3M Marble & Terrazo Manufacturing PLC - Final

I. Executive Summary ....................................................................................................................
1
II. Background Information..............................................................................................................5
2.1. The Applicant.......................................................................................................................5
2.2. Contact Person......................................................................................................................5
2.3. Certificates and Licenses......................................................................................................5
2.4. Brief History of the Company and the Project.....................................................................6
2.5. Capital Structure of the Company........................................................................................8
2.6. Past performance of the Project /Business...........................................................................8
2.7. Reason for Expansion & Future Plan of the Project..........................................................11
2.8. Credit Information of the Company...................................................................................11
2.9. The Loan.............................................................................................................................12
III. Key Success and Risk Factors..................................................................................................13
3.1. Key Success Factors...........................................................................................................13
3.2. Risk Factors........................................................................................................................15
3.3. Risk Mitigating Measures..................................................................................................16
3.4. SWOT Analysis..................................................................................................................16
IV. Market Study.............................................................................................................................17
4.1. Market Destination and Segmentation of Marble..............................................................17
4.2. Ethiopian Marble Market...................................................................................................17
4.3. Market and Marketing Arrangement..................................................................................23
4.4. Value Chain........................................................................................................................23
4.5. Price Trend.........................................................................................................................24
4.6. Marketing Strategy of the Company..................................................................................24
V. Technical Aspect of the Project................................................................................................25
5.1. Project Location..................................................................................................................25
5.2. Land Availability................................................................................................................25
5.3. Plant Layout and Civil Work..............................................................................................26
5.4. Machineries and Equipments.............................................................................................26
5.5. Vehicles..............................................................................................................................29
5.6. Generator............................................................................................................................29
5.7. Utilities...............................................................................................................................29
5.8. Material Inputs...................................................................................................................30
5.9. Production Process and Production Capacity.....................................................................30
5.10. Environmental Impact Assessment....................................................................................32
5.11. Implementation Plan...........................................................................................................33
VI. Organization and Management................................................................................................34
6.1. Organizational Structure.....................................................................................................34
6.2. Project Management...........................................................................................................35
6.3. Training Requirement and Employee Remuneration and Benefits....................................35
VII. Financial Analysis......................................................................................................................37
7.1. Fund Allocation..................................................................................................................37
7.2. Source of Fund...................................................................................................................37
7.3. Expected Financial Results.................................................................................................39
VIII. Socio Economic Benefit............................................................................................................41
IX. Conclusion and Recommendation............................................................................................42
9.1. Conclusion..........................................................................................................................42
9.2. Recommendation................................................................................................................43
9.3. Terms and Conditions........................................................................................................43
X. Annexes ........................................................................................................................................46
3M Marble and Granite Manufacturing PLC 0

I. Executive Summary
Three M Marble and Terrazzo Manufacturing PLC was established on 16/10/2000 E.C by four
shareholders, namely Ato Mesfin Mulugeta Tessema, Wro Abebech G/mariam Endesh, Meron
Mesfin Mulugeta and Matiw Mesfin Mulugeta with registered paid up capital of Birr 8,000,000.
As per the memorandum of association of the Company, it was established with general
objectives of establishing marble and quarry manufacturing plant, general import and export,
agriculture, and establishment of gypsum manufacturing plant.
The Company has already established terrazzo and marble manufacturing plant in Oromia
Region, Finfine Vicinity Oromia Special Zone, Sebeta Hawas Woreda, Alemgena Town, Kebele
03/04. For its establishment, the Company was granted the loan amount of Birr 3,891,115 based
on loan contract agreement signed on 11/02/2009 after the viability of the project had been
checked. Later, the Company was granted additional working capital loan of Birr 846,605 and
Birr 1,028,470 based on loan contract agreement signed on 07/06/2010 and 1/01/2012,
respectively, after settling the former. Based on loan contract agreement signed on 08/11/2012,
the Company was also granted additional loan amount of Birr 8,481,539 to expand its existing
business.
In order to assess the past performance and project its future, we have tried to review the loan
files of the Company and visited the project. Since its establishment the Company has been
registering a very good progress which we have delighted. All the proposed loan and equity
contribution in former appraisal reports are fully utilized for the intended purposes. The project’s
production and productivity, sales revenue and profitability have been increasing through time.
All the necessary buildings and constructions have been constructed and machineries and
equipments have been purchased. The Company has also invested additional investment on
building and constructions and additional machineries and equipments from its own equity. In
general, the status of the project is very pleasant and attractive.

As it is obviously know, the main raw material of marble production is marble block (stone).
During the past operational periods, the Company has been relaying on the marble block (stone)
suppliers like National Mining PLC which have their own quarry sites in different parts of the
country. Due to various factors, reasonably or unreasonably, these suppliers couldn’t supplied
adequate raw material (marble block) and this has been inhibited the Company to utilize its
achievable capacity. Delay of delivery and frequent price fluctuation have also been challenged
the smooth operation of the project. In order to solve these problems, the Company decided to
have its own quarry site and approached Benishangul Gumuz National Regional State Water
Mine and Energy Resource Development Bureau which finally granted large scale mining
license and secured two mounts with the total area of 0.8 Km2.
After acquiring the quarry site, the Company approached our Bank, Addis Ababa Branch, for
expansion loan to backward integrate the already established marble slab producing project with
the acquired quarry site. After carefully assessing the status of project as well as the Company,
the Branch has recommended financing of the project and forwarded its file to us for further
assessment.
Accordingly, the team has carefully assessed the key elements of the project that can determine
the success rate of the project. Since the Company is our existing client, its creditworthiness has
already been verified and confirmed. The Company has been paying its previous loans on time
and according to contractual loan agreement and this can easily prove that the Company is
creditworthy.
The next important element that we have tried to assess is the past performance of the project. As
we have mentioned above, the project has been growing since its establishment. Its production
and productivity, sales performance and profitability have been improving through time.
Building and construction, machineries and equipments, and other necessary facilities have
already been constructed, purchased, and installed and the required and qualified human
resources have already been hired. All these and others that are not mentioned but potentially
reveal the strength of the Company can easily motivate anybody to help this growing Company.

In view of the fact that market condition for the proposed products has vital role for the
realization of the objectives of establishment of the proposed project, the team has also tried to
review the past, contemporary as well as forecasted demand and supply condition and price of
the planned products based on the past and current performance of the Company and the studied
commodity study. As we have discussed with the General Manager, the Company has no market
problem. Rather, the project has excess order on hand. The follow-up report of the Branch has
also confirmed the same thing. In addition to this, based on commodity study of the Bank, we
have tried to assess future demand of the planned product and we have confirmed that there is
excess demand for the product even at a relatively higher price. The boosting construction sector
of the country can be seen as the best example. Therefore, instead of threat to the project the
prospective market situation of the product can be seen as an opportunity.
Technical viability of the project has also been assessed. All the required buildings and
constructions have already been constructed and their value and appropriateness are verified by
the Bank’s Civil Engineer. Machineries and equipments required for slab production has also
been procured and installed and they are fully operational. Mechanical Engineer of the Bank has
also valued and confirmed that they are on a very good condition. In addition to these, the
Company has submitted pro forma invoices for machineries and equipments that will be
employed for quarry site operations. Accordingly, Mechanical Engineer has evaluated and
recommended all the necessary machineries and equipments that are technically viable and their
costs are included in the total investment cost of the project.
For smooth and optimal operation of the project, proper organizational structure and human
resource have significant roles. As a result, we have also tried to evaluate the existing and
required organizational structure and human resource of the project. The Company has already
implemented proper organizational structure and hired required human resources for the existing
business. So as to include the expansion part of the project, we have modified the existing
organizational structure and proposed additional human resources.

Without compromising the above, financial viability of the project is unquestionable to
determine acceptance or rejection of the project. In the past, the project has been registering very
good financial progress. The current financial projections of the combination of existing and
expansion part project are also revealing the same thing. As we have tried to gone through each
financial components, the project is also financially viable & capable to achieve its objective
covering all its costs even in adverse conditions that can possibly affect either project cost or
revenue. Before and after tax IRR of the project is calculated to be 56% and 37%, respectively.
The project’s sensitivity to adverse situations has also been tested by reducing revenue and
increasing operating cost and investment cost all by 10%. In all scenarios, IRR is above the cost
of capital confirming that the project is financially viable. The net profit of the project is
forecasted to be Birr 4,628,292 and Birr 8,078,145 for the base and the last projected year,
respectively. The projected cash flow at the end of the base year and the last project year is
computed to be Birr 2,820,935 and Birr 51,833,623 respectively indicating that the venture is
liquid throughout the envisaged project years.
Establishment of the project has also various socio-economic importances for the country. Some
of them are: creation of employment opportunity, source of government revenue in the form of
tax and royalty fee, and its GDP contribution are among the benefits of the project. In addition to
these, the subsector has strong linkage with construction subsector which is highly demanding
slabs and tiles for modern housing construction. It will also substitute imported slab and tiles
products, which in turn solves the shortage of foreign currency.
However, unhidden fact, it does not mean that the project is totally free from obvious business
risks. The project has also some environmental impact. However, with appropriate mitigating
mechanisms and proper follow-up, associated risks as well as environmental impact can
successfully be reduced.
By considering all the above facts and findings, Appraisal Team I found that financing the
proposed expansion project for its implementation is commendable and appropriate. Therefore,
the team has proposed and approved the total loan amount of Birr 6,527,532 at its level and it
will be paid within 5 (five) years with terms and conditions stated under numbering list 9.3 of
this appraisal report.

II. Background Information
II.1. The Applicant
 Name: Three M Marble and Terrazzo Manufacturing PLC

 Address
Company and Project’s Slab Production

 Region: Oromia  Kebele: 03/04
Zone: Finfine Vicinity Oromia Special Zone  Mobile: +251 911 66 74 19
 Woreda: Sebeta Hawas  Telephone : +251 118 30 11 73
 Town: Alemgena  P. O. Box: 21347
Quarry Site
 Region: Benishangul Gumuz  Woreda: Oda Buldiglu
 Zone: Assosa  Special area name: Kambo Dusho
II.2. Contact Person
 Name: Ato Mesfin Mulugeta

 Address:
 City: Addis Ababa  House No.: 95/8
 Sub-city: Kirkos  Mobile: +251 911 66 74 19
 Kebele: 17/18  Email:
S&S Farms PLC 5

II.3. Certificates and Licenses
 Legal form of Business:- Private Limited Company

 License Registration or/and Renewal
 Investment Certificate
- Licensing Agency: Oromia Investment Commission
- Licensing Date: 18/10/2000 E.C
- License Number: KIO/II/H1845/00
 Trade License
- Registering Organ: Sebeta Town Admin. Trade & Market Dev’t Bureau No. 2
- Registration Date: 10/11/2000 E.C.
- License Number: 05/25110/02/00000228/00
 Large Scale Mining License
- Licensing Organ: Benishangul Gumuz National Regional State Water Mine and
Energy Resource Development Bureau
- Licensing Date: 28/05/2006 E.C
License Number: MLN-141-EL-2006
 TIN No.: 0004624346
 VAT No.: 905390002
 Land Lease Certificate No.: L/852/2000
 Type of the Project: Manufacturing backward integrated with quarry

 Objectives of the Project: Producing quality marble slab by backward integrating with
marble stone quarry.
II.4. Brief History of the Company and the Project
Three M Marble and Terrazzo Manufacturing PLC was established on 16/10/2000 E.C by four
shareholders, namely Ato Mesfin Mulugeta Tessema, Wro Abebech G/mariam Endesh, Meron
Mesfin Mulugeta and Matiw Mesfin Mulugeta with registered paid up capital of Birr
8,000,000. As per the memorandum of association of the Company, it was established with
general objectives of establishing marble and quarry manufacturing plant, general import and
export, agriculture, and establishment of gypsum manufacturing plant.

The Company has already established terrazzo and marble manufacturing plant in Oromia
Region, Finfine Vicinity Oromia Special Zone, Sebeta Hawas Woreda, Alemgena Town,
Kebele 03/04. For its establishment, the Company was granted the loan amount of
Birr 3,891,115 based on loan contract agreement signed on 11/02/2009 after the viability of the
project had been checked. Later, the Company was granted additional working capital loan of
Birr 846,605 and Birr 1,028,470 based on loan contract agreement signed on 07/06/2010 and
1/01/2012, respectively, after settling the former. Based on loan contract agreement signed on
08/11/2012, the Company was also granted additional loan amount of Birr 8,481,539 to expand
its existing business.
Since its establishment the Company has been registering a very good progress which we
appreciated. All the proposed loan and equity contribution in former appraisal reports have fully
been utilized for the intended purposes. The project’s production and productivity, sales revenue
and profitability have been increasing through time. The necessary buildings and constructions
have been constructed and machineries and equipments have been purchased. The Company has
also invested additional investment on building & constructions and machineries & equipments
from its own equity. In general, the status of the project is very pleasant and attractive.
As the name indicates, the Company was initially planned to establish both terrazzo and marble
slab. However, after carefully studying the business environment and market situation of
terrazzo, the Company decided to establish independent sister Company that produce high
quality terrazzo products. Accordingly, the Company is establishing terrazzo manufacturing
plant which is currently near to complete by its own fund. As a result, terrazzo production is
deliberately excluded from this expansion project appraisal. Even if terrazzo pressing machine
was considered as one of the investment items of the project in previous appraisal reports and
the item was partly purchased by the loan, we have excluded it from our current projection since
it has no use. For part of the loan invested on the item, we have considered as it was invested on
other machineries and equipments which are currently in for marble slab projection.

adequate raw material (marble block) and this has been inhibited the Company to utilize its
achievable capacity. Delay of delivery and frequent price fluctuation have also been challenged
the smooth operation of the project. In order to solve these problems, the Company decided to
have its own quarry site and approached Benishangul Gumuz National Regional State Water
Mine and Energy Resource Development Bureau which finally granted large scale mining
license and secured two mounts with the total area of 0.8 Km2.
After securing the quarry site, the Company approached our Bank for loan to cover the partial
expansion cost of the project. It includes procurement of quarry site machineries & equipments,
building and construction at quarry site, generator, vehicle, and other related investment costs.
After carefully assessing the status of project as well as the Company, the Branch has
recommended financing of the project and forwarded its file to us for further assessment.
II.5. Capital Structure of the Company
As per the Article of Association, the Company is owned by four shareholders namely Ato
Mesfin Mulugeta Tessema, Wro Abebech G/mariam Endesh, Meron Mesfin Mulugeta and
Matiw Mesfin Mulugeta and their total registered paid up capital is Birr 8,000,000. However,
since this is not sufficient to cover at least 40% of the total project costs, the Company will be
expected to raise its registered paid-up capital. The detail of current capital structure of the
Company is depicted in the below table.
Table 2.1: Capital Structure of the Company
Sr. Number Share Value Total Share

Name of Share Holders Nationality
No. of Share (Birr) Value (Birr)
1 Meron Mesfin Mulugeta American 60 80,000 4,800,000

2 Matiw Mesfin Mulugeta American 30 80,000 2,400,000
3 Abebech G/mariam Endesh Ethiopian 5 80,000 400,000
4 Mesfin Mulugeta Tessema American 5 80,000 400,000
Total 100 8,000,000
II.6. Past performance of the Project /Business
II.6.1. Summary of Operational Performance (Physical Performance)

The detail of production and sales performance for the past three years is depicted on the below
table. As we can easily observe, both sales and production of the Company has been growing.
This reflects that the Company’s experience in the business, production capacity utilization, and
market penetration and reputation has been improving. The production and sales performance of
the Company over the past three years are depicted below.
Table 2.2: Past Production and Sales Performance of the Company

Units
Description 2012 2013 2014
Meas.
Production Performance M2
Sales Performance Birr 9,805,970 13,147,928 17,629,137
II.6.2. Summary of Financial Performance (as indicated in financial statements provided)
As the past financial performance of any business is very crucial for future prediction, we have
tried to inspect trend financial performance of the project. The past three years audited financial
statement reports of the project are illustrated and discussed as follows.
i. Balance sheet Statement
In order to assess the assets and capital structure of the project, we have tried to go through
audited Balance Sheet Statement of the Company. Accordingly, the Company’s total assets
have been grown from Birr 11,349,618 on June 30, 2012 to Birr 44,260,988 on July 7, 2014.
The detail of the Balance Sheet Statement of the project is shown below.
Table 2.3: Balance Sheet Statement Report of the Company

Description June 30, 2012 June 30, 2013 July 7, 2014
Current Assets 4,718,177 8,539,556 11,808,936
Fixed Assets 6,631,440 11,537,753 32,452,052
Total Assets 11,349,618 20,077,310 44,260,988
Total Current Liability 460,322 3,150,074 2,017,906
Total Long Term Liability 4,369,983 9,142,090 10,111,321
Total Capital 6,519,313 7,785,146 11,458,949

Revaluation Reserve - - 20,672,812
Total (Liability + Capital) 11,349,618 20,077,310 44,260,988
As shown on the above table, the Company’s total assets have been growing from time to time.
During the period between 2012 and 2013, the total assets of the Company grew by 77%.
During this period, the Company undertaken expansion of the project from its own fund as well
as expansion loan granted by our Bank. The Company was granted expansion loan amount of
Birr 8,481,539 based on the loan contract agreement signed on 08/11/2012. During the period
between year 2013 and 2014, the Company’s total assets has once again double folded.
However, during this period the main reason for the increment was the revaluation of existing
assets. Building and construction and machineries and equipments were revalued by certified
construction professional and has resulted a total reserve of Birr 20,672,812. The other
significant factor that has contributed for the growth of the Company’s total assets is investment
made by retained earnings.
ii. Profit/Loss Statement
Based on the submitted audited financial report, we have also tried to assess financial
profitability of the Company. As depicted on the below table, the profitability of the Company
is also inspiring. Over the past three years, the Company’s profit has been increased by an
average rate of 126% and registered the average gross and net profit margin of 26% and 13%,
respectively. In general, the Company has been registering remarkable profit growth. The
profit/loss statement of the Company over the past three years is depicted as follows.
Table 2.4: Profit/Loss Statement of the project from July 1, 2011 – July 7, 2014
Description 2012 2013 2014
Sales 9,805,970 13,147,928 17,629,137
Operating Expense 7,923,478 9,817,746 11,929,737
Gross Profit 1,882,192 3,330,182 5,699,400
Overhead Costs 790,595 1,337,958 1,772,774
Net Loss/Profit (Before tax and Depr.) 1,091,597 1,992,224 3,926,626
Depreciation 194,557 164,128 132,288
Net Loss/Profit (Before tax ) 897,040 1,828,096 3,794,338
Profit Tax 89,704 562,257 48,877
Net Loss/Profit 807,336 1,265,839 3,745,641

iii. Cash Flow Statement
For the periods covered by the audit report, the cash flow status of the Company was also very
nice. The Company has been faced neither shortage that can cause liquidity problem nor excess
that reflects idleness of resources. However, for the year 2014 the Company registered negative
cash flow. But, this is covered by previous cumulative cash balance. The detail is depicted on
the following table.
Table 2.5: Cash Flow Statement of the Company

Description BBF 2012 2013 2014
Total Cash Inflows 2,981,521 11,987,981 9,246,624
Total Cash Outflows 1,589,063 11,033,204 10,466,537
Net Cash Flows 1,392,458 954,777 (1,219,912)
Cumulative 803,214 2,195,672 3,150,449 1,930,537
II.7. Reason for Expansion & Future Plan of the Project
adequate raw material (marble block) at the right time and this has been inhibited the Company
to utilize its achievable capacity. Delay of delivery and frequent price fluctuation have also been
challenged the smooth operation of the project. In order to solve these problems, the Company
decided to have its own quarry site and backward integrate with the existing marble slab
producing project. The Company has already acquired large scale mining license and secured
two mounts with the total area of 0.8 Km 2 from Benishangul Gumuz National Regional State
Water Mine and Energy Resource Development Bureau. In order to develop and extract the
required raw material from the site, the Company approached our Bank for credit facility.
II.8. Credit Information of the Company
II.8.1. With DBE
Based on loan agreement signed on 11/02/2009 and 08/11/2012, the total loan amount of
Birr 11,346,755 was approved. Out of this, it is confirmed that the Bank has so far disbursed
Birr 10,985,525.42 and the remaining Birr 361,229.58 has cancelled based on the request of
the Company. The Company has been paying previous loans on time and according to
contractual loan agreement. According to the follow-up report of the Branch, the Company has
so far been recovered 22% of its outstanding loan balance punctually and it has no arrears
balance. The outstanding loan balance and other detail information related to the Company’s
loan position is depicted on the below table.
Table 2.6: Loan Position of the Company as at January 31, 2015

Current Loan Balance Credit
Loan Loan Due Risk Advance
Account
Approved Disbursed Principal Interest Balance Classifn. Collection
Status
Current and
11,346,755 10,985,525.42 8,410,117.42 7,774.53 - within terms Pass 63,922.90
II.8.2. With Other Financial Institutions

As per credit information obtained from National Bank of Ethiopia dated on 25-15-2014 with
enquiry ID 234077 the Company as well as its shareholders has no credit relation with other
financial institutions reside in the country.
II.9. The Loan
 Loan requested: -
 Amount: - Birr 7,508,595
 Loan Proposed:-
 Amount: - Birr 6,527,532
 Variation: -
 Amount: - Birr (981,063)
Detail of loan requested and proposed with their respective reason of variation is depicted on the
below table.
Table 2.2: Variation of Loan Requested and Proposed
Requested Proposed Cost

Sr.
Description Amount Amount Variation Reason for Variation
No.
(Birr) (Birr) (Birr)
1 Machineries and Equipments There is no variation
except the difference that
i. Quarry site machineries and will occur due to change
equipments
2,319,339 2,319,339 -
in foreign exchange rate

ii. Other heavy duty and
supplementary machineries
1,930,482 1,930,482 -
and variation in cost
2 Vehicle 1,404,068 1,404,068 - build-up method.
Initially, the water pump
was not included in the
3 Generator 681,976 873,642 191,666
loan requested by the
Company.
This cost is included in
the working capital cost
Diamond wire & block cutting determination and the
4
machines consumables
1,172,729 - (1,172,729) company has sufficient
existing working capital
to cover it.
Total 7,508,595 6,527,532 (981,063)
III. Key Success and Risk Factors
III.1. Key Success Factors
III.1.1.Macro Level Success Factors
 The country has registered a continuous economic growth for the past few consecutive
years. Considerable economic growth is also expected for the coming years indicating the
right track the country is following to achieve middle income Ethiopia.
 The government policy and strategies initiates the business persons to invest capital. Among
these low cost of lease land, low bank rate and low taxation rate can be taken as indicative.
 There is stable and conducive economic and political environment in the country which is
one of the factors to attract investors for investment.
 The government has availed different incentive systems to attract investment in the country.
Tax exemption in importation of investment goods, availing land at reasonable price or free
of charge in some regional governments, established bonded manufacturing warehouse
systems, export credit guarantee scheme, voucher systems, etc.
 There is improvement in basic infrastructural facilities like road network, hydro power
plants and telecommunication which are the critical factors in attracting investments
 The government has availed a credit facility to be financed to investment projects with
particular emphasis /priority/ to export oriented and manufacturing projects. This project
could take advantage of it as it is the government's priority area.
 The country as LDC is characterized to have least labor cost. Investments made on labor
intensive industries will take advantage of this low labor cost that could result in low
production cost.
III.1.2.The Key Sub-sector Success Factors
 The manufacturing sector is one of the priority areas in the government industrial
development strategy and it has enjoyed every advantage that is rendered for the priority
sectors.
 In the country, there is urbanization and large scale housing like condominiums, real estates,
hotels, offices other constructions which are the prime consumers of the product. Therefore,
the demand for the product is expected to be ever increasing.
 The country has also easily trainable and abundant manpower. Currently, different
governmental Universities and TVET colleges are providing trainings for students on
technical and other related disciplines to fill the gap on trained manpower requirement.
III.1.3.Firm Level Success Factors
 Character: Based on the past track record, the Company has very good loan repayment
performance, tax settlement, and has no record of delinquency. The Company has been
settling its due loans on time and has no record of due balance. Ethiopian Custom and
Revenue Authority has also provided certificate of clearance of meeting tax obligation to the
Company. These all reveal that the Company has acceptable character to be financed.
 Capacity/Competence: Ato Mesfin Mulugeta is one of the shareholders and General
Manager of the company. Since the establishment of this project, he has been managing
efficiently and effectively in collaboration with other key management and staffs. The
progress that the Company has been registered is the best evidence of his and coworkers
hard work. For the expansion part, quarry site management, the company has already hired
Ato Asfaw Mahecha who has ample of work experiences in quarry operation. Ato Asfaw
had been worked on the positions of head quarry technician, senior quarry supervisor and
production and technical section head when he was at National Mining Corporation PLC
and as a production head when he was at Ethiopian Marble Industry and Assae Marble PLC
at a different times. Therefore, it can be inferred that the key management staffs
qualification and work experience are big enough to run the envisaged project.
 Capital: The Company was established with the total paid-up capital of Birr 8,000,000.
The current total capital of the Company is raised to Birr 11,458,949 (as at July 7, 2014)
because of retained earnings. Since the total capital doesn’t represent paid-up capital, the
Company is expected to raise its registered paid-up capital at least to the level of its required
equity contribution (40% of total project cost).
 Collateral: Since the project falls in the category of manufacturing and mining sub-sector
which the bank considers as one of the priority area of lending, the project itself is big
enough to mitigate the risk of default.
 Compliance: All permits and licenses required for the project have been submitted. The
kind of business itself is in line with the Government’s laws and regulations and also the
project is one of the priority area projects of DBE. Thus, it is possible to say that the project
complies with all national, local laws and regulations and with all the bank’s policies and
procedures.
III.2. Risk Factors
 Existence of substitute products: Granite, porcelain, terrazzo tiles and slabs are the major
substitute products for granite and marble slabs and tiles. Accordingly, in order to have price
advantages some customers are preferably, may shifts towards terrazzo tiles and slabs which
create risky condition to polished slab producers.

 Imported similar products: Arabian, Indian and Chinese products are the most rival for the
domestic producers in Ethiopia. The imported similar product from Indian is one of the
major risk factors to the domestic producers since it affects their pricing systems.
Nowadays, Indian, Arabian and other countries are producing similar but not the same
product in bulk so that it’s difficult to differentiate between them. This condition may cause
customer loss to domestic producers.
 Increase in price of imported items: The ever increasing price of the imported spare parts
and consumables can be taken as one of the risks to the project, since the project will import
various machineries and equipments, consumables and spare parts from foreign market.
III.3. Risk Mitigating Measures
 In order to compete with imported substitute goods, the Company has already planned to
produce quality products. Since the purpose of expansion of the project is also to have its
own quarry site and supply the required raw material by itself, the Company will be able to
produce at a relatively lower cost and will be able to compete in price.
 As the local products capable to compete with that of foreign by quality as well as price,
import of similar products will be diminished through time.
 Searching for local substitutes is the best measure to mitigate the problem of increase in
price imported items.
III.4. SWOT Analysis
 Strengths  Opportunities
Since the Company has been in the business, it Rapid expansion of construction subsector: it is
has already acquired good experience and known that the demand for the slab is derived
market reputation. from the construction subsector and the boosting
Experienced & Qualified management and construction sector of the country is the best
employees. opportunity for the Company.
The Company has already been employed Growing size of middle income group in the
appropriate and complete technologies for slab country: Following economic growth of the
production. The Company has also planned to country, the number of middle income groups is

purchase best technologies of quarry operation. growing rapidly. As a result, the interest of having
The Company has its own quarry site for its and/or constructing modern and luxurious house
marble block (stone) requirement. is increasing.
 Weaknesses  Threats
The Company has not heavy duty truck to The entering of the similar and substitute
transport raw material (marble block) from goods from china and India to the country.
quarry site to the processing site. This will force The high grade professionals required for this
the Company to outsource and incur high cost industry like quarry master and mining engineers
of transportation. are not available sufficiently
Since the quarry site located at the distance of
620 KMs away from the processing plant, it will
force the Company to incur high cost of
IV. Market Study transportation.
IV.1. Market Destination and Segmentation of Marble
The destination for marble is local market as there is hugely untouched or not served demand in
the country. In the near future also, these both domestic production and import continuous to
serve this of huge and emerging demand. The segmentation of the market can be based on the
major consumer of the product: Government offices, big commercial centers, real estate
developer and NGOs. The use of the product is for the construction of parts of house: floor, roof
and stair and sometimes for wall and other household equipments. Its best serves the quality of
durability and decorating houses.
IV.2. Ethiopian Marble Market
Ethiopia has little experience in the utilization of different construction materials. The
conventional materials are produced from mortar, gypsum, clay, limestone and others excavated
from the ground. The demand of these building materials which is not compatible with the
supply is increasing. This has impact on the rising of cost on construction materials. This shows
a need to focus on alternative building materials produced from raw materials like agro-
industrial wastes, and mineral products with relatively low price and much higher strength than
the ordinary hollow concrete blocks (Tamrat Tadele, 2008)

On the other hand, there are demands for best quality of house making materials which are
durable and attractive. Nowadays, there are various governmental and private buildings that
begin to use marble as parts of building materials as of floor, roof, walls and house equipments.
However, the use of these building materials is very limited in the country because of the
availability and affordability reason.
IV.2.1. Demand for Marble Market
The demand for marble is the driven demand of the housing unit: institutional commercial and
residential which in turn depends on the growth of population, income, urbanization and
commercialization. Urbanization is another most important factor that induces the demand.
Migration from rural area to urban area increases the demand for housing in the urban; the
current over crowdedness indicates the excessive need of these housing.
Again the demand for marble has higher correlation with the income that the increase income
induces the demand for quality housing. Marble uses as floor, roof, wall and other household
equipments; but only floor and wall parts of the housing unit is considered for this demand
estimation purpose. The potential percentage of the housing units that would consumes marble
as their construction materials are those housing units that constructed using concrete, hallow
block, bricks and stone wall as alternative technology.
According to central statistical agency population and housing census report, both the total
housing unit and the housing unit that are constructed using concrete, hallow block, bricks,
stone wall of the country has shown increasing trend in the last thirteen years with the
compound annual growth of 2.64 and 10 percent respectively.
Table 4.1: Housing Unit
Housing Unit 1994 2007 AAGR

Total Housing Unit 10,766,729 15,103,135 2.64 %
Construction & Building of houses
115,873 355,194 10 %
( with bricks , block & stone wall)
Percentage of Construction & Building of
1% 2%
houses ( with bricks , block & stone wall)
Source: Marble, Limestone & Granite block & Slab Processing Commodity Study, Sep. 2014
The amount of quality aficionada housing unit which, constructed using bricks, hallow blocks
and stones is 2% of the total housing unit population (Population and Housing census report,
2007). The future demand for marble is forecasted using the last country wide census period
(1994 & 2007) annual average growth rate of 10 % of these housing units.
Table 4.2: Projected Housing Units
Year Housing Units Year Housing Units

2014 692,173 2019 1,114,751
2015 761,390 2020 1,226,226
2016 837,529 2021 1,348,849
2017 921,282 2022 1,483,734
2018 1,013,410 2023 1,632,107
Source: Marble, Limestone & Granite block & Slab Processing Commodity
Study, Sep. 2014
Multiplying the housing units with the area of respective parts will give total area of the
required material or demand for the construction materials.
It is the only floor and wall parts of the housing unit that considered for the estimation of
demand despite marble uses in most parts of housing construction: floor, stair, ceiling, wall and
other housing equipments. The average area of most housing unit building in the country is 52.5
m2 and the perimeter of the wall for mentioned area excluding the partition is length (l) X height
( h) i.e. 4( 7.25m X 2.50m) =72.5 m 2 (Magnesium Board and Panel study of Research process,
2013). Therefore, the area of floor and the perimeter of the wall of the housing unit
(52.5 m2 +72.5 m2 = 125m2) is taken as the coefficient in calculating the potential demand.
Table 4.3: Projected area of housing units (m2)

Perimeter of the Total potential area to
Year Area of Floor
Wall be covered (m2)
2014 36,339,063 50,182,515 86,521,578
2015 39,972,969 55,200,767 95,173,735
2016 43,970,266 60,720,843 104,691,109
2017 48,367,292 66,792,928 115,160,220
2018 53,204,022 73,472,220 126,676,242
2019 58,524,424 80,819,442 139,343,866
2020 64,376,866 88,901,387 153,278,253
2021 70,814,553 97,791,525 168,606,078
2022 77,896,008 107,570,678 185,466,686
2023 85,685,609 118,327,746 204,013,354
Source: Marble, Limestone & Granite Block & Slab Processing Commodity Study, Sep. 2014
Nonetheless, the effective demand for marble is the percentage share of this construction
material from that of the total these material used area (wall and floor). The percentage share of
the marble usage in construction can be calculated by dividing the total apparent consumption to
the total housing unit area of floor and wall of which is constructed using bricks, block and
stone wall. Thus the average percentage share of marble is 0.32%.
Table 4.4: Percentage Share of Marble in Construction Material Demand
Apparent of Percentage
Year Housing Total potential area to be
consumption of share of
Units covered (m2 )
marble (m2 ) marble
2007 355,194 44,399,250 208,463 0.5%
2008 390,713 48,839,125 264,901 0.5%
2009 429,785 53,723,125 115,277 0.2%
2010 472,763 59,095,375 152,435 0.3%
2011 520,040 65,005,000 144,282 0.2%
2012 572,044 71,505,500 192,039 0.27%
2013 629,248 78,656,000 211,243 0.27%
Average 0.32%

Therefore, the demand for marble forecast is estimated assuming that the coming years demand
will also be the same percentage of the total potential area that could be covered by marble in
the past period respectively.
Table 4.5: Forecasted Demand for Marble (m2)

Total potential area Demand for
Year
to be covered (m2 ) marble (m2 )
2014 86,521,578 276,869
2015 95,173,735 304,556
2016 104,691,109 335,012
2017 115,160,220 368,513
2018 126,676,242 405,364
2019 139,343,866 445,900
2020 153,278,253 490,490
2021 168,606,078 539,539
2022 185,466,686 593,493
2023 204,013,354 652,843 Source: Marble,
Limestone & Granite Block & Slab Processing Commodity
Study, Sep. 2014
IV.2.2. Supply of Marble
The supply source for marble in the country is both domestic production and import. Both of
them are determined as follows:
A. Domestic Production
Domestically there are around six factories engaged in production of marble for building or
construction purpose. The five years production amount of marble is presented under table 4.6
showing declining trend during the period mentioned. The National Mining Corporation is the
largest producer of both marble with 200 m 2. According to the survey, the corporation’s
production amount has declined in the recent years from what was at initial that was about 600
m2. The machinery obsolesces and input price escalations are the major reason for the declining
of the production. Thus, according to the survey to other companies too these are the main
reasons for declining in production amount.
Table 4.6: Production of (Marble M2)

Production
Year
Amount ( M2)
2009 114,374
2010 152,421
2011 143,820
2012 136,872
2013 136,872
AGR 5%
Source: Source: Marble, Limestone & Granite Block & Slab
Processing Commodity Study, Sep. 2014
B. Import
The other source of supply in the country is import. The import amount of marble shows general
increasing trend in the last four years with on average annual growth rate of 8 %.
Table 4.7: Marble Import

Year Marble (M2)
2009 903
2010 14
2011 462
2012 39,939
2013 15,481
AGR 8%
Source: Marble, Limestone & Granite Block & Slab Processing
Commodity Study, Sep. 2014
The sum of both domestic production and import gives the total supply of the products in the
country assuming that domestic production estimated to be constant for the last two years of
under consideration.
C. Supply Projection
The supply for the coming years is projected with the same average annual growth rate that
registered in the last recent years, 5%, for domestic production and the current import is
assumed to continue at average amount.
Table 4.8: Supply Projection (M2)

Domestic Total Supply
Year Import (M2)
Production (M2) (M2)
2014 143,716 11,360 155,076
2015 150,901 11,360 162,261
2016 158,446 11,360 169,806
2017 166,396 11,360 177,729
2018 174,687 11,360 186,047
2019 183,422 11,360 194,782
2020 192,593 11,360 203,953
2021 202,222 11,360 213,582
2022 212,333 11,360 223,693
2023 222,950 11,360 234,310 Source:
Marble, Limestone & Granite Block & Slab Processing Commodity Study, Sep. 2014
IV.2.3. Demand and Supply Gap of Marble
The demand and supply gap of marble shows the existence of unsatisfied and continuously
increasing demand in the country. The calculated amount of unsatisfied demand in the country
shows that if the demand and supply situation for marble continuous with the same trend the
gap of un served demand will get wide and wide in the coming 10 years as it will increase from
211 thousand to 653 thousand square meter. Therefore, the quantitative market demand supply
gap analysis implies that quarrying and mining and manufacturing of these dimensional stone:
marble must be accelerated in order to serve the foreseen unsatisfied demand.
On the other hand the case team understands that the quantitative analysis of the demand supply
gap is made based on the underestimated demand, thus, the apparent consumption figure
displays not the actual or existing demand amount rather the fulfilled parts of demand. The
existing order based sale system also confirms the presence of this reality on the ground. Thus,
the gap of the market demand for marble which would not be covered by the predicted supply
(production and import) will be more than what is displayed in the demand supply gap table.
Table 4.9: Demand- Supply Gap
Demand Supply
Year Demand (m2) Supply (m2)
Gap (m2)
2014 276,869 155,076 121,793
2015 304,556 162,261 142,295
2016 335,012 169,806 165,206
2017 368,513 177,729 190,784
2018 405,364 186,047 219,317
2019 445,900 194,782 251,118
2020 490,490 203,953 286,537
2021 539,539 213,582 325,957
2022 593,493 223,693 369,800
2023 652,843 234,310 418,533
IV.3. Market and Marketing Arrangement
Most of the marketing of marble is held at the get of the processing factory that the buyer
transports by his/her own cost to the destination. The sale is order base where the time and
amount of installment of payment is according to the agreement between producer/seller and
buyer. For the most of producers the mode of payment is cash on hand and no credit service
exist. According to the observation on the survey there are many orders at the hand of producers
that the factories are in short of capacity to supply within the given frame of time.
IV.4. Value Chain
The raw material is obtained from both import and local sources. The major raw material, block,
is from the local quarry whereas, the other raw material and spare parts are from the foreign
market such as china, India, Italy and the like. The producer themselves can own quarry or they
purchase block directly from other quarry owner. Again, the products of marble channeled to
government or private constructor of housing unit (offices, commercial shops or other service
giving centers.
Figure 5.1: Value Chain Diagram
Local Market (block from quarry) Foreign market (other inputs)
Factory
Government Offices NGO Offices Commercial Centers Individuals

IV.5. Price Trend
Price is one of the marketing strategies that the local firms have to use while competing with
foreign. The selling price depends on the market demand and the production cost. The
economic scale is one of the mechanisms to lower the total cost of production and local firms
can use the advantageous of distributing products with less transportation cost than the foreign
firms while maintaining the desired quality.
Locally, most of the firms set prices by negotiation while making a contractual agreement with
customer. The price trend is not found nevertheless, the current price of the product of this
Company is assumed to be Birr 850 per square meter of marble slab.
IV.6. Marketing Strategy of the Company
The Company has already designed proper marketing strategy to win the market and maintain
fair market share in order to achieve its objectives of establishment. The main target of
emphasis of the Company is to produce quality product at a relatively lower price. The
Company has also planned to produce large amount of quality marble slab that can meet the
ever increasing demand of its customer. During the past, shortage of raw material (marble
block) has been inhibiting the Company to produce sufficient amount of marble slab that can
meet order quantity of its customers. However, soon after completion of this expansion, the
problem of raw material will be solved and able to produce at its maximum capacity and meet
its customers demand accordingly. This will also enable the Company to reduce its production
cost and consequently sales price which will able attract more customers than its competitors.
The Company has also planned to use advertising media to create public relation and introduce
about project and its product to a wide market. This will also further be enhanced by opening
product display shop at an ideal location in the city.
V. Technical Aspect of the Project
V.1. Project Location
V.1.1. The Company and Slab Production Site
The Company is located in Oromia Region, Finfine Vicinity Oromia Special Zone, Sebeta
Hawas Woreda, Alemgena Town, Kebele 03/04 and it is located at a very close proximity to the
central market, Addis Ababa. The site is also accessible with all the necessary utilities and

infrastructures such as electricity, main road, water, telephone, etc that are crucial for smooth
operation of the project and marketing of its final product.
V.1.2. Quarry Site
Based on large scale mining permit agreement made between the Company and Benishangul
Gumuz National Regional State Water Mine and Energy Resource Development Bureau and
project follow-up report of the Branch, the quarry is located in Benishangul Gumuz Regional
State, Assosa Zone, Oda Buldigdu Woreda, Kambodisho Kebele which is around 620
kilometers to the west of Addis Ababa on the way to Assosa. Until Mendi town, which is 580
kilometers, it is asphalt road and 36 kilometers from Mendi town until the nearest Kambodisho
Kebele is all-weather gravel road. The remaining one or two kilometers road are under
construction. The quarry site hasn’t fulfilled with utilities like electricity, water, and telephone.
However, since the Company has generators for its operation, electricity will not be a problem.
In addition to this, the Branch has confirmed that there is a river flowing near the quarry site and
it will be used for quarry operation.
V.2. Land Availability
The Company has already acquired 5,000 m2 of land which last for 40 years based on lease
agreement made with Sebeta Town Administration on 14/08/2006 E.C and later modified on
26/02/2001 E.C. The total lease payment is Birr 430,000 with annual payment of Birr 10,750. The
company has already paid down payment of Birr 10,750.
The Company has also granted large scale mining license and secured two mounts with the total
area of 0.8 Km2 based on large scale mining permit agreement made on 28/05/2006 E.C. with
Benishangul Gumuz National Regional State Water Mine and Energy Resource Development
Bureau. Based on this agreement, the Company shall pay 3% of the value of the extracted marble
block per annum as a royalty fee.
V.3. Plant Layout and Civil Work
Since the project is an existing and has been operational, all the required building and
construction for existing operation has already been fulfilled. As per Bank’s Civil Engineer
valuation report, the total value of existing buildings and construction is Birr 5,446,416. In
addition to this, as per follow-up report of the Branch, the Company has planned to construct
consumables store, offices, and residence for quarry operation at Daleti town which is located at
6 kilometers away from the quarry site and this cost will be covered by the Company’s own
equity. The detail of existing building and construction is depicted on the underneath table.
Table: 5.1. Building and Construction

Total Executed Planned
Sr. Number of Total Cost
Description Building Area Value Cost
No. Building (Birr)
(m2 or m) (Birr) (Birr)
1 Factory Building 1 7,911.00 3,603,900 - 3,603,900
2 Store Building 1 106.40 372,621 - 372,621
3 Office Building 1 186.00 696,926 - 696,926
4 Guard House 1 8.41 26,258 - 26,258
5 Fence 1 275.50 626,863 - 626,863
6 Consultancy Fee 1 - 119,848 - 119,848
Total 5,446,416 - 5,446,416
V.4. Machineries and Equipments
V.4.1. Slab Production Machineries and Equipments
Similarly, complete machineries and equipments for slab production has also been procured and
installed and they are fully operational. Mechanical Engineer of the Bank has also valued and
confirmed that they are on a very good condition. As per Mechanical Engineer’s valuation
report, the total value of these machineries and equipments is Birr 7,697,963 and its detail is
depicted below.
Table 5.2: Slab Production Machineries and Equipments

Sr. Unit Value Total Value
Description Quantity Condition
No. (Birr) (Birr)
1 Bridge Multiple Block Cutter Machine 2 629,440 1,258,880 Very good
2 Polishing Machine 1 1,777,940 1,777,940 Very good
3 Edge Polishing Machine 1 140,000 140,000 Very good
4 Manual Edge Cutting Machine 1 99,600 99,600 Very good
5 Second Hand, when purchased, Machines Very good
5.1. Block Cutter Machine 1 3,701,543 Fair

1 Fair
5.2. Surface Polishing Machine 1 Fair
5.3. Bridge Cutter Machine 1 Fair
5.4. Bridge Cutter Machine 1 Fair
5.5. Chamfering Machine 1 Fair
6 Stone Decorating Machine 1 720,000 720,000
Total 7,697,963
V.4.2. Quarry Site Machineries and Equipments
The Company has submitted pro forma invoices for machineries and equipments that will be
employed for quarry site operations. Accordingly, Mechanical Engineer has evaluated and
recommended all the necessary machineries and equipments that are technically viable and their
costs are included in the total investment cost determination of the project. The detail is
depicted in the following table:
Table 5.3: Quarry Site Machineries and Equipments
Sr. Unit Price Total Price

Description Quantity Remark
No. (Euro) (Euro)
I Drilling & Block Cutting Machines

1 Pneumatic Churn Drill 2 13,500 27,000 Planned
2 Diamond Wire Cutting Machine 2 22,300 44,600 Planned
3 Hydraulic Jacking Plant 1 8,000 8,000 Planned
4 Pillow 140X80X0.7 cm 2 770 1,540 Planned
Total 81,140
Special Price 63,500
Total (After Cost Build-up) (Birr) 1,596,494
Total Value
Unit Price Total Price
Sr. After Cost
Description Currency Quantity in Foreign in Foreign Remark
No. Build-up
Currency Currency
(Birr)
Supplementary Machineries
II and Equipments
1 Motor Compressor Euro 2 9,500 19,000 477,691 Planned
2 Splitting Machine USD 1 8,000 8,000 178,294 Planned
3 Frequency Welding Machine USD 1 3,000 3,000 66,860 Planned
Total 30,000 722,846

V.4.3. Other Supplementary Machineries and Equipments
The Company has already procured other supplementary machineries and equipments like
loader and crane. Loader will be used to develop the quarry site, pave the road to quarry site,
overturn and load marble block and other similar operations. The crane is also used to load
marble block on block cutter machines at slab production site. According to Mechanical
Engineer of the Bank, the total value of these two machineries is Birr 2,186,400.
The Company has also planned to purchase excavator and submitted pro forma invoice.
Excavator will be used to develop quarry site, facilitate quarry operation and sometimes load
small sized marble block on heavy duty trucks. After reviewing the submitted pro forma invoice
and confirming its appropriateness, Mechanical Engineer of the Bank has approved and
forwarded it to us. Accordingly, we have included in the lists of investment items and
considered its cost for total project cost determination.
Table 5.4: Other Supplementary Machineries and Equipments

Sr. Unit Price Equivalent
Description Quantity Remark
No. (USD) Value (Birr)
I Existing
1 Loader 1 1,466,400 Good
2 Locomotive Gantry Crane 1 720,000 Very good
Sub-total 2,186,400
II Planned
3 Excavator 1 86,620 1,930,482 Reconditioned
Sub-total 1,930,482
Total 4,116,882
V.5. Vehicles
As we have confirmed from the sales agreement, the Company has already procured Isuzu NPR
truck for transportation service of employees at quarry site. However, since the transfer of
ownership has not yet completed, we didn’t include its value in project cost determination.
Furthermore, the Company has submitted pro forma invoice from MOENCO for procurement
pick-up. According to the Company’s plan, two pick-up vehicles will purchased for slab
production and quarry operations follow-up. After carefully evaluating, Mechanical Engineer of
the Bank has approved the submitted pro forma invoice and its total cost is estimated to be
Birr 1,404,068. Since the team believed that the vehicles are crucial for smooth operation of the
project, the request has also accepted. The detail is depicted on the below table.
Table: 5.5: Vehicles

Planned Total
Sr. Name of
Description Existing Unit Cost Total Cost Cost
No. Quantity Supplier
1 Pick-up - 2 702,034 1,404,068 1,404,068 MOENCO
V.6. Generator & Water Pump
Since the quarry site hasn’t hydro electric power supply, generator is mandatory to supply
electric power for quarry machineries operation. Since the breakdown of the generator directly
leads to ceasing the quarry operation, holding reserve generator is appropriate. In addition to
this, water pump will used to suck water from river to the quarry operation. As a result, two
generators are included in the investment item of the project. Based on recommendation of
Mechanical Engineer of the Bank, the submitted pro forma invoice is accepted. After cost build-
up, the total cost of both generators and water pump is Birr 873,642. The detail is depicted on
the below table.
Table 5.6: Generator and Water Pump

Power Total
Sr. Unit Cost
Description Type & Model Rating Quantity Cost Remark
No. (Birr)
(KWh) (Birr)
1 Diesel Generator GBTAA5.9-G5 160 2 340,988 681,976 Planned
2 Water Pump 2 95,833 191,666 Planned
Total 873,642
V.7. Utilities
It is obvious that utilities like electric power, water and communication devices like telephone,
internet and fax are among important facilities that are supposed to be fulfilled for smooth
operation of every project. As we have observed during our field visit, the slab production site is
accessible with all infrastructures like power, water and communication devices.
The quarry site hasn’t fulfilled with utilities like electricity, and water. However, since the
Company has generators for its quarry operation, electricity will not be a problem. In addition to

this, the Branch has confirmed that there is a river flowing near the quarry site and it will be
used for quarry operation.
V.8. Material Inputs
As the name indicates, in marble slab processing industry the sole raw material is marble block
(stone). The Company is going to have its own marble quarry for its marble block (stone)
requirement. As a result, the Company will not face problems related with the supply of marble
block again. The only cost for its supply is costs related with quarry site operation and
transportation cost to move from quarry site to slab processing site. During operation, there are
also other consumables like circular blade and blade segment for block cutter machines and
abrasive disk for polishing operation. These are imported items and the Company has already
submitted pro forma invoice for their procurement.
In quarry operation, there are consumables like diamond wire, drilling equipments and diesel
fuel. Diamond wire and drilling consumables are imported items and the Company has already
submitted pro forma invoice for their procurement whereas, fuel is locally available.
V.9. Production Process and Production Capacity
V.9.1. Production Process
i. Quarrying Site Operation
The first step to finding the perfect slab is finding an optimal deposit of material with desirable
color, pattern, and composition. Once the potential location is selected, clearing follows.
Clearing the way to reach the best material allows a quarry to reach its full potential.
It takes lots of experience, vision and hard work to bring a quarry into full production. A good
quarry manager is able to control how to material is removed based on the veining and
coloration within the deposit. The manager must have the vision to see how the stone "flows"
through the quarry.
After the quarry manager decides how to extract the blocks, the drilling can begin. The process
starts by taking down a “bench wall,” a large dimensional chunk of rock that is then cut into
smaller blocks which will eventually be sent to the factory for processing. The bench walls are
cut using a combination of diamond wire cables, drills and splitting. Dirt is pushed up against

the base of the wall to cushion the fall. The blocks can then be drilled from the bench wall. The
blocks usually have a fairly uniform size, due to the size of the processing equipment used.
Once the blocks have been extracted, the journey to the processing plant can begin.
ii. Slab Processing

Once blocks of stone reach the processing facility, they are cut down into smaller more
manageable pieces. For tile, this means cutting the stone into billets before polishing. For slab
materials, this typically means a trip to the block cutter. A block cutter works just like a giant
bread slicer, with adjustable blades that allow for the thickness of the slabs to be adjusted.
After slabs are cut on the block cutter, they are moved to the polishing line, where they are laid
horizontally on a large conveyer type line called a polishing line. There, they pass under
polishing heads which begin with very coarse diamond abrasives, and then move to finer and
finer grit abrasives, just like sanding wood. Part of the way through this line, the slabs will
receive a coating of a resin treatment which will fill in any pits or micro fissures which are
inherent to the stone in order to make the final surface easier to clean. Most of the excess resin
is removed by further polishing, with only 1% remaining on the finished surface. For materials
where the final surface is to be honed, the process will stop with a lower grit abrasive than
materials with a polished surface.
At this point the materials are checked for quality and carefully packaged for their journey.
V.9.2. Production Capacity
Marble slab production capacity of the project has already reached 51% of theoretical
production capacity. The only bottleneck during this period was shortage of marble block.
However, from now on, since the company is going to have its own quarry, the problem of raw
material will be solved and as a result, marble slab production of the company will be improved.
Based our assumption, during the first operational year after expansion, the production capacity
utilization of the project will reach 60% of its theoretical production capacity and will increase
by 10% per annum until it reaches the maximum production capacity utilization of 90% during
its fourth operational period and it will remain the same thereafter. The rationale behind this
increment in production capacity utilization is that the quarry site develops through time and the
extracting capacity of marble block will also increase. This will in turn increase the production
capacity of the slab production.
When we compare quarry site extracting capacity with that marble block requirement of slab
processing plant at full production capacity, the former has much greater capacity than the
latter. According to our analysis, quarry site extracting capacity is 8,000 m 3 per annum, whereas
slab processing plant has the capacity to process 3,333 m3 per annum. However, based on our
assumption, the quarry site will only extract marble block to the extent that it fulfills the
requirement of slab processing plant.
V.10. Environmental Impact Assessment
Quarry operation and slab processing subsector has different impacts on environment like dust
emission, noise pollution, land degradation, ground vibration, and air pollution. Quarrying
operations involve removal of overburden, drilling, blasting and crushing of rocks materials.
These operations have their own specific impacts on the air, water, soil, earth surface, and
human beings. As a result, it demands appropriate mitigating mechanisms.
Accordingly, when slab processing project was established, the Company had been undertaken
environmental impact assessment and set mitigating mechanism which had been approved by
Oromia Regional State Rural Land and Environmental Protection Office by the time. Since its
implementation, the Company has been implementing those mitigating mechanisms and there is
no compliant or warning presented by appropriate government organ.
Furthermore, the Company has also granted approval for quarry operation from Benishangul
Gumuz Regional State Water Mine and Energy Resource Development Bureau by the letter
written on 27/10/07 E.C. with ref. no. 2512104107 after submitting environmental impact
assessment report. The proposed quarry operation machineries and equipments are also the best
to minimize the possible environmental impact of quarry operation. The company will also
implement all the necessary mitigating mechanisms which stated on the environmental impact
assessment report and adhere to the conditions set by the office in order to minimize impact of
implementation of the project on the Environment.
V.11. Implementation Plan

The project implementation schedule is an important time management document that defines
and schedules the major phases of project work being carried out to fulfill the desired project
objective(s) and achieve the expected deliverables. It clarifies and describes what the project
should deliver and within what time-frames. Based on this concept, all the key operations are
included and appropriate time is allotted. The detail of implementation schedule for expansion
part of the project is depicted as follows.
Table 5.7: Implementation Schedule

2015
Sr.
February
August
March
April
Type of Activities
June
May
July
No.
1 Loan processing
2 Quarry site development
3 Construction of quarry site office & residence facility
4 Procurement of quarry site machineries and equipments
5 Procurement of excavator, vehicle and generator
6 Procurement of imported consumables
7 Recruitment of Employee
8 Installation quarry machineries and equipments
9 Operation commencement

VI. Organization and Management
VI.1. Organizational Structure
The Company has already been implemented proper organizational structure and hired the
required human resources for the existing operations. So as to include the expansion part of
the project, we have modified the existing organizational structure. As before, the project will
be headed by the General Manager, who is responsible to control the activities of all staffs and
the overall operations of the project. Under the General Manager, major operations will be
performed by the middle level of management that consists of the heads of Production
Department, Administration and Finance Department and Marketing Department. Production
Department will further be divided into two major divisions, slab production division and
quarry site operation division. Under both divisions, there will be further divisions. The other
departments will also have divisions.
Summarized organizational structure of the project is depicted on the following chart. This
organizational structure is originated by combining the existing organizational structure the
project and recommendation of commodity study by modifying for optimal result.
Figure 6.1 Organizational Structure of the Project

VI.2. Project Management
Ato Mesfin Mulugeta is one of the shareholders and General Manager of the company. Since
the establishment of this project, he has been managing the project efficiently and effectively
in collaboration with other key management and staffs. The progress that the Company has
been registered is the best evidence of his and coworkers hard work.
For quarry site management, the company has already employed Ato Asfaw Mahecha who
has ample of work experiences in quarry operation. Ato Asfaw has been working on the
positions of head quarry technician, senior quarry supervisor and production and technical
section head when he was at National Mining Corporation PLC and as a production head
when he was at Ethiopian Marble Industry and Assae Marble PLC at a different times.
Therefore, it can be inferred that the key management staffs qualification and work experience
are big enough to run the envisaged project.
Besides, the Company has already hired 71 employees for slab production and we have also
proposed additional 52 employees for the new quarry site operation, expansion part of the
project. The detail of planned additional human resources with their respective remuneration
scale is depicted on the table 6.1 below.
VI.3. Training Requirement and Employee Remuneration and Benefits
Training is a process of enhancing the skills, capabilities, and knowledge of employees for
doing a particular job. It is crucial for organizational development and success. It is fruit full
to both employers and employees of an organization. An employee will become more efficient
and productive if he/she IS trained well. As a result, continuous and related training is
recommended as deemed necessary.
Employee remuneration and benefit are also an important factor for employee’s productivity.
Employee remuneration refers to the reward or compensation given to the employees for their
work performances. Similarly, benefits are any perks offered to employees in addition to
salary. The most common benefits are medical, disability and life insurance, retirement
benefits and fringe benefits. Both remuneration and benefits provide basic attraction and
motivation to an employee to perform job efficiently and effectively. These all are considered
and included in project cost. Therefore, the Company is expected to work hard on their
implementation for success of the project.

Table 6.1 Planned Additional Manpower with their Respective Salary
Salary Monthly Annual
Sr. No of
Categories of staff Scale Salary Salary
No. Employee
I General Manager Office
II Production & Technical Dep't
2.1. Quarry Site
Quarry manager 1 6,500 6,500 78,000
Quarry master 1 5,000 5,000 60,000
Quarry technician 2 4,200 8,400 100,800
Block cutter operator 4 3,300 13,200 158,400
Driller Operator 2 3,000 6,000 72,000
Compressor operator 2 2,800 5,600 67,200
Excavator operator 1 3,500 3,500 42,000
Loader operator 1 3,500 3,500 42,000
Water pump operator 1 1,200 1,200 14,400
Auto mechanic 1 2,500 2,500 30,000
Mechanic 2 2,500 5,000 60,000
Electrician 1 2,500 2,500 30,000
Welder 1 1,800 1,800 21,600
Laboratory technician 1 3,200 3,200 38,400
Quarry site worker 14 1,200 16,800 201,600
2.2. Marble Slab/Tile Production
Production foreman 1 2,443 2,443 29,316
Block cutter operator 2 2,000 4,000 48,000
Production clerk 4 1,500 6,000 72,000
Laborers 8 1,000 8,000 96,000
2.3. Quality Control & Safety Division
Quality control & safety supervisor 1 3,500 3,500 42,000
Environmental protection worker 1 3,500 3,500 42,000
III Administration & Finance Dep't
IV Marketing Department
Grand Total 52 1,345,716
N.B:- Salary is assumed to increase by 5% per annum

VII. Financial Analysis
VII.1. Fund Allocation
The total project cost is estimated to Birr 29,733,212. Out of this, Birr 21,987,448 (73.95%)
is fixed assets, Birr 6,962,247 (23.42%) is part of the project cost that has already been and
will be invested on the working capital and the remaining Birr 783,517 (2.64%) is pre-
production expenditure of the project. As depicted on the table 7.1 below, from the total
project cost the sum of Birr 23,008,536 (77%) has already been invested on fixed assets,
working capital and pre-production expenditures. The remaining cost of Birr 6,724,676
(23%) is the planned expansion cost of the project.
VII.2. Source of Fund
According to credit policy of the Bank, even if there are other conditions that will be
considered, the borrowers who wish to obtain financing for the expansion of an existing
priority area project are expected to contribute 40% of the total project cost. Based on this
concept, the Company that we are dealing with is expected to contribute at least 40% of the
total project cost. However, since the total existing investment that has been invested by the
Company is greater than the minimum requirement, the Company shall only be expected to
contribute for pre production expenditure part of the expansion cost.
As we have tried to depict on the below table, from the total cost of the project including
expansion part, the sum of Birr 23,008,536 (77%) has already been invested. Out of this, the
Company has the share of Birr 14,598,418 (63%) and the rest of Birr 8,410,117 (37%) has
been financed by the DBE loan. The total expansion cost has planned to be Birr 6,724,676
(23% of the total project cost). Among this, Birr 6,527,532 (97%) will be financed by the
DBE loan and the remaining Birr 197,144 (3%) will be covered by the Company’s own equity
contribution. When we sum up, from the total project cost of Birr 29,733,212, the share of the
Company will be Birr 14,795,562 (~50%) and the remaining Birr 14,937,649 (~50%) will be
covered by DBE loan. The detail of fund allocation and source of fund is depicted on the
following table.

Table 7.1: Fund allocation and Source of Fund
Existing Investment Expansion Investment Total Investment After Expansion
Sr.
Description Equity Debt Total Equity Loan Total Equity Loan Total
No.
(Birr) (Birr) (Birr) (Birr) (Birr) (Birr) (Birr) (Birr) (Birr)
1 Land Lease 9,138 - 9,138 - - - 9,138 - 9,138
2 Building and Construction 5,446,416 - 5,446,416 - - - 5,446,416 - 5,446,416
3 Machineries and Equipments
3.1. Marble Production Machineries and Equipments
I. Quarry Site Machineries and Equipments - - - - 2,319,339 2,319,339 - 2,319,339 2,319,339
II. Slab/Tile Processing Machineries & Equipments 698,013 6,999,950 7,697,963 - - - 698,013 6,999,950 7,697,963
3.2. Other Heavy Duty & Supplementary Machineries 2,186,400 - 2,186,400 - 1,930,482 1,930,482 2,186,400 1,930,482 4,116,882
4 Vehicle - - - - 1,404,068 1,404,068 - 1,404,068 1,404,068
5 Generator & Generator - - - - 873,642 873,642 - 873,642 873,642
6 Electric Installation 120,000 - 120,000 - - - 120,000 - 120,000
7 Office Furniture and Equipments - - - - - - - - -
Sub-total 8,459,966 6,999,950 15,459,916 - 6,527,532 6,527,532 8,459,966 13,527,482 21,987,448
8 Pre-production Cost 164,222 - 164,222 33,456 - 33,456 197,678 - 197,678
9 Pre-production Interest 422,151 - 422,151 163,688 - 163,688 585,839 - 585,839
Sub-total 586,373 - 586,373 197,144 - 197,144 783,517 - 783,517
10 Working Capital 5,552,079 1,410,167 6,962,247 - - - 5,552,079 1,410,167 6,962,247
Sub-total 5,552,079 1,410,167 6,962,247 - - - 5,552,079 1,410,167 6,962,247
Total 14,330,194 8,410,117 23,008,536 197,144 6,527,532 6,724,676 14,795,562 14,937,649 29,733,212
Proportion of Existing Vs Expansion 77% 23% 100%
Debt-Equity Ratio 63% 37% 100% 3% 97% 100% 50% 50% 100%

VII.3. Expected Financial Results
Here, our objective is to provide information about the financial position, performance and
changes in financial position of the project to make rational economic decision. Hereunder,
we will try to look Profit/loss or income statement forecast, cash flow and balance sheet
projection, financial rate of return and sensitivity of the project for potential variables.
VII.3.1. Profit/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 4,628,292 during the base year of operation and earn profit of Birr 8,078,145 at the
10th end year of projection. This indicates that the project could run profitable business
venture and can maintain objective of its establishment at competitive quality and price.
VII.3.2. Cash flow forecast
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. Thus, it is important to give due attention to identify whether
the total inflows of the project have the capacity to cover all cash outflows during its
operational period. Unless, the project will faces liquidity crisis and fail before achieving its
objective of establishment.
Based on this fact, the forecasted cumulative cash balance shows a balance of
Birr 2,820,935 during the base year and will grow up to Birr 51,833,623 at the end of the
tenth operational year, demonstrating that the project will not face liquidity constraint to
finance its operational costs as well as debt obligation.
VII.3.3. 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 Birr 31,222,483
during the base year to Birr 62,637,403 at the end project year.

VII.3.4. Financial Rate of Return
Net Present Value (NPV) Internal Rate of Return (IRR)

Before Tax 66,167,276 56
After Tax 40,368,971 37
VII.3.5. Sensitivity Analysis
Under sensitivity analysis we tried to made assessments that compares the expected results
with possible results. The profitability of the project will vary under various circumstances
that could possibly happen. Thus, the project's sensitivity to adverse circumstance is
analyzed from three different scenarios: decrease in sales revenue by 10%; increase in
operating costs by 10% and increase in investment costs by 10%.
i. Decrease on Revenue
Based on financial our findings, when revenue decreases by 10% after tax IRR of the project
reduced from 37% to 24%. From this, we can say that the project is viable and can achieve
its objective of its establishment even in an adverse circumstance that may happen and
trigger to reduce its revenue by 10%.
ii. Increase on operating Cost
Also, if the operating costs of the project may increase by 10% due to unforeseen
circumstances; other things remain constant, after tax IRR of the project anticipated to
reduce to 28%. This means, still the project has the capacity to cover its costs and make
profit for stakeholders.
iii. Increase on Investment
When investment costs increase by 10%, after tax IRR of the project anticipated to be 33%.
To sum up, the project is more sensitive to the sales performance. As a result, the company
should give more focus on pricing strategy and try to maximize its sales performance as
much as possible. Whatsoever will happen, the project has the capacity to absorb external
shock and attain its objectives of its establishment.

VIII. Socio Economic Benefit
As our country is among the world fastest growing countries, development and
establishment of such manufacturing and mining sub-sectors are very important. It is
possible to state enormous reasons. Among, the followings are some of it:
 Employment opportunity: unemployment is one of the major problems of developing

countries. In order to alleviate this, government has designed a policy and made
economic decisions which enhance the creation of job opportunity for unemployed
citizens. Towards this end, marble quarrying and slab processing subsector is
becoming significant for employment opportunities creation to the
local communities since it is both capital and labor intensive. The project is
expected to create total permanent employment opportunity for about 123 professionals,
skilled, semi-skilled and unskilled workers.
 Linkage effects: Due to this expansion, the project will integrate backward with the
mining subsector which adds value on the output of primary sector. In addition to this
the subsector has strong linkage with construction subsector which is highly demanding
slabs and tiles for modern housing construction.
 Import substitution: Nowadays, export promotion and import promotion is the main
strategic issue of Ethiopian economy. To meet such strategic objective the government
gives priority for manufacturing subsectors. Marble quarrying and slab processing
industry is one of such priority area which substitutes imported slab and tiles products
by homeland made products. This will in turn solve the shortage of foreign currency.
 Source of Government Income: The government will get income in the form of
income tax from permanent and temporary employees, profit tax, and royalty fee from
the business.

IX. Conclusion and Recommendation
IX.1. Conclusion
As we gone through all the issues that determine the success and failure of project, we have
tried to touch all important aspects. Since the Company is our existing client, its
creditworthiness has already been verified and confirmed. The Company has been paying its
previous loans on time and according to contractual loan agreement and this can easily
prove us that the Company is creditworthy.
In view of the fact that market condition for the proposed product has vital role for
realization of objectives of establishment of the proposed project, we have also tried to
review the contemporary and forecasted demand and supply condition and price of the
product. Based on commodity study of the bank and past performance of the Company, we
have observed that there is excess demand for the product even at a relatively higher price.
Technical viability of the project has also been assessed. All the required buildings and
constructions have already been constructed and their value and appropriateness are verified
by the Bank’s Civil Engineer. Machineries and equipments required for slab production has
also been procured and installed and they are fully operational. Mechanical Engineer of the
Bank has also valued and confirmed that they are on a very good condition. In addition to
these, the Company has submitted pro forma invoices for machineries and equipments that
will be employed for quarry site operations. Accordingly, Mechanical Engineer has
evaluated and recommended all the necessary machineries and equipments that are
technically viable and their costs are included in the total investment cost of the project
The Company has already implemented proper organizational structure and hired required
human resources for the existing business. So as to include the expansion part of the project,
we have modified the existing organizational structure and proposed additional human
resources.

In addition, financial viability of the project is unquestionable to determine acceptance or
rejection of the project. As we tried to gone through each financial components, the
project’s past performance and future projection has also revealed that the project is
financially viable & capable to achieve its objective covering all its costs even in adverse
conditions that can possibly affect either its cost items or revenue.
At the same time, establishment of the project has also various socio-economic importances
for the country. But, the unhidden fact, it does not mean that the project is totally free from
obvious business risks and some environmental impact. But, with appropriate mitigating
mechanisms, its national significances considerably surpass those anticipated risks.
IX.2. Recommendation
By considering all the above facts and findings, Appraisal Team I found that financing the
proposed expansion project for its implementation is commendable and appropriate.
Therefore, the team has proposed and approved the total loan amount of Birr 6,527,532 at
its level and it will be paid within 5 (five) years with terms and conditions stated under
numbering list 9.3 of this appraisal report.
IX.3. Terms and Conditions
IX.3.1. Terms
a) Disbursement Condition
 Equity Release Schedule
Balance in
Equity Amount to To be To be
Purpose of Commitment
Release be Released Disbursed Released
Release (Birr)
Plan (Birr) to (2015)
197,144
Pre-production
33,456 Existing
1 st
Cost
Equity Pre-production - Until
163,688 To DBE
Release Interest March 31
Sub-total 197,144
Equity to be Blocked In Cash 163,688

 Loan Disbursement Schedule
Amount to Balance in Months to

Loan Commitment To be
be Condition for be
Disbursement Purpose of Disbursement (Birr) Disbursed
Disbursed Disbursement Disbursed
Plan to
(Birr) (2014)
6,527,532
Procurement of (LC Opening)
i. Quarry site machineries and equipments
a) Drilling and Block Cutting Machines 1,596,494
(100% LC)
b) Motor Compressor, Splitting Machine After signing expansion
1st and Frequency Welding Machine 722,846 The loan contractual
1,594,397 April
Disbursement (100% LC) supplier agreement and block
equity contribution.
ii. Excavator (100% LC) 1,930,482
iii. Vehicles (Pick-up- Toyota Hilux) (30% LC) 421,220
iv. Generator (30% LC) 262,093
Sub-total 4,933,135
Settlement of remaining balance
After verification of
i. Vehicles (Pick-up- Toyota Hilux) 982,848 effective utilization of
2nd The
- previous disbursement June
Disbursement ii. Generator 611,550 supplier
and arrival of imported
items.
Sub-total 1,594,397
Total 6,527,532 -

b) Interest Rates and Other Charges
8.5% interest rate p.a. on the outstanding loan balance to be paid every four months.
c) Commitment Charge Payment
0.5 % per annum commitment charge shall be paid on balance in commitment.
d) Repayment Schedule
The previous (existing) loan repayment schedule remains unchanged, whereas the principal
of expansion loan is planned to be repaid every four months within 5 (five) years beginning
from January 31, 2016 and the last repayment shall be made on September 30, 2020 being.
Whereby, the repayment shall be made every-four-months and the first 14 (fourteen) equal
installments shall be amount of Birr 435,170 and the last one installment will be
Birr 435,152.
IX.3.2. Conditions
 The Company should deposit Birr 163,688 in a blocked account for pre-operating
interest.
 Collateral: First degree mortgage on the entire assets of the project.
 Insurance: Insurance policy for the entire assets of the project should timely be renewed
and confirmed that the DBE is co-beneficiary.
 Current Account: The Company should open current account with DBE.
 Record Keeping: The Company should keep maintaining proper record keeping system.
 L/C Opening: The Company should open letter of credit in DBE (both for import and
export)
 The Company should raise its registered paid up capital at least to the level of the
required 40% of the total project cost.
 Terms and conditions stipulated in the previous loan contract will remain intact unless
changed by terms and conditions stated here.
 The expansion loan shall be registered.

X. Annexes
- Pro forma Invoices

- Detail of Investment Costs
- Basic Assumptions
- Operating Cost Determination
- Working Capital Determination
- Fund Allocation
- Loan Repayment Schedule
- Depreciation Schedule
- Profit/Loss Forecast
- Cash Flow Forecast
- Balance Sheet Forecast
- FIRR Projection
- Others

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I. Executive Summary ....................................................................................................................

3M Marble and Granite Manufacturing PLC 0

3M Marble and Granite Manufacturing PLC 1

3M Marble and Granite Manufacturing PLC 2

3M Marble and Granite Manufacturing PLC 3

3M Marble and Granite Manufacturing PLC 4

II.1. The Applicant

 Name: Three M Marble and Terrazzo Manufacturing PLC

3M Marble and Granite Manufacturing PLC 5

II.2. Contact Person

 Name: Ato Mesfin Mulugeta

S&S Farms PLC 5

 Legal form of Business:- Private Limited Company

 Type of the Project: Manufacturing backward integrated with quarry

II.4. Brief History of the Company and the Project

3M Marble and Granite Manufacturing PLC 6

3M Marble and Granite Manufacturing PLC 7

II.5. Capital Structure of the Company

Table 2.1: Capital Structure of the Company

Sr. Number Share Value Total Share

1 Meron Mesfin Mulugeta American 60 80,000 4,800,000

II.6. Past performance of the Project /Business

II.6.1. Summary of Operational Performance (Physical Performance)

3M Marble and Granite Manufacturing PLC 8

Table 2.2: Past Production and Sales Performance of the Company

II.6.2. Summary of Financial Performance (as indicated in financial statements provided)

i. Balance sheet Statement

Table 2.3: Balance Sheet Statement Report of the Company

3M Marble and Granite Manufacturing PLC 9

ii. Profit/Loss Statement

3M Marble and Granite Manufacturing PLC 10

Table 2.5: Cash Flow Statement of the Company

II.7. Reason for Expansion & Future Plan of the Project

II.8. Credit Information of the Company

II.8.1. With DBE

Table 2.6: Loan Position of the Company as at January 31, 2015

II.8.2. With Other Financial Institutions

II.9. The Loan

Table 2.2: Variation of Loan Requested and Proposed

Requested Proposed Cost

3M Marble and Granite Manufacturing PLC 12

III. Key Success and Risk Factors

III.1. Key Success Factors

III.1.1.Macro Level Success Factors

III.1.2.The Key Sub-sector Success Factors

III.1.3.Firm Level Success Factors

III.2. Risk Factors

3M Marble and Granite Manufacturing PLC 15

III.3. Risk Mitigating Measures

III.4. SWOT Analysis

3M Marble and Granite Manufacturing PLC 16

IV.1. Market Destination and Segmentation of Marble

IV.2. Ethiopian Marble Market

3M Marble and Granite Manufacturing PLC 17

IV.2.1. Demand for Marble Market

Table 4.1: Housing Unit

Housing Unit 1994 2007 AAGR

Table 4.2: Projected Housing Units

Year Housing Units Year Housing Units