Article I.

Contents
Article I. Contents...................................................................................................................................I
I. EXECUTIVE SUMMARY.............................................................................................................1
1.1 Project summery.......................................................................................................................3
II. BACKGROUND INFORMATION.........................................................................................................4
2.1. The Applicant...................................................................................................................................4
2.2. Brief History of the project and Contact Person..............................................................................5
2.3. Objective of the Project...................................................................................................................6
2.4. Product Description.........................................................................................................................6
2.5. The lease machinery........................................................................................................................6
2.7. Credit Information...........................................................................................................................6
III. Key success and risk factors.............................................................................................................7
3.1. Key Success Factors.........................................................................................................................7
3.2. Risk factors......................................................................................................................................9
3.3. SWOT ANALYSIS.............................................................................................................................10
IV. Market Study.................................................................................................................................12
4.1. General Review..............................................................................................................................12
4.2. Demand Analysis & Projection.......................................................................................................12
Project Engineering...................................................................................................................................19
5.4. Environmental Impact assessment................................................................................................22
5.5. Implementation Plan.....................................................................................................................24
VI. Organization Structure, Management and Manpower..................................................................25
6.1. Organizational structure................................................................................................................25
6.2. Management.................................................................................................................................25
6.3. Manpower Requirements..............................................................................................................26
6.4. The Role of Major Responsible Bodies in a poultry project...........................................................26
VII. Financial Study...............................................................................................................................27
7.1. Investment out lay.........................................................................................................................27
VIII. SOCIO ECONOMIC IMPACTS..........................................................................................................29
Annex ………………………………………………………………………………………………………………………………….…………….… 3

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 1. EXECUTIVE SUMMARY

This is a leaseproject proposal for EkramSeidpoultry production project which

isestablished in the Amhara National Regional State, Oromia Zone, ChefaRobitTown ,
(02) kebele. This Project is established with an objective of producing Day old chicks for
domestic market and to sell at competitive price.

The total land holding of the project is about 21000 m2which is obtained through Leased
land. Whereas the Lease agreement which is expected to expire after 70 years.

For the project to function smoothly & optimally, the project is expected to have
GeneralManager, Farm Manager, Egg production section supervisor, Feeding
Department Head and other experts. The General Manager of the
projectbecomesAtoMohammed Ahmed; he has more than 9 year experience. Then
considering his experience and the assistance of qualified farm manager and other
qualified, skilled & experienced hired employees the project run effectively. On the
contrary the owner has enough experience before and afterward for the sameproject, so
he can support the Manager of the farm.
Machinery & other office equipment available by Performa invoice submitted and have
got a theoretical production capacity of producing19,200 on time. The project assuming
for feed formulation and processing 300 working days per annum and 8working hours
per shift and expects to have two shifts per day. The project is estimated to have a
theoretical production capacity of feed miler and mixer machine producing 24,000 quintal
per annumat full capacity in two shifts. The production capacity is assumed to start at
80% of its theoretical capacity, increase 5 % per annum until attainable capacity of 90% is
reached. The project has good infrastructure accessibility at any time.

The total financial investment cost of the project is estimated to be Birr 13,660,079.00 Out of
which Birr 11,635,417is owners equity and Birr 2,024,662is expected to be lease amount
covered by DBE.

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The projected income statement reveals a net profit before tax of Birr 11,770,115 and after
taxBirr 7,683,305, the cash flow projection reveals a cumulative cash flow of Birr
7,584,427.00

The project will create employment opportunities for about 17Employees and contribute
toincreases the income of the workers employed in and the owners too, transfer
technology and knowhow for local producers besides playing vital role in the growth of
economy. Thepoultry project generates substantial revenue to the government in the
form of taxes.

1.1 Project summery

a. The Projects Investment
b. Description Amount Percentage
Fixed Investment 9,703,121 71.03%
Working Capital 3,731,502 27.32%
Pre operating Cost 134,346 0.98%
Pre operating Interest 91,110 0.67%
Total
13,660,079 100%

c. Source of Finance
Description Amount Debt : Equity Ratio

Debt 2,024,662 17.66%

Equity 11,635,417 82.34%
Total 13,660,079 100%

d. Expected Financial Results

Description Year ( initial) Year ( final)

Sales Revenue 31,588,412 41,971,063
Profit / Loss/ 7,683,305 7,418,024
Cumulative Cash Balance 7,584,427 90,420,291
Capital 18,550,391 99,481,496

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 2. BACKGROUND INFORMATION
2.1. The Applicant
2.1.1. Name of the Applicant
Name– EkramSeid
Nationality: - Ethiopian
Legal form of Business: - Sole proprietorship
2.1.2. Address
2.1.2.1. Applicant Address
Name– EkramSeid
Region- Amhara National Regional State Zone- Oromia
Woreda – ArtumaFursi
Kebele – 02
P.O.Bo-------- House No.212
Tel.NoOffice Mobile092927313
Fax No. -------------------
E.mail: -----------------------

2.1.2.2. Project Address

Name of the project: EkramSeidpoultry farm Project
Region: Amhara Regional StateZone/sub city: Oromia
Woreda: ArtumaFursiTown: chefarobitKebele: 02
House No----------------- Tel.No092927313
Tel.Office: ………
Fax No. ------------------- E.mail: -------------------
2.1.3. Type of Project: Poultry farm Project
2.1.4. Legal form of Business: - Sole proprietorship

2.2. Brief History of the project and Contact Person

2.2.1. The Company

This poultry production project was established by EkramSeid. The project is located in Amhara
National Regional State, Oromia Zone, chefaTwon(Kebele02). The project site is found about

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300kmsfrom Addis Ababa. The total land holding of the project is about 21000 m 2 obtained through
Lease from Amhara National Regional State Oromia Environmental Protection, Land Administration
and Utilization Department for a lease period of 70 years. The company shows profitable and grows
fast and wants to expand to satisfy domestic market in the country.

2.2.2. The promoter

The poultry farm project is managed by AtoMohammed Ahmed. The General Manager
AtoMohammed Ahmed had a Degree educational back ground in Journalism and communication
and Diploma in human resource management. He had been working for more than 9
years .Objective of the Project.
2.3. Product Description
2.3.1 The project is established to produce Day Old Chicks for layers; the breeds selected
for parent stock could be imported from known countries that produce layer stocks. In
addition to this during summer time the project is expected to provide pullet and
fertile eggs to the market.
2.3.2 Amount to browed requested:-
 Amount – Birr 2,024,662.00
 Purpose - for purchase of machinery

3. Key success and risk factors

3.1. Key Success Factors

3.1.1. Macro level

 Thegovernment gives due attention for development of the sector by introducing the exotic
breeds in the country.
 The government gives high attention to reduce and suppress major poultry diseases that
affect the productivity of the sector.
 Attractive investment and industrial policy of the government.
 Ease access to land since government gives due attention for the sector.
 Access to credit provisions and provision of different incentives like tax holidays, low
interest rates, adequate grace period, favorable remittance policy etc.
 Stable macro- economic environment.
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  Conducive climate environment.
 High population growth leads to high demand for poultry products.
3.1.2. Sector level
 The availability of Ethiopian Agricultural Institution and research institutions to carry out,
researches on the most productive poultry breeds.
 Availability of labor at low wage rate.
 Availability of necessary infrastructure.
 Availability of high domestic and international market for the poultry products.
 There is extreme demand and supply gap in the sector.
 Availability of suitable location inrural areas of the country for setting up a poultry farm.
3.2. Risk factors
3.2.1. Macro level (General Risk):

The risk that might be created at macro level is generally low, since there are good government
policies and incentives to the sector.

3.2.2. Sector level risk Factors

The risk on livestock sector includes:

 The outbreak of poultry disease /Avian Influenza, Newcastle, Coccidiosis, Salmonellosis,

and various other parasitic diseases/
 Poor knowledge to use the full capacity of the farming and production system in the country
 The prices of major feed ingredients incessantly increase.
 Lack of exotic day old chicken (DOC) and fertile eggs due to monopolization of limited
number of foreign companies and their bargaining power of price setting in the market.
 Lack of appropriate housing is one of the constraints limiting productivity.
 Dependency on imported exotic day old chicken from abroad which may bring new diseases
that are not occurred in the country.
 Transmission of disease by the entrance of wild birds to the farm.
 Poor insecurity of the poultry farm.
 Sales of poultry through poorly controlled live poultry market.

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  Trans-border movement of poultry, poultry products or equipments, which may involve
movement from infected countries to uninfected countries.
 Operational procedures implemented for looking after feeding, vaccination of the poultry
farm.
 Fast and easy spread of air born and water born diseases to the poultry production farm.
 Microbes circulating freely in nearby village or backyard poultry.
3.2.3. Risk mitigating Mechanisms
 Workers should be given proper and adequate training in production process, safe
working procedures and proper waste management practices.
 With-holding enough vaccine and some medicine by the farm.
 Construction of sufficient and proper building for poultry farm.
 Utilization of enough preservative mechanism for the farm output at the project site.
 Personnel protective apparels such as safety boots, clothes, gloves, mouth mask, and mouth
mask should be provided in terms of suitability and adequacy.
 Widening the relation to most absorbents in the market.
 Use disinfectant for possible cause of disease.
 Reduce mortalities through proper animal care and disease prevention.
 Protect feed from exposure to rain and wind during processing, storage, transport and
feeding.

3.3. SWOT ANALYSIS

STRENGTHS
 The Project Manager have long years of experience
 The owner of the project become enough experience before and then by project financing
for the same project.
 The intended project is also planned to produce additional processed poultry feed.

WEAKNESSSS
 Unavailability of hybrid stock in domestic market

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  The owner is not use the full capacity of the incubator due to lack of the knowledge to
operate the incubator worker in the country.
OPPORTUNITIES

 Ever-growing market demand and population growth, as well as income growth,

 Establishment of poultry multiplication centers and poultry commercial farms.
 Good infrastructure development.
 Good agro-climatic condition for poultry farm.
 Available resources for feed ingredients.
 Ease of getting credit facilities.
 Favorable government policies and incentives to the sector
 Less environmental pollution.
 Creation of new market opportunities and improved veterinary services.

THREATS
 Prevalence of disease. Mortality is the most alarming threat to the viability of the farm.
 Price fluctuation of poultry products.
 Make stiff the domestic competitions.
 Short shelf life of the egg product
Mitigation Mechanisms for Weakness and Threats
A. Weaknesses
 To mitigate the educational problem of the incubation worker, so get experience from abroad
and communicate to share operation system.

B. Threats
 Use proper vaccination and medication for the stock after day to day follow up.
 In order to penetrate the market and remain competitive, the project should develop good
marketing strategy like production of quality product and avail it at competitive price.
Promotion also the main weapon to wean competitors.
 The promoter should take care of its quality of the product and should take care of stimulating
gradually to satisfy the market and cost minimization as much as possible.

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 Build proper and cold storage place for perishable products

4. Market Study
4.1. General Review
The Ethiopian chicken meat market situation analyses considered only the domestic market
because import and export contribution was insignificant to change the sector’s contribution to the
GDP, even if the country has a comparative advantage for export.
4.2. Demand Analysis & Projection
4.2.1. Demand Analysis
The demand for chicken meat consumption are primarily linked to four key factors namely
population growth, improvements in incomes, chicken prices relative to those for competitive
meats and dietary preferences. Poultry meat is the central diets of Ethiopian’s. “Doro Wet” which
is prepared from poultry meat and eggs is one of the favorite dishes of the local population which
is prepared especially during religious festivals and holidays, virtually in every household in the
country.

Besides, due to the traditional consumption habit and as the awareness of the population on the
nutritional and other advantages of poultry products increases the market for the products is also
expected to expand.

4.2.2. Demand Projection

As it has been said, the demand for poultry meat is mainly influenced by population growth the
domestic consumption for chickens’ meat is determined by using apparent consumption approach.
Apparent consumption is calculated by subtracting export from the sum of domestic production
and import.

PCC = (Consumable domestic production + Import) – (Export)

Number of Population
The case team determined the per capita consumption trend for chicken meat for the past nine
years to project the future domestic demand. In determining per capita consumption trend, the
annual actual population growth rate of 2.67 percent used as a base year forecasting rate. Based on

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the above consideration, the per-capita consumption of chickens and hen eggs is determined here
under the table.

Table 1: Per-capita Consumption Analysis

Population Chickens/slaughtered
Year Production (1000 head) Per Capita Consumption
2005 70,123,898 53,200 0.00076
2006 71,996,206 56,500 0.00078
2007 73,918,505 57,800 0.00078
2008 75,892,129 60,736 0.00080
2009 77,918,449 63,000 0.00081
2010 79,998,872 69,000 0.00086
2011 82,134,841 81,500 0.00099
2012 84,003,001 79,548 0.00095
2013 86,004,362 83,659 0.00098
2014 88,891,065 76,446 0.00086
2015 91,264,456 78,487 0.00086
Average 80,195,071 69,080 0.00086

As shown in the above table, the average per capita consumption for chicken meat was estimated
at 0.00086 tons per head per annum. As a result this rate was used for projection purpose as a
constant throughout the projection period. On the other hand, the per capita consumption trend of
hen eggs shows a decreasing trend with an average of 0.00050 ton per person per annum. As a
result an average growth rate of -0.477% for chicken and a constant per capita consumption of
0.00050 ton/person/annum is used for projection purpose.
Table 2:- Demand of hen eggs
Hen Eggs
Year Production (Tons) Per Capita Consumption Growth rate (%)
2005 35,000 0.00050
2006 37,500 0.00052 4.00%
2007 38,000 0.00051 -1.92%
2008 38,500 0.00051 0.00%
2009 39,000 0.00050 -1.96%
-2.00%
2010 39,000 0.00049
-2.04%
2011 39,600 0.00048
0.00%
2012 40,629 0.00048
0.00%
2013 41,264 0.00048

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 Average 38,721 0.00050 -0.477

B. Export Demand of chickens and hen eggs

There is no export of live chicken from Ethiopia. More over the country’s export of hen eggs is
negligible. However, as shown in the table below the country’s export of hen egg shows a
decreasing trend and finally it becomes zero for the year 2011. Thus, export of hen eggs is not
considered for projection purpose.

Table 3:- Export of Hen Eggs, tones

Year Export amount Growth rate (%)

2004 797
2005 232 -71
2006 194 -16
2007 137 -29
2008 179 30
2009 5 -97
2010 3 -40
2011 0 -100
Average 193 -46

C. Total Demand Projection

Projection of demand chickens and hen eggs includes projected demand for consumption and
export.
Table 4:- projected demand for chickens and hen eggs for the year 2016-2023

Description /        
years 2016 2017 2018 2019
2020 2021 2022 2023
Projected
93,701,217 96,203,040 98,771,661 101,408,864 104,116,481 106,896,391 109,750,525 112,680,864
Population
chickens/
93,781,800 96,285,775 98,856,605 101,496,076 104,206,021 106,988,322 109,844,910 112,777,769
slaughtered
Per capita
0.00086 0.00086 0.00086 0.00086 0.00086 0.00086 0.00086 0.00086
consumption
Change in
Per-capita 2.67% 2.67% 2.67% 2.67% 2.67% 2.67% 2.67% 2.67%
consumption
Hen Eggs
47788 49064 50374 51719 53100 54518 55973 57468
(tones)
Per capita
0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005 0.0005
consumption
Change in
Per-capita 2.67% 2.67% 2.67% 2.67% 2.67% 2.67% 2.67% 2.67%
consumption

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4.3. Supply of Chickens and Hen Eggs in Ethiopia

The supply of chickens and hen eggs determined from the domestic production. In the case of
Ethiopia, domestic production takes the lion share of the supply. In spite of this, there is a no
import of live chicken (except DOCs for raring purposes) and the import of hen eggs to the country
is negligible.

Table 5: Estimated numbers of poultry by Type and Breed, Ethiopia- 2011/12

Types of All Indigenous Hybrid Exotic
poultry Number % Number % Number % Number %
All Poultry 44,893,009 100 43,304,090 96.46 256,330 0.57 1,332,589 2.97
Cocks 4,381,338 9.76 4,206,765 9.37 29,086 0.06 145,488 0.32
Cockerels 2,170,997 4.84 2,097,037 4.67 14,150 0.03 59,809 0.13
Pullets 4,125,249 9.19 3,970,709 8.84 27,157 0.06 127,383 0.28
Non-laying
hens 1,393,876 3.1 1,340,232 2.99 8,009 0.02 45,636 0.1
Chicks 18,007,499 40.11 17,530,553 39.05 54,843 0.12 422,104 0.94
Laying
hens 14,814,050 33 14,158,795 31.54 123,086 0.27 532,169 1.19

A. Domestic Production
The total production of the country from the year 2004 to 2013 is given in table 5.13. As the
table shows, the total production of chickens and hen eggs in Ethiopia depicts a general
increasing trend with an annual average growth rate of 3.69% and 1.27% for chickens and hen
eggs, respectively.
Table 6: Production by chicken and hen eggs
Chickens/slaughtered (1000 head) Hen Eggs (Tones)
Year Production Growth rate (%) Production Growth rate (%)
2004 58,870 36,624
2005 53,200 -9.63% 35,000 -4.43%
2006 56,500 6.20% 37,500 7.14%
2007 57,800 2.30% 38,000 1.33%
2008 60,736 5.08% 38,500 1.32%
2009 63,000 3.73% 39,000 1.30%

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 2010 69,000 9.52% 39,000 0.00%
2011 81,500 18.12% 39,600 1.54%
2012 76,496 -6.14% 40,358 1.91%
2013 79,589 4.04% 40,904 1.35%
2014 82526 3.69% 41423 1.27%
2015 85571 3.69% 41949 1.27%
Average 68,732 3.69% 38,988 1.27%

B. Import of chickens and hen eggs

Ethiopia imports only parent stock DOC’s for rearing purpose. Currently there is no import of live
chicken for consumption purpose in the country. As shown in the table 5.14 below, the import of
hen eggs shows a fluctuating trend and is negligible. As a result, import of hen eggs is not
considered for projection purpose.
Table 7: Import of Hen Eggs, tones

Year Import amount Growth rate (%)

2004 5
2005 0 -100
2006 3 100
2007 6 100
2008 1 -83
2009 3 200
2010 1 -66
2011 5 400
Average 3 79

C. Total Supply Projection

The supply projection of chicken’s meat and hen egg is given in table 5.15 by taking into account
the trend analysis. As a result annual average growth rate of 3.69 pct and 1.27 pct is considered for
chicken meat and hen eggs.
Table 9: Supply Projection

Year Chickens/slaughtered (1000 head) Hen Eggs (Tones)

2016 88729 42482
2017 92003 43021
2018 95398 43568
2019 98,918 44,121
2020 98,918 44,121

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 2021 98,918 44,121
2022 98,918 44,121
2023 98,918 44,121

4.4. Projected Demand- Supply gap

The total demand supply gap analysis of chicken’s meat and hen eggs in Ethiopia shows a positive
result over the projection years.
Table 10: Projected Demand Supply Gap

Yea Chickens/slaughtered (1000 head) Hen Eggs (Tones)

r Demand Supply DD SS Gap Demand Supply DD SS Gap
2016 93,781,800 88,729 93,693,071 47,788 42482 5,306
2017 96,285,775 92,003 96,193,772 49,064 43021 6,043
2018 98,856,605 95,398 98,761,207 50,374 43568 6,806
2019 101,496,076 98,918 101,397,158 51,719 44,121 7,598
2020 104,206,021 102,568 104,103,453 53,100 44,682 8,418
2021 106,988,322 106,353 106,881,969 54,518 45,249 9,269
2022 109,844,910 110,277 109,734,633 55,973 45,824 10,149
2023 112,777,769 114,347 112,663,422 57,468 46,406 11,062

The demand supply gap is estimated to be increased from 93,693,071 to 112,663,422during the
year 2016 to 2023 for chicken meat while the gap of hen eggs estimated to be raised from 5306 to
11,062respectively during the same years. The gap will continue to grow that augments the
demand for poultry meat.

Moreover this gap indicates the existence future growing demand far from the projection period
due to the computation of per capita consumption considered the population number that would be
associated with increasing income or purchasing power.

Therefore, we can be sure that the level of chicken meat consumption will have a strong
association with the growth of income which would be confirmed by the economic growth.

5. TECHNICAL STUDY
5.1. Project Location Site

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This poultry production project was established by EkramSeid. The project is located in
Amhara National Regional State, Oromia Zone, ChefaRobitTwonKebele(02). The project
site is found about 300 kms from Addis Ababa. The total land holding of the project is
about 21000 m2 obtained through Lease from Amhara National Regional State
OromiaZone Environmental Protection, Land Administration and Utilization Department
for a lease period of 70 years without any lease payment.

5.1.1 Project Engineering

The project site seen and evaluated by the district engineer that concluded, 6 blocks with
area of 1350m2 which can hold more than 9500 parent stock and 12 blocks with area of
2400m2 it can hold 96,000 day old chicken at once and the engineer recommended that the
promoter has to add one block for day old chickens considering 101250 chickens
considering every 6 days 13500day old chicken has hatched.

5.1.2 Machinery &Equipment

The main machinery required for the project is Incubator and Hatchery. The machine will
be imported from abroad and purchased by DBE. Feed mill and mixer is the other
machinery required for feed processing where as other than the machinery purchased by
DBE all the necessary machinery and equipmentshould be purchased from local market
by the promoter confirmed by his undertaking letter.

5.2. List of lease Machinery

Unite price in Total Price in Total Price in
Description Quantity EURO ERO Birr
Incubator &Hachery
Smart set 76800 eggs electric heating 1 33,850 33,850 847343.36
Humidifier smart set 4 645 2,580 64583.33
Smart Hatch 19,200 eggs 1 15,550 15,550 389252.27
Set of water piping smart set 1 1,170 1,170 29287.79
Air exhaust smart set 77 1 460 460 11514.86
Air exhaust smart hatch 1 165 165 4130.33
water chillier 13KW 1 12,375 12,375 309774.71

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 supervision of installation 3,595 3,595 89991.12
Export packing and Warehouse cost 805 805 20151.00
Transport from Doetinchem to Rotterdam 1,000 1,000 25032.3
Marin transportation, marine insurance,bank
charge and port handling etc… 1,565.5 1,565.5 39188.07
Inland transportation, 98,000
Additional Cost of Machinery and
Equipment to ( 5% of the Total Cost of 96412.46
Machinery and Equipment)
2,024,662.00

5.2 Parent stock

The company will purchase 5000 hybrid day old chicks. The breed type Bovans Brown which is originated
from Netherlands is easily available from domestic certified supplier.

Table 5.6:- parent stock

Description Qty Unit price in Euro Total cost in Euro Total cost in birr
Day old chicks 5000 6.5 32,500 813,549.75

5.3 Utilities

The necessary utilities such as Electricity, Water, Telephone and road accessibility required for the
operation of the project are available at the project site.
The plant's and over all farm electric consumption level at full capacity per annum over the project
years is estimated to be 126,241.45 KW.
Raw materials

The major raw materials that are used in the proposed poultry production project mainly include
Parent stock Day Old Chicks (DOCs), poultry feed, water, poultry litter, fumigants, Vaccines and
disinfectants. The parent stock or parent day old chicken breed type is Bovans brown imported
from Netherlands andreared to hatching commercial broiler/layer, whereas feed and other basic
medicine are locally available at local market all are covered by the promoter.

Feed costs have a major impact on the profitability of poultry farm operations. The high cost of
feed is related to the energy, protein, calcium, and vitamins contents of the diet. The poultry feed
assortment to be given to the birds depend on their age, sex, and their type. Rations formulated to

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meet nutrient requirements produce faster growing and healthier chickens, and thus better products
and more profits.

5.4 Environmental Impact assessment

Environmental issues in poultry production projects primarily include Solid Waste management,
Wastewater, Air emissions Animal diseases, and Hazardous materials.Solid waste generated
during poultry production includes Waste feed, animal waste, carcasses, and sediments and sludge
from on-site wastewater treatment facilities (which may contain residual amounts of growth
enhancers and antibiotics, among other hazardous constituents). Other wastes include various
kinds of packaging (e.g. for feed and pesticides), used ventilation filters, unused / spoilt
medications, and used cleaning materials.

Recommended measures to maximize the efficiency of the operation and minimize wasted feed
include the following:
 Protect feed from exposure to rain and wind during processing, storage, transport and feeding.
 Maintain feed storage , transport and feeding systems in good working condition;
 Maintain records of livestock feed use;
 Use quality, uncontaminated feed materials
 Minimize the surface area of manure in storage;
 Locate manure piles away from water bodies, floodplains, wellheads or other sensitive
habitats;
 Match feed content to the specific nutritional requirements of the birds in their different
production / growth stages;
 Reduce mortalities through proper animal care and disease prevention;
 Collect carcasses on a regular basis to prevent putrefaction;
 Compost only disease-free carcasses and ensure that the composting process is managed to
prevent leach ate and odors (e.g. sufficient cover material, proper temperature and moisture
content);
 Reduce water use and spills from animal watering by preventing overflow of watering devices
and using calibrated, well-maintained self-watering devices;

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  Control the temperature, humidity, and other environmental factors of manure storage to
reduce emissions;
 Transport liquid effluent in sealed tankers and build a reserve slurry storage lagoon;
 Remove liquids and sludge from lagoons as necessary to prevent overtopping;
 Manage sludge and sediments from wastewater treatment systems as part of the solid waste
stream
 Use double valves on outlets from liquid tanks to minimize the risk of unintentional release;
 Further reduce the moisture content of dry poultry excreta(e.g. by blowing dry air over it or by
conveying ventilation air through the manure pits),
 Use hot water or steam in cleaning activities instead of cold water, as this can reduce the
amount of water used by 50 percent;
 Install vegetative filters to trap sediment;
 Install surface water diversions to direct clean runoff around areas containing waste;
 Consider the sitting of new facilities taking into account distances to neighbors and the
propagation of odors;
 Control the temperature, humidity, and other environmental factors of manure storage to
reduce emissions;
 Consider composting of manure to reduce odor emissions;
 If necessary, apply chemicals (e.g. urines inhibitors) weekly to reduce conversion of nitrogen
to ammonia;
 Install dust collection systems (including use of misters) in areas with dusty operations (e.g.
feed grinding);

5.5 Implementation Plan

Table 5.6:- Implementation schedule of the project

2016 2017
Description of activities  

S/N Nov. Dec. Jan. Feb. Mar. Apr May Jun. Jul. Aug Sep
1 Lease process            

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 Procurement of machinery,
2 vehicle, equipments                    

3 purchase of parent stock                    

4 parent stock growing                    

Egg production start and

5 commencement operation                    

6 Repayment start                    

6. Organization Structure, Management and Manpower

6.1. Organizational structure
The project has simple organizational set up. The legal form of this project is private company,
where there exists a general manager who takes the overall responsibility of managing the project.
Under the general manager the Farm manager controls the activities of all divisions /processes/ of
Administrative & HR process, Production process and Marketing & commercial process.

Figure 1: Organizational structure of typical poultry farm

General Manager

Farm Manager

Administration and Production Process Marketing & Commercial

Finance Process Process
Production Process

Human Resource Sales &

Production
Department Marketing
Department
department

Veterinary Egg Production Purchasing

Accounting Department
Department Control Section

Feeding
Ekramseid poultry Farm Department
Page
6.2. Management
The sector is one of the labor intensive businesses so, recruiting people with appropriate quality
and quantity is advantageous for poultry firms to cope up with firm competition in the domestic
market. Higher performance, speed, skill, and competency development, talent management and
human asset refreshing are the building blocks of human resource management and source of
success for poultry farm. In addition, having a well-structured organizational management system
is one of the success factors of any organization. The hierarchy of decision making, superior
subordinate coordinate and relationship, communication process are all determined by the nature
of organizational structure since it affects the overall efficiency and performance level of the
organization. Like that of many manufacturing establishments poultry subsector has also
functional and production based organizational structure.

The General Manager of the project becomes AtoMohammed Ahmed. He has more than 9 year to
9 month for overall experience. Then, considering his experience and the assistance of farm
manager, skilled& experienced hired employees manage the project.In addition to this the owner is
expected to manage the project successfully because he has enough experience before and then for
project financing at the same project.
6.3. Manpower Requirements
Manpower is an essential factor for the successful operation of a poultry farm since poultry
products are sensitive to the environment and could easily be contaminated. Skilled, Semi-skilled
and unskilled workers are needed to manage the operation of a poultry farm. Regarding availability
of qualified and skilled labor, in the country, there are adequate graduates in agricultural and
animal science and in other fields of study required by the project. In general, this project has
about 17additionalpermanentemployees.

7. Financial Study
7.1. Investment out lay

Ekramseid poultry Farm Page

From the total investment fund Birr 13,660,079is for fixed investment costs Birr 9,703,121; Birr
2,024,662.00 for DBE lease amount;Birr 3,731,502is for working capital,Birr 134,346is for Pre-
Operating Expense and the remaining Birr 91,110 is for Pre-operating interest.

The detail of total project investment outlay is presented in the table 8.1 as follow:-

Description Existing Planned Total

Building & Constructions 2,285,640   2,285,640

Machinery & Equipments (lease)   2,024,662 2,024,662

office Furniture & Fixture , Equipments 3,839,655 3,839,655

and machinery
Vehicle 1,553,164 1,553,164

Sub total 7,678,459 2,024,662 9,703,121

working capital 3,731,502 3,731,502

Sub total 3,731,502 3,731,502
Pre- Operating Expense 134,346 134,346

Pre- Operating Interest 91,110 91,110

Sub total 134,346 91,110 225,456

Grand Total 5,847,274 13,660,079

7,812,805
planned owners working capital +lease
amount 5,756,163
20% of planned owners equity +lease 1,151,233 (50% = 575,616 in cash blocked)

80% of planned owners equity + lease 575,616

4,604,931

As we have tried to depict in the table above, from the total planed cost of the project Birr
5,756,163 the promoter working capital and lease amount; from this the promoter should
contribute 20% birr1,151,233 as an equity contribution in cash or 50% in cash that is 575,616 and
50% in kind and the rest of Birr 2,024,662 will be financed by the DBE in the form machinery
lease. The detail of fund allocation and source of fund is depicted on the above table.

Ekramseid poultry Farm Page

Project Financial Results

A. Profitability/loss forecast

Profit/loss forecast presents the results of project’s operations during a period of time. It shows
income earning from the project and expenses incurred in attaining the income. The projected
profit/loss statement of the project reveals that the project will earn profit of Birr 7,683,305 during
its first year of its operation and earn profit of Birr7,418,024 at the 10thyear of projection. This
indicates that the project could run profitable business venture and can maintain objective of its
establishment at competitive quality and price.

B. Cash flow
Cash flow projection provides a look at the movement of cash in and out of the project. It is
important in determining whether or not a project has enough cash to pay its bills, handle expenses
and acquire assets. Based on this fact, the forecasted net cash balance shows a balance of
Birr7,584,427 in the first year and will grow up to Birr 90,420,291 at the 10thyear of projection
period, demonstrating that the project will not face liquidity constraint to finance its operational
costs as well as debt obligation.

C. Balance Sheet Projection

Balance Sheet Projection is used to provide insight into assets and debts of the project at a
particular point in time. Total assets of the project expected to rise from Birr13,660,079 during the
first operational year to Birr 99,481,496at the 10thyear of projection year.

8. SOCIO ECONOMIC IMPACTS

8.1. Socio-Economic Significance of the Poultry Project

 Source of Government Income: poultry production wills provides income tax to the
governments which in turn serve for different infrastructures in the country when the
exempted year ended.

 Create Job Opportunity: Theproject requires both skilled and semiskilled labor force and
hence will open job opportunities for them and thereby increase income of the workers and

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 improve their living standards. The project creates 17 additional permanent job opportunity
to the society.

 Saving of Foreign Currency and Import Substitution: The development of this sub-
sector will save the amount of foreign currency that necessitates to importing hen for meat
and fertile eggs.

 Technology and Knowledge Transfer: The development of this subsector can bring the
transfer of knowhow and technology by introducing modern production techniques that
optimize yield and quality of day old chicks and pullets that are competitive in the domestic
market in terms of price, quality and etc.

9. CONCLUSION AND RECOMMENDATION

9.1. Conclusion
Project appraisal team has gone through all files to assess the viability of the project in terms of
market, technical, financial aspects and come up with the following conclusion.

This is a lease projectproposed forEkramSeidPoultary in the Amhara National Regional State,

Oromia Zone, and Chefa(02)kebele: 300KMs from Addis Ababa.

The total land holding of the project is about 21000 m2which is obtained through Lease with lease
agreement period of 70 years.

Market assessment of the project indicates that the demand for poultry products is unsaturated
which indicates there is ample opportunity for the expansionthe project.

The project is expected to start its operation for only feed milling and mixing machine at initial
capacity of 80% and increase by 5% annually until attainable capacity 90% is reached in year
three and after.

The project is expected to create employment opportunity for about 17 additional Employees. Out
of this the feed formulation and processing unit works two shifts per day with 8 working hours
per shift for the total of 300 working days per annum. In addition the establishment of poultry

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project will contribute to the GDP, increases the income of the workers employed and owners,
transfer technology, increases the output both in quality and quantity, and generates substantial
revenue to the government.

AtoMohammed Ahmedis the General Manager of the project. He has about 9 years and 9 month
over all experience. Then considering his experience and the assistance of qualified farm manager
and other qualified, skilled & experienced hired employees is expected to manage the project
successfully.

9.2. Recommendation
The project is found to be financially viable, economically advantageous & socially
desirable.Based on the above facts theBranch Lease Appraisal team has proposed and approved a
loan amount of Birr 2,024,662.00 to EkramSeidPoultry production project under the following
terms & conditions.

Ekramseid poultry Farm Page