bonga university

College of Business & Economics

Department of NURSING

Prepared by:
 RAHEL DESTA
 HAMZA ABDURAHMAN
 MEKUANNT EMBIALE
 LELISE ETEFA

 MIHRET KOCHITO

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Submitted to: Ms MENGISTU NOVEMBER 26/2016EC

Table of Contents page no

1. Introduction...........................................................................................................................................3
1.1 Background of dairy farm product.....................................................................................................3
1.2 Objectives of Saron dairy farm product.............................................................................................3
1.3 Mission of Saron dairy farm product.................................................................................................3
1.4 Vision of Saron dairy farm product................................................................................................4
2. Considerations in Selecting the Project.................................................................................................4
3. Location of Project.................................................................................................................................4
4. Source of capital....................................................................................................................................5
5. Project Layout (Infrastructure)...............................................................................................................5
6. Financial analysis................................................................................................................................6
6.1 Building..............................................................................................................................................6
6.2 Plant machinery and material costs for production...........................................................................7
6.3 Cost to supplies.................................................................................................................................7
6.4 Utility expenses.................................................................................................................................7
6.5 Annual costs......................................................................................................................................8
7. Market analysis.....................................................................................................................................8
7.1 Market Size........................................................................................................................................8

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 7.2 Products.............................................................................................................................................8
8. Project management...............................................................................................................................9
9. Organizational structure..........................................................................................................................9
10. Major Duties and responsibilities........................................................................................................10
11. Environmental feasibility....................................................................................................................10
12. Risk assessment...................................................................................................................................11
Project implementation.............................................................................................................................11
13. SWOT Analysis.....................................................................................................................................11
13.1 Strength.........................................................................................................................................11
13.2 Weakness.......................................................................................................................................12
13.3 Opportunity...................................................................................................................................12
13.4 Threat............................................................................................................................................12
14. Summary and conclusion.....................................................................................................................12

1. Introduction
1.1 Background of dairy farm product
The birth date of Top dairy farm product was in 2015 E.C. The establishment of and
construction of saron dairy farm product is in Bonga town, cheta, shama as a basis for
production and distribution of milk. In this area, the idea of establishing this business is
penetrated in many of owners mind and appropriate to establish the business. From the beginning
the business is formed in the form of partnership with equal capital accumulations. The
accumulated capital; used for beginning the business is 500000 ETB which 20% is funded by
partners and the remaining 80% is borrowed from other financial institutions as a loan.

Saron dairy farm product engaged in providing quality product at fair market value for its
clients. From the beginning the business attempt to distribute its products through different
distribution center that it will open. During the first establishment, the business purchases
necessary raw materials from surrounding factories.

1.2 Objectives of Saron dairy farm product

Generally, Top dairy farm product aims to:-

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  Increase its customers and production level throughout times to increase its return.
 Satisfying the customers wants as an essential for the business survival and
competition.
Specifically, the Saron dairy farm product aims to:-

 Provide the product through different distribution center

 Increase the efficiency of current resource
 Offer a quality services attached with selling product

1.3 Mission of Saron dairy farm product

 To provide quality product at fair market price/value by using quality raw material
supplied by surrounding area of the farm.
 To assess the change in current demand and satisfy the customers need to increase the
business profit.

1.4 Vision of Saron dairy farm product

 To build our Owen flour factory in 2012 E.C to improve the cost of production
which currently purchased from other factories and to save different production
cost incur associated with transportation.
 To open a new plant in surrounding small towns in order to ensure the
profitability of the business.

2. Considerations in Selecting the Project

First of all, the project will develop to increase the revenues of owner.

The main factors in selecting the project are:-

 The current unbalance between the growth of town and demand for consumption
of milk.
 The Location of former dairy farm product business is mostly concentrated at the
center of the town. So, many people lived around the town face that has shortage
of milk and the existence of enough demand.

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 3. Location of Project
The project will be located in Bonga town around cheta, shama. This location is selected because
of the following considerations:-

 In cheta there are high populations and low milk product. This high population in turn
brings the increase of demand for projected business.
 This location will help to approach/easily get/ the raw materials from the nearest
towns/area when the business is constructed its own factory in the near future.
 Decrease current competitions highly observed in the town.
 Because of easily getting of the license from the government. This will be a helpful for
the business to be free from any problems will occurred if the business start to build its
own factory.

4. Source of capital
From the beginning of establishment the project is financed through individuals` investment and
loans from Banks. Each partner contributions for the establishment of the project presented in the
following table:

Partners’ investment

No. Partners name ETB contributed to the project

1 RAHEL DESTA 14285

2 HAMZA 14285
3 lelise 14285
4 mekunnt 14285.
Total 5712
The remaining sources of capital (i.e. 96,000.00) which is 20% of the total capital funded from
banks as loan

5. Project Layout (Infrastructure)

The surrounding of the Top dairy farm product project will be set in an attractive layout.

That means the buildings position for the convenience for management staffs, easy to safeguard
the surroundings for guards and safe to the Janitors to clean.

S/N ITEM SIZE QUANT. PURPOSE

1 Administrative office 10m2 1 For administration &mgmt

2 Area of the product 180m 2 For baking/preparing milk

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 3 Bath room 20m 2 For Washing

4 Material storage class 100m 1 For storing flour and other

materials

5 Class for guards 12 1 For keeping/safeguard

6 Staffs for employees 60 1 For resting during tiredness

of employees

7 Class for launch 40 1 For providing food for

employees

6. Financial analysis
The project will start the operation with Birr 500000 ETB . Out of this 20% of the total amount
of investment is financed by the owners (100000) and 80% (400000) is from banks as a loan
which will be paid for the next five years. Most of this investment will expanded on planting the
business for future rather than increasing short term gain of owners. This means some fixed asset
of the business may use high portion of the investment.

The investment arrangement and expenditure expected is preserving on the following

constructive table with its respective category.

S/N Item/description Measurement Quantity Unit price Total price

1 Land purchase 60X30 - - 20000
2 Land preparation M - - 1000
3 Building M2 4 - 20000
4 Plant mach.&equip. - - - 10000
5 Man power & salary - - - 20000
6 Supplies - - - 4000
8 Working capital - - - 10000
9 Utilities - - - 8000

10 Other costs - - - 0

TOTAL 93000

6.1 Building
The proposed project will consist three different buildings. These are buildings for the purpose
of storing purchased materials, buildings for management and staffs and buildings for other

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purpose (i.e. showering house, bathrooms, etc.).The investment arrangement for these buildings
is presented as follows:-

S/N Description Measurement Quantity Unit price Total price

/Items/
1 Cement Pkt 4 2000 8000
3 Nail Kg 10 40 400
4 Doors M2 3 1000 3,000
5 Windows M2 4 400 1600
6 Labor costs - - - 0
7 Electric mainten. - - - 2000
8 Design costs - - - 1000
9 Water pipe - - - 0
10 Guard for the catles - - - 0
11 Other related material - - - 1000
cost
Total 17000

6.2 Plant machinery and material costs for production

S/N Description Quantity Unit price Total price

1 Mabukia/ baldi 4 120 480
2 Plantary mixer 3 200 6,00
3 Working tables with grass 3 400 1,200
holder
4 Equipments of cleaning 5 40 200
the room
5 Productive cows 4 50000 200000
Total 202480

6.3 Cost to supplies

S/N Description Measurement quantity Unit price Total
price
1 Periodic vaccination Monthly 20 65 1300
2 Salt Kg 10 3.5 35
3 Water Littre 50 0 0
4 Grass supply Quintal 20 0 0
Total 1335

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6.4 Utility expenses
No. Description Measurement Consumption per Yearly cost in birr
month

1 Water Liter 0 0

2 Electric power Kw/h 50 240

Total 240

6.5 Annual costs

Interest expenses (400000x14%).....…………………..56000

Supplies expenses………………………………………………14,700

Utility expenses………………………………….15,600
Depreciation expenses:
Building………………………………......17000
Machinery and equip…………………...202480
Total ………….30578

7. Market analysis
7.1 Market Size

In the recent period, the milk market showed a better growth rate than in previous years.
This was mainly because retail price cuts were fewer and less stringent, but it was also because
of the growing importance of added-value products, especially in the specialty milk and dairy
farm product sectors.

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7.2 Products

Although the dairy farm product products market grew faster than the traditional milk sectors
and it to became the target of price cuts, and growth slowed considerably in the past. However,
there was something of a recovery and its share of the total milk market showed an increase
through time.
This project, the Saron dairy farm product, is planned to satisfy the current needs and wants of
the people around the area which there shows a shortage of milk suppliers in the near area. The
demand for milk shows an increase through time. Because of this reason we prefer to start the
Saron dairy farm product project in this area/place. Our sources of revenues will comes from the
daily sale of milk.

8. Project management

The proposed project will have consolidated management system controlled by the owners of the
project. This enables us to get the profit that we estimate and minimize the cost of administrative
through replace other employees being hired from outside. Besides, to business owners other
employees will be hired on permanent and contract basis.

9. Organizational structure

General Manager

Finance dep`t

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 Purchasing dep`t Selling dep`t

Production dep`t
Guards

Other employees

10. Major Duties and responsibilities

From the beginning the major activities performed in organization will expect to done by the
owners to minimize the related initial cost and to increase the profitability of the business.
General Manager will be responsible to lead and control all other employees to attain the goal of
the organization. The purchaser will be responsible for search market and present the supplies
with reasonable market price.
The sales person will be responsible for selling the prepared product by searching and attracting
a good market segments to increase the share of market. Finance department will be responsible
to prepare and follow up the business budget and periodic control of cash inflows and out flows.
It also responsible to pay the employee`s salary and wage in time and in accurate ways. These all
are the major responsibilities related to administrative department.
The other major duties are related to production department. Under this department there are
responsibilities to prepare and milk a quality and attractive product for customers. They will be
responsible for the use of the organization`s input materials and other equipment in proper ways.
In addition to these responsibilities, other employees work in organization will have different
responsibility related to their jobs. These are the responsibility declared by the organization`s
administrative to increase the earning of the business and to ensure the benefit of employees.
These duties are the responsibilities given to guard , janitors and other contract employees.
Guard will be responsible for keeping the security of the surrounding of the business

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organization. Janitors will be responsible to keep the organization clean and make the compound
attractive/ maintain the attractive site in the organization/. They are also responsible for the
proper use of the organization`s property in a cleaned and safety ways.

11. Environmental feasibility

As it is known use of the source of power saves the product that our organization can produce in
different ways.
In fact, dairy farm product project doesn`t have any noise and other influence with environment.

12. Risk assessment

The risks for top dairy farm product are there might be natural and human disasters we cannot
control natural disasters because they are uncontrollable but we can control human made
disasters by creating awareness on our employees we are going to insure our assets by giving
insurance.

Project implementation

In fact, at this stage there are different challenges that arise from evaluation of a project. A
project evaluated it is difficult to implement but with support if other advisory and consultants
who try to evaluate our project. We can conclude our project as follows:
 Although some fixed assets require high cost at the beginning ,it enables to plan the
project for future on good ground
 As the current earning of the project can cover all related expenses and yield profit to
owners, the length of period to cover initial cost never frustrate the project from
implementation.
When we decided to implement our project by using different methods and as well we expect

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some difficulties at this stage. Some of them are:

 Technical problem related materials

 Shortage of distribution point
 Unfamiliarity with customers. This may affect the test of market during implementation

13. SWOT Analysis

13.1 Strength
 To prepare and milk a quality and attractive product for customer
 Increase market share by using low price strategy
 The organization use input materials and other equipment in proper way.
13.2 Weakness
 The size of milk is small
 Lack of skilled man power
13.3 Opportunity
 It is good for poorer societies because of low price
 It is good for the society to create job opportunities
13.4 Threat
 Lack of raw material
 Lack of electric power

14. Summary and conclusion

As we know Dairy farm product in Ethiopia is still a crucial and valuable activity because
countries like Ethiopia have citizens who want to consume milk more than once a day. The needs
and wants of the people for milk consumption in shama town grow from time to time that
enables us to open/start the saron dairy farm product business project in the town specially in
shama,--------
In reality, Dairy farm product project can not cause environmental pollution because it can be
prepared or constructed locally . This enables us to get our license from the government of the
country and the administrative office of shama town. Thus, government allows this kind of

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project to enhance the access milk for dwellers by encouraging the newly open business firms
and already existed business organizations in Dairy farm product project.
There are formal and informal as well as legal and illegal milking and selling of milk in the
country as a whole including rural and urban areas. However, we prefer our project to be formal
and legal one because we can distribute our product and compete as we want without price
fluctuation ( i.e. by setting our price affordable for the people) and enables us to accumulate our
own capital by providing and diversifying our production level through maintaining our clients
wants and serving them in satisfied ways.

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