Mohammed Edrs

Table of Contents
1. Executive Summary..........................................................................................................................2
2. Introduction.....................................................................................................................................3
3. Project Rational................................................................................................................................6
3.1 Project Description.........................................................................................................................7
3.2 Background of Project Promoter..............................................................................................7
3.3 Business Purposes of the Company-...............................................................................................8
4. Market Study....................................................................................................................................9
4.1 Past Supply and Present Demand for Flour..................................................................................10
4.2 Projected Demand for Flour.........................................................................................................11
4.3 Demand – Supply Gap Analysis....................................................................................................12
4.3.1Currently Flour Factory operated on Motta Town..................................................................12
4.4. Price Analysis...............................................................................................................................13
4.5 Marketing Strategy.......................................................................................................................13
4.6 Market share of the project.........................................................................................................13
5. Technical Study..............................................................................................................................14
5.1 Location........................................................................................................................................14
5.2 Physical Layout.............................................................................................................................14
5.3 Raw Materials for flour production..............................................................................................15
5.4. Utilities........................................................................................................................................15
5.5. Marketing Plan............................................................................................................................16
5.6. Production Capacity of the Factory to Be Establish.....................................................................16
5.7 Machinery....................................................................................................................................16
5.8 Production Process.................................................................................................................17
5.9. Source of Technology..................................................................................................................18
6. Man power and Management........................................................................................................19
6.1. The management team...............................................................................................................19
7. Financial Analysis............................................................................................................................21
7.1. Investment costs and financial structure.....................................................................................21
7.2 Assumptions used in the projection...........................................................................................21
8. SWOT Analysis................................................................................................................................29
9. Economic Benefits and Environmental Impact...............................................................................29
10. Conclusion and Recommendation..............................................................................................30
10.1 Conclusion..................................................................................................................................30
10.2 Recommendation...........................................................................................................................30

1. Executive Summary
This feasibility study is prepared to assess the marketability, technical feasibility and
financial viability of Flour production line projects to be undertaken by project promoter.

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The objective of the study is to determine the viability of the projects. Hence, a detailed
market, technical, organizational and financial study is conducted in this feasibility study.

Flour is important item of bakery industry. They have now become a common item of
consumption among all classes of people. They are highly nutritious easy to digest can be
preserved for a long time. It is evident that Flour is used by all sections of people across
the broad round the year. They are, thus, mass consumption items with number of
varieties.

So far, the demand for flour has been met for specific area through supply from area and
local production. During the past ten recent years, from 2010 through 2020, the largest
portion of consumption of these products are met through local production. The market
study revealed that the total unsatisfied demand for flour is ranges from 14,851 to 134,212
tons during the year 2020 – 2025.

The total investment cost of the project is calculated to be Birr 32.8 million, out of which
Birr 15.3 million (47%) will be covered by the promoter as part of his equity contribution,
while the remaining balance amounting to Birr 17.5 million (53%) will be covered by bank
which is repayable within five years at equal quarterly repayments.

The projected profit and loss statement indicates that the project is profitable throughout
the project period. At the initial year of operation, the project will generate a net profit of
26 million and reaches to 36 million at the end of the project life.

The projected cash flow statement indicates that at the initial year of operation the
cumulative net cash balance would be Birr 25.9million. This is expected to reach to Birr
34.4 million at the end of year five. This shows that the company will have a healthy
liquidity position and will not face cash shortage throughout the project life.

The discounted cash flow also shows a net present value of Birr 115 million at 18%
discounted factor. The financial internal rate of return computed based on the discounted
cash flow is 83% on total investment. This rate is much higher than the prevailing cost of
capital and shows viability of the project.
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In general, market and financial appraisal of the project indicates that the project has
ample market potential and it is financially viable and profitable and will not face cash
shortage to service its loan. Thus it is worth implementing

2. Introduction
Ethiopia has recorded a sustainable economic growth with double digits for the past eight
consecutive years. Different international studies like World Bank and IMF proved that
Ethiopian GDP growth significantly outperformed the world average and sub-Saharan
Africa’s average in the past years, and is likely to continue in the years to come. The
government’s commitment to develop the country’s economy with supportive state
policies and strategies as well as political stability have contributed for the impressive
growth in new investments and corresponding economic growth of the country.
The overall macroeconomic policy adapted by the government of Ethiopia, which allows a
free market economy, has initiated many individuals who are able and willing to invest in
various business ventures. Besides, commitment of the government for the development
as reflected by the continuous effort to expand infrastructural facilitates in the country led
to ever-growing investment activities in every sector of the economy.

The industry sector as a whole is amongst the economic sectors of the economy that are
benefiting from the prevailing conducive economic policy. Apparently, the industry sector
is an essential contributor in the process of economic development of the country. There
are a number of industrial establishments in the country which are producing various
types of goods.

So far, the industrial sector in Ethiopia has been characterized by a low level of
development, even by the standards of many least developed countries. For instance, the
sector has contributed an average of only 13.2% to the GDP in comparison with agriculture
and service sectors’ average contribution of 45.9% and 41.7% to the GDP, respectively
during 2003/04 – 2010/11. However, in the upcoming five years Growth and
Transformation Plan /GTP/ of the Government, the industrial sector is designed to play a
leading role in the economy of the country.

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In the GTP, industrial growth will be given particular focus to speed up the sustainability
of growth and transformation. Industrial expansion will be promoted based on both
export oriented and import substituting industries. It is expected to grow at a faster rate
than other sectors. According to the five years GTP (2010/11 – 2014/15), the industry
sector is planned to have an average growth rate of 21.4% which is more than double from
the base year of 2009/10 and an average contribution of 16.9% to the GDP. This indicates
that how the government of the country has given due emphasis for the industrial sector to
lead the country’s economy and achieve Millennium Development Goals which in turn
leads to high demand for industrial manufacturing activities like food processing projects.

The food processing industry is the dominant group among the 15 groups of large and
medium-scale manufacturing industries in Ethiopia in terms of product varieties, number
of establishments, gross value of production and value-added at market prices. It is among
the oldest of Ethiopia’s manufacturing industries. Bakeries, grain and oil mills were in
operation as early as 1906 and the first food factory, Kality, was established in 1938.

The food processing industries mainly consist of meat, fruits & vegetables processing,
flour mills, macaroni, spaghetti, bakery, etc. which is one of the fastest growing industries
amid growing population and urbanization. As per the Central Statistics Authority (CSA)
report of 2010/11, the food processing industries contribute about 40% of the gross value
of production realized by manufacturing sector as a whole. Out of a total number of 2,170
operating industrial enterprises reported by the Central Statistics Authority of Ethiopia
(CSA: 2010/11), about 603 are in the food sectors. Generally, the food industry operates at
a small-scale level -mainly on manufacturing of grain mill products, macaroni and
spaghetti products, bakery products, and prepared foods. The average annual compound
rate of growth recorded in food-manufacturing over the recent past five years was about
18% per CSA report of 2010/11. The pasta and macaroni production subsector is one of the
booming subsectors of the food processing industry. According to the CSA data, this sector
has achieved a production value of Birr 0.6 million in the year 2010/11. Moreover, this
subsector grew by an average rate 17% over the past ten years (from 2001/02 through
2010/11).

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Macaroni and spaghetti production are one of the major activities carried out under the
food processing sector. It is carried out by a number of firms. Among these, Dire Daw
Food Complex, Kokeb Flour & Pasta Factory, Kality Food Share Company, etc. are the
major ones. According to CSA report of 2010/11 macaroni and spaghetti production has,
on average, been grown by 14% over the past ten consecutive years. This remarkable
growth rate is mainly achieved as a result of ever-increasing demand for the products in
the market which in turn resulted in attracting a large number of firms with increased
production capacity. Considering the untapped market potential as well as government’s
attractive incentives and conducive economic environment, project promoter is decided to
commit its resources by investing in modern flour mill manufacturing plant in Motta
town. To smoothly undertake these projects, the promoter needs financial support from
Banks.
3. Project Rational
Manufacturing sector is the top priority areas of the government under its Growth and
Transformation Plan. In this strategic plan, the government has a plan to transfer the
economy from agricultural-led economy to industrial-led economy in which a backward
and forward integration linkage between agriculture and industry will be created. Food
processing in general flour manufacturing in particular are one the industries given top
priority by the government in its GTP. This is mainly because of the fact that food
processing has a direct linkage with agro-processing, has great capacity to reduce poverty,
and contribute for hard currency saving by substituting import.
It is evident that as a convenient and preservative food, flour, biscuits, pasta and macaroni
are highly demanded by urban society. In this regard, the country has great market
potential with more than 15 million urban populations with growth rate of 4.4% per
annum.

In addition to strategic importance of the products and wide market potential, the subject
project will get a great advantage in easily accessing the basic raw material, dry wheat, as
it is to be established in the main wheat producing area. There is a flour mill plant with
production capacity of 36 ton per day is to be established. The dry wheat is expected to
feed the required raw material for flour production line. The location of the project is also
ideal in that basic infrastructures are available and it is near to potentially growing market
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areas. There will be significant economic and social benefits resulting from expanded
production and sales of flour products such as;
 Employment Creation: the expansion of labor intensive industries like this
contributes to the reduction of unemployment in the country.
 Contributes to the economic growth
 Technology and knowhow transfer: there will be technology and knowhow transfer
that enhances production and productivity in the manufacturing industries.
 Generates revenue to the government in the form of taxes and profit to the owners.

3.1 Project Description

Flour is a food item, which is finely ground meal of cereals such as wheat, maize, sorghum,
rice, etc. obtained by milling and blending various streams of different quality. It mainly
contains endosperm and certain quantity of beam. Wheat flour on average contains from 14%
to 16.5% moisture. Based on its baking quality and other quality indices such as gluten quality
and content, colour, moisture content, granular size of particles and others, flour is divided
into different grades.
The basic application of flour is for bread making, cakes and biscuits, and porridge at
household level. Semolina, a product obtained by milling extra hard (durum) wheat, is also
used in pasta and macaroni making.
3.2 Background of Project Promoter

Previous experience of the project promoter Ato Mohammed Endris and his spouse W/ro
Sofia Ismael both of them live in Saudi Arabia for 20 years while foreign country Ato
Mohammed was working as Sales Manager in food industry and his spouse at the same
company served as salesperson then before 7 years both of them turned back to home land
(Ethiopia), started business in Addis Ababa by purchasing one shop in Merkato central
market with purchased cost of Birr 5million and parallel purchased multipurpose house (G+3)
plot 460 m2 in Addis Ababa City Administration, Gullel Sub city. Then the promoters (Ato
Mohammed Endris and his spouse W/ro Sofia Ismael) were decided to invest at their birth
place Motta town accordingly roughly before 5 years they were requested land for flour factory
upon their requested Motta town Administration. The town administration taken in to account
their motivation and eager for investment in their birth place approved investment land of
10,257m2 after acquired the land the promoter was built warehouse, office and others.
Currently the promoter has been trying to realize the intend project via alternative source of
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finance and since existing (trade of construction materials) business demand high financial
source. We intend to request the bank’s to bridge our financial gap considering our main
objective to invest in our birth place, profitability of the project, job creation of the project for
local community, relationship we have with your bank’s and previous experience we have
inline if the project.
Hopefully existing retails trade of construction n materials is feeding the intend to be establish
the flour factory.

Requested Credit: -.
Project financing of Birr 17,447,500 for the purchase of flour milling machine, motor
vehicles, generator and working capital for 5 years with quarterly repayment.
S/N. Cost Items Owner Equity Bank loan Total Cost
Financial Source 15,347,618 17,447,500 32,795,118
% 47% 53% 100%
Purpose of the Loan: For establishment of wheat Flour milling
Line of Business: Promoter of the business is licensed to establish in flour mills
Collateral: The requested project financing granted against the project i.e. existing
warehouse plot area 10,257 m2 with built area of 950 m2 halls and 250 m2 (1,200
m) and machinery and vehicles to be purchased.
3.3 Business Purposes of the Company-
Mohammed Endris is established with a view to undertake the following main business
activities.
 To engage in food complex industry with startup flour mills
 To engage in Industry, agro-industry, livestock and abattoirs construction.
 To engage Construction and equipment and machinery rental
 To engage in Various social sectors
 To carry out all other activities related to the above businesses.

4. Market Study
According to reports of the ministry of industry, the main cereals produced and consumed
in Ethiopia are wheat, barley, teff, maize, oats, Zengada, and Mashella. Among these,
wheat is the main input for food processing industry; as the result there is a high level of

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shortage in the domestic production. In the year 2005 E.C there were 381 medium and
large food processing firms, out of which 275 simply add value on the cereals, 86 are flour
factories, 180 are bakeries, and 9 are producers of pasta and macaroni. On top of these,
there are also numbers of biscuit producers which are substituting the imported items.
Comparing the value of production of Egypt, having equivalent population with Ethiopia,
in the year 2005 E.C Egypt produces in the aforementioned industry worth of USD 900
million. This is more than 75% of the food processing industry production of Ethiopia.
Comparing the per person consumption with that of the same country, Egypt’s average
individual consumption is 21 Kg per year which is more than 14 fold from the case of
Ethiopia. To reach to the level of Egypt’s current consumption our production should
increase 93% per year till 2019 G.C.
On the other hand, due to the rapid growth of the number of population and the life style
of city dwellers, the demand for processed food is increasing from time to time.
Assuming the sole consumers of processed food like pasta, macaroni, biscuit, bread and
other flour products are urban dwellers and under normal circumstances an individual
should consume 21 Kg of these products per year. Moreover, the per capita consumption
increases 2% per year and urban population grows at an average rate of 3% per year.
Using the data of Central Statistics Agency population report of the year 2016 as a base
year, the demand for such products is projected for the coming 10 years as follows:

Average Per Quantity

Urban
Year (G.C) Capita Consumption Demanded
Population (B)
(in Kg) (A) (in Ton) (A*B)
2009 21.00 11,862,821.00 249,119,241.00
2010 21.42 12,218,705.63 261,724,674.59
2011 21.85 12,585,266.80 274,967,943.13
2012 22.29 12,962,824.80 288,881,321.05
2013 22.73 13,351,709.55 303,498,715.90
2014 23.19 13,752,260.83 318,855,750.92
2015 23.65 14,164,828.66 334,989,851.92
2016 24.12 14,589,773.52 351,940,338.42
2018 24.60 15,027,466.72 369,748,519.55
2019 25.10 15,478,290.73 388,457,794.64
Projection of Demand for Flour and Related Processed Food based on population size of the year 2019
Data Source: Central Statistics Agency, 2019

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4.1 Past Supply and Present Demand for Flour

The demand for composite flour constitutes a very small proportion of the total supply for
flour. Therefore, a sound basis for estimating the demand for composite flour would be
analyzing the supply and demand for flour in general.
The domestic production of flour during a ten years period of time is shown
Domestic Production of Flour (Tonnes)
Year Wheat Flour Other Flour Fafa, Edget & Dube Total
2009 115,968 1558 9711 167,237
2010 121,160 - 3215 124,375
2011 140,499 - 4704 145,203
2012 105,157 344 4684 110,185
2013 167526 344 6183 170,453
2014 195437 1147 9983 206,567
2015 165345 274 11693 177,312
2016 142541 891 9216 152,648
2018 136669 881 13848 151,398
2019 155692 293 18481 174,466
Source: CSA, Report of the survey of Manufacturing & Electricity Industries.
A glance at above table easily reveals that the commercial production of flour in Ethiopia is
marked by a general growth trend. The highest level of production, i.e. about 206,567 tones,
was attained in year 2011. The Average level of domestic supply during the most recent three
years covered by the data set (2016-2019) was about 160,000 tones; and this amount is
considered to approximate the present local supply of commercial flour.
Apart from local production, the country also imports considerable quantity of flour from
European and Asian countries. The import data of flour is shown in Table.
Import of Flour (2009-2019)
Year Import (Tones)
2009 1,523
2010 588
2011 186
2012 7,300
2013 10,686
2014 23,059
2015 60,995
2016 13,757
2018 122,365
2019 19,662
Import of flour is also characterized by a general growth trend, though fluctuation is observed
year to year. The import registered in the year 2019, i.e, about 122,365 tonnes, could be
considered as a record figure. The import of year 2016 (about 61,995 tonnes) was also high,
though it was about half of what was imported in 2018. Taking the average of the past five
years (2016-2018) as a point of departure, one can conclude that the present supply of flour

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originating from overseas is in the order of 48,000 tonnes. When added to the domestic
supply, aggregate supply, or apparent consumption would thus be about 208,000 tonnes.
Assuming that the market for flour is competitive, the apparent consumption or supply
pattern is used as a proxy measure of demand; and, hence, the above figure is considered as a
fair approximation of present effective demand for commercial flour.
As mentioned earlier, composite flour, however, constitutes a small fraction of the total flour
demand. According to knowledgeable opinion, the magnitude of demand for composite flour
could not exceed 5% of the total flour demand. .
4.2 Projected Demand for Flour
Flour demand in general and composite flour demand in particular, is mainly determined by
the growth rate of population and the per capita consumption of flour.
The apparent consumption of flour had not however, exhibited a discernible growth trend in
the past as the data in tables clearly show. The demand for composite flour, too, could not be
expected to grow at a high rate since the population’s food habit for this product is still
rudimentary. Therefore, a modest growth rate 3%, which is close to the population growth
rate, is used to project future demand for composite flour and the result is shown in Table.
Projected Demand for Composite Flour
Year Projected Demand (tonnes)
2020 210,000
2021 220,300
2022 240,600
2023 250,900
2024 311,255
2025 321,600
2026 331,940
4.3 Demand – Supply Gap Analysis
The market prospect for wheat flour in Ethiopia is explained through the demand and
supply gap analyzed and projected over the coming 7 years. The detail is presented in the
table as follows.
Projection of Demand - Supply Gap

Projected Demand Projected Supply in Demand - Supply

Year in Tons Tones Gap in Tones
2020 210,000 129,924 80,076
2021 220,300 144,436 75,864
2022 240,600 160,588 80,012
2023 250,900 178,565 72,335
2024 311,255 198,573 112,682
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2025 321,600 220,843 100,757

2026 331,940 245,628 86,312
The above table shows that the total demand for flour will be expected to grow from
210,000 tons to 331,940 tons and the total supply of flours are also projected to grow up
to a maximum of 331,940 tons, respectively in 2026. The demand supply gap of the
products shows an increasing trend from year to year as tabulated above which indicates
the existence of wide market potential.
4.3.1Currently Flour Factory operated on Motta Town
Specification Average Selling Price of Capacity per
flour per kg in Birr day
wheat flour machinery country origin china 26 36tons

4.4. Price Analysis

The current price of flour at Amhara regional State, East Gojjam Motta town is Birr 2,685
per quintal. For this project, Factory price of Birr 2,570 per quintal is proposed since
project location at Amhara regional State, the idea location on the way of Motta town to
Bahir Dar town and also on the way of raw materials especial wheat supply to central
market i.e. East and West Gojjam Zone. Flour is an industrial as well as a consumer
product. Bakeries and pastries could be supplied directly at factory gate or through
intermediaries. Households could be supplied through retailers as well as with
distribution centers to be established by the new project itself.
4.5 Marketing Strategy
The promoter’s sales plan is to seek business that will advance the projects quest to
become a stronger force in the food processing industries mainly consists of Flour Mills,
pasta and Macaroni factories. In order to capitalize on sales opportunities, the project will
require an effective promotional campaign. This will be accomplished through television,
radio, and magazine advertisements, as well as posters on billboards throughout the
country. By aggressively seeking new customers the project will expand and be able to
compete with the leading companies in the industry. The promoter plans to employ a
direct sales force, relationship selling, and subcontractors to reach out wide market areas.
These channels are most appropriate because time to market, reduced capital
requirements, and fast access to established distribution channels.

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In addition to these the promoter will sell the projects output at factory gate for customer
who would like to purchase at small or large quantities. The project promoter will also
participate in different trade shows so as to easily penetrate the market by demonstrating
and showing his quality product among competitors.

4.6 Market share of the project

As we have states in this feasibility study, the total production capacity of the envisaged
factory is about 10,800 tons at full capacity per annum. Based on this capacity our
maximum market share would be about 5% of the total market share. This imply that from
total demand 210,000 tons of flour in 2020/21 the proje8ct will be produce 10,800 tons
which equal to 10,800tons/210,000tons = 5%

5. Technical Study
5.1 Location
The project is located in Amhara Regional State, East Gojjam Zone, and Motta town. The
project site is 377 km far from Addis Ababa. The proximity of the project to infrastructure
as well as market is attractive. There is a convenient asphalt road from Motta town to
Bahir Dar town.
The site is supplied with infrastructure like electricity, water and suitable road
accessibility. This area is already identified as one of the major industrial zone by the
government and promoter of the project was acquired working area and also ready for
operation. It is chosen by the promoters by making co mparison analysis between the costs
and benefits to be gained by taking in to account:
 Availability of cheap labor force.
 Accessibility of raw materials.
 Its proximity to the main market for northern Market.
This space is used for the followings:
S/N Type of rooms Unit Required areas (M2)
1 Production Halls, Storage and tool shop M2 950
2 Office, security, carteen, powerstation & toilet M2 250
4 Parking open space and Green area M2 9,057
Total area 10,257

5.2 Physical Layout

The building consists of production hall, workshop, cafeteria, raw material store,
administrative building and finished product store. The factory’s buildings are constructed by
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incorporating the standard of Ministry of Heath that meets hygienic standard of consumable
products. The physical layout takes into account the layout of machinery for flour production.
It is studied and designed by professionals.
Since establishment of the business, the promoter has made different investments activities
within the existing premises. The investment outlay is reached to more than Birr 33 million.
All of this investment expenditure is covered by the promoter’s own sources. This indicates
that how the promoter has a strong commitment to buildup and develop its business venture.
The following table shows the major investments made so far.
Investments made so far

Description Invested Amount

Building and civil work 10,112,375
Total 10,112,375

5.3 Raw Materials for flour production

The principal raw materials required by the plant are mainly dry wheat and water. The other
auxiliary inputs printed polypropylene. The main raw materials i.e. dry wheat is available
mainly in both Gojjam Zone and other part of the country. The annual cost and quantity
requirement of auxiliary materials at full capacity utilization are given in the following table.
Raw materials and Input Cost at Full Capacity
Annual requirement Total Cost of Raw
S.N Description Unit Unit cost in Birr
at full capacity Material at full capacity
1 Dry Wheat Quintal 108,000 1,400 151,200,000
Polypropylene Bag and other materials required will be 3% of dry
2 4,536,000.00
wheat cost
Total 155,736,000
5.4. Utilities
The major utilities required by the plant are electricity, water and lubricants. The estimated
annual requirement at full production capacity of the plant and the corresponding cost are
given in below table.
Annual Utilities Requirement& Estimated Cost
S/N Description Unit of Measure Qty. Unit price Cost ('000 Birr)
(Birr)
1. Electricity kWh 890,000 0.8736 777,504

2. Water m3 9,000 3.5 31,500

3. Oil and lubricants Kg 549.8 20 10996

Total 820

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5.5. Marketing Plan

The company is proposed from the total production of the products 100% will be used for local
market.

5.6. Production Capacity of the Factory to Be Establish

The plant will start operation at 75% of its installed capacity during the first year, and will
increase production to 85% in the second year, and will increase production to 95% in the third
year and then to 100% in the four year and then after. The proposed production programme is given
in table.
Description Full Capacity Year 1 Year 2 Year 3 Year 4 Year 5
Production Rate 100% 75% 85% 95% 100% 100%
Total raw material in 108,000 81,000 91,800 102,600 108,000 108,000
quantity
Total Purchasing cost 151,200,000 113,400,000 128,520,000 143,640,000 151,200,000 151,200,000
Total Other cost 4,536,000 3,402,000 3,855,600 4,309,200 4,536,000 4,536,000
Total cost 155,736,000 116,802,000 132,375,600 147,949,200 155,736,000 155,736,000

5.7 Machinery
The machineries full capacity of the project is 360 quintals per day of flour. The machinery and
equipment of production sections are indicated in the following table below. The total cost of machinery
is estimated to be Birr 5.2 million.
Breakdown of Machinery and Equipment Cost
S/N Description Qty. Total cost
in Birr
1 Screw conveyor for wheat 3 180,697
2 Separator 1 610,520
3 Weigher 4 85,523
4 Oieur cylinder for wheat 1 402,090
5 Scourer 2 191,570
6 Bucket elevator for wheat 6 118,425
7 Roller mill 6 774,852
8 Plansifter 2 513,165
9 Purifier 1 684,240
10 Bran finisher 2 273,675
11 Flour cyclone with airlock 14 146,924
12 Flour filter 4 196,060
13 Detacher 10 88,424
14 Pneumatic Conveyor 2 478,517
15 Screw conveyor for flour and bran 4 68,415
16 Bucket elevator for flour 2 68,415
17 Pneumatic duct, set 1 68,490
FOB Price - 4,950,000
Freight, Insurance, Bank charges and - 247,500
Inland transport
Total - 5,197,500
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Motor Vehicles
The promoter will purchase three trucks (1 NPR ISUZU, 1FSR ISUZU) that will be used in transporting
inputs (raw materials) and also finished product to the customers and 1MINIBUS and Hilux pick up for
transport service of employees and project promoter specifically the Hilux pick up will be more demand
for the project follow up since residence location of the project promoter is in Addis Ababa and project
location will 360 km from Addis Ababa. The total estimated cost of vehicles is Birr 6.6million. The
details of the costs of vehicles are shown in below table.
Particular Quantity Unit Price Total Price
ISUZU NPR 1 1,200,000 1,200,000
ISUZU FSR 1 1,800,000 1,800,000
MINIBUS 1 1,200,000 1,200,000
Hilux pick up 1 2,200,000 2,200,000
Total cost of vehicles 6,400,000
Generator
Particular Capacity Country Quantity Unit Price Total Price
Generator 250 KWa Japan 1 850,000 850,000

5.8 Production Process

The production process of wheat flour consists of four major operations:-
- Wheat Intake and Pre-Cleaning
- Wheat Cleaning and preparation
- Milling
- Packing and Dispatching
Wheat Intake and Pre-cleaning:- The major unit operations are dumping, conveying,
weighing, pre-cleaning and conveying to storage silos or transferring to the working bins of the
cleaning room.
Wheat Cleaning and Preparation: - The main unit operations involved is weighing,
screening, destoning, impurity separation, ferromagnetic separation, scouring, aspiration,
dampening, tempering and entoleting.
Milling: - Major operations involved are weighing, breaking open, scalping, scratching,
detaching, sifting, purifying, milling (grounding), resifting and entoleting.
Packing and Dispatching: - The major operations involved are collection of flour streams
and bran, mixing and aerating, resifting, entoleting, packing, sewing, loading and dispatching.
The process does not release any pollutant to the environment.
5.9. Source of Technology
The technology of flour milling will be imported from China. One address of the machinery
supplier is given below.

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SHIJIAZHUANGHONGDEFAMACHINERYCO.,LTD
ADD:SHIJIAZHUANG,HEBEI,CHINAMOBILE:0086-13831107932
EMAIL:[email protected] WWW.hongdefa.co.za Shijiazhuang Hongdefa Machinery Co., Ltd
is a professional manufacturer of wheat flour/semolina mill, maize flour/grits mill, provide
high quality machine from 500kg/h to 50ton/h with different design according to our client
needs, with European technology, South Africa maize process, China wheat process, rollout
unique and innovative wheat flour mill and maize mill plant. So, the company has many
experience of supply of such machine and also has many customers in Ethiopia, for instance
machine on operation in Ethiopia having the following production capacity 500T/24HFLOUR
MILL, 120T/24HFLOUR MILL, and 80T/24HFLOUR MIL.
Specification Description Capacity
HIJIAZHUANGHONGDEFAMACHINERYCO.,LTD 36ton/24hour 36tons per
china wheat flour machinery country origin china wheat flour day
The machinery and equipment required to manufacture flour milling products are
conventional and available in different technological levels, in general. Selection among
alternatives was made based on the competitive advantages it provides to the stakeholder in
the context of the country. The major criterions taken in to consideration are: resource
utilization (especially labor), job opportunity, operability, and maintainability. Therefore; the
labor intensive machineries and equipment are selected for the envisaged plant. Suppliers of
labor intensive technologies are available in China.

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6. Man power and Management

6.1. The management team
The management team of the project has its own employed manager, supported with the necessary
department including administration and finance head, marketing head, technical head and
procurement head. As per the feasibility study, Expected qualification and experience of project
executive and middle level managers are tabulated here under:
No. Position qualification Related Experience Reported
1 Employed factory manager BA in Mechanical /process Engineering 8 years GM of the company
and MBA
2 Administration and finance BA in accounting or Business Manager 8 years The factory Manager
Manager
3 Marketing Manager BA in Marketing or Economics 8 years The factory Manager
4 Production Manager BA in Mechanical Engineering 8 years The factory Manager
Other supporting staffs of each type of profession are assumed to be recruited to run the project smoothly.
Organization

The Organizational structure of the company is illustrated here under:

General Manager

Factory Manager

Production
Admin. & Finance Marketing
Marketing Manager
Manager
Manger
Manager

Human Resource
As per the presented feasibility study, the total manpower requirement of the project is 40
including top management. Eighteen of the employee will be assigned in operation outside of
the production unit. The remaining 22 employees however will be assigned in the production

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unit. Detail of the appraised manpower requirement with respective salary for the project is
tabulated here below:
List of employees
Number Salary Per month Total Salary Total Salary per
Position
Required per individual Per month year
Factory manager 1 10,000 10,000 120,000
Finance and Admin. 6,500 6,500 78,000
1
Manager
Production Manager 1 6,500 6,500 78,000
Marketing Manager 1 6,500 6,500 78,000
Accountant 2 3,500 7,000 84,000
Store Man 1 2,200 2,200 26,400

Purchaser 1 2,200 2,200 26,400

Sales man 2 2,200 4,400 52,800

Drivers 3 1,500 4,500 54,000
Production staffs 19 2,500 47,500 570,000
Executive Secretary 1 2,000 2,000 24,000

Office Girl 1 1,500 1,500 18,000

Cleaners 2 1,500 3,000 36,000
Security Guards 4 1,500 6,000 72,000
Total 40 1,317,600

7. Financial Analysis
The project’s total investment cost is expected to be covered through owner’s equity and
bank loan sources. Accordingly, out of the total investment cost of birr 32.8 million,
birr15.3million (47%) is anticipated to be covered from owner equity sources while the
remaining birr 17.5million is to be raised in the form of bank loan. Thus, the total
investment cost will have the following financing structure:

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7.1. Investment costs and financial structure

S/N. Cost Items Owner Equity Bank loan Total Cost
1 Fixed Investment
1.1 Land Lease 1,866,500 1,866,500
1.2 Building and civil work 10,112,375 10,112,375
1.3 Machinery and equipment 5,197,500 5,197,500
1.4 Motor vehicles 6,400,000 6,400,000
1.5 Generator 850,000 850,000
1.6 Office furniture& equipment 450,000 450,000
Sub total 12,428,875 12,447,500 24,876,375
2 Pre operating cost *
2.1 Pre operating cost 550,000 550,000
Sub total 550,000 550,000
3 Working capital 2,368,743 5,000,000 7,368,743
Grand Total 15,347,618 17,447,500 32,795,118
% 47% 53% 100%

7.2 Assumptions used in the projection

1. Project life: 5 years
2. Working hour per shift 8
3. Number of shift 3
4. Working day per year 300 day
5. The plant will be use 360 quintal dry wheat per day
6. Average purchasing price of dry wheat will be Birr 1,400 per quintal
7.Annual production capacity of the plant will be 108,000 quintal
8. 80% of dry wheat convert to flour ( from 100kg wheat we will get 80kg flour)
9. Selling price flour per quintal will be Birr 2,570
10. Depreciation and amortization rates applied are:

Depreciation and Amortization Schedule

Description\Years Rate 1 2 3 4 5
Buildings and civil works 5% 505,618.75 505,619 505,619 505,619 505,619
Machinery and equipment 10% 519,750 519,750 519,750 519,750 519,750
Generator 10% 85,000 85,000 85,000 85,000 85,000
Motor Vehicles 20% 450,858 450,858 450,858 450,858 450,858
1,561,226 1,561,226 1,561,226 1,561,22 1,561,226
Total 6
11. Production capacity

The plant has theoretical capacity to cut 360 quintal per day of flour. The production schedule planned to
start operation at 75% of the installed capacity and to increase by 10% per annum until attainable capacity
of 100% is reached.
12. Raw material

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The plant will use wheat is the only raw material for production of flour.
Cos of raw material per meter is shown below:
Total raw material reached to the Production No. day with Raw material cost with Raw material cost with
warehouse capacity per day the month the month in birr the Annual in birr
Raw material Birr 1,400 per quintal 360 quintal 25 9,000 Quintal *1,400 12,600,000*12 =
purchasing cost Birr per Qt = Birr Birr151,200,000
12,600,000
Total costs Birr 1400 per 360*1400= Birr 12,600,000 151,200,000
quintal 504,000
Polypropylene Bag and other materials required will be 3% of dry wheat cost 4,536,000
Total 155,736,000
Description Full Capacity Year 1 Year 2 Year 3 Year 4 Year 5
Production Rate 100% 75% 85% 95% 100% 100%
Total raw material in quintal 108,000 81,000 91,800 102,600 108,000 108,000
Total Purchasing cost per 151,200,000 113,400,000 128,520,000 143,640,000 151,200,000 151,200,000
quintal Birr 1,400
Total Other cost will be 3% of 4,536,000 3,402,000 3,855,600 4,309,200 4,536,000 4,536,000
dry wheat cost
Total cost 155,736,000 116,802,000 132,375,600 147,949,200 155,736,000 155,736,000

13. Revenue projection:

Description Full Capacity Year 1 Year 2 Year 3 Year 4 Year 5

Production Rate 75% 85% 95% 100% 100%

Total flour ready for sales 86,400 64,800 73,440 82,080 86,400 86,400

Sales per quintal in Birr 2570 222,048,000 166,536,000 188,740,800 210,945,600 222,048,000 222,048,000

Byproduct ready for sales 19,440 14,580 16,524 18,468 19,440 19,440
sales income from byproduct 136,080 102,060 115,668 129,276 136,080 136,080
per quintal in Birr 7
Revenue in Birr 222,184,080 166,638,060 188,856,468 211,074,876 222,184,080 222,184,080

NB: 100kg of dry wheat after converted to flour equal to 80kg

14. Utility:
The electric consumption is so small less than 890,000KW/hr and water. It is also assumed that Birr
820,000 is for electricity expense and it will increase by 10% per year.
15. It is assumed that annual office supplies is estimated Birr 600,000 per year.
16. Repair and maintenance:
Annual repair and maintenance cost is assumed to be Br. 557,363 for 1st year of the total fixed asset of
building and machinery.
17. Insurance:
Insurance expense is assumed to be Br. 240,000 for 1 st year of the value of the building and machinery
per annum.
18. Land Lease repayment:
It is Birr 200,000 per year
19. Profit Taxes: 30%

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20. Cost of capital: the cost of capital is assumed to be the prevailing lending interest rate, i.e. 16.5%.
21. Fuel and lubricants: assuming that annual expenses will be Birr 2,280,529
22. Tyres costs: assuming that annual expenses will be Birr 1,900,000
Income Statement Projections
Description/Item Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Sales 166,638,060 188,856,468 211,074,876 222,184,080 222,184,080
Purchase cost 116,802,000 132,375,600 147,949,200 155,736,000 155,736,000
Gross Profit 49,836,060 56,480,868 63,125,676 66,448,080 66,448,080
Operating Expenses
Salary & allowance 1,317,600 1,449,360 1,594,296 1,753,726 1,929,098
Repair & maintenance 557,363 613,099 674,409 741,850 816,035
Office Supply 600,000 660,000 726,000 798,600 878,460
Depreciation 1,561,226 1,561,226 1,561,226 1,561,226 1,561,226
Utility 820,000 902,000 992,200 1,091,420 1,200,562
Insurance 240,000 264,000 290,400 319,440 351,384
Fuel and lubricants 2,280,529 2,508,582 2,759,440 3,035,384 3,338,923
Tyries and lease expenses 2,100,000 2,310,000 2,541,000 2,795,100 3,074,610
Total expenses 9,476,718 10,268,268 11,138,972 12,096,746 13,150,298
Income before Interest 40,359,342 46,212,600 51,986,704 54,351,334 53,297,782
Interest Expense 2,731,717 2,299,907 1,792,317 1,195,648 494,269
Operating Profit 37,627,625 43,912,694 50,194,388 53,155,685 52,803,513
Profit Tax 11,288,287 13,173,808 15,058,316 15,946,706 15,841,054
Net Income 26,339,337 30,738,886 35,136,071 37,208,980 36,962,459
The project will earn gross revenue of Birr 49 million during the first year of operation
Cash flow Statement Projection

Particular Year1 Year2 Year3 Year4 Year5

Net Income 26,339,337 30,738,886 35,136,071 37,208,980 36,962,459

Add: Depreciation 1,561,226 1,561,226 1,561,226 1,561,226 1,561,226

Cash flow after adjustment 27,900,564 32,300,112 36,697,298 38,770,206 38,523,686
Pr. Repayment of loan 2,460,555 2,892,365 3,399,955 3,996,623 4,698,003
Cash flow from operating 2,460,555 2,892,365 3,399,955 3,996,623 4,698,003
activities
Cash balance at the end of the 25,440,009 29,407,747 33,297,343 34,773,583 33,825,683
year (32,795,118)

Discount Rate 18%

NPV 115,092,494
IRR 83%

Profitability
The project will generate net profit throughout its life and the net income ranges from Birr 26million in
the first year of operation to Birr 36million in the Fifty-year.
Cash-Flow Statement

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The project will generate a cumulative cash flow of Birr 159million throughout its life
including recovery of initial working capital and scarp value. The net cash flow is
positive starting from the first year and it ranges from Birr 25.9million to million after
loan repayment.

NPV and IRR

The projected cash flow discounted at 18% costs of capital shows that NPV of Birr
11million and IRR of 83% which is much less than the cost of capital (prevailing
interest rate 16.5%).

Sensitivity Analysis
Scenario One: Revenue to Decrease by 10%
Income Statement Projections
Description/Item Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Sales 149,974,254 169,970,821 189,967,388 199,965,672 199,965,672
Purchase cost 116,802,000 132,375,600 147,949,200 155,736,000 155,736,000
Gross Profit 33,172,254 37,595,221 42,018,188 44,229,672 44,229,672
Operating Expenses
Salary & allowance 1,317,600 1,449,360 1,594,296 1,753,726 1,929,098
Repair & maintenance 557,363 613,099 674,409 741,850 816,035
Office Supply 600,000 660,000 726,000 798,600 878,460
Depreciation 1,561,226 1,561,226 1,561,226 1,561,226 1,561,226
Utility 820,000 902,000 992,200 1,091,420 1,200,562
Insurance 240,000 264,000 290,400 319,440 351,384
Fuel and lubricants 2,280,529 2,508,582 2,759,440 3,035,384 3,338,923
Tyries and lease expenses 2,100,000 2,310,000 2,541,000 2,795,100 3,074,610
Total expenses 9,476,718 10,268,268 11,138,972 12,096,746 13,150,298
Income before Interest 23,695,536 27,326,954 30,879,217 32,132,926 31,079,374
Interest Expense 2,430,029 2,057,897 1,621,829 1,110,842 512,065
Operating Profit 21,265,506 25,269,057 29,257,388 31,022,083 30,567,309
Profit Tax 6,379,652 7,580,717 8,777,216 9,306,625 9,170,193
Net Income 14,885,854 17,688,340 20,480,171 21,715,458 21,397,116

The project will earn gross revenue of Birr 33 million during the first year of operation
Cash flow Statement Projection
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Particular Year1 Year2 Year3 Year4 Year5

Net Income 14,885,854 17,688,340 20,480,171 21,715,458 21,397,116
Add: Depreciation 1,561,226 1,561,226 1,561,226 1,561,226 1,561,226
Cash flow after adjustment 16,447,081 19,249,566 22,041,398 23,276,685 22,958,343
Pr. Repayment of loan 2,150,297 2,527,659 2,971,246 3,492,679 4,105,619
Cash flow from operating 2,150,297 2,527,659 2,971,246 3,492,679 4,105,619
activities
Cash balance at the end of 14,296,784 16,721,907 19,070,152 19,784,006 18,852,723
the year (32,795,118)

Discount Rate 18%

NPV 53,299,727
IRR 47%

Sensitivity Analysis
Scenario Two: Expense to increase by 10%
Income Statement Projections
Description/Item Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Sales 166,638,060 188,856,468 211,074,876 222,184,080 222,184,080
Purchase cost 128,482,200 145,613,160 162,744,120 171,309,600 171,309,600
Gross Profit 38,155,860 43,243,308 48,330,756 50,874,480 50,874,480
Operating Expenses
Salary & allowance 1,449,360 1,594,296 1,753,726 1,929,098 2,122,008
Repair & maintenance 613,099 674,409 741,850 816,035 897,639
Office Supply 660,000 726,000 798,600 878,460 966,306
Depreciation 1,717,349 1,717,349 1,717,349 1,717,349 1,717,349
Utility 902,000 992,200 1,091,420 1,200,562 1,320,618
Insurance 264,000 290,400 319,440 351,384 386,522
Fuel and lubricants 2,508,582 2,759,440 3,035,384 3,338,923 3,672,815
Tyries and lease expenses 2,310,000 2,541,000 2,795,100 3,074,610 3,382,071
Total expenses 10,424,390 11,295,094 12,252,869 13,306,421 14,465,328
Income before Interest 27,731,470 31,948,214 36,077,887 37,568,059 36,409,152
Interest Expense 2,430,029 2,057,897 1,621,829 1,110,842 512,065
Operating Profit 25,301,440 29,890,317 34,456,058 36,457,217 35,897,087
Profit Tax 7,590,432 8,967,095 10,336,817 10,937,165 10,769,126
Net Income 17,711,008 20,923,222 24,119,241 25,520,052 25,127,961

The project will earn gross revenue of Birr 38 million during the first year of operation
Cash flow Statement Projection

Particular Year1 Year2 Year3 Year4 Year5

Net Income 17,711,008 20,923,222 24,119,241 25,520,052 25,127,961
Add: Depreciation 1,717,349 1,717,349 1,717,349 1,717,349 1,717,349

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Cash flow after adjustment 19,428,357 22,640,571 25,836,590 27,237,401 26,845,310

Pr. Repayment of loan 2,150,297 2,527,659 2,971,246 3,492,679 4,105,619
Cash flow from operating 2,150,297 2,527,659 2,971,246 3,492,679 4,105,619
activities
Cash balance at the end of 17,278,060 20,112,912 22,865,344 23,744,722 22,739,691
the year (32,795,118)

Discount Rate 18%

NPV 70,243,555
IRR 59%

Sensitivity Analysis
Scenario Three: Revenue to Decrease by 10% and Expense to Increase by 10% Simultaneously
Income Statement Projections
Description/Item Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Sales 149,974,254 169,970,821 189,967,388 199,965,672 199,965,672
Purchase cost 128,482,200 145,613,160 162,744,120 171,309,600 171,309,600
Gross Profit 21,492,054 24,357,661 27,223,268 28,656,072 28,656,072
Operating Expenses
Salary & allowance 1,449,360 1,594,296 1,753,726 1,929,098 2,122,008
Repair & maintenance 613,099 674,409 741,850 816,035 897,639
Office Supply 660,000 726,000 798,600 878,460 966,306
Depreciation 1,717,349 1,717,349 1,717,349 1,717,349 1,717,349
Utility 902,000 992,200 1,091,420 1,200,562 1,320,618
Insurance 264,000 290,400 319,440 351,384 386,522
Fuel and lubricants 2,508,582 2,759,440 3,035,384 3,338,923 3,672,815
Tyries and lease expenses 2,310,000 2,541,000 2,795,100 3,074,610 3,382,071
Total expenses 10,424,390 11,295,094 12,252,869 13,306,421 14,465,328
Income before Interest 11,067,664 13,062,567 14,970,400 15,349,651 14,190,744
Interest Expense 2,430,029 2,057,897 1,621,829 1,110,842 512,065
Operating Profit 8,637,634 11,004,670 13,348,571 14,238,809 13,678,679
Profit Tax 2,591,290 3,301,401 4,004,571 4,271,643 4,103,604
Net Income 6,046,344 7,703,269 9,343,999 9,967,166 9,575,075

The project will earn gross revenue of Birr 21million during the first year of operation
Cash flow Statement Projection
Particular Year1 Year2 Year3 Year4 Year5
Net Income 6,046,344 7,703,269 9,343,999 9,967,166 9,575,075
Add: Depreciation 1,717,349 1,717,349 1,717,349 1,717,349 1,717,349
Cash flow after adjustment 7,763,693 9,420,618 11,061,348 11,684,515 11,292,424
Pr. Repayment of loan 2,150,297 2,527,659 2,971,246 3,492,679 4,105,619
Cash flow from operating 2,150,297 2,527,659 2,971,246 3,492,679 4,105,619
activities
Cash Inflow (32,795,118) 5,613,396 6,892,959 8,090,103 8,191,837 7,186,805

Discount Rate 18%

NPV 3,696,750
IRR 5%
So as to check whether the request could absorb unforeseen changes, sensitivity analysis is conducted by varying both the
revenue it generates and its associated operating costs.

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A decrease in revenue by 10% and an increase in operating costs by 10% will have the following results .
Scenario NPV IRR%
At Normal condition Birr 119,846,532 91%
A decrease in revenue by 10% Birr 53,299,727 47%
An increase in operating cost by 10% Birr 70,243,555 59%
Revenue to Decrease by 10% and Expense to Increase by 10% Simultaneously Birr 3,696,750 5%
As can be observed from the table above, the project is more sensitive to a decrease in revenue than increase in
costs
Loan Repayment Schedule

No. of payment loan Balance Interest Principle payment Periodic payment outstanding Loan
Amount Disbursed 17,447,500.00
1 17,447,500.00 719,709.38 578,358.47 1,298,067.85 16,869,141.53
2 16,869,141.53 695,852.08 602,215.77 1,298,067.85 16,266,925.75
3 16,266,925.75 671,010.69 627,057.16 1,298,067.85 15,639,868.59
4 15,639,868.59 645,144.58 652,923.27 1,298,067.85 14,986,945.32
1st Year repayment 2,731,716.73 2,460,554.68 5,192,271.41
5 14,986,945.32 618,211.49 679,856.36 1,298,067.85 14,307,088.95
6 14,307,088.95 590,167.42 707,900.43 1,298,067.85 13,599,188.52
7 13,599,188.52 560,966.53 737,101.32 1,298,067.85 12,862,087.20
8 12,862,087.20 530,561.10 767,506.75 1,298,067.85 12,094,580.44
2nd Year repayment 2,299,906.54 2,892,364.87 5,192,271.41
9 12,094,580.44 498,901 799,166.41 1,298,067.85 11,295,414.03
10 11,295,414.03 465,936 832,132.02 1,298,067.85 10,463,282.01
11 10,463,282.01 431,610 866,457.47 1,298,067.85 9,596,824.53
12 9,596,824.53 395,869 902,198.84 1,298,067.85 8,694,625.69
3rd Year repayment 1,792,316.66 3,399,954.75 5,192,271.41
13 12,094,580.44 358,653.31 939,414.54 1,298,067.85 11,155,165.90
14 11,155,165.90 319,902.46 978,165.39 1,298,067.85 10,177,000.51
15 10,177,000.51 279,553.14 1,018,514.71 1,298,067.85 9,158,485.79
16 9,158,485.79 237,539.51 1,060,528.34 1,298,067.85 8,097,957.45
4th Year repayment 1,195,648.42 3,996,622.99 5,192,271.41
17 8,694,625.69 193,792.50 1,104,275.35 1,298,067.85 7,590,350.33
18 7,590,350.33 148,241.26 1,149,826.59 1,298,067.85 6,440,523.74
19 6,440,523.74 100,810.90 1,197,256.95 1,298,067.85 5,243,266.79
20 5,243,266.79 51,424.06 1,246,643.79 1,298,067.85 3,996,622.99
5th Year repayment 494,268.72 4,698,002.69 5,192,271.41
Grand Total 8,513,857.07 17,447,500.00 25,961,357.07 -

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8. SWOT Analysis
Strength
 The business is very lucrative and financial viable;
 The project will save foreign currency of the country through import
substitution and increase productivity;
 Priority sector of the Country ;
 The project financial indicators- income, cash flow, NPV and IRR are positive and;

 The project has important socio- economic benefits in job creation and income
tax to the government.
Weakness
 Working capital gap
 Technical expert turnover
9. Economic Benefits and Environmental Impact
The project can create employment for 40 persons. In addition to supply of the domestic
needs, the project will generate Birr 71million in terms of tax revenue after tax grace period of
five years. .
The project is environmentally friend and also no side effect on the community rather than
supporting their living conditions. The environmental analysis can be divided usefully, into
five areas: technological, governmental, economic, cultural, and demographic. Each of the
dimensions is no side effect on the community. Then, methods to forecast trends and events
are clearly, an ability to anticipate important changes will be helpful. Ways of creating and
using future scenarios to help generate and evaluate strategies formulas.

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10. Conclusion and Recommendation

10.1 Conclusion
Both the current economic and political situations of the country are in favor of
industrial development.
The increase in productivity of agricultural as well as industrial sectors, which has
a multiplier impact towards the increase in people’s life standard, also creates
ample market opportunity for the proposed business. Indeed, this study reveals
that there exists and will persist sufficient Demand-Supply gap in the market for
flour products.
The company has anticipated hiring well educated manpower upon inauguration of
the proposed project.
The company has proposed to import the more modernized machineries from
abroad.
The company’s projected financial statements reveal that it will be liquid and
profitable over the periods under review. Besides, it is anticipated to payback its
investment cost within four years period, which is relatively short.

10.2 Recommendation
In view of the foregoing remarks and viability indicators, the proposed flour product
production project is feasible to undertake and finance.

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