Project title:-Project Proposal for Wheat

and Teff crops production

Projectowner: -Uruba Agricultural Development PLC.

LicenseCertificate Number: - 1514087360005 at Ethiopian Revenues and Customs Authority

Project manager: -Ato Samson Asefa

Project Manager Address: -Addis Abeba

Project (P.L.C.) Head office: Hosanna Town

Mobile Phone Number: - 0930097848

E-Mail Address: - samson@hosamphama.com

Project area: -SNNPR, Hadiya Zone woreda, 2ndHankotakebele.

1stRevised Date:July, 2021G.C

1
 Application for project proposal approval
Project Address Region: SNNPRZone:Hadiya.woreda: Soro.Kebele: 2ndHankota.

Submission date: - September 22/01/2014 E.C.

Project Title: - Uruba Wheat and Teff production farm.

Project Location:-The licensed area is located in SNNP Regional State, South Hadiya Zone
SoroWoreda, 2ndHankota Keble. area of the project is 150 hectares.

Name of Organization: Uruba Agricultural Development P.L.C.

Date of Implementation Tentative Plan Time: -December 1st 2014 E.C

Number of P.L.C. members: -8 Whichis Establishedat:-2012 E.C.

Project (P.L.C.) Head office: -Hosaina Town

Project Manager: -Samson AseffaPhysical Address: Addis Ababa

Telephone: - 251 930 097 848

E-Mail Address: - samson@hosamphama.com

2
Table of Contents
Executive Summery

1. ....................................................................................................................................................................2
2.General Objective........................................................................................................................................6
2.1 .Specific objective..............................................................................................................................6
3.Vision..........................................................................................................................................................7
3.1 Values.................................................................................................................................................8
4.The significance of the project.....................................................................................................................9
5.Target customers........................................................................................................................................11
6.The project facilitation and Services plan..................................................................................................12
6.1Fixed asset (Construction schedule)..................................................................................................15
6.2 Structural design...............................................................................................................................15
6.3 Office Foundation Design.................................................................................................................16
7.Gender Main-streaming.............................................................................................................................17
8.Project implementation..............................................................................................................................17
9.Organization and management and Structure...........................................................................................18
10. Financial Requirement and Analysis.......................................................................................................23
11. Depreciation and Amortization...............................................................................................................23
12. Discounted Payback Period.....................................................................................................................23
Cash flow......................................................................................................................................................23
13. Internal Rate of Return............................................................................................................................24
14. Net present value.....................................................................................................................................24
15. Feasibility study and Recommendations..............................…………………………………………...25

3
 Project owner Uruba Agricultural Development plc.
Project title Uruba Wheat and Teff crops production farm

Land requirement amount 150 Hectares

Project area At SNNPR Hadiya ZoneSoroWoreda, 2ndHankotaKeble.

Project (P.L.C.) Head office: Hosaina Town

Production capacity

Products to be manufactured Wheat and Teff

Market Local and Zonal

Cost of the project 10,000,000.00 ETB

Project life time 10 years

Number of working days 256 days/year

Pbp ( payback period) 4 year months

 The project is technically feasible, financially and commercially viable as well as socially and economically
acceptable.

Executive Summary Key information highlights

General Background of the Farmarea:-

Ethiopia has a comparative advantage in a number of Cereal commodities due to its favorable climate,
proximity to European and Middle Eastern markets and cheap labor. However, the production of Cereal crops is
much less developed than the production of food grains in the country. At present, many commercial farms
& private farmers are producing cereal crops for domestic and export markets in the country.
Processing plays an important role in the conservation and effective utilization of cereal crops. Also it
helps in generating rural employment. Besides, processed cereal crops are sources of foreign exchange
earnings. Ethiopia is one of the developing countries and around 85% of the total population depends
on agriculture most of the agricultural practice is rain fed crop production.

Ethiopia has ample source of surface and subsurface water, resulting from this it is named as” The
water tower of East Africa.” Moreover, the irrigation potential is estimated to be about 4025 million
hectares of which only 5.8% is irrigated. (Source; a study carried out by international water
management institute-IWMI)

4
Hence, it is obvious that the agricultural system has to be improved and irrigation practice should be
spread extensively to bring about sustainable food self-sufficiency and to earn foreign exchange.

Most of Ethiopia’s cultivated land is under rain-fed agriculture. Due to lack of water storage and large
spatial and temporal variations in rainfall, there is not enough water for most farmers to produce more
than one crop per year and hence there are frequent crop failures due to dry spells and droughts which
have resulted in food shortage currently facing the country.

Although Cereal crops are important for health and economy the amount and mode of production are
still weak in the Zone. Cereal crops are cannot be differentiated as fruit (permanent crops) and
vegetables (they are short season crops). Accordingly, permanent crops are long term crops that
occupy the field planted for a long period of time and largely harvested every year and do not have to
be replanted for several years after each harvest. These include tree crops such as coffee, Enset, Chat,
oranges, Mangoes, Bananas, papaya, Avocados…etc.

The major source of growth for Ethiopia is still conceived to be the agriculture sector. Hence, this
sector has to be insulated from drought shocks through enhanced utilization of the water resource
potential of the country, (through the development of small-scale irrigation, water harvesting, and on-
farm diversification) coupled with strengthened linkages between agriculture and industry (agro-
industry), thereby creating a demand for agricultural output. In line with the above, different regions of
the country are working hard so as to promote irrigated agriculture and boost agricultural production
both in quantity and quality.

Soro is one of the districts at Hadiya Zone, Southern region of Ethiopia. This is Located 264 km away from
Addis Abeba, capital city of Ethiopia. It is bounded by Dawuro zone and Tambaroworeda in the West,
Dunaworeda in the East, Lemo and Gomboraworeda in the North. The Woreda has highland, midland and
lowland climatic condition. It is situated at 1200-2950 meters above sea level and has an average temperature
ranging from 18oc to 25oc. The annual rain fall is 2371 mm per year. More than 95% of the population is
engaged in agriculture. The type of soil found in SoroWoreda at 2 ndHankota Keble Uruba village is blackish,
and which is suitable for wheat and Teffagricultural practice from 31 kebeles of one.

The Uruba Agricultural P.L.C. Farm is organized to produce efficiently crops approximately on150
hectare. The farm is facing the choice of Wheat farming is known to be a profitable business over the
years, it has evolved from small scale to a Zone in the Region where it is carried out. If we are starting
5
a commercial wheat and Teff farming business, the good news is that we can’t get it wrong. This is
what wheat is consumed in different forms all over the Zone and Region.

The investors play a wide role in transforming the agriculture-based economy of our country to
industry based economy. It is not only about transforming the economy but also the government is
working very hard on quality production to make our country competing in international markets. In
this point of view, the investors also play a very great role.

Nowadays, the implementation of small and medium scale irrigation scheme is being given priority in
the water sector development strategy of Ethiopia. These are the reasons where the government
provided farmland in a different part of the country including proposed area exists in SNNPR Hadiya
Zone SoroWoreda, 2nd Hankota Keble.

However, due to the backward method of farming, unreliable rainfall, including population and
drought, the nation faced a series of food shortage.These food shortages were followed by severing
famines that resulted in the loss of the lives of millions of citizens.

Objectives

General Objective

The major goal of this project is to contribute towards the growth of the Agricultural sector. Its
specific objectives include the following.

Specific objective

 To construct and develop quality and quantity product that enable to provide standard goods to
consumer.
 To undertake trading and other refuted business activities that enable to generate a reasonable to
the invested capital.
 To develop modern business center that would provide quality producton standard.
 To create employment opportunities.
 To contribute towards the eradication of poverty.
 To establish economically viable, socially acceptable and environmentally friend farm.

6
Vision
The future vision for the farm business is to be a viable and sustainable business managed by the
UrubaAgricultural Development P.L.C. In the dynamic and changing business environment the focus
will be on maintaining a strong financial position in order to be prepared for multiple possible outcomes.
Specific actions include the following:
 The farm will maintain its focus on crop production andcontinuously pursue above average crop
productionperformance.
 The farm will take steps to gain detailed knowledge of cost drivers and cost control procedures that
can contribute to low costproduction.
 The farm will continuously undertake to identify and realize opportunities to provide commodities
with enhancing featuresthat lower transaction costs forbuyers.
 The farm will continuously monitor financial performance in orderto ensure a strong working capital
position.

Mission.
The farm business will achieve strong solvency and liquidity positions though the cumulative effect of
recent years of good crops and prices combined with reasonable levels of debt and modest withdrawals of
capital from the business. In addition the farm will able to upgrade the field equipment to take advantage
of modern technological advances including GPS navigation systems, auto steer and precision placement
of fertilizer.
The working relationship between working relationship between the father and daughter is very strong with
a shared view of the importance of maintaining the strong financial position of the farm through astute
financial management and agility.

Values
1. Paying down our expenses.
2. Putting money away for the future.
3. Farming full time.
4. Taking pride in the products we produce.
5. Creating a place for the next generation to farm.
6. Taking time to rest, vacation..

7
 7. Having a surplus to share with others in need.
8. Working together as a family.
9. Human and Animal Health
10. Christianity
11. Financial stability
12. Open communication
13. Healthy soil and water
14. Community relationships

Project description
The SNNPR Hadiya Zone Soro Woreda, 2nd Hankota Kebele has great potential and suitable natural
resources for the production of these crops. In fact, this project refers to only essential Cereal crops
production which includes Wheat and Teff. Combining different kinds of fruit & vegetable production
create a better opportunity for crop rotational practices and give the advantage of utilizing common
faculties such as washing, cleaning cooling and storage facilities. Plus marketing fruits & vegetables
facilitate an increase in marketable volume by attracting more customers.

The Hadiya Zone has large areas and water resources suitable for the production of Wheat and Teff.
Compared to other cereals, pulses and oil crops, fruits and vegetables are very high in productivity per
unit of land which can play a substantial role to increase the food supply area. With a growing urban
population, which is totally market dependent, and the current food supply shortage, expansion in
Cereal crops production will play a significant role in increasing the food supply of the zone.
Planned land use on farm site includes the construction of the house for residence and store, planting
of different verities of permanent and annual tree and crop species. Specifically: Wheat (100 ha), Teff
90 ha and 3ha land area set for vegetable production, 1ha for construction and 6ha environmental
protection/conservation.
On the other hand, unbalanced and inadequate nutritional status of the people is still a central problem
in the zone. Deficiency of essential food elements, such as protein, vitamins, and minerals are widely
observed as basic food intake is the minimum requirement in the area. Increase in blindness due to
΄Vitamin A΄ deficiency is an alarming circumstance in the country. Therefore, Cereal crops are
important sources of Carbohydrate and minerals.

8
Project Rationale
Agriculture is the cornerstone of the development policy of the Government of Ethiopia. According to
the Rural Development Policy and Strategy document, the basic ingredient and resource the country
has for agricultural development is the abundant land and labor. Most of the Southern lowlands are
endowed with water resources are virgin and fertile. Up to recently, the areas were not developed due
to lack of capital and technology. Therefore, there is a strong commitment from the government to
make these fertile lands available for investors that have the capital and technology to develop.
The existing promising investment opportunities, the demands of goods needs along with relatively
sound investment support made by the government in such kinds of feasible projects, compelled the
project promoter to initiate the multipurpose oriented business project to be established. Despite the
promising business opportunities, the trend on such kinds of investment found to not enough.
Therefore, the existing shortage or absence in the supply of these products, along with its better
location and infrastructure access, the escalating trend of urbanization and business activities, thus it is
with such reason that this project is identified and proposed and assumed to be more profitable.

The significance of the project

The envisaged project deemed to add to the economic development of the region in general in specific
with following ways:

Source of Revenue

As public policy of any nation, the government collects different forms of taxes from different
business organizations and individuals. Among the different forms of taxes, business income taxes,
payroll income tax and VAT are collected from undertaking business activities. Therefore, the farm
will serve as sources of revenue for the Zone.

Employment opportunity:

One of the problems that our country faced is unemployment. Therefore, the current objective of the
government is working on tackling the problem of unemployment and fostering the development
process either through creating self-employment or employment in other organization. Hence, this
project will hire 10and above individuals and more than 50 individual during every season.

9
The market Study:

Wheat and Teff have a large domestic market in Ethiopia, significantly higher than the exported volumes. The
size of the Ethiopian population is currently estimated at more than 100 million. This is a strong indication of
the existence of large potential demand for fresh fruit and vegetable crops in the country. This is a strong
indication of the existence of investment opportunities in Wheat and Teff supply for the local market. Thus,
there is a reliable demand for these Ethiopian products during a particular period and a great volume. Therefore
there is a strong business image for Wheat and Teff markets.

The Demand-Supply Gap

There has been a significant growth in the number of local and international trades across the country.
This increase is mainly associated with the stimulation of economic activist and partly due to an
increase in the demand of Wheat and Teff production. Even though there is a lack of quantitative
estimates that depict the actual demand and also the annual growth rate commercial facilities are
scarce in the region. As a result there is a large gap between the developed and that of the supply for
cereals production hence this project would not face any problem of demand scarcity for it market and
it would provide good goods to customers. The price of Wheat and Teff is volatile and seasonal.
Generally, Wheat and Teff are cheaper in harvesting seasons. However, even in the harvesting seasons
the average price of Wheat and Teff at major towns is estimated on average at birr 25 and 30 birr per
kg respectively. It is based on cost and competitors price.

Future market or Demand of fruits and vegetables

The future demand for Wheat and Teff 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 Wheat and Teff. At the same time, an increase in income inevitably improves the per capita
consumption in the future.

Target customers

The target customers of this envisaged project include:-

 The surrounding community

10
  District ,Zonal and Regional government
 Agricultural research institutes
 Agricultural technology and equipment suppliers
 Agro-processing factory

Marketing promotion and strategy

In order to penetrate and gain considerable market share, one of the major marketing strategies for the
project is consistently rendering quality service to its tenants. Due emphasis must be placed on
improving quality of service. The major marketing strategies to promote the project and gain
considerable market share include:

 Advertising through different means focusing on the existing service and products.
 Promote in association to the key location and nearby business
 Working on sustained promotional work.
 Working on public relations to reach and influence key personas and organization with a capacity
of making decision.
 Keeping the quality of its service/ product and consistently improving with changing situations.
 Seasonal discount pricing forthe customer centric marketing strategies will be used by the farm.

Competition
There are different forms of competition that may face the envisaged Fruit and vegetable farm. These
are price and non-price based competition. Moreover, there are different competitors that will compete
with the project either directly or indirectly. But the Wheat and Teff production farm under discussion
has diversified marketing strategies that could enable it to cope up with the different competitors in the
market. Moreover, it will frequently conduct competitors research which focuses on, the strength and
the weaknesses, the different competitors’ strategies, the techniques we use in rendering the service,
the customer handling methods, and others.

11
The project facilitation and Services plan

In order to provide Cerealsor Wheat and Tefffarm of a high standard, it has been planned to construct
and develop the infrastructure and facilities that would viable to meet the requirements of an
international standard farm. Accordingly, various facilities will be constructed phase by phase starting
with the most needed ones that are essential to commence the operation of its farm activities.

Since the project will be engaged in Wheat and Teff the main sources of its annual revenue would be
from the domestic product sell. Based on the market price of Fruit and vegetable in the area, the
envisioned project set the fair price (Before VAT) for its product.

Feature of the sector

Agriculture is the backbone of the economy and the most volatile sector mainly owing to its
dependency on rainfall and the associated seasonal shocks that affect productivity. More than 85% of
the Ethiopian population depends on agriculture for their livelihood. Within the context of the
Ethiopian economy, the Agriculture sector traditionally includes economic activities such as crop and
livestock production in which the crop sector has been the major driving element.

The Ethiopian economy is basically comprised of smallholder farming as well as medium and large
scale commercial farming. Relatively speaking, commercial farms are not significant in terms of area
cultivated and volume of production, even though the role has slightly increased in view of the recent
phenomena associated with the establishment of farms in the country.

Ethiopia is potentially a wealthy country, endowed with abundant resource conducive to agricultural
development such as fertile soil and good rainfall over large regions. Agriculture accounts for the lion
share of the foreign exchange earnings. The sector contributes about 90% of the total export of
commodities. The country’s industrial development programs are closely tied to value-added
processing of agricultural outputs with equal emphasis to both large & medium scale as well as small
scale manufacturing industries. The sector registered significant growth for the last four consecutive
years due to good climatic condition accompanied by increasing crop productivity through agriculture
input intensification and area expansion.

Beneficiaries

12
The country will get a contribution to its national income through domestic consumption. This project
will provide employment opportunity to the local population, this will raise the living standards of the
people working in this project, and they also learn the latest technologies in crop production and also
make use of them in their own farm. The regional government will also generate revenue in the form
of land rent will be an additional source of income on land resources.

The company, which is making an investment on the land and doing a lot of agricultural production
(Wheat and Teff) activities in developing the land will be benefitted in terms of return on their
investment during the lease period.

Past and Present intervention

Wheat and Teffproduction project has a technically strong, knowledgeable and experienced team to
execute the project on time. With the vast knowledge base in agri-business activities, the company has
tangible experience in making this project a success. Conflict in the area may retard plan of project.

Justification of the project

Ethiopia has huge investment potentials for agricultural development. Currently, investment in the
agriculture sector is found to be more attractive and profitable in diverse sub-sectors ranging from
food products, industrial raw materials to bio-fuel. The agriculture sector accounts for 47% of the
Gross Domestic Products of the country, provides 85% of employment and 90% of foreign currency
earning.

Moreover, the country has a huge market potential for crop and livestock produced with comparative
advantage to the Middle East, Europe, and Asia. For the past five consecutive years, the agriculture
sector was growing faster with more than 11% average annual growth. In addition to the contribution
to the national growth, the growth has triggered the increase in the domestic market has for both
livestock and food crops.

Looking at the agro-climatic condition i.e. average temperature, rainfall, physic-chemical properties of
the soil and the distribution of the rainfall give an indication that the proposed land is suitable for
cultivation of various crops but especially fruit and vegetables. The physic-chemical properties of the
soil indicated in the information sheet provide further confidence for the success of the project.

13
Moreover, the planning on the financial part of the project i.e. investment, cash flow, return on
investment, profitability and the cost-benefit ratio will show a positive trend.

The expertise in the marketing of farm-produced in the international market will provide an additional
benefit to improve the financial health of the organization. The statistic indicated in the financial
report will provide us confidence in the project. It justifies the investment and returns on the
investment.

Support for the project

The financial support i.e., the equity infusion in the form of cash and kind for this project on
investments shall be received from promoters. The company shall receive equity infusion in the form
of cash or kind from any of these mentioned companies hereby for its project. The company shall take
the financial support in the form of project loan from either development bank of Ethiopia or
commercial bank of Ethiopia. In addition to our in-house team, we are also interacting with the
Ethiopian Institute of Agriculture Research to get timely support and valuable advice in this project
based on their experiences.

We are also expecting support from Agricultural office and responsible government officials for
identification of suitable land and facilitation of the documentation and import of farm machinery and
equipment, farm inputs for the success of this project. It appears to be a joint project of Wheat and
Teff production farm project and Ministry of Agriculture, Government of Ethiopia, as we need lots of
support from the Ministry of Agriculture at various level of implementation of activities in this project.
Without their help and support, it will not be possible to make this project a success.

Fixed asset (Construction schedule)

The construction project is proposed to be started on October 2021, and is expected to be finished on
Jun 2022. As seen in the abbreviated construction schedule above, a majority of the schedule’s time is
made up of five major activities; concrete, building Enclosure, masonry, mechanical and Electrical
install. Concrete activities include processes such as placing foundations and slab on deck. The
Building Enclosure Phase includes erecting the scaffolding that will allow for exterior sheathing
installation and bricklaying. Mechanical and Electrical install coincide with each other due to the need

14
for coordination between the two divisions. There are several periods of construction during the
schedule in which there are multiple construction activities occurring at the same time.

The construction site must be organized accordingly as these processes take place. As with any
construction project, the goal of the schedule will to complete all construction activities before the
required Date of completion.

This date of completion is practical based on the time of year in which the building will be completed.
The team allowed a two week contingency for any setbacks. Typically, winter construction tends to
cause unforeseen delays that negatively impact a construction project. These conditions can and will
almost undoubtedly impact the project schedule by causing unforeseen delays and project inefficiency.

Structural design

One of principle deliverables of the project is the structural design of the building. The structural bays
were coordinated with the layout of the building adjustments will be made to the bays if specific
layouts are necessary. The frame will be made up of a grid with repeating standard structural bays.
Included in the structural system are bay sizes, shape and size of structural members, floor
compositions and curtain walls. These elements were established to resist gravity ad lateral loads as
appropriate.

The gravity load design will completed for two frames; one of structural steel and one of reinforced
concrete. The structural steel frame will chose for further design based on cost per square foot, local
availability of material and constructability considerations, such as erection

Office Foundation Design

The design of a superstructure may be accurate, have considered all possibilities and still fail because
the substructure is incapable of distributing the applied loads to the supporting soil.

Foundation design takes more into consideration than merely the loading from the columns. While the
main part of the project focused on the structural frame and its alternate designs, a preliminary
foundation plan was designed based upon maximum load carried from the superstructure through the
columns. The foundation design conducted by the project team consisted of the selection of foundation

15
type, determination of the bearing capacity and the design for typical interior and exterior spread
footings.

Office Construction Plan and process:-

The construction process for this project is normally a disjointed three images development by which
the conceptualized need of the promoter of this project is translated into a functional facility that will
meet their needs in terms of time, cost and quality.

Based on a general program of the project owners the 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 the design stage after the document are produced by the designers have been received,
and the works 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 for the works. The promoter of this project intends to compare the
bids and award the contract for the lowest responsible bidder. This, is of course, presupposes that the
favorable proposal does not exceed the allocated budget.

After the award is made and the contract signed between this project owners and the contractor, the
project constructor is expected to prepare and submits a detailed construction program which includes
material schedule, manpower requirement and cash flow forecast.

Office Building Civil Works and Mixed use building has a total site area of 1174 m 2. The building floor area
has covered 74 m2 and the remaining 1100 m 2 is left for construction. The type of buildings and its
corresponding construction cost is given.

Gender Main-streaming
In this brief, we explore how global standards and guidelines to contribute gender equality and
women’s empowerment, and whether more can do through these investment improve the situation of
women in agriculture includes
 Embed gender commitments in contracts with government policies, customers and suppliers.
 Ensure female participation in community (equal to men).

16
 Women’s needs in community agreements, determined through these consultations.
 Ensure participation of women in local farmer or employee training programs.
 The knowledge will passed from participant men to non-participant women.
 Monitor gender impacts on ongoing basis. Adapt business models and plans as required to be more
inclusive and gender-sensitive, and report on progress annually.

Risk managements

Potential Risk Strategy Responsibility

Reduce Early identification. Utilize funds. Reduce draw for living. Continuously assess Uruba
Working the opportunities for doing custom work and how this might impact on farm Agricultural
Capital operations and finances. development
Reduced Financial Postpone new machinery purchases during periods of reduced income. Reduce P.L.C
Strength the outflow of capital to provide living to father and mother.
Crop price variability Work with market advisor to identify price opportunities of crop insurance.
Reduced access to key Continue developing strong relationships based on respect and information
inputs including exchange.Apply fertilizer in fall as a means of gaining fall prices with limited
capital storage costs.
Changing land use Monitor changes in regulations and work with agronomist to determine options
regulations including available for dealing with regulations impacting on fertilizer use.
fertilizer practices.

The project’s implementation is expected to take 24 months. The major activities include Bank loan
processing construction of the building, cleaning the area around the building, Procurement of
equipment’s and start rendering services. The time schedule for major activities is presented below:

Organization and management and Structure

Owners

General Manager

Administration& Chief Operating Marketing Client ServiceExecutive

Department (Front Desk Officer)
Accountant Officer:

Personnel Finance
Officers Promotion
&Property
17
Crop Cultivation
IT, Manager/Supervisor
Electricity
The organizational structure of the project is designed to include all the necessary personnel under the
right division. At the top of the organizational structure, there will be a manager with the responsibility
of supervising overall activity of the building.

Depending upon the nature of the center and the amount of work to be performed; there exist auxiliary
units under the general manager. Workers for this type of Farm are available throughout the year. No
foreseeable problems are expected as most of the work requires previous skills.Employees under each
unit will be supervised by the department head that is accountable for the general manager. General
Manager is appointed by the owners.

As clearly shown in the organizational structure, the central organization has one general manager and
three main sections. Under the general manager, there are the Marketing Department, Maintenance
and Building administration department. Under building admin dept there exist two sections i.e., HRM
& finance and general service. Further subsections are also organized under technical and maintenance
manager. The following section deals with the duties and responsibilities of each department.

A. General Manager’s Duties and Responsibilities

 He/she will plan, organize, direct and control the overall activities of the building.
 He/she will devise policies and strategies that will enable the center to be profitable.
 He/she will incorporate modern technological innovation that will facilitate the service delivery
of the building to increase customer’s satisfaction.
 He/she will plan, organize, direct and control the human and non-human resources of the
building so as to achieve the short and long run objectives of the organization.

B Administration Department

18
The building Administration Department of the multipurpose Farm has two main sections (HRM and
Finance and General Service section). It has responsibility for undertaking the following activities;

 Manage the human resources and control employee’s activity.

 Well, non-human resources of the project, which include; effective handling of the different
resources of the building, and devise strategies of controlling against fraud and damage
 Will provide the right material or inventory to the center with the right price at the right time.
 Will plan, organize direct and control the financial transaction of the building by using all the
necessary documents.
 Accountant and casher that will collect money from the customers
 Will develop sound financial control system by developing modern financial control systems.
 Will prepare the annual financial statements and prepare condensed reports for both the General
Manager and another concerned government body.
 Follow the overall status of the business and provide maintenance and repair services

C. The Marketing Department

 Will handle the overall marketing activities of the organization which includes planning,
organizing, directing, and controlling.
 Will develop the marketing strategies for future multipurpose building development
 Will develop effective customer handling strategies and execute the promotion methods.

D. Technical and maintenance manager

 Will handle the overall physical maintenance and related issues

 Will make sure electricity and back up is organized.

 Follow up security issues and educate tenants

 Works in collaboration with general service to make sure tenants are well served

1. Project Implementation schedule

SN Activities Date
1 Revision of 2nd round Preparation Project September 2021
Proposal
2 Bank loan processing October 2021
19
3 Site Development December 2021
4 Building and construction work November 2021-March, 2022
5 Land Preparation for service April, 2022
6 Service execution May, 2022
2.Finance needed for undertaking the following. Activities

SN Description of Pre-service Expenses Cost in birr

1 Project proposal 100,000
2 Licensing fee and others
3.Fixed Investment (Office Building & Construction)
Total 100,000
Description of works Total Cost in birr
S.N
1 Building construction 380,000.00
2 Site Development 150,000
3 Design and supervision 30,000
Total 560,000

S.N Owned Equipment Year quat Purchase Remark

Built Model Price
1 Pick up Vehicleswith double cup model 2014 1 500,000 Duty Free
3 GPS & Controllers 2019 1 50,000 //
4 Truck 2016 1 2,000,000 //

5 Tractor with its Case 2020 1 2,000,000 //

6 Seeding EquipMorris Drill/Conserver Pak Tank 190,000 //

7 Sprayer with full Case 2019 1 55,000 //

8 Miscellaneous Grain Handling equipment 30,000 //

TotalofEquipmentOwnedatBeginningofYear: 4,825,000

4. Farm Resource operation and Equipment

20
5. Office Equipment’s

Position No Qualification Monthly Annual salary in

SN salary in Birr Birr
1 General manager 1 BA in management 10,000 120,000
2 Admin and 1 BA in Acct/Mgt 8,000 96,000
Accountant
3 Secretary 1 10+2 in secretariat science 3,000 36,000
4 Finance head 1 BA in Accounting 6,000 72,000
5 IT Technician 1 Diploma in computer science/IT 6,000 72,000
6 Marketer 1 Diploma in marketing 5,000 60,000
7 Guards/Security 4 Basic education 2,500 30,000
8 Purchaser 1 Diploma in purchasing &Sup Mgt 3,500 42,000
9 Electrician 1 10+2 in general electricity 4,000 48,000
10 Tractor operator 1 10+2 in general mechanic 3,500 42,000
11 Casher 1 10+1 in bookkeeping 3,500 42,000
12 Cleaner 3 Unskilled 3,000 36,000
13 Driver 1 10 completed 2,500 30,000
Total 18 86,000 654,000
14 Day laborer 50 Surrounding kebele youth 24dx100x10 1,200,000
month
Sub Total 2,580,000
Benefit (20%) 17,200 516,000
Grand Total 60,500 3,096,000

6. Manpower and the Annual cost of labor

SN Description Measurement Qty Unit cost in birr Total cost in Birr

1 Managerial tables Unit 1 12,000 12,000
2 Managerial chairs Unit 1 19,000 19,000
3 Office table with chair Unit 7 16,000 16,000
4 Secretarial table with chairs Unit 1 8,500 8,500
5 Desk top Computer with chairs Unit 1 15,000 15,000
6 Shelf Unit  1 3,500 3,500
7 Filing cabinets Unit 1 1,500 1,500
8 Guest chairs Unit 1 4900 5000
9 Fax & Telephone machine Unit 1 1,300 1,300
10 Carpet and Curtain LS 15,000
(minxafi&megareja)
Total 96,800

7.Utilities

No Items Quantity Unit cost in birr Total cost in birr Time frame

21
 1 Slashing (Minxaro) 10 hectares 2,000 20,000 January

2 Bush clearing 10 hectares 10,000 100,000 January

3 1st Plough 10 hectares 5,000 50,000 March

4 2nd Plough 10 hectares 5,000 50,000 April

5 Purchase of Fertilizers For 10 hectares 6,000 60,000 April

6 Planting 10 hectares 6,000 60,000 June

7 1st Weeding 10 hectares 6,000 60,000 July

8 Top dressing(UREA) 10 hectares 1,000 10,000 July

9 2nd Weeding 10 hectares 6,000 60,000 August

10 Tinning 10 hectares 5,000 50,000 August

11 Harvesting 10 hectares 6,000 60,000 October

12 Collecting Wheat 10 hectares 10,000 100,000 October

13 Transport to Crib 10 hectares 1,000 10,000 October

14 Bagging 10 hectares 30qu/hec x200birr 60,000 November

TOTAL 750,000

8. Summary of Total initial investment cost

SN Description Cost in Birr

1 Project Implementation schedule
2 Finance needed for undertaking the following. Activities 100,000
3 Fixed Investment (Office Building & Construction) 560,000
4 Farm Resource operation and Equipment 4,825,000
5 Office Equipment’s 96,800
6 Manpower and the Annual cost of labor 3,096,000
7 Utilities 750,000
8 Total initial investment capital 9,940,800

Financial Requirement and Analysis

22
The financial resource is a prime resource for undertaking any activities. Hence for implementing this mixed
use building a total of 9,940,800ETB is required. From this 2,982,240birr will be covered by the Owners of the
project.While the rest 70% (6,958,560) will be covered through loan from bank at the prevailing interest rate.

Financial analysis.

The financial analysis of thismixed use project is based on the data presented in the previous chapters and the
following assumptions: -

Finishing period 1year

Source of finance 30 % equity
Debt finance 70 % loan
Bank interest 13%
Discount cash flow 10%
Accounts receivable 30 days
Cash in hand 5 days
Accounts payable 30 days
Repair and maintenance 5% of equipment cost

Depreciation and Amortization

The following depreciation rates are applied to depreciate the assets of the project:

 Buildings and associated Civil works linear to scrap Value

 Machinery and Equipment’s linear to scrap Value
Total Revenue
Based on the projected profit and loss statement, the project will generate a profit throughout its operation life.
Annual net profit after tax increases at the beginning of the project during the First year of operation year.

Discounted Payback Period

The payback period, also called pay–off period is defined as the period required recovering the original
investment outlay through the accumulated net cash flows earned by the project. Accordingly, based on the
projected cash flow it is estimated that the project’s initial investment will be fully recovered within 3 year.

Cash flow

The projected cash flow of the envisaged project shows that the project would generate positive net cash
flows throughout the operation years. Cumulative cash flow generated by the project towards the end of the

23
first operation year will amount to Birr 9,259,139. At the end of the project life, this amount will rise. The
detail is presented in Annex.

Benefit cost ratio

The BCR is defined as the ratio of the sum of the project’s discounted benefits to the sum of its discounted
investment and operating costs.

When BCR > 1, accept the project

When BCR < 1, reject the projectWhen BCR = 1, be indifferent

n
Bt
 (1  r ) t
t 0
BCR  n
Ct
 (1  r ) t
t 0

BCR is 5 and positive this indicates this project would return 5 birr in benefits for each birr spent.

Internal Rate of Return

The internal rate of return (IRR) is an indicator of the efficiency or quality of an investment. A project is a good
investment proposition if its IRR is greater than the rate of return that could be earned by alternate investments
or putting the money in a bank account. Accordingly, the IRR of the project after tax is computed to be 34.13%
indicating the viability of the project.

Net present value

Net present value (NPV) is defined as the total present (discounted) value of a time series of cash flows. NPV
aggregates cash flows that occur during different periods of time during the life of a project into a common
measuring unit i.e. present value. It is a standard method for using the time value of money to asses’ long-
term projects. NPV is an indicator of how much value an investment or project adds to the capital invested. In
principle a project is accepted if the NPV is non-negative. Accordingly, the net present value of the project at
10% discount rate is found to be Birrwhich is acceptable.

Progressive Check List

24
 S.N Activities Progresses
1 Application and Obtaining Tax Payer’s ID: Completed
2 Start – up Capital generation Completed
3 Development P.L.C. Business Plan: Completed
4 Leasing of farm land and preparing the farm land inclusive In Progress
5 Conducting Feasibility Studies In Progress
6 Application for business license and permit: In Progress
7 Purchase of All forms of Insurance for the Business: In Progress
8 Opening of Bank Accounts in various banks in Hadiya zone: In Progress
9 Opening Online Payment Platforms: In Progress
10 Drafting of Employee’s Handbook In Progress
11 Building/construction of office and hot house on the facility In Progress
12 Purchase of the needed farm cultivating tools, machines and equipment In Progress
13 Creating Official Website for the Company In Progress
14 Awareness Creating for the business partners In Progress
15 Arrangement Farm land Treatment, Health and Safety In Progress
16 Recruitment of employees In Progress
17 Establishing business relationship with vendors and key players (agriculture farm In Progress
produce merchants, seedling suppliers and transport hotels, restaurants

Feasibility study and Recommendations

Feasibilitystudy:-

The objective of this proposed feasibility study is primarily to facilitate the entrepreneur with investment
information and provide an overview of the project. The proposed feasibility may form the basis of an important
investment decision and in order to serve this objective, the document covers various aspects of Concept
Development, Start-up, Production, Marketing, Finance, and Business Management.

The feasibility is based on the information obtained from various agricultural sources as well as discussions
with businessmen. For financial model, since the forecast/projections relate to the future periods, actual results
are likely to differ because of the events and circumstances that don’t occur frequently as expected.

Whilst due care and attention has been taken in performing the exercise, no liability can be inferred for any
inaccuracy or omissions reported from the results thereof. It is essential that our report is read in its entirety
with the financial model in order to fully comprehend the impact of key assumptions on the range of values
determined.

The project is accessible and has the necessary infrastructure such as road, telephone, water, and electric power.

25
The proposed project clearly identifies all the necessary equipment, inputs, management of the company and the
required manpower. The highest authority in the project will be vested in the hand of the owner. He will control
the overall activities of the proposed project. Demand projection divulges that there is high demand for feed
production in the country. Accordingly, the planned project is set to provide quality products in the area.

The proposed project possesses a wide range of economic and social benefits such as increasing the level of
investment, tax revenue and employment creation for both women and youths. It will have also environmental
concerns to protect it by planting trees around its working area and by utilizing environmental friendly raw
materials. Generally, the project is technically feasible, financially and commercially viable as well as socially
and economically acceptable. Hence the project is worth implementing.

Recommendations:-

Financial sensitivity analysis shows that the project is highly sensitive to a decrease in sales revenue but
relatively less sensitive to an increase in raw material and investment costs. Therefore, it is recommended that
the company should give great attention to the possible reasons for sales reduction. In this case, different
mechanisms should be selected and implemented to increase sales. In addition to this, the company should
decrease its cost that lowers profitability. The project must utilize modern promotional styles to capture the
planned market share. To do so, it has to design an effective strategy to achieve this plan.

Although due care and diligence have been taken to compile this document, the contained information may vary
due to any change in any of the concerned factors, and the actual results may differ substantially from the
presented information. In this case, any delaying to implement the project creates some problem on its
profitability as there is always change like change in the price of services and goods, cost of raw materials,
customer’s preference and purchasing power, etc.….

So, it is recommended that investor should implement the project as soon as possible before any change
occurred

26
27