fruit based drinks
TRANSCRIPT
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Investment Office ANRS
Project Profile on the Establishmentof Fruit Based Drinks Processing
PLANT
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Table of Contents
Table of Contents.....................................................................................................2
1.Executive Summary..............................................................................................3
2.Product Description and Application.................................................................3
3.Market Study, Plant Capacity and Production Program.................................3
3.1Market Study...........................................................................................................................33.1.1Present Demand and Supply............................................................................................3
3.1.2Projected Demand............................................................................................................4
3.1.3Pricing and Distribution...................................................................................................53.2Plant Capacity.........................................................................................................................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
5.Location and Site..................................................................................................76.Technology and Engineering ..............................................................................8
6.1Production Process..................................................................................................................8
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1. Executive Summary
This profile provides basic information on the production of 3,250 tons ofFruit-Based Drinks
per annum. The total investment requirement of the project is estimated at about Birr 31.7
million; of which Birr 21 million is for machinery and equipment while Birr 4.8 million is the
cost of working capital. Based on the cash flow statement, the calculated internal rate of return
(IRR) and simple rate of return of the project are 20.1 % and 18.3 %, respectively. And the net
present value (NPV) at 18 % discounting rate is Birr 2,320 thousand. The plant is expected to
create employment opportunities for about 60 persons.
2. Product Description and Application
There are variety of fruit type from which drinks or juices can be made. The common fruits from
which fruit drinks or juices are made are orange, grapes, pineapples, mangoes, papayas and other
fruits of the citrus family. The juices or drinks are consumed usually during breakfast time or in
refreshment hours.
Processed fruits and drinks are normally made available in packed cans, bottles, plastic pouches
& cartons for commercial purposes. Fruit based drinks are basically prepared by adding water,sugar and possibly acid and flavouring agents to the fruit juice.
S C
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The volume of supply from these sources is limited. Particularly, the orange juice (note the plant
processes only orange juice) supply from Marti has been declining throughout the past ten years
while the supply of fruit based drinks from the Sabata Agro-industry is very small and its sale is
limited to Addis and the nearby towns. The third source of supply is import; which is the largest
source of fruit based drinks and juices in the country. During the last 15 years, because of the
relatively better availability of foreign exchange, imports of fruits drinks and juices have been
growing fast. Now all the so-called super-markets and even small and large grocery stores are
filled with imported fruit drinks and juices. Table 3.1 shows the past trend of imports of fruit
based drinks.
The main determining factors for the demand of fruit juices and drinks are income and
population size especially urban population. Admittedly, consumption of fruit juices and drinks
in the ANRS is confined to a small section of the urban population. However, the estimated
amount of fruit based drinks consumption in ANRS is not too small to establish a fruit based
processing plant in the region.
Table 3.1
Imports of Fruit Based DrinksYear E.C In Tons
1990 2,402
1991 2,474
1992 2,548
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- Estimated population of ANRS - 20 million
- Urban population (15%) of
CountryANRS
- Average urban population growth 5 % annum
- Average family size - 6 person /household- Potential urban consumers 10 % of the households
- Per capita consumption liter per week or 26 liter (Kg) /annum
Accordingly the projected demand is shown in Table 3.2.
TABLE 3.2
PROJECTED DEMAND FOR FRUIT BASED DRINKSYear E.C At ANRS (In Tons) At Country Level(In Tons)
2000 7800 30030
2001 8190 31532
2002 8600 33108
2003 9029 34763
2004 9481 36502
2005 9955 38327
2006 10453 40243
2007 10975 42255
2008 11524 44368
2009 12100 46586
2010 12705 48916
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based drinks; and plans to sell its products to wholesalers at Birr 10 per liter. The viable
distribution method is selling to wholesalers or authorized marketing firm which will sell to end
consumers through its chain selling to supermarkets.
3.2 Plant Capacity
The selected capacity of the plant for fruit processing and soft-drink production is medium-sized
one. An output of approximately 3,250 tons of finished juice per annum is envisaged based on
one shift operation of 275 working days in a year. The working days are set by deducting
Sundays and public holidays in a given year, and by assuming that annual maintenance works
and unexpected work interruptions take 25 days.
3.3 Production Program
As there are competing brands in the market, and the plant is new and is equipped with new
machinery, production build-up is made by starting at reduced capacity. In other words, the low
production level at the initial stage is helpful to develop substantial market outlets for the
product. Similarly, machinery operators will also get enough time to develop the required skills
and experience. For this, the plant will be operated at 60 %, 75% and 90 % of its installed
capacity in the first year, the second and the third year of operation, respectively.
4. Raw Materials and Utilities
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TABLE 4.1
RAW & AUXILARY MATERIALS REQUIREMENT
No Description Qty
Tons
Unit
Price
BirrF.C L.C Total
1 Fruits 8000 2000 - 16,000,00
0
16,000,000
2 Bottles and Cans
(No).
3,000,000 0.5 - 1,500,000 1,500,000
3 Sugar 300 7000 2,100,000 2,100,000
4 Preservatives &
Other Chemicals
1000,000 1000,000
Total 1000,000 19,600,00
0
20,600,00
The major utilities required for the plant are water and electricity. Water is used for washing the
fruits as well as for steam generation. Electric power is used as an energy source for boiler and
for driving the motors of the production machinery. The annual consumption of these utilities in
terms of quantity are 15,000m3 and 425 MWH for water and electricity, respectively. In terms of
value electricity is estimated to be Birr 233,750 where as that of water is Birr 39,750.
Table 4.2
UTILITIES REQUIREMENT
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6. Technology and Engineering
6.1 Production Process
The fruit is fed into the brush washing machine. The remaining impurities are then removed by
an air-injection washing machine. It then passes to the sorting line where damaged fruit is
eliminated. The citrus fruit is transported to the fruit extraction device, which is connected to the
oil separating device and the oil expeller device. Whole fruits are sorted according to size. Aftersorting according to size, the fruit passes in groups into the juice maker. From there the juice is
delivered by pump to the clarification device where solid impurities are removed. Mixed with
syrup, the purified fruit juice is pumped to the homogenizer. It passes through a preheated, an
aerator and a condenser and is delivered to the homogenizer by screw pump. The homogenizer
makes the micro-structure of the juice more homogeneous and improves its quality. The juice is
then delivered to the pasteurizer and pumped in. It is sterilized by being kept for a period at the
proper temperature. On leaving the pasteurizer, the juice passes either to the juice store or to the
filling and bottling section. The filling machine fills the juice into bottles, jars or plastic
containers.
Alternatively, fruit based drinks can be made using a cheaper production methods which require
a high proportion of manual work. However, it is not advisable to prepare fruit based drinks by
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TABLE 6.1
MACHINERY & EQUIPMENTS REQUIRED
Description: Quantity:
Brush-Type Fruit Washer 1
Air-Injection Fruit Washer 1
Fruit Sorting Line 1
Extraction Device 1
Oil Separation Device 1
Oil Expeller 1
Fruit Sorting Device 1
Juice Processor 2
Clarificator 2
Cleaning Device 2
Homogenizer 2
Pasteurizer 2
Process Pipeline 1 Set
Automatic Equipment 1 Set
Electric Fittings And Materials 1 Set
Special Tools 1 Set
Air Compressor 1Filler 1
Pot Manufacturing Device 1
Water Preparation Unit 1
Diesel Electric Power Station 1
Steam Boiler 1
Lathe 1
Bench Drill 1
Milling Machine 1
Bench Grinder 1
Mechanic's Tool Kit 1Electrician's Tool Kit 1
Tool Cabinet With Tools 1
Th ti t d t t l i f hi d i t i Bi 21 000 000 Of th t t l
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land lease value is about Birr 110,400 thousands; which is based on the land lease price of
Shewa-Robit for industrial purpose- which is Birr 27.60 per square meter. Of the total cost of the
lease, 5 % is paid in the beginning while the rest will be paid in 40years.
7. Human Resource and Training Requirement
7.1 Human Resource
The list of manpower requirement is shown in Table 7.1.
Table 7.1
MANPOWER REQUIREMENT
Description No. Monthly Salary
(Birr)
Annual
Salary (In Birr)
A. Administration
1. Manager 1 5000 600002.Chemical Engineer 1 3000 360003 Chemist 2 2300
55200
4. Technicians 3 2000 720005. Personnel Officer 1 2000 240006. Accountant 1 2000 240007.Seretary 1 1300 156008.Slaesman 1 1300 156009. Storekeeper 1 600 720010.Guards 4 300 14400
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7.2 Training Requirement
The plant is expected to be operated by competent and experienced production personnel. For
this purpose, appropriate training programme has to be designed and conducted for about 15
days. Training can be carried out during erection and commissioning period. Accordingly,
skilled operators, supervisors and quality control personnel will be trained, possibly by an expert
from technology supplier.
8. Financial Analysis
8.1 Underlying Assumption
The financial analysis of Fruit Based Drinks producing plant is based on the data provided in
the preceding chapters and the following assumptions.
A. Construction and Finance
Construction Period 2 Years
Source Of Finance 40% Equity and 60% Loan
Tax Holidays 2Years
Bank Interest Rate 12%
Di t F C h Fl 18%
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C. Working Capital (Minimum Days of Coverage)
Raw Material-Local 30 Days
Raw Material-Foreign 120 Days
Factory Supplies In Stock 30 Days
Spare Parts In Stock And Maintenance 30 Days
Work In Progress 10 Days
Finished Products 15 DaysAccounts Receivable 30 Days
Cash In Hand 30 Days
Accounts Payable 30 Days
8.2 Investment
The total investment cost of the project including working capital is estimated at Birr 31.7million as shown in Table 8.1 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 8.1
Total Initial Investment
Items L.C F.C Total
Land 5,520 5,520
Building and Civil Works4,000,000 4,000,000
Offi E i t
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8.3 Production Costs
The total production cost at full capacity operation is estimated at Birr 30.2 million (See Table
8.2). Raw materials and utilities account for 76.6 % or 20.9 million.
Table 8.2
PRODUCTION COST AT FULL CAPACITY
Raw Material
Requirement Cost1.Local Raw Materials 19,600,000
2.Foreign Raw Materials 1,000,000
Total Production Cost at full Capacity
Items Cost
1. Raw materials 20,600,000
2. Utilities 273,500
3. Wages and Salaries 665,280
4. Spares and Maintenance 768,166
Factory Costs 22,306,946
5. Depreciation 2,666,055
6. Financial costs2,283,627
T t l P d ti C t
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II. Breakeven Analysis
The breakeven point of the projects is given by the formula:
BEP = Fixed CostSale Variable Cost at full capacity.
The project will break even at 29.1 % of capacity utilization
III. Payback Period
Investment cost and income statement projection are used in estimating the project payback
period. The project will payback fully the initial investment less working capital in four years.
IV. Simple Rate of Return
The projects simple rate of return (SRR) is given by the formula:
SRR= (Net Profit + Interest)/ (Total Investment Outlay) at full capacity utilization.
The SRR would be 18.3 % at full capacity utilization.
V Internal Rate of Return and Net Present Value
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9. 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 Amhara National Regional State. 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 4.1 million per
year and Birr 41.4 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 17.2 million from
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
As there is no enough production of Fruit-Based Drinks in the country, the commencement of
this project relieves a portion of the import burden. That is, based on the projected figure we
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ANNEXES
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Annex 1: Total Net Working Capital Requirements (in Birr)
CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4
Capacity Utilization (%) 0 0 50% 70% 90% 100%
1. Total Inventory 0.00 0.00 2557777.26 3580888.16 4603999.07 5115554.52
Raw Materials in Stock- Total 0.00 0.00 906000.00 1268400.00 1630800.00 1812000.00
Raw Material-Local 0.00 0.00 687818.18 962945.45 1238072.73 1375636.36
Raw Material-Foreign 0.00 0.00 218181.82 305454.55 392727.27 436363.64
Factory Supplies in Stock 0.00 0.00 9388.64 13144.09 16899.55 18777.27
Spare Parts in Stock and Maintenance 0.00 0.00 32240.88 45137.23 58033.58 64481.76
Work in Progress 0.00 0.00 234715.91 328602.28 422488.65 469431.83
Finished Products 0.00 0.00 469431.83 657204.56 844977.29 938863.66
2. Accounts Receivable 0.00 0.00 1636363.64 2290909.09 2945454.55 3272727.27
3. Cash in Hand 0.00 0.00 47694.00 66771.60 85849.20 95388.00
CURRENT ASSETS 0.00 0.00 3335834.90 4670168.86 6004502.81 6671669.79
4. Current Liabilities 0.00 0.00 1636363.64 2290909.09 2945454.55 3272727.27
Accounts Payable 0.00 0.00 1636363.64 2290909.09 2945454.55 3272727.27
TOTAL NET WORKING CAPITAL REQUIRMENTS 0.00 0.00 1699471.26 2379259.76 3059048.27 3398942.52
INCREASE IN NET WORKING CAPITAL 0.00 0.00 1699471.26 679788.50 679788.50 339894.25
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Annex 1: Total Net Working Capital Requirements (in Birr) (continued)
PRODUCTION
5 6 7 8 9 10
Capacity Utilization (%) 100% 100% 100% 100% 100% 100%
1. Total Inventory 5115554.52 5115554.52 5115554.52 5115554.52 5115554.52 5115554.52
Raw Materials in Stock-Total 1812000.00 1812000.00 1812000.00 1812000.00 1812000.00 1812000.00
Raw Material-Local 1375636.36 1375636.36 1375636.36 1375636.36 1375636.36 1375636.36
Raw Material-Foreign 436363.64 436363.64 436363.64 436363.64 436363.64 436363.64
Factory Supplies in Stock 18777.27 18777.27 18777.27 18777.27 18777.27 18777.27
Spare Parts in Stock and Maintenance 64481.76 64481.76 64481.76 64481.76 64481.76 64481.76
Work in Progress 469431.83 469431.83 469431.83 469431.83 469431.83 469431.83
Finished Products 938863.66 938863.66 938863.66 938863.66 938863.66 938863.66
2. Accounts Receivable 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27
3. Cash in Hand 95388.00 95388.00 95388.00 95388.00 95388.00 95388.00
CURRENT ASSETS 6671669.79 6671669.79 6671669.79 6671669.79 6671669.79 6671669.79
4. Current Liabilities 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27
Accounts Payable 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27
TOTAL NET WORKING CAPITAL REQUIRMENTS 3398942.52 3398942.52 3398942.52 3398942.52 3398942.52 3398942.52
INCREASE IN NET WORKING CAPITAL 0.00 0.00 0.00 0.00 0.00 0.00
2
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Annex 2: Cash Flow Statement (in Birr)
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CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4
TOTAL CASH INFLOW 10343949.00 13742891.52 16636363.64 21654545.45 27654545.45 30327272.73
1. Inflow Funds 10343949.00 13742891.52 1636363.64 654545.45 654545.45 327272.73
Total Equity 4137579.60 5497156.61 0.00 0.00 0.00 0.00
Total Long Term Loan 6206369.40 8245734.91 0.00 0.00 0.00 0.00
Total Short Term Finances 0.00 0.00 1636363.64 654545.45 654545.45 327272.73
2. Inflow Operation 0.00 0.00 15000000.00 21000000.00 27000000.00 30000000.00
Sales Revenue 0.00 0.00 15000000.00 21000000.00 27000000.00 30000000.00
Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00
3. Other Income 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL CASH OUTFLOW 10343949.00 10343949.00 14699571.23 15935169.63 21585998.51 22642458.12
4. Increase In Fixed Assets 10343949.00 10343949.00 0.00 0.00 0.00 0.00
Fixed Investments 9851380.00 9851380.00 0.00 0.00 0.00 0.00
Pre-production Expenditures 492569.00 492569.00 0.00 0.00 0.00 0.00
5. Increase in Current Assets 0.00 0.00 3335834.90 1334333.96 1334333.96 667166.98
6. Operating Costs 0.00 0.00 7526596.10 10457899.10 13389202.10 14854853.60
7. Corporate Tax Paid 0.00 0.00 0.00 0.00 3008567.96 3555585.14
8. Interest Paid 0.00 0.00 3837140.23 1734252.52 1445210.43 1156168.34
9.Loan Repayments 0.00 0.00 0.00 2408684.05 2408684.05 2408684.05
10.Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00
Surplus(Deficit) 0.00 3398942.52 1936792.41 5719375.82 6068546.95 7684814.61
Cumulative Cash Balance 0.00 3398942.52 5335734.93 11055110.75 17123657.70 24808472.31
Annex 2: Cash Flow Statement (in Birr): Continued
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PRODUCTION
5 6 7 8 9 10
TOTAL CASH INFLOW 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00
1. Inflow Funds 0.00 0.00 0.00 0.00 0.00 0.00
Total Equity 0.00 0.00 0.00 0.00 0.00 0.00Total 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 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00
Sales Revenue 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00
Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00
3. Other Income 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL CASH OUTFLOW 21772961.68 21659740.50 21457411.04 18846397.52 18846397.52 18846397.52
4. 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
Pre-production Expenditures 0.00 0.00 0.00 0.00 0.00 0.00
5. Increase in Current Assets 0.00 0.00 0.00 0.00 0.00 0.00
6. Operating Costs 14854853.60 14854853.60 14854853.60 14854853.60 14854853.60 14854853.60
7. Corporate Tax Paid 3642297.76 3818118.67 3904831.29 3991543.92 3991543.92 3991543.92
8. Interest Paid 867126.26 578084.17 289042.09 0.00 0.00 0.00
9. Loan Repayments 2408684.05 2408684.05 2408684.05 0.00 0.00 0.00
10.Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00
Surplus(Deficit) 8227038.32 8340259.50 8542588.96 11153602.48 11153602.48 11153602.48
Cumulative Cash Balance 33035510.64 41375770.14 49918359.11 61071961.58 72225564.06 83379166.54
Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED
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CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4
TOTAL CASH INFLOW 0.00 0.00 15000000.00 21000000.00 27000000.00 30000000.00
1. Inflow Operation 0.00 0.00 15000000.00 21000000.00 27000000.00 30000000.00
Sales Revenue 0.00 0.00 15000000.00 21000000.00 27000000.00 30000000.00
Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00
2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL CASH OUTFLOW 10343949.00 10343949.00 9226067.36 11137687.61 14068990.61 18750332.99
3. Increase in Fixed Assets 10343949.00 10343949.00 0.00 0.00 0.00 0.00
Fixed Investments 9851380.00 9851380.00 0.00 0.00 0.00 0.00
Pre-production Expenditures 492569.00 492569.00 0.00 0.00 0.00 0.00
4. Increase in Net Working Capital 0.00 0.00 1699471.26 679788.50 679788.50 339894.25
5. Operating Costs 0.00 0.00 7526596.10 10457899.10 13389202.10 14854853.60
6. Corporate Tax Paid 0.00 0.00 0.00 0.00 0.00 3555585.14
NET CASH FLOW -10343949.00 -10343949.00 5773932.64 9862312.39 12931009.39 11249667.01
CUMMULATIVE NET CASH FLOW -10343949.00 -20687898.00 -14913965.36 -5051652.97 7879356.42 19129023.43
Net Present Value (at 18%) -10343949.00 -8766058.47 4146748.52 6002507.80 6669670.79 4917333.13
Cumulative Net present Value -10343949.00 -19110007.47 -14963258.96 -8960751.16 -2291080.37 2626252.76
Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED (Continued)PRODUCTION
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5 6 7 8 9 10
TOTAL CASH INFLOW 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00
1. Inflow Operation 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00
Sales Revenue 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00
Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00
2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL CASH OUTFLOW 18497151.37 18672972.27 18759684.90 18846397.52 18846397.52 18846397.52
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
Pre-production Expenditures 0.00 0.00 0.00 0.00 0.00 0.00
4. Increase in Net Working Capital 0.00 0.00 0.00 0.00 0.00 0.00
5. Operating Costs 14854853.60 14854853.60 14854853.60 14854853.60 14854853.60 14854853.60
6. Corporate Tax Paid 3642297.76 3818118.67 3904831.29 3991543.92 3991543.92 3991543.92
NET CASH FLOW 11502848.63 11327027.73 11240315.10 11153602.48 11153602.48 11153602.48
CUMMULATIVE NET CASH FLOW 30631872.07 41958899.80 53199214.90 64352817.38 75506419.85 86660022.33
Net Present Value (at 18%) 4261017.92 3555837.56 2990352.79 2514647.39 2131057.11 1805980.60
Cumulative Net present Value 6887270.69 10443108.24 13433461.03 15948108.42 18079165.53 19885146.14
Net Present Value (at 18%) 19,885,146.14
Internal Rate of Return 37.7%
Annex 4: NET INCOME STATEMENT ( in Birr)PRODUCTION
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1 2 3 4 5
Capacity Utilization (%) 50% 70% 90% 100% 100%
1. Total Income 15000000.00 21000000.00 27000000.00 30000000.00 30000000.00
Sales Revenue 15000000.00 21000000.00 27000000.00 30000000.00 30000000.00
Other Income 0.00 0.00 0.00 0.00 0.00
2. Less Variable Cost 7195489.50 10073685.30 12951881.10 14390979.00 14390979.00
VARIABLE MARGIN 7804510.50 10926314.70 14048118.90 15609021.00 15609021.00
(In % of Total Income) 52.03 52.03 52.03 52.03 52.03
3. Less Fixed Costs 2468134.20 2521241.40 2574348.60 2600902.20 2600902.20
OPERATIONAL MARGIN 5336376.30 8405073.30 11473770.30 13008118.80 13008118.80
(In % of Total Income) 35.58 40.02 42.50 43.36 43.36
4. Less Cost of Finance 3837140.23 1734252.52 1445210.43 1156168.34 867126.26
5. GROSS PROFIT 1499236.07 6670820.78 10028559.87 11851950.45 12140992.54
6. Income (Corporate) Tax 0.00 0.00 3008567.96 3555585.14 3642297.76
7. NET PROFIT 1499236.07 6670820.78 7019991.91 8296365.32 8498694.78
RATIOS (%)
Gross Profit/Sales 9.99% 31.77% 37.14% 39.51% 40.47%
Net Profit After Tax/Sales 9.99% 31.77% 26.00% 27.65% 28.33%
Return on Investment 23.84% 36.44% 35.65% 39.24% 38.88%
Return on Equity 15.56% 69.24% 72.86% 86.11% 88.21%
Annex 4: NET INCOME STATEMENT (in Birr):ContinuedPRODUCTION
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6 7 8 9 10
Capacity Utilization (%) 100% 100% 100% 100% 100%
1. Total Income 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00
Sales Revenue 30000000.00 30000000.00 30000000.00 30000000.00 30000000.00
Other Income 0.00 0.00 0.00 0.00 0.00
2. Less Variable Cost 14390979.00 14390979.00 14390979.00 14390979.00 14390979.00
VARIABLE MARGIN 15609021.00 15609021.00 15609021.00 15609021.00 15609021.00
(In % of Total Income) 52.03 52.03 52.03 52.03 52.03
3. Less Fixed Costs 2303874.60 2303874.60 2303874.60 2303874.60 2303874.60
OPERATIONAL MARGIN 13305146.40 13305146.40 13305146.40 13305146.40 13305146.40
(In % of Total Income) 44.35 44.35 44.35 44.35 44.35
4. Less Cost of Finance 578084.17 289042.09 0.00 0.00 0.00
5. GROSS PROFIT 12727062.22 13016104.31 13305146.40 13305146.40 13305146.40
6. Income (Corporate) Tax 3818118.67 3904831.29 3991543.92 3991543.92 3991543.92
7. NET PROFIT 8908943.56 9111273.02 9313602.48 9313602.48 9313602.48
RATIOS (%)
Gross Profit/Sales 42.42% 43.39% 44.35% 44.35% 44.35%
Net Profit After Tax/Sales 29.70% 30.37% 31.05% 31.05% 31.05%Return on Investment 39.39% 39.03% 38.67% 38.67% 38.67%
Return on Equity 92.47% 94.57% 96.67% 96.67% 96.67%
Annex 5: Projected Balance Sheet (in Birr)
CONSTRUCTION PRODUCTION
Year 1 Year 2 1 2 3 4
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TOTAL ASSETS 10343949.00 24086840.52 27222440.23 32139122.41 37404975.72 43619929.71
1. Total Current Assets 0.00 3398942.52 8671569.83 15725279.61 23128160.52 31480142.11
Inventory on Materials and Supplies 0.00 0.00 947629.52 1326681.32 1705733.13 1895259.03
Work in Progress 0.00 0.00 234715.91 328602.28 422488.65 469431.83
Finished Products in Stock 0.00 0.00 469431.83 657204.56 844977.29 938863.66
Accounts Receivable 0.00 0.00 1636363.64 2290909.09 2945454.55 3272727.27Cash in Hand 0.00 0.00 47694.00 66771.60 85849.20 95388.00
Cash Surplus, Finance Available 0.00 3398942.52 5335734.93 11055110.75 17123657.70 24808472.31
Securities 0.00 0.00 0.00 0.00 0.00 0.00
2. Total Fixed Assets, Net of Depreciation 10343949.00 20687898.00 18550870.40 16413842.80 14276815.20 12139787.60
Fixed Investment 0.00 9851380.00 19702760.00 19702760.00 19702760.00 19702760.00
Construction in Progress 9851380.00 9851380.00 0.00 0.00 0.00 0.00
Pre-Production Expenditure 492569.00 985138.00 985138.00 985138.00 985138.00 985138.00
Less Accumulated Depreciation 0.00 0.00 2137027.60 4274055.20 6411082.80 8548110.40
3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00
4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL LIABILITIES 10343949.00 24086840.52 27222440.23 32139122.41 37404975.72 43619929.71
5. Total Current Liabilities 0.00 0.00 1636363.64 2290909.09 2945454.55 3272727.27Accounts Payable 0.00 0.00 1636363.64 2290909.09 2945454.55 3272727.27
Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00
6. Total Long-term Debt 6206369.40 14452104.31 14452104.31 12043420.26 9634736.21 7226052.16
Loan A 6206369.40 14452104.31 14452104.31 12043420.26 9634736.21 7226052.16
Loan B 0.00 0.00 0.00 0.00 0.00 0.00
7. Total Equity Capital 4137579.60 9634736.21 9634736.21 9634736.21 9634736.21 9634736.21
Ordinary Capital 4137579.60 9634736.21 9634736.21 9634736.21 9634736.21 9634736.21
Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00
Subsidies 0.00 0.00 0.00 0.00 0.00 0.00
8. Reserves, Retained Profits BroughtForward 0.00 0.00 0.00 1499236.07 8170056.85 15190048.75
9.Net Profit After Tax 0.00 0.00 1499236.07 6670820.78 7019991.91 8296365.32
Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00
Retained Profits 0.00 0.00 1499236.07 6670820.78 7019991.91 8296365.32
Annex 5: Projected Balance Sheet (in Birr): Continued
PRODUCTION
5 6 7 8 9 10
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TOTAL ASSETS 49709940.43 56210199.94 62912788.90 72226391.38 81539993.86 90853596.33
1. Total Current Assets 39707180.43 48047439.94 56590028.90 67743631.38 78897233.86 90050836.33
Inventory on Materials and Supplies 1895259.03 1895259.03 1895259.03 1895259.03 1895259.03 1895259.03
Work in Progress 469431.83 469431.83 469431.83 469431.83 469431.83 469431.83
Finished Products in Stock 938863.66 938863.66 938863.66 938863.66 938863.66 938863.66
Accounts Receivable 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27Cash in Hand 95388.00 95388.00 95388.00 95388.00 95388.00 95388.00
Cash Surplus, Finance Available 33035510.64 41375770.14 49918359.11 61071961.58 72225564.06 83379166.54
Securities 0.00 0.00 0.00 0.00 0.00 0.00
2. Total Fixed Assets, Net of Depreciation 10002760.00 8162760.00 6322760.00 4482760.00 2642760.00 802760.00
Fixed Investment 19702760.00 19702760.00 19702760.00 19702760.00 19702760.00 19702760.00
Construction in Progress 0.00 0.00 0.00 0.00 0.00 0.00
Pre-Production Expenditure 985138.00 985138.00 985138.00 985138.00 985138.00 985138.00
Less Accumulated Depreciation 10685138.00 12525138.00 14365138.00 16205138.00 18045138.00 19885138.00
3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00
4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL LIABILITIES 49709940.43 56210199.94 62912788.90 72226391.38 81539993.86 90853596.33
5. Total Current Liabilities 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27Accounts Payable 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27 3272727.27
Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00
6. Total Long-term Debt 4817368.10 2408684.05 0.00 0.00 0.00 0.00
Loan A 4817368.10 2408684.05 0.00 0.00 0.00 0.00
Loan B 0.00 0.00 0.00 0.00 0.00 0.00
7. Total Equity Capital 9634736.21 9634736.21 9634736.21 9634736.21 9634736.21 9634736.21
Ordinary Capital 9634736.21 9634736.21 9634736.21 9634736.21 9634736.21 9634736.21
Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00
Subsidies 0.00 0.00 0.00 0.00 0.00 0.00
8. Reserves, Retained Profits BroughtForward 23486414.07 31985108.85 40894052.40 50005325.42 59318927.90 68632530.37
9. Net Profit After Tax 8498694.78 8908943.56 9111273.02 9313602.48 9313602.48 9313602.48
Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00
Retained Profits 8498694.78 8908943.56 9111273.02 9313602.48 9313602.48 9313602.48
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