unit
farm
Transport Mill House

Figure 7: Organization Structure
61
The organizational set up of Toltu Ture Trading Plc, Mung Bean Farm and Processing company for
Mung Bean production project shall be composed of the owner general manager W/r.Tigist Kasaaye
at the top with the farm manager, Administration, finance that are accountable to the general manager.
There are also supervisors & Forman for the farm & irrigation operation. 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.
Project Management
Mung Bean production needs a great care and management staring from site selection up to marketing.
Improved seed is the major base for agricultural product. Particularly, in Mung Bean crops cultivation
practices, the qualification and experiences of the management is very important. The management has
to be well educated and experienced in terms of its ability to choose the type of seed of Mung bean with
the right variety; optimum production area in terms of climatic conditions, soil type, and agronomic
practice; especially general manager and farm manager are recommended to be with agricultural
background.
General Manager
The company’s General Manager W/r.Tigist Kasaaye has 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 Mung Bean production
activities need experience and qualification of the management especially agronomist are recommended
to do on the system to fulfil the quality standard of Mung Bean through applying good and modernized
agricultural practice integrated with research. Thus the company shall recruit an agronomist 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
8.3 MAN POWER REQUIREMENT

8.3.1. SKILLED MAN POWER
Mung Bean production is said to be the most labour intensive agricultural crops. The field plantation
operations like land clearing, tree felling, uprooting, trash removal, disposal, parcelling harvesting,
sorting activities need large amount of labour. The pruning workers, mechanical and technical workers
which apply on the machine, seedling preparation workers, sprayers (chemicals and fertilizer) quality
inspectors, pest assessors and the like are expected to be skilled in their respective profession. The
62
remoteness of the project location and unfavourable weather condition as well as the lack of necessary
infrastructure are the main cause for skilled man power not to be interested to work in such areas.
The project requires skilled & unskilled labour. Labour can easily be made available from the
surrounding towns. Man power is an essential factor in the improved seed production business. Mung
Bean production is a labour intensive operation. Unskilled daily labour workers will be employed in the
nursery operation & shall be provided with training to facilitate operational activity of the farm to avoid
mismanagement & mishandling.
The required man power with different disciplines and casual laborers are available and will be hired by
the project from the project area & the nearby towns. Skilled and unskilled workers are needed to
manage the operation of the farm. The total manpower requirement planned for the project is shown in
the table 33 shown below.
Table 33: Man Power requirements
Sr. Position No of Salary/month Total Salary/

No Personnel (Birr) Salary/month Year
(Birr) (Birr)
1 General Manager 1 20,000 20,000 240,000
2 Agronomist 2 10,500 21,000 252,000
3 Personnel manager 1 8,300 8,300 99,600
4 Accountant 1 5,700 5,700 68,400
5 Farm manager 1 8,000 8,000 96,000
6 Farm supervisors 2 5,000 10,000 120,000
7 Irrigation Foreman 1 8,500 8,500 102,000
8 Electrician - generator operator 1 3,500 3,500 42,000
9 workshop operator 2 5,000 10,000 120,000
10 Tractor Operator 2 5,000 10,000 120,000
11 Plumber 1 2,500 2,500 30,000
12 Machinist 1 5,500 5,500 66,000
13 Casher 1 4,000 4,000 48,000
14 Store keeper 2 4,000 8,000 96,000
15 Driver 1 5,000 5,000 60,000
16 Guards 4 3,000 12,000 144,000
Total 24 - 142,000 1,704,000
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8.4 TRAINING REQUIREMENT
The skill of Agronomy and Agro-processing is well developed in the country since there is a farm and
Processing plant engaged in Mung Bean 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
mung bean production and processing technology.
7.5 BENEFITS
To cover employee’s benefits of leave, bonus, dressing, health, and pensions an additional budget of
20% of the salary included in the budget.
 LEAVE: Employees will be entitled to annual and sick leaves. The duration and condition of
leave will be worked out by the Department of Administration and finance.
 HEALTH AND LIFE INSURANCE: Employees will be entitled to health and life
insurance as per the terms and condition of the plant manual.
 BONUS: Employees will be entitled to annual bonus equivalent to their monthly salary based
on overall performance and achievement of the Plant. Criteria, type, and amount of a bonus
should be prepared separately by Administration and finance department.
 DRESSING: Technical workers will be provided with uniforms to wear at workplace in the
plant premises
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9. FINANCIAL STUDY OF THE PROJECT
9.1 INTRODUCTION
The demand for mung bean seeds is increasing rapidly in national markets and 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 “Toltu Ture Trading Plc, Mung Bean Farm
and Processing Project” putting hands in commercial farm and processing of agriculture crops in the
country. Mung Bean production farm movement in to large scale production of improved seed would
give fast returns to them and will contribute in the wealth of nation.
With the imbalance between supply and demand in the national for Mung Bean market coupled with a
high level of commercial for improved seed prices, there is much interest among private operators to
invest in for improved seed production in Ethiopia. This chapter will assess the financial feasibility of
investing in oyster mushroom processing and marketing, using the “Toltu Ture Trading Plc, Mung
Bean Farm and Processing Project” establishment as feasibility studies. Detailed information
regarding economics of the project is provided as follows
9.2 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
Mung Bean 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 Mung Bean is sales pricing related to international Mung
Bean export price base analysis.
iv. Carry out sensitivity analysis to identify the impact of change of key parameters on
profitability.
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9.3 INVESTMENT OUTLAY (COST ESTIMATES)
9.3.1 Total financial Requirement FOR project Investment cost

Toltu Ture Trading Plc, Mung Bean Farm and Processing project the total initial investment
estimated cost including land lease, fixed asset, Pre-Production cost and working capital is estimated at
ET. Birr 223,289,069 million. For the detailed information which is given below table 34.
Table 34: Total financial Requirement, project Investment cost & Sources of finance
Cost of Project Source of Finance (Fund Allocation)
Owner's Equity contruib & utilization (birr)
Sr. Existing Owner's Total Eqty
Description DBE Loan (birr) Existing Equity to be
No (birr) Propose(birr) Total(Birr) Eqty cash ExiAsset&
Asset Value blocked- Cash
contr cash
Yr 0 Yr 0 Yr 0 Yr 0 Yr 0
I. Fixed Asset Investment
1 Land Lease payment - 350000 350,000 245,000 0 105,000 105,000 105,000
2 Land development cost - 10707644.55 10,707,645 7,495,351 0 3,212,293 3,212,293 3,212,293
3 Bldg & construction - 20,150,000.00 20,150,000 14,105,000 0 6,045,000 6,045,000 6,045,000
4 Borehole (Drilling of deep water well) - 13500000 13,500,000 9,450,000 0 4,050,000 4,050,000 4,050,000
5 Submersible water pump - 5700000 5,700,000 3,990,000 0 1,710,000 1,710,000 1,710,000
6 Water Reservoir const - 2580000 2,580,000 1,806,000 0 774,000 774,000 774,000
7 Drip Irriga system eqpts - 49745780 49,745,780 34,822,046 0 14,923,734 14,923,734 14,923,734
8 Machinery cost - 44609620 44,609,620 31,226,734 0 13,382,886 13,382,886 13,382,886
9 Machinery Equipment and Tools - 2995200 2,995,200 2,096,640 0 898,560 898,560 898,560
10 Vechicles - 61000000 61,000,000 42,700,000 0 18,300,000 18,300,000 18,300,000
11 Office Eqpts and Furniture - 453000 453,000 317,100 0 135,900 135,900 135,900
Sub-total F/Asset (I) - 211791244.6 211,791,245 148,253,871 0 63,537,373 63,537,373 63,432,373
II. W/Capital Requirement
1 Direct Cost -Crop production - 3,175,625 3,175,625 2,222,938 - 952,688 952,687.50 952,687.50
2 Indir cost crop Production - 4,086,374 4,086,374 2,860,462 - 1,225,912 1,225,912.34 1,225,912
Sub-total W capital (II) - 7,261,999 7,261,999 5,083,400 - 2,178,600 2,178,600 2,178,600
III. Pre-prodn cost 2%of sumof F/ixed Asset - 4,235,825 4,235,825 2,965,077 0 1,270,747 1,270,747 1,270,747
Sub-total I+II+III - 223,289,069 223,289,069 156,302,348 0 66,986,721 66,986,721 66,881,721
Total I+II+III 223,289,069 223,289,069 156,302,348 0 66,986,721 66,986,721 66,881,721
Debt : Equity Ratio (%) on initial Year
- 100% 70% - - 30% -
Investment
8.3.2 SOURCES OF FINANCE (FUND ALLOCATION)

The promoter of the project has planned to finance the project through a long-term loan from the
Development Bank of Ethiopia; and, partially from own contribution. The debt equity ratio is assumed
to be 70:20 and or it can be lease financing based on the agreement between the bank and owner. For the
detailed information is given above table 34
9.3.4 Total Project initial investment cost

Toltu Ture Trading Plc, Mung Bean Farm and Processing project the total initial investment
estimated cost including land lease, fixed asset, Pre-Production cost and working capital is estimated at
ET. Birr 223,289,069 million. The fixed investment component is estimated at about Birr 211,791,245,
66
the working capital portion is Birr 7,261,999 and Pre- Production cost 2% of sum of Fixed Ass Birr
4,235,825 is a pre-production expenditure. From the total investment cost birr 161,055,400 (72%) is
foreign currency required and the remaining of birr 62,233,669(28%) 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 35 below.
Table 35: Total project Initial Investment Outlay by Existing & planned, Foreign & local Cost
component
Cost of Project Source of Component

Existin Percntg Foreign Local
Sr. Total Cost
Description g Proposed (Birr) share of Component Component
no (birr)
(Birr) the total (Birr) (Birr)
I. Fixed Asset Investment
1 Land Lease payment 0 350,000 350,000 - 350,000
2 Land development cost - 10,707,645 10,707,645 - 10,707,645
3 Bldg & construction - 20,150,000 20,150,000 - 20,150,000
4 Borehole (Drilling of deep water well) - 13,500,000 13,500,000 - 13,500,000
5 Submersible water pump - 5,700,000 5,700,000 5,700,000 0
6 Water Reservoir const - 2,580,000 2,580,000 0 2,580,000
7 Drip Irriga system eqpts - 49,745,780 49,745,780 22% 49,745,780 -
8 Machinery cost - 44,609,620 44,609,620 44,609,620 0
9 Machinery Equipment and Tools - 2,995,200 2,995,200 0 2,995,200
10 Vechicles 61,000,000 61,000,000 61,000,000 0
11 Office Eqpts and Furniture - 453,000 453,000 0 453,000
I Sub-total F/Asset 0 211,791,245 211,791,245 94.85% 161,055,400 50,735,845
II. W/ Capital Requirement
1 Dircost-farm Labor & mat input maintence 0 3,175,625 3175625 - - 3175625
2 Indirect cost for corop production - 4086374 4086374 - - 4086374
Sub-total W/capital (II) 7,261,999 7,261,999 3.25% - 7261999
III. Pre- Prodn cost of sum of F/Ass - 4,235,825 4,235,825 1.90% - 4,235,825
IV. Pre-Prodn Interest - 0 0 - - -
Total ( I+II+III+IV ) 0 223,289,069 223,289,069 100% 161,055,400 62,233,669
Percent Share of Forex & Local (%) - 100% - 72% 28%
8.4 PRODUCTION, REVENUE AND OPERATION COST

8.4.1 Production
8.4.1.1 Mung Bean Production
Type of Crop unit Year 1 Year 2 Year 3 Year 4-10y
Mung Bean(ha) ha 1398.95 1598.8 1798.65 1998.5
Yield Qt/ha 12 12 12 12
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9.4.2 PROJECTED GROSS REVENUE
The planned Expected Revenue: Based on current Mung Bean market the revenue earned from mung
bean from company sales for ten year project life. The following table briefly summarizes the projected
revenue of the project. The detailed calculation is given below table 36.
Table 36: Revenue Determination (seals)
Production Type unit Y1 Y2 Y3 –Y10
Revenue
Mung Bean Birr/year 60,000,000 63,000,000 66,150,000
Total Gross Revenue 60,000,000 63,000,000 66,150,000
9.4.3 OPERATION AND ADMINISTRATIVE (DIRECT & INDIRECT) COST

The total operating cost is estimated at Birr 35,987,215 at full production capacity of fourth year 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 28,742,566 and, Birr 7,244,649
is the indirect cost and. Summary of operating costs is presented on below table 37.
Table 37: Projected Operation estimated cost (direct and indirect)
PRODUCTION & ADMINISTRATIVE COST

Y0 Y1 Y2 Y3 Y4 Y5
Production Cost -
Direct - 6,821,250 6,821,250 12,702,500 12,702,500 12,702,500
Indirect - 6,803,916 11,599,554 16,040,066 16,073,141 16,109,470
Sub-total - 13,625,166 18,420,804 28,742,566 28,775,641 28,811,970
Administrative cost -
Direct - 1,705,313 1,705,313 3,175,625 3,175,625 3,175,625
Indirect - 1,759,986 2,958,896 4,069,024 4,077,292 4,086,374
Sub-total - 3,465,299 4,664,208 7,244,649 7,252,917 7,261,999
Total - 17,090,465 23,085,012 35,987,215 36,028,558 36,073,969
9.5 FINANCIAL ANALYSIS KEY ASSUMPTIONS

The project cost estimates for the proposed Toltu Ture Trading Plc, Mung Bean Farm and
Processing project has been formulated on the basis of discussions with project manager. The
projections cover the cost of infrastructures, building and civil works construction, machinery and
equipment purchase, office furniture and fixtures, pre-operating expense and working capital for the
start-up 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.
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9.6 PROJECT FINANCIAL RESLTS
9.6.1 Profitability - Profit / Loss forecast
The projected profit and loss statement forecasted for 10 years shows that the first birr 14,932,424,
second years 12,966,058 third year 4,224,482, and fourth year 6,035,030, at full production capacity and
goes increased through the project life. The projection shows positive net profits of starting the first year
to the 10th projection period. Further, adequate surplus cash is available with the unit for promoter
withdrawal, Annexure-1.
9.6.2 Cash Flow Forecast (Liquidity)

The cash flow projection shows positive cash balances in the first onwards with an increasing cash flow
to finance its operational cost at the same time meeting its debt obligation.
9.6.3 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 260.665 million during the first
operational year to birr 202.401 million 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 30.298 Million at the 10th project year, with an increase of annual retained earnings in the
1st to 10th year.
9.7 FINANCIAL EVALUATION (VIABILITY)

9.7.1 Project worth (The NPV & FIRR)
9.7.1.1 The Net Present Value (NPV)
 Net Present Value (NPV) before Tax at 11 % interest rate; Birr 89,895,596
 Net Present Value (NPV) after Tax at 11 % interest rate; Birr 64,846,428
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 11% interest rate
results positive large cash amount indicating that the project is viable.
9.7.1.2 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; 17% and FIRR after Tax; 15 %. The rate is above the cost of debt of 11%
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.
69
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=
772,769,778 /263,020,834 = 2.938
Given the BCR > 1; therefore, the project is considered economically sound
9.7.3 Pay Back Period

The computation of the payback period is given at Annexure-4. The payback 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 6 years on the basis of profit
after tax. The project’s initial investment will be fully recovered within 9 years.
9.8 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 11%, the result indicates that FIRR after tax decreases from 15% to
9%. 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.
B) Sensitivity test Scenario II: – Decrease in Revenue by 10 %
When revenue decreases by 11%, the result indicates that FIRR after tax decreases from 15% to 12 %.
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.
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10. SOCIO-ECONOMIC IMPACT ASSESSMENTPROJECT
10.1. Positive impact on Social & Economy

The establishment of the Improved Seed cultivation farm has many socio-economic benefits which
include, among others:-
10.1.1 Creation of Employment Opportunity

The project is expected to create new employment for permanent about 24 skilled & semi-skilled in
the initial and 500 temporary totally 524 project year and more of these & large number of man days in
the subsequent investment years & projected operational years .improved seeds production is one of the
labour 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.
10.1.2 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 seed production for the
country agricultural development, which increases the country’s foreign holding and on the backward
side the production & processing of improved seed creates employment to the poor rural house hold and
semi urban dwellers. The establishment of Mung Bean Farm and Processing Company will enable
the sector to expand to different works of operations. Exportable Mung Bean production project is
backward linked with mung bean producers and suppliers of inputs. And also it has a forward linkage
with other sector like utilization of the local mung bean making. This creates mutual benefits in the
sectors.
 Technology and knowhow transfer: The plantation 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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11. CONCLUSION AND RECOMMENDATIONS
11.1 Conclusion
Toltu Ture Trading Plc, Mung Bean Farm and Processing Company had applied for a loan of Birr
156,302,348 to finance its new exportable mung bean production project to be established in SNNP
Regional State western Gurage Zone, Cheha.
The Promoter’s business objective is to engage in the production of mung bean seed production and
marketing. The project operation will start by developing land; establish improved farm and cultivation
of improved mung bean for the country. Moreover, improved seed produce & shall be sold at local
market for local farmers and private investment as well cooperative. In order to establish the project and
achieve its objective; the promoter has approached CBE for partial finance which is in excess of its
equity. A loan of Birr 156,302,348 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.
The total investment cost is estimated to Birr 223,289,069out of which Birr 211,791,244.6 is on fixed
Asset, Birr 7,261,999 on working capital, Birr 4,235,825 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 66,986,721 (30%) is the
owner’s equity contribution and Birr 156,302,348 (70%) is planned to be financed by DBE term loan.
The projected financial statements & analysis indicates that the project will run in losses during the
period at beginning investment improved seed is able to produce and marketing successfully. The
project will be profitable at the begging year of the project.
101.2 Recommendation
11.2.1 Proposed Loan amount & Purpose

With the available documents on hand, the due diligence assessment report and based on the financial
analysis conducted, the project is found to be viable. Based on this, the consultant team has proposed a
total loan amount of Birr 156,302,348 to be used for partial cost coverage of the fixed asset investment
cost and for working capital as per the following terms & conditions. It is shows in above table 34.
72
11.2.2 Loan Disbursement
Table 38: Loan Disbursement Schedule (Plan)
Amount to be Period of Balance in To be disbirsed Conditions for
S r. no Disbursement Plan Purpose
disbursed (birr) disbursement commitment (birr) to Disbursement
Total Loan Amount 156,302,348
Land Lease payment 245000 31/8/2022 156057348 to the promoter
Land development cost 7495351 31/8/2022 148561997 L/C opening
Bldg & construction 14105000 31/8/2022 134456997 L/C opening
Borehole (Drilling of deep water well) 9450000 31/8/2022 125006997 to the supplier
Submersible water pump 3990000 31/8/2022 121016997 After signing of

the loan
Water Reservoir const 1806000 31/8/2022 119210997 agreement & fully
utilization of the
1 First disbursement Drip Irriga system eqpts 34822046 31/8/2022 84388951
equity
Machinery cost 31226734 31/8/2022 53162217 contribution for
building &
Machinery Equipment and Tools 2096640 31/8/2022 51065577 construction
Vechicles 42700000 31/8/2022 8365577
Office Eqpts and Furniture 317100 31/8/2022 8048477
W/Capital Requirement 5083400 31/8/2022 2965077
Pre-prodn cost 3%ofsumof F/Ass & W/cap 2965077 31/8/2022 0
Total 156,302,348 - 0
11.2.3 Principal loan Repayment Schedule

The principal loan shall be repaid every year, starting on, 2024 & ending on, 20233, 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 39 bellows throughout the project life.
Table 39: loan repayment Schedule
No of year Loan disburse. Principal Interest Payment (Birr) Outstanding Loan

Install Amt. (Birr) Repayment Balance (Birr)
Year (Birr) Pre- prodn Production
Interest Interest
1 2024 156,302,348 15,630,235 17,193,258 32,823,493
2 2025 140,672,113 15,630,235 15,473,932 31,104,167
73
3 2026 125,041,879 15,630,235 13,754,607 29,384,841
4 2027 109,411,644 15,630,235 12,035,281 27,665,516
5 2028 93,781,409 15,630,235 10,315,955 25,946,190
6 2029 78,151,174 15,630,235 8,596,629 24,226,864
7 2030 62,520,939 15,630,235 6,877,303 22,507,538
8 2031 46,890,704 15,630,235 5,157,977 20,788,212
9 2032 31,260,470 15,630,235 3,438,652 19,068,886
10 2033 15,630,235 15,630,235 1,719,326 17,349,561
- - -
Total - 156,302,348 - 94,562,921 250,865,269
Interest Payment: 11% 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 @ 3% per annum on the balance in commitment
74
11. ANNEXTURE
Annex 1 PROJECTED INCOME STATEMENT ( Birr)
Sr. Project Years
Description
No 1 2 3 4 5 6 7 8 9 10
1 Gross Revenue 60,000,000 63,000,000 66,150,000 69,457,500 72,930,375 76,576,894 80,405,738 84,426,025 88,647,327 93,079,693
Less: Production costs
2 13,625,166 18,420,804 28,742,566 28,775,641 28,811,970 28,848,435 28,886,723 28,926,926 28,969,139 29,013,463
(Dir+Indir)Costs
3 Gross profit 46,374,834 44,579,196 37,407,434 40,681,859 44,118,405 47,728,459 51,519,015 55,499,099 59,678,187 64,066,230
Less:- Adiminstrative cost 3,465,299 4,664,208 7,244,649 7,252,917 7,261,999 7,271,116 7,280,688 7,290,739 7,301,292 7,312,373
Operation Profit 42,909,535 39,914,988 30,162,785 33,428,942 36,856,406 40,457,343 44,238,327 48,208,360 52,376,895 56,753,857
Less: Deprication Expense 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853
4 Profit Before Interest & Tax 32,125,682 29,131,134 19,378,932 22,645,088 26,072,552 29,673,490 33,454,474 37,424,507 41,593,042 45,970,004
5 Less: Prodn Interest Exp 17,193,258 16,165,077 15,023,796 13,756,973 12,350,801 10,789,949 9,057,403 7,134,278 4,999,609 2,630,126
6 Profit before tax (PBT) 14,932,424 12,966,058 4,355,136 8,888,115 13,721,752 18,883,541 24,397,070 30,290,229 36,593,433 43,339,878
7 Community Development(3%) 447,972.71 388,981.73 130,654.09 266,643.45 411,652.55 566,506.22 731,912.11 908,706.87 1,097,803.00 1,300,196.33
8 Less Profit 14,484,451 12,577,076 4,224,482 8,621,471 13,310,099 18,317,034 23,665,158 29,381,522 35,495,630 42,039,681
9 Less: Profit Tax (30% of PBT) - - 2,586,441.44 3,993,029.75 5,495,110.35 7,099,547.45 8,814,456.65 10,648,689.07 12,611,904.45
10 Net Profit / Loss 14,932,424 12,966,058 4,224,482 6,035,030 9,317,069 12,821,924 16,565,611 20,567,066 24,846,941 29,427,777
Groos Profit Margine 77% 71% 57% 59% 60% 62% 64% 66% 67% 69%
Net profit Margine 25% 21% 6% 9% 13% 17% 21% 24% 28% 32%
Operting Profit Margine 25% 21% 7% 13% 19% 25% 30% 36% 41% 47%
Annex 2 PROJECTED BALNCE SHEET (Birr)
Discription Y0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Assets
Cash 44,070,038 46,720,258 28,669,495 33,303,710 39,850,925 46,843,257 54,312,215 62,295,789 70,835,238 79,975,592
Inventory - 1,090,013 1,473,664 2,299,405 2,302,051 2,304,958 2,307,875 2,310,938 2,314,154 2,317,531 2,321,077
Accounts receivable - 3,000,000 3,150,000 3,307,500 3,472,875 3,646,519 3,828,845 4,020,287 4,221,301 4,432,366 4,653,985
Total current assets - 48,160,051 51,343,923 34,276,401 39,078,636 45,802,402 52,979,976 60,643,440 68,831,244 77,585,135 86,950,654
Gross property, plant & equipment 223,289,069 223,289,069 223,289,069 223,289,069 223,289,069 223,289,069 223,289,069 223,289,069 223,289,069 223,289,069 223,289,069
Less: Accumulated depreciation expense - -10,783,853 -21,567,707 -32,351,560 -43,135,414 -53,919,267 -64,703,121 -75,486,974 -86,270,828 -97,054,681 -107,838,535
Net property/equipment 223,289,069 212,505,215 201,721,362 190,937,508 180,153,655 169,369,802 158,585,948 147,802,095 137,018,241 126,234,388 115,450,534
Total assets 223,289,069 260,665,266 253,065,285 225,213,909 219,232,291 215,172,203 211,565,924 208,445,534 205,849,485 203,819,523 202,401,188
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 - 408,755 552,624 862,277 863,269 864,359 865,453 866,602 867,808 869,074 870,404
Notes payable/short-term debt - 0 0 0 0 0 0 0 0 0 0
Total current liabilities - 408,755 552,624 862,277 863,269 864,359 865,453 866,602 867,808 869,074 870,404
Long-term debt from 156,302,348 146,955,245 136,579,960 125,063,394 112,280,005 98,090,444 82,340,031 64,857,073 45,450,989 23,910,236 -
Shareholders equity 66,986,721 14,932,424 12,966,058 4,224,482 6,035,030 9,317,069 12,821,924 16,565,611 20,567,066 24,846,941 29,427,777
Total long-term debt and shareholders equity 223,289,069 161,887,668 149,546,017 129,287,876 118,315,035 107,407,513 95,161,955 81,422,683 66,018,054 48,757,177 29,427,777
Total liabilities 223,289,069 162,296,423 150,098,642 130,150,153 119,178,304 108,271,872 96,027,408 82,289,285 66,885,862 49,626,251 30,298,181
Annex 3. PROJECTED CASH FLOW STATEMENT (Birr)

Project Years
Description
Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Cash Inflows
Owner’s equity 66,986,721 - - - - - - - - - -
Bank Loan 156,302,348 146,955,245 136,579,960 125,063,394 112,280,005 98,090,444 82,340,031 64,857,073 45,450,989 23,910,236 -
Net Profit / Loss - 14,932,424 12,966,058 4,224,482 6,035,030 9,317,069 12,821,924 16,565,611 20,567,066 24,846,941 29,427,777
Plus Annual depre Expense - 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853 10,783,853
Total Cash Inflows 223,289,069 172,671,522 160,329,871 140,071,729 129,098,889 118,191,367 105,945,809 92,206,537 76,801,908 59,541,030 40,211,631
Cash Out flows
Inves on Fixed Asset 211,791,245 - - - - - - - - - -
Pre production cost 4,235,825 423,582 - 3,812,242 3,388,660 2,965,077 2,541,495 2,117,912 1,694,330 1,270,747 847,165
Pre-prod Int till final disb - - - - - - - - - - -
Profit Tax - - - - 2,586,441 3,993,030 5,495,110 7,099,547 8,814,457 10,648,689 12,611,904
Inve.Loan interst - 17,193,258 16,165,077 15,023,796 13,756,973 12,350,801 10,789,949 9,057,403 7,134,278 4,999,609 2,630,126
Work.Cap.In 1sty1 7,261,999 - - - - - - - - - -
Increase in W/capital 0 1,198,910 1,198,910 2,580,441 8,269 9,082 9,116 9,572 10,051 11,081 -
Lease Payment 0 0 0 0 0 0 0 0 0 0 0
Loan repayment 0 9,347,103 10,375,285 11,516,566 12,783,388 14,189,561 15,750,413 17,482,958 19,406,084 21,540,753 23,910,236
Share holder's Dividend: 20 % of the Net
0 0 0 0 0 0 0 0 0 0 0
profit
Total cash outflows 223,289,069 28,162,854 27,739,271 32,933,045 32,523,732 33,507,551 34,586,083 35,767,394 37,059,199 38,470,879 39,999,431
Net cash flow - 144,508,668 132,590,600 107,138,685 96,575,157 84,683,816 71,359,725 56,439,143 39,742,709 21,070,151 212,199
Cumulate Cash Balance - 144,508,668 277,099,268 384,237,952 480,813,109 565,496,925 636,856,650 693,295,793 733,038,502 754,108,653 754,320,853
Retained Earnings Projection

Project Years
Description
0 1 2 3 4 5 6 7 8 9 10
Net Profit - 14,932,424 12,966,058 4,224,482 6,035,030 9,317,069 12,821,924 16,565,611 20,567,066 24,846,941 29,427,777
Share holder's Dividend: 20 % of the Net

- 0 0 0 0 - - - - - -
profit
Net profit less dividend - 14,932,424 12,966,058 4,224,482 6,035,030 9,317,069 12,821,924 16,565,611 20,567,066 24,846,941 29,427,777
Retained Earnings = Cummulativ net profit

- 14,932,424 27,898,481 32,122,964 38,157,994 47,475,063 60,296,987 76,862,598 97,429,663 122,276,604 151,704,382
less Dividend
76
Annex 4 INTERNAL RATE OF RETUREN (Birr)
Benefits Costs
Initial Income tax Net Benefit Net Benefit
Project Gross W/Cap Fixed asset Total Replacement Operat/Prodn
30% of PBT Before Tax After Tax
Investment Total costs
Years Revenue Recovery recovery Benefits Cost costs
Cost
1 2 3 4=1+2+3 5 6 7 8 = 5+6+7 9 10 = 4-8 11= 4-8-9
0 0 0 0 0 223,289,069 0 0 223,289,069 0 -223,289,069 -223,289,069
1 60,000,000 0 0 60,000,000 0 0 13,625,166 13,625,166 0 46,374,834 46,374,834
2 63,000,000 0 0 63,000,000 0 0 18,420,804 18,420,804 0 44,579,196 44,579,196
3 66,150,000 0 0 66,150,000 0 0 28,742,566 28,742,566 0 37,407,434 37,407,434
4 69,457,500 0 0 69,457,500 0 0 28,775,641 28,775,641 2586441 40,681,859 38,095,418
5 72,930,375 0 0 72,930,375 0 0 28,811,970 28,811,970 3993030 44,118,405 40,125,375
6 76,576,894 0 0 76,576,894 0 0 28,848,435 28,848,435 5495110 47,728,459 42,233,348
7 80,405,738 0 0 80,405,738 0 0 28,886,723 28,886,723 7099547 51,519,015 44,419,468
8 84,426,025 0 0 84,426,025 0 0 28,926,926 28,926,926 8814457 55,499,099 46,684,642
9 88,647,327 0 0 88,647,327 0 0 28,969,139 28,969,139 10648689 59,678,187 49,029,498
10 93,079,693 7,312,373 10,783,853 111,175,919 0 0 29,013,463 29,013,463 12611904 82,162,456 69,550,552
17% 15%
FIRR Before Tax = 17%
FIRR After Tax = 15%
NPV beforeTax (Birr) 89,895,596

NPV after Tax (Birr) 64,846,428
77
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 7% 11%(DBE)
Discounted cash flow 10% 10%
Source of finance 25% 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
Export Market 90% of Sales
Local Market 10%
Selling Expenses 5 % of Sales
For Community development 3%
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 2 Months
Auxiliary Raw Materials Local 1 Month
Stock of Finished Goods 28 Days
Goods in Process 30 Days
Administrative and Marketing Expenses 1 Months
PRODUCTION ASSUMPTIONS
available working day per year for farm 300
78
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Mug Bean Farm Feasibility Study PROJECT

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Mug Bean Farm Feasibility Study PROJECT

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TOLTU TURE TRADING PLC

MUNG BEAN FARM AND PROCESSING

INVESTMENT FEASIBILITY STUDY PROJECT-I

Project Location: SNNPRS, Gurage Zone

Promoters: Toltu Ture Trading Plc

CONSULTANT: ABRHAM ASTATIKE (09-11-38-48-33)

EARO Ethiopian Agricultural Research Organization

ECX Ethiopian Commodity Exchange

ETB Ethiopian Birr

FDRE Federal Democratic Republic of Ethiopia

GDP Gross Domestic Product

GTP Growth and Transformation Plan

KA(s) Kebele Administration(s)

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

MoARD Ministry of Agriculture and Rural Development

MoFED Ministry of Finance and Economic Development,

PIF Policy and Investment Framework (of Ethiopian Agricultural Sector)

PLC Private Limited Company (Pvt. Ltd. Co)

USA United States of America

USD United States Dollars

Annex 1 PROJECTED INCOME STATEMENT ( Birr) ............................................................................................ 75

1.2 Description of the Project

1.3 PROFILE OF PROMOTER

1.4 OBJECTIVE OF THE PROJECT

1.6 STATUS OF THE PROJECT

1.7 MARKETING STRATEGY OF THE PROJECT

1.8 Building & construction and Technology of machineries

1.10 Project THE PROJECT’S INITIAL INVESTMENT

1.11 Source of Finance

1.12 Expected Financial Results (VIABILITY)

1.14 Project Component

1.15 SOCIO-ECONOMIC JUSTIFICATIONS

1.16 Rational Behind the Project

2.2 Ethiopia Production

1) international market price for mung bean;

2.4 Company Profile

2.6.2 Main and Specific objective

4.1.1.2 Favorable Climatic Condition

4.1.1.4 High Demand of Ethiopian Coffee in Domestic & Foreign Market

4.1.1.5 Investor Friendly Policies in the Agricultural Sector

4.2.2.1 Support institutions

4.2.2.2 Farm Labor availability at manageable cost

 Availability of suitable improved varieties for each ecological zone.

4.2.3 Firm level success Factors

4.2.3.1 Capacity (Competence) of the Applicant

4.2.3.3 Collateral for the Loan

4.2.3.5 The location of the project site

4.2.4 Firm Level Risk Factors

4.2 Risk mitigating Mechanisms for risk factors indicated

5.1.1 Global Market over View

Table 3: World Pulse Export Quantity from 2011–2016 (metric tons)

Table 4: major Importers Country in Year 2016

Table 5: Ethiopia Total export Value from 2012-2016 (Birr)

Pigeon peas 0 0 52756 599667 0

Source: Ministry of Trade (2016)

Table 6: Ethiopia Total export Volume from 2011-2016(tons)

5.2.2 Market Destination

5.3.2 Mug Bean Export from Ethiopia

Table 9: Mung Bean Export from 2012- 2016

year Export GR%

5.3.2 Present Demand projection of Mung Bean

5.4 Production Plan

Type of Crop unit Year 1 Year 2 Year 3 Year 4-10y

5.5 Market Distribution