PROJECT PROPOSAL TOBE THE ESTABLISHMENT OF

BURSA/GYPSUM POWDER PACKING

LOCATION:

OROMIA NATIONAL REGIONAL STATE NORTH

SHEWA ZONE SULULTA DISTRICT

PROMOTER/OWNER: BINIYAM KEFALE WONDIMU

SEPTEMBER 2024

Chancho

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 1. Executive Summary
 Project type:- Bursa factory
 Owner :- Biniyam Kefale Wondimu
 Project location :-
- Oromiya National Regional State
- North shoa Zone
- Sululta District
 Total land area required (Proposed) :- 5000 M2
 Job opportunity ;- 45,Permanent 100 and Temporary
145
 Total Investment cost ;- Birr----------------------------
34,000,000
- Working capital birr-----------------br. =
24,000,000
- Fixed capital birr_____________br =
10,000,000
 Source of capital :-
- Owner equity birr = 10,200,000 (%30)
- Bank loan birr. = 23,800,000 (% 70)

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1. Introduction
The public sector and private company has to cope with numerous
challenges, has to respond to many new needs, and demands in
societies. Due to the challenge the public sector is a large a reform.
Over the last two decades there appears to have been a huge
amount of public management reform. Ethiopia is the country in the
way of performing well economic in response of this economic
development, investment flows both foreign and domestic have
been growing steadily. Though the government has attached high
importance to agricultural sector, which considered as a springboard
to enhance the industrial sector, the importance of distributive
service such as Hotel, trade, transport and the like would not be
underestimated.
The country has been registering an imperative growth which makes
be one of the rapidly growing developing countries and thus, the
dynamically growth of agricultural sector necessitates equivalent
growth of other sectors to make them feed each other.
The manufacturing sector is a compositions of two sub sectors, the
distributive service mainly comprising of trade, hotel & restaurants,
transport and communication and the other services sector that
mainly includes Banking and insurance public administration and
defense, education, health, domestic and other services. The

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pension project under discussion is to be constructed in North Shewa
zone, in sululta district. Sululta district. is around 40 kms from
Addis Ababa. The town hosts many regional and national
organizations and it is rapidly expanding mainly due to the urban
migration and the effects of urbanization

2. Background
The project originated from the reconnaissance assessment of
market potential of the project area and its surroundings. The
excessive market potential in the market and manufacturing sector
in the very surrounding of the project is conducive for the
establishment of the market centre that could enable to maximize
elastic demand in terms of both price and income. More over the
very low initials investment that would be required may further
justify the financial viability of the project.
Thus, the area is selected as an ideal place for this investment for
reason that it has suitable topography and climatic conditions; it is
the host to regional and national organizations; also it is one of the
main outlets to the Northern part of the country.

3. Project Objective
The main and subordinating objective of the project are:-

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  By building Bursa production in the area providing better and
quality services for the community/visitors of the area.
 To set up and develop a financially and an economically
important mauling market center, and also facilitate socio-
economic activities in the region and the country as a whole,
 To provide employment opportunities which would bring
about specific and general improvement of the quality of life in
the region,
 To contribute or create a ground in the project area, which will
serve as a take off for further economic growth and
development,
 To provide standard high quality market centre play service
efficiently at a reasonable and affordable price by employing
well-experienced and trained personnel to satisfy the needs of
the area.

4. The Project
4.1. Location
The proposed project will be located in Oromia region, in Sululta
district, located at about 40 km North East of Addis Ababa along
the Addis_ Gojjam high way road. The project is located along the
main road which connects the capital Addis Ababa with the
northern parts of the country. In order to support any endeavors
this would contribute to the overall socio-economic development,

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the government under the road sector development program has
identified this corridor for improvement. Sululta district is small,
and now a fast growing town. There is adequate supply of utilities
like electricity, telephone/digital, and water supply in the project
area. Postal services can also be obtained in the proposed project
area.
4.2. Project Description
The project under discussion is a well designed and attractive
market center. The purpose of each roam is as follows. The
building construction was designed in order to hold for bursa
production, and also will have enough parking facility for its
customers.
4.3. Project Justification
Gerbe Guracha town is situated some 40 km away from Addis
Ababa along the Addis-Gojjam road. It has a population about
540,220 and is a growing at faster rate. The town is increasingly
becoming the center of socio- economic activities.
Among the basic service facilities required to a rapidly growing
population and active socio- economic center like in Sululta
district a provision of building of pension and house building that
fulfills the whole services in one place is indispensable. To this
end the promoter has decided to invest in the area of a market
center building.

There is shortage of ware house in the town and the provision of

such facility to a population would to insufficient. Moreover the
viability test in the project analysis would tallest that it is
justifiable on financial criterion. As the project is on the main

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 asphalt road and renders quality services, it is believed that the
project attracts a number of visitors and thus there is no
anticipated market problem for the services. This fact in turn
extremely increases the demand to rent out the building for the
aforementioned purposes as well.
Therefore, in Sululta district is an ideal place to invest on such
bursa production building to render services as well as to rent out
to other businessmen.
Thus, the promoter thoroughly thought and came up with this
noble idea of investing on this project.
5. The Market
 Market
Considering possible inclusion of different raw materials for market
centre to avail for sale in response to customers demand, certain
main lists are only included foe analysis purpose.
The people who reside in Sululta district and those who visit the
town for various reasons are considered as potential market of for
the project.
The current market size/number of expected customers is expected
to expand further as socio- economic interaction of the project area
with others being strength from time to time.
5.1. Market Assessment
Bursa production building has a dynamic change in the past few
years. The reason for this could be rapid economic growth and a
supporting public infrastructural development. Other factors
relevant in the specific case of commercial buildings are the large

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increases in national and international businesses, particularly firms
in the services sector.

The market for manufacturing building has increased in the past few
years. Data on building permits granted by city administration
between 2012 and 2021 indicate that, out of the services and two
business categories, market center business building accounted for
more than 45 percent of the total share in the area.

5.2. Market prospects

The people who reside in Sululta district and those who visit the
town for various reasons are considered as potential market of for
the project.
The current market size/number of expected customers is expected
to expand further as socio- economic interaction of the project area
with others being strength from time to time. Based on market
study, the demand of market center is very high therefore; the
envisioned building will be successful by entering in to this market in
the city and achieves full scale service in its third year.
The major marketing strategies to promote the project and gain are
keeping the quality of its services facilities and consistently
improving with change situations and promote in association to the
key location and nearby business. In other case, working on target
customers, business community, nearby business organization
Banks and insurances, government and non government
organizations are the main marketing promotion strategy of the
project.
6. Land use plan

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The land is planned in that to use efficiently and properly. The total
land requirement proposed for the project is 5000 m 2. The total
building area of the project is 2000 m 2 and the rest 3000 m2 is
parking and green area. The detail land use project of the project is
presented as follows:
Table 01; - Land use plan
No Description Land Remarks
. size
M2
1. Main Building 2000 For different purpose
2 Parking and green area 3000
Total 5000

6.1. Construction
The construction for this project is a three stages development
by which the conceptualization need of the promoter of this
project is translated into a functional facility that will meet their
needs intermesh of time ,cost and quality.
As the construction idea and program assumption of the owner,
the qualified consultant who is going to be hired makes site
studies, develops structural designs, prepares drawings and
specifications, determines quantities involved and estimated the
resultants costs. All these activities will be done in the first phase
of the project which is design stage after the document are
produced by the designers have been received, and the works

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secured the project is supposed to enter the tendering stage. At
this stage contractors study the project document analyze and
subsequently determine the construction methods, built up their
unit rates and submit their bids and award the contract for the
lowest responsible bidder. After the award is made and the
contract signed between this project owner and the contractor,
the project constructor is expected to prepare and submits a
detailed construction program which includes material schedule,
man power requirement and cash flow forecast.
The project owner researched typical architectural layouts for
store and executive office spaces. The structural design of the
building where coordinated with the layout of the building. The
frame will made up of a grid with repeating standard structural
bays included in the structural system are by size, shape and size
of structural members, floor compositions and curtain walls.
These elements were established to resist gravity and lateral
loads as appropriate. The structural steel frame was chosen for
further design based on cost per square foot, local availability of
material and constructability considerations, such as erection and
fabrication. The design of the typical bay accounted for the use of
different commercial space, in which a live load of 125 pounds per
square was assumed.
Foundation of the design takes more into consideration the
applied loads, the loading from the columns, while the main part
of the project focused on the structural frame and its alternate
designs, preliminary foundation plan was designed based up on

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 maximum loads carried from the supper structure through the
columns.

7. Organization and management

7.1. Man power
The government of Ethiopia has issued a new labor proclamation
on 377/2003 in which the duties and responsibilities of workers
and employers are distinctively explained. In this proclamation,
the employer is obliged to respect the worker’s human dignity, to
defray the cost of medical examination, to provide the
proclamation, agreements and rules.
Similarly, the workers include to perform the work specified in the
contract, to follow the employer’s instruction and to report work,
to handle with due care all instruments and tools, and to observe
the provisions of the proclamation, agreements and rules.
It must be note that presently in the country, there is no labor
problem as such that threatens the smooth running of the
activities of the enterprise. The availability of trained labor force
will enhance the successful implement of the project.
The man power requirements of the owner of the project for this
commercial center building is organized in the manner that it
consists of general manager, technical personnel, office workers
and other contract daily and monthly laborers. The man power
requirement of the project that will run the overall managerial
and technical day to day activities of the project during the
operation period are shown here under in the following table.

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Table 02:- Man Power Requirement of the project
Position Qualification & Salary
No (Job Description) education level
. Qualification NO. Monthl Annual
y
1. Manager Magt. 1 2500 30000
2. Secretary ICT & S. 1 2400 16800
science
2. Administrator Technical 1 2000 24000
3. Human resource& Technical 1 2800 21600
Finance
4. Marketing study Marketing 3 2500 54000
5. Accountant Accountant 3 2400 50400
6. General Technical Technique 3 2700 61200
person
7. Technical supervisor Engineering 2 2000 72000
8 Maintenance Technique 4 1100 52800
9 Purchaser Purchasing 3 1980 35280
10 Casher Technique 3 1700 25200
11 Store keeper Technical 3 1500 18000
12 Waiters Tvt 6 1400 28800
13 Janitor Any 5 1300 18000
14 Guard Any 4 1250 12000
15 Cleaner Any 3 1250 9000
Total 45 52908
0

7.2. Organization structure

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It is evident that for the proper and successful implementation of the
project, due consideration has to be given to organization and
management.
Accordingly, the overall project will be carried out by the competent
workers with reach experience in the registered field. The
administrator, being accountable to the investor, will manage all the
secretariats of the project. The accountable to the administrator .will
manage all the financial aspects of the project. The financial
statement, Bank interactions, personnel fees, will be directed to
such stream. The finance will also clearly issue the overall system
using software to any concerned personnel, government agencies
and make transparent to external audit. The general administrator
and line responsible organ will dictate other professionals and
laborers.
Accordingly, the promoter planned to recruit competent staffs with
relevant skills & experience for operation and office administration.
This project creates the job opportunity for a minimum of 45
employees during operation period. Moreover, there is job
opportunity that will be created by the businessmen who are going
to rent the other parts of the market center building for shop and
other business purposes.
Financial Requirement and Analysis
The financial resource is a prime resource for undertaking any
activities. Therefore for implementing this “Pension estimated it
needs a total of 34,000,000 Eth birr. From this 30% or 10,200,000
birr will be covered by the promoter of the project, while the rest
70% (birr. 27,800,000) will be covered by the financial institutions

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 7.3. Fixed investment
The proposed project will be executed with goods and services to be
procured entirely from the local market in local currency. Brief
description of the fixed investment cost construction and civil work,
equipment are indicated in the table 3 below.

7.3.1. Cost of Construction and Civil Works

The building under construction is a Pension standardized and

modern one in small town in Fitche town. Quality materials are used

for construction and its total construction cost is estimated to be

Birr. 20,000,000

7.3.2. Cost of Machines and Equipments(Furniture)

The furniture, machineries and equipments whose details are shown

in the table below will be purchased from the local suppliers. The
promoter is expected to fulfill machineries, equipment and
furniture’s for the project to be completed within planed period of
time The total cost of these machineries and equipments is
estimated to be Birr. 136,910
Table: 4. Equipment and Furniture

No Description Unit Qty. Total

. Cost
1. Equipment and future Set 1 897750
2. Store equipment and “ 1 119700
future
3. Employees house “ 1 186750
4. Guard house “ 1 82450

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 5. Toilet and shower “ 1 82450
Total 1369100

8. Operating Cost Requirement

The proposed market center development business and service
sector project’s pre-operating capital requirement /initial working
capital is estimated to be 3,500,000 for activates and operation of
the project before at full capacity .
9.1.1. Working Capital
Operating expenses of the project for raw materials, for salary
and Wages, for fuel and oil (transport), for other operation which
is a total of birr. 10,000,000 are estimated annually at full
capacity operation of the project.

Table: 5. Working Cost Requirement

No Description Unit Total Unit Total
. consumpt cost amount
ion (Birr)

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1. Salary and wages Birr 1 14532 512,280
2. Inputs “ 1 69820 15,000,000
3. Property Insurance “ 12 3144 37724
4. Repair and “ 12 3586 43029
maintenance
5. Land lease “ 12 800 45,000
6. Utilities “ 1 322 322,000
7. Stationery and “ 1 162 162,000
postage
8. Audit and license “ 12 322 38670
9. Working clothes “ 6 268 16110
10 Fuel, lubricant “ 1 536 536,000
11 Pension pay “ 1 1366 1,366,000
.
12 Miscellaneous “ 1 213 213,000
Total “ 213000

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 9. Action plan /Project Implementation schedule
No Implementation Year
Activities 2024 2025 2026 2027
Months of the year Months of the year Months of the year Months of
the year
12 3 4 5 6 7 89 1 1 1 1 2 3 4 5 6 7 8 9 1 1 1 1 2 3 4 5 6 7 8 9 1 1 1 1 2 34 5 6
0 1 2 0 1 2 0 1 2
1.Land issuance * * * * * *
and hand over
2.land * * * * * * *
development
3.Acquisition of * * * * * * *
building
materials
4.Site clearing * * * * * *
5.Building & * * * * * *
construction
6. Acquisition of * * * * * * * * * *
tools and equip.
7.Infrastructure * * * * * * * * * * *
provision
8.Man power * * * * * * * * *
development
9.Acquisition of * ** **
materials

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7.Beging * * * ** **
operation

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 1. Profit and/ or loss statement projection
Description Project years

1 2 3 4 5 6

2022 2023 2024 2025 2026 2027

Gross Revenue 18,000,000 24,000,000 30,000,000 37,002,400 409,202,640 45,122,904

Less operating costs 271,709,125 292,647,980 329,238,895 343,432,492 358,335,770 373,984,211

Profit before depr. & Amort. 6,599,675 6,622,420 8,945,105 28,569,908 50,866,870 76,138,693

Less Depr & Amortization 5,084,726 5,084,726 5,084,726 5,084,726 5,084,726 5,084,726

Profit before Interest rate 1,514,949 1,537,695 3,860,380 23485,182 45,782,145 71,053,967

Less Interest 3,937,500 3,445,313 2,953,125 2,460,938 1,968,750 1,476,563

Profit before tax (2,422,551) (1,907,618) 907,255 21,024,245 43,813,395 69,577,405

Less tax (726,765) (572,285) 272,176 6,307,273 13,144,018 20,873,221

Net Income (1,695,786) (1,335,333) 635,078 14,716,971 30,669,376 48,704,183

2. Cash flow statement

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Description Project years
- 1 2 3 4 5 6
Cash Inflow
Owners equity 11,520,000.00 - - - - - -
Loan 26,880,000.00 - - - - - -
Net Profit - (1,695,786) (1,335,333) 635,078 14,716,971 30,669,376 48,704183
Depreciation & amortization. - 5,019,496 4,307,357 3,704,084 3,171,872 2,513,041 2,170,478
Total Cash Inflows 45,000,000 3,323,710 2,972,024 4,339,162 17,908,843 33,182,417 50,874,662
Fixed Assets 40,651,375
Pre-Operating 652,294
Working cap. Increases - - 596,568 1,727,684 354,840 372,582 391,211
Replacement Costs - - - - - - 2,490,000
Loan Repayment 11,666,666.6 11,666,666.6 11,666,666.6 11,666,666.6 11,666,666.6 11,666,666.6
Dividend (678,314) (534,133) 254,031 5,886,789 12,267,750 19,481,673
Total Cash Outflows 41,303,669 7,196,686 7,445,248 8,872,340 12,640,066 18,546,582 27,776,947
Net Cash Flow 3,696,331 (3,872,975) (4,473,224) (4,533,178) 5,268,777 14,635,835 23,097,715
Cumulative Flows - (176,644) (4,649,868) (9,183,046) (3,914,269) 10,721,566 33,819,281
Retained earning 1,017,471 801,200 381,047 8,830,183 18,401,626 29,222,510
Cumm.ret. earning 1,017,471 1,818,671 420,153 9,211,230 27,231,808 47,624,136

3. Balance sheet

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Description Project years
0 1 2 3 4 5 6
Assets -
Current Assets
Cash - (1,695,786) (1,335,333) 635,078 14,716,971 30,669,376 48,704,183
Inventory 273,717,026 271,709,125 292,647,980 329,238,895 343,432,492 358,335,770 373,984,211
Total Current 273,717,026 270,013,340 291,312,647 329,873,973 358,149,464 389,005,146 422,688,395
Assets
Fixed Assets
Land Development 666,674 653,340 640,007 540,007 440,007 340,007 240,007
Build & Construction 2,000,021 1,250,021 500,021 (249,979) (999,979) (1,749,979) (2,499,979)
Machineries &equip. 28,134,680 27,195,372 26,256,064 25,316,756 24,377,448 23,438,140 22,498,832
Vehicle 7,450,000 4,960,000 2,470,000 (20,000) (2,510,000) (5,000,000) (2,008,000)
Office fur. & equipment 400,000 360,000 320,000 280,000 240,000 200,000 160,000
Total Fixed Assets 38,651,375 34,418,734 30,186,092 25,866,784 21,547,476 17,228,168 18,390,860
Total Assets 312,368,402 304,432,074 321,498,740 355,740,757 379,696,940 406,233,314 441,079,255
B. Liabilities
Bank Loan 31,500,000 27,562,500 23,625,000 19,687,500 11,812,500 11,812,500 7,875,000
Total Liability 31,500,000 27,562,500 23,625,000 15,750,000 11,812,500 11,812,500 7,875,000
Current Capital
Equity 1,050,000
Contribution 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000
Retained earning 279,818,402 275,819,573 296,823,739 335,003,257 362,896,940 393,370,814 432,154,255
Total Capital 280,868,02 276,869,573 297,873,739 336,053,257 363,946,940 394,420,814 433,204,255
Total Liability & Capital 312,368,402 304,432,074 321,498,740 355,740,757 379,696,940 406,233,314 441,079,255

4. Computation of financial internal rate of return

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Description Project Years

0 1 2 3 4 5 6

Benefits -

Revenue - 236,728,800 338,365,600 338,184,000 388,911,600 447,248,340 514,335,59--

Working capital - - - - - - -

Total Benefits 236,728,800 304,365,600 338,184,000 388,911,600 447,248,340 514,335,591

Costs

Inc. on Work cap. 45,000,000

Inc. in Work Cap. - - 596,568 1,727,684 354,840 372,582 391,211

Operating Costs 271,709,125 292,647,980 329,238,895 343,432,492 358,335,770 373,984,211

Profit tax - (254,368) (200,300) 95,262 2,207,546 4,600,406 7,305,627

Total Cost 45,000,000 271,454,758 293,044,248 331,061,840 345,994,878 363,308,758 381,681,050

Net benefit after tax (45,000,000) (34,725,958) 11,321,352 7,122,160 42,916,722 83,939,582 132,654,541

Net benefit before tax (45,000,000) (34,980,325) 11,121,052 7,217,421 45,124,268 88,539,988 139,960,169

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