Omer 1

RIM VEGETABLE AND FRUITS FARM IN WEREBABO
WOREDA
PROJECT PROPOSAL ON THE ESTABLISHMENT OF

FRUITS AND VEGETABLE FARM IN WEREBABO
WOREDA, SOUTH WOLLO ZONE OF
AMHARA NATIONAL REGIONAL STATE
PROJECT OWNER:-RIM MANUFACTURING OF ELECTRICAL MACHINERY

APPARATUS UTILITY PLC
GENERAL MANAGER;-OUMER HASSEN

Mobile No: -0920-20-86-86
MAY; 2015 E.C

DESSIE; ETHIOPIA
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I. Executive summery
The major objective of Omer Hassen project is to establish modern vegetable, and fruits farm, produce
quality vegetable and fruits, and also collect vegetable and fruits from farmers for process and pack which
can be marketed in domestic and foreign market to implement forest management plane. The project will
be located in Amhara Regional State south wollo zone Worebabo woreda. Generally such area was
among the potential vegetable, fruits and fruits areas in the region.
The total planned investment cost of the project is estimated at Birr 17,015,593.79 of which Birr
12,570,329.00 is earmarked to finance fixed assets and Birr 180,000 preproduction cost and other costs.
The balance of Birr 4,265,264.79is provided to meet the working capital requirement of the project.
Consequently, out of the total investment cost 70 % (11,910,915.65) will be bank loan and 30%
(5,104,678.14.) will be equity contribution.
The loan will be for the period of 10 years and paid back fully at the end of the 6,45 th with the interest.
The financial study of the project projected for the next ten years shows the venture will become
profitable, liquid and viable.
The project will commence harvesting of vegetable beans and fruit in forth years.it will incur a net loss in
the first three years and third year onwards it will generate a net profit. It will generate a net profit of Birr
13,445,519 in years five and a net profit of Birr 59,211,733 in years ten. Detail of projected income
statement is attached in annex part of the study.
The cash flow calculation shows a positive cash flow throughout the project. The NPV and IRR are also
calculated to be as follows.
 Before Tax
NPV at 18 % Discounting factor = 31,085,342
IRR = 29.3%
 After Tax
NPV at 8.5 % Discounting factor= 24,143,249
IRR = 25.6%
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II. Project profile

1. Project Name Oumer Hassen vegetable and fruits farm
2. Project Owner Oumer Hassen
3. Project Type Agriculture
4. Nationality Ethiopian
5. Project Location Amhara National Regional State, south wollo zone, Worebabo woreda 019
kebele.
6. Land Required 9.4 hectors
7. Project description vegetable and fruits production
8. Total investment capital and 17,015,593.79 (ETB) is required. From this 30% (5,104,678.14birr) will be
its sources out sourced from owners’ equity while the remaining 70%
(11,910,915.65birr) from bank loan.
9. Job opportunity Permanent 20 ( male 10 & female 10)
Casuals (Temporarily) 50 ( male 30 & female 20)
10. Benefit Expected -The expected benefit of the project is to generate adequate revenue per
annual for its owners.
-Produce quality product
-Generating income and benefit for the local people
- Creating job opportunity for the community
-Becoming source of tax income for the government.
11. Project start-up 1 year
12. Utility  Electricity =1000 KHW

 Water 15,000 m3
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Table of Contents
I. Executive summery i
II. Project profile ii
1. Introduction 1
1.1 Back ground 1
1.2 Status of fruits and vegetable marketing in Ethiopia 2
1.3 Overview of Horticulture Subsector in Amhara Region 3
1.4 Objectives of the farm 3
1.5 Vision, Mission, Values and Clients 4
1.5.1 Vision of the Project 4
1.5.2 Mission of the Project 4
1.5.3 Values 4
1.6 The promoter 4
1.7 The Owner Address 5
1.7.1 Residence Address 5
1.7.2 Project Location 5
1.7.3 Legal documents of the project 5
1.8 Credit information with other banks 5
2 Pull, push and success factors 5
2.1 Pull Factors 5
Suitable agro-climatic conditions and fertile soil 6
Water resource potential 6
Labor force 6
Investment incentives, guarantees and protections 6
Investment guarantee and protection 7
2.2. Push Factors 7
2.2 Success Factor 8
2.3 Social responsibility 8
2.3.1 Natural resource development 8
2.3.2 Establish good working environment for project workers 9
2.3.3 Financial support to institution and infrastructure development 9
2.3.4 Technology Transfer 10
2.3.5 Natural compost preparation 10
3 Product Description 10
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4 MARKET STUDY 11
4.1 Vegetable Demand in Ethiopia 11
4.2 Vegetable Supply in Ethiopia 13
4.2.1 Domestic Production 13
4.2.2 Supply Projection 14
4.2.3 Pricing and Distribution 15
5 Technical Study and Background of the project area 15
5.1 Location of the project 15
5.2 Demographics 15
5.3 The site selection 16
5.4 Farm establishment 16
i. Land Preparation for Cultivation 16
5.4.1 Harvesting and Processing 18
5.4.2 Transportation 18
5.5 Building and construction 19
5.6 The production process fruits and technology selection 19
5.7 Farm Operation Costs 20
5.7.1 Nursery of the fruit Farm 20
ii.Planting 24
5.7.2 Transplanting 24
5.8 Machinery and Equipment 24
5.9 Farm tools 25
5.10 Office furniture and equipment 26
5.11 Packaging material 26
5.12 Utilities27
5.13 Fuel, Oil and Lubricants28
6 Organizational structure of the farm 29
6.1 Management 29
6.2 Manpower 29
6.3 Overhead Expenses 32
6.4 Pre – Operational Cost 32
6.4.1 Depreciation Treatment 33
6.5 Spare parts and maintenance cost 33
6.6 Insurance expense 34
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6.7 Summary of Planned Investment 34

6.8 Source of fund35
6.9 Credit & Borrowing System 35
6.10 . Annual Production Cost 35
7 Projected Financial Statements 38
7.1 Revenue Projection 38
7.2 Profitability 38
7.3 Financial Internal Rate of Return: 39
7.4 Sensitivity Analysis 39
7.5 Plan of Operation 40
8 Business monitoring 42
9 Business evaluations 42
10 Environmental Impact Assessment 43
10.1 Potential environmental impacts of the project 44
10.2 Pollution Control 44
11 Conclusion and recommendation 44
11.1 Conclusion 44
11.2 Recommendation 45
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1. Introduction
1.1 Back ground
The Development of Fruit and Vegetables in Ethiopia About 75% of Ethiopia’s industry is engaged in
processing of farm products. According to (CSA, 2003) the area under these crops (vegetables and root
crops) was estimated to be 356,338.82 hectares. From the total area of fruit plantation about 70% is
cultivated by individual peasant farmers, The total annual volume of fresh fruit production of the state
sector agriculture contribution is less than 20%.
The number of small-scale producers involved in horticulture is estimated at 5.7 million farmers
(MOARD, 2007). Few smallholder farmers are engaged in out-growers arrangements. After the
establishment of fanners association unions, like Mekibatu and Haramaya, in the rift valley and eastern
part of the country respectively, approximately 600 farmers are supplying their products (tomato, onion,
potatoes) to the unions under contractual agreements. The union supplies the out- growers with inputs like
seed and fertilizer and sometimes pesticides (Woldsadiq, 2007). According to the study made by
Ethiopian Export Promotion Agency (Sisay Habte, 2004), the major fruits and vegetables growing areas
of the country are summarized as follows:
Amhara region has different agro-ecologies and fertile soil that are suitable for production of
different types of fruits and vegetables. The production practice of fruits and vegetables is
predominantly using traditional farming system for local markets as cash crops. The area allocated for
production of these crops, and their production and productivity in the region are very low. Currently,
fruit and vegetable production covered about 0.06% and 2.14% of the total area covered by crops in the
region, respectively.
The areas allocated for the production of fruits and vegetables are also very small. Thus the
production and productivity of fruits and vegetables in the region as well as at country level is very
low. Currently, very few commercial farms are participated in the production of fruits and vegetables in
the region compared to Oromia and SNNP states (Joonsten et al., 2011)
Generally, horticulture industry in the region is facing a number of challenges in both production and
marketing aspects.
Some of the production constraints include improper agronomic practices because of lack of skills
and knowledge in the production and management practices; limited accessibility to improved
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agricultural technologies; shortage of inputs like fertilizers, improved seeds and pesticides; occurrence of
diseases and insect pests; improper harvesting and harvest handling; poor packaging, sorting, and
processing which do not add value to the products and do not increase the shelf life and safety of the
products. Among the market constraints multiplicity of actors and unfair competition, lack of market
information, seasonal price fluctuation, unavailability of market facilities and infrastructure, poor
handling and transportation, absence of norms and regulations for fair marketing, considerable role of
middlemen or brokers, etc are the major once
1.2 Status of fruits and vegetable marketing in Ethiopia
The Ethiopian size of the domestic market for fruit and vegetables is limited as is also clear from the very
low consumption data. Export of fruit and vegetables can be categorized into three types. First, export of
relatively high value perishable produce to Europe. Second, the export of low value produce cultivated
predominantly in Eastern Ethiopia around Dire Dawa, to regional markets (mostly Djibouti) and, third,
some processed and fresh produce to Middle East countries (Greenhalgh and Havis, 2005). Further
development of the fruit and vegetable sector in Ethiopia for export to Europe and the Middle East has
good perspectives and provides interesting opportunities. In accordance with this the focus of project
should be on describing and analyzing different institutions engaged in marketing including producers,
commission agents, wholesalers, shopkeepers, retailers, etc. in the marketing system and the relative
importance of this facilitating agency to the project.
Vegetable is a big deal to Ethiopians as around 20 % of the population make their living directly or
indirectly out of the commodity by production and trading, it accounts for 2.5% of the GDP, up to 30% of
the total yearly export income of the country and 10% of the total government earning. However; the
vegetable sector has not developed fast and the export volume has not shown a rapid growth and the
country did not exploit and benefit from this economically important crop by using its comparative
advantage to the best of its genetic and ecological potential (CSA).
Fruits are of the various strongly flavored or aromatic substances obtained from plants. Fruits are
commonly used as condiments or employed for other purposes on account of their fragrance and
preservative qualities. Principal sources of fruits are black pepper, chilies, cinnamon and cassia, cloves,
cardamom, fruit seeds as coriander, cumin, fenugreek dry ginger, turmeric, etc. These fruits are used in
various blends for the preparation of food items and other products
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1.3 Overview of Horticulture Subsector in Amhara Region
Amhara region has different agro-ecologies and fertile soil that are suitable for production of
different types of fruits and vegetables. The production of fruits and vegetables is usually practiced by
smallholder farmers throughout the region like it is in the country. According to the information obtained
from Regional Investment Agency, some private commercial investors are currently starting to
engage in the horticulture sector. However, their contribution to the regional fruit and vegetable
production is very low. The production practice of fruits and vegetables is predominantly using
traditional farming system for local market as cash crops. The area allocated for the production of fruits
and vegetables and their production and productivity in the region is very low.
According to CSA data from 2013, from the total area covered by crops, about 0.06% and 2.14% of
the area is covered by fruits and vegetables, respectively. The objective of the company is to avail
high quality and quantity products to local and international market by establishing high tech production
facility and highly professional experts in this field. To develop different type of product that is suitable
for end consumer by focusing locally available plants, herbs and oil seeds and produce products that is
environmentally friendly products and be role model in implementing and certification of Good
Manufacturing Practice (GMP) and ISO.
1.4 Objectives of the farm
The main objective of the project is aimed at to maximize the return on invested capital in the form of
profit for the promoter. However, its implementation will benefit the employee, the consumer society and
the government at different levels. In this respect the project is aimed to promote the following objectives:
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 To maximize the return on invested capital through Delivering quality Fruit and Vegetables
 To raise the significance and importance of the sector and thereby raising its contribution to the
national economic development.
 Effectively use local inputs and strengthening the linkage between agriculture and other sectors of
the economy.
 To provide gainful employment to a large segment of the population of the project area and
augment earning capacity at the grassroots level.
 Increase government revenue through the different forms of taxes, which in turn used to facilitate
social and economic development. In general, the project is believed to have significant social
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and economic benefits that accrue to the society, the region and the country beyond the financial
returns to its owner.
1.5 Vision, Mission, Values and Clients
1.5.1 Vision of the Project
To be leader and competitive in quality assured vegetable , fruit and fruits product in Amhara national
Regional State, south wollo zone, Worebabo woreda in particular and at National level in general. As the
same time contributing its share in the economic development of the country by creating job opportunities
to youths and women in this sector.
1.5.2 Mission of the Project
Fully committed towards the production and delivery of high quality vegetable and fruits product
to the respective communities.
Seeking fair and reasonable profit, enough to keep the company financially healthy for the short
and long term, and to fairly remunerate employees for their hard work and effort.
1.5.3 Values
Community based: expressed in knee and close relationship with the local community.
Reliability: expressed in supply of sustainable quality assured detergent products which satisfy
costumer’s interest?
Integrity: keeping work procedures, rules, regulation of the project at all levels.
Responsiveness: expressed in giving appropriate and timely responses to the government and the
growing need and request of the society.
1.6 The promoter
The owners of the project, Omer Hassen lives in Dessie town and participate in different social
responsibilities. The Project Owner has trade licensee for in electronics trade in Dessie town. Currently
the owner took land from tehuldere woreda for electronics manufacturing and built the shed.
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1.7 The Owner Address
1.7.1 Residence Address

Name: - Oumer Hassen
Country: Ethiopia
City: Dessie
Phone: 0920-20-86-86
1.7.2 Project Location
Country: Ethiopia
Region: amhara national regional state
Location: Werebabo woreda
1.7.3 Legal documents of the project
 Legal form of business: Sole Enterprise

 Type of project: Fruit and vegetable farm production
 Status of the project:- New
Total area required:- 9.4 hectors
Lease period:- 25 years
 Right of Occupancy:- private holding
1.8 Credit information with other banks
The Project has no any credit relation with other local as well as foreign banks
2 Pull, push and success factors
2.1 Pull Factors

Opportunities of Horticulture Subsector Development in Amhara Region Amhara National Regional
State is an agrarian region where more than 85% of its population is living in the rural area and
practicing crop production as their source of its livelihood (USAID, 2000). The region is endowed
with favorable environmental conditions and plenty of natural resources that are required for the
production of crops including horticultural crops.
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 Suitable agro-climatic conditions and fertile soil
As a result of altitudinal differences existing in the region, ANRS has diverse agro-climatic
conditions which are suitable for the production of various types of horticultural crops. In highlands
where the temperature is relatively cool, temperate fruits and vegetables like apple, pear, plum, peach,
cabbages, potatoes and others can be grown, whereas in low lands with relatively high annual average
temperatures typical tropical and subtropical horticultural crops can be grown in the region.
 Water resource potential
The mean annual rainfall of the region varies from 300 mm in the east (Habru and Kobo woredas of
North Wello) to over 2000 mm in the Awi zone in the west, specifically, the Banja Shikudad, Sekela and
Guangua woredas. Generally, the western parts of the region are characterized as high rainfall and high
agricultural potential areas including irrigation potential, with precipitation exceeding 1200 mm annually
and irrigation potential (Figure 5). Relatively low rainfall and agricultural potential areas are found in
the North Wello and Wag Hemra zones. The region experiences both uni-modal and bimodal rainfall
patterns, generally, in the west and east, respectively (BoA, 1990).
 Labor force
Horticulture farming is a labor-intensive system of crops production which requires about 30 man-days
per hectare (EIA, 2012). The Amhara region is a very big and probably the most populated region in
Ethiopia. According to the estimate of CSA in 2008 the population of Amhara region is 20,136,000. More
than 50% of the population is being at working age (BoFED, 2003) that can be actively engaged in the
production of horticultural crops. Besides labor cost for unskilled as well as university graduates is very
low as it is also at country level (EIA, 2012).
 Investment incentives, guarantees and protections
The Ethiopian Government has developed a package of incentives under Regulations No.1180/2021 for
investors engaged in new enterprises and expansions, across a range of sectors including
horticulture. These incentives are available to both domestic and foreign investors without any
difference in their nationalities. The following are types of incentives available to both foreign and
domestic investors (EIA, 2012): Customs duty exemption
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 A 100 percent exemption from the payment of import customs duty and other taxes imposed on
imports is granted to investment capital goods and construction materials necessary for the
establishment of a new enterprise or for the expansion or upgrading of an existing enterprise as
well as spare parts worth up to 15 percent of the value of the imported capital goods;
 Investment capital goods imported without the payment of import customs duties and other taxes
imposed on imports may be transferred to investors enjoying similar privileges;
 Exemptions from customs duties or other taxes levied on imports are granted for raw materials
and packing materials necessary for the production of export goods. Taxes and duties paid on
raw materials and packaging materials are drawn back at the time of exports of finished
products. The voucher system and bonded manufacturing warehouse facilities are also in place.
 All goods and services destined for export are exempted from any export and other taxes
imposed on exports. Income tax exemption
 Any income derived from an approved new manufacturing, agro-industrial or agricultural
investment is exempted from the payment of income tax ranging from 2-8 years depending up on
the area of investment, the volume of export and the location in which the investment is
undertaken.
 Income derived from an expansion or upgrading of an existing manufacturing, agro-industrial or
agricultural enterprise is exempted from income tax for a period of two years if it exports at least
50% of its products and increases, in value, its production by 25%.
 Investment guarantee and protection
In Ethiopia both the Constitution and the investment Code protect private property. Ethiopia is also a
member of MIGA, which issues guarantees against non-commercial risks to enterprises that invest in
signatory Countries. Besides, the Country has signed bilateral investment promotion and protection
treaties with a number of Countries and is also in the process of signing such treaties with a number
other Countries.
2.2. Push Factors
 Inadequate Infrastructure
Transportation facilities in vegetable growing areas especially at times of harvesting and processing are
the major problem. Most producing areas are far from cities so that it takes long time to transport
vegetable to the market at the right time
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2.2 Success Factor
 Professional Management and Skilled Man Power
Vegetable and fruits production activities need experience and qualification of the management
especially agronomist are recommended to do on the system to improve vegetable , fruit and fruit
productivity through applying good and modernized agricultural practice integrated with research.
Currently the issue of protecting the environment and the health and safety of workers; and growing
quality and standard requirement of the vegetable product needs good management and skilled man
power.
The selection of a given variety depends on its yield per tree, quality of the fruit, shelf life and others. The
selection and production of a variety that optimizes such parameters is a key to success on fruit
production.
 Selecting a Good Variety and Climatic Condition
Vegetable and fruit production is highly sensitive to climatic condition. Hence, before making an
investment decision on vegetable production, analysis of climatic conditions, soil temperature and water
taste in the area where investment is planned to be made is very important.
Additionally selecting good varieties is also important for the success of the sector. The selection of a
good variety depends, on its yield per tree, better quality, disease resistance, and others. Research
activities have been carried out by the Agricultural Research Center (JARC).
 Past Experience of the Existing Vegetable and fruit Growers
Before deciding to allocate money on vegetable and fruit production, the owners are required to have the
knowledge of the specific feature of vegetable production and marketing activities, the qualification and
experience of the management they would employee, the willingness to accept a reasonable amount of
risk and the importance of working closely with the local residents.
2.3 Social responsibility
2.3.1 Natural resource development

The owner will establish an integrated water and soil conservation practice even if the land is plain.
Moreover, together with the local farmers the owner will support the nearby area which is not covered by
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natural vegetation by making agro forestry activities. For this purpose the project will have 345,000.00
birr financial support to sub city and kebele for an integrated water and soil conservation practices.
Table 1 Water and soil conservation and its budget
Birr
No Activities Unit plan Unit cost Total cost
1 Gulley treatment M2 200 10,000.00
2 Provision of indigenous seedling No 100 50 5,000.00
3 Compost Demonstration M3 10 1000 10,000.00
4 Seedling distribution for farmers N0 500 30 15,000.00
5 Nursery preparation M2 10*40 50 50,000.00
6 Plantation on farm land No 1000 10 10,000.00

7 Financial support for technological No 20 250 10,000.00
transfer
8 Out grower purpose training No 50 1000 50,000.00
Total 160,000.00
2.3.2 Establish good working environment for project workers

Since the nature of the farms need to much effort, the project will establish workers house health
facilities, transportation and recreational center. For the purpose the following budget is allocated
Table 2 Staff facilities
Birr
No Activities Unit Plan Unit cost Total cost
1 Provision of one meal feed Qt 20 2000 42,080.00
2 Health facility No 50 200 10,000.00
3 Transportation No 50 100 5000.00
4 Housing No 4 10000 180,000
5 Provision of clean water M3 100,000 1 100,000
Total 337,080
2.3.3 Financial support to institution and infrastructure development
The project will support the establishment of institution and infrastructure development within the project
sub city and kebele. For this purpose the following budget will be allocated.
Table 3 Social infrastructure cost
Birr
No Activities Unit Plan Unit cost Total cost
1 School building No 1 50,000 50,000.00
2 Road construction k.m 10 10,000 50,000.00
3 Health center building No 1 50,000 50,000.00
Total 150,000.00
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2.3.4 Technology Transfer
Trainings on new and adaptive technology shall be arranged and delivered to local farmers and
stakeholders. The following budget will be allocated for this in the first 3 years of the project phase.
s.no Activities unit Plan Total birr
1 Training no 13 100,000.000
2 Technology adoption No 13 100,000.00
Total 26 200,000.00
2.3.5 Natural compost preparation
As we known fruit and vegetables are very perishable due to short life period. So the wasted product will
be used for natural compost preparation for its own farm.
3 Product Description
Fruit and vegetable product means those plant items used by human beings for human food consumption
including, but not limited to, field crops, root crops, berries, herbs, fruits, vegetables, flowers, seeds,
grasses, tree products, mushrooms, and other similar products, or any other fruit and vegetable product
processed for human consumption as determined by the Michigan commission of agriculture.
A vegetable is basically any part of an herbaceous plant that can be eaten. Vegetables may be raw or
cooked; fresh, frozen, canned, or dried/dehydrated; and may be whole, cut-up, or mashed. Vegetables
contain water soluble vitamins like vitamin B and vitamin C, fat soluble vitamins including vitamin A and
vitamin D, and also contain carbohydrates and minerals.
Tropical fruit growing in Ethiopia between the tropics of cancer Capricorn that is part of the earth which
lies between 0 and 20 degree latitudes and North and South of equator. These include Banana, orange,
onion, potato, Pineapple, Papaya, Mango and Guava, etc.
Potato is only a minor root crop in tropical Africa despite its potentials as indicated by its growth in terms
of production. Among the root and tuber crops, it is the only one that had a Positive per capita annual rate
of increase in production in Sub-Saharan Africa.
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Potato has a high yield potential that may be realized within a relatively short growing season and an
adaptability to a wide ecological range of 0 to 2000meters above sea level and 30° N to 300S
(Hahn ,1984). Presently, it does not find much use as food in most parts of Africa except in Burundi,
Rwanda, Ethiopia and Zaire, which accounted for over 46% of African potato production in 1984.
Onion: According to Lemma and Shimeles (2003), Ethiopian onion is produced in many parts of the
country by private growers; state enterprise mainly in Awash valley and lake Region, where the bulk of
dry bulbs and seed are produced. Onion is one of the most important commercial vegetables. Onion is a
cool season crop. However it can be grown under a wide range of climatic conditions. It grows well under
mild climatic without extreme heat or cold or excessive rain fall (Sharma, 2006).
Orange: is one of the most important fruits in the tropical and sub-tropical regions of the world. The
fruits are eaten fresh and used for making canned orange juice. Large quantities of sweet orange are used
to produce single strength juice, frozen concentrate, rind oil, pectin used in the production of jams and
jelly pulp residue which is fed to livestock. The orange juice is also extracted and used for flavors for
food items. In West Africa and Africa in general however, the great potentials derivable from sweet
orange has not been harnessed (Apata, 2002).Banana: is grown in many developing countries and is
mainly distributed between 30° north and South latitude (Taye, 1975). It is the fourth most important food
crop in terms of gross value of production. Total value of international banana trade ranged between USD
4.5 and 5 billion per year, of which 80% of the export comes from Latin America with African countries
having a share of only 4% during 1998-2000. The majority of the 7global banana production (47%)
comes from Cavendish sub-group (FAO,2008). The Economic Significance of the Project The envisaged
project deemed to contribute to the economic development of the region ingeneral and the woreda/zone in
specific with to the three zones of Oromia regional state in the following ways:
4 MARKET STUDY
This market study consists of market segmentation, global market, domestic market, which consists of
domestic demand and supply of vegetable , fruit and fruit marketing channels and arrangement of green
bean vegetable in domestic market, and price trend of its in Ethiopia. Ethiopian Market
4.1 Vegetable Demand in Ethiopia

The Demand for vegetable is composed of both domestic Consumption derived from the population and
international demand. The domestic consumption, sum of per capita consumption of all persons, which
holds large share linked to vegetable culture in Ethiopia. On the other hand, international demand is
another spectrum which makes the major demand side of vegetable in Ethiopian context.
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4.1.1.1 Domestic Consumption
Domestic demand of vegetable in Ethiopia is emanated from the consumption of the mass population. It is
estimated that nearly 50 percent of vegetable produced in Ethiopia is self-consumed (USAID, 2012).
Indeed, a special feature of Ethiopian vegetable production is that domestic consumption is considerably
high, as vegetable is a traditional beverage throughout the country. Vegetable is closely associated with
the Ethiopian culture.
Vegetable is not usually consumed for nutritional benefits. However, many recent studies suggest
vegetable may have positive beneficial health effects, independent of the energy boost offered by
caffeine. For example, vegetable and caffeine consumption have been linked to a lower risk of
Parkinson’s disease and lower rates of Type 2 diabetes, gallstone development, and liver cirrhosis. Also,
vegetable is high in antioxidants.
Ethiopia is not only the icon of vegetable, but it thrives on vegetable and people eat vegetable regularly in
every part of the country. Vegetable is closely associated with the Ethiopian culture. Most people in the
country start their day by taking a cup or two of vegetable in the morning. A large proportion of vegetable
consumption in Ethiopia occurs on farm, which makes levels of consumption difficult to assess.
According to FAOSTAT data base, the per capita consumption of Ethiopia is on average 2.2 Kg per
person per year.
4.1.1.2 Demand Projection
Assumption
2007 total population of 73,918,505 as a base year and annual population growth rate of 2.67% is used to
estimate the total population of Ethiopia (2007 population and housing census report).
Average per capital consumption 2.2 kg/person/annum is used to determine domestic consumption of
vegetable (FAOSTAT database).2015 vegetable export amount of 211,200 ton as a base year and average
annual growth rate of 3.11% is used to estimate export demand of Ethiopian vegetable.
Green vegetable consumed by the industry are not considered for projection purpose because it is
considered that the per capita consumption per person is an end user of the crop and includes industrial
demand.
Table 14:- National green Vegetable Demand Projection (in tons)
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Domestic Demand Export Total Demand

Years Demand
Population of Domestic
Ethiopia Consumption (In
Tons)
2016 93,701,217 206,142.7 217,768.3 423,911.00
2017 96,203,040 211,646.7 224,540.9 436,187.60
2018 98,771,661 217,297.7 231,524.1 448,821.79
2019 101,408,864 223,099.5 238,724.5 461,824.04
2020 104,116,481 229,056.3 246,148.9 475,205.13
2021 106,896,391 235,172.1 253,804.1 488,976.16
4.2 Vegetable Supply in Ethiopia
4.2.1 Domestic Production
Ethiopia produces only vegetable Arabica which is 80 percent natural or sun dried. An accurate figure of
production is difficult to get due to the reason that a large proportion of the harvest is gathered from semi-
forest and individual farmers plot and a large part of the crop is consumed locally in addition to the weak
farm documentation in the country. There is also a difficulty to know the accurate amount of vegetable
production in the country being different sources indicate different amount of vegetable production in the
same indicated years.
Vegetable production systems in Ethiopia can be grouped into four broad categories as: forest vegetable ,
semi-forest vegetable , garden vegetable and plantations vegetable . The first three are traditional
production systems by small-scale subsistent farmers. The three traditional systems, i.e., forest (Bale,
western Wollega, Bench Maji, Keficho-Shekicho, Metu and Jimma Zone), semi-forest (South and South-
Western) and garden (Southern & Eastern parts of Sidamo,Godeo, South and North Omo, East and west
Harage, Wollega and Gurage Zones) vegetable production systems account for 5-6%, 20%, and 68-69%
of the total vegetable production in Ethiopia respectively, summing up to 95% of the national produce
and the remaining percentage is produced by plantation.
A production growth rate of green vegetable bean increase by 1.2 percent expected to increase in future
because Ethiopia creates a new market partnership out of united States like countries Saudi Arabia, Japan,
Denmark, China (Main land) and South Africa which show a strong interest to import Ethiopian green
Bean vegetable (United States Foreign Agricultural Service Office of Global Analysis).
Table 15: The National Green Vegetable (Washed & Unwashed) Production of Ethiopia
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Year Amount Produced

(Tons)
2011 373,980
2012 391,620
2013 397,500
2014 388,500
2015 391,800
(Geometric 1.2
Mean)
Source:-United States Foreign Agricultural Service Office of Global Analysis (USAS)
4.2.2 Supply Projection
Assumption
2015 vegetable production amount of 310035 tones is considered as a base year and Average annual
growth rate of 1.2% is used to estimate supply of vegetable.
Table 14:- Projection of the National Green Vegetable Production

National Production of
Year Vegetable
(In tone)
2016 310035
2017 401241
2018 406037
2019 410928
2020 415840
2021 420833
Table 18 Demand Projection for Fruits

Year Demand in Tons
2020 5050
2021 5580
2022 6166
2023 6814
2024 7530
2025 8320
As shown in Table 18 the demand ranges from 3388 tons in 2016 to 8320 tons in 2025.
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4.2.3 Pricing and Distribution

Pricing strategy: In selecting the prices for the service takes into account the following principles:
 Select the most profitable prices;
 Select the most competitive prices;
 Select the prices that allow us to position in the marketplace.
 Select the price that can affect to the demand of the consumers.
There are two main factors in formulating pricing strategy:
 Cost that incurred to deliver service/operational cost
 Price of competitors
In order to exploits the market opportunities and the available potential for fruits production the average
selling price has been established at Birr 115/kg which amounts to Birr 115,000/ton. The envisaged farm
can directly distribute the product to end users or export market as the product has identified dependable
markets. The average product of vegetable and fruit are 435 quintals per hectare. So from 7.03 ha of lane
3058.05 quintals will be produced
5 Technical Study and Background of the project area
5.1 Location of the project
WereBabo (Amharic) is one of the woredas in the Amhara Region of Ethiopia. This woreda is named for
one of the "Houses" or subgroups of the Wollo Oromo that used to govern the area and is still located
there. Part of the Debub Wollo Zone, Were Babu is bordered on the south by Kalu, on the west by
Tehuledere, on the north by the Mille River which separates it from the Semien Wollo Zone, on the east
by the Afar Region, and on the southeast by the Mio River which separates it from the Oromia Zone. The
administrative center of Were Babu is Bistima; other towns include Ejersa, Arabati and Bokeksa.
The western part of Were Babo lies in the Ethiopian highlands, with the eastern part stretching down to
the lowlands of the Afar Region; elevations range from 700 meters above sea level where the Mille leaves
the woreda to 2700 meters at its southernmost point. Rivers include the Wakalo and the Burqa.
5.2 Demographics
Based on the 2007 national census conducted by the Central Statistical Agency of Ethiopia (CSA), this
woreda has a total population of 100,530, an increase of 11.22% over the 1994 census, of whom 50,459
are men and 50,071 women; 6,726 or 6.69% are urban inhabitants. With an area of 714.28 square
kilometers, Were Babu has a population density of 140.74, which is less than the Zone average of 147.58
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persons per square kilometer. A total of 23,910 households were counted in this woreda, resulting in an
average of 4.2 persons to a household, and 23,201 housing units. The majority of the inhabitants were
Muslim, with 97.88% reporting that as their religion, while 2.01% of the population said they practiced
Ethiopian Orthodox Christianity.
The 1994 national census reported a total population for this woreda of 90,386 in 19,733 households, of
whom 44,737 were men and 45,649 were women; 4,539 or 5.02% of its population were urban dwellers.
The two largest ethnic groups reported in Were Babu were the Amhara (97.76%), and the Oromo
(2.18%); all other ethnic groups made up 0.06% of the population. Amharic was spoken as a first
language by 95.91%, and 4% spoke Oromiffa; the remaining 0.09% spoke all other primary languages
reported. The majority of the inhabitants were Muslim, with 97.6% of the population reported as
practicing that belief, while 2.37% of the population said they professed Ethiopian Orthodox Christianity
5.3 The site selection
Appropriate site selection is the first requirement for vegetable and fruit production. This is work is
finalized by project manager by using their tremendous knowledge of about the site and full of experience
about on vegetable, fruit and fruit farm. The selected site is suitable for vegetable, fruit and fruit
production system.
5.4 Farm establishment
In field preparation, starting from land preparation and extends up to young vegetable plant transfer. The
major operations under farm establishment are:
i. Land Preparation for Cultivation
Once, the site for plantation is properly selected, the next step will be land preparation which starts from
land clearing. Land preparation involves allowing adequate spacing for vegetable, fruit and fruit trees to
grow, for machinery to operate and the correct shade needed from seedling to maturity stage.
A, Land Cleaning
After bush and unwanted large trees should be cleared and perennial grasses eradicated before the
vegetable, fruit and fruit is planted, any remaining roots and stumps are then less liable to harbor
pathogenic fungi. Ones the trees are dead they should be felled and the stumps dug out by hand. Smaller
trees can be felled and the stumps pulled out by winch or tractor. The use of bulldozers should be avoided
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if possible because it is important not to remove topsoil or bring up the subsoil. The land should then be
ploughed and any remaining stumps and root removed by tined cultivator or ripper, but on sloping land
hand clearing is preferable in order to reduce the risk of soil erosion.
Therefore to establish a modern plantation that would be convenient for general management mobility of
workers and family supervision of different farm activities the entire land under the project should be
surveyed parceled in to blocks and the net vegetable area should be identified.
B. Leveling the Land
Land leveling may be necessary if there is small depression which subject to water logging and the land
used for intercropping until the tree plant canopy joined together.
C. Terracing
Even though the land is plain it needs to be terraced along the contour to avoid soil erosion by
constructing ridges along the counter. Terracing is excellent method to reduce soil erosion from
agricultural land. Terraces can greatly reduce soil erosion, increase infiltration, and make the land more
easily managed during normal agricultural operations. In general as our farm is a forest fruit, which have
self-sown and grown under the canopy of natural forest trees it is difficult to use machine for farm
operation.
Table 19: estimated cost for Land development

Land Development Activity Area Unit Cost Total Cost
Trash removal 50.00 2,340 117,000.00

Leveling 50.00 1,740 87,000.00
Ridge Construction 50.00 900 45,000.00
Total Planned Land Development Cost 249,000.00
Note: MD/hr = Man-day per hour
H. Pest Control
Weeds in the vegetable and fruit crop should be controlled to avoid the production loss and make easier
the crop management. Good weed management and effective weed control require better understanding
of weed response to change in cultural methods and the application of herbicides.
It is a paramount important to know the weed species in general and the dominant weed species in
particular before designing and implementing any weed control strategies. Weeds in vegetable fruit and
fruit range from the easily controlled annual grasses and broad-leaved weeds to the more persistent
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perennial grasses. The methods in vegetable weed control can be grouped under two sub headings cultural
(physical) and chemical methods.
Slashing, mulching and use of hoe (dig over) are the commonly used cultural methods of weed control in
vegetable. Pulling or uprooting of the weeds out of the soil by hand also the other way of cultural weed
control. The total cost of herbicide chemicals for matured and young vegetable plantation is 23,403 birr.
5.4.1 Harvesting and Processing
Vegetable and fruit are harvested (picked) by hand. And the harvesting stage of the vegetable and fruit
plantation will depend on the method of vegetable processing. Vegetable Processing is a major activity in
vegetable production and it is the most critical activities from a quality point of view.
5.4.2 Transportation
Storage and transport pose similar risks to vegetable quality. Re-wetting of beans due to leaky
tarpaulins (observant cover), or high humidity inside hot containers standing for long periods in
tropical ports, can result moldy or musty flavors. Special techniques for handling bulk or bagged
green beans for container shipping are now well known.
A, Avocado and other fruits plantation
Citrus fruits can be useful both as home-produced sources of very important nutrients, and as a valuable
cash crop. Well-established trees grow satisfactorily in favorable environments even when given little
care. However, in most environments young trees die if neglected; and mature trees grow and produce
well only when cultivated carefully. With proper management the trees grow and produce fruit
indefinitely. Therefore, they should be treated as a lifetime investment deserving constant care.
At present avocado is being produced by private peasant and some commercial holdings in many suitable
areas in the country. In this connection, the Agricultural Sample Survey of CSA (July, 2007-Vol I) report
that in Ethiopia there are about 561,790 private peasants cultivating citrus on 3298.2 hectares of land.
These farmers produced about 526,663 quintals of fruits in 1999 E.C. The average yield, therefore, was
160 quintal per hectare (90 quintals for lemons and 180 quintals for orange). Such average production is
very low and can be increased to at least to 600 quintals per hectare if cultivated in a standard manner.
At the same time there is a potential of high consumption of citrus fruits, particularly orange, provided
that the fruit is supplied to the market at affordable prices. According to CSA, Annual Abstract (2008),
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the number of population in July 2007 has reached 77.1 million in the country of which 12.7 million
resides in the urban places while the remaining 64.4 million dwells in the rural part of the country. If we
assume that at least 25 % percent of the urban and 1% of the rural residents can afford to consume 0.5 Kg
of fruits per head per week if it is sold at an affordable price, the annual consumption of the fruit will
amounts to 992,940 quintal.
5.5 Building and construction

Building and construction planned for the project by the promoter are Shed store, office, clinic, dry
latrine, guard house, product house, residence and office with a total estimated cost of Birr 5,093,888.00
Table 1. Cost of Building
Unit Unit block
No Description Total block amount
amount
1 Raw material And product Storage 30*40 2,980,000.00 2,980,000.00
2 Machine house (shed) 30*20 1,824,654.00 1,324,654.00
3 Office 10*20 1,289,234.00 1,389,234.00
Grand total 5,093,888.00
5.6 The production process fruits and technology selection

Based on the fertility of soil, climatic condition, availability of water sources used for irrigation scheme in
the absence of rain fed, communication facilities like transport, proximity to markets and acceptance of
the product by consumer and selection of verities are essential requirements for selection of suitable and
right location for fruit production before, going to fruit production process. After these necessary
conditions are fulfilled, the production process then followed. The production process starting from farm
field preparation and proceed up to packing of the product. The major processes in fruit plantation are:
 Farm Establishment
 Planting operations of tree fruit
 Fresh Fruit Harvesting, Storage facilities and Packaging
 Farm Machinery and Equipment
 Farm building and construction
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5.7 Farm Operation Costs
5.7.1 Nursery of the fruit Farm
5.7.1.1 Nursery site selection

The Nursery of the vegetable and fruit farm will be established to accommodate the total amount of
vegetable and seedling that has seen as a gap. The total area to be covered by vegetable plantation is 7
hectare in excluding the construction and nursery site from the total area.
Omer Hassen farm, specialists were selected the vegetable nursery site using the standard criteria for
vegetable nursery site establishment which includes: Accessibility to the plantation site, good drainage
ability, proximity to sources of different soils, suitable altitudes, sheltered location, sufficient water
supply, level topography, infrastructure, and the availability of labor sources.
I. Accessibility to the plantation site
The selected nursery site is located at the center of the fruit farm which is easily accessible for transport
the seedling to planting site during rainy season.
II. Good drainage
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We have selected the nursery site which can avoid black cotton soils since it has poor infiltration during
rain and watering that makes the area muddy and affects activities like transporting by vehicle and wheel
barrow.
III. Proximity to sources of different soils
It is required to raise the fruit seedling by using only polythene tubes which require available soil-mix
ingredients that can be brought from another place and the selected nursery site is able to get the essential
and suitable physical soil texture to produce vigorous seedling root growth.
IV. Suitable altitude
In Ethiopia the altitude (with the correlated rainfall and temperature) has the greatest effect on the growth
of vegetable. Altitude also affects the growth of seedlings in the nursery. The selected nursery site has an
altitude of 1500 meter above sea level which is within a good range for vegetable nursery.
V. Sheltered location
A vegetable nursery site should not be exposed to desiccating winds. The selected site is protected from
wind by natural vegetation in the area.
VI. Sufficient water supply
Growing vegetable seedlings must have enough water at all times. The water supply must be especially
sufficient during the driest season when seedlings need water most. The area has sufficient amount of rain
fall for at least 8 months in a year. The supply of water is enough the growing period of the seedling.
VII. Level topography
Relatively flat land, ideally with a 2—5% slope, is most suitable for a nursery so as to protect water
logging does not become a problem. But 50% of the selected nursery site topography is above 5 % slope
while 50% of the site is having 5% slopes. Due to this reason terraces must be constructed.
5.7.1.2 Nursery Size Determination

We have got a total of 4375 wildings of vegetable from the total vegetable and fruit farm 10,000 m 2 by
deducting 10% of land for construction). The expected planting spacing will be 2*2 m in which 2500
seedling per hectare is estimated. The total number of seedling required is therefore indicated as follows.
The nursery will use a polythene bags for seedling having a diameter of 16 cm. The number of seedling
per 1m2 is calculated using the following formula.
N=(100/d)2, where
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N= number of seedling in 1 m2
d= diameter of the pot

, N=(100/16)2=38 seedling in one m2
1. Bed Size
For good management of the seedling it is required to make a bed size of 1.2m width and 10 m length
having a total of 12m2 which have a capacity of raising 456 seedlings. We assumed to plant the total
required seedling within two years and a total of 4375 seedlings including the contingency are required in
a single year
Therefore, 7 ha of land for production area and 3761m 2 for administration area and a total of 400 m 2 of
land is required for nursery establishment.
5.7.1.3 Cost Estimation for Nursery Establishment
A. Seed Cost
Seed Rate……………………………………………………………0.84kg/hectare
Note: Recommended vegetable spacing and some assumptions
 The average recommended space = 2m*2m
 The average number of seedling per hectare =2500. (The number of seedling per hectare will vary
depending on soil type, type of variety, spacing and altitude.
 1kg of seed = 250 birr
 Germination rate is assumed to be 65- 70%
 Total cost for seed - 21,000.00 birr
B. Nursery Operation Costs
Table 2: Vegetable Nursery Establishment

Description Frequ MD/ amount of work cost
ency ha Total 2016 2017 Total 2018 2019
Surveying seedlings site 1 30 2 2 2 6000 6000 6000
Seed bed preparation 1 25 2 2 2 5000 5000 5000
Peg preparation 1 8 2 2 2 1800 1800 1800
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Lining and pegging 1 5 2 2 2 1500 1500 1500

parcel and leveling 1 0.5 2 2 2 500 500 500
Soil heaping and mixing 1 27 2 2 2 2700 2700 2700
composite materials
Cutting polyethylene, 1 20 2 2 2 2000 2000 2000
Filling polyethylene bags
Arranging polyethylene 1 1 2 2 2 100 100 100
bags
Sorting seeds 1 5 2 2 2 500 500 500
Pre-sowing watering 1 3 2 2 2 300 300 300
Sowing 1 2 2 2 2 200 200 200
Mulch material 1 5 2 2 2 500 500 500
preparation
Mulching 1 25 2 2 2 2500 2500 2500
Shed materials collecting 1 330 2 2 2 33000 33000 33000
& construction
Watering and Cleaning 60 7 2 2 2 42000 42000 42000
Weeding 25 2 2 2 2 5000 5000 5000
Fertilizing 2 4 2 2 2 800 800 800
Hoeing 8 2 2 2 2 1600 1600 1600
Spraying chemicals 3 20 2 2 2 6000 6000 6000
Thinning shade 3 1 2 2 2 300 300 300
Removal of mulch 1 4 2 2 2 400 400 400
Shade removal 1 6 2 2 2 600 600 600
Seedling Sorting 2 3 2 2 2 600 600 600
Seedling Counting 2 22 2 2 2 4400 4400 4400
Sub total 118,300.00 118,300.00 118,300.00
 Wage rate Per day ………………………………………………………….160 Birr/labor
A. Fertilizer Requirement for nursery
Chemical fertilizer requirement for nursery

Descri Frequ Application rate Total Fertilizer requirement for Costs of fertilizer in Birr
ption ency seedling nursery quintal
total 2016 2017 total 2018 2019
DAP 3 6 gram/seedling 2500 300 150 150 1,350,000 675,000 675,000

Note: nursery needs 3:2:1 ratio of top soil, compost and sand soil respectively in addition of chemical
fertilizer.
 The total costs of nursery = seed cost+ Vegetable Nursery Establishment+ fertilizer
= 21,000.00 +118,300.00 + 675,000
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= 814,300.00
ii. Planting
Vegetable is planted during the beginning of the rainy season, when the soil is moist and under cool
conditions. The spacing width between the rows can be 15 cm to 20 cm. In the rows the seeds are placed
3 cm to 5 cm apart, 0.5 cm to 1 cm deep and with the flat side down. If the flat side faces upwards, the
radical will have to emerge around a curve and this leads to poor seedlings.
5.7.2 Transplanting
Transplantation of the seedlings is done about six months after they were grown in nursery beds or plastic
bags or when they are about 20 cm tall, and they are planted in the fields . Or vegetable seedlings are
ready for transplanting when 6 pairs of leaves have been fully developed and with no lateral branches yet.
Dig holes and transplant in the field at the start of the rainy season. This will give sufficient time for
young plant to establish roots before dry season sets in. Before planting the vegetable seedlings, holes
must be dug in order to stir the soil and loosen it. The holes should be dug two months before planting the
vegetable trees and they should be about 50 cm long, 50 cm wide and 50 cm deep. After that return
topsoil in the hole, then add tablespoons of phosphorus fertilizer and mix thoroughly (if it is used). The
cost of transplanting is estimated based on the standard sated by Development Bank of Ethiopia. Based on
this standard One person plants 105 seedlings on average per day. From this the total cost is
Table 22: Transplanting vegetable

Items Total 2016 2017
Required seedlings 4375 2187 2187
Labor to plant(M/D) 800 400 400
5.8 Machinery and Equipment

The machinery and equipment required by the farm and processing project will be procured from local
and foreign sources. The main machinery’s are tractor, generator, water pump and others. The total cost
of plant machinery and equipment is estimated at Birr 4,093,888.00. The list of plant machinery and
equipment is depicted in the following table 8.
Table 3: Cost of machinery and water pump
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Item Description Unit Qty Unit Price Total Price
Tractor 120(Hp) pice 1 4,451,300 2,417,052.89

Generator150kva/120kw380/4 PCS 1 936,695.11 936,695.11
Water pumps (diesel) No 2 350,000 700000
Weight scale 300KG PCS 2 18,000.00 36,000
Knapsack Sprayer Cp15 Pcs 3 1380 4140
Total 4,093,888.00
5.9 Farm tools

The following hand tools would be required for the operations
Table 4: Hand tool Requirements of the Project
Description UoM Quantity Total Total Unit Total Price

Required/Ha Ha Quantity Price (Birr)
Required (Birr)
S.no
Pruning Shear Pieces 0.5 544.5 272 58 15,790.50
1
Bow Saw Blade “ 0.5 544.5 272 96.68 26,321.13
2
3 Machet “ 0.4 544.5 218 74.71 16,271.84
4 Sickle “ 0.15 544.5 82 75 6,125.63
5 Zapa “ 0.5 544.5 272 62 16,879.50
6 Axe “ 1 544.5 545 19.99 10,884.56
7 Bow Saw “ 0.5 544.5 272 50 13,612.50
8 Shovel “ 0.5 544.5 272 108 29,403.00
9 Flat file “ 0.4 544.5 218 70 15,246.00
10 Mattock 2 544.5 1,089 8 8,712.00
Weeding hoe 0.4 544.5 218 6 1,306.80
11
12 Rake 0.16 544.5 87 20 1,742.40
13 Wheel barrow 0.5 544.5 272 100 27,225.00
14 Meter 0.02 544.5 11 100 1,089.00
Hammer ( small) 1 544.5 545 23 12,523.50
15
Hammer ( big) 0.2 544.5 109 66 7,187.40
16
17 Barbed wire Roll 1 544.5 545 21 11,434.50
18 Dry Cell Pieces 1.44 544.5 784 12.5 9,801.00
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19 Basket 2 544.5 1,089 20 21,780.00

20 Gesso 0.15 544.5 82 10 816.75
Total 544.5 254,153.00
5.10 Office furniture and equipment

In order to facilitate day-to-day operation and to meet the level of efficiency demanded by the
management team, office furniture and equipment is vital. The following table shows list of office
equipment necessary for the smooth operation of the project planned to be procured and existing.
Table 28: List of Office Furniture and Equipment
Unit
Measure Quant Unit
Office Equipment and furniture ment ity Price Total Cost
Computer No 3 50,000 100,000
Laptop core i5 " 1 80,000 80,000
Printer " 1 15,500 15,000
Fax Machine " 1 20,000 20,000

Chair " 40 1600 64,600
File Cabinet " 3 3500 10,500

Shelf " 2 10,000 20,000
Table " 10 3000 30,000
Miscellaneous Office equipment (Staplers, adding
machine etc sum 40,000 40,000
Binding Machine " 1 15,000 15,000
Total 395,100.00
5.11 Packaging material

Packaging provides physical protection, attractive display and ease of use as well as product
differentiation and a form of competitive advantage. Based on this advantage the project will use the
polypropylene (PP) bag.
Table 29: Packaging and material cost
Description UoM Unit Cost Required Total Cost

Picking Sacks(Plastic Bucket) Pcs 37 8,167.50 302,197.50
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Jut Sack for Output Transport Pcs 40 2,178.00 87,120.00

(100kg)
String Thread 1m for 1 sack 0.5 2,178.00 1,089.00
Total Cost 390,406.50
5.12 Utilities
Tele services, Electric city and water are the utilities required by the envisaged Vegetable plantation
and processing Project. The water is required for farm are:- portable Water for drinking and cooking,
usable water for washing and bathing, clean water for washing of vegetable , irrigation of seedling as and
when necessary during November to February
The water used in the process is any type of water from the ground or surface but it must be clean water
as much as possible in case of this farm it will be used spring water that are found their farm. In addition,
vegetable processing water is the necessary materials needed especially to reduce the water consumption
cost if the farm used water harvesting from their roof structure and water it is better.
The requirement of water for washing of vegetable as per technique to be large as the steam will be
reconsider and surplus heat used for dryers of vegetable .
The use of power in vegetable plantation is for huller & pulpier machine, for water pump and office and
residential consumption. In remote area where hydro-power is not available the plantation farm uses
generator as the source of power. Nevertheless, generator is essential in the case of electricity interruption
to accomplish hulling and pulping of vegetable timely.
Tele services are to communicate any activities in relation to project. The total costs of these utilities are
shown in Table below.
Table 30: Utilities Requirement and Cost
Items description Units Qty Cost (ETB)

Water M3 1260 12,600
Fuel for domestic and lighting only Lit. 1460 29200
Tele service Minute 66,667 50,000
Total 91,800
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5.13 Fuel, Oil and Lubricants
Table 31: Fuel, Oil and Lubricant Requirement and Cost
Total required
Activities Norm Fuel
consumption Fuel (in Cost (Birr)
rate lit)
Plowing of 2 ha nursery site by two Tractors 1ha = 1Tr per 7hr 5ltr /hr 70 1400
Disking of 2 ha nursery site by two Tractors 1ha = 1Tr per 5hr 5ltr /hr 50 1000
Transporting of mulch for two nursery site 1ha = 1Tr per 1.5h 5ltr /hr 25 500
120000
Transporting of Uprooted wood from the 1ha=1Tra per 2hr 5ltr /hr 6000
whole area(600)in one year
Fuel for dozer for 34 ha road 1ha=1Dos per 15 hr 28lit/hr 14280 285600
Fuel for service vehicle 12000km/year 10km/lit 1200 24000

Fuel cost of Motor Bicycle
6000km/year 15km/lit 400 8000
Fuel cost of Heavy truck and Mini bus
12,000 km/year 3km/lit 4000 80000
Generator (diesel)
1825lit/year 1825 36500
Motorized sprayer (Regular)
600 12000
For machinery
15,000 300,000
For other services
1000 20000
Total
44,450 889,000
The total fuel requirements for project machinery, is 148.16 liter per day. It estimates 889,000 Birr
annum. The cost of oil and lubricants are 10% of the cost of the fuel, which is about 88,900 Birr. The total
cost for fuel, lubricants and oil is estimated at Birr 977,900 Birr.
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6 Organizational structure of the farm
6.1 Management
The success of any organization is highly associated with among other things by the way it is organized
and its management. Effective management of any company requires efficient and effective use of all the
available resources for the achievement of desired objective.
In the organizational structure of Omer Hussen Vegetable, and fruit Plantation, the highest decision
making organ is the General Manager of the Business organization. Next to General Manager there will
be four departments who are directly related to operation. Based on the requirements each departments
will have the necessary divisions, these division will be assigned to specific task and responsibility.
6.2 Manpower
Accordingly the project will create new job opportunities for at least 20 permanent and 70 temporary
employees when it starts operation. Since agriculture is not new to Ethiopian agricultural industries as a
result obtaining highly skilled labor is easy. All employees will be recruited from the local work force,
some are professionals, some are semi-skilled and clerical, and others will be un-skilled employees.
Table4: Human resource requirement
No Description Req. Monthly Annual
Person salary,(Birr) salary(Birr)
1 Farm Manger 1 15,000

180000
2 farm Attendant 1 3,000
36000
3 Salesperson 1 5,000
60000
4 Casher 1 5000
60000
5 Grad 2 2000 48000
6 Secretary 1 2,000 24000
7 Driver 1 4800 57600
8 Technical and Production Head 2 4,400 105,600
9 Food Technologist 1 3,000 36,000
10 General Mechanic 1 3,000 36,000
8 Plant science 1 12,800 153600
9 Others 5 10,800 648000
10 Cleaner 2 1500
36000
11 Temporarily worker 50 Daily payment
--
Total 70 1,480,800
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6.3. Organizational Structure

In the organizational structure of Omer Hussen Vegetable, fruit and fruit project, the highest decision
making organ is the General Manager. He will be responsible and also fully authorized to run the day to
day operations of the factory. Since differentiated and quality product will be identity, to realize these
organization will invest heavily to research and development activity. Accordingly the company has two
assistance departments (Research & Development service and corporate business advisory service) who
are chaired by the General Manager. Detail organizational structure presented in the following table.
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2.5 Organizational Structure
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6.3 Overhead Expenses

Table 32: Over Head Cost

Total
Over Head Cost Type Assumption Cost
Employee benefit 10% of salary 221,418
Travel and per diem 10% of salary 221,418
Stationery & Printing Birr 13/ha 7,079
Workers uniform 5% of salary 221,418
Workers Medical & 5% of salary 221,418
insurance
Legal and audit fee - 20,000
Workers Protective 84,500
Equipment
Miscellaneous expense - 10,000
Total 1,007,250
6.4 Pre – Operational Cost

As shown Table 33, Pre-Operational cost includes - all expenses for pre-investment studies,
consultancy expenses, project administration expenses, commission expenses, preproduction
marketing etc…….
Table 5: Pre – Operational Cost
Description Unit Total cost
Project document preparation Lump sum 30,000.00
EIA document preparation Lump sum 50,000.00
Miscellaneous Lump sum 100,000.00
Subtotal 180,000
6.4.1 Depreciation Treatment

The treatment of depreciation would be on a diminishing balance method at the rate of on the
following Table. The method is also expected to provide accurate tax treatment.
32
WOREDA
Depreciation rate
 Building and Construction: 5% of original cost

 Machinery & Equipment: 20% of original cost
 Furniture and Fixture: 20% of original cost
 Cost of Vehicle: 20% of original cost
 Generator: 20% of original cost
 Water Pump: 20% of original cost
6.5 Spare parts and maintenance cost

Machinery is expected to be serviced on an annual basis. During the projection period,
maintenance expenses are estimated to be around
a. Building and Construction: 5%of original cost
b. Furniture and Fixture: 2% of original cost
c. Vehicles: 5% of original cost
d. Generator: 3% of original cost and
e. Machinery & Equipment: 8% of original cost
Table 35: Spare parts and Maintenance cost
Maintenance
Description Original value Project year
Rate
Building 5,093,888.00 5.00% 254,694.40
Machinery and Equipment 4,093,888 8.00% 327,511.04
Vehicles 2,615,000 5.00% 130,750.00
Nursery establishment 118,300 3.00% 3,549.00
Farm tools 254153 2% 5,083.06
Office Furniture 395100 2% 7,902.00
Total 12,570,329 729,490
6.6 Insurance expense

In order to avoid the risk of losing asset, asset insurance can mitigate this loss exposure and
enable the project to expand. During the projection period, insurance expenses are estimated to
be around 1% for fixed asset and of the total cost of fixed asset.
Table 36: Insurance cost of fixed asset and Movable Asset
33
WOREDA
Total Insurance Insurance

Description Investment rate Cost
Fixed Asset 12,570,329 1% 125,703.29
6.7 Summary of Planned Investment

The proposed development works of the project will be executed within a specified time
schedule. Procuring farm machineries and equipment, land development activities,
procurement and erection of necessary equipment’s are the major activities to be performed in
this period. The planned investment cost of the project is summarized in table below.
Table 6: Summary of Investment Expense of the Project
Item Description Total

building and construction 5,093,888.00
nursery establishment cost 118,300.00
Machinery cost 4,093,888.00
Farm tools 254,153.00
Furniture 395,100.00
Vehicles 2,615,000.00
Fixed investment cost 12,570,329.00
Working Capital 4,265,264.79
Sub-total 16,835,593.79
Pre-production cost 180,000
Total 17,015,593.79
The total planned investment cost of the project is estimated at Birr 17,015,593.79 of which Birr
12,570,329.00(73.87%)is earmarked to finance fixed assets and Birr 4,265,264.79 (26.13) working
capital costs. The balance of Birr 180,000.00 is provided to meet the preproduction requirement
of the project.
6.8 Source of fund

The total planned investment cost required Birr 17,015,593.79 of which the financing of the
project consists of bank loan and promoter’s equity. Consequently, out of the total investment
cost 70 %(11,910,915.65) will be bank loan and 30 % (5,104,678.14) will be equity contribution.
34
WOREDA
Description Amount D/E-Ratio
Debt 11,910,915.65 70%

Equity 5,104,678.14 30%
Total 17,015,593.79 100%
6.9 Credit & Borrowing System

Bank loan Repayment
6.10 . Annual Production Cost
The annual production cost of the Omer Hassen vegetable and fruit farm will be described in
the following table in detail.
35
TableThe Production cost Projection

Years
Description 1 2 3 4 5 6 7 8 9 10
Seed 64,568.35 71,025.19 78,127.71 85,940.48 94,534.53 94,534.53 94,534.53 94,534.53 94,534.53 94,534.53
Fertilier 547,969.18 602,766.09 663,042.70 729,346.97 802,281.67 882,509.84 970,760.82 1,067,836.90 1,174,620.59 1,292,082.65
Pesticides 323,637.55 356,001.30 391,601.43 430,761.57 539,395.91 539,395.91 539,395.91 539,395.91 539,395.91 539,395.91
Packing Material 61,304.00 61,304.00 61,304.00 61,304.00 61,304.00 61,304.00 61,304.00 61,304.00 61,304.00 61,304.00
Sub-Total 936,175.08 1,029,792.58 1,132,771.84 1,246,049.02 1,436,212.11 1,516,440.27 1,604,691.26 1,701,767.34 1,808,551.03 1,926,013.09
Farm Operation Costs
Manual Operation 368,215.46 368,215.46 368,215.46 368,215.46 368,215.46 368,215.46 368,215.46 368,215.46 368,215.46 368,215.46
Mmachine Operation 20,397.34 20,397.34 20,397.34 20,397.34 20,397.34 20,397.34 20,397.34 20,397.34 20,397.34 20,397.34
Sub-Total 388,612.80 388,612.80 388,612.80 388,612.80 388,612.80 388,612.80 388,612.80 388,612.80 388,612.80 388,612.80
Indirect Cost
Fuel Cost - Submersible
Water Pump 96,000 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00
Fuel Cost - Vehicles 432,500.00 432,500.00 432,500.00 432,500.00 432,500.00 432,500.00 432,500.00 432,500.00 432,500.00 432,500.00
Fuel Consumption -
Electric Generator 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00
Oil and Lubricant Cost 28,425.00 28,425.00 28,425.00 28,425.00 28,425.00 28,425.00 28,425.00 28,425.00 28,425.00 28,425.00
Sub-Total 596,925.00 596,925.00 596,925.00 596,925.00 596,925.00 596,925.00 596,925.00 596,925.00 596,925.00 596,925.00
Overhead Cost
Wages and Salaries 937,316.82 984,182.66 1,033,391.79 1,085,061.38 1,139,314.45 1,196,280.18 1,256,094.18 1,318,898.89 1,384,843.84 1,454,086.03
Employee Benefits 46,865.84 49,209.13 51,669.59 54,253.07 56,965.72 59,814.01 62,804.71 65,944.94 69,242.19 72,704.30
Sanitary Consumable 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00
36
Promotion & Advertising 45,640.93 45,640.93 45,640.93 45,640.93 45,640.93 45,640.93 45,640.93 45,640.93 45,640.93 45,640.93
Uniform 192,000.00 192,000.00 192,000.00 192,000.00 192,000.00 192,000.00 192,000.00 192,000.00 192,000.00 192,000.00
Travel & Perdium 11,903.92 11,903.92 11,903.92 11,903.92 11,903.92 11,903.92 11,903.92 11,903.92 11,903.92 11,903.92
Telephone and Postage 70,000.00 70,000.00 70,000.00 70,000.00 70,000.00 70,000.00 70,000.00 70,000.00 70,000.00 70,000.00
Audit & Legal Lee 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00
Miscellaneous Expense 55,000.00 55,000.00 55,000.00 55,000.00 55,000.00 55,000.00 55,000.00 55,000.00 55,000.00 55,000.00
Repair and Maintenance 375,500.00 375,500.00 375,500.00 375,500.00 375,500.00 375,500.00 375,500.00 375,500.00 375,500.00 375,500.00
Spare Part 321,000.00 321,000.00 321,000.00 321,000.00 321,000.00 321,000.00 321,000.00 321,000.00 321,000.00 321,000.00
Insurance 96,525.00 96,525.00 96,525.00 96,525.00 96,525.00 96,525.00 96,525.00 96,525.00 96,525.00 96,525.00
Sub-Total 2,211,752.51 2,260,961.64 2,312,631.23 2,366,884.30 2,423,850.02 2,483,664.03 2,546,468.74 2,612,413.69 2,681,655.88 2,754,360.18
Total 4,133,465.39 4,276,292.03 4,430,940.88 4,598,471.13 4,845,599.93 4,985,642.11 5,136,697.80 5,299,718.83 5,475,744.71 5,665,911.07
37
WOREDA
7 Projected Financial Statements
7.1 Revenue Projection
The total revenue expected from this project is assumed to derive from the planned activities to perform.
The project will be fully operational on the first year.
Therefore, the project income is assumed to increase from the first years to the planning period by
increasing and improving their products to hold the existing, expected and attract new customers.
The projection for the income statement is primarily derived from market based sales estimates which is
based on an adequate market assessment and guaranteed sales from previous experiences. The crop
revenue assumptions were based up on the current market prices with the pessimistic approach that these
prices increased by 5% in the coming ten years.
The average annual projection of the revenue obtained from the sales of different clean vegetable yield
will be estimated to be Birr 35167575 (from vegetable and fruit) in the fourth year and expected to grow
45885709at the end of 10th year and decrease after onwards.
Table 38: Project Revenue turnover

Years

Product 1 2 3 4 5 6 7 8 9 10
vegetable 3058.05 3058.05 2293.5375 1987.7325 1529.025 1223.22 917.415 917.415 917.415 917.415
Fruit 764.5125 1070.3175 1529.025 1834.83 2140.635 2140.635 2140.635 2140.635
Total production 3058.05 3058.05 3058.05 3058.05 3058.05 3058.05 3058.05 3058.05 3058.05 3058.05
Average sales 35167575 36222602 37309280 38428559 39581415 40768858 41991924 43251681 44549232 45885709
7.2 Profitability
The project will commence harvesting of vegetable beans and fruit in forth years.it will incur a net loss in
the first three years and third year onwards it will generate a net profit. It will generate a net profit of Birr
13,445,519 in years five and a net profit of Birr 59,211,733 in years ten. Detail of projected income
statement is attached in annex part of the study.
38
WOREDA
7.3 Financial Internal Rate of Return:
Before and after tax internal rate of return computed for the proposed project is found to be 29.3% and
25.6% respectively, in this cases the FIRR are above banks’ lending rate implying that the project is
viable.
The cash flow calculation shows a positive cash flow throughout the project. The NPV and IRR are also
calculated to be as follows.
 Before Tax
NPV at 18 % Discounting factor = 31,085,342
IRR = 29.3%
 After Tax
NPV at 8.5 % Discounting factor= 24,143,249
IRR = 25.6%
7.4 Sensitivity Analysis
The sensitivity analysis shows what will happen to the profitability of a project when there are changes in
the most sensitive parameters that have an influence on the results of the project. Hence, it also shows the
risks of the investments that have to be done.
The factors that will cause the highest risks for the profitability of the project are:-
 Reduction in Sales,
 Increase in Cost of Production and
 Increase in Investment cost.
The sensitivity analysis carried out with the effect of these three parameters on the NPV and IRR of the
project is shown below. Detail of sensitivity analysis is attached in annex part of the business plan.
Reduction in sales: 10% reduction in sales revenue.
 Before Tax IRR = 21%

 After Tax IRR = 17%
Increase in cost of production: 10% increase in production costs.
39
WOREDA
Increase in investment cost: 10% increase in investment costs.
From the above result it can be seen that revenue is more sensitive to increase in investment and increase
in cost of production costs. In all cases the project is profitable.
7.5 Plan of Operation
Detail activities of the project which includes construction, land preparation, planting, weeding,
harvesting, storing etc are the main operation of the farm that conduct per time frame work of them. The
activities of the operation per their phases are shown below.
40
Table 39: Implementation Schedule

2023 2023/24 2024/2025 2025/23
M A M J J A S O N D S
S- -
Activities J F MA MJ J A D J F M A M J J A DJ F M A M J
Loan Processing and
Registration
Land Development works
Bush Clearing
Trash Removal and Disposal
Rough leveling
In farm road Construction
Building and construction
works
Procurement of farm
machinery &Equipment’s and
Vehicles
Hole preparation
Seedling Transplanting
Fertilizer application
Crop management
Weeding
Harvesting
Marketing
41
WOREDA
8 Business monitoring
Monitoring is the continuous or periodic surveillance of the functioning of the project activities during its
implementation. It involves measuring, recording, collecting, processing and communicating information
to assist project management decisions. Not only should the physical progress of the project be
monitored, but also the impacts of the project and development in its environment. There should be one
format for monitoring and reporting throughout the life of the project to make it adaptable when there is a
change of personnel, management and decision makers. Monitoring is an internal project management
tool therefore it will be conducted by the project coordinator regularly. The project coordinator will
ensure that inputs, work schedules and outputs are proceeding according to the plan, provide records of
inputs use activities and results,warn the deviations from initial goals and expected outcome. In order to
attain the expected results the project coordinator and the whole project team will use the following
monitoring tools;
 Field visits, these are very essential for any field-based project and they are to be planned well in
order to be of maximum use. Field visit will be an often used monitoring tool due to the nature of
the project. It’s expected to be conducted four times per annum meaning that the visits will be
done after every three months.
 Annual and semi-annual project reports, these act as a self-assessment by the project management
that serves as the basis for assessing the performance of projects in terms of their contributions to
intended outcomes through outputs. The project coordinator will prepare semi-annual reports and
annual reports which will be submitted to the project stakeholders.
 Annual work plan, detail the activities to be carried out by a project including who is responsible
for what, time frames, planned inputs and funding sources in order to generate outputs in relation
to the outcome. Annual work plan will be developed for the use of the project throughout its
lifetime and it will be reviewed and amended at each year of the project
9 Business evaluations
Evaluation refers to the process of determining systematically and objectively the relevance, efficiency,
effectiveness and the impacts of business activities in the light of their objectives. It determines whether
the project objectives have been achieved, whether the resources committed were utilized effectively and
efficiently. Our business will be evaluated two times per its lifetime whereby this will include;
42
WOREDA
 Midterm evaluation, this will be conducted by the internal project monitoring and evaluation
officer around the middle period of the project implementation. The intention of this evaluation is
to improve performance of the project activities.
 Final or terminal evaluation, this will also be conducted by the internal project evaluator at the
end of the project to determine the extent to which anticipated outcomes were produced and it is
intended to provide information about the worth of the project. Generally evaluation will focus
on;
 Assessing the reasons for success or failure of specific aspects of the business
 Assessing whether the business is achieving its objectives and targets
 Assessing the adequacy of resources being mobilized to implement the project
 Determining whether available resources are being utilized efficiently to achieve the targets set
for the strategic objectives of the business
 Determining whether the business is facing any problems that need immediate or long-term
solutions
10 Environmental Impact Assessment

Reducing the burden of environmental impacts is necessary if development is to become sustainable. As
resources become limited, environmental impacts become more complex, EIA has become of ever
increasing importance as a tool for development and decision making. This role is formally recognized in
principle 17 of the Rio Declaration on Environment and Development (UNCED 1992). Environmental
impact assessment, as a national instrument, shall be undertaken for proposed activities that are likely to
have significant adverse impact on the environment and are subject to a decision of a competent national
authority. In practice, EIA is applied primarily to prevent or minimize the adverse effects of major
development projects. It is also used as a planning tool to promote sustainable development by integrating
environmental considerations into a wide range of proposed actions. Most notably, the use of policies and
plans focus on the highest levels of decision making and take care of the environment in considering a
development alternatives and options. The aim and objective of EIA can be divided into two categories.
The immediate aim of EIA is to inform the process of decision making by identifying the potentially
significant environmental effects and risks of development by ensuring that development projects. The
ultimate (long term) aim of EIA is to promote sustainable development by ensuring that development
projects do not undermine critical resource and ecological functions or the wellbeing, lifestyle and
livelihood of the communities and people who depend on them.
43
WOREDA
To facilitate basic research to resolve uncertainties around human and environmental safety
when they arise
To follow the spirit and intent of all national laws and regulations
10.1 Potential environmental impacts of the project
The envisaged farm unit is a farm plant with no hazardous chemical or any hazardous wastes released in
to the surrounding environment. But, in the process of disposing used waste water care must be taken not
to throw anywhere without care. The operation of the envisaged plant is a simple cut and pack operation
which does not have any complicated process that generates waste, and hence there is no adverse
environmental impact created as a result of this operation. Thus, the project is purely environment
friendly.
10.2 Pollution Control
There is no major pollution problem associated with this farm except for disposal of waste water which
should be managed appropriately.
11 Conclusion and recommendation
11.1 Conclusion
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 Fruit products and vegetable.
The project’s projected financial statements reveal that it will be liquid and profitable over the periods
under review. Besides, it is anticipated to pay back its investment cost within five years period, which is
relatively short.
The establishments and implementation of the project will create job opportunity for many skilled and
unskilled workers in line to reduce unemployment which hinders the stability of macroeconomic
condition of a country. The project will create opportunities for technology and knowledge transfer
to the local communities and farmers
44
WOREDA
The continuous economic growth of Ethiopia and favorable economic policy in the recent years play great
role for the establishment of large and medium scale farms in the country by foreign and domestic
investors. The per capita consumption of the society and the agriculture sector of the country is increasing
from time to time. As a result of this, the demand for fruit products and vegetable have increased through
time. Since the sector was not efficiently utilized, the government has set different strategies and policies
to encourage and attract potential investors.
Ahmed Mohammed, through his company, endeavors to establish a farm project in Arabati area of the
Werebabo Wereda transform and utilize the local potential. The project viability is checked through
different scenarios including financially, technically, market and management considerations. Moreover,
it was found that the project is worthwhile since it is also one of the priority areas of the government that
helps to enhance the economic development of the country by creating employment opportunity to local
community, tax revenue for government, and foreign exchange saving by export. The project plays its
part in minimizing poverty and contributing to sustainable development of the local economy and the
country at large.
11.2 Recommendation
In view of the foregoing remarks and viability indicators, the proposed project is feasible to undertake.
45
Projected Income Statement
Project Years
Description 1 2 3 4 5 6 7 8 9 10
Revenue 51,616,125 56,777,738 62,455,511 68,701,062 75,571,169 83,128,285 91,441,114 100,585,225 110,643,748 121,708,123
Operating Costs 18,734,769 19,533,402 20,409,438 21,370,495 22,490,502 22,630,545 22,781,600 22,944,621 23,120,647 23,310,814
Gross Profit 32,881,356 37,244,336 42,046,073 47,330,568 53,080,666 60,497,741 68,659,514 77,640,604 87,523,101 98,397,309
Less
Depreciation 7,520,639 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689
Profit Before Int.
and tax 25,360,717 29,891,646 34,693,384 39,977,878 45,727,977 53,145,052 61,306,824 70,287,915 80,170,411 91,044,620
Interest Expense 4,725,658 4,134,951 3,544,243 2,953,536 2,362,829 1,772,122 1,181,414 590,707
Profit Before tax 20,635,059 25,756,696 31,149,140 37,024,342 43,365,148 51,372,930 60,125,410 69,697,208 80,170,411 91,044,620
Profit tax 7,189,541 8,982,113 10,869,469 12,925,790 15,145,072 17,947,795 21,011,163 24,361,293 28,026,914 31,832,887
Net Profit/Loss
after tax 13,445,519 16,774,582 20,279,671 24,098,552 28,220,076 33,425,134 39,114,246 45,335,915 52,143,497 59,211,733
46
Projected Cash Flow Statement
Proejct Years
Description
0 1 2 3 4 5 6 7 8 9 10
Cash Inflows
Owner's Equity 5,104,678.14 - - - - - - - - - -
Long-term loan 11,910,915.65 - - - - - - - - - -
Net Profit 13,554,686 16,774,582 20,279,671 24,098,552 28,220,076 33,425,134 39,114,246 45,335,915 52,143,497 59,211,733
Depreciation 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689 7,352,689
Total Cash Inflows 17,015,594 20,907,375 24,127,271 27,632,361 31,451,242 35,572,766 40,777,824 46,466,936 52,688,604 59,496,187 66,564,422
Cash out Flows
Fixed assets 12,570,329
Working Capital 5,104,678
Loan Payment 4,725,658 4,134,951 3,544,243 2,953,536 2,362,829 1,772,122 1,181,414 590,707
Withdrwal - 2,710,937 5,032,375 6,083,901 7,229,566 8,466,023 10,027,540 11,734,274 13,600,774 15,643,049 11,842,347
Total Cash Outflows 17,675,007 7,436,595 9,167,325 9,628,145 10,183,102 10,828,852 11,799,662 12,915,688 14,191,482 15,643,049 11,842,347
Net Cash Flow (659,413) 13,470,780 14,959,946 18,004,216 21,268,140 24,743,914 28,978,162 33,551,247 38,497,123 43,853,138 54,722,076
Cumulative Cash
Balance (659,413) 12,811,367 27,771,313 45,775,529 67,043,669 91,787,583 120,765,745 154,316,992 192,814,115 236,667,252 291,389,328
Retained earning - 10,843,749 13,419,665.71 16,223,737 19,278,841.91 22,576,061 26,740,107.52 31,291,397 36,268,731.91 41,714,798 47,369,386.32
Cumulative (659,413) 10,184,335 23,604,001 39,827,738 59,106,580 81,682,641 108,422,748 139,714,146 175,982,878 217,697,675 265,067,062
Projected Balance Sheet

DESCRIPTION Y E A R S
47
0 1 2 3 4 5 6 7 8 9 10
ASSETS
CURRENT ASSETS
Cash 5,104,678 13,554,686 16,774,582 20,279,671 24,098,552 28,220,076 33,425,134 39,114,246 45,335,915 52,143,497 59,211,733
Inventory - 11,245,100 16,774,582 20,279,671 24,098,552 27,220,076 34,425,134 42,111,246 48,535,915 55,143,497 59,211,733
Total Current Assets 5,104,678 24,799,786 33,549,164 40,559,342 48,197,105 55,440,152 67,850,269 81,225,493 93,871,830 107,286,995 118,423,466
FIXED ASSETS
Total Fixed Asset 12,570,329.00 43,250,204 35,897,515 28,544,825 21,208,136 39,955,447 32,602,757 25,250,068 17,913,379 10,560,689 29,308,000
Intangible Assets
Pre-Production Cost 1,800 360,000 320,000 280,000 240,000 200,000 160,000 120,000 80,000 40,000
Pre-Operating Interest 1,035,000 920,000 805,000 690,000 575,000 460,000 345,000 230,000 115,000
Total Intangibble
1,800.00 1,395,000 1,240,000 1,085,000 930,000 775,000 620,000 465,000 310,000 155,000
Assets
Total Asset 17,676,807 69,444,990.22 70,686,679.10 70,189,167.79 70,335,240.88 96,170,599.08 101,073,026.2 106,940,561.0 112,095,208.5 118,002,684.2 147,731,465.8
Liablity
Long-term loan 11,910,915.65 34,457,921 29,535,361 24,612,801 19,690,241 14,767,681 9,845,120 4,922,560
CAPITAL
Owner's Equity 5,104,678.14 20,952,893.52 20,952,893.52 20,952,893.52 20,952,893.52 20,952,893.52 20,952,893.52 20,952,893.52 20,952,893.52 20,952,893.52 20,952,893.52
Retained Earnings 10,843,749 13,419,665.71 16,223,737 19,278,841.91 22,576,061 26,740,107.52 31,291,397 36,268,731.91 41,714,798 47,369,386.32
Sub total 5,104,678 15,948,427 29,368,093 45,591,830 64,870,672 87,446,732 114,186,840 145,478,237 181,746,969 223,461,767 270,831,153
Total Liabilities and
17,015,594 69,444,990 70,686,679 70,189,168 70,335,241 96,170,599 101,073,026 106,940,561 112,095,208 118,002,684 147,731,466
Capital
48

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RIM VEGETABLE AND FRUITS FARM IN WEREBABO

PROJECT PROPOSAL ON THE ESTABLISHMENT OF

PROJECT OWNER:-RIM MANUFACTURING OF ELECTRICAL MACHINERY

GENERAL MANAGER;-OUMER HASSEN

MAY; 2015 E.C

II. Project profile

2. Project Owner Oumer Hassen

3. Project Type Agriculture

7. Project description vegetable and fruits production

12. Utility  Electricity =1000 KHW

6.7 Summary of Planned Investment 34

1.1 Back ground

1.2 Status of fruits and vegetable marketing in Ethiopia

1.3 Overview of Horticulture Subsector in Amhara Region

1.4 Objectives of the farm

1.5 Vision, Mission, Values and Clients

1.5.1 Vision of the Project

1.5.2 Mission of the Project

1.6 The promoter

1.7 The Owner Address

1.7.1 Residence Address

1.7.2 Project Location

1.7.3 Legal documents of the project

 Legal form of business: Sole Enterprise

1.8 Credit information with other banks

2 Pull, push and success factors

2.1 Pull Factors

 Suitable agro-climatic conditions and fertile soil

 Water resource potential

 Investment incentives, guarantees and protections

2.2. Push Factors

2.2 Success Factor

 Professional Management and Skilled Man Power

 Selecting a Good Variety and Climatic Condition

 Past Experience of the Existing Vegetable and fruit Growers

2.3 Social responsibility

2.3.1 Natural resource development

6 Plantation on farm land No 1000 10 10,000.00

2.3.2 Establish good working environment for project workers

2.3.3 Financial support to institution and infrastructure development

2.3.4 Technology Transfer

s.no Activities unit Plan Total birr

2.3.5 Natural compost preparation

4.1 Vegetable Demand in Ethiopia

4.1.1.1 Domestic Consumption

4.1.1.2 Demand Projection

Table 14:- National green Vegetable Demand Projection (in tons)

Domestic Demand Export Total Demand

4.2 Vegetable Supply in Ethiopia

4.2.1 Domestic Production

Year Amount Produced

4.2.2 Supply Projection

Table 14:- Projection of the National Green Vegetable Production

Table 18 Demand Projection for Fruits

4.2.3 Pricing and Distribution

5.3 The site selection

5.4 Farm establishment

i. Land Preparation for Cultivation

B. Leveling the Land