Vision

WUBNESH HABTU GEBRU pasta,macaroni and related product factory visions

is to be well know manufacture of high quality pasta and macaroni with related
products in Ethiopia at 2030 G.C

MISSION

Our mission is to establish large scale pasta,macaroni and similar products

production factory to minimize the products demand shortage in Ethiopia, and
contribute for foreign countries like Sudan,Eritrea,South Sudan and Djibuti
international markets from our total products with in 50%.

OBJECTIVE

The major objective this project wil be establish pasta and macaroni factory at a
production capacity of 2,750,000 kg per year.
 Excutive summary

Pasta products were first introduce in Italy in the 13 th century efficient

manufacturing equipment and high quality ingredients have been available only
since the 20th century. Pasta and macaroni products are becoming popular in
current lifestyle. The product of our company will be sold to whole
sellers ,retailers, and households consumers for people. Pasta products are
produced by mixing milled wheat, water , eggs and sometimes optional
ingredients.

Our plant capacity of the pasta macaroni and related products recommended to
have a production capacity of 10,000 kg in a day or 2,750,000 kg per year at 275
working days with in two shifts and at 8 working hours. Machines for pasta,
macaroni and other related products are Mixer, Extruder, Dryier, and Automatic
packing machine.

The total land area designated for the factory buildings is about 10,000m2 which
will be obtained from Debark city administration industry and investment office
through long term lease contractual base.

The project will provide 100 employees, 100 permanent (87 skilled & 13
unskilled) and 80 casual skilled and unskilled workers.

The net present value of this project is recommended. Because the NPV is positive
i.e. 496834171 and profit index is 5.542025 and also the rate on investment is 32%
 Introduction

Pasta products were first introduce in Italy in the 13 th century efficient

manufacturing equipment and high quality ingredients have been available only
since the 20th century. prior to the industry revolution most pasta products were
made by hand in small shops. Today most pasta is manufactured by continous high
capacity extruder which operate on the auger extrusion principle in which kneading
and extrusion are performed in a single operation. the manufacture of pasta pasta
includes dry macaroni, noodle, and spaghetti production. pasta product contains
milled wheat water, and occationally ingredients like eggs. Pasta manufacturers
typically use milled durum wheat in pasta production although farina and flour
from common wheat are occasionally used. Most pasta manufactures prefer
semolina, which consists fine particles of uniform size and produces the highest
quality pasta product.

The water used in pasta production should be pure free from offlavors and suitable
for drinking. Also ,since pasta is produced below pasteurization temperatures water
should be used of low bacterial count. Eggs are added to pasta to make egg noodles
or egg speggati and to improve the nutritional quality and richness of the pasta.
small amounts of optional ingredients such as salt, celery,garlic,and bay leafs may
also added to pasta enhance flavor. Disodium phosphate may be used to shorten
cooking time. Other ingredients such as gum gluten, glycerylmonostreate and egg
whites may also added. All optional ingredients must be clearly labeled on the
package.

According to the report prepared by the international pasta organization (IPO),in

2016 over 14 million tones of pasta was produced around the world. Huge amount
of this production are covered by Italy, Turkey, Brazil, Russia and US. According
to this report, Italy ranks first in production sequence with 3 million 324 thousand
636 tones.

Pasta and macaroni production is an industry branch with a high demand in the
food sector many years. The main factor in high demand are associated with the
availability of psta in every culture easy of access and cooking nourishment and
cheapness. Pasta enriched with sauces prepared with different ingredients is
accepted as an important nutrient in every area of food consumption from houses
to luxury restaurants. Pasta industry which has a growing market has an investment
worth of trading volume and capacity.

MARKETING STUDY

Past supply and present demand

Currently the demand for pasta and macaroni is gaining immense popularity in
Ethiopia, particularly amongst the younger population due to expansion in food
service restaurants. the primary factor catalyzing the grouth of the both product
market include rising urbanization, changing lifstyles and surging demand for
ready to eat products. In addition to this the healthy conscious consumers are
demanding food products with healthier ingredients which has led to a rise in the
demand for pasta made with whole wheat and quinoa. Some of the other forces that
have been proactive in maintaining the market growth are longer shelf life and ease
of preparation. highly rated for its nutritional value pasta and macaroni are an ideal
meal for people who are paying more attention to their dietary intake. In addition
people are finding less time to prepare meals and pasta is easily made. The demand
for pasta and macaroni is met though both domestic productions and import.pasta
and maccaroni producing firms in Ethiopia are about 10 in number.

Table 1 domestic production of pasta and macaroni (tons)

Year Domestic production

2001/2 23,258
2002/3 30,239
2003/4 36,208
2004/5 40,258
2005/6 35,372
2006/7 38,908
2007/8 37,079
2008/9 28,151
2009/10 43,691
Source:CSA large and medium scale manufacturing and electricity industries
survey various issues.
 Above table reveals that the patern of production of pasta and macaroni in
Ethiopia is marked by three phases. A consistent growth trend is observed in the
first phase i.e.2001/2004/2005. The production level which was 23,218 tons in the
year 2001/2has increased to 40,218 tons by the year 2004/5 registering an annual
average growth rate of about 20%. During the second phase (2005/6-2008/9)
production has gone down to a minimum level of 28,151 tons with a mean figure
of 34,877 tons. A huge increase of domestic production was again registered in the
last and recent year of 2009/10 which amounts to 43,691 tons. The fluctuation in
the domestic production of pasta and macaroni is believed to be as a result of the
availability of the main raw materials i.e. wheat. Since the supply of wheat is
improved in the recent years at a minimum domestic production assumed to remain
at the lvel which was attained in the year 2009/10. Accordingly ,the current
domestic production of pasta and macaroni is estimated at 44,000 tons.

Table 2 IMPORT OF PASTA AND MACCARONI (tons)

Year Import
2001 1326
2002 832
2003 1232
2004 1514
2005
2006 3854
2007 2781
2008 3158
2009 5655
Source :Ethiopia Revenue and Customs Authority

As we can be observed from above table imports of pasta and macaroni is

characterized by fluctuation during 2001-2007. However, the import has registered
a consistent growth starting 2008. Hence the recent years import is found to be
better in estimating the 2012 import level. Accordingly the average of last three
years import i.e.12,663 tons has been takes an estimate of 2012 import. when
added to the domestic supply, aggregate supply will thus be about 56,663 tons. this
figure has been taken as the present effective demand for pasta and macaroni.
 DEMAND PROJECTION

The demand for pasta and macaroni is dependent on size of urban population and
per capita income growth. Since both are increasing the resulting effect will be a
multiplicative. Therefore, the demand for pasta and macaroni is projected at a
growth rate of 4%. Domestic production is assumed to remain at the 2009/10 level.

Table3 PROJECTED DEMAND ,DOMESTIC SUPPLY AND

UNSATISFIED DEMAND FOR PASTA AND MACCARONI(TON)

Year Total projected Domestic supply Unsatisfied

demand demand
2013 58930 44000 -14930
2014 61287 44000 -17287
2015 63738 44000 -19738
2016 66288 44000 -22288
2017 68939 44000 -24939
2018 71697 44000 -27697
2019 74565 44000 -30565
2020 77547 44000 -33547
2021 80649 44000 -36649
2022 83875 44000 -39875
2023 87230 44000 -43230
2024 90719 44000 46719
2025 94348 44000 -50348
2026 98122 44000 -54122
2027 102047 44000 -58047
2028 106129 44000 -62129
2029 110374 44000 -66374
2030 114789 44000 -80789

Marketing areas and channel of the product

The product of our company will be sold to whole sellers ,retailers,and households
consumers for people live in

 Amhara region
 All Ethiopia regions and
 Foreign country like Sudan, South Sudan, Eretrea and Dgibouti

Key Competitors
It is no secret that the pasta and macaroni market has no more comptetive.
Small number of factories exists in Ethiopia. Pasta and macaroni suppliers
are offer imported and domestically produced products for all Ethiopian
markets. But ,because of high demand pasta and macaroni in the market all
competitors would be not be cover or meet consumption need of all
customers which has been shown in the above market studies of this study.
Distribution Strategy
The factory should be sell its products to near by shops, or transport its
products throughout Ethiopia market and foreign market by using its own
transportation . the project planned to be use modern technology like
production ,packaging ,storage ,and suitable transportations as a mean to
penetrate market, in addition to applying cost reduction mechanisms to be
competitive in the market. The market arrangement is concerning selling
chain with buyers there is direct sell to wholesalers.
Our pricing strategies
Our pasta and macaroni factory have perfected our plans to charge
competitive rates since we have minimial overhead compared to our
competition in the industry. We will ensure that we leverage on price to win
over customers ,our price will be affordable negotiable. The fact that our
business door is open to both individuals and corporation organizations
means that we will have different price range for different category of
clients. as the business grows we will continue to review our pricing system
to accommodate a wide range of clients.

Table 4 Average Sales Prices Of Proposed Product

 Types of product Unit price (birr)
Macaroni
Macaroni 5kg packed 400
Macaroni 10kg packed 800
Macaroni 20kg packed 1600
Macaroni 25kg packed 2000
Pasta
Pasta 0.5 kg packed 50
Pasta 10 piece per carton 400

Product description and application

Pasta and macaroni products are becoming popular in current lifestyle because
they are healthy, testy and convenient for transportation and preparation. pastas
and macaroni in general are considered to have low glycerin indexes and
correspondingly produce low postprandial blood glucose and insulin responses.
pasta refers to the staple food of traditional Italian cuisine made using dough,water,
eggs, vegetables, and oil. the dough is kneaded into various shapes some of which
are known as penne, spaghetti, farfalle, fetuccin ,barbine etc.pasta is associated
with several health benefits owing to high concentration of vitamins and minirals.

Macaroni is dry pasta shaped like narrow tubes. made with durum
wheat ,macaroni is commonly cut in short lengths curved macaroni may be refered
to as elbow macaroni.some home machines can make macaroni shapes but like
most pasta,macaroni usually made commercially by large scale extrusion. The
curved shape is created by different speeds of extrusion on opposite sides the pasta
tube as it comes out of the machine. The popularity of macaroni can be attributed
to its sensory ,appeal,versatility,low cost ,ease of preparation,nutritional content
and excellent storage stability as well as increased consumer interest in ethnic
foods.

Varieties of pasta
Different types of pasta categorized according to their shapes and size

1.long and medium length pasta

Spaghetti

Spaghetti is the plural form of the Italian term sphagetto, derived from spago
means thin string. it is long and thin type of pasta,made of semolina or flour and
water.sphagetti is one of the most commonly used pasta in the world.according to
some theories spaghetti was originated in china and was imported to vanice by
marco polo a popular travler. these long thin and round shaped noodles are
commonly served with a wide range of sauces, vegetable, meats and exotic sauces
like marinara sauce.carbonara is one of the most famous dishes made of spaghetti
pasta.

Bucatini

This pasta is thicner version of spaghetti with a hole running through the
middle.the shape of this pasta is like thinner version of straw.the name of this pasta
is derived from the Italian word buco or bucatto meaning hole or pierced .it was
originated in the Italian rigion of Naples,Liguria and Lazio.bucatini is served with
savoury food items like pancetta ,curved meat ,chease eggs, anchovious and
sardines.the best way to have bucatini is to blend it with a buttery sauce.

Pappardelle

is large ,very broad, flat pasta noodles originated from the centeral southern region
of Tuscany in Italy.this ribbon shapedpasta is cut into very broad strips.the freshly
made are 2-3 centimetres wide and have fluted edges.the dried ones have straight
sides.papardelle is among the type of pasta that taste best with a wide range of
sauces,from meat to shelfish to vegetables,like artichokes,fava beans and
prosciutto.

Fettuccini

This super popular pasta is mostly used in rome.it is along flat,ribbon like pasta
with decent thickner usually measured 10 inches long and quarterth of an inch
wide.the best recipe of fettucinni includes cherry tomatoes,bell peppers and creamy
alfredo sauce.
 Tonnarelli

Tonnarelli is known as the roman version of spaghetti allachitara from the abruzzo
region you can use the same fresh pasta dough recipe roll the dough sheet about the
same thickness and cut the pasta dough using a tool with strings called a chitarra.

You can also use a straight rolling pin for cutting the dough,and it will pretty much
give you the same results.so tonnarelli and spaghetti allachitara are the same pasta
only with dissimilar names depending on where you are

2.Short cut pasta

Farfalle

Is commonly known as bow tie bow tie pasta or butterfly pasta.the name is derived
from the itallian word farfalle meaning butterflies.this type of pasta dates back to
the 16th century in in the Lombardy region of northern itally.it commonly used in
dishes with light sauces or salads.

Penne

The penne pasta originated in 19 th when a pasta maker from san marino de
albaro,Giovanni batista capuro made iton certain demand.it is small cylenderical
shaped pasta which is cut into a pen shape without crushing it.penne pasta is one of
the ten most popular types of pasta in the world.it is often stuffed with various
fillings and served in tomato or cream sauce.

Maccharoni

Also known as maccaroni, it is perhaps one of the most popular pasta styles in the
world.it originated in northern and central itally and is shaped like a small,slightly
curved tubular shaped that make it very flexible to use.Maccaronni is commonly
used in baked pasta dishes,soups,or tossed with cheese.

3.Pasta with filling

Ravioli
This uber popular pasta was originated in in the Lombardy region in rome.the
shape of the ravioli is square with ruffled edges.it is often stuffed with various
filling like meat,cheese, vegetables and seafoods.

Tortillini

It is ring shaped pasta also described as navel shaped.therefore it is also called as

navel button pasta.it is often stuffed with a combination of meat or cheese.

Lumache

It is small snail shaped pasta shells with one closed end to hold the sauce
better.they find their roots in sicily and are usually enjoyed with slightly
heavier,chunkier sauces.

Mezzelune

Is also known as half moon pasta.it is stuffed with bitto cheese ,eggs,milk,and
white pepper.

4.Soup pasta

Ditalini

Originally hailing from naples means smaal thimbles.it is cut into tubes that are
similar to the size of kernel of corn and it is also called short macaroni due to its
smaller size.Ditallini is usually served with ricotta cheese or broccoli and is best
for use in soups.

Pastina

Means tiny dough in English. Also known by the name Acini Di Pepe.this type of
pasta is so small that is look like tinny grains. it takes around 4to 9 minutes to cook
this pasta. pastini is commonly used in soups, salads.

Nutritional value of pasta

Pasta is rich in nutrition and per 100gram

Content Gram(g)
Calorie 19627
Moisture 77.04
Protein 7.19
Total fat 1.15
Ash 0.33
Carbohydrate 38
Fibre 2.2
Sugar 0.69
Sucrose 0.11
Glucose 0.05
Fructose 0.04
Maltose 0.5
Starch 32.5
Calcium 9m
Iron 1.59m
Magnesium 2m
Phosphorous 72m
Potassium 55m
Zinc 1m
Copper 0.63m
Manganese 0.399m
Selenium 32.7micro
Fluoride 8.7micro

Production process

Pasta products are produced by mixing milled wheat, water ,eggs and sometimes
optional ingredients. these ingredients are typically added to continous, high
capacity auger extruder which can be equipped with a variety of dies that
determines the shape of the pasta. the pasta is then dried and packed for market.

Manufacturing process of pasta and maccaroni

1.Mixing

In the mixing operation water is added to the milled wheat in a mixing trough to
produce dough with a moisture content of approximately 31 percent. eggs and anny
optional ingredients are may be added. most modern pasta presses are equipped
with a vaccum chamber to remove air bubbles from the pasta before extruding.if
the air is not removed prior to extruding small bubbles will form in the pasta which
diminish the mechanical strength and give the finished product a white,chalky
appearance.

2.Extruding

After the dough is mixed it is transferred to the extruder. The extrusion auger not
only forces the dough through the die but it also kneads the dough into a
homogenous mass, control the rate of production and influences the over all quality
of the finished product. although constraction and dimension of extrusion augers
vary by equipment manufacturers, most modern presses have sharp edged augers
that have a uniform pitch over theire entire length. The auger fits into a grooved
extrusion barrel which helps the dough move forward and reduces friction between
the auger the inside of the barrel. Extrusion barrels are equipped with water
cooling jacket to dissipate the heat generated during the extrusion process. The
cooling jacket also helps to maintain a constant extrusion temprarure, which should
be approximately 51 degree centigrade.

Drying

Is the most difficult and critical step to control in the pasta production process. The
67,441,057 objective of drying is to the lower the temperature of moisture content
of the pasta from approximately 31 percent to 12 to 13 percent so that the finished
product will be hard ,retain its shape, and store without spoiling. Most pasta drying
operation uses a preliminary drier immediately after extrusion to prevent the pasta
from sticking together . pre-drying hardens the outside surface of the pasta while
keeping the inside soft and plastic . a final drier is then used to remove most of the
moisture from the product.

Packing

Packing keeps the product free from contamination ,protect the pasta from damage
duringshipment and storage and displays the product favorable . the principal
packaging materials for noodles is the cellophane bag, which provides moisture
proof protection for the product and is used easily an automatic packaging
machine. Many manufacturers utilize boxes instead of bags to package pasta
because boxes are easy to stack,provide good protection for fragile pasta products
and offer the opportunity to print advertising that is easier to read than on bags.

Manufacturing process of pasta and macaroni

mixing extruding drying packing

 Semolina
 Water
 Salt
 Other ingredient

PLANT CAPACITY
Our plant capacity of the pasta macaroni and related products recommended to
have a production capacity of 10,000 kg in a day or 2,750,000 kg per year at 275
working days with in two shifts and at 8 working hours.

The following tables showing general assumption used to determain production.

Table 5

Description Amount
Working days per annum 275
Number of shifts 2
Working hours per shift 8
Macaroni
Theoretical production capacity of macaroni machine in kg per hour 312
Theoretical production capacity of macaroni machine in kg per shift 2,500
Theoretical production capacity of macaroni machine in kg per day 5,000
Theoretical production capacity of macaroni machine in kg per year 1,375,000
Pasta and pastini
Theoretical production capacity of macaroni machine in kg per hour 312
Theoretical production capacity of macaroni machine in kg per shift 2,500
Theoretical production capacity of macaroni machine in kg per day 5,000
Theoretical production capacity of macaroni machine in kg per year 1,350,000
Theoretical production capacity of all machine in kg per day 10,000
Theoretical production capacity of all machine in kg per year 2,750,000
 Table 6 Assumptions used to determine products production

Products Units size Share of Total

percentage production kg
production per day
Macaroni
Macaroni 5 kg Kg 5 30% 1,500
Macaroni 10 kg Kg 10 30% 1,500
Macaroni 20 kg Kg 20 20% 1,000
Macaroni 25 kg Kg 25 20% 1,000
Total production 100% 5,000
Pasta and pastini
Pasta 0.5kg Kg 0.5 50% 2,500
Pasta 10 piece per carton carton 10 50% 2,500
Total production 100% 5,000
Total production of all 10,000
products

Production program

Our factory will start its operation at 80% of its capacity and progressively it will
grow and reach at full capacity operation at third year and then after.
 Table 7 Production programmed at different capacity utilization rate

Descripti Forcasted production in each plan year

on
Initial 2024 2025 2026 2027 2028
estimate
d
producti
on per
year
Capacity 80% 90% 100% 100% 100%
utilization
Macaron
i
Macaroni 412,000 329,000 370,000 412,000 412,000 412,000
5kg
packed
Macaroni 412,000 329,000 370,000 412,000 412,000 412,000
10kg
packed
Macaroni 275,000 484,000 544,000 275,000 275,000 275,000
20kg
packed
Macaroni 275,000 220,000 247,500 275,000 275,000 275,000
25kg
packed
Sub total 1,375,00 1,099,200 1,236,600 1,374,000 1,374,000 1,374,000
0
Pasta
and
pastini
Pasta 687,500 550,000 618,750 687,500 687,500 687,500
0.5kg
Pasta 10 687,500 550,000 618,750 687,500 687,500 687,500
piece per
carton
Sub total 1,375,00 1,100,000 1,237,500 1,375,000 1,375,000 1,375,000
0
Total
production of
2,750,00 2,199,200 2,475,000 2,750,000 2,750,000 2,750,000
all product 0
 Material and inputs

Pasta products contain milled wheat ,water,and occasionally eggs or optional

ingredient. Pasta manufacturer typically use milled durum wheat(semolina durum
granular,and durum flour) in pasta production,although farina and flour from
common wheat are occasionally used.most pasta manufacturers prefer semolina
which consists of fine particle of uniform size and produces the highest quality of
pasta product.the water used in pasta production should be pore,free from
offlavors,and suitable for drinking. Also,since pasta is produced below
pasteurization temperatures ,water should be used low bacterial count.eggs are
added to pasta to make egg noodles or egg spagehetti and to improve the
nutritional quality and richness of the pasta.small amounts of optional ingredients
such as salt celery garlic,and bay leafs may also added to pasta to enhance
flavor.disodium phosphate may be used to shorten cooking time.other ingredients
such as gun gluten,glycerylmonostreate and eggs white may also be added. All
optional ingredients must be clearly labeled on the package.
 Table 8 Auxiliary materials are shown below

Description Units Mix rate Required Unit Annual

per 1 kg amount cost(birr) raw
product per year material
cost(birr)
Raw
material
for
macaroni
Wheat flour Kg 0.67 921,250 60 55,275,000
Salt Kg 0.03 41,250 17 701,250
Potable Kg 0.3 412,500 15 6,187,500
water
Raw
material
for pasta
Wheat flour Kg 0.67 921,250 60 55,275,000
Salt Kg 0.03 41,250 17 701,250
Potable Kg 0.3 412,500 15 6,187,500
water
Total 124,327,500

Utility

The major utilities required by the plant are electricity,water,lubricants and others
are below table.

Table 9

Descripti Measurme Qty/ Total Qty Unit Cost(bir

on nt quintal pro.quintal/ye used/ye price(bir r)
ar ar r)
Electricit Kwh 13 60,500 786,500 7 5505500
y
Water Liter 30 60,500 181500 0.8 1452000
0
Total 6957500
 TECHNOLOGY AND ENGINEERING

Source of technology

Those machineries can be imported from Italy,and China countries as per the
factory production plan and plant capacity. Domestic pasta and macaroni and
related product processing machine suppliers are located in Addis Ababa.

Machinery and Equipments

Machines for pasta, macaroni and other related products are

 Mixer
 Extruder
 Dryier as well as cooler
 Automatic packing machine
Assumption of costs of machinery and equipment

Description QTY Total amount in birr

Fully automatic and complete pasta 1 24,740,000
macaroni machine
Generator 1 1,000,000
Isuzu FSR 2 8,000,000
Total 33,740,000
 Table 10 Furniture and equipment

Description Measurement Quantity Cost/unit(birr) Total

Tables Number 7 5000 35,000
Chairs Number 13 1200 15,600
Shelf Number 3 10,000 30,000
Cabinets Number 3 8000 24,000
Desktop Number 4 20,000 80,000
computer
Printer Number 2 10,000 20,000
Cash register Number 1 6000 6000
machine
Projector Number 1 19,000 19,000
Hand tools Number 28 175 4,900
Safety Number 200 800 160,000
equipmets
Office Piece,realm,packet 40 400 16,000
supply
Total 409,900

CONSTRUCTION AND FACILITY ARRANGMENT STUDY

Debark city is located in amhara national regional state,North Gondar zone
at a distance of 830km from Addis Ababa,and 103 km from historical city of
Gondar. The head office of the company will be in Debark where it runs
and manages its business.
LAND
The total land area designated for the factory buildings is about 10,000m2
which will be obtained from Debark city administration industry and
investment office through long term lease contractual base.
Table 11 space requirement

Description Dimension Area

Factory building 128m*48m 6,144m2
Ware house for raw material 50m*24m 1,200m2
Ware house for product 50m*20m 1000m2
0ffice building 15m*15m 225m2
Cafeteria,clinic,toilate,access road and walk 1431m2
way, fence and others
Total 10,000m2
Building and facility constraction

The building and construction cost is estimated based on built up areas and
rates for various catagories of structures. The factory building and stores
shall be built with local materials. The minimum requirements of civil works
considered for production stated below.
Table 12 Estimation cost of buildings and civil works

Description Cost(birr)
Factory building 3,200,000
Warehouse for raw material 600,000
Ware house for product 600,000
Office building 500,000
Cafeteria,clinic,toilate,access road and walk way, 1,200,000
fence and others
Total 5,020,000

HUMAN RESOURCES STUDY

The organizational structure of the project is designed by including all
the necessary personal under the right division. At the top of the
organizational structure, there will be a general manager with the
responsibility of supervising the overall activity of plant or factory.
Depending up on the nature of the center and the amount of work to
be performs under each will be supervised by the unit head that is
accountability for general manager.

General manager

production and quality head administration,marketing head

quality personel,guard,sales
operator
controller person etc

Management
As to the management of the project is concerned the owner will be
responsible for the overall project planning, co-ordination and
implementation. After project implementation the promoter serves as a top
management body and frequently visits and supervises the organization. The
owner will employee by pasta and macaroni factory long year experience in
managing business activities. Therefore, the extensive experience he has
enables him to organize and properly manage the envisaged pasta macaroni
and related product factory.
Manpower Requirement
For smooth and efficient operation of the organization, it has been
anticipated that each units will have adequate number of qualified and
experienced manpower. The labor component of the pasta macaroni factory
G/manager will hire qualified and experienced in management
whose main responsibility is to coordinate the overall activity of the project.
 The distinct units have their own operational teams under them. To fill in all
these work units with the required manpower. The project will provide 100
employees, 100 permanent (87 skilled & 13 unskilled) and 80 casual
skilled and unskilled workers. For smooth operation of the project,
employees will be given on job training, clear duties and responsibilities
under the direct supervision of their respective units.

Table 13 Manpower Requirement

Description Annual
S/n Qualification No. Monthly
of Job Salary(Br)
General BSc in chemical
1 1 10000 120,000
Manager engineer,related field
BSc in
Product
2 food,chemical,industrial 1 9000 108,000
manager
engineer
Quality Chemistry,biology,food
1 5 5,000 300,000
control science
2 mechanic Diploma in mechanics 7 3,000 252,000
3 chemist Degree in chemistry 7 3,000 252,000
4 operator Degree mechanical engineer 6 3,500 252,000
5 Product clerk Any field 34 2,000 816,000
Marketing
6 Degree in marketing 1 7,000 84,000
manager
7 Purchaser Degree in purchasing 7 3,000 252,000
9 Sales person Degree in business 7 3,000 252,000
Degree in
Finance
10 accounting,economics,relate 1 7,000 84,000
manager
d field
Degree in accounting,related
11 Accountant 6 3,000 216,000
field
12 Driver Any driving lissence 2 2,000 48,000
13 Cashier Diploma any field 7 2,500 210,000
14 Guard Any militant certificate 8 2,000 192,000
Sub Total 100 3,438,000
15
16 Employee
687,600
benefit(20%)
 Total 4,125,600
17

Table 14 Estimated cost of repair and maintenance

Description Value (birr) Rate Cost (birr)

Machinery 25,740,000 3% 772,000
Vehicle 8,000,000 5% 400,000
Building 5,020,000 1% 50,200
Office furniture 409,900 1% 4,099
Total 39,169,900 1,226,299

Table 15 Estimated cost of depreciation and amortaization

Description Value Rate Costs(birr)
Machinery 25,740,000 5% 1,287,000
Vehicle 8,000,000 10% 800,000
Building 5,020,000 5% 251,000
Office furniture 409,900 5% 20,495
Total 39,169,900 2,358,495

Estimated cost of insurance assumed to be 0.8% of fixed capital

investment cost it will be 313,359

Table 16 Summary of Operational cost

Description Annual Cost(birr)
Raw material cost 124,327,500
Salary and wage 3,438,000
Employee benefit 687,600
Repair and maintenance 641,599
 Insurance 173,599.2

Electric consumption 5,505,500

Water consumption 1,452,000
Total 135,584,199

INVESTMENT OUTLAY AND FUND ALLOCATION

The project will be financed by 30%(20,232,317.1) owns capital contribution and

remain 70%(47,208,739.9) by bank loan and the total capital investment is
67,441,057

Table 17

Description Birr
Fixed capital 39,169,900
Working capital 28,271,157
Total 67,441,057

Loan Repayment Schedule

Assume installment period 10 years

Interest rate 12%

Table 18

Year Principal Interest Year ending

Repayment Payment Balance

0 47,208,740
1 4720874 5665048.8 42,487,866
2 4720874 5098543.92 37,766,992
3 4720874 4532039.04 33,046,118
4 4720874 3965534.16 28,325,244
5 4720874 3399029.28 23,604,370
6 4720874 2832524.4 18,883,496
 7 4720874 2266019.52 14,162,622
8 4720874 1699514.64 9,441,748
9 4720874 1133009.76 4,720,874
10 4720874 566504.88 0
Total 47208740 31157768.4

Estimation of total sales

Table 19
type of unit price quan.produc 2024 2025 2026 2027 2028
product t
Macaroni
5kg 400 412,000 26,368,000 29,664,000 32960000 32960000 32960000
10kg 800 412,000 26,368,000 29664000 32960000 32960000 32960000
20kg 1600 275,000 17,600,000 19800000 22000000 22000000 22000000
25kg 2000 275,000 17,600,000 19800000 22000000 22000000 22000000
sub total
Pasta
0.5kg 50 687,500 27,500,000 30937500 34375000 34375000 34375000
10 pieces 400 687,500 27,500,000 30937500 34375000 34375000 34375000
142,936,00 160,803,000 17867000 17867000 178670000
0 0 0

Operational cost estimation

Table 20
operational cost
description 2024 2025 2,026 2027 2028
Raw matrial 99462000 111894750 124,327,500 124,327,500 124,327,500
cost
Salary and 2750400 3094200 3,438,000 3,438,000 3,438,000
wage
Employee 550080 618840 687,600 687,600 687,600
benefit
Repair and 513279.2 577439.1 641,599 641,599 641,599
maintenanc
e
insurance 138879.2 156239.1 173,599 173,599 173,599
fee
Electric 4404400 4954950 5,505,500 5,505,500 5,505,500
consumptio
n
Water 1161600 1306800 1,452,000 1,452,000 1,452,000
consumptio
n
Total 10846735 122025779. 135,584,199 135,584,199 135,584,199
9 1

Profit/loss statement

Table 21
income statement
from year 2024-2028
Description 2024 2025 2026 2027 2028
Sales 142,936,00 160,803,00 178670000 178670000 178670000
0 0
operating cost 108467359 122025779 135,584,19 135,584,19 135,584,19
9 9 9
gross profit 34,468,641 38,777,221 43,085,801 43,085,801 43,085,801
depreciation 2,358,495 2,358,495 2,358,495 2,358,495 2,358,495
profit before tax and 32,110,146 36,418,726 40,727,306 40,727,306 40,727,306
charge
Interest 5665048.8 5098543.9 4532039.04 3965534.16 3399029.2
2 8
profit before tax 26,445,097 31,320,182 36,195,267 36,761,772 37,328,277
35% tax 9255784.0 10962063. 12668343.4 12668343.4 12668343.
2 7 4 4 4
net profit 17,189,313 20,358,118 23,526,924 24,093,428 24,659,933

Cash flow statement

Table 22
 cash flow statement
for year 2024-2028
Description 0 2024 2025 2026 2027 2028
cash inflow
Equity 20,232,317.10
Loan 47,208,739.9
0
Revenue 142,936,00 160,803,00 178670000 178670000 178670000
0 0
Depreciation 2,358,495 2,358,495 2,358,495 2,358,495 2,358,495
total inflow 67,441,057.00 145,294,49 163,161,49 181,028,49 181,028,49 181,028,49
5 5 5 5 5
cash outflow
fixed asset 39,169,900
working capital 28,271,157 22616925. 22616925. 28,271,157 28,271,157 28,271,157
6 6
Loan Repayment 4720874 4720874 4720874 4720874 4720874
total 67,441,057 27337799. 27337799. 32,992,031 32,992,031 32,992,031
cashoutflow 6 6
net cashflow 117,956,69 135,823,69 148,036,46 148,036,46 148,036,46
5 5 4 4 4
cumulative cashflow 117,956,69 253,780,39 401,816,85 549,853,31 697,889,78
5 1 5 9 3

Balance sheet
balance sheet
description 0
A.ASSETS
fixed assets
Building 5,020,000
Vehicle 8,000,000
office 409,900
furniture
Machinery 25,740,000
total fixed 39,169,900
asset
 Inventory 28,271,157
total asset 67,441,057
liability
Loan 47,208,739.90
Capital 20,232,317.10
total 67,441,057.00

Net present value

interest rate 12%
Year 0 1 2 3 4 5
Cashinflow 67,441,057.0 145,294,49 163,161,49 181,028,49 181,028,49 181,028,49
0 5 5 5 5 5
Cashoutflow 67,441,057 27337799.6 27337799.6 32,992,031 32,992,031 32,992,031
discount rate 1 0.89 0.8 0.71 0.636 0.567
pv cashinflow 67441057 129312100. 130529196 128530231. 115134123 102643157
6 5
pv cashoutflow 67441057 24330641.6 21870239.6 23424342.0 20982931. 18706481.
4 8 1 7 6
total pv cash 673589864
inflow
total pv cashout 176755694
flow
NPV 496834171

Rate on investment(ROI)=(net profit/total capital investment)*100% assume the

average net profit of 5 conscuative years

=(21,965,543/67,441,057)*100*=32%

Profit index=sum of cash inflow/sum of cash outflow

=851,541,475/851,541,475

=5.542025

PBP=2 years
1. Economic and Social Benefit and Justification

Based on the foregoing presentation and analysis, we can learn that the proposed
project possesses wide range of benefits that complement the financial feasibility
obtained earlier. In general the envisaged project promotes the socio-economic
goals and objectives stated in the strategic plan of the ETHIOPIA. These benefits
are listed as follows
 A. Profit Generation

The project is found to be financially viable and earns on average a profit of Birr
23,526,924 million per year within the project life. Such result induces the project
promoters to reinvest the profit which, therefore, increases the investment
magnitude in the region as well as the country.

B. Tax Revenue

In the project life under consideration, the region will collect about Birr
12668343.44 millionfrom corporate tax payment alone (i.e. excluding income tax,
sales tax and VAT). Such result create additional fund for the regional government
that will be used in expanding social and other basic services in the region.

C. Import Substitution and Foreign Exchange Saving

The commencement of this project relieves a portion of the import burden. That is,
based on the projected figure we learn that in the project life an estimated amount
of US Dollar will be saved as a result of the proposed project. This will create
room for the saved hard currency to be allocated on other vital and strategic
sectors.and export our product to get dollar currency.
 D. Employment and Income Generation

The proposed project is expected to create employment opportunity to several

citizens of the country. That is, it will provide permanent employment to 100
professionals as well as support stuffs. Consequently the project creates income of
birr per year. This would be one of the commendable accomplishments of the
project.

E. Pro Environment Project

The proposed production process is environment friendly.