Amare HCB Production Proposal

Business Plan
For Cement Based Construction Materials

Manufacturing
In Adola Woyu Town, Lega Gefersa Kebele
Promoter: Mr. Amare Mulushewa

Phone No: 0916806003
Dawit and Alem Consulting Office PLC.

November/2022
Project Proposal for Production of HCB and Terrazzo Tiles
Ethiopia, Oromia, Adola Woyu Town

Table of Contents
Business Plan Summary..................................................................................................................2
I. PROJECT SUMMARY..............................................................................................................3
1.1 Brief Profile of the Promoter.................................................................................................3
1.2 Location of the Project...........................................................................................................3
1.3 Project Objective....................................................................................................................4
1.4 Main types of products...........................................................................................................4
1.5 Financial Overview................................................................................................................4
1.6 Expected Beneficiaries...........................................................................................................5
1.7 Socio-Economic benefit.........................................................................................................5
II. PRODUCT DESCRIPTION AND APPLICATION..................................................................5
2.1 Hollow Concrete Blocks........................................................................................................6
2.2 Paver Blocks..........................................................................................................................6
2.3 Cement Concrete Tiles and Terrazzo Tiles............................................................................7
III. MARKET STUDY AND PLANT CAPACITY........................................................................9
4.1 Target market and Marketing Strategy..................................................................................9
4.2 Competitors Analysis...........................................................................................................10
4.3 S.W.O.T. Analysis...............................................................................................................10
4.4 Advertising and Sales...........................................................................................................11
IV. TECHNICAL AND ENGINEERING STUDIES...................................................................12
5.1 Raw materials and consumables..........................................................................................13
V. ORGANIZATION AND MANAGEMENT............................................................................15
VI. FINANCIAL ANALYSIS.......................................................................................................16
1
Business Plan Summary
Details of the proposal Information required
Project/Business Name Amare Cement Based Construction Materials Manufacturing
Project Owner Mr. Amare Mulushewa
Full Address Oromia Region, Guji Zone, Adola Woyu Town, L/D Kebele
Phone No: 0916806003
Nationality Ethiopian
Product Type Manufacturing of HCB, Floor tiles and Terrazzo tiles
Type of Establishment Medium Scale Manufacturing Company
Legal form Sole proprietorship
Proposed Site Oromia Region, Guji Zone, Adola Woyu Town
Specific Location Lega Gefersa Kebele
Size of Proposed Land 5000 m2 (100m x 50m)
Total Estimated Investment 6.4 million Birr of total investment
Expected Source of Financing Equity 30% ………………………. Birr 1,920,000.00
Bank Loan 70%...................... Birr 4,480,000.00
Target Market The company is intended to sell the products for construction
companies and individual contractors in Adola Woyu Town
and Neighboring town.
2
Financial viability The project is highly attractive with NPV value of 18.2
million, IRR 36.5% at both 15% discount rate and a payback
period of a years and three months.
I. PROJECT SUMMARY
The Proposal is carrying out of for the setting up of cement-based manufacturing unit in Adola
Woyu town that produce cement concrete hollow blocks (HCB), paver tiles, Terrazzo Tiles and
color tiles mainly to supply the domestic demand in construction material sector.
1.1 Brief Profile of the Promoter
The startup project is based on the idea that a prosperous market for cement base products that
present in local market. The anticipated Project" is initiated and owned by Mr. Amare Mulu
Shewa’’. The owner was born in Ethiopian and currently has Ethiopia citizenship Mr. Amare
Mulu Shewa has more than 12 years of experience in trade in his own business.
The promoters of the project have excellent understanding of the products and the markets due to
his experience in trading. Mr. Amare also has several influential and informative contacts that
will support him in this business venture. In addition, he has experience in receiving loans and
has been successful in repayment.
Mr. Amare Mulu is the man of decision as well as entrepreneur that knows what he wants to
accomplish and plan. There is also a boom in Ethiopia in the construction sector and hence the
promoters felt that they will be able to market the products easily.
1.2 Location of the Project
Location of the proposed unit should preferably in the vicinity of the major sites of
construction as well as sources of raw materials. The proposed project will be setup in Oromia
3
Regional State, Guji Zone in Adola Woyu Town Administration, which is near to the major
sites of construction as well as sources of raw materials.
The units for the manufacture of man raw materials viz stone aggregates and sand also need to
be promoted near the proposed project. Cement, in any case, has to be transported from Addis
Ababa. Keeping in view, the various parameters, these sites have been short listed in the order of
preference.
1.3 Project Objective

 To manufacture cement-based products and to sell the products to potential
customers to maximize profit & make the project sustainable.
 To provide employment opportunity to the growing labor force of the
project area by employing permanent and temporary employees.
i. Vision statement
“Being number one choice for contractors in supplying innovative Cement Products such as
HCB, Floor Tiles and Terrazzo tiles in Guji Zone”
ii. Mission statement
Providing quality breaks and tiles for the construction sector at an affordable price.
iii. Goals/Specific objectives
The business has the following basic goals in the coming five years.
 Generating ………………………. amount of profit on average each year

 Having .....................................market share
1.4 Main types of products
The project has been designed for the production of a variety of cement-based products. The unit
shall have two manufacturing sections, the first for the production of cement concrete blocks,
hollow concrete blocks and paving blocks and the second for the production of cement concrete
tiles and mosaic flooring tiles (terrazzo tiles).
4
1.5 Financial Overview
In terms of financing, The total investment cost of the project including working capital is
estimated at Birr 11.4 million, Birr of total investment out of which 30% from promoter’s equity
and 70% from long term bank loan. To avoided financial constraints, loan will be requested from
Leander institution. Therefore, this proposal is prepared to produce different size HCB and
Terrazzo’s for domestic’s market.
The business will approach Development banks of Ethiopia for assistance with the required
funds. The funds will be used to build a plant and purchase of machinery and equipment and
amount also covers the working capital requirements of the business.
The project is financially viable with an internal rate of return (IRR) which is (36.5%>15%).
Therefore, the project is acceptable hence the IRR is greater than the discount rate. Also, The
project is financially feasible that it will reach breakeven point at 18% of the capacity and has a
payback period of 3 years.
1.6 Expected Beneficiaries
The project can create employment for 35 persons. The project will create backward linkage
with raw materials suppliers and forward linkage with the construction sub sectors and generate
income for the Government in terms of tax revenue and payroll tax
Permanent employee for day-to-day operation: ……………………………………………. 25.00
Temporary employee during Construction: ……………………………………………………….

10.00
Total Expected Beneficiaries/Employment: ………….

……………………………………………. 35.00
1.7 Socio-Economic benefit
 The project will create Opportunity to get employed in an organized plan for the local
society
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 Sand and red ash producers prefer to deal directly with the unit and sell their raw
materials at better price
 Increase in income opportunity will provide access to community to provide better
education and health facilities and quality of life
II. PRODUCT DESCRIPTION AND APPLICATION
The project has been designed for the production of a variety of cement-based products. The unit
shall have two manufacturing sections, the first for the production of cement concrete blocks,
hollow blocks and paving blocks and the second for the production of cement concrete tiles and
mosaic flooring tiles (terrazzo tiles). The company will produce the following range of products:
2.1 Hollow Concrete Blocks
Now days, hollow concrete blocks (HCB) are becoming very popular. These blocks are being
widely used in construction of residential buildings, factories and multi-storied buildings. These
hollow blocks are commonly used in compound walls due to its low cost.
The products proposed to be manufactured hollow concrete blocks (HCB) of various dimensions
from Portland cement, aggregates (sand and stone chips) and water. The hollow concrete blocks
(HCB) are made with normal weight aggregate and are known as normal weight units. Moreover,
the hollow blocks have thermal as well as sound proof properties to a certain extent due to the air
column within it. Hollow blocks have better-insulating properties, more durable, easier to install
electrical and plumbing fixtures. The hollow load bearing blocks are made of standard sizes,
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standard dimensions, length, breadth and thickness and the weight per unit for hollow cement
blocks are as given below:
 Hollow Concrete Blocks………………………………….40 x 20 x 20 (cm)
Blocks of sizes other than mentioned above can also be manufactured as per the mutual
agreement between the buyer & manufacturer.
2.2 Paver Blocks
Other products proposed to be manufactured are paver blocks of various dimensions from
Portland cement, aggregates (sand and stone chips) and water. The paving blocks of different
sizes and shape find application in pavements, footpaths, gardens, passengers waiting halls, bus
stops, industry and other public places. The Paver blocks are made both in natural cement color
and different bright colors. As per the application they are made both in plain geometrical
designs & interlocking.
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2.3 Cement Concrete Tiles and Terrazzo Tiles
The cement concrete tiles are used both for laying floors inside & outside the buildings. The
mosaic flooring tiles are also known as terrazzo tiles. The natural occurring raw materials like
marble chips, stone chips, stone dust, sand, stone aggregate and cement is used in the production
of tiles. The construction of floor by laying these tiles is time saving. The repair of damaged
floor can easily be carried out by replacing the tiles. The colorful stone chips tile is a good
decorative flooring material. The promotion of these items will help in promoting the use of
natural resources.
Cement tiles proposed to be manufactured can broadly be classified in the following categories:
 Plain Cement Tiles: In the manufacture of plan cement tiles no pigment or stone chips,
marble chips & others are used.
 Plain Color Tiles: The tiles have a plain color wearing surface.
 Terrazzo Tiles (Chequered Tiles): Are also known as Mosaic Flooring Tiles. The
wearing surface is composed of stone chips in a matrix of ordinary or colored Portland
cement mixed with or without pigments and the surface is mechanically ground to
achieve the smoothness.
The tiles are made in various sizes depending upon their use and usage conditions. The details of
the recommended sizes are as under:
Cement Flooring Tiles Cement Terrazzo Tiles

200 x 200 x 20 (mm) 200 x 200 x 22 (mm)
250 x 250 x 22 (mm) 250 x 250 x 22 (mm)
300 x 300 x 25 (mm) 300 x 300 x 25 (mm)
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At the beginning of the project the company plans to produce only cement tiles. After five years
of operation the company plans to produce Cement Terrazzo Tiles and Paver tiles. The three
products the company plans to produce at the beginning are Hallow Blocks, Cement floor and
Roof tiles.
III. MARKET STUDY AND PLANT CAPACITY
The cement-based products envisaged to be manufacture in the unit are the basic building blocks
of any construction viz housing and commercial buildings, industrial estates, road and bridges,
hydroelectric power projects and any other type or construction. In Ethiopia, the construction
becomes the major activity in various spheres of development, be it power, road, urban
infrastructure and housing. education, health, communication. Evidently, the strengthening of
infrastructure has become a focused sector for development in Ethiopia.
9
It could be observed that a lot of construction activities are either in the process of
implementation or planned to be taken up in near future both in public and private sector.
With the growing pace of development in infrastructure sector mainly power & roads and
increasing trend of urbanization, the construction activities are likely to gain further momentum.
The activities in all these sectors of construction shall generate a huge and long-term demand
for various construction materials. As the items proposed to be manufactured in the project
are the basic units for construction for any type construction, prima-facie, there would be no
problems in marketing the products of the unit.
There is already one unit near the project having facilities for the production of cement
concrete bricks and blocks and they have been able to successfully market their products.
Keeping in view, the boom in construction industry in Ethiopia, there is ample scope for
Setting up few more units for the production or cement products.
3.1 Target market and Marketing Strategy

The industrial units for the production of cement-based products could be developed as a
cluster of a number of units manufacturing different products. In this cluster, a number of
units could be setup tor manufacturing different products.
This would enable the individual units to achieve better economics of production since it would
be possible to transport the raw materials in bulk at an economical price and also to market wide
range of product from one center of production.
The cluster approach would also help in developing and refining the skills of manpower to be
employed in these units through joint programs of training and demonstration.
The following strategy could be adopted by the unit for better market access.
 Long term contract with government and none government project for supplying the
cement-based products on mutually agreed terms and conditions as the project would be
the main buyer.
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 Ensuring the quality and design of the products as per requirement of the project
authorities.
 Direct Sales to construction projects in private sector.
 Sales of floor tiles through hardware stores.
The marketing team of the unit has to create awareness among the prospective buyers about the
advantages associated with the use of cement bricks. The unit also needs to market the cement
blocks and paver blocks to road construction agencies and contractors by offering quality
products at a competitive rate as compared to the blocks usually cast near the site of
construction.
3.2 Competitors Analysis
The cement products proposed to be manufacture by the unit constituent the basic building
blocks for any construction activity. The main competition will be from the red clay bricks or the
cement products produced at different of locations. And there are also a lot of small-scale hollow
block manufacturers. The main competitors’ strength and weakness is stated below.
It is envisaged that the proposed project shall be able to supply the hollow blocks and tiles for the
construction activities related to different government construction project and other construction
projects at economical prices due to lower cost of transport of finished goods from the
manufacturing unit to the construction sites.
3.3 S.W.O.T. Analysis

The following table stipulates the SWOT analysis, i.e. strength, weakness, Opportunity and
Threats in the context of Mr. Amare Mulushewa.
Strengths Weaknesses
• Competent management
• Shortage of capital
• Clear Business Strategy
• New experience
• Strategic Marketing and Sells plan
• Strong Financial systems
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Opportunities Threats
• Conducive government policy • Unorganized youth laborer

• Country development
• Availability bank loan
3.4 Production Capacity
For the purpose of financial analysis product mix has been taken into consideration on the basis
of single shift working for 300 days in a year. 300 days of production has been taken for the
manufacture of each item mentioned below. 90% of installed machine capacity has been taken as
the production capacity or feasible normal capacity of the plant. The capacity of the machine is
producing 10,000 units/ day i.e. 3,000,000 unites/year. So 90% will be the normal capacity of the
company i.e. 9,000 unites/day and 27000, 000 unites/ year for the three products. Depends on the
market demand of the three products the percentage usage of this capacity will be 60, 25 and 15
percent for Blocks, Floor tiles and cement tiles respectively.
The product mix along with quantity of each item of production per annum is given below.
S/no Product Deamination Number of unites

per annum
1 Hollow blocks 390 x 190 x 140 0.7*3,000,000=1,890,000
2 Floor tiles 390 x 190x 190 0.2*3,000,000=540,000
3 Terrazzo Tiles 300 x 300 x 22 .15*3,000,000=270,000
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3.4 Advertising and Sales
The main marketing strategy begins as a provide quality, unique and full package services;
deliver to the needs of potential customers, that will fill the needs of them. We are planning our
marketing strategy so that we ensure excellence product with affordable price.
In summary, the proposed cement base product factory will adopt the following sales and
marketing approach to sell our quality cement base products
 Introduce our cement base products brand by sending introductory letters to

Customers, in Adola Woyu town and other neighboring town in the region
 Advertise our cement base products in newspapers and radio stations
 Engage in direct marketing and sales
 Encourage the use of Word-of-mouth marketing (referrals)
All marketing decisions with regard to specific media choices, frequency, size, and expenditures
will be conducted on an on-going basis with careful considerations of returns generated.
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IV. TECHNICAL AND ENGINEERING STUDIES
The most important technical considerations for the production of cement-based products include
the following:
 Land and building

 Plant and machinery
 Raw materials viz Portland cement, stone aggregates, natural sand, stone crush,
synthetic and natural pigments
 Power Supply
 Water
 Skilled and non-skilled workers
It has been envisaged in the project the land for the project would be available on lease basis
from Government. The building and the shed as per requirements have to be constructed for the
unit. There would be two production sections of the unit viz cement concrete block
manufacturing section and cement concrete tiles & mosaic flooring tiles section.
Persons having sufficient experience in the production of these products have to be employed as
production supervisor so as to ensure the manufacturing of quality goods. Experienced machine
operators would also be needed for main machine for hydraulic presses. The operators can also
be trained by the machine manufacturers at the site of the factory during installation and
commission of the machine.
The main resources for the production of cement-based products include the following and
described below:
4.1 Land, Buildings and Civil Works
Location of the plant is determined on the proximity of raw materials, availability of

infrastructure, availability of skilled and semi-skilled labor, land, and other necessary
14
infrastructures and distance to potential market outlet. In view of this, the envisaged plant will be
established in Guji Zone at Adola Woyu town administration industrial zone.
4.1.1 Land Requirement
Cement based products production project is estimated to require a total area of land 5,000 m2
which will be used for stockpiling of raw material, production of blocks, cement storage and
storage of finished product. Since heavy machinery and vehicles i.e. dumper, fork lifters etc.
would be used which require open space for the movement as well as there will be frequent
movement of heavy transportation and delivery vehicles; therefore, large land requirements
being recommended. Moreover, the space would also be used for machinery installation, storage
and vehicle parking and different services necessary for the project.
Urban land permit by lease is on negotiation base. The Recommended size of the intended
project, approximately 5,000m2 of land is required with future expansion and other requirements
the total cost of land, at the rate of Birr 87 per m2 for 40 years of land holding is estimated at
Birr 435,000. Out of this amount 10% down payment birr 43,500 will be paid. The remaining
balance Birr 391,500.00 will be paid within 40 years after the end of grace period.
The details Land Use Plan is shown in table below.
S/N Description Dimension (m*m) Area (Sq.m)

1 Cement & general stores building 30 x 10 300.00
2 Raw material shed 75 x 20 1,500.00
3 Main Working Shed 20 x 20 400.00
4 Curing Chamber /shed 50 x 20 1,000.00
5 Storage of finished product/ Shed/ 60 x 20 1,200.00
6 Office 10 x 3 30.00
15
7 Rest Room 10 x 3 30.00

8 Toilet & Shower 4x3 12.00
9 Security Guard Room 7x4 28.00
10 Inner Roads, Parking and Unloading Area 50 x 10 500.00
Total Land Required (m2) 5,000.00
4.1.2 Building and Civil works
This complex will consist of separate buildings /sheds for different purposes The site should
have provision for stockpiling aggregates and storing cement, a production area, a stacking area,
staff facilities, an office, and access between different areas and facilities. The total estimated
cost for building, sheds and civil works will be 1.5 million Birr.
4.2 Raw materials and consumables
The main raw materials required include cement, stone aggregates, fine and coarse sand,
chemical additives and water. The major raw materials for the project include cement, stone
aggregates and sand / stone dust. All these raw materials are available in Ethiopia and the cement
could be directly procured from the cement companies. The stone aggregates, stone dust and
river sand is also available in near to the project area.
Marble stone, chips and powder is also available in Ethiopia. The pigments and additives will be
purchased from importer. The details are as under
 Cement
Portland cement that complying with Ethiopia Standard, Cement should always be stored in dry
place, off the floor and should be use within three months of the date of manufacture. Never use
cement that has lumps in it and only use cement from a well-known brand that has a SABS mark
of approval on it.
 Aggregate
16
Aggregate is the stone, sand and ash you want to vibrate and compact down and bind together
with the cement. A good aggregate is an aggregate that is from chemicals, clay and organic
material. A good aggregate will bond well with the cement paste and not react with it. As a rule
of thumb, the denser you’re finished block or block the stronger the block or block will be. You
must choose your aggregates according to your needs.
To achieve a dense block with an aggregate that can be vibrated and compacted down easily you
need to have an aggregate with evenly graded particles ranging from fine dust up to larger stone
of around 9mm. Blending different aggregates often produces the best results.
 Water
Only clean clear potable water should be used in the manufacture of the blocks and blocks. Any
organic material in water will prevent the cement from setting. Never use salty or break water. It
is advisable to get your water tested for impurities. Chemical additives are also used for
imparting water proofing characteristics. Colors and pigments are also used for imparting color
to the products.
4.3 Utilities/Power Supply and Water/
Electrical Power Requirement: It is estimated that 30 KWH power connections will be

required for the production unit including the power requirement for production machines and
general-purpose lighting. The cost of the power has been calculated on the basis of birr
0.65/kwh.
Water
S.N Description Consumption/ Unit Cost Total Cost

year (Birr) (Birr)
1 Electricity (kWh) 300,000 kWh 0.65 195,000
2 Water (M3) 130,000 m³ 11 1,430,000
17
3 Fuel Oil (litters) 56,250 Litter 20 1,125,000
4 Lubricating oil (kg) As reqd. As reqd. - 200,000
Total Annual Cost 2,950,000
4.4 Process of Manufacture

4.4.1 Cement blocks
The manufacturing process of cement blocks mainly involves mixing and casting of blocks. The
mix in respect of cement aggregate and sand should be suitably proportioned to gain required
strength of block conforming to the standards. The coarse, fine & medium grade materials should
preferably be mixed in the ratio of 40:20:40 for obtaining better interlocking of grains. Vibration
& pressing action together helps in better dispersion of mixture and compaction. The amount of
water required for the mixture varies depending upon the grading of aggregated & capacity of
press machine.
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PAN MIXER SKIP LOADER
VIBRO-HYDRAULIC PRESS
Batching equipment is used for proportioning the ingredient accurately. Mixer is used for
homogenous mixing and blocks are shaped in a vibrio compactor. Material handling is carried
out with the help of shovel loader, screw & belt conveyer and forklift etc. The blocks after
formation are stacked on pallets and carefully shifted to shed in a humid atmosphere to develop
initial strength in 24-36 hours. The blocks are stacked & sprayed with the water. The spraying of
water must be continued intermittently for a period of three weeks for complete curing. The
blocks are then allowed to dry for four weeks before dispatch.
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As stated above, keeping in view the size of the demand for these products in the market, a semi-
automatic process has been recommended in the project.
4.4.2 Paver Blocks
The process flowchart for the manufacture of cement blocks and paver blocks is as given below:
20
4.4.3 Terrazzo Tile/Cement floor
The process flowchart for the manufacturing of plain and colored mosaic tiles is given below:
21
4.5 Plant Layout
The following diagram shows the layout arrangement of the factory.
22
V. ORGANIZATION STRUCTURE AND MANAGEMENT
5.1 Human Resources Plan
The key to the success of the company lies in its people whose skills, expertise and talent help in
company to achieve and sustain its market position. The Proposed project believes that
employees are the key to achieved targeted goals and are the primary source of competitive
advantage.
5.2 Organization Structure
The proposed project uses the organizational structure fits to carry out its activities. The highest
management body in the project is general manage. The highest executive body of the project
management organ is Mr. Amare Mulushewa which is privately owned. All section heads of the
project are accountable to the manger. Production section head, Testing and quality control and
Fnance and administration section heads need to report the manager.
Plant supervisor, machine operators and unskilled workers need to report to production section
heads. Laboratory technical is needs to report to Testing and quality control section heads. And
all others, sales person, accountant, Drivers and guards need to report to financial and
administration section heads. The organizational structure of the project will be made up of the
following:
 Production section
 Testing and quality control
 Finance and administration section
 Plant supervisor
 Machine operator
 Unskilled workers
 Laboratory technician
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 Sales person
 Accountant
 Drivers
 Guards
The Organization structure below shows the working relationship Mr. Amare Mulushewa the
CEO of the factory and owner. The General Manager will be accounted to the owner. Under
each division heads there are employees who will undertake day to day activities.
General
Manager
Admin & Productionhead Marketing &sales

Finance head head
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VI. FINANCIAL ANALYSIS
6.1 Assumptions
The following assumptions are taken in to consideration throughout the financial analysis. All
finance is expressed in terms of Birr, and fractions are rounded to the next digit.
Particulars Measure
Rate of Interest (Bank)…………………………………………………………………….
……….8.5%
Source of finance…………………………………………………………………………….
………..70% Loan
30% Equity
Discount
rate…………………………………………………………………………………………….15%
Accounts
receivable…………………………………………………………………………………30 days
Account
payable……………………………………………………………………………………..30 days
Raw material
local………………………………………………………………………………….30 days
Raw material abroad
…………………………………………………………………………….90 days
Work in process inventory……………………………………………………………….……..35
days
Cash on hand……………………………………………………………………………….
………….5 days
25
Depreciation (Building)
………………………………………………………………………….SLM* 20 years
Depreciation (Machinery)………………………………………………………………………
SLM 10 years
Depreciation (furniture & fixtures) …………………………………………………………SLM
20 years
Tax…………………………………………………………………………………………………
…………..30%
Tax
holidays……………………………………………………………………………………………
…3 years
Repayment period of Debt……………………………………………………………………..8
years
Construction
period………………………………………………………………………………….1 year.
Capacity Utilization…………………………………………………………………….
…………..90%
Working Capital Cycle………………………………………………………….………………..1
month
Spare Parts and Maintenance……………………………………………………………….5% of
plant & machinery
6.2 Initial Investment Cost

The total initial investment cost of the project including working capital is estimated at about
Birr 4.33 million, out of which about 53% will be required in foreign currency.
S/no Description Amount (Birr)

1 Machinery and Equipment 1,155,335.00
2 Land & Construction Cost 1,720,000.00
3 Miscellaneous Fixed Assets 100,000.00
4 Pre-operating Expenses 205,000.00
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5 Training Expense 34553.00

6 Working Capital 1,121,500.00
Total (Birr) 11560531156053
6.3 Production Cost

The annual production cost at full operation capacity of the plant is estimated at Birr 1.4 million
(see Table below). The material and utility cost accounts for 16.8 per cent while repair and
maintenance take 13.5 per cent of the production cost.
Items Year
3 4 7 15
Raw Material and Inputs 40 45 50 50
Labour direct 78.2 88.00 97.80 97.80
Utilities 159.20 179.10 199.00 199.00
Maintenance and repair 110.40 124.20 138.00 138.00
Factory overheads 27.80 31.20 34.71 34.71
Administration Overheads 41.04 41.04 41.04 41.04
Total operating costs 456.60 508.60 560.55 560.55
Depreciation 298.40 298.40 298.40 298.40
Cost of Finance 557.10 583.90 607.90 597.60
Total Production Cost 1,312.10 1,390.9 1,445.10 1,402.90
6.3 Detail breakdown Fixed investment cost
S/n o Descriptions Cost/m2 Area /m2 Total Cost

(Birr) (Birr)
1 Land 18 10,000 220,000.00
2 Shade 1,500 2,500 1,250,000.00
3 Site Preparation for FG inventory 500 2,500 250,000.00
Total 0
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A. Cost Land and Building
B. Terrazo tiles and mosaic flooring tiles section
S/n o Description Msrt Amount Unit Total price

Price
1 Hydraulic press (Cap 150 kg/sq cm) with
3 79800 239400
pressure No
gauge (M20)
Hydraulic double piston pump with 5 HP
motor combined with safety valve, capable of
No 1 56500 56,500
feeding 4 to 5 presses, ram vibrator 1.5 HP,
2 mould vibrator 2 HP
(M21)
Levelling (grinding) machine complete
3 with all attachments grinding capacity 1 130,000 130,000
4 tiles at a time (5 HP) No
(M22)
4 Semi polishing machine with 2 HP motor for
1set 62,000 62,000
sample polishing for testing (M23) No
5 Mould with 1 set of extra mould (M24) 1set 86,000 86,000
6 Pallets (M25) No 250 500 125000
7 Tipping borrows (M26) LS 12,000
Sub-Total B 710,900
C. Cost of machinery and Equipment for Cement concrete
S/no Descriptions Unit Amount Unit Price Total Cost

1 Hydraulically operated stationary No 1 340,000 340,000
block making machine (M1)
2 200 x 200 x 400 (mm) cavity block No 1 9,600
ram & mould (M2)
3 150 x 200 x 400 (mm) cavity block Dozen Dozen 9,600
ram & mould (M3)
4 100 x 200 x 400 (mm) cavity block Dozen Dozen 9,000
ram & mould (M4)
28
5 200 x 200 x 400 (mm) solid block ram Dozen Dozen 8,700
& mould (M5)
& mould (M6)
& mould (M7)
8 Paver block mould (M8) Dozen Dozen 100,000
9 Pallet stacker (M9) No 1 220,000
10 Pan mixer of 500 kg. capacity with No 1 140,000
15 HP motor(M10)
11 Mix conveyor with 2 HP No 1 674,078
motor(M11)
Platform electronic weighing scale
12 No 1 24,000
500kg capacity (M12)
13 Water dosing pump with 2 HP motor No 1 17,000
(M13)
14 Wheel barrows with pneumatic No 4 600 2,400
wheels (M14)
15 Pallet truck 1500 kg. capacity (M15) No 2 8,000 16,000
16 Pallet truck capacity 500 kg. with No 500 500 25000
pneumatic wheels (M16)
18 Skip loader (M18) No 1 13000 13000
19 Color mixer 100 kg. capacity 7 HP No 1 24000 24000
(M19)
Sub-Total (Birr) 1,906,778.00
D. Miscellaneous Fixed Assets & Expenditures
S/n o Unit Total
Description
Mst Amoun Price price
1 Furniture & office equipment LS 1,000,000
2 Laboratory equipments LS 200,000
3 Raw material moving Vehicles No 2 85000 170,000
4 Double pickup Vehicles No 1 735000 735,000
29
Sub Tota/Birr/ 2,105,000
E. Pre-Operating Expense
S/n o Description Measrt Amount Unit Price Total price
1 Registration and formation of the LS 15,000

company
2 Consultant fees while project LS 85,000

preparation
3 Salary, travel expense, legal expense LS 105,000

etc
Subtotal E 205,00
Total Fixed Cost A+B+C+D+E 2,792,678.00
6.4 Profit and loss forecast
The income prepared based on the company’s revenue and cost. The detail for each part and the
summary of income statement is stated below
Operating Revenue
The company plans to produce and sell three types of products. The demands for these services
are forecasted based on detail analysis of the construction sector and the future of the country.
30
The price and the number of units produced and considered to be constant in the normal
operation of the company. The detail of this part is presented in the following table.
31

Amare HCB Production Proposal

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Amare HCB Production Proposal

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Business Plan

For Cement Based Construction Materials

Promoter: Mr. Amare Mulushewa

Dawit and Alem Consulting Office PLC.

Ethiopia, Oromia, Adola Woyu Town

Business Plan Summary

Details of the proposal Information required

Project/Business Name Amare Cement Based Construction Materials Manufacturing

Project Owner Mr. Amare Mulushewa

Phone No: 0916806003

Product Type Manufacturing of HCB, Floor tiles and Terrazzo tiles

Type of Establishment Medium Scale Manufacturing Company

Legal form Sole proprietorship

Proposed Site Oromia Region, Guji Zone, Adola Woyu Town

Specific Location Lega Gefersa Kebele

Size of Proposed Land 5000 m2 (100m x 50m)

Total Estimated Investment 6.4 million Birr of total investment

Expected Source of Financing Equity 30% ………………………. Birr 1,920,000.00

Bank Loan 70%...................... Birr 4,480,000.00

1.1 Brief Profile of the Promoter

1.2 Location of the Project

1.3 Project Objective

 Generating ………………………. amount of profit on average each year

1.4 Main types of products

1.5 Financial Overview

1.6 Expected Beneficiaries

Permanent employee for day-to-day operation: ……………………………………………. 25.00

Temporary employee during Construction: ……………………………………………………….

Total Expected Beneficiaries/Employment: ………….

1.7 Socio-Economic benefit

II. PRODUCT DESCRIPTION AND APPLICATION

2.1 Hollow Concrete Blocks

 Hollow Concrete Blocks………………………………….40 x 20 x 20 (cm)

2.2 Paver Blocks

2.3 Cement Concrete Tiles and Terrazzo Tiles

Cement Flooring Tiles Cement Terrazzo Tiles

III. MARKET STUDY AND PLANT CAPACITY

3.1 Target market and Marketing Strategy

3.2 Competitors Analysis

3.3 S.W.O.T. Analysis

• Conducive government policy • Unorganized youth laborer

3.4 Production Capacity

S/no Product Deamination Number of unites

2 Floor tiles 390 x 190x 190 0.2*3,000,000=540,000

3 Terrazzo Tiles 300 x 300 x 22 .15*3,000,000=270,000

3.4 Advertising and Sales

 Introduce our cement base products brand by sending introductory letters to

IV. TECHNICAL AND ENGINEERING STUDIES

 Land and building

4.1 Land, Buildings and Civil Works

Location of the plant is determined on the proximity of raw materials, availability of

4.1.1 Land Requirement

The details Land Use Plan is shown in table below.

S/N Description Dimension (m*m) Area (Sq.m)

7 Rest Room 10 x 3 30.00

4.1.2 Building and Civil works

4.2 Raw materials and consumables

4.3 Utilities/Power Supply and Water/

Electrical Power Requirement: It is estimated that 30 KWH power connections will be

S.N Description Consumption/ Unit Cost Total Cost

2 Water (M3) 130,000 m³ 11 1,430,000

3 Fuel Oil (litters) 56,250 Litter 20 1,125,000

4 Lubricating oil (kg) As reqd. As reqd. - 200,000

Total Annual Cost 2,950,000