Bottled Water-Geni
Bottled Water-Geni
Bottled Water-Geni
EXECUTIVE SUMMARY........................................................................................................................2
1. Introduction...........................................................................................................................................3
3. MARKET ASSESSMENT...................................................................................................................12
3.6. Competition..................................................................................................................................20
3.7. Pricing...........................................................................................................................................20
4. TECHNICAL STUDY.........................................................................................................................22
4.2. Technology...................................................................................................................................23
0
4.4. Utilities..........................................................................................................................................26
7. FINANCIAL ANALYSIS...............................................................................................................39
8. FUTURE DEVELOPMENT............................................................................................................46
1
EXECUTIVE SUMMARY
1. Project Name Bottled Water Manufacturing Plant
2. Project owner Mrs. Genet Abebe
3. Nationality Ethiopian
4. Project location Oromia National Regional State, Oromia Special Zone
Surrounding Finfine, Sebeta Hasaw District
5. Project composition Different size clear and safe bottled water
6. Premises required 10,000M2
7. Total initial capital The total capital requirement of the project is Birr 99,837,894.2
of which 29,951,368.26 ( 30%) is owner’s equity while the
remaining 69,886,525.94 ( 70%) is financed through bank loan
8. Employment The total manpower required for the plant will be 335
employees at full capacity of which:
Permanent workers 128:Skilled – 95 &Unskilled 33
Temporary workers 207 :Skilled 7 & Unskilled 200
9. Market share 70% for domestic market and 30% for export
12. Raw material Ground water, polyethylene terephtalate (PET) bottles proof
caps, labels, polypropylene rolls and, disinfectant and other
13. Benefits of the Supply of quality drinking water, source of revenue,
project for the employment opportunity, foreign currency generation,
region/country improvement of life quality , technology transfer etc
2
1. Introduction
Ethiopia is a country endowed with significant growth potential. Despite the potential
the country’s economy has been characterized by stagnant, at best steady economic
growth, until the demise of the socialist oriented military regime. Under the current
The impressive economic growth and sound macroeconomic stability are made possible
management and ongoing partnership with external donors and investors as well.
Ethiopia has been made peace and stable through establishment of federal system of
government and parliamentary democracy. Simultaneously there was the general shift
tight fiscal and monetary policy. This may includes deregulation of domestic price
of liberalized investment laws, and the like. On top this, investment incentives and
investment property protection have also granted to both domestic and foreign
investors.
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The conducive economic and political condition created by the government boosted the
confidence of private investors and inspire them to invest in different sector of the
economy. As such, the coordinated effort of public and private sectors has putted the
country on the truck of fast and sustainable economic growth. The fast and dynamic
manufacturing and service sectors, in order to bring about significant economic and
In this regard, the government has been excreting unprecedented effort to bring about
economic structural transformation. The stretched GTP is the case in point. GTP aspire
industry to take the leading role in the economy. To this effect, a strong but careful
emphasis has given to bridge the missing link among various sectors of the economy in
Inspired by prevailing fertile ground for investment, the owner of the envisage water
bottling Plant is planned to invest Oromia National Regional State, Oromia Special
Zone Surrounding Finfine, Sebeta Hasaw District. This project study is undertaken to
check the marketing and financial feasibility of the project and the result of the study is
viable for the owners to start the project at the proposed area.
economic sectors in Ethiopia. She is highly passionate by government’s call for Ethiopian
investors that, through their skill and finance help their country fulfill the Socio - economic
transformation and benefited from their engagement. The promoter has very well
understanding of government’s policies and strategies and highly convinced that the planed
project will enable here share the country’s burden of fighting poverty and reducing
unemployment.
The feasibility of the project has been carefully assessed and the promoter is confident that it
will be a total success. The promoter is also extremely optimistic and determinant to model the
new ways of practicing modern production and marketing while meeting the growing demand
for bottled water. Hence, the promoter expected to get the necessary support from the regional
As part of business enterprises the project is planned with the objective of generating
income to the promoters. However, it is also have the following objectives to:
Develop local technology by bringing expatriate technical advisers and create the
Generate foreign exchange through the sale of its products in the export markets
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Generate income to the government in the forms of income and business taxes
The envisaged project deemed to add to the economic development of the nation in
It is a very target of the plant to help the life quality of the citizen by producing and
B. Source of employment
poor polices and strategies which ultimately aimed at ensuring the benefits of the
mega projects financed by the government are labor intensive creating employment
opportunity for millions of citizens. Despite the effort, unemployment still remains the
pressing issues particularly in urban area. Hence, the project is a labor intensive and
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To redistribute income, the government collects different forms of tax from different
business undertakings and individuals. Among the different forms of taxes, business
income taxes, payroll income tax and VAT are the major one. Therefore the project will
The plan has positive externality in the zone that will encourage economic movement of
local economy. The plant also uses national raw materials, bottling materials from local
The project tries to secure local community’s sense of ownership. To this end, it will
engage in different development activities on the surrounding areas that benefit the
The planed project will be established in Oromia Regional State, Oromia Special Zone
Surrounding Finfine, Sebeta Hasaw District, were industrial sector is flourishing from
time to time. The town has easy access to the fundamental utilities and other facilities
required for industrial area such as; developed infrastructure, dependable pull of labor
force, treated water supply, electric power access to telephone line and easy access for
transportation and market outline.
Moreover, the Regional Government has been undertaking various measures that help
boost the growth of investment endeavors in the area by allotting land, and providing
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efficient municipal service. The location of the plant should be at a place where the
workers conveniently commute or take up their lording in view of the fact that the plant
is operated sixteen hours a day.
Attributable to the cumulative effects of the aforementioned factors and its proximity to
the capital Addis, where the majority of financial transaction of the country take place,
the location and project site of the venture believed suitable.
The total project site/plot area required has been assessed in accordance with the
effective space requirement of the plant machinery and the overall duties and activities
that will be carried out by the project as per the standard set by the manufacture of the
plant machinery.
One of the crucial factors, which determine the implementation and overall success of
any project, is the acquisition of land, its location, its relative size and cost of
acquisition. In determination of the required size of the project area, these all
parameters have been assessed and it is found to be suitable.
be of high quality standard so as to ensure consumers’ satisfaction and meet all the
customers' requirements.
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Bottled water has become a safer alternative to other sources of water such as tap water.
Bottled water usage has increased even in countries where clean tap water is present.
This may be attributed to consumers disliking the taste of tap water or its organ
oleptics. Another contributing factor to this phenomenon could the association of the
use of bottled water with social status. Consumers tend to choose bottled water due to
health related reasons. In communities that experience problems with their tap water,
Some surveys “found that bottled water, far from being an alternative to tap water,
seems to be mostly consumed as a substitute for alcoholic and traditional soft drinks –
the exception being when water contamination presents serious health risks and the
trust in the tap water company is highly eroded. Another explanation for the rise in
purging behavior.” Many low-income families avoid drinking tap water because they
Bottled water can be classified in several categories. Some of the more common types of
Artesian water: This is water that originates from a confined aquifer that has been
tapped and in which the water level stands at some height above the top of the aquifer.
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Groundwater: This type of water is from an underground source that is under a
Mineral water: Mineral water contains at least 250 parts per million total dissolved
solids (TDS). It comes from a source tapped at one or more bore holes or spring, and
Purified water: This type of water has been produced by distillation, deionization,
reverse osmosis, or other suitable processes. Purified water may also be referred to as
"demineralized water". It meets the definition of "purified water" in the United States
Pharmacopoeia.
Sparkling water: Sparkling water contains the same amount of carbon dioxide that it
had at emergence from the source. The carbon dioxide may be removed and
Spring water: This type of water comes from an underground formation from which
Sterile water: This type of water meets the requirements under "sterility tests" in the
10
Well water: Well water is taken from a hole tapping, etc. This hole may be bored,
industrially processed and bottled water can be classified into two major groups:
bottled drinking water (ES597:2001) and mineral water (ES 621:2001). The former is
natural water. If water has been made after possible treatment, effervescent by addition
nature and after possible treatment does not contain free CO 2, in excess of the amount
necessary to keep dissolved the hydrogen carbonates salts that are present in the water.
In this study, the non-carbonated “still” natural water has been considered
3. MARKET ASSESSMENT
The market study crew of the project has tried to access relevant, up to date and time
series data about bottled water in Ethiopia, so as to come up with the comprehensive
market assessment. However, the assessment has been undertaken amidst the existing
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3.1. Past Supply and Present Demand
The country’s requirement for purified water is met through domestic production and
imports. The following table shows the supply of the product from domestic production
and imports during 1997-2006. During the period under reference, domestic production,
imports and total supply averaged at 404,950 hectoliters, 789 hectoliters and 405,740
hectoliters, respectively. Thus, domestic production, on the average, accounted for 99.8
percent of the total supply of purified water in the domestic market, revealing the
relatively limited share of imports (0.20%) in the total supply of the product.
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1997 374,257 2,498 376,755 99.34 0.66
During the period 1997-2006, the maximum total supply (apparent consumption) of
purified water was 448,983 hectoliters in the year 2006, while a minimum of 376,755
hectoliters was registered in year 1997. In the remaining years, apparent consumption
was fluctuating between these two extremes quantities. The mean of the total supply
was 405,740 hectoliters and the average growth rate during the period under reference
was 2%.
Accordingly, due to the fluctuating nature of the products total supply, it appears more
appropriate to consider the average of the last four years of the period under reference
(2003 – 2006) which was 418,931 hectoliters as the effective demand for the product for
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the year 2007. In estimating the present (2008) effective demand for the product, since
the consumption of purified water is associated with the urban population, the demand
for the product is assumed to grow at the rate of 4% which corresponds to the annual
Accordingly, the present effective demand for purified water is, thus, estimated at
435,688 hectoliters.
The future demand for purified water is a function of income, urban population growth
and growth of catering and recreational establishments. Accordingly, the demand for
rate of urban population. Moreover, assuming that existing domestic producers will
maintain their current production (year 2006) for the future, the unsatisfied demand for
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2012 509,694 448,279 61,415
The demand and supply analysis for the products conducted above showed that there
exist large market gap in Ethiopian market. Hence, the envisioned factory will be
The envisioned project will supply 70% of its products for domestic market and 30% of
its product for export in its initial years and continuous to increase international market
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3.5. Marketing strategy and Promotion
The promotion strategy shall initially revolve around informing customers of the
projects existence, the products it produce, and how to order them. The intention will be
including:
Its lower production costs which will convert to lower order prices.
The firm intends to be well known by all its stakeholders in particular wholesalers and
distributors. Hence it shall leverage its presence using introductory letters, brochures
and other sales literature. The firm intends to spread the word about its business
most powerful form of promotion mainly due to the fact that its products are
enable it to give its customers concise details of what it has to offer and the
personal selling is the fact that it is relatively new on the market. As such
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b. Advertising. The firm intends to undertake adequate advertising of its name
and products it offer. This is to instill awareness and knowledge of its existence
in the market place, which hopefully shall convert into market share. A constant
look out will be made of any special editions in the local newspapers, which
customers of its products and informing them of its existence. It may then
d. Events. The firm intends to attend trade shows and exhibitions to increase
awareness of its products and services. These events will also enable to interact
Products shall initially be mainly sold through personal selling and referral business,
with relationships and customer experience being, by far, the most important factor.
Relationships in this regard means establishment of links with the various wholesalers,
organizations and institutions which often order or require products for their
customers. Invariably the experience a customer has with its products will go a long
way toward influencing the intermediary to continue to order the products, and
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whether they should refer their friends to order products. To this end the firm intends
safe bottled water. This shall be undertaken through use of high quality raw materials
and production processes so as to ensure the efficient delivery of quality products. The
product strategy will also be based on quality, combined with making the product
easily available to the customers. An important competitive edge will be our assembly
strategy, which will be based on good quality, such that production and delivery are
not only a pleasure, but also a feature that enhances the sense of quality and perception
by clients. Our faster delivery, relative to our imprinting counterparts, will also serve as
Through our lower prices, made possible by reduced local delivery charges, we intend
to attract a large portion of the market, both directly and indirectly through referrals.
3.6. Competition
The envisage project has diversified marketing strategies that could enable it cope-up
with the different competitors in the market. Moreover it will frequently conduct
competitors research which focuses on, the weaknesses, the different competitor’s
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strategies, the techniques they use in rendering product, their customer handing
3.7. Pricing
The pricing strategy will be done by conducting market research and by assessing the
competitors’ price and customers’ income level. The plant will use penetration strategy
to introduce the products and to attract the customers. The price of the products is
determined primarily by what customers are willing to pay that the company is offering
and the price of competitors. For this matter the existing retail price of in the market is
assessed for comparative analysis and the firm settled the lower price.
Accordingly, the current retail price of domestically produced purified water is Birr 20
per/two liter pack, 15 birr/ one liter pack and 10 birr/ half a liter pack . Allowing 30
per cent for wholesale and retail margin, the factory-gate price for the product of the
envisaged plant is estimated at Birr 14, 11.5, and 7 per pack respectively.
hectoliter, based on 300 working days per annum and 8 hours per day. In this study, the
size of the plastic bottle is assumed to be 0.5 liters ,1 liters and 2 liters. Actually, these
are the most popular and favored sizes. The half liter size is more commonly used in
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organization and institute while one liter and two liter size are most often used by
individual customers and households and getting more popular than half liter.
Therefore, proportion of production shall be 20 %, 40% and 40% of half, one and two
liter respectively.
At the initial stage of production period the plant may require some year to capture a
significant market share of products. The plant may start production at 60% and 80% of
its capacity in the first and second year of production, respectively. Full production
shall be attained in the third year and then after. The proposed production program
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4. TECHNICAL STUDY
The source of raw water for the proposed project is ground water, which is abundantly
available in the Sebeta Hawas District. Raw water shall be supplied from a deep-well
The major auxiliary materials are polyethylene terephtalate (PET) bottles with pilfer
proof caps, labels, polypropylene rolls and different chemicals required to sanitation,
disinfection and other purposes. PET bottles shall be imported in performs and
preheated and blown to final sizes. Caustic soda and Common salt is locally available
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while the other raw materials will be imported. The annual requirement (at full
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14 P3 special kg 3000
15 P3 stabilon kg 4760
16 P3 Ferisol kg 200
17 Porcelain ring kg 145
18 Silica Gel kg 110
19 Sulphuric Acid kg 50
20 Filter paper Pcs 300
21 Manganese Greensand kg 600
22 Everite lt 738
4.2. Technology
Technology is also the necessary factors that need due consideration during machinery
technology that are cheap and easy to acquire, lower power consumers, reasonable size,
enable to produce best quality products and easily adaptable. In addition proper
monitoring and follow up will be made during construction and production process. In
this study the various technological options available in the market have not yet
considered despite their influence on capital lay out and recurrent costs.
The process aims to guarantee the highest safety standards for drinking water and
technologies of mineral water are more or less similar. The major difference arises from
the type of bottles, glass or plastic. The glass bottles are normally reused, about 6 to 7
They are thin and shatter-proof containers, with glass-like transparence and exceptional
Each type of bottling has its own advantages and drawbacks. The glass bottles, for
example, are heavier, i.e., costly to transports, are brittle and have danger of breakage
and need be washed thoroughly. On the other hand, they are reusable. Therefore, it has
lower production cost. The PET bottles have some drawbacks such as relatively high
production cost and larger factory floor area for their manufacturing. However, they are
lighter in weight and thus cheaper for transportation less damaged while filling and
easy for handling. Therefore, either of the alternatives can be used based on the
preference of the project owner. In this study the plastic bottle has been considered.
The production and bottling of purified water in PET bottles involves processes like
raw water storage and treatment, filling and capping, labeling and wrapping. The major
operation in water storage and treatment unit include water color removal, raw water
pumping and storage, chemical dosage, filtration using different types of filters,
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Fig – Production flow chart
After proper water treatment, the PET bottles are automatically conveyed and
transferred to the rinsing rotor where they are subject to rinsing jets. Then the bottles
are transferred to the filling and capping rotors. After labeling and sealing, bottles are
4.4. Utilities
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Electric power, water, telephone line and paved road are the utilities required for textile
and garment factory. Detail is indicated in the production cost estimate section of this
document
The following are the list of necessary machineries and equipment for the envisioned
1 Water Treatment
1.1 Feed Tank 1
1.2 Feed Pump 1
1.3 Multi-Media Filter 1
1.4 Cartridge Filter 1
1.5 Middle Tank 1
1.6 Middle Pump 1
1.7 Fine Filter 1
1.8 Micro Filter 1
1.9 Final Tank 1
1.10 Final Pump 1
1.11 Ozon System Set
1.12 Pipes, valves and accessories Set
1.13 Control Equipment Set
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2 Filling, Capping, and Packing Unit
2.1 Rinser, Filter, and capper (with accessories) Set
2.2 Light checking box 2
2.3 Caps sterilizing cabinet 2
2.4 Shrink labeling machine 1
2.5 Inkjet printer 1
2.6 Conveyor with motor and extension Set
2.7 Label inserting table 1
2.8 Air compressor 3
3 PET stretch Blow Molding Unit
3.1 Stretch blow moldings with 2 high pressure air compressor Set
air receiving tank, 2 air filters, air drier, spare parts and tool
3.2 Mould, ½ lt PET bottle 1
3.3 Mould, 1 lt PET bottle 1
4 Caps Production line
4.1 Injection Machine 1
3.2 Auto loader 1
3.3 Mould for caps 1
Total
The total land required for the envisage water bottling factory is 12,520 M2. . This
include built up are, free spaces, buffer zone internal road, greenery and parking among
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1.3. Inspection room 400
Total production hall and workshop 4,000
2. Warehouse
2.1. Raw material store 1000
2.2. Finished product store 1000
Total store 2000
3. Administration and general building
3.1. Administrative building, 500
3.2. Workers cafe and lounge 500
3.3. Assembly hall 500
3.4. Shop and showroom 100
3.5. Waste Accumulation area 500
3.6. Gourd houses(two) 40
3.7 Generator house 50
3.8 Green area, internal road, and parking 1810
Total 10,000
executed at different phases of the project life. These activities include: design and
stores, showrooms, shops, administrative offices and other utility requirements as well.
In general the building must be capable of being kept clean and provision should be
made for keeping the sewerages drained out properly and room temperature is attained
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to keep healthy environment. In most environments, equipment should be totally
enclosed in a light structure: where the climate is suitable. In addition the loading and
offloading areas together with incoming and outgoing roads are proposed to be paved
to ensure a clean environment around the project site. The site will be encircled by a
Business activities needs well established system in order to be competitive and become
profitable. The envisage project will have its own autonomy and legal entity to execute
its objectives. Organizational structure of the project is designed by including all the
necessary personnel under the right division. Structurally it will have three main units;
production & technical unit, marketing & sales unit and administration & finance units
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At the top of the organizational structure, there will be manager with the responsibility
of supervising the overall activity of the plant. The production & technical unit is
responsible for operational and technical aspects of production, maintenance and safety
of the plant. The marketing unit is responsible for procurement of row material and
sales activities. The administration and finance unit is responsible for controlling and
guiding personnel, for administering the buildings and controlling all financial
accounts.
Depending up on the nature of the center and the amount of work to be performed;
there exist auxiliary units under the general manger. Employees under each unit will be
supervised by the department head that is accountable for the general manger. General
General Manager
Executive Secretary
Finance team
Quality Control
The smooth & efficient operation of the factory presupposes adequate number of
qualified and experienced manpower. The manpower component of the factory will
include the general manager, unit managers and skillful technicians to control the
The company will use efficient trained staffs in the area of marketing to be competitive
supplier of bottled water in the market. The opportunities of being serviced by well
skilled professionals will enable the company to evaluate the internal weakness and
strength of the company and help cope up with the dynamics of the market situation.
The total manpower required for the plant will be 335 employees
31
o Skilled 7
o Unskilled 200
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Store keeper 10+3 in store and logistics 5
Driver 10 completed 20
Assistant driver Basic 10
Office boy/girl 10 completed 3
Cleaner & laundry Unskilled 30
Security Basic 6
Gardner Unskilled 3
Total permanent 128
Temporary
Mechanic Diploma/10+2 in general mechanics 4
Electrician 10+2 in general electricity 2
Plumber man 10 + 3 in plumbering 1
Wage workers Unskilled 200
Total temporary 207
Total 335
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building
3.1. Administrative building, 500 5,500.00 2,750,000.00
3.2. Workers cafe and lounge 500 5,500.00 2,750,000.00
3.3. Assembly hall 500 5,500.00 2,750,000.00
3.4. Shop and showroom 100 5,500.00 550,000.00
3.5. Waste Accumulation area 500 2,800.00 1,400,000.00
3.6. Gourd houses(two) 40 4,000.00 160,000.00
3.7 Generator house 50 4,000.00 200,000.00
3.8 Green area, internal road, parking 1810 1000 1,810,000.00
4 Design and supervision 500,000.00
5 Fences 2,000,000.00
6 Site dvt and utility & installation 709375
about 28 production machine and equipment required for production. The cost of
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2.1 Imported, high back, high quality managerial chair Unit 1 10,000 10,000
2.2 High back managerial chair Unit 4 6000 24,000
2.3 Office chair Unit 70 900 63,000
2.4 Secretarial chairs Unit 1 1500 1500
2.5 Guest chairs Unit 20 1000 20,000
3 Computer with chairs Unit 8 15,000 120,000
4 Shelf Unit 6 4,500 27,000
5 Filing cabinets Unit 6 1,500 6000
6 Fax & Telephone machine Unit 4 1,200 4,800
7 Carpet and Curtain LS 200,000
8 Other equipment 105,000
Total 814,300
6.1.5. Vehicle
SN Description Qty Unit cost Total cost Remark
Total 2 3,900,000
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Total 1,755,000
section 4.1 of this document. The estimated cost of this material is Birr 220,945,273/
Monthly
Position Qualification Req No. Yearly salary
salary
Permanent
General manager MSC/MSC industrial eng 1 20,000 240,000.00
Production manager BSC in chemical engineering 1 15,000 180,000.00
Quality controller BSC in chemistry 1 10,000 120,000.00
Machine operator BSC in industrial eng 15 6,000 1,080,000.00
Assistant operator 10 + 3 in general machine 10 5,800 696,000.00
Public affairs BA in mgt/leadership/ PSIR, 1 6,000 72,000.00
Marketing head BA in marketing management 1 6,000 72,000.00
Administration head BA in accounting, economics 1 6,000 72,000.00
Finance head BA in Accounting 1 6,000 72,000.00
Personnel head BA in mgt/ leadership 1 6,000 72,000.00
Accountant BA in accounting 3 6,000 216,000.00
Sales 10+3 sales man ship 5 2,800 168,000.00
Secretary Diploma in sectarian science 3 2,800 100,800.00
Cashier 10+2 in bookkeeping 5 2,800 168,000.00
Clerk 10 completed 2 2,800 67,200.00
Store keeper 10+3 in store and logistics 5 2,800 168,000.00
Driver 10 completed 20 2,800 672,000.00
Assistant driver Basic 10 2,800 336,000.00
Office boy/girl 10 completed 3 2100 75,600.00
Cleaner & laundry Unskilled 30 2100 756,000.00
Security Basic 6 2100 151,200.00
Gardner Unskilled 3 2100 75,600.00
Total permanent 128 0.00
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Temporary 0.00
Mechanic Diploma/10+2 in l mechanics 4 3,200 153,600.00
Electrician 10+2 in general electricity 2 3,200 76,800.00
Plumber man 10 + 3 in plumbering 1 3,200 38,400.00
Wage workers Unskilled 100 60/day 3,600,000.00
Total temporary 107 0.00
Total 235 9,499,200
Benefits 20% 1,899,840
Grand total 11,399,040
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6.3. Initial investment capital
The initial investment capital of the proposed factory is estimated to be birr 99,837,894.2
3 Vehicles 3,900,000
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7. FINANCIAL ANALYSIS
The financial analysis of the water bottling plant is based on the data provided in the
preceding sections and the assumption indicated in the following table.
TL Description Rate
1. Depreciation
Building 5%
Vehicle 20%
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Lease payment 18.75/m2
0 69,886,525.94
1 6,988,652.6 9,784,113.6 16,772,766.2 62,897,873.3
2 6,988,652.6 8,805,702.3 15,794,354.9 55,909,220.7
3 6,988,652.6 7,827,290.9 14,815,943.5 48,920,568.1
4 6,988,652.6 6,848,879.5 13,837,532.1 41,931,915.5
5 6,988,652.6 5,870,468.2 12,859,120.8 34,943,262.9
6 6,988,652.6 4,892,056.8 11,880,709.4 27,954,610.3
7 6,988,652.6 3,913,645.4 10,902,298.0 20,965,957.7
8 6,988,652.6 2,935,234.1 9,923,886.7 13,977,305.1
9 6,988,652.6 1,956,822.7 8,945,475.3 6,988,652.5
10 6,988,652.6 978,411.4 7,967,064.0 (0.1)
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7.4. Depreciation Schedule
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7.6. Financial Statement
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7.6.2. Cash flow Statement
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7.7. Financial evaluation
7.7.1. Profitability
According to the projected income statement, the plant will start generating profit in the
1st year of operation. Important ratios such as profit to total sales, net profit to equity
(Return on equity) and net profit plus interest on total investment (return on total
investment) show an increasing trend during the lifetime of the project. The income
statement and the other indicators of profitability show that the project is viable.
Break - even analysis establish relationship between operation costs and revenues. More
importantly it indicates the level at which costs and revenue are in equilibrium.
Accordingly the break - even point of the project including cost of finance when it starts
The investment cost and income statement projection are used to project the pay-back
period. Accordingly the project initial investment will be fully recovered in less than 5
years of operation.
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8. FUTURE DEVELOPMENT
order to survive and prosper. In such innovative and changing environment, supper
strategies become lame, efficient ways of production become wasteful, if they could not
go with the order of the day. Operating in such environment therefore, the factory will
particularly in producing the profile itself by installing the plant. In this regard, the
envisioned project will expand its capacity to include the bottling of other related
products.
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9. ENVIRONMENTAL IMPACT OF THE PROJECT
In recent years environmental issues has swollen enough to assume pressing national
and international agendas. Government of Ethiopia has device policies, rules and
to be implemented in the country should not cause environmental and social harms.
The environmental and social impacts associated to the project should be avoided if
environmental and social impact assessment together with its mitigation method.
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