Investment Office ANRS: Project Profile On The Establishment of Banana Plantation

Investment Office ANRS
Project Profile on the Establishment

of banana plantation
Development Studies
Associates (DSA)
October 2008
Addis Ababa
Table of Contents
1.Executive Summary..............................................................................................3
2.Product Description and Application.................................................................3
3.Market Study, Farm Capacity and Production Program.................................4
3.1Market Study...........................................................................................................................4
3.1.1Present Demand and Supply............................................................................................4
3.1.2Projected Demand............................................................................................................4
3.1.3Pricing and Distribution...................................................................................................5
3.2Farm Size................................................................................................................................6
3.3Production Program................................................................................................................6
4.Raw Materials and Utilities.................................................................................6

4.1Availability and Source of Raw Materials..............................................................................6
4.2Annual Requirement and Cost of Raw Materials and Utilities...............................................6
5Location and Site...................................................................................................8

6Technology and Engineering ...............................................................................8
6.1Production Process..................................................................................................................8
6.2Machinery and Equipment......................................................................................................8
6.3Civil Engineering Cost............................................................................................................9
7Human Resource and Training Requirement.....................................................9

7.1Human Resource ....................................................................................................................9
7.2Training Requirement.............................................................................................................9
8Financial Analysis................................................................................................10
8.1Underlying Assumption .......................................................................................................10
8.2Investment.............................................................................................................................10
8.3Production Costs...................................................................................................................11
8.4Financial Evaluation.............................................................................................................12
9Economic and Social Benefit and Justification.................................................13

ANNEXES..............................................................................................................14
1. Executive Summary
This project profile deals with the establishment of banana plantation in Amhara National
Regional State. The following presents the main findings of the study
Demand projection divulges that the potential demand for banana is substantial and is increasing
with time. Accordingly, the planned farm is set to produce 4,000 quintals annually. The total
investment cost of the project including working capital is estimated at Birr 861.69 thousand and
creates more than 41 job opportunity and Birr 419.56 thousand of income
The financial result indicates that the project will generate profit beginning from the first year of
operation. Moreover, the project will break even at 53.8% of capacity utilization and it will
payback fully the initial investment less working capital in 2 years. The result further shows that
the calculated IRR of the project is 37.9% and NPV discounted at 18% of Birr 363,529.09
In addition to this, the proposed project possesses a wide range of economic and social benefits
such as increasing the level of investment, tax revenue and employment creation.
Generally, the project is technically feasible, financially and commercially viable as well as
socially and economically acceptable. Hence the project is worth implementing.
2. Product Description and Application

Banana plant is grown for its fruit. It is a tropical fruit widely consumed as fresh, processed and
dried in all countries of the world. The banana needs heat, humid air, plenty of water and light. It
also likes soils rich in organic matter and soils that drain quickly. On the other hand it dislikes
wind. Once picked, bananas should not be left long in the plantation.
Banana plantations are usually planted along roads and tracks so that the fruits can be quickly
moved away. In the world as a whole, Central and South America produce most bananas
followed by Asia and Africa.
In Africa, the chief producers of bananas are: Angola,
Madagascar, Ivory Coast, Cameroon, Guinea and Somalia. However, the highest concentration
of banana consumption is in Western Europe and North America where the standard of living is
much higher than in any other parts of the world. Bananas are a strength- giving food. The sweet
banana is as rich as other raw fruits in vitamins.
3
3. Market Study, Farm Capacity and Production Program

3.1
Market Study
3.1.1 Present Demand and Supply
At present banana is being produced by private peasant and some commercial holdings in many
suitable areas in the country. In this connection, the Agricultural Sample Survey of CSA (July,
2007-Vol I) report that in Ethiopia there are about 1,668,905 private peasants cultivating banana
on 30,429.5 hectares of land. These farmers produced about 2,279,421.2 quintals of banana in
2006/07. The average yield, therefore, was 75.4 quintal per hectare. Such average production is
very low and can be increased at least to 400 quintals per hectare if cultivated in a standard
manner.
At the same time there is a potential of high consumption of bananas provided that the fruit is
supplied to the market at affordable prices. According to CSA, Annual Abstract (2008), the
population number in the country has reached 77.1 million at the end of July 2007 of which 12.7
million resides in the urban places while the remaining 64.4 million dwells in the rural part of the
country. If we assume that at least 25% percent of the urban and 1% of the rural residents can
afford to consume 2 kgs of bananas per head per week if it is sold at an affordable price, the
annual consumption of the fruit will amount to 3,309,467 quintal (658,372 quintal for Amhara
region). This creates a demand gap of 1,030,046 quintals of which the share of Amhara region is
estimated to be 20% (or 204,913 quintals)..
3.1.2 Projected Demand

The future demand for banana is promising due to two main factors. First, an increase in
population in general and urbanization in particular is expected to amplify the domestic
consumption of the output. At the same time, an increase in income inevitably improves the per
capita consumption of banana in the future. Consequently, with a conservative growth rate of 3%
per annum, the future demand for banana is forecasted as shown in table 1 below.
Table 1: Projected Demand for Banana (in quintal)

Year
Projected Demand for Banana
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
2016/17
3,408,751
3,511,014
3,616,344
3,724,834
3,836,580
3,951,677
4,070,227
4,192,334
4,318,104
4,447,647
Table 1 divulges that there is substantial and growing demand for banana in the coming years. At
the same time it suggests the relevance of establishing a banana plantation farm so as to meet the
future demand.
3.1.3 Pricing and Distribution

Based on the market research result and the capacity of the envisaged plantation, the selling price
of a quintal of banana is set to be Birr 200. In distributing the output, the plantation shall make
use of the available sales network.
3.2
Farm Size
Thus, given the expected demand for banana as presented earlier, and the planned technology,
the envisaged plantation is set to produce 4,000 quintals of bananas annually.
3.3
Production Program
The program is scheduled based on the consideration that the envisaged plantation will work
throughout the year except for Sundays and public holidays. During the first year of operation
the farm will operate at 75 percent capacity and then it grows to 90 percent in the 2 nd year. The
capacity will grow to 100 percent starting from the 3rd year. This consideration is developed
based on the assumption that there is ample demand for the product so that market and logistics
barriers would be eliminated with in the first two years of operation.
4. Raw Materials and Utilities

4.1
Availability and Source of Raw Materials
In the production of banana the main inputs are fertilizer, insecticides, water as well as semiskilled and unskilled labor. While fertilizer and chemicals can be purchased from domestic
suppliers operating in the region, the firm shall make use of water pump equipments to pump
water from the nearby river or other source.
4.2
Annual Requirement and Cost of Raw Materials

and Utilities
The annual raw material and utility requirement and the associated cost for the envisaged plant is
listed in table 2 here under
Table 2: Material and Utility Requirement
Material and Input

Fertilizer (Urea)
Insecticides
Total Material Cost
Quantity
7,500 kg
625 kg
L.C.
Total Cost
F.C.
48,750
6,250
55,000
Utility
6
Electricity
Furnace Oil
Water
Total Utility Cost
5,000kwh
6,000 lit
1000m3
2,750
48,000
2,650
53,400
According to the above table the annual cost of input and utility at full capacity of operation is
estimated to be Birr 108,400.
5 Location and Site

The appropriate locations for the envisaged project in view of the availability of input,
infrastructure as well as market for the output are close to major towns of the region notably
Bahir Dar, Gondar, Dessie and Combolcha towns.
6 Technology and Engineering

6.1
Production Process
The main stages of producing bananas are preparing and producing seedlings, planting the
seedlings on the plantation, watering, seeding and in general nurturing the stands of banana trees,
harvesting and packing the bananas for distribution. The cultivation process of the banana tree
involves the following.
- keeping the soil clean;
- applying fertilizers;
- pruning the plants;
- preventing the plants from falling;
- looking after the fruit; and
- protecting the plants from diseases and insects
6.2
Machinery and Equipment
Basically, the planting and harvesting of bananas do not require much machinery and equipment.
Tractor is used while preparing the land for the first planting period and therefore, the envisaged
enterprise shall use rented tractor while preparing the land. The farm however, needs to acquire
10 medium capacity water pumps and the associated equipments for irrigation purpose. In
addition various hand tools are also needed. The cost of the machinery and equipment is
estimated to be Birr 50,000. The water pumps and equipments can be purchased from local
suppliers.
6.3
Civil Engineering Cost
The envisaged banana plantation requires 10 hectares of land. It also requires 100m 2 area for
office, store and other related facilities.
7 Human Resource and Training Requirement

7.1
Human Resource
The list of required manpower for the envisaged farm is stated in table 3 below
Table 3: Human Resource Requirement
Position
Manager/Agronomist
Administration/Finance
Accountant/Casher
Sales Clerk
Store Keeper
Supervisor
Driver
Laborers
Guards
Benefit (20%)
Total
No.
Required
1
1
2
3
1
2
1
25
5
Monthly
Salary
4500
2500
1200
800
800
1000
800
400
400
41
Total Annual
Salary
54000
30000
28800
28800
9600
24000
9600
120000
24000
65760
394560
The envisaged farm creates 41 permanent job opportunity and about Birr 394.56 thousand of
income. The professionals and support staffs for the envisaged plantation shall be recruited from
the Amhara region. In times of harvest the farm shall engage additional unskilled labor on
temporary basis and hence, extra Birr 25,000 is allocated for such purpose.
7.2
Training Requirement
On job training of personnel shall be conducted with the aim of production technology
machinery maintenance and trouble shooting. For this, Birr 5,000 will be allocated as training
expense.
9
8 Financial Analysis
8.1
Underlying Assumption
The financial analysis of banana plantation is based on the data provided in the preceding
chapters and the following assumptions.
A. Construction and Finance
Mobilization and Cultivation
Source of finance
Tax holidays
Bank interest rate
Discount for cash flow
Value of land
Spare Parts, Repair & Maintenance
2 year
40% equity and 60% loan
2 years
12%
18%
Based on lease rate of ANRS
1% of fixed investment
B. Depreciation
Building
Machinery and equipment
Office furniture
Vehicles
Pre-production (amortization)
5%
10%
10%
20%
20%
C. Working Capital (Minimum Days of Coverage)

Raw Material-Local
Spare Parts in Stock and Maintenance
Accounts Receivable
Cash in Hand
Accounts Payable
8.2
30
30
30
30
30
Investment
10
The total investment cost of the project including working capital is estimated at Birr 861.69
thousand as shown in table 4 below. The Owner shall contribute 40% of the finance in the form
of equity while the remaining 60% is to be financed by bank loan.
Table 4: Total initial investment
Items
Land
L.C
Building and civil works

Office equipment
Vehicles
Farm machinery & equipment
Total fixed investment cost
Pre production capital
expenditure*
Total initial investment
Working capital at full capacity
Total
F.C
Total
800
800
100,000
100,000
15,000
15,000
225,000
225,000
50,000
50,000
390,800
390,800
19,540
19,540
410,340
410,340
451,350
861,690
451,350
861,690
*Pre-production capital expenditure includes - all expenses for pre-investment studies, consultancy fee during
construction and expenses for companys establishment, project administration expenses, commission expenses,
preproduction marketing and interest expenses during construction.
8.3
Production Costs
The total production cost at full capacity operation is estimated at Birr 643.98 thousand as
detailed in table 5 below.
11
Table 5: Production Cost
Items
1.
2.
3.
4.
Raw materials
Utilities
Wages and Salaries
Spares and Maintenance
Factory costs
5. Depreciation
6. Financial costs
Total Production Cost

8.4
I.
Cost
55,000
53,400
419,560
3,908
531,868
60,408
51,701
643,977
Financial Evaluation
Profitability
According to the projected income statement attached in the annex part (see annex 4) the project
will generate profit beginning from the first year of operation. Ratios such as the percentage of
net profit to total sales, return on equity and return on total investment are 1%, 2% and 29% in
the first year and are gradually rising. Furthermore, the income statement and other profitability
indicators show that the project is viable.
II.
Breakeven Analysis
The breakeven point of the project is estimated by using income statement projection.
Accordingly, the project will break even at 53.8% of capacity utilization.
III.
Payback Period
Investment cost and income statement projection are used in estimating the project payback
period. The projects will payback fully the initial investment less working capital in 2 years.
IV.
Simple Rate of Return
For the envisaged farm the simple rate of return equals to 17.4%.
V.
Internal Rate of Return and Net Present Value
Based on cash flow statement described in the annex part, the calculated IRR of the project is
37.9% and the net present value at 18 % discount is Birr 363,529.09
12
VI.
Sensitivity Analysis
The envisaged plantation maintains to be profitable starting from the second year when a 10 %
production cost increment takes place. That is, such an increase in production cost makes the
envisaged farm incur loss of Birr 21,685.46 in the first year of operation and starts to earn profit
then after.
9 Economic and Social Benefit and Justification

The envisaged project possesses a wide range of benefits that promotes the socio-economic goals
and objectives stated in the strategic plan of the Amhara National Regional State. In this regard,
the proposed project helps diversify the agricultural sector by intensifying cash crop production.
The other benefits are listed as follows:
A. Profit Generation
The project is found to be financially viable and earns a profit of Birr 1.3.million within the
project life. Such result induces the project promoters to reinvest the profit which, therefore,
increases the investment magnitude in the region.
B. Tax Revenue
In the project life under consideration, the region will collect about Birr 507.7 thousand from
corporate tax payment alone. Such result create additional fund for the regional government that
will be used in expanding social and other basic services in the region.
C. Employment and Income Generation
The proposed project is expected to create employment opportunity to several citizens of the
region. That is, it will provide permanent employment to 41 professionals as well as support
stuffs. It also creates temporary employments for unskilled laborers. Consequently the project
creates income of Birr 419.56 thousands per year. This would be one of the commendable
accomplishments of the project.
D. Pro Environment Project
The proposed production process is environment friendly.
13
ANNEXES
14
Annex 1: Total Net Working Capital Requirements (in Birr)

CONSTRUCTION
PRODUCTION
Year 1
Year 2
Capacity Utilization (%)
0.00
0.00
75%
90%
100%
100%
1. Total Inventory
0.00
0.00
9959.24
11951.08
13278.98
13278.98
0.00
0.00
4500.00
5400.00
6000.00
6000.00
Raw Material-Local
0.00
0.00
4500.00
5400.00
6000.00
6000.00
Raw Material-Foreign
0.00
0.00
0.00
0.00
0.00
0.00
Supplies in Stock
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
959.24
1151.08
1278.98
1278.98
Work in Progress
0.00
0.00
0.00
0.00
0.00
0.00
Finished Products
0.00
0.00
0.00
0.00
0.00
0.00
2. Accounts Receivable
0.00
0.00
65454.55
78545.45
87272.73
87272.73
3. Cash in Hand
0.00
0.00
38696.73
46436.07
51595.64
51595.64
0.00
0.00
109610.51
131532.61
146147.35
146147.35
4. Current Liabilities
0.00
0.00
65454.55
78545.45
87272.73
87272.73
Accounts Payable
0.00
0.00
65454.55
78545.45
87272.73
87272.73
TOTAL NET WORKING CAPITAL REQUIRMENTS
0.00
0.00
44155.96
52987.16
58874.62
58874.62
INCREASE IN NET WORKING CAPITAL
0.00
0.00
44155.96
8831.19
5887.46
0.00
Raw Materials in Stock- Total
CURRENT ASSETS
Annex 1: Total Net Working Capital Requirements (in Birr)
(continued)
PRODUCTION
5
10
100%
100%
100%
100%
100%
100%
13278.98
13278.98
13278.98
13278.98
13278.98
13278.98
6000.00
6000.00
6000.00
6000.00
6000.00
6000.00
6000.00
6000.00
6000.00
6000.00
6000.00
6000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1278.98
1278.98
1278.98
1278.98
1278.98
1278.98
Work in Progress
0.00
0.00
0.00
0.00
0.00
0.00
Finished Products
0.00
0.00
0.00
0.00
0.00
0.00
2. Accounts Receivable
87272.73
87272.73
87272.73
87272.73
87272.73
87272.73
3. Cash in Hand
51595.64
51595.64
51595.64
51595.64
51595.64
51595.64
146147.35
146147.35
146147.35
146147.35
146147.35
146147.35
4. Current Liabilities
87272.73
87272.73
87272.73
87272.73
87272.73
87272.73
Accounts Payable
87272.73
87272.73
87272.73
87272.73
87272.73
87272.73
TOTAL NET WORKING CAPITAL REQUIRMENTS
58874.62
58874.62
58874.62
58874.62
58874.62
58874.62
0.00
0.00
0.00
0.00
0.00
0.00

1. Total Inventory
Raw Materials in Stock-Total
Raw Material-Local
Raw Material-Foreign
Supplies in Stock
CURRENT ASSETS
INCREASE IN NET WORKING CAPITAL
Annex 2: Cash Flow Statement (in Birr)

CONSTRUCTION
PRODUCTION
Year 1
Year 2
205170.00
656520.00
665454.55
733090.91
808727.27
800000.00
205170.00
656520.00
65454.55
13090.91
8727.27
0.00
Total Equity
82068.00
262608.00
0.00
0.00
0.00
0.00
Total Long Term Loan
123102.00
393912.00
0.00
0.00
0.00
0.00
0.00
0.00
65454.55
13090.91
8727.27
0.00
2. Inflow Operation
0.00
0.00
600000.00
720000.00
800000.00
800000.00
Sales Revenue
0.00
0.00
600000.00
720000.00
800000.00
800000.00
Interest on Securities
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
TOTAL CASH OUTFLOW
205170.00
205170.00
643433.56
655960.27
736303.35
714450.42
4. Increase In Fixed Assets
205170.00
205170.00
0.00
0.00
0.00
0.00
195400.00
195400.00
0.00
0.00
0.00
0.00
9770.00
9770.00
0.00
0.00
0.00
0.00
5. Increase in Current Assets
0.00
0.00
109610.51
21922.10
14614.73
0.00
6. Operating Costs
0.00
0.00
405745.07
485827.48
539215.76
539215.76
7. Corporate Tax Paid
0.00
0.00
0.00
0.00
44602.45
47704.54
8. Interest Paid
0.00
0.00
128077.98
62041.68
51701.40
41361.12
9.Loan Repayments
0.00
0.00
0.00
86169.00
86169.00
86169.00
10.Dividends Paid
0.00
0.00
0.00
0.00
0.00
0.00
Surplus(Deficit)
0.00
451350.00
22020.99
77130.64
72423.93
85549.58
Cumulative Cash Balance
0.00
451350.00
473370.99
550501.63
622925.55
708475.14
TOTAL CASH INFLOW

1. Inflow Funds
Total Short Term Finances
3. Other Income
Fixed Investments
Pre-production Expenditures
Annex 2: Cash Flow Statement (in Birr): Continued

PRODUCTION
5
800000.00
6
800000.00
7
800000.00
8
800000.00
9
800000.00
10
800000.00
0.00
0.00
0.00
0.00
0.00
0.00
Total Equity
0.00
0.00
0.00
0.00
0.00
0.00
Total Long Term Loan
0.00
0.00
0.00
0.00
0.00
0.00
Total Short Term Finances
0.00
0.00
0.00
0.00
0.00
0.00
2. Inflow Operation
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
Sales Revenue
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
707212.22
714646.42
707408.23
614001.03
614001.03
614001.03
0.00
0.00
0.00
0.00
0.00
0.00
Fixed Investments
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
6. Operating Costs
539215.76
539215.76
539215.76
539215.76
539215.76
539215.76
50806.62
68581.10
71683.19
74785.27
74785.27
74785.27
8. Interest Paid
31020.84
20680.56
10340.28
0.00
0.00
0.00
9. Loan Repayments
86169.00
86169.00
86169.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Surplus(Deficit)
92787.78
85353.58
92591.77
185998.97
185998.97
185998.97
Cumulative Cash Balance
801262.92
886616.49
979208.27
1165207.23
1351206.20
1537205.17
TOTAL CASH INFLOW

1. Inflow Funds
3. Other Income
TOTAL CASH OUTFLOW
4. Increase In Fixed Assets
5. Increase in Current Assets
10.Dividends Paid
Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED

CONSTRUCTION
PRODUCTION
Year 1
Year 2
TOTAL CASH INFLOW
0.00
0.00
600000.00
720000.00
800000.00
800000.00
1. Inflow Operation
0.00
0.00
600000.00
720000.00
800000.00
800000.00
Sales Revenue
0.00
0.00
600000.00
720000.00
800000.00
800000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
TOTAL CASH OUTFLOW
205170.00
205170.00
449901.03
494658.68
589705.67
586920.30
3. Increase in Fixed Assets
205170.00
205170.00
0.00
0.00
0.00
0.00
Fixed Investments
195400.00
195400.00
0.00
0.00
0.00
0.00
9770.00
9770.00
0.00
0.00
0.00
0.00
4. Increase in Net Working Capital
0.00
0.00
44155.96
8831.19
5887.46
0.00
5. Operating Costs
0.00
0.00
405745.07
485827.48
539215.76
539215.76
0.00
0.00
0.00
0.00
44602.45
47704.54
NET CASH FLOW
-205170.00
-205170.00
150098.97
225341.32
210294.33
213079.70
CUMMULATIVE NET CASH FLOW
-205170.00
-410340.00
-260241.03
-34899.71
175394.62
388474.32
Net Present Value (at 18%)
-205170.00
-173872.88
107798.74
137149.69
108467.47
93139.10
Cumulative Net present Value
-205170.00
-379042.88
-271244.14
-134094.45
-25626.98
67512.12
2. Other Income
Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED
(Continued)
PRODUCTION
10
TOTAL CASH INFLOW
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
1. Inflow Operation
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
Sales Revenue
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
590022.38
607796.86
610898.95
614001.03
614001.03
614001.03
3. Increase in Fixed Assets
0.00
0.00
0.00
0.00
0.00
0.00
Fixed Investments
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
5. Operating Costs
539215.76
539215.76
539215.76
539215.76
539215.76
539215.76
50806.62
68581.10
71683.19
74785.27
74785.27
74785.27
NET CASH FLOW
209977.62
192203.14
189101.05
185998.97
185998.97
185998.97
CUMMULATIVE NET CASH FLOW
598451.94
790655.08
979756.13
1165755.10
1351754.06
1537753.03
77782.33
60337.38
50308.10
41934.60
35537.79
30116.77
Cumulative Net present Value
145294.45
205631.83
255939.93
297874.52
333412.32
363529.09
2. Other Income
TOTAL CASH OUTFLOW
4. Increase in Net Working Capital

Internal Rate of Return
363,529.09
37.9%
Annex 4: NET INCOME STATEMENT ( in Birr)

6
PRODUCTION
1
75%
90%
100%
100%
100%
600000.00
720000.00
800000.00
800000.00
800000.00
600000.00
720000.00
800000.00
800000.00
800000.00
Other Income
0.00
0.00
0.00
0.00
0.00
2. Less Variable Cost
274544.07
329452.88
366058.76
366058.76
366058.76
325455.93
390547.12
433941.24
433941.24
433941.24
54.24
54.24
54.24
54.24
54.24
191609.00
216782.60
233565.00
233565.00
233565.00
133846.93
173764.52
200376.24
200376.24
200376.24
22
24
25
25
25
128077.98
62041.68
51701.40
41361.12
31020.84
5768.95
111722.84
148674.84
159015.12
169355.40
0.00
0.00
44602.45
47704.54
50806.62
5768.95
111722.84
104072.39
111310.58
118548.78
Gross Profit/Sales
1%
16%
19%
20%
21%
Net Profit After Tax/Sales
1%
16%
13%
14%
15%
Return on Investment
29%
38%
33%
33%
32%
Return on Equity
2%
32%
30%
32%
34%

1. Total Income
Sales Revenue
VARIABLE MARGIN
(In % of Total Income)
3. Less Fixed Costs
OPERATIONAL MARGIN
4. Less Cost of Finance
5. GROSS PROFIT
6. Income (Corporate) Tax
7. NET PROFIT
RATIOS (%)
Annex 4: NET INCOME STATEMENT (in Birr): Continued

PRODUCTION
10
100%
100%
100%
100%
100%
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
800000.00
Other Income
0.00
0.00
0.00
0.00
0.00
2. Less Variable Cost
366058.76
366058.76
366058.76
366058.76
366058.76
433941.24
433941.24
433941.24
433941.24
433941.24
54
54
54
54
54
184657.00
184657.00
184657.00
184657.00
184657.00
249284.24
249284.24
249284.24
249284.24
249284.24
31
31
31
31
31
4. Less Cost of Finance
20680.56
10340.28
0.00
0.00
0.00
5. GROSS PROFIT
228603.68
238943.96
249284.24
249284.24
249284.24
6. Income (Corporate) Tax
68581.10
71683.19
74785.27
74785.27
74785.27
7. NET PROFIT
160022.58
167260.77
174498.97
174498.97
174498.97
Gross Profit/Sales
29%
30%
31%
31%
31%
Net Profit After Tax/Sales
20%
21%
22%
22%
22%
Return on Investment
39%
38%
37%
37%
37%
Return on Equity
46%
49%
51%
51%
51%

1. Total Income
Sales Revenue
VARIABLE MARGIN
3. Less Fixed Costs
OPERATIONAL MARGIN
RATIOS (%)
Annex 5: Projected Balance Sheet (in Birr)

CONSTRUCTION
PRODUCTION
TOTAL ASSETS
1. Total Current Assets
Inventory on Materials and Supplies
Work in Progress
Finished Products in Stock
Accounts Receivable
Cash in Hand
Cash Surplus, Finance Available
Securities
2. Total Fixed Assets, Net of Depreciation
Fixed Investment
Construction in Progress
Pre-Production Expenditure
Less Accumulated Depreciation
3. Accumulated Losses Brought Forward
4. Loss in Current Year
TOTAL LIABILITIES
5. Total Current Liabilities
Accounts Payable
Bank Overdraft
6. Total Long-term Debt
Loan A
Loan B
7. Total Equity Capital
Ordinary Capital
Preference Capital
Subsidies
8. Reserves, Retained Profits Brought Forward
9.Net Profit After Tax
Dividends Payable
Retained Profits
Year 1
205170.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
205170.00
0.00
195400.00
9770.00
0.00
0.00
0.00
205170.00
0.00
0.00
0.00
123102.00
123102.00
0.00
82068.00
82068.00
0.00
0.00
0.00
0.00
0.00
0.00
Year 2
861690.00
451350.00
0.00
0.00
0.00
0.00
0.00
451350.00
0.00
410340.00
195400.00
195400.00
19540.00
0.00
0.00
0.00
861690.00
0.00
0.00
0.00
517014.00
517014.00
0.00
344676.00
344676.00
0.00
0.00
0.00
0.00
0.00
0.00
1
932913.49
582981.49
5459.24
0.00
0.00
65454.55
38696.73
473370.99
0.00
349932.00
390800.00
0.00
19540.00
60408.00
0.00
0.00
932913.49
65454.55
65454.55
0.00
517014.00
517014.00
0.00
344676.00
344676.00
0.00
0.00
0.00
5768.95
0.00
5768.95
Annex 5: Projected Balance Sheet (in Birr):
2
971558.24
682034.24
6551.08
0.00
0.00
78545.45
46436.07
550501.63
0.00
289524.00
390800.00
0.00
19540.00
120816.00
0.00
0.00
971558.24
78545.45
78545.45
0.00
430845.00
430845.00
0.00
344676.00
344676.00
0.00
0.00
5768.95
111722.84
0.00
111722.84
3
998188.90
769072.90
7278.98
0.00
0.00
87272.73
51595.64
622925.55
0.00
229116.00
390800.00
0.00
19540.00
181224.00
0.00
0.00
998188.90
87272.73
87272.73
0.00
344676.00
344676.00
0.00
344676.00
344676.00
0.00
0.00
117491.78
104072.39
0.00
104072.39
4
1023330.48
854622.48
7278.98
0.00
0.00
87272.73
51595.64
708475.14
0.00
168708.00
390800.00
0.00
19540.00
241632.00
0.00
0.00
1023330.48
87272.73
87272.73
0.00
258507.00
258507.00
0.00
344676.00
344676.00
0.00
0.00
221564.17
111310.58
0.00
111310.58
Continued
PRODUCTION
5
10
TOTAL ASSETS
1. Total Current Assets
Inventory on Materials and Supplies
Work in Progress
Finished Products in Stock
Accounts Receivable
Cash in Hand
Cash Surplus, Finance Available
Securities
2. Total Fixed Assets, Net of Depreciation
Fixed Investment
Construction in Progress
Pre-Production Expenditure
Less Accumulated Depreciation
3. Accumulated Losses Brought Forward
4. Loss in Current Year
TOTAL LIABILITIES
5. Total Current Liabilities
Accounts Payable
Bank Overdraft
6. Total Long-term Debt
Loan A
Loan B
7. Total Equity Capital
Ordinary Capital
Preference Capital
Subsidies
8. Reserves, Retained Profits Brought Forward
9. Net Profit After Tax
Dividends Payable
Retained Profits
1055710.26
947410.26
7278.98
0.00
0.00
87272.73
51595.64
801262.92
0.00
108300.00
390800.00
0.00
19540.00
302040.00
0.00
0.00
1055710.26
87272.73
87272.73
0.00
172338.00
172338.00
0.00
344676.00
344676.00
0.00
0.00
332874.76
118548.78
0.00
118548.78
1129563.84
1032763.84
7278.98
0.00
0.00
87272.73
51595.64
886616.49
0.00
96800.00
390800.00
0.00
19540.00
313540.00
0.00
0.00
1129563.84
87272.73
87272.73
0.00
86169.00
86169.00
0.00
344676.00
344676.00
0.00
0.00
451423.54
160022.58
0.00
160022.58
1210655.61
1125355.61
7278.98
0.00
0.00
87272.73
51595.64
979208.27
0.00
85300.00
390800.00
0.00
19540.00
325040.00
0.00
0.00
1210655.61
87272.73
87272.73
0.00
0.00
0.00
0.00
344676.00
344676.00
0.00
0.00
611446.11
167260.77
0.00
167260.77
1385154.58
1311354.58
7278.98
0.00
0.00
87272.73
51595.64
1165207.23
0.00
73800.00
390800.00
0.00
19540.00
336540.00
0.00
0.00
1385154.58
87272.73
87272.73
0.00
0.00
0.00
0.00
344676.00
344676.00
0.00
0.00
778706.88
174498.97
0.00
174498.97
1559653.55
1497353.55
7278.98
0.00
0.00
87272.73
51595.64
1351206.20
0.00
62300.00
390800.00
0.00
19540.00
348040.00
0.00
0.00
1559653.55
87272.73
87272.73
0.00
0.00
0.00
0.00
344676.00
344676.00
0.00
0.00
953205.85
174498.97
0.00
174498.97
1734152.52
1683352.52
7278.98
0.00
0.00
87272.73
51595.64
1537205.17
0.00
50800.00
390800.00
0.00
19540.00
359540.00
0.00
0.00
1734152.52
87272.73
87272.73
0.00
0.00
0.00
0.00
344676.00
344676.00
0.00
0.00
1127704.82
174498.97
0.00
174498.97
10

Investment Office ANRS: Project Profile On The Establishment of Banana Plantation

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Investment Office ANRS: Project Profile On The Establishment of Banana Plantation

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What is the project profile about?

What is the project profile about?

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What are the main sections covered in the project profile?

Investment Office ANRS

Project Profile on the Establishment

4.Raw Materials and Utilities.................................................................................6

5Location and Site...................................................................................................8

7Human Resource and Training Requirement.....................................................9

9Economic and Social Benefit and Justification.................................................13

2. Product Description and Application

In Africa, the chief producers of bananas are: Angola,

3. Market Study, Farm Capacity and Production Program

3.1.2 Projected Demand

Table 1: Projected Demand for Banana (in quintal)

Projected Demand for Banana

3.1.3 Pricing and Distribution

4. Raw Materials and Utilities

Availability and Source of Raw Materials

Annual Requirement and Cost of Raw Materials

Material and Input

5 Location and Site

6 Technology and Engineering

Machinery and Equipment

Civil Engineering Cost

7 Human Resource and Training Requirement

C. Working Capital (Minimum Days of Coverage)

Building and civil works

Table 5: Production Cost

Total Production Cost

Simple Rate of Return

Internal Rate of Return and Net Present Value

9 Economic and Social Benefit and Justification

Annex 1: Total Net Working Capital Requirements (in Birr)

Capacity Utilization (%)

Spare Parts in Stock and Maintenance

TOTAL NET WORKING CAPITAL REQUIRMENTS

INCREASE IN NET WORKING CAPITAL

Raw Materials in Stock- Total

Annex 1: Total Net Working Capital Requirements (in Birr)

TOTAL NET WORKING CAPITAL REQUIRMENTS

Capacity Utilization (%)

INCREASE IN NET WORKING CAPITAL

Annex 2: Cash Flow Statement (in Birr)

Total Long Term Loan

TOTAL CASH OUTFLOW

4. Increase In Fixed Assets

5. Increase in Current Assets

7. Corporate Tax Paid

Cumulative Cash Balance

TOTAL CASH INFLOW

Total Short Term Finances

Annex 2: Cash Flow Statement (in Birr): Continued

Total Long Term Loan

Total Short Term Finances

7. Corporate Tax Paid

Cumulative Cash Balance

TOTAL CASH INFLOW