Contents

EXECUTIVE SUMMARY ............................................................................................................. 1

I. COMMODITY DESCRIPTION .................................................................................................. 3

1.1 Technologies Used in Cold Storage: .................................................................................................................................. 3

1.2 Advantages of Cold Storage: ............................................................................................................................................. 3

1.3 Economic Impact ............................................................................................................................................................... 4

1.4 Target Industries ................................................................................................................................................................ 4

1.5 Food products that can be stored in a cold storage for export and imported foods............................................................ 4

1.6. Main Products of the Industry ........................................................................................................................................... 6

2.7. Key to Success .................................................................................................................................................................. 6

2.5. Growth and Beliefs of the Industry ................................................................................................................................... 6

II. THE PROJECT ................................................................................................................................................................... 6

Background Information .......................................................................................................................................................... 6

2.1. Objectives of the Project ................................................................................................................................................... 8

2.1.1. General Objective of the project .................................................................................................................................... 8

2.1.2. Specific Objectives ........................................................................................................................................................ 9

2.1.3. MAJOR SUCCESS AND RISK FACTORS ............................................................................................................... 10

2.2.3 MAJOR RISK FACTORS AND MITIGATION MEASURES ................................................................................... 10

2.2.4. Risk Mitigating Measures ............................................................................................................................................ 11

MARKET STUDY ................................................................................................................................................................ 11

3.1 Marketing channel............................................................................................................................................................ 21

IV. TECHNICAL STUDY ........................................................................................................... 21

4.1. Project Location and Land use plan ................................................................................................................................ 21

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4.1.1. Land availability .......................................................................................................................................................... 22

4.2. Project Design & Engineering ........................................................................................................................................ 22

4.2.1. Building, Civil Work and Engineering ........................................................................................................................ 22

4.2.2. Plant Layout & Possibility of Expansion ..................................................................................................................... 22

4.2.3 Machinery and Equipment ............................................................................................................................................ 24

4.2.4 Production Capacity ...................................................................................................................................................... 24

4.2.5 Technology and Engineering ........................................................................................................................................ 25

4.6. Sources of Technology................................................................................................................................................ 25

4.2.6 Materials and Inputs ...................................................................................................................................................... 26

4.2.6.1 Raw materials............................................................................................................................................................. 26

4.2.7 Production Process and Technology ............................................................................................................................. 26

4.2.7.1 Working principle of the technology ......................................................................................................................... 26

4.2.7.2 Byproducts/Waste ...................................................................................................................................................... 28

Office Furniture and Equipment ............................................................................................................................................ 29

Utilities................................................................................................................................................................................... 29

Environmental Impact assessment ......................................................................................................................................... 29

V. Project Implementation Schedule ............................................................................................. 30

VI. ORGANIZATION, MANAGEMENT AND MANPOWER .................................................. 31

7.1 . Organization Structure ................................................................................................................................................... 31

7.2 Manpower ........................................................................................................................................................................ 32

VII. FINANCIAL STUDY .................................................................................................................................................... 35

8.1 Investment Outlay ............................................................................................................................................................ 35

8.2 Source of finance ......................................................................................................................................................... 35

8.3. Financial Results ............................................................................................................................................................ 36

VIII. CONCLUSION AND RECOMMENDATION ............................................................................................................ 37

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9.1 Conclusion ....................................................................................................................................................................... 37

9.2 Recommendation ............................................................................................................................................................. 38

ANNEX ......................................................................................................................................... 39

FINANCIAL TABLES .......................................................................................................................................................... 39

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 EXECUTIVE SUMMARY

Cold storage is a crucial component of modern supply chains, providing a controlled environment to
preserve the freshness and quality of perishable goods. This specialized storage method involves
maintaining low temperatures, typically below ambient levels, to slow down the natural processes of decay
and spoilage. Cold storage facilities play a pivotal role in the storage and distribution of products ranging
from agricultural produce, food and Beverage and dairy to pharmaceuticals and other temperature-sensitive
goods. . This is the power of cold storage technology, a crucial innovation that preserves the quality and
integrity of countless perishable and sensitive materials cold storage and its associated technologies not
only play a pivotal role in preserving the quality of perishable goods but also contribute significantly to
economic growth, global trade, and sustainability efforts. As technology continues to advance, cold storage
solutions are poised to become even more efficient, further reinforcing their positive impact on industries
and economies worldwide.

Cold storage, once an unpracticed investment in Ethiopia, is now witnessing a transformative surge with
the entrance of a proactive promoter dedicated to introducing cutting-edge technology. This visionary
investment aims to revolutionize the country's agricultural and perishable goods sector by establishing
state-of-the-art cold storage facilities. The introduction of advanced refrigeration and storage technologies
not only addresses the longstanding challenge of post-harvest losses but also facilitates the extension of the
shelf life of agricultural produce. Beyond enhancing local food security, this initiative is poised to
contribute significantly to Ethiopia's economic growth. By leveraging modern cold storage solutions, the
promoter envisions a seamless integration of Ethiopia into the global supply chain, attracting foreign
investments and fostering international trade. This strategic investment holds the promise of technology
transfer, bringing in expertise and know-how that can uplift local industries and agricultural practices.
Moreover, the economic impact extends to the generation of foreign currency through the export of high-
quality, well-preserved products. In essence, this pioneering cold storage investment not only addresses a
critical need in Ethiopia but also lays the foundation for sustainable economic development, technological
advancement, and global market participation.

The promoter Mr. Kiflemariam Kindeya present this investment proposal for the development of a state-of-
the-art cold storage facility spanning 14,000 square meters capable of storing 80,000m 3.This venture aims
to address the growing demand for advanced cold storage solutions, catering to diverse industries such as
agriculture, pharmaceuticals, food and beverage processing. The proposed cold storage facility will be
equipped with cutting-edge technology to ensure optimal temperature control, humidity management, and
security. The 14,000 square meters of space will be divided into distinct chambers, allowing for the
simultaneous storage of various temperature-sensitive goods. The facility will adhere to international
standards and certifications to guarantee the highest quality and safety standards. Target Industries the
facility will serve a diverse clientele, including but not limited to: agriculture providing storage for fruits,
vegetables, and other perishable produce, enabling farmers and distributors to extend shelf life and access
wider markets. Pharmaceuticals: offering temperature-controlled storage for pharmaceutical products,
ensuring compliance with stringent regulatory requirements and maintaining the integrity of sensitive
medications. Supporting food manufacturers by providing a reliable and efficient cold storage solution for
raw materials and finished goods.
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The government of Ethiopia has developed conducive investment policy packages and other sectorial
reforms at federal and regional level to attract a huge private investment for the wellbeing of the nation and
its citizens as a whole. Besides, it is also currently implementing home grown economic model that gave a
special focus for manufacturing industries.

In this regard, the Tigray Regional State government has been exerting its maximum effort to expand
investment opportunities in the region, so as to foster the economic development of the region and
subduing the region’s big enemy that is the trap of poverty. Therefore, the regional government has been
preparing a viable business environment to attract many domestic and foreign investors so that the dream of
making poverty history turns to be true.

Therefore, the lucrative market potential and those viable investment policies have attracted Mr.
KIFLEMARIAM KINDEYA to engage in cold storage and import and export of food related
products in Tigray region Mekele city on lease land holding of 14,000 Sq. meters with investment cost
of more than 363,500,000 Birr (Three hundred sixty three million and five hundred thousand) to be
fully financed (100%) by the promoter.

The project promoter of the envisaged cold storage investment has a good business experiences and need to
extend his assets to this new establishment. Therefore, the investor is very determined to establish the
factory so that the required support from regional government by considering the existing facts and the
multi benefits of this project is highly sought.

The factory starting with 60% capacity and increment by 5% per year, up to attainable capacity of 90%,
would make profit throughout its assumed operational years and generate positive net cash inflows. It
would return 31% of IRR and Birr 398 million net present value and pay back its gross investment cost
within 5 years. It is also observed that the return is not sensitive to operating an investment costs but
slightly sensitive to price that indicates the need for price adjustments in accordance with cost increments.

The realization of the project as ascertained in the financial appraisal, enables the promoter to generate
higher net benefits, creates employment benefit to the local labor force, generates tax revenue benefit and
import substitution effect that saves the scarce hard currency. These parameters are basic indicators of the
project’s priority, social desirability and economic viability.

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I. COMMODITY DESCRIPTION

Cold Storage
Cold storage is a crucial component of modern supply chains, providing a controlled environment to preserve
the freshness and quality of perishable goods. This specialized storage method involves maintaining low
temperatures, typically below ambient levels, to slow down the natural processes of decay and spoilage. Cold
storage facilities play a pivotal role in the storage and distribution of products ranging from agricultural produce
and dairy to pharmaceuticals and other temperature-sensitive goods.

1.1 Technologies Used in Cold Storage:

1. Refrigeration Systems: the heart of cold storage, refrigeration systems employ compressors, evaporators,
and condensers to circulate refrigerants and regulate temperatures within storage spaces.

2. Insulation Materials: High-quality insulation materials, such as polyurethane foam or expanded polystyrene
(EPS), are used in constructing cold storage facilities to minimize heat transfer and maintain consistent internal
temperatures.

3. Cold Storage Panels: Prefabricated panels with integrated insulation layers are utilized in constructing walls
and ceilings to create well-insulated enclosures.

4. Monitoring Systems: Automated monitoring systems equipped with sensors and Internet of Things (IoT)
devices provide real-time data on temperature, humidity, and other environmental conditions.

5. Automated Control Systems: These systems use advanced algorithms to monitor and adjust temperature
and humidity levels, ensuring precision in maintaining storage conditions.

6. Ventilation Systems: Designed to circulate air efficiently, ventilation systems help maintain uniform
temperatures throughout the storage space.

7. Energy-Efficient Lighting: LED lighting, known for its low heat emission, is employed to illuminate storage
areas without contributing significantly to temperature fluctuations.

1.2 Advantages of Cold Storage:

1. Extended Shelf Life: Cold storage significantly extends the shelf life of perishable goods, reducing food
waste and allowing for year-round availability of seasonal products.

2. Preservation of Quality: By slowing down enzymatic and microbial activity, cold storage preserves the
quality, nutritional content, and appearance of stored products.

3. Global Trade Facilitation: Cold storage supports international trade by enabling the export and import of
temperature-sensitive goods, contributing to economic growth and market diversification.

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4. Reduced Energy Consumption: Advancements in refrigeration technologies and insulation materials
contribute to energy-efficient operations, reducing the environmental impact associated with energy
consumption.

5. Optimized Logistics: Cold storage facilitates optimized transportation logistics by consolidating goods in
larger shipments, reducing the frequency of transportation and associated carbon emissions.

1.3 Economic Impact

Job Creation: The establishment and operation of cold storage facilities create job opportunities, ranging from
facility management and logistics to maintenance and support services.

Agricultural Growth: Cold storage supports farmers by providing a means to store and market their produce
effectively, contributing to the growth and sustainability of the agricultural sector.

Supply Chain Efficiency: Cold storage enhances supply chain efficiency by reducing losses during
transportation and enabling a more reliable and consistent flow of goods.

Market Diversification: Businesses utilizing cold storage can explore new markets and expand their customer
base by offering a variety of products throughout the year.

Reduction in Food Waste: The extension of shelf life through cold storage contributes to the reduction of food
waste, positively impacting both economic and environmental aspects.

Cold storage and its associated technologies not only play a pivotal role in preserving the quality of perishable
goods but also contribute significantly to economic growth, global trade, and sustainability efforts. As
technology continues to advance, cold storage solutions are poised to become even more efficient, further
reinforcing their positive impact on industries and economies worldwide.

1.4 Target Industries

The facility will serve a diverse clientele, including but not limited to:

1. Agriculture: Providing storage for fruits, vegetables, and other perishable produce, enabling farmers and
distributors to extend shelf life and access wider markets.

2. Pharmaceuticals: Offering temperature-controlled storage for pharmaceutical products, ensuring compliance

with stringent regulatory requirements and maintaining the integrity of sensitive medications.

3. Food Processing: Supporting food manufacturers by providing a reliable and efficient cold storage solution
for raw materials and finished goods.

1.5 Food products that can be stored in a cold storage for export and imported foods

Cold storage facilities are designed to accommodate a variety of perishable food products, allowing for the
preservation of quality during transportation and storage. Here are some common types of food products that
are often stored in cold storage for export and import:

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1. Fresh Fruits and Vegetables: - Apples, berries, citrus fruits, tomatoes, leafy greens, and other fresh produce
can be stored in cold storage to extend their shelf life and maintain quality.

2. Dairy Products: - Milk, cheese, yogurt, and other dairy products require cold storage to prevent spoilage and
maintain freshness. Temperature-controlled environments help preserve the nutritional content and prevent
bacterial growth.

3. Meat and Poultry: - Fresh and frozen meat products, including beef, chicken, pork, and seafood, are stored
in cold storage to maintain proper temperatures and prevent bacterial contamination.

4. Frozen Foods: - Various frozen food products, such as frozen vegetables, fruits, prepared meals, and
seafood, can be stored in cold storage for export and import. This allows for extended storage periods without
compromising quality.

5. Bakery and Pastry Products:- Bread, pastries, cakes, and other baked goods often benefit from cold storage
to maintain freshness and prevent mold growth. Frozen dough and partially baked products are also commonly
stored in cold conditions.

6. Processed Foods: - Many processed foods, including ready-to-eat meals, sauces, and condiments, are stored
in cold storage to preserve flavor, texture, and nutritional value.

7. Eggs: - Eggs are stored in cold storage to extend their shelf life and prevent the growth of harmful bacteria.
Maintaining a consistent temperature is crucial for egg quality.

8. Frozen Fruits and Vegetables:- Frozen fruits and vegetables, such as peas, corn, and berries, are commonly
stored in cold storage for export and import. Freezing helps retain nutritional content and prevents deterioration.

9. Chocolate and Confectionery: Chocolate and confectionery items benefit from cold storage to prevent
melting and maintain their structure and taste.

10. Pharmaceuticals and Vaccines: - While not food products, pharmaceuticals and vaccines are often stored
in cold storage for transportation. Maintaining specific temperature ranges is critical to preserving the efficacy
of medications and vaccines.

It's important to note that different food products may have specific temperature requirements, and cold storage
facilities are equipped with systems that can provide precise temperature control. Additionally, proper
packaging and handling are crucial for maintaining the quality and safety of perishable goods during export and
import. Regulatory compliance and adherence to international standards are essential for the successful export
and import of cold-stored food products.

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1.6. Main Products of the Industry

 Fresh Fruits and Vegetables

 Meat and Poultry
 Dairy Products
 Processed Foods

2.7. Key to Success

The cold storage and export and import of food related products Success will be primarily attributable to the
hard work and commitment of our employees. Amongst the team it has the brightest vision, brimming with
knowledge experience and creativity. All these motivated and experienced professionals will provide the
company with the vast reservoir of knowledge in almost all areas of the plants activity.

2.5. Growth and Beliefs of the Industry

Profitable growth results in greater opportunities. As individuals, teams, business units and company, aware of
the impact of the decisions and actions at all levels of improving quality, setting competitive selling price and
distribution. The manufacturing Industry believes in nurturing business relationships that have been built on
mutual benefit. The company's focus will be to ensure customer's satisfaction, improvement of quality,
productivity and sales distribution. Organizing this approach with proper services enables foam and foam
product manufacturing industry to provide maximum benefit to its customers and to the economy in the sector.

II. THE PROJECT

Background Information

PROJECT PROMOTER

Name: KIFLEMARIAM KINDEYA

The promoter of this project Mr. KIFLEMARIAM KINDEYA has been involved in a great investment
opportunity in Ethiopia & abroad in different dimensional business ,importing& exporting of essences, metal
and nonmetal products, work on construction industry, electrical equipment’s & appliances, the Owner of the
project has a life time experience in different business and at the moment he is doing constructive business own
a mineral water factory known as Rewina mineral water located in Atsbi (Tigray)and importing of metal and
non metal scraps, Mr.KIFLEMARIAM KINDEYA is aware of identifying market gaps now the envisaged
promotor wants to expand his asset by investing in cold storage warehouse, also has pass through several stages
& he has long years of experience on various business works& plays a great role in generating revenue for the
government in the form of employee tax, profit tax, income tax and value added tax (VAT) that can help for the
revival of the country’s economy.

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BACKGROUND OF THE PROJECT AND HISTORY

Brief History of the Project

KIFLEMARIYAM KNDEYA ENTEHABU has been involved in a great business opportunity in import trade
in metal and nonmetal scraps capital 21, 000, 000, 00 ETB in Tigray administration investment and urban
development bureau .

Registered Trade Name: KIFLEMARIYAM KNDEYA ENTEHABU

Existing business: IMPORT TRADE IN MATRIAL METAL AND NON METAL SCRAPS

No. of existing Employee :523 permanent and temporary workers

Registered capital:21 million

Address : Mekelle

Region: Tigray

Sub-City: Ayder

Manager of the project: KIFLEMARIYAM KNDEYA ENTEHABU

Telephone:+2519-14- 31-44-06

Name: Rewina cold storage and import and export of food related products

Form of business: sole proprietorship

Products: food related products

Employment opportunity 100 permanent 1000 under construction

Project Address:

Region: Tigray Regional State

City: Mekele

Land size required:14,000 square meters

Investment cost: 363,500,000

Project Financing: 100% from equity

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Target market: 15% local 85 % foreign (Export)

2.1. Objectives of the Project

2.1.1. General Objective of the project

1. Enhance Food Supply Chain Efficiency:

- Improve the overall efficiency of the food supply chain by providing a reliable and efficient storage solution
for perishable goods.

2. Reduce Food Loss and Waste:

- Contribute to the reduction of food loss and waste by extending the shelf life of agricultural produce, dairy,
and other perishable items.

3. Facilitate International Trade:

- Support and promote international trade by providing a secure and compliant storage facility for export and
import of temperature-sensitive goods.

4. Ensure Food Safety and Quality:

- Safeguard the quality and safety of stored products through precise temperature control, thereby meeting
regulatory standards and consumer expectations.

5. Stimulate Economic Growth:

- Generate economic growth by creating job opportunities, fostering entrepreneurship, and supporting related
industries such as transportation and logistics.

6. Contribute to Sustainable Agriculture:

- Encourage sustainable agricultural practices by providing farmers and producers with a means to store and
market their produce effectively.

7. Address Market Seasonality:

- Mitigate the impact of seasonal fluctuations by enabling year-round availability of seasonal produce and
reducing price volatility.

8. Support Diverse Industries:

- Serve various industries including agriculture, pharmaceuticals, food processing, and more, by offering
specialized storage solutions for their unique requirements.

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2.1.2. Specific Objectives

Specific Objectives of Cold Storage Investment:

1. Capacity Expansion:

- Increase storage capacity to accommodate a specific volume of perishable goods, meeting the demands of
local and international markets.

2. Technology Integration:

- Implement cutting-edge refrigeration and storage technologies to ensure precise temperature control,
humidity management, and real-time monitoring.

3. Compliance with Standards:

- Adhere to international quality and safety standards to guarantee the integrity of stored products and comply
with regulatory requirements.

4. Diversification of Services:

- Provide value-added services such as inventory management, order picking, and transportation logistics to
cater to diverse client needs.

5. Energy Efficiency:

- Optimize energy consumption through the use of energy-efficient equipment, insulation, and sustainable
practices to reduce operational costs.

6. Market Penetration:

- Penetrate new markets and strengthen market presence by strategically locating the cold storage facility in
areas with high demand and accessibility.

7. Collaboration with Stakeholders:

- Foster collaboration with farmers, producers, distributors, and other stakeholders to create a mutually
beneficial ecosystem that supports the entire supply chain.

8. Risk Mitigation:

- Develop contingency plans and invest in backup systems to mitigate risks associated with power outages,
equipment failures, and other potential disruptions.

9. Employee Training and Safety:

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 - Ensure the safety of personnel and the efficient operation of the facility through comprehensive training
programs and adherence to occupational safety standards.

10. Financial Sustainability:

- Achieve financial sustainability and a positive return on investment by implementing sound financial
management practices and efficient operational strategies.

These general and specific objectives serve as a roadmap for a cold storage investment, guiding the
development and operation of the facility to meet the diverse needs of the industry and contribute to broader
economic and social goals.

2.1.3. MAJOR SUCCESS AND RISK FACTORS

In the past consecutive years, the country has shown a continuous double digit economic growth which can
boost the demand for goods and services as well as the image of the country among foreign countries.

Ethiopia has location advantage to export goods particularly to Europe, Middle East and neighboring East
Africa Countries.

There is relatively lower labor cost in the country and thus production cost for labor intensive industries is low.

Government gives different incentives for investors such as low interest rate, long grace period and attractive
policies.

Different market opportunities created by trade partners such as Everything but Arms of EU, COMESA and
other bilateral and regional trade agreements open up market for investors.

Manufacturing is one of the priority areas in the government industrial development strategy and it enjoys every
advantage that is rendered for the priority sectors.

The output has high demand in the local market. It will be the only solution for the scarcity of Sanitary pad with
affordable price and closer to customers in Ethiopia. Therefore, high demand is the major key success for
expansion and development of this sector.

Easily trainable man power: -The country has easily trainable and abundant man power. Different Government
Universities have been training students on textile and related fields which fill the gap on trained human
resource requirement.

2.2.3 MAJOR RISK FACTORS AND MITIGATION MEASURES

Environmental pollution due to factory wastes as a result of cutting.

Competition from foreign and local firms.

Frequent power interruption.

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2.2.4. Risk Mitigating Measures

Chemicals and wastes should be directed to treatment plant and eliminated through waste treatment pool.

Removal of pieces of cotton and installation of appropriate wall mounted firefighting units.

The promoter has to use modern technology machines to produce high quality sanitary pad and diaper so that it
can compete with both local and foreign competitors. Etc

MARKET STUDY

Since there is no product specific market research data, we prefer to employ data from internet sources for the
global overview and that of different research out puts for the Sub-Saharan and Ethiopia's case. Some written
literatures on cold storage and import and export of food related products still insist developing countries to
continue cold storage industry to generate foreign currency by export of locally produced products, since
storing, logistics and export is labor intensive and involves labor at large. On the other hand developed
countries may not have interest to continue in the sector as the effect of high labor charge and expensiveness of
technology. And the study is presented below based on the products of this proposed investment which is cold
storage and import and export of food related products.

Cold storage Market

Here are some key factors driving this growth:

Rising demand for temperature-sensitive products: With increasing emphasis on fresh and healthy food,
pharmaceuticals, and other temperature-sensitive goods, the need for safe and efficient cold storage solutions is
escalating.

Growth in organized retail: Developing economies are witnessing a surge in organized retail, leading to
higher demand for cold storage infrastructure to support logistics and supply chains.

Stringent regulations: Stricter regulations governing food safety and temperature-controlled product handling
are pushing businesses to invest in robust cold storage facilities.

Technological advancements: Automation and AI integration in cold storage facilities are improving
efficiency, reducing costs, and minimizing product spoilage, further fueling market growth.

However, it's important to note that these projections vary slightly depending on the research firm and its
methodology. Additionally, specific segments within the cold storage market might experience different growth
rates based on factors like application (food vs. pharmaceuticals), type of storage (warehouses vs. reefer
containers), and geographic location.

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Global Market

Cold Storage Market Analysis

The global cold storage market size was valued at USD 138.97 billion in 2022 and is projected to grow at a
compound annual growth rate (CAGR) of 17% during the forecast period. The market has benefitted
significantly from the stringent regulations governing the production and supply of temperature-sensitive
products.

Its expansion can be linked to rising demand for cold storage in commercial and industrial organizations, as
well as regulatory compliance demands. The majority of the expansion was seen in emerging nations such as
India, China, Brazil, Indonesia, and Mexico, among others.

According to the cold storage industry, 53% of enterprises want to enhance their cold storage capacity.
Increasing demand for food and pharmaceuticals, as well as a greater emphasis on safety, has resulted in a rise
in demand for cold storage space.

In 2022, the frozen category led the market, accounting for around 77.3% of worldwide sales. Increasing frozen
food consumption in emerging nations such as India and China is pushing the frozen food industry in particular.
Warehouses in this category keep their storage temperatures between -10°F and -20°F. They hold frozen
vegetables, fruit, fish, meat, seafood, and other items.

The absence of infrastructure necessary to support the cold chain is expected to provide a significant hurdle for
enterprises looking to grow into emerging economies. Furthermore, the unavailability of power hook-ups for
reefer trailers at transportation hubs and ports may stymie industry expansion in these areas. COVID-19 caused
lockdowns and travel restrictions in numerous regions of the world, affecting the supply chains of many
industries. The consequences of COVID-19 have had a considerable impact on the market.

Cold Storage Market Trends

Rapid Growth in Import and Export Activities of Food Items and Pharmaceutical

Cold storage facilities are witnessing rapid growth in demand owing to the increasing import and export
activities. The cold storage market is booming with increasing global trade and the corresponding need for
secure storage infrastructure.

India accounts for 5.92% of the worldwide pharmaceutical and medicine market. Formulations and biologics
accounted for most of India's exports (73.31%), followed by drug intermediates and bulk medicines. In 2021-
22, the country exported pharmaceutical items worth USD 24.62 billion, a 2% increase over the previous year.
Exports increased by 18% yearly to USD 24.4 billion in 2020-21.

In March 2022, India exported USD 2.4 billion worth of drugs and pharmaceuticals, a 23% increase from USD
1.97 billion in February 2022. The USA, UK, South Africa, Russia, and Nigeria are India's top five export
destinations.

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In December 2022, China's pharmaceutical product exports totalled USD 990 million, while imports totaled
USD 3.29 billion, resulting in a USD 2.3 billion negative trade deficit. From December 2021 and December
2022, China's pharmaceutical exports fell by USD -3.04B (-75.4%) from USD 4.03B to USD 990M, while
imports fell by USD -423M (-11.4%) from USD 3.71B to US

Source: https://www.mordorintelligence.com/industry-reports/cold-storage-market

East African

East Africa's cold storage market shows tremendous potential for growth, fueled by several key factors.

Drivers

Rising population and incomes: A rapidly growing population, particularly in urban areas, coupled with
increasing disposable income, translates to higher demand for perishable goods like fruits, vegetables, dairy,
and meat, all reliant on proper cold storage.

Post-harvest losses: Estimates suggest a staggering 13.8% of food spoils before reaching consumers in Sub-
Saharan Africa, including East Africa. Improved cold chain infrastructure can significantly reduce these losses,
boosting food security and income for farmers.

Shifting dietary patterns: Changing preferences towards processed and fast foods, along with rising demand
for pharmaceuticals and other temperature-sensitive products, further drive the need for efficient cold storage
solutions.

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Government initiatives: Recognizing the vital role of cold chain development, East African governments are
increasingly investing in infrastructure and policies to enhance this sector. For example, the African
Development Bank's multinational cold chain solutions fund aims to build facilities in key East African cities.

Technological advancements: Innovations like solar-powered cold storage units and AI-powered monitoring
systems are making cold storage more accessible and efficient, even in rural areas with limited resources.

While comprehensive market size projections vary depending on the source, the general consensus points
towards strong growth.

Market size research by ESI Africa indicates East Africa's cold chain infrastructure market is nascent but
rapidly developing, with Kenya taking the lead. By 2030, the market size is expected to reach several billion
dollars, a significant jump from its current level. Different research firms estimate CAGRs (Compound Annual
Growth Rates) ranging from 14% to 17.5% for the Cold Chain Storage Market in Africa, including East Africa.
This signifies robust and sustained growth in the coming years.

Ethiopian Perspective

The cold storage industry in Ethiopia has been limited in the past due to the country's economic challenges and
lack of investment in infrastructure. However, in recent years there has been a push to modernize and expand
the country's cold storage capabilities in order to support the growing demand for perishable goods.

One key factor driving the growth of the cold storage industry in Ethiopia is the country's expanding
agricultural sector, which produces a variety of perishable goods such as fruits, vegetables, and meats. These
products often require cold storage in order to maintain their freshness and quality during transport and
distribution.

In addition to serving the domestic market, Ethiopia's cold storage facilities also play a role in the country's
export industry. Ethiopia exports a range of perishable goods to other countries in the region, and the
availability of cold storage facilities enables these exports to be preserved during transport.

Despite the increasing demand for cold storage facilities in Ethiopia, the construction of new projects has been
limited due to the country's economic challenges and lack of investment. However, with the recent
improvement in the country's economic situation and increased foreign investment, it is possible that more cold
storage projects may be constructed in the future.

There are have been some small size cold rooms in different areas of the country specially on horticulture
investments but they are limited to small storage size and specific for the intended investment services. Now
there are big cold storage ware house projects such as; Ethiopian Pharmaceutical storage and a 350 million birr
cold storage underway in Modjo town.

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In January 3/2020 Ethiopian Pharmaceutical Fund Supply Agency (EPSA) on Friday officially inaugurated
three new cold chain warehouses with an outlay of more than 20 million Birr.

The modern cold chain warehouse featuring three independent cold rooms capable of operating at temperature
ranges from 2 to 8 Degree Celsius. The warehouses have also 300 meter cube storage capacity each and will
help to enhance the cold storage capacity to 4278 meter cube.

And a private company commanding the lion’s share of the market in the horticulture logistics sector is making
headway to establish a cold storage facility in Modjo town, Oromia, with an investment capital of 350 million
birr. The facility is expected to be set up at the most efficient route for transporting flowers and plants via train
from Modjo to Djibouti along the Ethio-Djibouti corridor. About 25,000 square metres of land is needed to
build the facility.

Revenue in the Storage market Ethiopia is projected to reach US$32.4m in 2024.

Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 9.87%, resulting in a market volume
of US$47.2m by 2028. The average Spend per Employee in the Storage market is projected to reach US$0.52 in
2024.In global comparison, most revenue will be generated in the United States (US$20,060m in 2024).

Meat Market

Meat consumption

Ethiopia consumes beef, sheep and goat meat, camel meat, poultry meat, game and, to a very limited extent, pig
meat. The per capita consumption of farm animal meat has changed only slightly in recent years and is
estimated at around 6 kg. About 60% of consumption is beef (3.6 kg) and about another 20% is sheep and goat
meat (1.2 kg). Poultry meat has slightly increased its share and now makes up a share of about 10-15%.

The consumption of camel meat is estimated at approx. 0.3 kg per head and year, although there are large
regional differences. The above consumption figures are approximate values which can be derived from
different information from international (OECD, FAO, BMG) and national statistics. There is, however, a broad
consensus that consumption is stagnating at this level and that rising production is largely being absorbed by
population growth. The population rose from around 95.4 million in 2013 to 109.2 million in 2018.

The consumption of meat products shows clear differences between urban and rural populations. People in
urban areas consume more meat due to the higher standard of living as well as the better accessibility of meat
products in supermarkets. This is particularly true for the consumption of beef and poultry meat. In rural areas,
meat is not part of the daily diet and is only consumed on religious holidays. In addition to the necessary
household income, there is a lack of opportunities to buy meat products at any time.

In urban areas, consumers buy meat and meat products mainly in butchers' shops and supermarkets. In rural
areas, on the other hand, live animals are handed in for slaughter and distribution within family and friends.
Processed meat products such as corned beef, sausages, etc. are usually only in demand by foreign consumers.
The market volume for processed meat products can therefore be considered marginal on a national average.

15
While beef, sheep and goat meat is consumed throughout the country, camel meat, for example, is consumed
more in the eastern and south-eastern regions and predominantly by people of Muslim faith. In Ethiopia, meat
or edible offal is usually sold as unprocessed raw material via local butchers or supermarkets, often
with complete animal halves or slaughter pieces being presented to customers on open counters. The customers
then decide which cuts they would like to have. The meat is then cut into standard household portions and given
to the customer.

The consumption of eggs is estimated at 0.4 to 0.5 kg per head and year. This corresponds to a consumption of
about 10 eggs per head and year. It is also to be expected that consumption of eggs will be significantly higher
in urban areas.

Market supply of meat and eggs

The Ethiopian market supply of meat is defined by a comparatively low per capita consumption and a high
degree of self-sufficiency. The current supply is almost exclusively covered by domestic production; imports
play only a minor role and contribute less than 1% to the market supply. In 2019, the FAO stated that imports
consisted of 1,000 t of poultry meat and 3,541 t of sheep and goat meat in 2017 (see also Table 5 with the FAO
and ITC figures from 2020 for the same year, which show slightly different values). Since meat exports also
accounted for less than 20,000 t, Ethiopian meat production accounts for 97 % of domestic supply.
However, live animal exports (formal and informal) are not included in this calculation.

In addition to the production of farmed meat, some 85,000 tons of game meat is also produced and consumed in
the country. This corresponds to a per capita consumption of another 0.75 kg.The market supply of eggs is
ensured by the domestic production of 55,000 tones of eggs.

Meat production

Meat production has increased slightly in all categories in recent years. A total of around 788,000 tons of meat
were produced in 2018, which means that the volume grew by 4.9 per cent from 2014 to 2018. Poultry meat
production recorded the largest increase in the reference period (2014 to 2018) at 8.2 percent, followed by beef
(5.6 percent), pork (5.5 percent), camel meat (3.8 percent) and sheep and goat meat (4.2 percent).

16
Dairy market
Milk consumption

Milk and dairy products are part of the daily diet of many people in Ethiopia. The importance of people's milk
consumption is based on the prevailing socio-cultural environment and agricultural production systems and
shows considerable regional differences. In the lowlands, especially where livestock farming is the main source
of income for the rural population, milk is consumed by all social groups. In the highlands, on the other hand,
people maintain a diet based mainly on cereal products as sedentary farmers who both keep livestock and
grow cereals. In addition, milk consumption and the consumption of dairy products also variesgreatly
according to the season and the period of fasting (especially for followers of Orthodox Christianity). Fresh milk
or whey, Ethiopian cottage cheese (Ayib) and traditional butter are the most commonly produced and consumed
dairy products in the different parts of the country. About half of the marketable milk in Ethiopia is
consumed as fresh drinking milk or in fermented form (e.g. whey drink, drinking yoghurt etc.). A further 40
percent is used to make butter and 9 percent for cheese.

The capital Addis Ababa has the highest per capita consumption in the country, averaging around 52 litres per
year, while other (smaller) cities such as Bahir Dar, Hawassa and Dire Dawa consume less than 30 litreson
average. The upland regions also consume less. Overall, the average per capita consumption of milk in Ethiopia
is around 30 kg of milk equivalent (ME). In general, Ethiopia consumes mainly cow's milk, but also camel,
sheep and goat milk.

Market supply of dairy products

Demand for milk and dairy products is currently met mainly through local production, supplemented by small
imports of processed dairy products. Although Ethiopia produced just under 4 million tones of milk in 2017,
more than about 25% of this was lost as so-called production losses. Furthermore, only a fraction of the
produced and marketable milk volume reaches the market through formal production and marketing channels.
Depending on the region and production system, between 78 and 90 per cent of the (marketable)milk volume is
absorbed by informal structures and reaches the final customer directly via these structures.

The remainder reaches consumers via formal structures and further processing. In the informal supply
chains, marketing by food service providers such as milk collectors and the sale of their milk directly to local
17
consumers accounts for about 50 percent of milk. Milk is also exported formally and informally to neighbouring
countries (Somaliland and Kenya) on cross border markets. The quality of the milk is low. Vendors use plastic
canisters that are difficult to wash; there are no collection and refrigeration centres, and the traditional
transport system exposes the milk to direct sunlight. Camel milk is traded in traditional supply chains. In
contrast to cow's milk, the largest share (approx. 58percent) of camel milk reaches consumers via
(intermediate) traders on markets and not via direct marketing by milk collectors. About 40.5 percent of the
milk is marketed directly via milk collectors. Only about 1.5 percent of camel milk is exported across borders
to neighbouring countries by (intermediate) traders.

Milk production

Milk production in Ethiopia takes place mainly in small-scale farming structures. According to FAO &
OECD figures, there are currently around 16.2 million dairy cows and 354,000 milking camels, as well as an
unknown number of milked sheep and goats in the country. Together, all animals produce a total milk quantity
of about 3.9 million tonnes, with cow's milk (3.6 million tones) being the largest share, followed by camel milk
(169,724 tonnes). Sheep's and goat's milk played a lesser role with about 79,000 and 82,000 tonnes
respectively.

The data situation for milk production in Ethiopia is in part very patchy and contradictory. According to figures
from the International Livestock Research Institute (ILRI), 5.2 million tones of milk are produced in Ethiopia.
Cow's and camel milk together account for 5.03 million tones. 80 percent of this amount comes from cow's
milk farming, while the remaining 20 percent is attributed to camel farming .There is also different information
on the production of camel milk. For example, the FAO reports a total volume of camel milk production of
around 170,000 tones (for 2017), while the CSA states over 300,000 tones. The Ethiopian Statistical Office's
(CSA) nationwide surveys and samples may be incomplete or unrepresentative. Furthermore, production and
consumption in the informal sector can only be estimated.

Development of self-sufficiency, import and export

Ethiopia's livestock farming sector is an enormous resource whose potential for value creation is only
utilized to a limited extent. The current market is characterized by low per-capita consumption, declining
exports of live animals and meat via the formal export route and substantial but difficult to capture exports of
live animals via the informal export route. At the same time, livestock farmers complain about a lack of

18
structures and non-transparent trade practices. As a result, producer prices are often very low and the main
added value is only achieved in the subsequent stages of trade. Therefore, there are few incentives for
producers to improve or expand production. Imports are very small (see Table ), with more than 90 percent of
the imported goods (2017) being poultry meat from Brazil. Imports of meat and meat products have increased
somewhat, but only at a very low level, largely following the establishment of luxury hotels and supermarkets
in the capital city, which aim to meet the specific taste and quality requirements of foreign guests.

Over the last two decades, Ethiopia has mainly focused on red meat exports. The quantity of meat exported
rose by 29.3 percent to around 18,900 tones in the period from 2013 to 2017. Currently, meat products worth
around 97 million USD are exported. Goat meat is the most exported type of meat with an export value of
around 88 million USD, ahead of beef at 6.2 million USD and offal at 2.3 million USD.

The Arabian Peninsula is currently the largest sales market for meat products. The United Arab Emirates (UAE)
alone imports around 10,000 tones of Ethiopian meat, ahead of Saudi Arabia with 6,400 tones and Bahrain (960
tonnes), see Table.

19
Exports of red meat (poultry meat is practically not exported) are still at a low level despite all efforts and do
not even reach 3% of domestic production. In the case of beef, Ethiopia has made various attempts to maintain
the substantial added value in the country through domestic slaughter and export marketing of the carcasses.
This has led to the establishment of specialized export slaughterhouses, some of which are now closed again or
are producing at low capacity. It is apparent that the informal export route has established itself as more flexible
and efficient and is not subject to official control. Goats are less suitable for live marketing, so that slaughter in
the country has become established as an advantage.

More important than the trade in meat and meat products is the marketing and export of live animals for

Ethiopia. In addition to important export earnings, it also provides access to foreign exchange, which is critical
for Ethiopian economic development. In recent years, the export of live animals has been subject to strong
fluctuations and informal export has gained in importance compared to formal export channels. For formal
exports, an export value of around USD 62 million is estimated for 2017. In another publication, the value of
formal exports is given as USD 190 million.

Ethiopia is thus an important supplier of live animals to Somalia, Djibouti, Kenya and Sudan, as well as Saudi
Arabia, particularly through informal trade channels. It is assumed that the total value of the informal export
channel significantly exceeds the value of the formal export channel and could be three or four times higher.

Overall, Ethiopia has not yet succeeded in taking advantage of the dual opportunities of, on the one hand, a
better supply of red meat for the domestic population, and on the other hand, better export marketing in the red
meat sector, where a high added value remains in the country.

20
3.1 Marketing channel

IV. TECHNICAL STUDY

4.1. Project Location and Land use plan

The project site will be located in Tigray Regional State, Mekele city on leased land area of
14,000 square meters. The land size required for each construction is shown below.

Admin Bldg: 500m2

3 Ware houses including raw material store: 15x100 =4500 m2

Sanitary pad production line 180 sqm

Changing Room & Toilet: 84 sqm

Workers living room : 210sqm

Generator House: 100sqm

Display Room: 600sqm

Waste area: 42sqm

Green area: 500sqm

Recreational area: 500 sqm

water tower: 45 aqm

21
Training hall: 700sqm

Guard house: 96 sqm

The total built up area is 7834 sq meteres.The remaining is allotted for U/loading area, internal
roads, and other services.

The diagram showing the plant and machinery layout is annexed.

4.1.1. Land availability

The total area of land required for the envisaged project, including provision for open space is
14,000 m2, out of which 7834 m2 will be built-up area. Land value at the current lease rate per
m2 per annum and 50 years of land holding with estimated land lease value will be considered
and 20% of the lease rate will be paid in advance. The remaining 80% will be paid annually.
Actual land availability of the project has been decided by taking into account the dimensions
of the building for the main process considering the size of the machineries and equipment such
as machine layout, store house, office system and parking lot.
4.2. Project Design & Engineering

4.2.1. Building, Civil Work and Engineering

The Company proposes to develop and construct building with latest concepts and food grade materials to
operate proposed industrial activities efficiently. Thus, the overall site area for the proposed plant is envisaged
to be 14,000 m2. The cold storage 7834 m2. The administration building (including administrative office,
cafeteria, Guard house generator and transformer room, changing room with common Toilet and shower, water
tanker tower and septic tank) occupy 6166m2. The floor will be reinforced concrete, having a strong foundation.
The required amount of utilities with perspective price is shown here below in detail in the table. As a result of
the market demand of the product, the plant will propose additional nearby site area to expand its manufacturing
plant and create additional advantages to the study area in terms of employment opportunity, revenue
generation, and production quality & quantity supplying, cost minimization and soon. As a result, the company
will operate at an adequate area of land for proposed project.

4.2.2. Plant Layout & Possibility of Expansion

Actual land availability of the project has been decided by taking into account the dimensions of the building
for the main process considering the size of the machineries and equipment such as machine layout, store house,
office system and parking lot. Land decisions entail determines the placement of the departments, work groups
within the departments, workstations, machines, and warehouses points within the production facility. The
objective of the machine layout is to arrange these elements in a way that ensures a smooth work flow or a
particular traffic pattern. In general, the inputs to the layout decisions are as follows

Specification of the objectives and corresponding criteria to be used to evaluate the reaction. The amount of
materials required, and the amount that must be traveled between elements in the layout, are common basic

22
criteria. Estimates of product or service demand on the system. Processing requirements in terms of number of
operations and work flow between the elements in the layout.Space requirements for the elements in the layout.
Space availability within the facility itself, or if this is a new facility, possible building configurations.

A machine layout is one in which equipment's or work processes are arranged according to their progressive
steps by which the product is made. A group of technology layout groups of dissimilar machines in to work
centers to work on products that have similar shapes and processing requirements. A group of technology layout
is similar a process layout in that cells are designed to perform a specific set of processes, and it is similar to a
product layout in that the cells are dedicated to limited range of products. In a fixed-position layout, the product
remains at one location. Plant processing equipment is moved to the product rather than vice versa.
Construction Sites and movie lots are examples of this plant. Many Processing facilities present a combination
of the two layout types. For example, a given production area may be laid out by process, while another
production area may be laid out by product.

S.n Description U.M Total Area Cost in Birr

1 warehouse m2 4500 41,505,000

2 Toilet and shower m2 180 839,000

3 Generator room m2 100 620,000

4 Output warehouse m2 1,650 4,500,000

5 Office and Administration Block m2 500 1,600,000

6 Water tank m2 46 160,000

7 Guard house m2 96 95,000

8 Parking m2 108 170,250

9 Green space m2 500 150,000

10 Vehicle circulation m2 1655.64 500,000

Total 14,000 50,139,250

23
4.2.3 Machinery and Equipment

The production machinery and equipment is broadly categorized in to two. These are production machinery &
equipment, and general use equipment’s. The total cost of machinery and equipment is estimated to be
105,145,000.00 Birr. The detail of machinery and equipment type is shown in the table below.

No. Item Model/Year Unit Qty Cost In Birr

DIAPER PRODUCTION &

All machines are 2023 model.
FINISHING LINE

1 Refrigeration unit and evaporator BM0059F/23 SET 14 $33,840,000.00

Automated Monitoring and

2 PM4960J/23 set 1 $1,100,000.00
Control Systems

LED lamps and Doors in cold

3 CM5004L/23 set 1 $2,240,000.00
warehouse

4 packaging and sealing Machine A/CM61-JF/23 set 6 $1,100,000.00

5 Pallet racking in cold warehouse T96J-65F/23 set 4,000 $8,000,000.00

6 Manual pallet truck WM-J400/23 set 4 $1,000,000.00

7 2.5 Ton Forklift R-6541-R/23 set 1 $2,500,000.00

8 2.5 Ton Forklift with Attachment SM6644-T/23 set 1 $2,260,000.00

9 Stand by Generators DG1000V/23 Set 4 $50,000,000.00

Transformer - set 1 $2,105,000.00

10 Compressor CM120/23 Set 2 $1,000,000.00

Total 4035 $105,145,000.00

4.2.4 Production Capacity

Factors that affect production efficiency of the machineries are number of working days and type of product,
daily or hourly production volume, process losses and capacity utilization of machinery. The project theoretical
capacity is 464800 Pcs/day putting the machine efficiency and the time that will take to get in to full capacity
production by considering the project will start operation at 60% of its capacity. The plant is assumed to
24
increase its production capacity to 65% in second year, 70% in third year and will reach in its maximum
capacity of 90% in fifth year.

4.2.5 Technology and Engineering

In the selection of the appropriate technology for the proposed plant the following points have taken in the
consideration.

Local conditions under which the basic machineries will operate

Cost of technology and quality construction

Skill requirement to operate it

Availability of raw materials(machinery and equipment)

Conduct visit to project area

Prepare proposals-technical and financial- to carry out the work; Mobilize resources-manpower and machinery-
to project site;

4.6. Sources of Technology

There are a couple of numbers of agents in Addis Ababa and different countries in Europe and Far East that
represent suppliers of the required machinery. These include the following:

Carrier Global Corporation:

- Website: [Carrier Global Corporation](https://www.corporate.carrier.com/)

Thermo King:

- Website: [Thermo King](https://www.thermoking.com/)

Danfoss:

- Website: [Danfoss](https://www.danfoss.com/)

Bitzer:

- Website: [Bitzer](https://www.bitzer.de/)

Emerson Electric Co.:

- Website: [Emerson](https://www.emerson.com/)

25
Tecumseh Products Company:**

- Website: [Tecumseh](https://www.tecumseh.com/)

Hussmann Corporation:

- Website: [Hussmann](https://www.hussmann.com/)

JBT Corporation:

- Website: [JBT Corporation](https://www.jbtc.com/)

United Technologies Corporation (UTC):**

- Website: [United Technologies](https://www.utc.com/)

Johnson Controls:

- Website: [Johnson Controls](https://www.johnsoncontrols.com/)Tel: 905326322429

Fax: 903723228903

Web site: www.tunaexim.com

4.2.6 Materials and Inputs

4.2.6.1 Raw materials

The raw materials used for constructing of the the whole project is 50% local construction materials and the
other 50% is imported from different foreign countries since the food standard materials and technologies are
not locally available. All the material to be used is food grade and globally certified materials.

The other core raw materials such as red meat, egg and milk diaries are 90% local products that will be exported
to generate foreign countries and for domestic use the rest 10 % food related materials (products) are imported
from foreign countries for domestic sales.

4.2.7 Production Process and Technology

4.2.7.1 Working principle of the technology

The working principle of a cold storage warehouse involves creating and maintaining specific temperature and
humidity conditions to preserve the quality and freshness of perishable goods. Here's a breakdown of the key
components and processes involved in the functioning of a cold storage warehouse:

Refrigeration System: Cold storage warehouses are equipped with refrigeration systems that control the
temperature inside the facility. These systems typically consist of compressors, condensers, evaporators, and
expansion valves. The refrigeration cycle involves the compression and expansion of refrigerant gases to absorb
heat from the storage area and release it outside, thus maintaining a lower temperature inside.
26
Insulation: The walls, roof, and floor of the cold storage warehouse are usually heavily insulated to minimize
heat transfer. High-quality insulation materials help create a thermal barrier, preventing external heat from
entering and internal cold from escaping.

Temperature and Humidity Control: The refrigeration system is designed to maintain specific temperature
and humidity levels based on the requirements of the stored products. Different types of perishable goods may
have varying temperature and humidity needs. For example, fruits, vegetables, and pharmaceuticals may require
different storage conditions.

Air Circulation: Adequate air circulation is essential to ensure uniform temperature distribution throughout the
storage space. Cold storage warehouses are designed with efficient air distribution systems, including fans, to
prevent temperature variations and maintain consistent conditions across all storage areas.

Monitoring and Control Systems: Modern cold storage facilities are equipped with sophisticated monitoring
and control systems. These systems continuously monitor temperature, humidity, and other environmental
factors. If there are deviations from the set parameters, the control system triggers alarms and may initiate
corrective actions to maintain optimal storage conditions.

Loading and Unloading Areas: Cold storage warehouses have designated areas for loading and unloading
goods. To minimize temperature fluctuations, these areas often have airlocks or vestibules that serve as
transitional zones between the external environment and the cold storage space.

Backup Power Supply: Given the critical nature of maintaining a constant temperature, cold storage
warehouses often have backup power supplies, such as generators, to ensure continuous operation in case of
power outages.

Safety Measures: Cold storage facilities implement safety features to protect both the stored products and
personnel. This includes emergency systems, ventilation, and safety protocols to handle any unforeseen events.

By integrating these components and principles, cold storage warehouses can effectively create and sustain the
optimal conditions needed to preserve the quality of perishable goods, extend their shelf life, and contribute to
the efficient functioning of the supply chain.

27
 Diagram; working principles of cold storage ware house

4.2.7.2 Byproducts/Waste

Waste treatment in a cold storage warehouse primarily involves managing and disposing of waste generated
during the operation of the facility. Here are some aspects of waste treatment specific to cold storage
warehouses:

Packaging Waste:- Recycling: Implementing a comprehensive recycling program for packaging materials like
cardboard, plastic, and metal can significantly reduce the environmental impact. Cardboard boxes, plastic
wraps, and other packaging materials can often be recycled.

Waste Sorting: Establishing waste sorting stations to separate different types of waste at the source can facilitate
recycling efforts.

Composting: Some organic waste, such as spoiled fruits or vegetables, can be directed to composting facilities.
Composting turns organic waste into nutrient-rich compost that can be used for soil enrichment.

Donations: When feasible, donating surplus but still edible food to local charities or food banks can help
minimize food waste.

Optimizing: Regular maintenance and optimization of refrigeration systems can enhance energy efficiency,
reducing overall energy consumption and the environmental impact.

Hazardous Waste: Cold storage warehouses may generate hazardous waste, such as refrigerants or chemicals
used in the refrigeration system. It's crucial to follow proper disposal procedures in accordance with
environmental regulations to prevent harm to the environment.

Water Management: Implementing water recycling systems can help minimize water consumption and reduce
the environmental impact. For example, condensation from refrigeration units can be collected and reused for
non-potable purposes.

Obsolete Equipment: When upgrading or decommissioning refrigeration equipment, efforts should be made to
recycle or responsibly dispose of the old equipment. This can include components like compressors,
condensers, and other parts.

Employee Training: Training employees on proper waste management practices and encouraging a culture of
environmental responsibility can contribute to the success of waste reduction efforts.

It's essential for cold storage warehouses to comply with local regulations and environmental standards
regarding waste disposal and management. Additionally, adopting sustainable practices, such as energy-
efficient technologies and waste reduction initiatives, not only benefits the environment but can also lead to cost
savings and improved overall operational efficiency.

Vehicles
28
To facilitate the projects day to day activities, the project needs; one services bus for workers, one Double cabin
pick up for the key management staffs, two forklift for the factory operation and three trucks for transporting
the raw materials and products for estimated investment cost of Birr 26,700,000.

Office Furniture and Equipment

The furniture, fixture and office equipment required include tables, chairs, sofa sets, shelves, computers,
printers, etc., estimated to cost about Birr 500,000.

Utilities

The major utilities required for the textile plant are water for greenery and sanitary, Electricity, Fuel, diesel Oil
and Lubricants. For electric power, EEPCO will supply after the completion of all the civil works but the
promoter plans use power from one generator during construction phase, water shall be supplied from
government infrastructure. On the other hand, since the project is being established in the regional capital it will
not face any problem regarding telephone, fax, internet and the like.

Environmental Impact assessment

Provided separate Environmental impact assessment shall be conducted by the respective environmentalists,
notionally, the project will not have any adverse effect on the environment and the required follow up and
controlling will take on as needed in the project.

It's essential for cold storage warehouses to comply with local regulations and environmental standards
regarding waste disposal and management. Additionally, adopting sustainable practices, such as energy-
efficient technologies and waste reduction initiatives, not only benefits the environment but can also lead to cost
savings and improved overall operational efficiency.

29
V. Project Implementation Schedule

Table: Implementation schedule

Year 2016 E.C Year 2017 E.C Year 2018 E.C

Activity S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F

Land Acquisition

Civil Work
Construction

L/C Opening and

Delivery Of Machinery
and Equipment

Machinery Erection

Procurement of
Vehicle

Procurement of Office
Equipment

Procurement of Raw
Materials

Recruitment of
Manpower

Trial Production and

Commissioning

Commercial
Production

30
VI. ORGANIZATION, MANAGEMENT AND MANPOWER
7.1 . Organization Structure

The organizational structure has General Manager that controls the overall activities of the project and different
Departments to run the smooth operation of the project. These are Production Department, Finance Department,
Marketing and Sales Department and Purchasing Department. The Production Department controls overall
activities in the production process like planning and quality assurance including maintenance of machineries
and other damaged plants in the production process. The Finance Department is in charge of the administrative
tasks and related finance works of the company. The third unit is the Marketing and Sales Department, which
carry out marketing promotion and sales of the product.

Finally, the fourth Department is Purchasing Department which is accountable to procurement and supplying of
required raw materials, packing materials, spare parts, and other items needed for operations of the company to
facilitate the production process of the project. The detail structure of the organization of the company is
depicted in the diagram below.

31
 Service

7.2 Manpower

The project is labor intensive by its very nature. Accordingly, the promoter plans to hire 5,550 employees at
different positions. Significant proportion of the labor is expected to be skilled and semiskilled. The machinery
supplier will also give on job training as much as possible so that key technical operators can easily manage the
technology.
RECOMMENDED
SALARY
MANPOWER
SECTION JOB TITLE

NO. Monthly Annual

GENERAL MANAGER 1 35,000 420,000

SECRETARY 1 6,000 72,000

GENERAL MANAGER
OFFICE OFFICE CLEANER/TEA GIRL 1 1,525 18,300

SUB TOTAL 3 510,300

AUDIT SERVICE AUDITOR 1 15,000 180,000

SUB TOTAL 1 - 180,000

32
 MARKETING MANAGER 1 10,000 120,000

MARKETING SALES MAN 5 6,500 390,000

SECRETARY 1 4,000 48,000

SUB TOTAL 7 - 558,000

QUALITY CONTROL HEAD 1 12,500 150,000

PHYSICAL LAB HEAD 1 7,500 90,000

LAB TESTERS 2 6,000 144,000

QUALITY
PROCESS TESTERS 2 5,000 120,000

CHEMICAL LAB 1 7,500 90,000

PRODUCT INSPECTERS 4 3,750 180,000

SUB TOTAL 11 - 774,000

PLANNING HEAD 1 12,500 150,000

PRODUCTION CLERCKS 2 6,500 156,000

MIS (PALNNING)
PROGRAMER (COMPUTER) 2 6,000 144,000

SECRETARY/DATA INCODER 1 4,000 48,000

SUB TOTAL 6 - 498,000

LEGAL SERVICE LAWYER 1 15,000 180,000

SUB TOTAL 1 - 180,000

FINANCE HEAD 1 12,500 150,000

FINANCE ACCOUNTANT 1 10,000 120,000

MAIN CASHIER 1 5,000 60,000

SUB TOTAL 5 - 330,000

PURCHASING & PROPERTY HEAD 1 12,500 150,000

COOLED PRODUCT STORE KEEPER 2 5,000 120,000

SPARE PART STORE KEEPER 1 5,000 60,000

PURCHASING &
RAW MATERIAL STORE KEEPER 2 5,000 120,000
PROPERTY
EPARTMENT
PURCHASER 2 3,000 72,000

FORKLIFT OPERATORS 4 3,250 156,000

LOADING AND UNLOADING

5 1,500 90,000
OPERATORS

SUB TOTAL 17 - 828,000

ADMINISTRATION HEAD 1 12,500 150,000

ADMINISTRATION PERSONNEL ADMINISTRATOR 1 10,000 120,000

GENERAL SERVICE HEAD 1 7,500 90,000

33
 GUARDES 10 1,600 192,000

BIG TRUCK DRIVER 2 3,750 90,000

SMALL CAR DRIVER 2 2,500 60,000

GARDNER 1 1,500 18,000

SUB TOTAL 18 - 720,000

PRODUCTION & TECHNIQUE HEAD 1 25,000 300,000

PRODUCTION &
TECHNIQUE
SECRETARY 1 6,500 78,000

SUB TOTAL 2 - 378,000

LOGISTICS DIVISION HEAD 1 12,500 150,000

SERVICES HEAD 1 11,000 132,000

SHIFT LEADER 3 9,000 324,000

FINISHING DIVISION WOKERS FORMAN 3 6,500 234,000

PRODUCT TRANSPORTER 6 1,750 126,000

PAKING WORKER 8 2,500 240,000

MECHANICAL MENTENANCE 1 11,000 132,000

SUB TOTAL 23 - 1,338,000

ELECTRICAL MAINTENANCE HEAD 1 11,000 132,000

ELECTRICAL FORMAN 2 6,500 156,000

ELECTRICAL
MAINTENANCE ELECTRICIAN ELECTRONIC
3 5,000 180,000
WORKSHOP

SUB TOTAL 18 468,000

TOTAL 109 5,934,300

Employment skilled unskilled Total

permanent 44 33 77

temporary 5 27 32

total 54 47 101

female 38 35 73

male 16 20 36

34
VII. FINANCIAL STUDY

8.1 Investment Outlay

The total investment of the project will be Birr 1 billion of which 91% will be investment on fixed assets while
the remaining is working capital, pre-operating cost and pre-operating interest. The detail of planned investment
cost is depicted in the following table:

1. Investment Costs Foreign Cost (Birr) Local Cost (Birr) Total Cost (Birr)

Land lease advance 1,980,000 1,980,000

Building & Construction 52,119,065 52,119,065

Machinery & Equipments $105,145,000.00 105,145,000

Electric Installation Cost 1,000,000 1,000,000

Vehicles 26,700,000 26,700,000

Furniture & Equipments 500,000 500,000

Working Capital 168,147,560 2,100,000 170,247,560

Pre- production cost 1,666,920 1,100,000 2,766,920

Total 304,959,480 58,469,065 363,428,545

8.2 Source of finance

The project will be financed 100% from promoter’s contribution. The promoter equity shall be sourced from
the existing businesses the promoter is engaged. The detail financing plan is depicted in the following table.
Description Total FROM ASSET REMARK

Building & Construction & Land 52,119,065 52,119,065

Machinery & Equipments 105,145,000.00 105,145,000.00

Electric Installation Cost 1,000,000 1,000,000

Vehicles 3,000,000 3,000,000

Furniture & equipments 500,000 500,000

Working Capital 170,247,560 170,247,560

Pre- production cost 2,766,920 2,766,920

Sub Total ≈363,500,000 ≈363,500,000

Ratio 100% 100%

35
8.3. Financial Results

Profitability:-The projected profit and loss statement forecasted for 10 years shows that the net profit of the
project will be Birr 108 million in the first project year and Birr 208 million in the last projection period.

Liquidity:-The cash flow projection also shows a positive growth in cash balance from Birr 119 million in the
first year to Birr 530 million in the last projection period implying that the project will not face liquidity
constraint to finance its operational costs and at same time meeting its debt obligation.

Financial Internal Rate of Return:-Before and after tax internal rate of return computed based on 10 years
projection period is 31% and 24%, where the rate is above the maximum lending rate in the country implying
that it is worthwhile to invest on the project.

Sensitivity Analysis:-The project's sensitivity to adverse circumstances is viewed from three different
scenarios: by decreasing its sales revenue; increasing its operating cost and investment cost, all by 10%. The
result indicates that FIRR after tax decreases to 10% with decrease in revenue, 22% with increase in operating
cost and to 23% with an increase in investment cost. This indicates that the project is not sensitive to external
shocks.

Net Present Value:-Net Present value of the project after tax at 15% discount rate shows a positive balance of
Birr 218 million implying the project's ability to cover what is invested over its life span.

Pay-back period: the projects payback period is 5 years.

Socio-economic Benefits

The major socio economic benefits of the project can be seen from three perspectives: job opportunity, foreign
exchange earnings, generating government tax, and technology transfer and linkage effect.

Job Opportunity: The project will create a job opportunity for about 109skilled, semi-skilled and unskilled
workers on permanent basis.

Source of Government Income (income tax and profit tax): The project will annually generate an average
revenue to the government treasury of about Birr 27.2 million in the form of income tax. The government will
also secure tax from employees as income tax.

Technology and Knowledge Transfer: - The knowledge is not yet well developed in the country. Therefore,
the establishment of the project will help for the transfer of the knowhow to the country.

The last but not the least, the promoter, shall guarantee to contribute 0.5% of its net profit after tax to the
social fund for the project surrounding people as part of discharging its social responsibility. As per the
financial projections this is minimum of one million per annum and total of birr 10 million during the project
estimated period of 10 years.

36
VIII. CONCLUSION AND RECOMMENDATION

9.1 Conclusion

Tedros Abreha is well established sole proprietorship owned Tedros Abreha Tekeste who have been living in
foreign country for many years.

The promoter has now planned to build Diaper and Sanitary pad factory at Tigray Regional State Mekele city
on 14,000 square meters leas land with estimated project cost of birr 363,500,000 to be financed by the
promoter. The project planned to sell 100% of its products for domestic market import substitute to cut of the
import hard currency. The project creates job opportunity for more than 109 employees. The financial
projections also indicate the project’s viability. Therefore, the consultant has proposed the following.

37
9.2 Recommendation

Based on the fact that the project is financially and technically viable, socially desirable and environmentally
friendly, the consultant proposed implementation of the project.

38
ANNEX

FINANCIAL TABLES

Assumptions
BIG STAR GARMENT

I. Assumptions

1.1 Annual working days …………………………. 300

1.2 Number of shifts per day …………………………. 3

1.3 Number of working hours per shift ………………… 8

1.4 Exchage Rate (November 19, 2023)………………….. 1 USD = 56 Birr, and 1

1.5 Theoretical (Design) Production capacity by product type

Products In Weight basis

Product
Qty (ton/day) Qty (ton/year)
Type

Fresh Fruits and 0.912 273.6

Vegetables

Meat and Poultry 1.845 553.5

Dairy Products 0.831 249.3

Processed Foods 1.565326963 469.598089

Eggs 2.512566163 753.769849

Frozen Fruits and 1.933452 580.0356

Vegetables

Total 6.011345126 3.588

39
 Product Local Sales (15% of total output) Foreign Sales (85% of total output)

Type Qty (Linear Annual Qty (Linear Annual

Unit Unit price
Revenue Revenue Total Revenue
price (Birr)
meter/year) (Birr) meter/year) (Birr)

Fresh Fruits and

232,560 40 2,000,700 41,040 48.75 9,302,400 11,303,100
Vegetables

Meat and Poultry 470,475 41 3,673,856 83,025 44.25 19,289,475 22,963,331

Dairy Products 211,905 44 1,851,053 37,395 49.5 9,323,820 11,174,873

Processed Foods 399,158 42 3,521,986 70,440 50 16,764,652 20,286,637

Eggs 640,704 44 5,766,339 113,065 51 28,190,992 33,957,332

Frozen Fruits and

493,030 46 4,611,283 87,005 53 22,679,392 27,290,675
Vegetables

Total 2,447,833 21,425,217 431,971 105,550,731 126,975,948

Annual Revenue

Annual Total Annual

Capacity Utilization Annual Revenu
Year Revenue- Local Revenue
(%) - Foeign (Birr)
(Birr) (Birr)

1 60% 23,297,227 132,017,621 155,314,848

2 65% 25,238,663 143,019,089 168,257,752

3 70% 27,180,098 154,020,558 181,200,656

4 75% 29,121,534 165,022,026 194,143,560

5 and thereafter 80% 31,062,970 176,023,494 207,086,464

Calculation of Financial Internal Rate of Return

Working
Capital Fixed Asset Operating Net Ben
Year Revenue Recovery Recovery Total Benefits Initial Inv't. Replacement Costs Total Income Tax Total Cost After Ta

0 336,428,545 1,001,257,713 1,001,257,713 (1,001,2

1 518,769,000 518,769,000 197,174,072 197,174,072 - 197,174,072 321,594

40
2 561,999,750 561,999,750 211,731,449 211,731,449 - 211,731,449 350,268

3 605,230,500 605,230,500 277,478,555 277,478,555 72,595,827 350,074,381 255,156

4 648,461,250 648,461,250 287,777,682 287,777,682 86,407,663 374,185,345 274,275

5 648,461,250 648,461,250 42,582,500 298,076,675 340,659,174 100,219,547 440,878,721 207,582

6 648,461,250 648,461,250 298,076,675 298,076,675 102,505,315 400,581,990 247,879

7 648,461,250 648,461,250 298,076,675 298,076,675 104,791,084 402,867,758 245,593

8 648,461,250 648,461,250 298,076,675 298,076,675 107,076,852 405,153,527 243,307

9 648,461,250 648,461,250 298,076,675 298,076,675 108,602,785 406,679,460 241,781

10 648,461,250 85,022,988 183,079,444 916,563,682 599,199,913 298,076,675 897,276,588 108,602,785 1,005,879,373 (89,315,

IRR before tax --31%

IRR after tax --24%

NPV at 15% 258,015,916

41